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CITY COUNCIL AGENDA ITEM NO. 16

Meeting Date: July 8, 2003

Subject/Title: Consideration of actions pertaining to the approval of CIFP 2003-1 and Assessment District 2003-1.

Submitted by: Engineering: B. Grewal/P. Eldredge

Approved by: John Stevenson, City Manager

RECOMMENDATION
Approve a Resolution approving Capital Improvement Financing Plan 2003-1 and acknowledging certain findings of the City Manager in accordance with Title 17.805 of the Brentwood Municipal Code, as amended, with Exhibits A and B.

Approve a Resolution approving an Amended Boundary Map and overruling protests; approving the Final Engineer's Report and Assessments; ordering acquisition and construction of improvements and levying assessments with Exhibit A.

Approve a Resolution determining significant public benefits to the City of Brentwood from the sale of Local Obligations to the Brentwood Infrastructure Financing Authority; approving form and substance of the Trust Agreement and authorizing changes thereto and execution thereof; providing for the issuance of City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2003-1; approving the sale of said bonds (which establishes the maturities of and interest rates on said bonds); approving a Local Obligation Purchase Contract; approving a Preliminary Official Statement and a Final Official Statement; approving a Continuing Disclosure Agreement; approving the form of the Funding, Acquisition and Disclosure Agreements; and authorizing related actions and the execution of related documents to implement the proposed Financing Plan, with Exhibit A.

PREVIOUS ACTION
On November 10, 1998, the City Council approved the annexation of the Northwest Area into the City of Brentwood.

On November 28, 2000, the City Council added the Northwest Quadrant Infrastructure to the 2000/05 Capital Improvement Program (CIP Project No. 336-3127) and directed the City Engineer to initiate discussions with the development community to develop a Capital Improvements Financing Program (and Assessment District) to assist in financing the required engineering and public infrastructure to support the anticipated commercial and residential development in the Northwest Quadrant. CIFP/AD 2002-1 financed the first phase of the Northwest Quadrant Infrastructure and this CIFP/AD 2003-1 is intended to finance the second phase of infrastructure.

On February 27, 2001, by Resolution No. 2246, the City Council approved the Northwest Quadrant Infrastructure Design Engineering Fee Reimbursement Agreement, for the City to initiate design of Northwest Quadrant infrastructure.

On March 5, 19, and April 9, 2003, the City held Property Owners Meeting to discuss CIFP/AD 2003-1.

On May 13, 2003, by Resolution No. 2864, the City Council appointed an Underwriter, Bond Counsel and Engineer of Work, and approved Deposit and Reimbursement Agreements in and for CIFP 2003-1 and Assessment District No. 2003-1 with various developers, including; Western Pacific Housing (for Subdivision Tracts 8601, 8557 and 8556), Meritage Homes (for Subdivision Tracts 8603 and 8546), Balfour Properties LLC (for MS 354-00 Parcels A, B and C, and APN 019-150-072), Blackhawk-Nunn (for Parcel “O” of Subdivision Tract 7816) and California Sun Properties (for Subdivision Tracts 8485, 8486, 8487, 8488, 8489, and 8490).

In addition, on May 13, 2003, by Resolution No. 2865, the City Council Declared Official Intent to Reimburse Certain Expenditures from Proceeds of Indebtedness, by Resolution No. 2866 Ordered Improvements in Assessment District 2003-1 and Approved the Proposed Boundary Map for Assessment District 2003-1, by Resolution No. 2867 Preliminarily Approved Engineer’s Report, Set the date of July 8, 2003 for Public Hearing and Provided for Property Owner Ballots for Assessment District No. 2003-1.

On May 27, 2003, by Resolution No. 2868, the City Council adopted the 2003/08 Capital Improvement Program, which includes infrastructure for the Northwest Quadrant.

BACKGROUND
The Capital Improvement Financing Plan (CIFP) is a financing mechanism that is used to fund infrastructure improvements necessary to support the development of the City. Residential and commercial developers participate in the CIFP by either prepaying their facility fees prior to recordation of the final map, or participating in the assessment district. The assessment district will sell bonds against future developed property to provide revenue for the construction of needed infrastructure, with the City acting as the custodian to disperse funds after the improvements are completed.

The City of Brentwood has a long history of utilizing Assessment District (AD) financing to assist in the funding of master-planned infrastructure. The following developers and landowners have requested the preparation of Capital Improvement Financing Plan 2003-1 and the formation of Assessment District 2003-1 to assist in financing the facilities included in the CIFP report.

The developer and owners included in this CIFP and AD include:

1. Western Pacific Housing
2. Roy and Mary Carlisle (developer: Western Pacific Housing)
3. GMAC Model Home Finance (developer: Meritage Homes)
4. Frederick DelBarba (developer: Meritage Homes)
5. SCC Kiper, LLC (developer: Meritage Homes)
6. California Sun Properties
7. Balfour Properties LLC
8. Blackhawk-Nunn Active Adult

The attached Amended Boundary Map depicts the properties involved in this program. All residential properties have an approved Tentative Map and Conditions of Approval.

Facility Fee credits and projected Developer Impact Fees have been incorporated into the CIFP report so the City and the developers will have a complete picture of the costs associated with this program. The Final CIFP report contains the estimated 2003/04 Developer Fees, scheduled to be adopted by City Council later this month. This CIFP includes 882 single-family residential lots, 336 multifamily units, and 5.66 acres of commercial property.

This CIFP will fund construction of approximately $17,500,000 of infrastructure through the prepayment of facility fees or the construction of improvements. Capital Improvement Financing Plan No. 2003-1 and Assessment District No. 2003-1 is comprised of the prepayment of developer fees, financing of public improvements, and redemption of previous Assessment District Bonds. The prepayment of fees will provide the City with a sufficient amount of money to construct much-needed infrastructure now, instead of waiting to collect the fees when building permits are issued. The improvement items include Balfour Road, Empire Avenue and Lone Tree Way. These are public improvements that directly benefit the participating property owners. Empire Avenue and Lone Tree Way are part of the phased Improvements of the Northwest Quadrant Infrastructure, and are included in this district to continue the orderly development of this area. The California Sun Properties are redeeming previous Assessment District 93-1 Bonds. The Blackhawk-Nunn residential property is redeeming previous Reassessment District 96-1 Bonds. The redemption of bonds will allow the properties to equalize their liens with other current residential parcels. The redemption of bonds against these undeveloped lots will additionally benefit the city when they refinance the previous districts in the future.

Staff has held several meetings with the development community related to the development of the Northwest Quadrant Infrastructure and this assessment district formation. The development community has been very helpful in the preparation of the attached Final Engineer’s Report and has been supportive and encouraging for CIFP 2003-1 to commence.

FISCAL IMPACT
There will not be any fiscal impacts to the City associated with this district, as the participating developers have each provided $5,000.00 deposits to cover costs incurred during the formation of the CIFP. All future administrative costs to the City will be covered by the Assessment District once it is formed.

Attachments:
Resolutions (3)
Form of the Trust Agreement
Form of Local Obligations Purchase Contract
Form of Preliminary Official Statement
Form of the Continuing Disclosure Agreement
Form of Funding, Acquisition and Disclosure Agreement
CIFP 2003-1 Report
Final Engineer’s Report

RESOLUTION NO. _____
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING CAPITAL IMPROVEMENT FINANCING PLAN 2003 1 AND ACKNOWLEDGING CERTAIN FINDINGS OF THE CITY MANAGER IN ACCORDANCE WITH TITLE 17.805 OF THE BRENTWOOD MUNICIPAL CODE, AS AMENDED


WHEREAS, the City has prepared Capital Improvement Financing Plan 2003 1, dated July 8, 2003 (“CIFP 2003 1”), a fully executed original of which is on file with the City Clerk, for certain proposed new development consisting of the subdivisions and properties listed in Exhibit A, attached hereto and incorporated herein (the “CIFP 2003 1 Properties”); and

WHEREAS, CIFP 2003 1 provides for certain public capital improvements and reimbursements necessary to serve the CIFP 2003 1 Properties (the “CIFP 2003 1 Facilities”) and allocates the cost of same across all CIFP 2003 1 Properties; and

WHEREAS, the owners of the CIFP 2003 1 Properties have consented to form Assessment District No. 2003 1 (“AD 2003 1”) for the purpose of providing financing for all of the CIFP 2003 1 Facilities, or have paid their full obligations with respect to CIFP 2003 1 to the City in cash; and

WHEREAS, the City Manager has made certain findings with respect to CIFP 2003 1 and the CIFP 2003 1 Properties, as required by Section 17.805.005, as evidenced by the Certificate of the City Manager attached hereto as Exhibit B; and

WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the approval of CIFP 2003 1 do exist, have happened and have been performed in regular and due time, form and manner as required by law, and this Council is now duly authorized to adopt this resolution and to approve CIFP 2003 1.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BRENTWOOD, AS FOLLOWS:

Section 1. The foregoing recitals are true and correct and this Council hereby so finds and determines.

Section 2. CIFP 2003 1 is hereby approved and accepted. The findings of the City Manager evidenced by Exhibit B are hereby acknowledged, and this Council hereby confirms that CIFP 2003 1 satisfies the CIFP requirement which is a tentative map conditioned for each CIFP 2003 1 Subdivision; provided, that all of the improvements and other payments are actually financed and installed through AD 2003 1 or cash payments by the owners of the CIFP 2003 1 Properties or any combination of same. No final map shall be recorded for any CIFP 2003 1 Subdivision until the following conditions are met with respect to the property upon which such final subdivision map is to be recorded: (A) the CIFP 2003 1 Facilities with respect to such property have been installed in place and accepted by the City or (B) improvement security as required by the Brentwood Municipal Code has been posted in an amount at least equal to the cost of all CIFP 2003 1 Facilities.
Section 3. Pursuant to Section 17.805.003 of the Brentwood Municipal Code, this Council hereby establishes that all of the units in each proposed CIFP 2003 1 Subdivision (as shown in Exhibit A) constitute the total number of residential development allotments available as part of CIFP 2003 1. There shall be no restriction on the number of units to be permitted annually provided that all of the conditions in Section 2 above are met. Other applicable laws must be followed for units to be permitted.

Section 4. This resolution shall be effective immediately upon its adoption.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting on the 8th day of July, 2003 by the following vote:



EXHIBIT A

CIFP 2003 1 PROPERTIES

Residential Projects
Subdivision No. Owners/Developments No. of Units/Acres
8601 Western Pacific Housing / Brighton Station 199 units
8603 Meritage Homes / Sterling Pinnacle 220 units
8557 Western Pacific Housing / Providence Place 28 units
8556 Western Pacific Housing / Providence Place 27 units
8546 Meritage Homes / Sterling Preserve II 99 units
8485 Cal. Sun Properties / Deer Ridge 24 units
8486 Cal. Sun Properties / Deer Ridge 65 units
8487 Cal. Sun Properties / Deer Ridge 75 units
8488 Cal. Sun Properties / Deer Ridge 19 units
8489 Cal. Sun Properties / Deer Ridge 42 units
8490 Cal. Sun Properties / Deer Ridge 84 units
MS354-00
(Parcels A & B) Cox Balfour Properties LLC Senior Apartments 120 units
7816
(Parcel “O”: MF Site) Cox Blackhawk-Nunn Property 216 units

Commercial Projects

MS 354-00
(Parcel C) and
APN #019-150-072 Cox Balfour Properties LLC Commercial Property
5.66 acres



EXHIBIT B
CERTIFICATE OF THE CITY MANAGER
I, John Stevenson, City Manager of the City of Brentwood, hereby make the findings set forth below in connection with Capital Improvement Financing Plan 2003 1 (“CIFP 2003 1”) in accordance with Section 17.805.005 of the Brentwood Municipal Code. All such findings are contingent upon the following conditions and are null and void if any of the following conditions are not satisfied:

Conditions

1. CIFP 2003 1 is approved by the City Council.

2. Assessment District No. 2003 1 (“AD 2003 1”) is formed to finance all of the improvements contemplated by CIFP 2003 1 for all properties included within CIFP 2003 1 (net of developer contributions).

3. All of the CIFP 2003 1 improvements are actually completed prior to or at the time they are required to serve development within the subdivisions included in CIFP 2003 1, as determined by the City Engineer. Such improvements may be financed through the issuance of bonds for AD 2003 1 or cash contributions by property owners or any combination of the two.

4. Adequate provision is made for education facilities to serve the properties within CIFP 2003 1 as required by Ordinance No. 456 adopted by the City Council on September 12, 1989.

Findings

Based upon and subject to the foregoing conditions and on the facilities contemplated by CIFP 2003 1, I hereby find as follows with respect to each subdivision included within CIFP 2003 1:

1. The project has reasonable assurance of a sufficient quantity of water to provide the proposed development with a safe, potable water supply.

2. The project will not create a demand for sewage collection, treatment, transmission or disposal capacity greater than that available to Brentwood and/or the development will bear its fair share of the cost of the expanded facilities and the facilities will be available prior to issuance of a certificate of occupancy for any dwelling unit in the project.

3. The project will not create a demand for water storage or transmission capacity greater than that available to Brentwood and/or if the water storage or transmission capacity need expansion, the project will bear its fair share of the cost of the expanded facilities and such expansion will be completed prior to issuance of a certificate of occupancy for any dwelling unit in the project.

4. The project will not create a demand for water treatment capacity greater than that available to Brentwood and/or if the water treatment capacity need expansion, the project will bear its fair share of the cost of the expanded facilities and such expansion will be completed prior to issuance of a certificate of occupancy for any dwelling unit in the project.
5. The project will not create a demand for circulation improvements greater than that available and/or if the additional circulation improvements are needed, the project will bear its fair share of the cost of the necessary roadway and thoroughfare facilities.

6. The project will not create a demand for other public services, as determined to be necessary by the City Council, greater than those services available to Brentwood at the time of application and/or if these other public services need expansion, the project will bear its fair share of the cost of the expanded facilities, and the necessary facilities will be available prior to issuance of a certificate of occupancy for any dwelling unit in the project.

7. To the extent the project creates a demand for educational facilities greater than those facilities available to Brentwood at the time of application, or if these educational facilities need expansion, the project will bear its fair share of the cost of the expanded facilities as determined under Section 17.805.005(B)(1) and all other applicable laws, and, in reliance upon the separate authority of the governing school district and the cooperation of the developers of the project, the necessary facilities should be available prior to issuance of a certificate of occupancy for any dwelling unit in the project.

Based upon the above findings, and subject to the foregoing conditions, each subdivision within CIFP 2003 1 shall be entitled to receive a development allotments for the number of units contemplated for such subdivision by CIFP 2003 1 upon application therefore to the City and without paying any additional fee or charge except as may be required by the document entitled “Brentwood Capital Improvements Costs and Basis of Development Fees” as amended from time to time.
Dated: July 8, 2003.

__________________________________
John Stevenson, City Manager,
City of Brentwood


CLERK’S CERTIFICATE
I, Karen Diaz, City Clerk of the City of Brentwood, do hereby certify as follows:

The foregoing resolution is a full, true and correct copy of a resolution duly adopted at a regular meeting of the City Council of said City duly and regularly held at the regular meeting place thereof on the 8th day of July, 2003, of which meeting all of the members of said City Council had due notice and at which a majority thereof were present; and that at said meeting said resolution was adopted by the following vote:

AYES: Councilmembers

NOES:

ABSENT:

An agenda of said meeting was posted at least 72 hours before said meeting at City Hall, 150 City Park Way, Brentwood, California 94513, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda.

I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes.

Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect.

Dated: , 2003.


__________________________________
Karen Diaz, CMC
City Clerk, City of Brentwood



RESOLUTION NO. _____

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AN AMENDED BOUNDARY MAP, OVERRULING PROTESTS, APPROVING FINAL ENGINEER’S REPORT AND ASSESSMENTS, ORDERING ACQUISITION AND/OR CONSTRUCTION OF IMPROVEMENTS AND LEVYING ASSESSMENTS

WHEREAS, the City Council (the “City Council”) of the City of Brentwood (the “City”) has taken a series of actions preliminary to ordering the acquisition and/or construction of certain public improvements in Assessment District No. 2003-1, City of Brentwood, Contra Costa County, California, which improvements are briefly described in Exhibit A attached hereto and incorporated herein (the “Improvements”); and

WHEREAS, on May 13, 2003, the City Council approved the boundary map for Assessment District No. 2003-1, City of Brentwood, Contra Costa County, California, and adopted the Resolution of Intention. The boundary map was filed for record in the office of the County Recorder of the County of Contra Costa on May 22, 2003, in Book 73 of Maps of Assessment and Community Facilities Districts at page 12; and

WHEREAS, in accordance with the Resolution of Intention, the City Engineer, as Engineer of Work, filed with the City Clerk of the City on May 13, 2003, a report containing the matters required by Section 10204 of the Streets and Highways Code, which report was duly presented by the City Clerk to the City Council for consideration; and

WHEREAS, the City Council, by Resolution No. 2867 heretofore duly adopted on May 13, 2003, preliminarily approved the report, and fixed 7:00 o'clock P.M. on Tuesday, July 8, 2003, at the regular meeting place of the City Council at the City Council Chambers of the City of Brentwood, 734 Third Street, Brentwood, California 94513, as the time and place for a public hearing of protests to the acquisition and construction of the Improvements, to the extent of said assessment district and to the levy of said assessment; and

WHEREAS, the City Council provided for the giving of notice of said public hearing of protests to said acquisition and construction of the Improvements and of the property owner ballot procedure required by Article XIIID of the California Constitution (together with the property owner ballots); and

WHEREAS, the City Clerk has filed with the City Council a certificate setting forth the time and manner of the compliance with the requirements of law for mailing notices of the adoption of the Resolution of Intention and of the filing of the report and the preliminary approval thereof and of the time and place for said public hearing thereon and notice of the property owner ballot procedure required by Article XIIID of the California Constitution (together with the property owner ballots); and the City Council hereby finds that notice of the adoption of the Resolution of Intention and of the filing of the report and the preliminary approval thereof and of the time and place for said public hearing thereon and notice of the property owner ballot procedure required by Article XIIID of the California Constitution (together with the property owner ballots) has been mailed in the time, form and manner required by law; and

WHEREAS, said public hearing of protests was duly convened by the City Council at said time and place set for said public hearing of protests on July 8, 2003, and the City Council thereupon proceeded with said public hearing of protests, and duly heard all interested parties desiring to be heard at said public hearing of protests; and

WHEREAS, in accordance with said Resolution No. 2867 and Article XIIID of the California Constitution, property owner ballots were provided to all of the property owners in said assessment district, and at the end of the public hearing, the City Council found and determined that property owner ballots cast against the levy of said assessment did not exceed the property owner ballots cast in favor of the levy of said assessment; and

WHEREAS, prior to the public hearing on July 8, 2003, the Engineer of Work had found it necessary to amend the Boundary Map and to modify the preliminary Engineer's Report due to certain changes to the parcels in the assessment district, including, but not limited to, elimination of certain parcels from the assessment district at the request of the property owners and revisions to the spread of the assessments to conform to the latest subdivisions of the parcels; and

WHEREAS, an Amended Boundary Map designated “Amended Boundary Map of Assessment District No. 2003-1, City of Brentwood, Contra Costa County, State of California” and a Final Engineer’s Report have been prepared by the Engineer of Work and filed with the City Clerk for presentation to the City Council for consideration; and

WHEREAS, there has been filed with the City Clerk a Waiver and Consent executed by each owner of the parcels upon which an assessment has been levied, waiving its entitlement to pay the assessment in cash within the 30-day cash payment period, and consenting to the modifications and changes made to the Engineer’s Report between the preliminary approval thereof on May 13, 2003 and the final approval thereof on July 8, 2003, without further notice and hearing.


NOW, THEREFORE, BE IT RESOLVED as follows:

Section 1. The foregoing recitals are true and correct and the City Council so finds and determines.

Section 2. The City Council finds that any and all protests against the proposed acquisition and/or construction of public improvements (specifically all written protests not withdrawn in writing before the conclusion of the protest hearing) are made by the owners of less than one half of the area of the land to be assessed. The City Council hereby overrules each of these protests, written and oral.

Section 3. This City Council intends to comply with the requirements of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 by proceeding under Part 7.5 of said Act. As directed by the City Council, the Engineer of Work has included in the written engineer's report all of the information required by Section 2961 of the California Streets and Highways Code.

Section 4. The City Council hereby finds that the Engineer of Work, in the Final Engineer’s Report has fairly and properly apportioned the cost of the acquisition and/or construction of the Improvements to each parcel of land in the assessment district in proportion to the estimated benefits to be received by each parcel, respectively, from the Improvements. The City Council hereby confirms and levies each individual assessment as stated in the Final Engineer’s Report.

Section 5. This City Council intends, pursuant to subparagraph (f) of Section 10204 of the California Streets and Highways Code, to provide for an annual assessment upon each of the parcels of land in the proposed assessment district to pay various costs and expenses incurred from time to time by the City and not otherwise reimbursed to the City which result from the administration and collection of assessment installments or from the administration or registration of the improvement bonds and the various funds and accounts pertaining thereto.

Section 6. The Amended Boundary Map is hereby approved. The City Clerk is directed to have the Amended Boundary Map filed for record in the office of the County Recorder of the County of Contra Costa no later than 15 days after the adoption of this resolution by the City Council.

Section 7. Subject to the provisions of Section 10 hereof, the City Council hereby approves the Final Engineer’s Report and each component part of it, including each exhibit incorporated by reference in the report.

Section 8. The City Council hereby orders the acquisition and/or construction of the Improvements as detailed in the Final Engineer’s Report.

Section 9. Bonds representing unpaid assessments, and bearing interest at a rate not to exceed twelve percent (12%) per annum, will be issued in the manner provided by the Improvement Bond Act of 1915 (Division 10, Streets and Highways Code), and the last installment of the bonds shall mature not to exceed twenty nine (29) years from the second day of September next succeeding twelve (12) months from their date.

Section 10. The City Council hereby finds and determines that authorized representative of the owner of each of the parcels assessed in these proceedings has executed and filed with the City Clerk a form of Consent and Waiver by which the entitlement otherwise given to each such owner to pay all or any part of the subject assessment or assessments in cash within the 30-day cash payment period has been waived, and by which the property owner consents to the changes to the Engineer’s Report between the preliminary approval thereof on May 13, 2003 and the final approval thereof on July 8, 2003, without further notice and hearing. Accordingly, this City Council hereby authorizes and directs the City Treasurer to proceed forthwith, without the necessity of the 30 day cash payment period otherwise required, to provide for the issuance, sale and delivery of limited obligation improvement bonds in a principal amount equal to the assessments levied. The Paid and Unpaid List is hereby approved by the City Council and the City Treasurer is authorized to sign the Paid and Unpaid List. The City Treasurer shall prepare the auditor’s record pursuant to the Streets and Highways Code and shall transmit said auditors record to the County of Contra Costa. The assessment installments for the bonds issued for the District shall be apportioned to all property in the District.

Section 11. The City Clerk is hereby directed to record the Final Engineer's Report in the office of the City Engineer. The City Clerk is hereby further directed to record the assessment diagram contained in the Final Engineer's Report and a notice of assessment in the office of the County Recorder of the County of Contra Costa, and to publish a notice of assessment in the Ledger Dispatch, all in the time, form and manner as required by law.

Section 12. This resolution shall take effect immediately upon its passage.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting the 8th day of July 2003, by the following vote:


CLERK’S CERTIFICATE
I, Karen Diaz, City Clerk of the City of Brentwood, do hereby certify as follows:

The foregoing resolution is a full, true and correct copy of a resolution duly adopted at a regular meeting of the City Council of said City duly and regularly held at the regular meeting place thereof on the 8th day of July, 2003, of which meeting all of the members of said City Council had due notice and at which a majority thereof were present; and that at said meeting said resolution was adopted by the following vote:

AYES: Councilmembers

NOES:

ABSENT:


An agenda of said meeting was posted at least 72 hours before said meeting at City Hall, 150 City Park Way, Brentwood, California 94513, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda.

I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes.

Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect.

Dated: _________________, 2003


Karen Diaz, CMC
City Clerk of, City of Brentwood


Exhibit A


DESCRIPTION OF IMPROVEMENTS

The City Council intends to order the acquisition of the following improvements under the authority of the Municipal Improvement Act of 1913:
1. Balfour Road

Balfour Road includes roadway, utility and intersection improvements that include Balfour Road, Balfour Way, and utility connections to and from the area of improvement. Specifically,

A. Balfour Road: approximately 1,000 LF of frontage roadway and utility improvements;

B. Balfour Way: approximately 1,000 LF of roadway and utility improvements.

C. Offsite Utilities: approximately 2,500-LF of storm drainage pipes, approximately 1,150-LF of waterlines and approximately 2,100-LF of sanitary sewer lines and associated appurtenances for each system.

2. Empire Avenue

Empire Avenue includes approximately 2,120-LF of roadway and utility improvements.

3. Lone Tree Way

Lone Tree Way includes approximately 760-LF of frontage roadway and utility improvements.

4. Prepayment of Roadway Facilities Fee

Prepayment of roadway facilities fees to fund Capital Improvements to the City's roadway System.

a) $646,750 for Western Pacific Housing's "Brighton Station" Tract 8601.
b) $248,080 for Western Pacific Housing's "Providence Place" Tract 8557.
c) $252,450 for Western Pacific Housing's "Providence Place" Tract 8556.
d) $171,156 for California Sun Properties' "Deer Ridge" Tract 8485.
e) $463,500 for California Sun Properties' "Deer Ridge" Tract 8486.
f) $534,845 for California Sun Properties' "Deer Ridge" Tract 8487.
g) $135,482 for California Sun Properties' "Deer Ridge" Tract 8488.
h) $299,432 for California Sun Properties' "Deer Ridge" Tract 8489.
I) $557,394 for California Sun Properties' "Deer Ridge" Tract 8490.


5. Prepayment of Water Facilities Fee

Prepayment of water improvement fees to fund Capital Improvements to the City's Water Distribution System.

a) $776,100 for Western Pacific Housing's "Brighton Station" Tract 8601.
b) $624,800 for Meritage Homes' "Sterling Pinnacle" Tract 8603.
c) $45,819 for Western Pacific Housing's "Providence Place" Tract 8557.
d) $416,868 for Meritage Homes' "Sterling Preserve II" Tract 8546.

6. Prepayment of Wastewater Facilities Fee

Prepayment of wastewater improvement fees to fund Capital Improvements to the City's Wastewater Treatment System.

a) $118,441 for Western Pacific's "Brighton Station" Tract 8601
b) $754,600 for Meritage Homes' "Sterling Pinnacle" Tract 8603.
c) $362,724 for Meritage Homes' "Sterling Preserve II" Tract 8546.

7. Prepayment of Parks and Trails Fee

Prepayment of parks and trails fees to accelerate projects within the city.

a) $764,160 for Western Pacific Housing's "Brighton Station" Tract 8601.
b) $512,600 for Meritage Homes' "Sterling Pinnacle" Tract 8603.
c) $138,600 for Western Pacific Housing's "Providence Place" Tract 8557.
d) $164,693 for Western Pacific Housing's "Providence Place" Tract 8556.
e) $395,010 for Meritage Homes' "Sterling Preserve II" Tract 8546.

8. Redemption of 96-1 Reassessment Bonds

a) $61,541 for Blackhawk-Nunn "Brentwood Country Club" Tract 7816, Parcel "O".

9. Redemption of 93-3 Assessment Bonds

a) $211,628 for California Sun Properties' "Deer Ridge" Tract 8485.
b) $573,161 for California Sun Properties' "Deer Ridge" Tract 8486.
c) $661,339 for California Sun Properties' "Deer Ridge" Tract 8487.
d) $167,540 for California Sun Properties' "Deer Ridge" Tract 8488.
e) $370,349 for California Sun Properties' "Deer Ridge" Tract 8489.
f) $784,788 for California Sun Properties' "Deer Ridge" Tract 8490.

Possible Additional Items of Work include:

- Lone Tree Way
- Fairview Avenue
- Empire Avenue
- Shady Willow Lane
- Balfour Road

RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD DETERMINING SIGNIFICANT PUBLIC BENEFITS TO THE CITY OF BRENTWOOD FROM THE SALE OF LOCAL OBLIGATIONS TO THE BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY; APPROVING THE FORM AND SUBSTANCE OF A TRUST AGREEMENT AND AUTHORIZING CHANGES THERETO AND EXECUTION THEREOF; PROVIDING FOR THE ISSUANCE OF THE CITY OF BRENTWOOD LIMITED OBLIGATION IMPROVEMENT BONDS, ASSESSMENT DISTRICT NO. 2003 1; APPROVING THE SALE OF SAID BONDS (WHICH ESTABLISHES THE MATURITIES OF AND INTEREST RATES ON SAID BONDS); APPROVING THE FORMS AND SUBSTANCE OF A LOCAL OBLIGATION PURCHASE CONTRACT; A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT DERIVED THEREFROM; A CONTINUING DISCLOSURE AGREEMENT; THE FUNDING, ACQUISITION AND DISCLOSURE AGREEMENTS.; AND AUTHORIZING RELATED ACTIONS AND THE EXECUTION OF RELATED DOCUMENTS TO IMPLEMENT THE PROPOSED FINANCING PLAN

WHEREAS, the City Council (the “Council”) of the City of Brentwood (the “City”), on May 13, 2003, adopted its Resolution of Intention No. 2866, (the “Resolution of Intention”), relating to the acquisition and/or construction of certain proposed public improvements in an assessment district in the City of Brentwood designated “Assessment District No. 2003-1” (the “District”), as described therein, pursuant to the provisions of the Municipal Improvement Act of 1913, which said Resolution of Intention provided that serial and/or term bonds to represent unpaid assessments and to bear interest at a maximum rate not to exceed 12% would be issued in the manner provided by the Improvement Bond Act of 1915 (Division 10, commencing with Section 8500, of the Streets and Highways Code of the State of California) (the “1915 Act”), and that said bonds would mature not to exceed twenty-nine (29) years from the second day of September next succeeding twelve (12) months from their date, reference being hereby made to the Resolution of Intention for further particulars; and

WHEREAS, an assessment and diagram were thereafter duly made and filed with this City Council, and after a hearing duly noticed and held, said assessment was confirmed, levied and approved by resolution adopted by this City Council on July 8, 2003; and

WHEREAS, said assessment and diagram were authorized to be duly recorded in the office of the Superintendent of Streets (being the City Engineer) of the City of Brentwood, and said diagram shall be recorded in the office of the County Recorder of the County of Contra Costa, all in the time, form and manner required by law; and

WHEREAS, said assessment was in the total amount of $17,338,512 and was apportioned upon the several subdivisions of land in the District in proportion to the estimated benefits to be received by such subdivisions, respectively, from said work, acquisitions and improvements as shown in said assessment; and a notice of assessment was authorized to be duly recorded in the office of the County Recorder of the County of Contra Costa, all in time, form and manner required by law; and

WHEREAS, notice of the levy of said assessment, and notice otherwise as required by law, has been authorized to be duly given by publication in the time, form and manner required by law, and the owners of all of the property proposed to be assessed in said assessment district have waived their rights to pay their assessment in cash and to receive notice of assessment by mail; and

WHEREAS, the Treasurer of the City (the “Treasurer”) certified and filed with this City Council a complete list of all paid assessments in the aggregate amount of $0.00; and

WHEREAS, the Treasurer has determined that the total of unpaid assessments is $17,338,512 and this City Council has determined that the aggregate amount of unpaid assessments is $17,338,512; and

WHEREAS, the City has determined to issue its City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2003-1 (the “Local Obligations”) as provided herein, limited to an aggregate principal amount of $17,338,512 which represents the amount of the total unpaid assessments; and

WHEREAS, in connection with the funding for the acquisition and/or construction of public improvements under the Capital Improvement Financing Plan (the “CIFP 2003-1”), the Brentwood Infrastructure Financing Authority (the “Authority”), acting through its Board Members (the “Authority Board”), authorized and issued its CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003 (the “Revenue Bonds”), pursuant to the Trust Agreement (the “Trust Agreement”) dated as of August 1, 2003, by and among the Authority, the City of Brentwood (the “City”) and U.S. Bank National Association (the “Trustee”), for the purpose of purchasing from the City its City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2003-1 (the “Local Obligations”). The net proceeds of sale of the Local Obligations shall be utilized by the City to pay for certain acquisition and/or construction of public improvements in and for Assessment District No. 2003-1 under the CIFP 2003-1 (the “Assessment District”), including prepayment of certain unpaid assessments in the City’s Assessment District Nos. 93-3 and Reassessment District No. 96-1; and

WHEREAS, the Authority has authorized the issuance of and sale to RBC Dain Rauscher Inc., as underwriter (the “Underwriter”), of its Revenue Bonds, with the net proceeds of sale thereof (after funding a reserve fund and payment of costs of issuance) to be utilized to purchase from the City the Local Obligations; and

WHEREAS, pursuant to Section 6586.5 of the Government Code, a notice of public hearing was duly published by the City as required by law in the Ledger Dispatch, a newspaper of general circulation in the County of Contra Costa, to consider the proposed financing of the acquisition and/or construction of certain public improvements within the City by the issuance by the Authority of its Revenue Bonds, and whether there are any significant benefits to the City from such proposed financing, including the more efficient delivery of local services and demonstrable savings to the City such as savings in effective interest rate, bond preparation, bond underwriting or bond issuance costs (in accordance with Section 6586 of the California Government Code). A proof of publication of the notice of public hearing is on file in the office of the City Clerk; and

WHEREAS, such public hearing was duly convened by the City Council on July 8, 2003 at the time and place as set forth in the notice of public hearing, and at such public hearing the City Council heard all interested persons desiring to be heard; and

WHEREAS, evidence of the public benefits to the City from the proposed financing was presented by the Underwriter; and
WHEREAS, the City Council has considered the presentation given by the Underwriter and is fully advised in the premises; and

WHEREAS, the City has determined pursuant to Section 6588(v) of the Government Code to sell the Local Obligations to the Brentwood Infrastructure Financing Authority (the “Authority”) pursuant to a Local Obligation Purchase Contract (the “Local Obligation Purchase Contract”) by and between the City and the Authority, and hereby finds and determines that such sale will result in significant public benefits including demonstrable savings in effective interest rate, bond preparation, bond underwriting discount, original issue discount or bond issuance costs and more efficient delivery of local agency services to residential and commercial development; and

WHEREAS, in furtherance of implementing the proposed CIFP 2003-1, there has been filed with the City Clerk for consideration and approval by this City Council the form of a Trust Agreement by and among the Authority, the City and the Trustee, dated as of August 1, 2003, under the terms of which (1) the Revenue Bonds are to be issued and the assessment revenues (received by the Authority as holder of the Local Obligations) are to be administered to pay the principal of and interest on the Revenue Bonds and (2) the City will covenant for the benefit of Owners of the Revenue Bonds to provide certain credit information on an annual basis; and

WHEREAS, the City, and the Trustee desire to enter into a Continuing Disclosure Agreement (the “Continuing Disclosure Agreement”), dated as of the date of issuance of the Local Obligations in the form and substance as presented to this meeting, for the purpose of making undertakings to provide certain annual financial information and notice of material events as required by Securities Exchange Commission Rule 15c2-12; and

WHEREAS, the City desires to enter into a Funding, Acquisition and Disclosure Agreement with each of the Developers (as that term is defined in the Trust Agreement) (collectively, the “Funding, Acquisition and Disclosure Agreements”), dated as of July 8, 2003, in the form and substance as presented to this meeting; and

WHEREAS, being fully advised in the matter of the proposed CIFP 2003-1 plan, this City Council wishes to approve the financing as described above.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brentwood, as follows:

Section 1. The foregoing recitals are true and correct, and this City Council so finds and determines.
Section 2. This City Council has reviewed all proceedings heretofore taken relative to the foregoing and has found, as a result of such review, and does hereby find and determine that all acts, conditions and things required by law to exist, to happen and to be performed precedent to and in the issuance of the Local Obligations as hereinafter authorized and provided do exist, have happened and have been performed in due time, form and manner as required by law, and the City is now authorized pursuant to each and every requirement of law to issue the Local Obligations in the manner and form as provided in this resolution.
Section 3. The City Council hereby determines that (1) the public improvements to be acquired and/or constructed under the CIFP 2003-1 are located within the geographic boundaries of the City; and (2) the City Council hereby approves the financing of the acquisition of the public improvements and determines that there are significant public benefits to the City from the proposed financing in that there will be demonstrable savings to the City from the issuance and sale by the Authority of the Revenue Bonds, including savings in bond preparation, bond underwriting and bond issuance costs (in accordance with Section 6586 of the California Government Code).
Section 4. The Local Obligations shall be issued as provided herein upon the security of the aggregate amount of unpaid assessments (together with the interest thereon) and shall represent and shall be secured by said assessments in accordance with the provisions of said 1915 Act and pursuant to the provisions of the Resolution of Intention and proceedings taken there under. The Local Obligations shall be limited to the aggregate principal amount of $17,338,512 as hereinafter set forth and shall be known as the “City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2003-1.”
The Local Obligations shall be issued as fully registered bonds, shall be of the denomination of $1.00 or any integral multiple of $1.00 (except possibly for Bond No. 1 which may be an odd amount if the aggregate principal amount is not evenly divided by $1.00), as determined by the registered owners thereof (not exceeding the principal amount of Local Obligations maturing at any one time) (“Authorized Denominations”). The dated date of the Local Obligations shall be determined by the City Manager or the Director of Finance, or designee thereof, pursuant to Section 15 and shall mature and bear interest as hereinafter provided in Section 15.

The Local Obligations shall bear interest from the interest payment date next preceding the date of authentication and registration thereof, unless such date of authentication and registration is on a day during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such interest payment date, both inclusive, in which event they shall bear interest from such interest payment date, or unless such date of authentication and registration is on a day on or before the fifteenth (15th) day of the month next preceding the first interest payment date, in which event they shall bear interest from the date of initial issuance thereof. Interest shall be payable on the date specified in Exhibit A of the Local Obligation Purchase Contract, and thereafter semiannually on March 2 and September 2 of each year until and at the respective maturity dates of the Local Obligations.

The interest on and principal of and redemption premiums, if any, on the Local Obligations shall be payable in lawful money of the United States of America at the office of the Treasurer of the City in Brentwood, California. Payment of the interest on the Local Obligations due on or before the maturity or prior redemption thereof shall be made by check mailed to the registered owners of the Local Obligations at their addresses as they appear on the registration books maintained by the Treasurer at the close of business as of the fifteenth (15th) day of the month prior to each such interest payment date, and payment of the principal of and redemption premiums, if any, on the Local Obligations shall be made only upon surrender thereof by the registered owners thereof on their maturity dates or on redemption prior to maturity to the Treasurer.

Any Local Obligation may be redeemed in whole or in part in integral multiples of the minimum authorized denomination of the Local Obligations on the second day of March or September in any year, at the option of the City, upon payment of the principal amount thereof and interest accrued thereon to the date of redemption, together with a premium equal to three percent (3%) of such principal amount redeemed; provided, that the City shall proceed pursuant to Part 11.1 of the 1915 Act in determining those Local Obligations or portions thereof to be redeemed and the manner of the redemption thereof; and provided further, that notice of redemption of any Local Obligation shall be given by the City as provided in the 1915 Act.

Pursuant to Section 15, Exhibit A to the Local Obligation Purchase Contract may provide that one or more maturities of the Local Obligations shall be term bonds, and shall be subject to mandatory redemption on September 2 in the years, and in the amounts, as provided in Exhibit A to the Local Obligation Purchase Contract. In the event terms bonds are specified, such mandatory redemptions shall be made upon notice as provided in this section, shall be at a price equal to the principal amount of terms bonds to be redeemed, plus accrued interest to the redemption date, without premium and the redemption price shall be paid from the Redemption Fund. Any term bonds to be redeemed shall be selected by the Treasurer by lot in any manner the Treasurer deems fair. In the event any term bonds are redeemed in part pursuant to the optional redemption provisions hereof, the scheduled amount of mandatory redemptions of such term bonds set forth in Exhibit A to the Local Obligation Purchase Contract shall be reduced proportionately.

This City Council declares and determines that it does not obligate itself to advance, and will not advance, funds from the City treasury to cure any deficiency which may occur at any time in the Redemption Fund created in Section 10 of this resolution.

Section 5. (a) The Local Obligations shall initially be issued and registered in the name of the Trustee, as assignee of the Authority, and shall initially be issued as one Local Obligation for each maturity, as authorized in Section 4 of this resolution.
(b) In the case of any transfer of ownership of the Local Obligations to any other person, and upon receipt of such outstanding Local Obligations by the Treasurer together with a written request of the Trustee and the Authority to the Treasurer, new Local Obligations shall be executed and delivered in such denominations and numbered in such manner as determined by the Treasurer and registered in the names of such persons as are requested in such written request of the Authority, subject to the limitations of Section 4 of this resolution; and thereafter, such Local Obligations shall be transferred pursuant to Section 8 of this resolution; provided, that the Treasurer shall not be required to deliver such new Local Obligations on a date prior to sixty (60) days after receipt of such written request.
(c) The City and the Treasurer shall be entitled to treat the person in whose name any such Local Obligation is registered as the owner thereof for all purposes hereof and any applicable laws, notwithstanding any notice to the contrary received by the Treasurer or the City; and the City and the Treasurer shall have no responsibility for transmitting payments to, communication with, notifying, or otherwise dealing with any persons other than the registered owners of such Local Obligations; and neither the City nor the Treasurer shall have any responsibility or obligation, legal or otherwise, to any other party, except the registered owner of any such Local Obligations.
(d) So long as such outstanding Local Obligations are registered in the name of the Trustee, the City and the Treasurer shall cooperate with the Trustee, as sole registered owner, in effecting payment of the interest on and principal of and redemption premiums, if any, on such Local Obligations by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due in accordance with the Trust Agreement.
Section 6. The Local Obligations shall be in substantially the form, the blanks to be filled in with appropriate words or figures, as shown in Exhibit A, attached hereto and incorporated herein.
Section 7. The Treasurer of the City and the City Clerk, or the deputy thereof, are hereby authorized and directed, respectively, as such officers, to execute each of the Local Obligations on behalf of the City, manually or by use of their engraved, printed or lithographed facsimile signatures, and the City Clerk or the deputy thereof, is hereby authorized and directed to affix the official seal of the City thereto which seal may be manually impressed or engraved, printed, lithographed or otherwise placed by facsimile thereon. Such signing and sealing as herein provided shall be a sufficient and binding execution of the Local Obligations by the City. In case either of such officers whose signature appears on the Local Obligations shall cease to be such officer before the delivery of the Local Obligations to the purchaser, such signature shall nevertheless be valid and sufficient for all purposes the same as though such officer had remained in office until the delivery of the Local Obligations. Only such of the Local Obligations as shall bear thereon a certificate of registration and authentication in the form set forth in Exhibit A, executed and dated by the Treasurer, shall be entitled to any benefits hereunder or be valid or obligatory for any purpose, and such certificate shall be conclusive evidence that the Local Obligations so authenticated have been duly authorized, executed, issued and delivered hereunder and are entitled to the benefits hereof.
Section 8. The Treasurer shall pay interest on the Local Obligations due on or before the maturity or prior redemption thereof to the registered owners thereof as their names appear at the close of business as of the fifteenth (15th) day of the month next preceding each interest payment date on the registration books required to be kept by the Treasurer pursuant to this section as the registered owners thereof, such interest to be paid by check mailed to such registered owners at their addresses appearing on such books or at such other addresses as they may have filed in writing with the Treasurer for that purpose, or by wire transfer so long as the Local Obligations are registered in the name of the Trustee, and to pay to such registered owners the principal of and redemption premiums, if any, on the Local Obligations upon presentation and surrender of the Local Obligations to the Treasurer at maturity or on redemption prior to maturity.
The Treasurer will keep at his or her office in Brentwood, California, sufficient books for the registration, transfer and exchange of the Local Obligations, and upon presentation for such purpose the Treasurer shall, under such reasonable regulations as he or she may prescribe, register or transfer or exchange Local Obligations on such books as hereinafter provided.

Any Local Obligation may be transferred or exchanged on such books by the registered owner thereof, in person or by such registered owner’s duly authorized attorney, upon payment by the person requesting such transfer or exchange of any tax or other governmental charge required to be paid with respect to such transfer or exchange and upon surrender of such Local Obligation for cancellation accompanied by delivery of a duly executed written instrument of transfer or exchange in a form approved by the Treasurer. Whenever any Local Obligations shall be surrendered for transfer or exchange, the Treasurer and the City Clerk, or the deputy thereof, shall execute and the Treasurer shall authenticate and deliver a new Local Obligations of authorized denominations and of the same maturity date aggregating the principal amount of the surrendered Local Obligations. The City and the Treasurer may deem and treat the registered owner of any Local Obligation as the absolute owner of such Local Obligation for the purpose of receiving payment thereof and for all other purposes, whether such Local Obligation shall be overdue or not, and neither the City nor the Treasurer shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of and redemption premium, if any, on such Local Obligation shall be made only to such registered owner as above provided, which payment shall be valid and effectual to satisfy and discharge liability on such Local Obligation to the extent of the sum or sums so paid.

Section 9. The unpaid assessments in the aggregate amount of $17,338,512, as hereinabove referred to and as determined by the Treasurer and the City Council, together with interest thereon computed at the rate specified in the Local Obligations (which interest shall begin to run with respect to an amount of such unpaid assessments equal to the amount of the Local Obligations from the date of the Local Obligations), shall, in accordance with and consistent with the Improvement Bond Act of 1915, remain and constitute a trust fund for the redemption and payment of the principal of the Local Obligations and for the interest due thereon, and said assessments and each installment thereof and the interest and penalties thereon shall constitute a lien against the lots and parcels of land on which they are made until paid. The Treasurer of the City shall annually make a record in his or her office showing the several installments of principal and interest on said assessments which are to be collected in each year during the term of the Local Obligations and shall transmit such record to the Auditor-Controller of Contra Costa County; and an annual installment of said unpaid assessments shall be payable and shall be collected in each year corresponding in amount to the amount of the Local Obligations unpaid and to accrue that year, which amount shall be sufficient to pay the Local Obligations as the same become due, and an annual installment of interest on said unpaid assessments shall be payable and shall be collected in each year corresponding in amount to the amount of interest which will accrue on the Local Obligations outstanding for such year, which amount shall be sufficient to pay the interest thereon that shall become due in the next succeeding March and September. The annual portion of said unpaid assessments coming due in any year, together with the annual interest on such assessments, shall be payable in the same manner and at the same time and in the same number of installments as the general taxes on real property in Contra Costa County are payable, and said unpaid assessment installments and said annual interest on said unpaid assessments shall be payable and become delinquent on the same dates and bear the same proportionate penalties and interest after delinquency as do general taxes on real property in Contra Costa County.
This City Council hereby covenants with the owners of the Local Obligations that, in the event any assessment or installment thereof, including any interest thereon, is not paid when due, it will order and cause to be commenced no later than one hundred fifty (150) days following the date of any delinquency in any assessment or installment thereof securing the Local Obligations, and thereafter diligently prosecute, judicial foreclosure proceedings upon such delinquency and interest thereon, which foreclosure proceedings shall be commenced and prosecuted without regard to available surplus funds of the City; provided, that the City shall not be required to commence or prosecute any such foreclosure action so long as (i) the City, in its sole discretion, advances funds to the Redemption Fund sufficient in both time and amount to pay when due scheduled principal of and interest on the Local Obligations and (ii) the amounts on deposit in the Reserve Fund held under the Trust Agreement (the “Reserve Fund”) are equal to the Reserve Requirement (as defined in the Trust Agreement). Pursuant to Section 8831 of the Streets and Highways Code, the City shall be entitled to reasonable attorney’s fees from the proceeds of any foreclosure sale.

Section 10. There is hereby created and established a fund to be known as the “City of Brentwood, Assessment District No. 2003-1 Redemption Fund,” (referred to herein as the “Redemption Fund”) which fund shall be kept by the Treasurer and shall constitute a trust fund for the benefit of the registered owners of the Local Obligations. All sums received by the Treasurer which are received from the collection of unpaid assessments (except for those amounts allocable to administrative expenses), and of the interest and penalties thereon, shall upon receipt be deposited in said fund. At the time of the issuance of the Local Obligations, the City shall deposit in the Redemption Fund from the proceeds of sale of the Local Obligations the amount representing capitalized interest, and all sums to become due for the principal of and the interest on the Local Obligations shall be withdrawn by the Treasurer from said fund for use for the payment of the principal of and the interest on the Local Obligations, and the Local Obligations and the interest thereon shall not be paid out of any other funds.
There is hereby created and established within the Redemption Fund a Prepayment Account. A property owner may prepay the assessment and remove the lien of the same from his or her property by paying to the City the sum of the following amounts: (a) the amount of any delinquent installments of principal and interest, together with penalties accrued to the date of prepayment; (b) the unpaid, non-delinquent principal of the assessment, including principal posted to the tax roll for the current fiscal year but not yet paid; (c) an allowance for redemption premium, calculated by multiplying the amount of the unmatured principal (exclusive of principal due during the fiscal year of prepayment) by the redemption premium, being three percent (3%), of the principal amount so prepaid; (d) a reasonable fee, to be fixed by the City, for the cost of administering the prepayment and the advance redemption of Local Obligations; (e) interest accrued to the next interest prepayment date which is not less than 90 days after the date of prepayment; and (f) less a credit for the Reserve Fund calculated to be an amount equal to the ratio of the total amount initially deposited to the Reserve Fund to meet the Reserve Requirement with respect to the Local Obligations to the total amount originally assessed in the proceedings for the issuance of the Local Obligations, as specified in an Officer’s Certificate to be delivered to the Trustee upon such prepayment pursuant to the Trust Agreement. Upon receiving any prepayment of an assessment, the City shall disburse the amount thereof as follows: (a) the administrative fee shall be deposited in the general fund of the City; (b) delinquent principal, interest and penalties shall be deposited in the Redemption Fund unless the Reserve Fund has been depleted on account of the delinquencies, in which case the delinquent amounts and penalties shall be transferred to the Trustee to be deposited instead in the Reserve Fund held under the Trust Agreement; (c) the installment of principal due in the fiscal year of prepayment shall be deposited in the Redemption Fund; (d) interest accrued to the next Interest Payment Date shall be deposited in the Redemption Fund; and (e) the balance of such prepayment shall be deposited in the Prepayment Account to be used to advance the maturity of Local Obligations to the next redemption date as provided in Part 11.1 of the Improvement Bond Act of 1915.

All moneys in said fund shall be invested in any lawful investments of City funds (in accordance with the City’s investment policy) (“Permitted Investments”) maturing not later than the date on which such moneys are required for disbursement as herein provided, and all interest earned on such investments shall be credited to said fund. All surplus remaining in said fund after payment of all Local Obligations and the interest thereon shall be applied as directed by the City.

Section 11. (a) There is hereby created and established a fund to be known as the “City of Brentwood, Assessment District No. 2003-1 Improvement Fund,” (referred to herein as the “Improvement Fund”) which shall be kept by the Trustee which is hereby appointed as fiscal agent (the “Fiscal Agent”) for purposes of this section. After making the deposit in the Redemption Fund required by Section 10, the City shall deposit all remaining proceeds of the sale of the Local Obligations (together with the paid assessments) in the Improvement Fund held by the Fiscal Agent. All moneys in said fund shall be invested by the Fiscal Agent in Permitted Investments maturing not later than the date on which such moneys are required for disbursement as herein provided. All interest earned on such investments in the Improvement Fund (and in the accounts within the Improvement Fund specified below) shall be credited to said fund and accounts, respectively.
From the amount deposited in the Improvement Fund, the Fiscal Agent shall transfer the amount specified in the Local Obligation Purchase Contract provided for in Section 15 to the CIFP 2003-1 Acquisition Account.

The moneys in the Improvement Fund and the Acquisition Account shall be applied, pursuant to the Funding, Acquisition and Disclosure Agreements provided exclusively for the purpose of paying the cost of constructing and/or acquiring the improvements for which Assessment District No. 2003-1 has been formed, including payment of the incidental expenses in connection with such improvements; provided, that after completion of said improvements and the payment of all claims from the Improvement Fund and all accounts therein, notice of which shall be given to the Fiscal Agent by the Treasurer, any surplus moneys remaining in the Improvement Fund and any accounts therein (as determined by the City Council), or such portion thereof as is allowed by law, shall be used as follows (i) transferred to the Redemption Fund to be the used as a credit on the assessment or (ii) transferred to the Redemption Fund to be used to redeem Local Obligations on the next redemption date, in either case in accordance with the provisions of Section 10427.1 of the Streets and Highways Code. Amounts in the Improvement Fund or any account therein shall be disbursed by the Fiscal Agent as specified by the Treasurer only upon receipt by the Fiscal Agent of a written certificate from the Treasurer stating that (1) the conditions to the release of such funds have been satisfied, (2) the name of the person to whom payment is due, (3) the amount to be paid and the fund or account from which it is to be paid, (4) the purpose for which the obligation to be paid was incurred, (5) there has not been filed with or served upon the City notice of any lien, right to lien or attachment upon, stop notice or claim affecting the right to receive payment of, any of the moneys payable to any of the persons named in such certificate or written requisition, which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen or mechanics liens accruing by mere operation of law.

(b) The City shall from time to time, subject to any agreement between the City and the Fiscal Agent then in force, pay to the Fiscal Agent compensation for its services, reimburse the Fiscal Agent for all its advances and expenditures, including, but not limited to, advances to and fees and expenses of independent accountants, counsel and engineers or other experts employed by it in the exercise and performance of its powers and duties hereunder.
The City may in the exercise of its sole discretion, upon thirty (30) days prior written notice to the Fiscal Agent, remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto which successor may include the Treasurer of the City.

The Fiscal Agent may at any time resign by giving written notice to the City. Upon receiving such notice of resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing provided; however, that in the event that the City does not appoint a successor Fiscal Agent within thirty (30) days following receipt of such notice of resignation, the resigning Fiscal Agent may petition an appropriate court having jurisdiction to appoint a successor Fiscal Agent. Any resignation or removal of the Fiscal Agent and appointment of a successor Fiscal Agent shall become effective only upon the acceptance of appointment by the successor Fiscal Agent.

Section 12. Reserved.
Section 13. The City Clerk, or the deputy thereof, is directed to cause the Local Obligations to be prepared in typewritten form on safety paper and to cause the blank spaces thereof to be filled in to comply with the provisions hereof, and to procure their execution by the proper officers, and thereafter to deliver them, when so executed, to the Treasurer, who shall authenticate them and deliver them to the purchaser thereof on receipt by the City of the purchase price thereof. The Treasurer and the City Clerk, or the deputy thereof, are further authorized and directed to make, execute and deliver to the purchaser of the Local Obligations a signature certificate in the form customarily required by purchasers of municipal bonds, certifying to the genuineness and due execution of the Local Obligations, and the City Attorney is authorized and directed to make, execute and deliver to the purchaser of the Local Obligations a no-litigation certificate in the form customarily required by purchasers of municipal bonds, certifying to all facts within his or her knowledge relative to any litigation which may or might affect the City or said officers or the Local Obligations, and the Treasurer is further authorized and directed to make, execute and deliver to the purchaser of the Local Obligations a receipt in the form customarily required by purchasers of municipal bonds, evidencing the payment of the purchase price of the Local Obligations, which receipt shall be conclusive evidence that said purchase price has been paid and has been received by the City. Any purchaser or subsequent taker or holder of the Local Obligations is hereby authorized to rely upon and shall be justified in relying upon such signature certificate, such no-litigation certificate and such receipt with respect to the Local Obligations executed, sold and delivered pursuant to the authority of this resolution. Additionally, the officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents and contracts which they may deem necessary or advisable in order to consummate the sale, execution and delivery of the Local Obligations and otherwise to carry out, give effect to and comply with the terms and intent of this resolution, the Local Obligations, and the Local Obligation Purchase Contract; and any such actions heretofore taken by such officers in connection therewith are hereby ratified, confirmed and approved.
Section 14. The form and substance of the Trust Agreement is hereby approved. The City Manager or the Director of Finance and Information Systems (the “Director of Finance”), or designee thereof, is hereby authorized to approve modifications and changes to the Trust Agreement in consultation with the City Attorney, such approval to be conclusively evidenced by execution thereof. The City Manager or the Director of Finance, or designee thereof, is hereby authorized to execute the Trust Agreement, as modified, and the City Clerk, or the deputy thereof, is hereby authorized to attest its execution.
Section 15. The form and substance of the Local Obligation Purchase Contract for the Local Obligations (the “Local Obligations Purchase Contract”) is hereby approved. The Local Obligation Purchase Contract makes reference to Exhibit A to be attached thereto to set forth and establish, among other things, the Dated Date, the maturity schedule and the interest rates for the Local Obligations. This City Council hereby authorizes the City Manager or the Director of Finance, or designee thereof, to approve Exhibit A after the date of this resolution and upon the condition that (i) notwithstanding the foregoing, Exhibit A to the Local Obligation Purchase Contract shall not specify an interest rate on any Local Obligation in excess of twelve percent (12%) per annum; a true interest cost on all the Local Obligations in excess of twelve percent (12%) per annum; more than one rate of interest for the Local Obligations maturing in one year; more than one rate of interest on any one bond; nor a maturity date for any Local Obligation after September 2, 2033, and (ii) the Dated Date shall not be later than January 31, 2004. The Local Obligation Purchase Contract shall specify the distribution of proceeds from the sale of the Local Obligations, including amounts to be deposited in the Improvement Fund (and the CIFP 2003-1 Acquisition Account therein) and amounts to prepay certain assessments in Assessment District No. 93-3 and Reassessment District No. 96-1.
Following attachment of the approved Exhibit A, and subject to such modification and revisions to the body thereof not inconsistent with the essential terms thereof, which modifications shall be approved in the interest of the City by the City Manager or the Director of Finance, or designee thereof, in consultation with the City Attorney, and concurrently with execution thereof by the Treasurer/Controller or any other authorized representative of the Authority, the City Manager or the Director of Finance, or designee thereof, is authorized to execute the Local Obligation Purchase Contract on behalf of the City.

Section 16. The form and substance of the Preliminary Official Statement describing the Authority’s CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003 and the Local Obligations is hereby approved. The facts contained therein, as of this date, are true and correct in all material respects, and said Preliminary Official Statement neither contains any untrue statement of a material fact nor omits to state any material fact necessary to make any statement therein not misleading in light of the circumstances under which it was made.
This City Council hereby finds and determines that said Preliminary Official Statement is and shall be deemed “nearly final” for purposes of Rule 15c(2)-12 of the Securities and Exchange Commission, and the City Manager or the Director of Finance, or designee thereof, is hereby authorized to execute a certificate to such effect in the customary form upon request of the Underwriter and is hereby authorized to execute the final Official Statement.

The City Manager or the Director of Finance, or designee thereof, is authorized to approve corrections and additions to the Preliminary Official Statement by supplement or amendment thereto, by appropriate insertions, or otherwise as appropriate, provided that such corrections or additions shall be regarded by the City Manager or the Director of Finance, or designee thereof, as necessary to cause the information contained therein to conform to facts material to the Local Obligations or the Authority’s assessment revenue bonds or to the proceedings of this City Council or the Authority Board or that such corrections or additions are in form rather than in substance.

Section 17. The form and substance of the Continuing Disclosure Agreement is hereby approved. The City Manager or the Director of Finance, or designee thereof, is hereby authorized and directed to execute and deliver said Continuing Disclosure Agreement in substantially the form on file with the City Clerk, or the Deputy thereof, and presented to this meeting, with such changes as may be approved in the interest of the City by the City Manager or the Director of Finance, or designee thereof, in consultation with the City Attorney, such approval to be conclusively evidenced by such execution and delivery.
Section 18. The forms and substance of the Funding, Acquisition and Disclosure Agreements are hereby approved. The City Manager or the Director of Finance, or designee thereof, is hereby authorized and directed to execute and deliver a Funding, Acquisition and Disclosure Agreement with each Developer that will be constructing improvements for the District in substantially the form on file with the City Clerk, or the deputy thereof, and presented to this meeting, with such changes as may be approved in the interest of the City by the City Manager or the Director of Finance, or designee thereof, in consultation with the City Attorney, such approval to be conclusively evidenced by such execution and delivery.
Section 19. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents, or to make any necessary modifications thereto, which are acceptable to the City Manager, Director of Finance, City Attorney and Bond Counsel and which they deem necessary or advisable in order to consummate the issuance, sale and delivery of the Local Obligations and to carry out the purposes of this Resolution.
Section 20. This resolution shall take effect immediately upon its passage.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting on the 8th day of July, 2003, by the following vote:



EXHIBIT A
[FORM OF LOCAL OBLIGATIONS]
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF CONTRA COSTA
REGISTERED REGISTERED
NUMBER R-_________ $__________
CITY OF BRENTWOOD
LIMITED OBLIGATION IMPROVEMENT BOND
ASSESSMENT DISTRICT NO. 2003-1

INTEREST
RATE MATURITY
DATE BOND
DATE
% September 2, ______ __________, 2003

REGISTERED OWNER: U.S. BANK NATIONAL ASSOCIATION, as Trustee
PRINCIPAL AMOUNT: DOLLARS

Under and by virtue of the Improvement Bond Act of 1915, Division 10 (commencing with Section 8500) of the Streets and Highways Code (the “Act”), the City of Brentwood in the State of California (the “City”) will, out of the Redemption Fund hereinafter referred to, pay to the registered owner set forth above on the maturity date set forth above (subject to the right of prior redemption hereinafter reserved) the principal amount set forth above in lawful money of the United States of America, and in like manner will pay interest from the interest payment date next preceding the date on which this bond is authenticated and registered (unless this bond is authenticated and registered on a day during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such interest payment date, both inclusive, in which event it shall bear interest from such interest payment date, or unless this bond is authenticated and registered on a day on or before the fifteenth (15th) day of the month next preceding the first interest payment date, in which event it shall bear interest from __________, 2003) until payment of such principal sum shall have been discharged, at the interest rate per annum set forth above, payable semiannually on March 2 and September 2 in each year commencing on March 2, 2004; and the City Council has declared and determined that it does not obligate itself to advance, and will not advance, funds from the City treasury to cure any deficiency which may occur at any time in said Redemption Fund. Both the principal hereof and redemption premium hereon are payable at the office of the Treasurer of the City (the “Treasurer”) in Brentwood, California, and the interest hereon is payable by check mailed to the owner hereof at the owner’s address as it appears on the registration books of the Treasurer, or at such address as may have been filed in writing with the Treasurer for that purpose, at the close of business as of the fifteenth (15th) day of the month next preceding each interest payment date.

This bond is one of several annual series of bonds of like date, tenor and effect, but differing in amounts, maturities and interest rates, issued by the City under the Act and the resolution providing for its issuance (the “Resolution”) for the purpose of providing funds to pay for the improvements described in said proceedings, and is secured by the moneys in the Redemption Fund provided in the Resolution and by the unpaid portion of assessments levied for the payment hereof, and, including principal and interest, is payable exclusively out of said fund.

This bond will continue to bear interest after maturity at the rate above stated; provided, it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient moneys in said Redemption Fund with which to pay the same. If it is not presented at maturity, interest thereon will run until maturity.

This bond or any portion of it in the amount of one dollar ($1.00) or any integral multiple thereof, may be redeemed and paid in advance of maturity upon the second day of March or September in any year by giving at least thirty (30) days’ notice by registered or certified mail to the registered owner hereof at the owner’s address as it appears on the registration books of the Treasurer by paying principal and accrued interest together with a redemption premium equal to three percent (3%) of the principal amount of bonds redeemed.

In addition, the term bonds maturing on September 2, ____ and on September 2, ____ are subject to mandatory redemption in advance of maturity, without premium, as set forth in the Local Obligation Purchase Contract dated __________, 2003.

This bond is transferable by the registered owner hereof, in person or by the owner’s attorney duly authorized in writing, at the office of the Treasurer, subject to the terms and conditions provided in the Resolution, including the payment of certain charges, if any, upon surrender and cancellation of this bond. Upon such transfer, a new registered bond or bonds, of any authorized denomination or denominations, of the same maturity, for the same aggregate principal amount, will be issued to the transferee in exchange therefore.

The bonds shall be registered only in the name of an individual (including joint owners and including the Brentwood Infrastructure Financing Authority), a corporation, a partnership or a trust.

Neither the City nor the Treasurer shall be required to make such exchange or registration of transfer of bonds during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such payment date, both inclusive.

The City and the Treasurer may treat the registered owner hereof as the absolute owner for all purposes, and the City and the Treasurer shall not be affected by any notice to the contrary.

This bond shall not be entitled to any benefit under the Act or the resolution providing for its issuance, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Treasurer.

IN WITNESS WHEREOF, the Council of the City of Brentwood has caused this bond to be signed in facsimile by the Treasurer of the City and by the City Clerk, and has caused its corporate seal to be impressed hereon, all as of __________, 2003.

CITY OF BRENTWOOD


_______________________________________
Treasurer

_______________________________________
City Clerk



[Form of Certificate
of Authentication and Registration]
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the bonds described in the within-mentioned Resolution which has been authenticated and registered on _________________.

_____________________________
Treasurer of the
City of Brentwood

[Form of Assignment]
ASSIGNMENT
For value received the undersigned do(es) hereby sell, assign and transfer unto ____________________________________ __________________________________ the within bond and do(es) hereby irrevocably constitute and appoint _______________________ _____________________________________attorney to transfer the same on the register of the Treasurer, with full power of substitution in the premises.


_____________________________
Date:
SIGNATURE GUARANTEED:

_____________________________
NOTE: The signature(s) to 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. Signature must be guaranteed by an eligible guarantor institution.

CLERK’S CERTIFICATE
I, Karen Diaz, City Clerk of the City of Brentwood, do hereby certify as follows:

The foregoing resolution is a full, true and correct copy of a resolution duly adopted at a regular meeting of the City Council of said City duly and regularly held at the regular meeting place thereof on the 8th day of July, 2003, of which meeting all of the members of said City Council had due notice and at which a majority thereof were present; and that at said meeting said resolution was adopted by the following vote:

AYES: Councilmembers

NOES:

ABSENT:

An agenda of said meeting was posted at least 72 hours before said meeting at City Hall, 150 City Park Way, Brentwood, California 94513, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda.

I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes.

Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect.
Dated: _____________, 2003.

_________________________________________
Karen Diaz, CMC
City Clerk, City of Brentwood



TRUST AGREEMENT
by and among
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY,
CITY OF BRENTWOOD
and
U.S. BANK NATIONAL ASSOCIATION
as Trustee
______________________
Relating to
$__________
Brentwood Infrastructure Financing Authority
CIFP 2003-1 Infrastructure Revenue Bonds
Series 2003
______________________
Dated as of August 1, 2003



TRUST AGREEMENT
This Trust Agreement, dated as of August 1, 2003, is by and among the BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY, a joint exercise of powers agency established pursuant to the laws of the State of California (the “Issuer”), the CITY OF BRENTWOOD, a municipal corporation organized and existing under the Constitution and laws of the State of California, (the “Local Agency”) and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America , as trustee (the “Trustee”).

WHEREAS, the Local Agency has completed its legal proceedings under the Municipal Improvement Act of 1913 (Division 12 of the Streets & Highways Code) in connection with the formation of Assessment District No. 2003-1, City of Brentwood, Contra Costa County, California, established by the Local Agency, as it may be modified or subdivided from time to time by the Local Agency (the “CIFP 2003-1 District”);
WHEREAS, the Local Agency is empowered under the provisions of the Improvement Bond Act of 1915 (Division 10 of the Streets and Highways Code) or, the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division 11.5 of the Streets and Highways Code) to undertake legal proceedings for the levy of assessments, reassessments or and for the issuance, sale and delivery of bonds (“local obligations”) upon the security of the recorded assessment or reassessment liens;

WHEREAS, the Local Agency has determined to issue its City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2003-1 (the “Local Obligations”) for the CIFP 2003-1 District to fund the improvements therefore;

WHEREAS, the Issuer is empowered under the provisions of Article 4, Chapter 5, Division 7, Title 1 of the California Government Code to issue its bonds for the purpose of purchasing various local obligations issued by certain local agencies, including the Local Obligations;

WHEREAS, the Issuer has authorized and undertaken to issue the Brentwood Infrastructure Financing Authority CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003 (the “Bonds”) in order to provide funds to purchase the Local Obligations, to fund a reserve fund securing the Bonds and to pay the costs of issuance;

WHEREAS, the Issuer has determined that the estimated amount necessary to finance the purchase of the Local Obligations, to fund a reserve fund securing the Bonds and to pay the costs of issuance will require the issuance of the Bonds in the aggregate principal amount of _____________________ Dollars ($__________); and

WHEREAS, the Issuer and the Local Agency have determined that all things necessary to make the Bonds (as hereinafter defined), when authenticated by the Trustee and issued as provided in this Trust Agreement, the valid, binding and legal obligations of the Issuer according to the import thereof and hereof have been done and performed;
NOW, THEREFORE, THIS TRUST AGREEMENT WITNESSETH:
That the Issuer and the Local Agency, in consideration of the premises, the acceptance by the Trustee of the trusts hereby created, and other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to secure the payment of the interest on and the principal of and the redemption premiums, if any, on all Bonds Outstanding hereunder from time to time according to their tenor and effect, and such other payments required to be made under the Trust Agreement, and to secure the observance and performance by the Issuer and the Local Agency of all the agreements, conditions, covenants and terms expressed and implied herein and in the Bonds, do hereby assign, bargain, convey, grant, mortgage and pledge a security interest unto the Trustee, and unto its successors in the trusts hereunder, and to them and their successors and assigns forever, in all right, title and interest of the Issuer and the Local Agency in, to and under, subject to the provisions of the Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein, each and all of the following (collectively the “Trust Estate”):

(a) the proceeds of sale of the Bonds;
(b) the Revenues (as herein defined);
(c) the amounts in the Funds (as herein defined) established by this Trust Agreement, except amounts in the Rebate Fund; and
(d) the Local Obligations.

TO HAVE AND TO HOLD IN TRUST all of the same hereby assigned, conveyed and pledged or agreed or intended so to be to the Trustee and its successors and assigns forever for the equal and ratable benefit of the Owners from time to time of the Bonds authenticated hereunder and issued by the Issuer and outstanding and without any priority as to the Trust Estate of any one Bond over any other (except as expressly provided in or permitted by the Trust Agreement), upon the trusts and subject to the agreements, conditions, covenants and terms hereinafter set forth;
AND THIS TRUST AGREEMENT FURTHER WITNESSETH, and it is expressly declared, that all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all of the rights and property hereby assigned, bargained, conveyed, granted, mortgaged and pledged are to be dealt with and disposed of under, upon and subject to the agreements, conditions, covenants, purposes, terms, trusts and uses as hereinafter expressed, and the Issuer and the Local Agency have agreed and covenanted, and do hereby agree and covenant, with the Trustee and with the Owners from time to time of the Bonds, as follows:
ARTICLE I

DEFINITIONS
SECTION 1.01. Definitions. The terms set forth below shall have the following meanings in the Trust Agreement, unless the context clearly otherwise requires:
“ Accountant” shall mean an independent certified public accountant, or a firm of independent certified public accountants, selected by the Issuer.

“Act” shall mean Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code, as amended and supplemented from time to time.

“Annual Debt Service” shall mean, for each Fiscal Year, the sum of (1) the interest falling due on all Outstanding Bonds in such Fiscal Year, assuming that all Principal Installments are paid as scheduled (except to the extent that such interest is to be paid from the proceeds of sale of any Bonds), and (2) the scheduled Principal Installments of the Outstanding Bonds, payable in such Fiscal Year.

“Appraisal” shall mean, with respect to Assessed Parcels (i) an opinion of value of an independent appraiser who is a Member of the Appraisal Institute (“MAI”) and is credentialed by the State of California Office of Real Estate Appraisers or (ii) the assessed value (land and improvements) shown on the most recent equalized assessment roll of the County of Contra Costa.

“Assessed Parcel” shall mean a parcel of property which is within any CIFP 2003-1 District and upon which is levied assessments or reassessments securing Local Obligations.
“ Assessment District No. 93 3” shall mean Assessment District No. 93 3 established by the City of Brentwood under CIFP 94 1.

“Average Annual Debt Service” shall mean the average Fiscal Year Annual Debt Service over all Fiscal Years during which the Bonds are scheduled to remain Outstanding.

“Authorized Denominations” shall mean five thousand dollars ($5,000) and any integral multiple thereof, but not exceeding the principal amount of Bonds maturing on any one date.
“ Authorized Officer”, when used with reference to the Issuer, shall mean the Chair, Vice-Chair, Treasurer/Controller or any other Person authorized by the Issuer in a Written Order or resolution to perform an act or sign a document on behalf of the Issuer for purposes of the Trust Agreement, and, when used with reference to the Local Agency, shall mean the City Manager, the City Treasurer, Director of Finance, or any other Person authorized by the Local Agency in a Written Order or resolution to perform an act or sign a document on behalf of the Local Agency for the purposes of the Trust Agreement.

“Blanket Letter of Representations” shall mean the letter of the Issuer and the Trustee delivered to and accepted by the Depository on or prior to the issuance of the Bonds setting forth the basis on which the Depository serves as depository for such Bonds as originally executed or as it may be supplemented or revised or replaced by a letter to a substitute depository.

“Bonds” shall mean any Bond or all of the Bonds of the Brentwood Infrastructure Financing Authority, CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003, authorized and issued by the Issuer and authenticated by the Trustee and delivered under this Trust Agreement.

“Bond Counsel” shall mean an attorney-at-law, or a firm of such attorneys, of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on obligations issued by states and their political subdivisions.

“Bond Register” shall mean the registration books specified as such in Section 2.07.

“Book-Entry Bonds” shall mean any Bonds designated as Book-Entry Bonds pursuant to this Trust Agreement and registered in the name of the Nominee pursuant to Section 2.06.
“ Business Day” shall mean any day other than (i) a Saturday or Sunday or (ii) a day on which the Corporate Trust Office of the Trustee is closed.

“Cash Flow Certificate” shall mean a written certificate executed by a Cash Flow Consultant.
“ Cash Flow Consultant” shall mean Sutro & Co., Incorporated; provided, that the Local Agency may appoint a different Cash Flow Consultant with the consent of the Owners of at least 60% in aggregate principal amount of Outstanding Bonds. In the event a different Cash Flow Consultant is appointed, the Cash Flow Consultant shall be a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field relating to municipal securities such as the Bonds, appointed and paid by the Local Agency or the Issuer and who, or each of whom:

(1) is in fact independent and not under the domination of the Local Agency or the Issuer;
(2) does not have any substantial interest, direct or indirect, with the Local Agency or the Issuer; and
(3) is not connected with the Local Agency or the Issuer as a member, officer or employee of the Local Agency or the Issuer, but who may be regularly retained to make annual or other reports to the Local Agency or the Issuer.
The Cash Flow Consultant shall not be deemed to have a “financial advisory relationship” with the Issuer within the meaning of California Government Code Section 53590(c).

“Chair” shall mean the Chair of the Issuer.

“CIFP 94-1” shall mean Capital Improvement Financing Plan 94-1, adopted by the Local Agency on February 28, 1995, as amended and supplemented from time to time.

“CIFP 2003-1” shall mean Capital Improvement Financing Plan 2003-1, adopted by the Local Agency on July 8, 2003, as amended and supplemented from time to time.

“CIFP 2003-1 District” shall mean Assessment District No. 2003-1, City of Brentwood, Contra Costa County, California, established by the Local Agency, as it may be modified or subdivided from time to time by the Local Agency.

“City Manager” shall mean the City Manager of the Local Agency.

“Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations there under.

“Continuing Disclosure Agreement” shall mean that certain Continuing Disclosure Agreement, dated as of the date of delivery of the Bonds, by and between the Local Agency and the Trustee.

“Corporate Trust Office” shall mean the office of the Trustee in San Francisco, at which at any particular time corporate trust business shall be administered, or such other office as it shall designate, except that with respect to presentation of Bonds for payment, transfer or exchange, such term shall mean the corporate trust office of U.S. Bank National Association in St. Paul, Minnesota.

“Dated Date” shall mean the dated date of the Bonds.

“Depository” shall mean the securities depository acting as Depository pursuant to Section 2.06.
“ Developer” means each of the following developers, who own or control (under option) property within the CIFP 2003-1 District: Western Pacific Housing, Inc.; Meritage Homes, Northern California; California Sun Properties, LLC; Balfour Partners LLC; and Blackhawk-Nunn Active Adult Communities of Brentwood, L.P.

“Director of Finance” shall mean the Director of Finance and Information Systems of the City.

“DTC” shall mean The Depository Trust Company, New York, New York, and its successors and assigns.

“Event of Default” shall mean any event of default specified as such in Section 8.01.

“Expenses” shall mean all costs of issuing the Bonds and the Local Obligations and all administrative costs of the Local Agency or the Issuer that are charged directly or apportioned to the administration of the Local Obligations and the Bonds, such as salaries and wages of employees, audits, overhead and taxes (if any), legal and financial consultant fees and expenses, amounts necessary to pay to the United States of America or otherwise to satisfy requirements of the Code in order to maintain the tax-exempt status of the Bonds, and compensation, reimbursement and indemnification of the Trustee, together with all other reasonable and necessary costs of the Local Agency or the Issuer or charges required to be paid by it to comply with the terms of any refunding escrow agreement, this Trust Agreement, or the Bonds or in connection with the acquisition of the Local Obligations.

“Expense Fund” shall mean the Fund by that name established pursuant to Section 5.01.

“Fiscal Year” shall mean the fiscal year of the Issuer, which at the date hereof is the period commencing on July 1 in each calendar year and ending on June 30 in the following calendar year.

“Funds” shall mean, collectively, the Revenue Fund, the Interest Fund, the Principal Fund, the Redemption Fund, the Reserve Fund, the Proceeds Fund, the Local Obligation Fund, the Expense Fund and the Rebate Fund, including all accounts therein.

“Government Obligations” shall mean and include any of the following securities: United States Treasury Obligations - State and Local Government Series (SLGS); and United States Treasury bills, notes and bonds.

“Information Services” shall mean the following information services: (i) Financial Information, Inc.’s “Daily Called Bond Service,” 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor, (ii) Kenny Information Services “Called Bond Service,” 65 Broadway Street, 28th Floor, New York, New York 10004, (iii) Moody’s “Municipal and Government,” 99 Church Street, 8th Floor, New York, New York 10007, Attention: Municipal News Reports, and (iv) Standard and Poor’s “Called Bond Record,” 25 Broadway, 3rd Floor, New York, New York 10004; or, in accordance with then-current guidelines of the Securities and Exchange Commission, such other services providing information with respect to called bonds, or no such services, as the Issuer may designate in an Officer’s Certificate delivered to the Trustee.

“Interest Fund” shall mean the Fund by that name established pursuant to Section 5.01.

“Interest Payment Date” shall mean March 2 and September 2 in each year, commencing on March 2, 2004.

“Investment Securities” shall mean and include any of the following securities, to the extent permitted by the laws of the State.

(i) Direct obligations (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America and obligations of the Government National Mortgage Association), or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America.
(ii) Bonds, debentures or notes or other evidence of indebtedness payable in cash issued by the United States Treasury which represents the full faith and credit of the United States of America or the following Federal agencies: Federal Home Loan Bank, Export Import Bank of the United States, Federal Financing Bank, Federal Farm Credit Bank, Farmer’s Home Administration, Federal Housing Administration, Maritime Administration, Public Housing Corporation, Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
(iii) Certificates of deposit issued by commercial banks, state banking corporations (including the Trustee or any of its affiliates), savings and loan associations and mutual savings banks and properly secured at all times by collateral security described in (i) or (ii) above and rated at least “A” or better by S&P.
(iv) The following investments fully insured by the Federal Deposit Insurance Corporation (“FDIC”): (a) certificates of deposit, (b) savings accounts, (c) deposit accounts, or (d) depository receipts of banks, state banking corporations (including the Trustee or any of its affiliates), savings and loan associations and mutual savings banks.
(v) Repurchase agreements or collateralized investment agreements with banks, state banking corporations, savings and loan associations, or any broker-dealer with “retail customers” which falls under the jurisdiction of the Securities Investors Protection Corporation (SIPC), provided that: (a) the collateralization is at least one hundred six percent (106%), valued monthly, with remaining terms and maturities less than or equal to one year, (b) the Trustee or a third party on behalf of the Trustee will have possession of such obligations, (c) the Trustee will have perfected a first priority security interest in such obligations, (d) such obligations are free and clear of claims of third parties, and (e) failure to maintain the requisite collateral percentage will require the Trustee to liquidate the collateral, and (f) eligible collateral will include: (I) direct obligations of the Department of the Treasury of the United States of America, (including obligations of the Government National Mortgage Association), and (II) bonds, debentures or notes or other evidence of indebtedness payable in cash issued by any one or a combination of any of the following federal agencies: the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
(vi) Money market funds rated at least “A” or better by S&P, or money market funds comprised of obligations described in clause (i) above (or repurchase agreements or interest rate swap agreements collateralized by such obligations) including funds for which the Trustee, its parent and affiliates provide investment advisory or other management services.
(vii) Investment agreements or contracts issued by entities whose long-term debt or claims paying ability of which are rated in one of the top two long-term rating categories by S&P in form acceptable to the Issuer, provided that any such contract or agreement shall in any event provide that if the investment rating assigned to the long term unsecured debt obligations of the financial institution by S&P falls below “A”, the Trustee shall require immediate repayment of all funds invested there under, with prior notification to S&P.
(viii) Tax-exempt obligations rated in either of the two highest rating categories by S&P, including money market funds comprised solely of such obligations.
(ix) The Local Agency Investment Fund (Sections 53600-53609 of the Government Code of the State of California), as now in effect or as may be amended or recodified from time to time; provided, that such investment is held in the name and to the credit of the Trustee; and provided further, that the Trustee may restrict such investment if required to keep monies available for the purposes of the Trust Agreement.
(x) Shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State of California which invests exclusively in investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the Government Code of the State of California, as it may be amended; provided that such shares are held in the name and to the credit of the Trustee.
“ Issuer” shall mean the Brentwood Infrastructure Financing Authority, a joint exercise of powers agency established pursuant to a Joint Exercise of Powers Agreement, dated March 14, 1995 by and between the Local Agency and the Redevelopment Agency of the City of Brentwood, and the laws of the State, and its successors.

“Lien Amount” means, with respect to any Assessed Parcel, the sum of (A) the aggregate principal amount of the Local Obligations attributable to such Assessed Parcel plus (B) the aggregate principal amount of bonds, notes or other evidences of indebtedness other than the Local Obligations then outstanding and payable from assessments or reassessments to be levied on such Assessed Parcel, plus (C) a portion of the aggregate principal amount of bonds, notes or other evidences of indebtedness issued under the Mello-Roos Community Facilities District Act of 1982 and payable at least partially from special taxes to be levied on the Assessed Parcel (except to the extent such special taxes are made expressly subordinate to the assessments securing Local Obligations) (the “Other Mello-Roos Bonds”) equal to the aggregate principal amount of the Other Mello-Roos Bonds multiplied by a fraction, the numerator of which is the amount of special taxes levied for the Other Mello-Roos Bonds on the Assessed Parcel and the denominator of which is the total amount of special taxes levied for the Other Mello-Roos Bonds on all parcels of land securing the Other Mello-Roos Bonds (such fraction to be determined based upon the maximum special taxes which could be levied the year in which maximum annual debt service on the Other Mello-Roos Bonds occurs), based upon information from the most recent available fiscal year.

“Local Agency” shall mean the City of Brentwood, California, and its successors.

“Local Obligation Fund” shall mean the fund by that name established pursuant to Section 5.01.

“Local Obligation Resolution” shall mean the resolution adopted by the City Council of the Local Agency on July 8, 2003, and providing for the issuance of the Local Obligations upon the security of unpaid assessments in the CIFP 2003-1 District and all resolutions supplemental thereto.

“Local Obligation Revenue” shall mean all moneys collected and received by the Local Agency on account of unpaid assessments, or reassessments, or securing Local Obligations including amounts collected in the normal course via the Contra Costa County property tax roll and thereafter remitted to the Local Agency, Property Owner Prepayments, and amounts received by the Local Agency or a result of superior court foreclosure proceedings brought to enforce payment of delinquent installments, but excluding there from any amounts explicitly included therein on account of collection charges, administrative cost charges, or attorneys fees and costs paid as a result of foreclosure actions.

“Local Obligations” shall mean the City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2003-1, in the principal amount of $__________, issued under the Local Obligation Statute for the CIFP 2003-1 District and acquired with the proceeds of the Bonds pursuant to Section 5.03.

“Local Obligation Statute” shall mean the Improvement Bond Act of 1915, Division 10 of the Streets and Highways Code (being Section 8500 and following thereof).

“Maximum Annual Debt Service” shall mean the largest Annual Debt Service during the period from the date of such determination through the final maturity date of any Outstanding Bonds.
“ Nominee” shall mean the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.06.

“Officer’s Certificate” shall mean a certificate signed by an Authorized Officer.

“Opinion of Bond Counsel” shall mean a legal opinion signed by a Bond Counsel.

“Outstanding” shall mean, with respect to the Bonds and as of any date, the aggregate of Bonds authorized, issued, authenticated and delivered under the Trust Agreement, except:

(a) Bonds canceled or surrendered to the Trustee for cancellation pursuant to Section 2.10;
(b) Bonds deemed to have been paid as provided in Section 12.02; and
(c) Bonds in lieu of or in substitution for which other Bonds shall have been authenticated and delivered pursuant to the Trust Agreement.
“ Owner” shall mean, as of any date, the Person or Persons in whose name or names a particular Bond shall be registered on the Bond Register as of such date.

“Participants” shall mean those broker-dealers, banks and other financial institutions from time to time for which the Depository holds the Bonds as securities depository.

“Person” shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.

“Principal Fund” shall mean the Fund by that name established pursuant to Section 5.01.

“Principal Installment” shall mean, with respect to any Principal Payment Date, the principal amount of Outstanding Bonds due on such date, or mandatory sinking account payment required to be paid on any Principal Payment Date and used to redeem a portion of any Bond on such date, if any.

“Principal Payment Date” shall mean September 2 of each year commencing September 2, 2004, and ending on the last date on which any Bonds are scheduled to mature.
“ Prior Assessments” means the existing assessment liens on certain property in the City’s Assessment District No. 93 3 and Reassessment District No. 96 1 which shall be paid off with a portion of the proceeds of the Local Obligations.

“Proceeds Fund” shall mean the Fund by that name established pursuant to Section 5.01.

“Property Owner Prepayments” shall mean that portion of Revenues which are initially paid to the Local Agency by or on behalf of a property owner to accomplish pay-off and discharge of a lien securing the Local Obligations (except the portion, if any, of such Revenues which represents accrued interest on the Local Obligations) and which are thereafter transmitted by the Local Agency to the Trustee, as assignee of the Issuer with respect to the Local Obligations, for deposit in the Redemption Fund for application in accordance with Section 5.07(c).

“Reassessment District No. 96 1” shall mean the Reassessment District No. 96 1 established by the City of Brentwood.

“Rebate Fund” shall mean the Fund by that name established pursuant to Section 5.01.

“Rebate Instructions” shall mean those calculations and directions required to be delivered to the Trustee by the Issuer pursuant to the Tax Certificate.

“Rebate Requirement” shall mean the Rebate Requirement defined in the Tax Certificate.

“Record Date” shall mean the fifteenth (15th) day of the month preceding any Interest Payment Date, whether or not such day is a Business Day.

“Redemption Fund” shall mean the Fund by that name established pursuant to Section 5.01.
“ Requisition of the Issuer” shall mean a requisition of the Issuer delivered to the Trustee pursuant to Section 5.11.

“Reserve Fund” shall mean the Fund by that name established pursuant to Section 5.01.
“ Reserve Requirement” shall mean, as of any date of calculation, Maximum Annual Debt Service on all then Outstanding Bonds; provided, that as of the date of issuance of the Bonds, the amount required to be deposited in the Reserve Fund shall not exceed the lesser of (i) Maximum Annual Debt Service on the Bonds, (ii) 125% of average Annual Debt Service on the Bonds, or (iii) 10% of the amount (within the meaning of Section 148 of the Code) of the Bonds. The Reserve Requirement with respect to the Bonds as of their date of issuance is $_________.

“Revenue Fund” shall mean the Fund by that name established pursuant to Section 5.01.

“Revenues” shall mean Local Obligation Revenues and all other amounts received by the Trustee as the payment of interest or premiums on, or the equivalent thereof, and the payment or return of principal of, or the equivalent thereof, all Local Obligations, whether as a result of scheduled payments or Property Owner Prepayments or remedial proceedings taken in the event of a default thereon, and all investment earnings on any moneys held in the Funds or accounts established hereunder, except the Rebate Fund.

“Secretary” shall mean the Secretary of the Issuer, or the deputy thereof.

“Securities Depositaries” shall mean the following registered securities depositaries: (i) The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax - 516/227-4039 or 4190, (ii) Midwest Securities Trust Company, Capital Structures-Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax - 312/663-2343, and (iii) Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Dex - 215/496-5058; or, in accordance with then-current guidelines of the Securities and Exchange Commission, such other securities depositaries, or no such depositaries, as the Issuer may designate in an Officer’s Certificate delivered to the Trustee.

“Series” shall mean, when used with reference to the Bonds, all of the Bonds authenticated and delivered on original issuance and identified pursuant to this Trust Agreement and any Bonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to the Trust Agreement.

“S&P” shall mean Standard and Poor’s Ratings Group, and its successors.

“Special Record Date” shall mean the date established by the Trustee pursuant to Section 2.02 as a record date for the payment of defaulted interest on the Bonds.

“State” shall mean the State of California.

“Supplemental Trust Agreement” shall mean any trust agreement supplemental to or amendatory of the Trust Agreement which is duly executed and delivered in accordance with the provisions of the Trust Agreement.

“Tax Certificate” shall mean that certificate, relating to various federal tax requirements, including the requirements of Section 148 of the Code, signed by the Issuer and the Local Agency on the date the Bonds are issued, as the same may be amended or supplemented in accordance with its terms.

“Treasurer” shall mean the Treasurer/Controller of the Issuer.

“Trust Agreement” shall mean this Trust Agreement dated as of August 1, 2003, among the Local Agency, the Issuer and the Trustee, pursuant to which the Bonds are to be issued, as amended or supplemented from time to time in accordance with its terms.

“Trustee” shall mean U.S. Bank National Association, a national banking association, duly organized and existing under the laws of the United States, in its capacity as trustee hereunder, and any successor as trustee under the Trust Agreement.

“Trust Estate” shall have the meaning ascribed thereto in the granting clause hereof.

“Vice-Chair” shall mean the Vice-Chair of the Issuer.

“Written Order”, when used with reference to the Issuer, shall mean a written direction of the Issuer to the Trustee signed by an Authorized Officer, and, when used with reference to the Local Agency, shall mean a written direction of the Local Agency to the Trustee signed by an Authorized Officer.

SECTION 1.02. Rules of Construction. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, and pronouns inferring the masculine gender shall include the feminine gender and vice versa. All references herein to particular articles or sections are references to articles or sections of the Trust Agreement. The headings and Table of Contents herein are solely for convenience of reference and shall not constitute a part of the Trust Agreement, nor shall they affect its meanings, construction or effect.
ARTICLE II

THE BONDS; TERMS OF THE BONDS
SECTION 2.01. Authorization. Bonds in unlimited amount may be issued at any time under and subject to the terms of this Trust Agreement. The Bonds shall be designated “Brentwood Infrastructure Financing Authority CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003.” The Issuer has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, happen or be performed precedent to and in connection with the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Issuer is now duly authorized, pursuant to each and every requirement of law, to issue the Bonds in the manner and form provided in this Trust Agreement. Accordingly, the Issuer hereby authorizes the issuance of the Bonds for the purpose of acquiring the Local Obligations, to fund a Reserve Fund, and to pay Expenses in connection with the issuance of the Bonds.
SECTION 2.02. The Bonds. There shall be issued under and secured by the Trust Agreement bonds in the form of fully registered bonds to be designated “Brentwood Infrastructure Financing Authority CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003” in the aggregate principal amount of _____________________ Dollars ($__________). The Bonds shall be dated as of the Dated Date and shall bear interest from the Dated Date at the rates specified in the table below, such interest being payable on each Interest Payment Date, and shall mature on the Principal Payment Dates in the following years in the following principal amounts, namely:
Maturity Date
(September 2)
Principal Amount
Interest Rate

2004 $ %
2005
2006
2007
2008
2009
2010
2011
20__
20__*
2033*
$__________
* Term bonds

The principal of and redemption premiums, if any, and interest on the Bonds shall be payable in lawful money of the United States of America. The Bonds shall be issued as fully registered bonds in Authorized Denominations (except possibly for Bond No. 1 which may be an odd amount), and shall be numbered as the Trustee shall determine. The Bonds shall be Book-Entry Bonds as provided in Section 2.06 and shall be initially registered in the name of “Cede & Co.” as nominee of DTC. The Bonds shall bear interest from the Dated Date. Payment of the interest on any Bond shall be made to the Person whose name appears on the Bond Register as the Owner thereof as of the close of business on the Record Date, such interest to be paid by check mailed by first class mail on the Interest Payment Date to the Owner at the address which appears on the Bond Register as of the Record Date, for that purpose; except that in the case of an Owner of one million dollars ($1,000,000) or more in aggregate principal amount of Bonds, upon written request of such Owner to the Trustee, in form satisfactory to the Trustee, received not later than the Record Date, such interest shall be paid on the Interest Payment Date in immediately available funds by wire transfer to an account in the United States. The principal of and redemption premiums, if any, on the Bonds shall be payable at the Corporate Trust Office, upon presentation and surrender of such Bonds. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months.

Notwithstanding any other provision herein contained, any interest not punctually paid or duly provided for, as a result of an Event of Default or otherwise, shall forthwith cease to be payable to the Owner on the Record Date and shall be paid to the Owner in whose name the Bond is authenticated at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof being given to the Owners by first class mail not less than ten (10) days prior to such Special Record Date.

SECTION 2.03. Form of Bonds. The Bonds and the certificate of authentication and assignment forms to appear thereon shall be in substantially the forms set forth in Exhibit A hereto, with such variations, insertions or omissions as are appropriate and not inconsistent herewith including, without limitation, variations to distinguish among different Series of Bonds.
SECTION 2.04. Bonds Mutilated, Destroyed, Stolen or Lost. In the event any Bond, whether temporary or definitive, is mutilated, lost, stolen or destroyed, the Issuer may execute and, upon its request in writing, the Trustee shall authenticate and deliver a new Bond of the same principal amount and maturity as the mutilated, lost, stolen or destroyed Bond in exchange and substitution for such mutilated Bond, or in lieu of and substitution for such lost, stolen or destroyed Bond.
Application for exchange and substitution of mutilated, lost, stolen or destroyed Bonds shall be made to the Trustee at the Corporate Trust Office. In every case the applicant for a substitute Bond shall furnish to the Trustee security or indemnification to the Trustee’s satisfaction. In every case of loss, theft or destruction of a Bond, the applicant shall also furnish to the Trustee evidence to the Trustee’s satisfaction of the loss, theft or destruction and of the identity of the applicant, and in every case of mutilation of a Bond, the applicant shall surrender the Bond so mutilated.

Notwithstanding the foregoing provisions of this section, in the event any such Bond shall have matured, and no default has occurred which is then continuing in the payment of the principal of or redemption premiums, if any, on or interest on the Bonds, the Trustee may pay the same (without surrender thereof except in the case of a mutilated Bond) instead of issuing a substitute Bond so long as security or indemnification is furnished as above provided.

Upon the issuance of any substitute Bond, the Trustee may charge the Owner of such Bond with its reasonable fees and expenses in connection therewith. Every substitute Bond issued pursuant to the provisions of this section by virtue of the fact that any Bond is lost, stolen or destroyed shall constitute an original additional contractual obligation of the Issuer, whether or not the lost, stolen or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of the Trust Agreement equally and proportionally with any and all other Bonds duly issued under the Trust Agreement to the same extent as the Bonds in substitution for which such Bonds were issued.

SECTION 2.05. Execution of Bonds. All the Bonds shall, from time to time, be executed on behalf of the Issuer by the manual or facsimile signature of the Treasurer and attested by the manual or facsimile signature of the Secretary.
If any of the officers who shall have signed any of the Bonds shall cease to be such officer of the Issuer before the Bond so signed shall have been actually authenticated by the Trustee or delivered, such Bonds nevertheless may be authenticated, issued and delivered with the same force and effect as though the Person or Persons who signed such Bonds had not ceased to be such officer of the Issuer, and any such Bond may be signed on behalf of the Issuer by those Persons who, at the actual date of the execution of such Bonds, shall be the proper officers of the Issuer, although at the date of such Bond any such Person shall not have been such officer of the Issuer.

SECTION 2.06. Book-Entry System. Each maturity of the Book-Entry Bonds shall be in the form of a separate single fully registered Bond (which may be typewritten). Upon initial issuance, the ownership of each such Book-Entry Bond shall be registered in the bond register in the name of the Nominee, as nominee of the Depository.
With respect to Book-Entry Bonds, the Issuer and the Trustee shall have no responsibility or obligation to any Participant or to any person on behalf of which such a Participant holds an interest in such Book-Entry Bonds. Without limiting the immediately preceding sentence, the Issuer and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in Book-Entry Bonds, (ii) the delivery to any Participant or any other person, other than an Owner as shown in the Bond Register, of any notice with respect to Book-Entry Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in Book-Entry Bonds to be redeemed in the event the Issuer redeems such in part, or (iv) the payment to any Participant or any other person, other than an Owner as shown in the Bond Register, of any amount with respect to principal of, premium, if any, or interest on Book-Entry Bonds. The Issuer and the Trustee may treat and consider the person in whose name each Book-Entry Bond is registered in the Bond Register as the absolute Owner of such Book-Entry Bond for the purpose of payment of principal, premium and interest with respect to such Book-Entry Bond, for the purpose of giving notices of redemption and other matters with respect to such Book-Entry Bond, for the purpose of registering transfers with respect to such Book-Entry Bond, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the Book-Entry Bonds only to or upon the order of the respective Owner, as shown in the Bond Register, or his respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Issuer’s obligations with respect to payment of principal of, premium, if any, and interest on the Book-Entry Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Bond Register, shall receive a Bond evidencing the obligation of the Issuer to make payments of principal, premium, if any, and interest pursuant to this Trust Agreement. Upon delivery by the Depository to the Trustee and Issuer of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to record dates, the word Nominee in this Trust Agreement shall refer to such nominee of the Depository.

In order to qualify the Book-Entry Bonds for the Depository’s book-entry system, the Issuer and the Trustee shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Issuer or the Trustee any obligation whatsoever with respect to persons having interests in such Book-Entry Bonds other than the Owners, as shown on the Bond Register. In addition to the execution and delivery of a Letter of Representations, the Issuer and the Trustee shall take such other actions, not inconsistent with this Trust Agreement, as are reasonably necessary to qualify Book-Entry Bonds for the Depository’s book-entry program.

In the event (i) the Depository determines not to continue to act as securities depository for any Series of Bonds initially designated as Book-Entry Bonds, or (ii) the Depository shall no longer so act and gives notice to the Trustee of such determination, then the Issuer will discontinue the book-entry system with the Depository. If the Issuer determines to replace the Depository with another qualified securities depository, the Issuer shall prepare or direct the preparation of a new single, separate, fully registered Bond for each of the maturities of such book-entry Bonds, registered in the name of such successor or substitute qualified securities depository or its nominee. If the Issuer fails to identify another qualified securities depository to replace the Depository, then the Bonds shall no longer be restricted to being registered in such Bond Register in the name of the Nominee, but shall be registered in whatever name or names Owners transferring or exchanging such Bonds shall designate, in accordance with provisions of Sections 2.07 and 2.08 hereof.

Notwithstanding any other provision of this Trust Agreement to the contrary, so long as any Book-Entry Bond is registered in the name of the Nominee, all payments with respect to principal of, premium, if any, and interest on such Book-Entry Bond and all notices with respect to such Book-Entry Bond shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository.

SECTION 2.07. Transfer and Exchange of Bonds. The Bonds may be transferred or exchanged and title thereto shall pass only in the manner provided in this Trust Agreement, and the Trustee shall keep books constituting the Bond Register for the registration and transfer of the Bonds as provided herein. All Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the Trustee, duly executed by the Owner or by his attorney duly authorized in writing and all such Bonds shall be surrendered to the Trustee and canceled by the Trustee pursuant to Section 2.10 hereof. The Issuer and the Trustee may deem and treat the Owner of any Bond as the absolute owner of such Bond for the purpose of receiving any payment on such Bond and for all other purposes of the Trust Agreement, whether such Bond shall be overdue or not, and neither the Issuer nor the Trustee shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid.
SECTION 2.08. Regulations with Respect to Exchanges or Transfers of Bonds.
(a) In all cases in which the privilege of exchanging or registering the transfer of Bonds is exercised, the Issuer shall execute and the Trustee shall authenticate and deliver Bonds in accordance with the provisions of the Trust Agreement. There shall be no charge to the Owner for any such exchange or registration of transfer of Bonds, but the Issuer may require the payment of a sum sufficient to pay any tax or other governmental charge required to be paid with respect to any such exchange or registration of transfer. Neither the Issuer nor the Trustee shall be required to register the transfer or exchange of any Bond during the period established by the Trustee for selection of Bonds for redemption or any Bond selected for redemption.
(b) Upon surrender for exchange or transfer of any Bond at the Corporate Trust Office of the Trustee, the Issuer shall execute (which may be by facsimile) and the Trustee shall authenticate and deliver in the name of the Owner (in the case of transfers) a new Bond or Bonds of Authorized Denominations, in the aggregate principal amount which the registered Owner is entitled to receive.
(c) New Bonds delivered upon any transfer or exchange shall be valid obligations of the Issuer, evidencing the same debt as the Bonds surrendered, shall be secured by this Trust Agreement and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered.
SECTION 2.09. Authentication of Bonds. No Bond shall be secured by the Trust Agreement or entitled to its benefits or shall be valid or obligatory for any purpose unless there shall be endorsed on such Bond the Trustee’s certificate of authentication, substantially in the form prescribed in the Trust Agreement, executed by the manual signature of a duly authorized signatory of the Trustee; and such certificate on any Bond issued by the Issuer shall be conclusive evidence and the only competent evidence that such Bond has been duly authenticated and delivered under the Trust Agreement.
SECTION 2.10. Cancellation of Bonds. Upon the surrender to the Trustee of any temporary or mutilated Bond or Bond surrendered for transfer or exchange, or Bonds purchased, redeemed or paid at maturity, the same shall forthwith be canceled and the Trustee shall destroy such Bonds and upon written request of the Issuer deliver a certificate of destruction with respect thereto to the Issuer.
SECTION 2.11. Bonds as Special Obligations. The Bonds shall be special, limited obligations of the Issuer, payable from, and secured as to the payment of the principal of and the redemption premiums, if any, and the interest on in accordance with their terms and the terms of the Trust Agreement solely by, the Trust Estate. The Bonds shall not constitute a charge against the general credit of the Issuer or any of its members, and under no circumstances shall the Issuer be obligated to pay principal of or redemption premiums, if any, or interest on the Bonds except from the Trust Estate. Neither the State nor any public agency (other than the Issuer) nor any member of the Issuer is obligated to pay the principal of or redemption premiums, if any, or interest on the Bonds, and neither the faith and credit nor the taxing power of the State or any public agency thereof or any member of the Issuer is pledged to the payment of the principal of or redemption premiums, if any, or interest on the Bonds. The payment of the principal of or redemption premiums, if any, or interest on, the Bonds does not constitute a debt, liability or obligation of the State or any public agency (other than the Issuer) or any member of the Issuer.
No agreement or covenant contained in any Bond or the Trust Agreement shall be deemed to be an agreement or covenant of any officer, member, agent or employee of the Issuer in his or her individual capacity and neither the members of the Issuer nor any officer or employee thereof executing the Bonds shall be liable personally on any Bond or be subject to any personal liability or accountability by reason of the issuance of such Bonds.
ARTICLE III

ISSUANCE OF BONDS
SECTION 3.01. Provisions for the Issuance of Bonds. The Bonds shall be executed by the Issuer and delivered to the Trustee for authentication, together with a Written Order certifying that all conditions precedent to the authorization of the Bonds have been satisfied and authorizing the Trustee to authenticate the Bonds. The Trustee shall authenticate and deliver the Bonds upon receipt of the Written Order described above, and upon the following having been made available to the Trustee:
(a) A copy of the resolution adopted by the Issuer approving the Trust Agreement and the execution and delivery by the Issuer of the Trust Agreement, duly certified by the Secretary to have been duly adopted by the Issuer and to be in full force and effect on the date of such certification;
(b) A Written Order directing that the Trustee authenticate the Bonds and containing instructions as to the delivery of the Bonds;
(c) The proceeds of sale of the Bonds;
(d) An Officer’s Certificate stating that the Issuer is not in default in the performance of any of the agreements, conditions, covenants or terms contained in the Trust Agreement; and
(e) A Cash Flow Certificate to the effect that, assuming that all payments are made with respect to the Local Obligations, (i) the Revenues, together with monies on deposit in other funds and accounts held under the Trust Agreement, will be sufficient to pay all scheduled principal and interest payments on the Bonds when due; and (ii) the redemption premiums, if any, on the Local Obligations payable in the event of early retirement of the Local Obligations, together with other Revenues available to the Trustee for such purpose, are sufficient to offset any difference between the interest to accrue on the Bonds to be paid or redeemed with the proceeds of prepayment of such Local Obligations (plus any redemption premium payable upon redemption of such Bonds) and the income to be earned on any investment of such proceeds (assured as of the date of payment thereof), in each case until the date of payment or redemption of Bonds, such that in no event will the prepayment of the Local Obligations cause the Trustee to have insufficient funds to pay Annual Debt Service when due after such redemption;
(f) An original executed counterpart of the Trust Agreement;
(g) The Local Obligations registered in the name of the Trustee; and
(h) An Opinion or Opinions of Bond Counsel addressing the validity and tax exempt status of the Bonds and the validity of the Local Obligations, subject to said exceptions as may be reasonable and appropriate.
SECTION 3.02. No Issuance of Additional Parity Bonds; Refunding Bonds. The Issuer may not issue any additional bonds on a parity with the Bonds hereunder issued. The Issuer may issue bonds for the purpose of refunding all of the Outstanding Bonds (and any bonds issued to refund the Bonds) hereunder and may secure said refunding bonds with the Local Obligations.
ARTICLE IV

REDEMPTION AND PURCHASE OF BONDS
SECTION 4.01. Privilege of Redemption and Redemption Price. Bonds subject to redemption prior to maturity pursuant to the Trust Agreement shall be redeemable, upon mailed notice as provided in this article, at such times and upon such terms as are contained in this article. Whenever, by the terms of the Trust Agreement, the Trustee is required or authorized to redeem Bonds, subject to Section 4.05, the Trustee shall select the Bonds to be redeemed, shall give the notice of redemption and shall pay out of moneys available therefore the redemption price thereof, plus interest accrued and unpaid to the redemption date, in accordance with the terms of this article.
SECTION 4.02. Extraordinary Redemption. The Bonds shall be subject to extraordinary redemption as a whole on any date, or in part on any Interest Payment Date, and shall be redeemed by the Trustee, from moneys transferred to the Redemption Fund pursuant to Section 5.07(c), and derived as a result of Property Owner Prepayments plus, if applicable, amounts transferred from the Reserve Fund pursuant to Section 5.10(b), at a redemption price equal to the principal amount thereof, together with a redemption premium equal to three percent (3%) of the principal amount of the Bonds to be redeemed, plus accrued interest to the redemption date.
SECTION 4.03. Optional Redemption of Bonds. The Bonds shall be subject to optional redemption as a whole on any date or in part on any Interest Payment Date, at the option of the Issuer from any moneys deposited in the Redemption Fund from any source for such purpose by the Issuer at a redemption price equal to the principal amount thereof, together with a redemption premium (computed upon the principal amount of the Bonds to be redeemed), equal to three percent (3%) plus accrued interest to the redemption date.
In the case of the optional redemption of any Outstanding Bonds, in addition to the documents required by Section 4.05, the Issuer shall deliver a Written Order to the Trustee stating its election to redeem Bonds, which such Written Order containing redemption instructions shall be delivered to the Trustee at least forty-five (45) days prior to the redemption date. In the event such Written Order containing redemption instructions is delivered to the Trustee, the Issuer shall pay or cause to be paid to the Trustee on or prior to the date on which the notice of redemption shall be given pursuant to Section 4.06 an amount which, in addition to other moneys (including the amount, to be transferred from the Reserve Fund pursuant to Section 5.10(b)), if any, available therefore held by the Trustee will be sufficient to redeem on the redemption date at the redemption price thereof, plus interest accrued and unpaid to the redemption date, the Outstanding Bonds identified in Written Orders delivered pursuant to Section 4.05; provided, that such amount may be delivered after such date and prior to the redemption date if such Written Order requires the notice of redemption to state that such redemption shall be conditioned upon the receipt of such funds.
SECTION 4.04. Mandatory Redemption of Bonds. (a) The Bonds maturing on September 2, 20__ are subject to mandatory redemption in part by lot on September 2 in each year commencing September 2, 20__ at the principal amount thereof plus accrued interest thereon to the date fixed for redemption in accordance with the following schedule:

Year
(September 2) Mandatory
Term Bond
Redemption

20__ $_______
20__ _______
20__ _______
20__ _______
20__ _______
20__ _______
20__ _______
20__ (maturity)
Total $


(b) The Bonds maturing on September 2, 2033 are also subject to mandatory redemption in part by lot on September 2 in each year commencing September 2, 20__ at the principal amount thereof plus accrued interest thereon to the date fixed for redemption in accordance with the following schedule:

Year
(September 2) Mandatory
Term Bond
Redemption

20__ $_______
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20__ _______
20__ _______
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20__ _______
20__ (maturity)
Total $


In the event that Bonds subject to mandatory redemption pursuant to this Section are redeemed in part prior to their stated maturity date from any moneys other than Principal Installments, the remaining Principal Installments for such Bonds shall be reduced proportionately in each year remaining until and including the final maturity date of such Bonds.

SECTION 4.05. Redemption Instructions. In the event a portion, but not all, of the Outstanding Bonds are to be redeemed pursuant to Section 4.02 or Section 4.03, the Trustee shall select the amounts and maturities of Bonds for redemption in accordance with a Written Order of the Issuer. Upon any prepayment of a Local Obligation or a determination to redeem Bonds pursuant to Section 4.03, the Local Agency and the Issuer shall deliver to the Trustee at least forty-five (45) days prior to the redemption date the following:
(i) A Written Order of the Issuer to the Trustee designating the maturities and amounts of Bonds to be redeemed and designating the reduction, if any, in the Reserve Requirement required pursuant to the Cash Flow Certificate delivered pursuant to subsection (ii) below, resulting from such redemption;
(ii) A Cash Flow Certificate certifying that the anticipated or scheduled Revenues to be received from the Local Obligations will be sufficient in time and amount (together with funds then held under the Trust Agreement representing payments under the Local Obligations and available therefore, but excluding amounts on deposit in the Reserve Fund or earnings thereon) to make all remaining scheduled Principal Installments with respect to, and interest on, the Outstanding Bonds after such redemptions. The Cash Flow Certificate shall indicate the amount which must be withdrawn from the Reserve Fund to redeem a portion of the Bonds in order to prevent any reduction in the proportional relationship between principal and interest remaining due on the Local Obligations and principal and interest remaining due on the Bonds as existed prior to such redemption.
SECTION 4.06. Notice of Redemption. In the case of any redemption of Bonds, the Trustee shall determine that it has in the Funds maintained pursuant to this Trust Agreement and available therefore sufficient moneys on hand to pay the principal of, the interest on, and the redemption premium, if any, to make any such redemption. Subject to receipt of the Written Order of the Issuer delivered pursuant to Section 5.07, if sufficient moneys are available for such redemption, the Trustee shall give notice, as hereinafter in this section provided, that Bonds, identified by CUSIP numbers, serial numbers and maturity date, have been called for redemption and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof that has been called for redemption (or if all the Outstanding Bonds are to be redeemed, so stating, in which event such serial numbers may be omitted), that they will be due and payable on the date fixed for redemption (specifying such date) upon surrender thereof at the Corporate Trust Office, at the redemption price (specifying such price), together with any accrued interest to such date, and that all interest on the Bonds, or portions thereof, so to be redeemed will cease to accrue on and after such date and that from and after such date such Bond or such portion shall no longer be entitled to any lien, benefit or security under the Trust Agreement, and the Owner thereof shall have no rights in respect of such redeemed Bond or such portion except to receive payment from such moneys of such redemption price plus accrued interest to the date fixed for redemption.
Such notice shall be mailed by first class mail, in a sealed envelope, postage prepaid, at least thirty (30) but not more than sixty (60) days before the date fixed for redemption, to the Information Services and to the Owners of such Bonds, or portions thereof, so called for redemption, at their respective addresses as the same shall last appear on the Bond Register. No notice of redemption need be given to the Owner of a Bond to be called for redemption if such Owner waives notice thereof in writing, and such waiver is filed with the Trustee prior to the redemption date. Neither the failure of an Owner to receive notice of redemption of Bonds hereunder nor any error in such notice shall affect the validity of the proceedings for the redemption of Bonds.

At least two (2) Business Days before notice of redemption is given to the Owners, the Trustee shall send a copy of the notice of redemption by facsimile, certified mail or overnight delivery to the Securities Depositaries; provided, that failure to provide notice to the Securities Depositaries or to the Information Services shall not affect the validity of proceedings for the redemption of any Bonds.

SECTION 4.07. Selection of Bonds for Redemption. Whenever less than all the Outstanding Bonds of any one maturity are to be redeemed on any one date, the Trustee shall select the particular Bonds to be redeemed by lot and in selecting the Bonds for redemption the Trustee shall treat each Bond of a denomination of more than five thousand dollars ($5,000) as representing that number of Bonds of five thousand dollars ($5,000) denomination which is obtained by dividing the principal amount of such Bond by five thousand dollars ($5,000), and the portion of any Bond of a denomination of more than five thousand dollars ($5,000) to be redeemed shall be redeemed in an Authorized Denomination. The Trustee shall promptly notify the Issuer in writing of the numbers of the Bonds so selected for redemption in whole or in part on such date.
SECTION 4.08. Payment of Redeemed Bonds. If notice of redemption has been given or waived as provided in Section 4.06, the Bonds or portions thereof called for redemption shall be due and payable on the date fixed for redemption at the redemption price thereof, together with accrued interest to the date fixed for redemption, upon presentation and surrender of the Bonds to be redeemed at the office specified in the notice of redemption. If there shall be called for redemption less than the full principal amount of a Bond, the Issuer shall execute and deliver and the Trustee shall authenticate, upon surrender of such Bond, and without charge to the Owner thereof, Bonds of like interest rate and maturity in an aggregate principal amount equal to the unredeemed portion of the principal amount of the Bonds so surrendered in such Authorized Denominations as shall be specified by the Owner.
If any Bond or any portion thereof shall have been duly called for redemption and payment of the redemption price, together with unpaid interest accrued to the date fixed for redemption, shall have been made or provided for by the Issuer, then interest on such Bond or such portion shall cease to accrue from such date, and from and after such date such Bond or such portion shall no longer be entitled to any lien, benefit or security under the Trust Agreement, and the Owner thereof shall have no rights in respect of such Bond or such portion except to receive payment of such redemption price, and unpaid interest accrued to the date fixed for redemption.

SECTION 4.09. Purchase in Lieu of Redemption. In lieu of redemption of any Bond pursuant to the provisions of Section 4.02, 4.03 or 4.04 hereof and after complying with Section 4.05 hereof, amounts on deposit in the Principal Fund or in the Redemption Fund may also be used and withdrawn by the Trustee at any time prior to selection of Bonds for redemption having taken place with respect to such amounts, upon a Written Order 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 Fund) as the Issuer may in its discretion determine, but not in excess of the redemption price thereof plus accrued interest to the purchase date. All Bonds so purchased shall be delivered to the Trustee for cancellation.
ARTICLE V

REVENUES AND FUNDS FOR BONDS
SECTION 5.01. Establishment of Funds. There is hereby established with the Trustee, and the Trustee hereby agrees to maintain, the following special trust funds for the Bonds, which the Trustee shall keep separate and apart from all other funds and moneys held by it: the Revenue Fund, the Interest Fund, the Principal Fund, the Redemption Fund, the Proceeds Fund, the Reserve Fund, the Expense Fund, the Local Obligation Fund and the Rebate Fund.
SECTION 5.02. Deposit of Proceeds of Bonds. The proceeds received from the sale of the Bonds shall be applied by the Trustee as follows:
(i) The Trustee shall deposit in the Reserve Fund the sum of $__________ (being an amount equal to the initial Reserve Requirement).
(ii) The Trustee shall deposit in the Expense Fund the sum of $__________.
(iii) The Trustee shall deposit in the Proceeds Fund the sum of $__________.
SECTION 5.03. Proceeds Fund.
(a) The Trustee shall deposit into the Proceeds Fund proceeds of the Bonds in the amount provided by Section 5.02 hereof, which amount shall be applied by the Trustee, upon receipt of a Written Order from the Issuer, to pay the purchase price of the Local Obligations. If any amounts shall remain in the Proceeds Fund following such purchase, such amounts shall be deposited by the Trustee into the Revenue Fund and the Proceeds Fund shall thereupon be closed.
SECTION 5.04. Local Obligation Fund.
All Local Obligations acquired by the Trustee pursuant to Section 5.03 shall be deposited into the Local Obligation Fund, which the Trustee is hereby directed to establish and maintain.
SECTION 5.05. Covenant Respecting Redemption Funds for the Local Obligations.
(a) The Local Agency expressly acknowledges that, pursuant to the Local Obligation Statute and the Local Obligation Resolution pursuant to which the Local Obligations are being issued by the Local Agency and sold to the Issuer, the Local Agency is legally obligated to establish and maintain a separate redemption fund for the Local Obligations (the “Local Obligation Redemption Fund”) which, for the Local Obligations, is held by Treasurer of the Local Agency under the Local Obligation Resolutions and, so long as any part of Local Obligations remains outstanding, to deposit into the Local Obligation Redemption Fund, upon receipt, any and all Local Obligation Revenues received by the Local Agency. The Local Agency further acknowledges that, pursuant to the Local Obligation Statute and the Local Obligation Resolution, no temporary loan or other use whatsoever may be made of the Local Obligation Revenues, and the Local Obligation Redemption Fund constitutes a trust fund for the benefit of the owners of the Local Obligations.
(b) The Local Agency hereby covenants for the benefit of the Issuer, as owner of the Local Obligations, the Trustee, as assignee of the Issuer with respect to the Local Obligations, and the Owners from time to time of the Bonds, that it will establish, maintain and administer the Local Obligation Redemption Fund and the Local Obligation Revenues in accordance with their status as trust funds as prescribed by the Local Obligation Statute, the Local Obligation Resolution, and this Trust Agreement.
(c) The Local Agency further covenants that, no later than ten (10) Business Days prior to each Interest Payment Date and Principal Payment Date on the Bonds, the Local Agency will advance to the Trustee against payment on the Local Obligations, as assignee of the Issuer with respect to the Local Obligations, the interest due on the Local Obligations on such Interest Payment Date and the principal of all Local Obligations maturing on such Principal Payment date, respectively, and upon receipt by the Trustee, such amounts shall constitute Revenues. The Trustee shall provide written notice to the Issuer no later than February 1 and August 1 of each year during which the Bonds remain outstanding specifying the amount required to be paid to the Trustee pursuant to this subsection 5.05(c) in each such month.
SECTION 5.06. Revenue Fund. All Revenues, other than Revenues derived from Property Owner Prepayments (which shall be identified in writing to the Trustee by the Local Agency and deposited in the Redemption Fund and administered in accordance with Section 5.07(c)), received by the Trustee shall be deposited by the Trustee into the Revenue Fund. Not later than five (5) Business Days prior to each Interest Payment Date and Principal Payment Date on the Bonds, the Trustee shall transfer Revenues from the Revenue Fund, in the amounts specified in Sections 5.08, 5.09, 5.10, 5.11 and 5.12 hereof, for deposit into the respective funds specified therein in the order of priority set forth, the requirements of each fund to be fully satisfied, leaving no deficiencies therein, prior to any deposit into any fund later in priority.
SECTION 5.07. Revenues Derived From Property Owner Prepayments.
(a) The Local Agency and the Issuer acknowledge that the Local Obligation Statute requires that amounts received by the Local Agency on account of Property Owner Prepayments shall be utilized, in accordance with the Local Obligation Statute, for the sole purpose of prior redemption of Local Obligations and not to pay current, scheduled debt service payments on the Local Obligations. Correspondingly, in order to maintain a proper matching between debt service payments on the Local Obligations and debt service payments on the Bonds, it is a requirement of this Trust Agreement that Revenues received by the Trustee which constituted Property Owner Prepayments when received by the Local Agency shall be utilized by the Trustee pursuant to Section 4.02 and this Section 5.07.
(b) The Issuer hereby covenants for the benefit of the Owners that, as to each separate date upon which Bonds are to be redeemed from the proceeds of Property Owner Prepayments, the Written Orders of the Issuer required pursuant to Section 4.05 shall as nearly as possible (taking into account the minimum denominations of such bonds and the requirements of Section 4.05(ii)) apply such Local Obligations to the redemption of Bonds.
(c) All Revenues derived from Property Owner Prepayments received by the Trustee shall be immediately deposited in the Redemption Fund to be used to redeem Bonds pursuant to Section 4.02.
SECTION 5.08. Interest Fund. The Trustee shall deposit in the Interest Fund before each Interest Payment Date from the Revenue Fund an amount of Revenues which together with any amounts then on deposit in said Interest Fund is equal to the interest on the Bonds due on such date. On each Interest Payment Date, the Trustee shall pay the interest due and payable on the Bonds on such date from the Interest Fund. All amounts in the Interest Fund shall be used and withdrawn by the Trustee solely for the purpose of paying interest on Bonds as it shall become due and payable.
SECTION 5.09. Principal Fund. Having first satisfied the requirements of the foregoing Section 5.08 respecting deposits in the Interest Fund, the Trustee shall next deposit in the Principal Fund before each Principal Payment Date from the Revenue Fund an amount of Revenues which together with any amounts then on deposit in said Principal Fund (other than amounts previously deposited on account of any Bonds which have matured but which have not been presented for payment), is sufficient to pay the Principal Installments on the Bonds when due on such Principal Payment Date. The Trustee shall pay the Principal Installments when due upon presentation and surrender of the subject Bonds.
SECTION 5.10. Reserve Fund.
(a) The Trustee shall deposit in the Reserve Fund the amount transferred to the Reserve Fund pursuant to Section 5.02. Except as provided in subsection (b) and (c) below, all moneys in the Reserve Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on or the principal or the redemption premiums, if any, of, the Bonds; but solely in the event that insufficient moneys are available in the Interest Fund, the Principal Fund, or the Redemption Fund for such purpose.
(b) Upon any partial redemption of Bonds pursuant to Section 4.02, 4.03 or 4.04, the Trustee shall withdraw an amount from the Reserve Fund equal to the reduction in the Reserve Requirement specified in the Written Order of the Issuer delivered in connection with such redemption pursuant to Section 4.05 and transfer such amount to the Redemption Fund.
In the event of a redemption of Local Obligations resulting from a Property Owner Prepayment, the Trustee shall transfer to the Redemption Fund from the Reserve Fund an amount equal to the proportionate share of the Reserve Fund allocable to such prepayment, as specified in an Officer’s Certificate. The Trustee shall notify the Local Agency of such amounts to be transferred.
(c) Except as provided in Section 6.02(d), the Trustee shall retain in the Reserve Fund all earnings on amounts on deposit in the Reserve Fund which amounts shall be applied as provided in subsection (a) hereof.
(d) Notwithstanding any other provision hereof, the failure to maintain an amount in the Reserve Fund equal to the Reserve Requirement shall not be an Event of Default hereunder.
(e) Having first satisfied the requirements of the foregoing Sections 5.08 and 5.09 respecting deposits in the Interest Fund and the Principal Fund, respectively, the Trustee shall next deposit in the Reserve Fund an amount of Revenues which, together with any other amounts on deposit in the Reserve Fund, equal the Reserve Requirement.
SECTION 5.11. Expense Fund. The Trustee shall deposit in the Expense Fund the amount transferred to the Expense Fund pursuant to Section 5.02. In addition, having first satisfied the requirements of the foregoing Sections 5.08, 5.09 and 5.10 respecting deposits in the Interest Fund, the Principal Fund and the Reserve Fund, respectively, the Trustee shall next deposit in the Expense Fund from Revenues an amount specified in a Written Order of the Issuer delivered pursuant to this Section 5.11. The Issuer shall deliver to the Trustee within thirty (30) days after the beginning of each Fiscal Year a Written Order specifying the amount of Expenses it anticipates will be required to be paid in such Fiscal Year. The Issuer may amend such Written Order at any time during the Fiscal Year by filing a new Written Order with the Trustee which shall supersede all previously filed Written Orders with respect to Expenses. Amounts in the Expense Fund shall be applied by the Trustee to the payment of Expenses upon receipt of a Requisition of the Issuer stating the Person to whom payment is to be made, the amount and purpose of the payment and that (i) such payment is a proper charge against the Expense Fund, and (ii) such payment has not been previously paid from the Expense Fund. Any amounts remaining in the Expense Fund on the last day of each Fiscal Year shall be retained in the Expense Fund unless the Issuer delivers a Written Order to the Trustee requesting that such amounts be transferred to the Local Agency. Any amounts so transferred shall be subject to the provisions of Section 5.12.
SECTION 5.12. Transfer to Local Agency. Having first satisfied the requirements of the foregoing Sections 5.08, 5.09, 5.10 and 5.11 respecting deposits in the Interest Fund, Principal Fund, Reserve Fund and Expense Fund, respectively, the Trustee shall transfer any remaining Revenues to the Local Agency. All amounts transferred to the Local Agency pursuant to this Section shall be applied to pay the cost of public capital improvements of the Local Agency or other governmental body in accordance with the Tax Certificate.
SECTION 5.13. Redemption Fund.
(a) All moneys held in or transferred to the Redemption Fund pursuant to Section 5.07(c) (including any amounts transferred from the Reserve Fund in connection therewith pursuant to Section 5.10(b)) shall be used for the purpose of redeeming or purchasing all or a portion of the Outstanding Bonds pursuant to Section 4.02.
(b) The Trustee shall use amounts in the Redemption Fund for the payment of the redemption price of Bonds called for redemption pursuant to Section 4.02 or the purchase price of Bonds purchased pursuant to Section 4.09, together with accrued interest to the redemption or purchase date.
SECTION 5.14. Rebate Fund. The Trustee agrees to establish and maintain a fund separate from any other fund established and maintained hereunder designated the Rebate Fund. The Trustee shall deposit in the Rebate Fund, from funds made available by the Issuer, the Rebate Requirement, all in accordance with Rebate Instructions received from the Issuer. The Trustee will apply moneys held in the Rebate Fund as provided in Section 7.04 hereof and according to instructions provided by the Issuer. Subject to the provisions of Section 7.04, moneys held in the Rebate Fund are hereby pledged to secure payments to the United States of America. The Issuer and the Owners will have no rights in or claim to such moneys. The Trustee will invest all amounts held in the Rebate Fund in Investment Securities as directed in writing by the Issuer and all investment earnings with respect thereto shall be deposited in the Rebate Fund.
Upon receipt of the Rebate Instructions required by the Tax Certificate to be delivered to the Trustee, the Trustee will remit part or all of the balance held in the Rebate Fund to the United States of America as so directed. In addition, if the Rebate Instructions so direct, the Trustee will deposit moneys into or transfer moneys out of the Rebate Fund from or into such accounts or funds as the Rebate Instructions shall direct. The Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the Issuer including supplying all necessary information in the manner provided in the Tax Certificate to the extent such information is reasonably available to the Trustee, and shall have no liability or responsibility to monitor or enforce compliance by the Issuer with the terms of the Tax Certificate.

The Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to this Section, other than from moneys held in the Rebate Fund or from other moneys provided to it by the Issuer. The Trustee shall not be responsible for computing the Rebate Requirement. Computations of the Rebate Requirement shall be furnished to the Trustee or on behalf of the Issuer in accordance with the Tax Certificate.

Notwithstanding any other provision of this Trust Agreement, including in particular Article XII hereof pertaining to defeasance, the obligation to remit the rebate amounts to the United States and to comply with all other requirements of this Section, and the Tax Certificate shall survive the defeasance or payment in full of the Bonds.
ARTICLE VI

SECURITY FOR AND INVESTMENT OF MONEYS
SECTION 6.01. Security. All moneys required to be deposited with or paid to the Trustee in any of the Funds (other than the Rebate Fund) referred to in any provision of the Trust Agreement shall be held by the Trustee in trust, and except for moneys held for the payment or redemption of Bonds or the payment of interest on Bonds pursuant to Section 12.03, shall, while held by the Trustee, constitute part of the Trust Estate and shall be subject to the lien and pledge created hereby.
SECTION 6.02. Investment of Funds.
(a) So long as the Bonds are Outstanding and there is no default hereunder, moneys on deposit to the credit of the Redemption Fund, the Revenue Fund, the Interest Fund, the Principal Fund, the Reserve Fund and all accounts within such funds (other than amounts invested in Local Obligations) shall, at the request of an Authorized Officer of the Issuer, which shall be in writing at least two (2) Business Days prior to the date of investment, specifying and directing that such investment of such funds be made, be invested by the Trustee in Investment Securities having maturities or otherwise providing for availability of funds when needed for purposes of this Trust Agreement, and moneys held in the Rebate Fund shall, at the request of an Authorized Officer of the Issuer, which shall be confirmed in writing at least two (2) Business Days prior to the date of investment, specifying and directing that such investment of such funds be made, be invested by the Trustee in Government Obligations having maturities or otherwise providing for availability of funds when needed for purposes of this Trust Agreement, and the Trustee shall be entitled to rely on such instructions for purposes of this section. The Trustee shall notify the Issuer in writing no less than five (5) Business Days prior to the date moneys held hereunder will be available for investment. The Authorized Officer of the Issuer, in issuing such written instructions, shall comply with the provisions of the Tax Certificate. In the absence of written instructions from the Authorized Officer of the Issuer regarding investment, such funds shall be invested in investments described in clause (vi) of the definition of Investment Securities. The Trustee or any of its affiliates may act as principal or agent in the acquisition or disposition of investments.
(b) Moneys on deposit in the Proceeds Fund, if any, shall be invested in Investment Securities pursuant to a Written Order and such moneys may not be reinvested in any other Investment Securities unless the Trustee receives, at the time of such reinvestment, a Cash Flow Certificate to the effect that, after such reinvestment, Revenues will be sufficient to pay principal and interest on the Bonds when due.
(c) Notwithstanding anything to the contrary contained in this Trust Agreement, an amount of interest received with respect to any Investment Security equal to the amount of accrued interest, if any, paid as part of the purchase price of such Investment Security shall be credited to the Fund (or account) from which such accrued interest was paid. The Trustee shall not be responsible for any losses or consequences of any investment if it follows such instructions in good faith.
The securities purchased with the moneys in each such Fund shall be deemed a part of such Fund. If at any time it shall become necessary or appropriate that some or all of the securities purchased with the moneys in any such Fund be redeemed or sold in order to raise moneys necessary to comply with the provisions of the Trust Agreement, the Trustee shall effect such redemption or sale, employing, in the case of a sale, any commercially reasonable method of effecting the same. The Trustee shall not be liable or responsible for any consequences resulting from any such investment or resulting from the redemption, sale or maturity of any such investment as authorized pursuant to this section. The Issuer acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Issuer the right to receive brokerage confirmations of security transactions as they occur, the Issuer specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the Issuer monthly cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.

Investments in the Revenue Fund, the Interest Fund, the Principal Fund, the Reserve Fund and the Redemption Fund, may be commingled for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in particular Funds amounts received or held by the Trustee; provided, that the Trustee shall at all times account for such investments strictly in accordance with the Funds to which they are credited and otherwise as provided in the Trust Agreement.

(d) All earnings on the investment of the moneys on deposit in any fund shall remain a part of such fund; provided that, in the event the amount on deposit in the Reserve Fund is equal to the Reserve Requirement, then earnings on the investment of moneys on deposit in said Reserve Fund shall be transferred to the Local Agency for deposit in the redemption funds for the Local Obligations held by the Trustee hereunder.
ARTICLE VII

COVENANTS OF THE ISSUER AND THE LOCAL AGENCY
SECTION 7.01. Payment of Bonds; No Encumbrances. The Issuer shall cause the Trustee to promptly pay, from Revenues and other funds derived from the Trust Estate pledged hereunder, the principal of and redemption premium, if any, on and the interest on every Bond issued under and secured by the Trust Agreement at the place, on the dates and in the manner specified in the Trust Agreement and in such Bonds according to the true intent and meaning thereof. The Issuer shall not issue any bonds, notes or other evidences of indebtedness or incur any obligations payable from or secured by the Trust Estate, other than the Bonds.
SECTION 7.02. Enforcement and Amendment of Local Obligations. The Local Agency, the Issuer and Trustee shall enforce all of their rights with respect to the Local Obligations to the fullest extent necessary to preserve the rights and protect the security of the Owners under the Trust Agreement.
The Local Agency, the Issuer and the Trustee may, without the consent of or notice to the Owners consent to any amendment, change or modification of any Local Obligation that may be required (a) to conform to the provisions of this Trust Agreement (including any modifications or changes contained in any Supplemental Trust Agreement), (b) for the purpose of curing any ambiguity or inconsistency or formal defect or omission, (c) so as to add additional rights acquired in accordance with the provisions of such Local Obligation, (d) in connection with any other change therein which is not to the material prejudice of the Trustee or the Owners of the Bonds pursuant to an Opinion of Bond Counsel, (e) in the Opinion of Bond Counsel, to preserve or assure the exemption of interest on the Local Obligation or the Bonds from federal income taxes or the exemption from California personal income tax or (f) any other amendment to the Local Obligation (or consent to any change or modification of the applicable CIFP 2003-1 District), including a change to the method of apportionment of assessments) provided, that the following conditions are met:

(a) no territory outside the exterior boundaries of the applicable CIFP 2003-1 District (as originally formed) may be assessed to secure any Local Obligation; and
(b) the Trustee shall have received a certificate of the Cash Flow Consultant to the effect that, after giving effect to the change or modification, the value of each Assessed Parcel as shown by an Appraisal is at least equal to three (3.0) times the Lien Amount.
Except for amendments, changes or modifications provided for in the preceding paragraph, neither the Local Agency, the Issuer nor the Trustee shall consent to any amendment, change or modification of any Local Obligation without the mailing of notice and the written approval or consent of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding given and procured as in this Section provided. If at any time the Issuer and the Local Agency, as the case may be, shall request the consent of the Trustee to any such proposed amendment, change or modification of a Local Obligation, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of such proposed amendment, change or modification to be mailed in the same manner as provided by Section 13.04 hereof. Such notice shall briefly set forth the nature of such proposed amendment, change or modification and shall state that copies of the instrument embodying the same are on file with the Trustee for inspection by all Owners. Nothing contained in this Section shall be construed to prevent the Trustee, with the consent of the Issuer, from settling a default under any Local Obligation on such terms as the Trustee may determine to be in the best interests of the Owners.

SECTION 7.03. Further Documents. The Issuer covenants that it will from time to time execute and deliver such further instruments and take such further action as may be reasonable and as may be required to carry out the purpose of the Trust Agreement; provided, that no such instruments or actions shall pledge the faith and credit or the taxing power of the State or any political subdivision of the State.
SECTION 7.04. Tax Covenants.
(a) The Issuer and the Local Agency will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of interest on the Bonds under Section 103 of the Code. The Issuer and the Local Agency will not directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the Issuer or take or omit to take any action that would cause the Bonds to be “private activity bonds” within the meaning of Section 141(a) of the Code or obligations which are “federally guaranteed” within the meaning of Section 149(b) of the Code. The Issuer will not allow ten percent (10%) or more of the proceeds of the Bonds to be used in the trade or business of any nongovernmental units and will not lend five percent (5%) or more of the proceeds of the Bonds to any nongovernmental units.
(b) The Issuer and the Local Agency will not directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the Issuer or take or omit to take any action that would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code. To that end, the Issuer and the Local Agency will comply with all requirements of Section 148 of the Code to the extent applicable to the Bonds. In the event that at any time the Issuer is of the opinion that for purposes of this section it is necessary to restrict or to limit the yield on the investment of any moneys held by the Trustee hereunder, the Issuer will so instruct the Trustee in writing, and the Trustee will take such actions as directed by such instructions.
(c) The Issuer will pay or cause to be paid the Rebate Requirement as provided in the Tax Certificate. This covenant shall survive payment in full or defeasance of the Bonds. The Issuer will cause the Rebate Requirement to be deposited in the Rebate Fund as provided in the Tax Certificate (which is incorporated herein by reference).
The Trustee will conclusively be deemed to have complied with the provisions of this section including the provisions of the Tax Certificate if it follows the directions of the Issuer set forth in the Tax Certificate and the Rebate Instructions and shall not be required to take any actions hereunder in the absence of Rebate Instructions from the Issuer.

(d) Notwithstanding any provision of this Section, if the Issuer shall provide to the Trustee an Opinion of Bond Counsel that any specified action required under this section is no longer required or that some further or different action is required to maintain the exclusion from gross income for federal income tax purposes of interest with respect to the Bonds, the Trustee and the Issuer may conclusively rely on such Opinion in complying with the requirements of this section, and the covenants hereunder shall be deemed to be modified to that extent.
(e) The provisions of this Section 7.04 shall survive the defeasance of the Bonds.
SECTION 7.05. Maintenance of Existence. The Issuer shall maintain the existence, powers and authority of the Issuer as a joint powers authority under California law.
SECTION 7.06. [Reserved].
SECTION 7.07. Continuing Disclosure. The Local Agency and the Trustee hereby covenant and agree that they will comply with and carry out all of their respective obligations under the Continuing Disclosure Agreement. The Trustee is authorized and directed to enter into the Continuing Disclosure Agreement with the Local Agency. Any provisions of the Continuing Disclosure Agreement may, however, be modified or waived only if there is filed with the Trustee, and the Local Agency an Opinion of Bond Counsel to the effect that such modification or waiver will not, in and of itself, cause the undertakings in the Continuing Disclosure Agreement to no longer satisfy the requirements of Securities Exchange Commission Rule 15c2-12(b)(5). Notwithstanding any other provision of this Trust Agreement, failure of the Local Agency or the Trustee to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default and shall not be deemed to create any monetary liability on the part of the Local Agency or the Trustee to any other persons, including Owners; however, any Owner or beneficial owner of the Bonds or the Trustee, at the written request of the Owners of at least 25% aggregate principal amount in Outstanding Bonds, the Trustee shall, but only to the extent funds or other indemnity in an amount satisfactory to the Trustee have been provided to it to hold the Trustee harmless from any loss, cost, liability or expenses and additional charges of the Trustee and fees and expenses of its attorneys, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Local Agency or the Trustee, as the case may be, to comply with its obligations under this Section 7.07.
ARTICLE VIII

DEFAULTS AND REMEDIES
SECTION 8.01. Events of Default. The following shall constitute “Events of Default” hereunder:
(a) if payment of interest on the Bonds shall not be made when due; or
(b) if payment of any Principal Installment shall not be made when due and payable, whether at maturity, by proceedings for redemption, or otherwise; or
(c) if the Issuer or the Local Agency shall fail to observe or perform in any material way any other agreement, condition, covenant or term contained in the Trust Agreement on its part to be performed, and such failure shall continue for thirty (30) days after written notice specifying such failure and requiring the same to be remedied shall have been given to the Issuer or the Local Agency, as the case may be, by the Trustee or by the Owner(s) of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds Outstanding, provided, that if such default be such that it cannot be corrected within the applicable period, it shall not constitute an Event of Default if corrective action is instituted by the Issuer or the Local Agency within the applicable period and diligently pursued until the default is corrected.
SECTION 8.02. Proceedings by Trustee; No Acceleration. Upon the happening and continuance of any Event of Default the Trustee in its discretion may, or at the written request of the Owners of not less than twenty-five percent (25%) in aggregate principal amount of Bonds Outstanding shall (but only if indemnified to its satisfaction from any liability, expenses or costs), do the following:
(a) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Owners, including the right to receive and collect the Revenues;
(b) bring suit upon or otherwise enforce any defaulting Local Obligation;
(c) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Owners;
(d) as a matter of right, have a receiver or receivers appointed for the Trust Estate and of the earnings, income, issues, products, profits and revenues thereof pending such proceedings, with such powers as the court making such appointment shall confer; and
(e) take such action with respect to any and all Local Obligations or Investment Securities as the Trustee shall deem necessary and appropriate, subject to Section 8.04 and to the terms of such Local Obligations or Investment Securities.
The Trustee shall have no right to declare the principal of all of the Bonds then Outstanding, or the interest accrued thereon, to be due and payable immediately.

SECTION 8.03. Effect of Discontinuance or Abandonment. In case any proceeding taken by the Trustee on account of any default shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the Trustee and the Owners shall be restored to their former positions and rights under the Trust Agreement, respectively, and all rights, remedies and powers of the Trustee shall continue as though no such proceeding had been taken.
SECTION 8.04. Rights of Owners. Anything in the Trust Agreement to the contrary notwithstanding, subject to the limitations and restrictions as to the rights of the Owners in Sections 8.01, 8.02 and 8.05, upon the happening and continuance of any Event of Default, the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding shall have the right, upon providing the Trustee security and indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, by an instrument in writing executed and delivered to the Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Trustee under the Trust Agreement.
The Trustee may refuse to follow any direction that conflicts with law or the Trust Agreement or that the Trustee determines is prejudicial to rights of other Owners or would subject the Trustee to personal liability without adequate indemnification therefore.

SECTION 8.05. Restriction on Owner’s Action. In addition to the other restrictions on the rights of Owners to request action upon the occurrence of an Event of Default and to enforce remedies set forth in this article, no Owner of any of the Bonds shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of any trust under the Trust Agreement, or any other remedy under the Trust Agreement or on the Bonds, unless such Owner previously shall have given to the Trustee written notice of an Event of Default as hereinabove provided and unless the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding shall have made written request of the Trustee to institute any such suit, action, proceeding or other remedy, after the right to exercise such powers or rights of action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers granted in the Trust Agreement, or to institute such action, suit or proceeding in its or their name; nor unless there also shall have been offered to the Trustee security and indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall not have complied with such request within a reasonable time; and such notification, request and offer of indemnity are hereby declared in every such case to be conditions precedent to the execution of the trusts of the Trust Agreement or for any other remedy under the Trust Agreement, it being understood and intended that no one or more Owners of the Bonds secured by the Trust Agreement shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of the Trust Agreement, or to enforce any rights under the Trust Agreement or under the Bonds, except in the manner provided in the Trust Agreement, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner provided in the Trust Agreement, and for the equal benefit of all Owners of Outstanding Bonds; subject, however, to the provisions of this section. Notwithstanding the foregoing provisions of this section or any other provision of the Trust Agreement, the obligation of the Issuer shall be absolute and unconditional to pay, but solely from the Trust Estate, the principal of and the redemption premiums, if any, on and the interest on the Bonds to the respective Owners thereof at the respective due dates thereof, and nothing herein shall affect or impair the right of action, which is absolute and unconditional, of such Owners to enforce such payment.
SECTION 8.06. Power of Trustee to Enforce. All rights of action under the Trust Agreement or under any of the Bonds secured by the Trust Agreement which are enforceable by the Trustee may be enforced by it without the possession of any of the Bonds, or the production thereof at the trial or other proceedings relative thereto, and any such suit, action or proceedings instituted by the Trustee shall be brought in its own name, as Trustee, for the equal and ratable benefit of the Owners subject to the provisions of the Trust Agreement.
SECTION 8.07. Remedies Not Exclusive. No remedy in the Trust Agreement conferred upon or reserved to the Trustee or to the Owners is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given under the Trust Agreement or now or hereafter existing at law or in equity or by statute.
SECTION 8.08. Waiver of Events of Default; Effect of Waiver. Upon the written request of the Owners of at least a majority in aggregate principal amount of all Outstanding Bonds the Trustee shall waive any Event of Default hereunder and its consequences. The Trustee may waive any Event of Default hereunder and its consequences at any time. If any Event of Default shall have been waived as herein provided, the Trustee shall promptly give written notice of such waiver to the Issuer and shall give notice thereof by first class mail, postage prepaid, to all Owners of Outstanding Bonds if such Owners had previously been given notices of such Event of Default; but no such waiver, rescission and annulment shall extend to or affect any subsequent Event of Default, or impair any right or remedy consequent thereon.
No delay or omission of the Trustee or of any Owner to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default, or an acquiescence therein; and every power and remedy given by this article to the Trustee and to the Owners of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient.

SECTION 8.09. Application of Moneys. Any moneys received by the Trustee pursuant to this article shall, after payment of all fees and expenses of the Trustee, and the fees and expenses of its counsel incurred in representing the Owners, be applied as follows:
(a) unless the principal of all of the Outstanding Bonds shall be due and payable,
FIRST - To the payment of the Owners entitled thereto of all installments of interest then due on the Bonds, in the order of the maturity of the installments of such interest, and if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or privilege;
SECOND - To the payment of the Owners entitled thereto of the unpaid principal of and redemption premiums, if any, on any of the Bonds which shall have become due (other than Bonds matured or called for redemption for the payment of which moneys are held pursuant to the provisions of the Trust Agreement) in the order of their due dates, and if the amount available shall not be sufficient to pay in full the principal of and redemption premiums, if any, on such Bonds due on any particular date, then to the payment ratably, according to the amount due on such date, to the Persons entitled thereto without any discrimination or privilege; and
THIRD - To be held for the payment to the Owners entitled thereto as the same shall become due of the principal of and redemption premiums, if any, on and interest on the Bonds which may thereafter become due, either at maturity or upon call for redemption prior to maturity, and if the amount available shall not be sufficient to pay in full such principal and redemption premiums, if any, due on any particular date, together with interest then due and owing thereon, payment shall be made in accordance with the FIRST and SECOND paragraphs hereof.
(b) if the principal of all of the Outstanding Bonds shall be due and payable, to the payment of the principal and redemption premiums, if any, and interest then due and unpaid upon the Outstanding Bonds without preference or priority of any of the principal of or the redemption premium, if any, on any Outstanding Bond over any other Outstanding Bond or of any interest on any Outstanding Bond over any other Outstanding Bond, ratably, according to the amounts due respectively for principal and redemption premiums, if any, and interest, to the Owners entitled thereto without any discrimination or preference except as to any difference in the respective amounts of interest specified in the Outstanding Bonds.
(c) After having first satisfied all obligations to Owners of Bonds pursuant to subsections (a) and (b) of this Section 8.09, then any remaining moneys received by the Trustee pursuant to this article shall be transferred to the Local Agency.
(d) Whenever moneys are to be applied pursuant to the provisions of this Section 8.09, such moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. The Trustee shall give, by mailing by first class mail as it may deem appropriate, such notice of the deposit with it of any such moneys.
ARTICLE IX

THE TRUSTEE
SECTION 9.01. Appointment and Acceptance of Duties.
The Trustee hereby accepts and agrees to the trusts hereby created to all of which the Issuer agrees and the respective Owners of the Bonds, by their purchase and acceptance thereof, agree.
SECTION 9.02. Duties, Immunities and Liability of Trustee.
(a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in the Trust Agreement, and no implied duties or obligations shall be read into the Trust Agreement against the Trustee. The Trustee shall, during the existence of any Event of Default (which has not been cured or waived), exercise such of the rights and powers vested in it by the Trust Agreement, and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.
(b) The Issuer may, in the absence of an Event of Default, and upon receipt of an instrument or concurrent instruments in writing signed by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or if at any time the Trustee shall cease to be eligible in accordance with subsection (e) of this section, or shall become incapable of acting, or shall commence a case under any bankruptcy, insolvency or similar law, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take control or charge of the Trustee or its property or affairs for the purpose of rehabilitation, conservation or liquidation, shall, remove the Trustee by giving written notice of such removal to the Trustee, and thereupon the Issuer shall promptly appoint a successor Trustee by an instrument in writing.
(c) The Trustee may, subject to (d) below, resign by giving written notice of such resignation to the Issuer and by giving notice of such resignation by mail, first class postage prepaid, to the Owners at the addresses listed in the Bond Register. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor Trustee by an instrument in writing.
(d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and shall have accepted appointment within thirty (30) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Owner (on behalf of himself and all other Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under the Trust Agreement shall signify its acceptance of such appointment by executing and delivering to the Issuer and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless, at the written request of the Issuer or of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under the Trust Agreement and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Issuer shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, such successor Trustee shall mail a notice of the succession of such Trustee to the trusts hereunder by first class mail, postage prepaid, to the Owners at their addresses listed in the Bond Register.
(e) Any Trustee appointed under the provisions of this section shall be a trust company or bank having the powers of a trust company, having a corporate trust office in California, having a combined capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection, the Trustee shall resign immediately in the manner and with the effect specified in this section.
(f) No provision in the Trust Agreement shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. The Trustee shall be entitled to interest on all moneys advanced by it hereunder at its prime rate then in effect plus two percent.
(g) In accepting the trust hereby created, the Trustee acts solely as Trustee for the Owners and not in its individual capacity, and under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds.
(h) The Trustee makes no representation or warranty, express or implied, as to the compliance with legal requirements of the use contemplated by the Issuer of the funds under the Trust Agreement including, without limitation, the purchase of the Local Obligations hereunder; provided, however, that the Trustee shall not acquire Local Obligations other than pursuant to the requirements of Section 5.03.
(i) The Trustee shall not be responsible for the validity or effectiveness or value of any collateral or security securing any Local Obligation. The Trustee shall not be responsible for the recording or filing of any document relating to this Agreement or any Local Obligation or of financing statements (or continuation statements in connection therewith) or mortgage or of any supplemental instruments or documents of further assurance as may be required by law in order to perfect the security interests or lien on or in any collateral or security securing any Local Obligation. The Trustee shall not be deemed to have made representations as to the security afforded thereby or as to the validity or sufficiency of any such document, collateral or security.
(j) The Trustee shall not be deemed to have knowledge of any Event of Default hereunder unless and until it shall have actual knowledge thereof at its corporate trust office in San Francisco, California.
(k) The Trustee shall not be accountable for the use or application by the Issuer or any other party of any funds which the Trustee has released under the Trust Agreement.
(l) The Trustee shall provide a monthly accounting of all Funds held pursuant to the Trust Agreement (and all funds held by the Trustee as trustee or fiscal agent pursuant to any Local Obligation) to the Issuer within fifteen (15) Business Days after the end of such month and shall provide statements of account for each annual period beginning July 1 and ending June 30, within 90 days after the end of such period. Such accounting shall show in reasonable detail all financial transactions during the accounting period and the balance in any Funds and accounts (including the Local Obligation Fund) created under this Trust Agreement as of the beginning and close of such accounting period.
SECTION 9.03. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under subsection (e) of Section 9.02, shall succeed to the rights and obligations of such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
SECTION 9.04. Compensation and Indemnification. The Issuer shall pay or cause the Local Agency to pay the Trustee reasonable compensation for its services rendered hereunder and reimburse the Trustee for reasonable expenses, disbursements and advances, including attorney’s fees, incurred by the Trustee in the performance of its obligations hereunder and with respect to the Local Obligations.
The Issuer agrees, to the extent permitted by law, to indemnify the Trustee and its officers, directors, employees, attorneys and agents for, and to hold it harmless against, any loss, liability or expense incurred without negligence or willful misconduct on its part arising out of or in connection with (i) the acceptance or administration of the trusts imposed by the Trust Agreement, including performance of its duties hereunder, or related to the Local Obligations including the costs and expenses of defending itself against any claims or liability in connection with the exercise or performance of any of its powers or duties hereunder (ii) the projects to be financed with the purchase of the Local Obligations; (iii) the sale of any Bonds or the purchase of the Local Obligations and the carrying out of any of the transactions contemplated by the Bonds or the Local Obligations; or (iv) any untrue statement of any material fact or omission to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading in any official statement or other disclosure document utilized by the Issuer or under its authority in connection with the sale of the Bonds or the Local Obligations. The Issuer’s obligations hereunder with respect to indemnity of the Trustee and the provision for its compensation set forth in this Article shall survive and remain valid and binding notwithstanding the maturity and payment of the Bonds, or the resignation, or removal of the Trustee.

The Trustee shall have no responsibility for or liability in connection with assuring that all of the procedures or conditions to closing set forth in the contract of purchase for sale of the Bonds, that all documents required to be delivered on the closing date to the parties are actually delivered, except its own responsibility to receive or deliver the proceeds of the sale, deliver the Bonds and other certificates expressly required to be delivered by it and its counsel.

The Trustee shall not be responsible for determining or investigating whether any Local Obligation purchased pursuant to Section 5.03 is a Local Obligation, as defined in this Trust Agreement, and the Trustee may conclusively rely on the Issuer’s determination and direction in this regard; provided, however that the Trustee shall not acquire Local Obligations other than pursuant to the requirements of Section 5.03. The Trustee shall be entitled to rely on the covenants, representations and warranties of each obligor on any Local Obligation and in the documents and certificates delivered in connection therewith and each Written Order.

SECTION 9.05. Liability of Trustee. The recitals of facts herein and in the Bonds contained shall be taken as statements of the Issuer, and the Trustee does not assume any responsibility for the correctness of the same, and does not make any representations as to the validity or sufficiency of the Trust Agreement or of the Bonds, and shall not incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it; provided, that the Trustee shall be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. The Trustee (in its individual or any other capacity) may become the Owner of Bonds with the same rights it would have if it were not Trustee hereunder, and, to the extent permitted by law, may act as depositary for and permit any of its officers, directors and employees to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of a majority in principal amount of the Outstanding Bonds relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, hereunder. Whether or not therein expressly so provided, every provision of this Trust Agreement or related documents relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article.
SECTION 9.06. Right to Rely on Documents. The Trustee may rely on and shall be protected in acting or refraining from acting upon any notice, resolution, requisition, request, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may be counsel of or to the Issuer, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance therewith.
Whenever in the administration of the trusts imposed upon it by the Trust Agreement the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by an Officer’s Certificate, and such Certificate shall be full warrant to the Trustee for any action taken or suffered or omitted in good faith under the provisions of the Trust Agreement in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.

The Trustee shall be entitled to advice of counsel and other professionals or agents concerning all matters of trust and its duty hereunder, but the Trustee shall not be answerable for the acts or omissions of any agent, attorney-at-law, certified public accountant, or other professional if such agent, attorney-at-law, certified public accountant or other professional was selected by the Trustee with due care.

SECTION 9.07. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of the Trust Agreement shall be retained in its possession and shall be subject at all reasonable times upon prior notice to the inspection of the Issuer, the Owners of at least twenty-five percent (25%) of the aggregate principal amount of the Bonds, and their agents and representatives duly authorized in writing, at reasonable hours and under reasonable conditions.
SECTION 9.08. Indemnity for Trustee. Before taking any action or exercising any rights or powers under the Trust Agreement, the Trustee may require that satisfactory indemnity be furnished to it for the reimbursement of all costs and expenses which it may incur and to indemnify it against all liability, except liability which may result from its negligence or willful misconduct, by reason of any action so taken.
ARTICLE X

EXECUTION OF INSTRUMENTS BY OWNERS AND PROOF
OF OWNERSHIP OF BONDS
SECTION 10.01. Execution of Instruments; Proof of Ownership. Any request, direction, consent or other instrument in writing required or permitted by the Trust Agreement to be signed or executed by Owners may be in any number of concurrent instruments of similar tenor by different parties and may be signed or executed by such Owners in Person or by agent appointed by an instrument in writing. Proof of the execution of any such instrument and of the ownership of Bonds shall be sufficient for any purpose of the Trust Agreement and shall be conclusive in favor of the Trustee with regard to any action taken, suffered or omitted by either of them under such instrument if made in the following manner:
(a) The fact and date of the execution by any Person of any such instrument may be proved by the certificate of any officer in any jurisdiction who, by the laws thereof, has power to take acknowledgments within such jurisdiction, to the effect that the Person signing such instrument acknowledged before him the execution thereof, or by an affidavit of a witness to such execution.
(b) The fact of the ownership of Bonds under the Trust Agreement by any Owner and the serial numbers of such Bonds and the date of his ownership of the same shall be proved by the Bond Register.
Nothing contained in this article shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters in this article stated which to it may seem sufficient. Any request or consent of the Owner of any Bond shall bind every future Owner of the same Bond and any Bond or Bonds issued in exchange or substitution therefore or upon the registration of transfer thereof in respect of anything done by the Trustee in pursuance of such request or consent.
ARTICLE XI

MODIFICATION OF TRUST AGREEMENT
AND SUPPLEMENTAL TRUST AGREEMENTS
SECTION 11.01. Supplemental Trust Agreements Without Consent of Owners. The Issuer and the Local Agency may, without the consent of the Owners, enter into a Supplemental Trust Agreement or Supplemental Trust Agreements, which thereafter shall form a part of the Trust Agreement, for any one or more of the following purposes:
(a) to add to the agreements and covenants of the Issuer or the Local Agency contained in the Trust Agreement other agreements and covenants thereafter to be observed, or to surrender any right or power in the Trust Agreement reserved to or conferred upon the Issuer or the Local Agency; provided, that no such agreement, covenant or surrender shall materially adversely affect the rights of any Owner;
(b) to cure any ambiguity, to supply any omission or to cure, correct or supplement any defect or inconsistent provisions contained in the Trust Agreement or in any Supplemental Trust Agreement;
(c) to make any change which does not materially adversely affect the rights of any Owner;
(d) to grant to the Trustee for the benefit of the Owners additional rights, remedies, powers or authority;
(e) to subject to the Trust Agreement additional collateral or to add other agreements of the Issuer or the Local Agency;
(f) to modify the Trust Agreement or the Bonds to permit qualification under the Trust Indenture Act of 1939, as amended, or any similar statute at the time in effect, or to permit the qualification of the Bonds for sale under the securities laws of any state of the United States of America; or
(g) to evidence the succession of a new Trustee.
The Trustee may in its discretion determine whether or not in accordance with the foregoing powers of amendment hereof any particular Bond would be affected by any modification or amendment of the Trust Agreement and any such determination shall be binding and conclusive on the Issuer, the Local Agency and all Owners of Bonds. For all purposes of this section, the Trustee shall be entitled to rely upon and shall be fully protected in relying upon an Opinion of Bond Counsel, in form and substance satisfactory to it, with respect to the extent, if any, to which any action affects the rights under the Trust Agreement of any Owner.

SECTION 11.02. Trustee Authorized to Enter into Supplemental Trust Agreement. The Trustee is hereby authorized to enter into any Supplemental Trust Agreement with the Issuer and the Local Agency authorized or permitted by the terms of the Trust Agreement, and to make the further agreements and stipulations which may be therein contained, and for all purposes of this section, the Trustee shall be entitled to rely upon and shall be fully protected in relying upon an Opinion of Bond Counsel, in form and substance satisfactory to it, to the effect that such Supplemental Trust Agreement is authorized or permitted by the provisions of the Trust Agreement.
SECTION 11.03. Supplemental Trust Agreements With Consent of Owners. Any modification or alteration of the Trust Agreement or of the rights and obligations of the Issuer, the Local Agency or the Owners of the Bonds may be made with the consent of the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding; provided, that no such modification or alteration shall be made which will reduce the percentage of aggregate principal amount of Bonds the consent of the Owners of which is required for any such modification or alteration, or permit the creation by the Issuer or the Local Agency of any lien prior to or on a parity with the lien of the Trust Agreement upon the Trust Estate or which will affect the times, amounts and currency of payment of the principal of or the redemption premiums, if any, on or the interest on the Bonds or affect the rights, duties or obligations of the Trustee without the consent of the party affected thereby.
ARTICLE XII

DEFEASANCE
SECTION 12.01. Defeasance. If and when the Bonds secured hereby shall become due and payable in accordance with their terms or through redemption proceedings as provided in the Trust Agreement, or otherwise, and the whole amount of the principal and the redemption premiums, if any, and the interest so due and payable upon all of the Bonds shall be paid, or provision shall have been made for the payment of the same, together with all other sums payable under the Trust Agreement by the Issuer, including all fees and expenses of the Trustee, then and in that case, the Trust Agreement and the lien created hereby shall be completely discharged and satisfied and the Issuer shall be released from the agreements, conditions, covenants and terms of the Issuer contained in the Trust Agreement, and the Trustee shall assign and transfer all property (in excess of the amounts required for the foregoing) then held by the Trustee free and clear of any encumbrances as provided in Section 12.04 and shall execute such documents as may be reasonably required by the Trustee or the Issuer in this regard.
Notwithstanding the satisfaction and discharge of the Trust Agreement, those provisions of the Trust Agreement relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, nonpresentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, remain in effect and shall be binding upon the Trustee and the Owners and the Trustee shall, subject to Section 13.09, continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of and redemption premiums, if any, on and interest on the Bonds, to pay to the Owners of Bonds the funds so held by the Trustee as and when such payment becomes due, and those provisions of the Trust Agreement contained in Section 9.04 relating to the compensation and indemnification of the Trustee and in Section 7.04 relating to the tax covenants of the Issuer and the Local Agency shall remain in effect and shall be binding upon the Trustee, the Local Agency and the Issuer.

SECTION 12.02. Bonds Deemed to Have Been Paid. If moneys shall have been set aside and held by the Trustee for the payment or redemption of any Bonds and the interest installments therefore at the maturity or redemption date thereof, such Bonds shall be deemed to be paid within the meaning and with the effect provided in Section 12.01. Any Outstanding Bond shall prior to the maturity or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in Section 12.01 if (a) in case said Bonds are to be redeemed on any date prior to their maturity, the Issuer shall have given to the Trustee in form satisfactory to the Trustee irrevocable instructions to mail notice of redemption of such Bonds on such redemption date, such notice to be given in accordance with the provisions of Article IV, (b) there shall have been deposited with the Trustee in escrow either moneys in an amount which (as stated in a Cash Flow Certificate) shall be sufficient, or noncallable Government Obligations the principal of and the interest on which when due, and without any reinvestment thereof, will provide moneys which, together with the moneys, if any, deposited with or held by the Trustee at the same time, shall be sufficient (as verified by a Cash Flow Certificate), to pay when due the principal of and the redemption premiums, if any, and the interest due and to become due on such Bonds on and prior to the redemption date or maturity date thereof, as the case may be, and (c) in the event any of such Bonds are not to be redeemed within the next succeeding sixty (60) days, the Issuer shall have given the Trustee in form satisfactory to the Trustee irrevocable instructions to mail, as soon as practicable in the same manner as a notice of redemption is mailed pursuant to Article IV, a notice to the Owners of such Bonds and to the Securities Depositaries and the Information Services that the deposit required by (b) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with this section and stating such maturity or redemption dates upon which moneys are to be available for the payment of the principal of and redemption premiums, if any, on and interest on such Bonds. Neither the securities nor moneys deposited with the Trustee pursuant to this section nor principal or interest payments on any such securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of and redemption premiums, if any, on and interest on such Bonds; provided, that any cash received from such principal or interest payments on such obligations deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable and at the direction of the Issuer, be reinvested in Government Obligations maturing at times and in amounts, together with the other moneys and payments with respect to Government Obligations then held by the Trustee pursuant to this section, sufficient to pay when due the principal of and redemption premiums, if any, and interest to become due on such Bonds on and prior to such redemption date or maturity date thereof, as the case may be, and interest earned from such reinvestments shall, upon receipt by the Trustee of a Written Order so directing, be paid over to the Issuer as received by the Trustee free and clear of any trust, lien or pledge.
SECTION 12.03. Moneys Held for Particular Bonds. Except as otherwise provided in Section 12.02 or 13.09, the amounts held by the Trustee for the payment of the principal or the redemption premiums, if any, or the interest due on any date with respect to particular Bonds shall, on and after such date and pending such payment, be set aside on its books and held in trust by it solely for the Owners of the Bonds entitled thereto.
ARTICLE XIII

MISCELLANEOUS
SECTION 13.01. Dissolution of Issuer. In the event of the dissolution of the Issuer, all the agreements, conditions, covenants and terms contained in the Trust Agreement by or on behalf of, or for the benefit of, the Issuer shall bind or inure to the benefit of the successors of the Issuer from time to time and any officer, board, commission, agency or instrumentality to whom or to which any power or duty of the Issuer shall be transferred.
SECTION 13.02. Parties Interested Herein. Except as in the Trust Agreement otherwise specifically provided, nothing in the Trust Agreement expressed or implied is intended or shall be construed to confer upon any Person other than the Issuer, the Local Agency, the Trustee, and the Owners of the Bonds any right, remedy or claim under or by reason of the Trust Agreement, the Trust Agreement being intended to be for the sole and exclusive benefit of the Issuer, the Local Agency, the Trustee, and the Owners of the Bonds.
SECTION 13.03. Severability of Invalid Provisions. If any clause, provision or section of the Trust Agreement is held illegal or invalid by any court, the invalidity of such clause, provision or section shall not affect any of the remaining clauses, provisions or sections of the Trust Agreement, and the Trust Agreement shall be construed and enforced as if such illegal or invalid clause, provision or section had not been contained herein.
SECTION 13.04. Notice. All written notices to be given hereunder to the Issuer or the Trustee shall be given by mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the Issuer: Brentwood Infrastructure Financing Authority
150 City Park Way
Brentwood, CA 94513
Attention: Treasurer
FAX: (925) 516-5441

If to the Local Agency: City of Brentwood
150 City Park Way
Brentwood, CA 94513
Attention: City Manager
FAX: (925) 516-5441

If to the Trustee: U.S. Bank National Association
One California Street, Suite 2550
San Francisco, CA 94111
Attention: Corporate Trust
Ref.: Brentwood IFA Series 2003
FAX: (415) 273-4590

Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate answer back or other written acknowledgment or confirmation of receipt of the entire notice, approval, demand, report or other communication, (c) if given by first class mail deposited with the United States mail postage prepaid, seventy-two (72) hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, twenty-four (24) hours after delivery to said overnight courier, or (d) if given by any other means, upon delivery at the address specified in this section.
In case, by reason of the suspension of or irregularities in regular mail service, it shall be impractical to mail to the Owners of Bonds notice of any event when such notice is required to be given pursuant to any provision of the Trust Agreement, then any manner of giving such notice as the Issuer shall direct and not objected to by the Trustee shall be deemed to be a sufficient giving of such notice.

SECTION 13.05. Counterparts. The Trust Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original; but all of which such counterparts shall together constitute but one and the same instrument.
SECTION 13.06. Governing Law. The Trust Agreement shall be governed as to validity, construction and performance by the laws of the State.
SECTION 13.07. Holidays. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in the Trust Agreement, shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in the Trust Agreement, and no interest shall accrue for the period from and after such nominal date.
SECTION 13.08. Limitation of Liability. The Issuer shall not be obligated to make any payments required hereunder or under any Bond, or be deemed to incur any liability hereunder or by reason hereof or arising out of any of the transactions contemplated hereby, payable from any funds or assets other than the Trust Estate as provided herein.
SECTION 13.09. Unclaimed Money. Anything contained herein to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of the interest on, or principal or redemption premiums, if any, of any Bond which remains unclaimed for two (2) years after the date when such amounts have become payable, if such money was held by the Trustee on such date, or for two (2) years after the date of deposit of such money if deposited with the Trustee after the date such amounts have become payable, shall be paid by the Trustee to the Issuer as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Issuer for the payment of such amounts; provided, that before being required to make any such payment to the Issuer, the Trustee shall, at the expense of the Issuer, give notice by first class mail to all Owners and to those Securities Depositaries and Information Services selected by it pursuant to Section 4.06 that such money remains unclaimed and that after a date named in such notice, which date shall not be less than sixty (60) days after the date of giving such notice, the balance of such money then unclaimed will be returned to the Issuer.
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IN WITNESS WHEREOF, the Issuer has caused the Trust Agreement to be executed by the Treasurer, the Local Agency has caused the Trust Agreement to be executed by the Director of Finance, and Trustee has caused the Trust Agreement to be executed by its authorized officer, all as of the day and year first above written.

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY

By
Treasurer/Controller
Attest:

By
Secretary of
the Brentwood Infrastructure
Financing Authority

CITY OF BRENTWOOD

By
City Manager


Attest:


By
City Clerk of the
City of Brentwood

U.S. BANK NATIONAL ASSOCIATION,
as Trustee

By
Authorized Officer

EXHIBIT A

FORM OF BOND

UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF CONTRA COSTA

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
CIFP 2003-1 INFRASTRUCTURE REVENUE BOND
SERIES 2003


No. R-__ $______________

INTEREST
RATE MATURITY
DATE DATED
DATE CUSIP
NUMBER

____% September 2, ____ ___________, 2003

Registered Owner: CEDE & CO.

Principal Sum: DOLLARS

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY, a joint exercise of powers agency established pursuant to the laws of the State of California (the “Issuer”), for value received hereby promises to pay to the registered owner specified above, or registered assigns, on the maturity date set forth above (subject to any right of prior redemption hereinafter mentioned) the principal sum set forth above in lawful money of the United States of America; and to pay interest thereon at the interest rate per annum set forth above in like lawful money from the date hereof. The interest on this Bond will be payable on March 2 and September 2 in each year (each an “Interest Payment Date”), commencing on March 2, 2004. The principal hereof and redemption premium hereon, if any, are payable upon presentation and surrender hereof at the Corporate Trust Office of U.S. Bank National Association, in St. Paul, Minnesota, or such other place as designated by the Trustee (together with any successor as trustee under the Trust Agreement hereinafter mentioned, the “Trustee”). Interest hereon is payable by check, mailed by first class mail, on each Interest Payment Date to the owner whose name appears on the bond register maintained by the Trustee as of the close of business on the fifteenth day of the month preceding such Interest Payment Date (the “Record Date”), except with respect to defaulted interest for which a special record date will be established; provided, that in the case of an owner of one million dollars ($1,000,000) or more in aggregate principal amount of the Bonds, upon written request of such owner to the Trustee received not later than the Record Date, such interest shall be paid on the Interest Payment Date in immediately available funds by wire transfer to an account in the United States. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months.

The Issuer and the Trustee may deem and treat the owner of this Bond as the absolute owner hereof for the purpose of receiving payment as herein provided and for all other purposes, and the Issuer and the Trustee shall not be affected by notice to the contrary.
This Bond is one of a duly authorized issue of Bonds of the Issuer designated as “Brentwood Infrastructure Financing Authority CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003” issued in the aggregate principal amount of _____________________ Dollars ($__________) pursuant to the provisions relating to the joint exercise of powers found in Chapter 5 of Division 7 of Title 1 of the California Government Code, including the Marks-Roos Local Bond Pooling Act of 1985 (California Government Code, Sections 6584-6594) as amended and supplemented (the “Act”), and pursuant to a trust agreement dated as of August 1, 2003, by and among the Issuer, the City of Brentwood (the “Local Agency”) and the Trustee (the “Trust Agreement”). The Bonds are issued for the purpose of purchasing Local Obligations (as that term is defined in the Trust Agreement), and reference is hereby made to the Trust Agreement (a copy of which is on file at the San Francisco office of the Trustee) and all trust agreements supplemental thereto and to the Act for a description of the purposes thereof, of the rights there under of the owners of the Bonds, of the nature and extent of the security for the Bonds and of the rights, duties and immunities of the Trustee, the obligations of the Local Agency, and the rights and obligations of the Issuer there under, to all the provisions of which Trust Agreement, the owner of this Bond, by acceptance hereof, assents and agrees.

The Bonds and the interest thereon and any redemption premiums thereon are special, limited obligations of the Issuer payable solely from the Trust Estate (as that term is defined in the Trust Agreement) and are secured by the Trust Estate, including amounts held in the funds and accounts (other than the Rebate Fund) established pursuant to the Trust Agreement (including proceeds of the sale of the Bonds), subject only to the provisions of the Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth in the Trust Agreement. No member or officer of the Issuer, nor any person executing this Bond, shall in any event be subject to any personal liability or accountability by reason of the issuance of this Bond.

THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE FROM, AND SECURED AS TO THE PAYMENT OF THE PRINCIPAL OF AND ANY REDEMPTION PREMIUMS ON OR INTEREST ON THE BONDS IN ACCORDANCE WITH THEIR TERMS AND THE TERMS OF THE TRUST AGREEMENT, SOLELY FROM THE TRUST ESTATE. THE BONDS DO NOT CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF THE ISSUER OR ITS MEMBERS, AND UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE OBLIGATED TO PAY PRINCIPAL OF OR ANY REDEMPTION PREMIUMS ON OR INTEREST ON THE BONDS EXCEPT FROM THE TRUST ESTATE. NEITHER THE STATE OF CALIFORNIA NOR ANY PUBLIC AGENCY (OTHER THAN THE ISSUER) NOR ANY MEMBER OF THE ISSUER IS OBLIGATED TO PAY THE PRINCIPAL OF OR ANY REDEMPTION PREMIUMS ON OR INTEREST ON THE BONDS, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA OR ANY PUBLIC AGENCY THEREOF OR ANY MEMBER OF THE ISSUER (INCLUDING THE LOCAL AGENCY) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR ANY REDEMPTION PREMIUMS ON OR INTEREST ON THE BONDS, AND NEITHER THE PRINCIPAL OF NOR ANY REDEMPTION PREMIUMS ON NOR INTEREST ON THE BONDS CONSTITUTES A DEBT, LIABILITY OR OBLIGATION OF THE STATE OF CALIFORNIA OR ANY PUBLIC AGENCY (OTHER THAN THE ISSUER) OR ANY MEMBER OF THE ISSUER.

The Bonds are subject to extraordinary, optional and mandatory redemption upon the terms, at the times, upon notice and with the effect provided in the Trust Agreement, which provisions are hereby incorporated by reference in this Bond as if fully set forth herein.

The Bonds are issuable as fully registered bonds in denominations of $5,000 or any integral multiple thereof. This Bond may be transferred or exchanged by the owner hereof, in person or by an attorney duly authorized in writing, but only in the manner, subject to the limitations and upon payment of the charges, if any, provided in the Trust Agreement, and upon surrender and cancellation of this Bond. Upon such transfer or exchange, a new Bond or new Bonds, of authorized denominations, for the same aggregate principal amount, interest rate, and maturity will be issued to the transferee in accordance with the provisions of the Trust Agreement. The Trustee is not required to register the transfer of, or to exchange, any Bond during the period established by the Trustee for selection of Bonds for redemption or any Bond which has been selected for redemption.

The Trust Agreement and the rights and obligations of the Issuer and of the owners of the Bonds may be modified or amended from time to time and at any time (and in certain cases without the consent of the owners) in the manner, to the extent, and upon the terms provided in the Trust Agreement.

The Trust Agreement contains provision permitting the Issuer to make provisions for the payment of the interest on, and the principal and premium, if any, of, any of the Bonds so that such Bonds shall no longer be deemed to be outstanding under the terms of the Trust Agreement.

It is hereby certified and recited that any and all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by the Constitution and laws of the State of California, including the Act, and that the amount of this Bond, together with all other indebtedness of the Issuer, does not exceed any limit prescribed by the Constitution and laws of the State of California, including the Act, and is not in excess of the amount of Bonds permitted to be issued under the Trust Agreement.

This Bond shall not be entitled to any benefit under the Trust Agreement, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been manually signed by an authorized signatory of the Trustee.

IN WITNESS WHEREOF, the Brentwood Infrastructure Financing Authority has caused this Bond to be executed in its name and on its behalf by the manual or facsimile signature of its Treasurer/Controller and attested by the manual or facsimile signature of its Secretary, all as of the dated date set forth above.

BRENTWOOD INFRASTRUCTURE
FINANCING AUTHORITY
By_______________________________________
Treasurer/Controller

Attest:

Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Trust Agreement, which has been authenticated on the date below.
Dated: ______________, 2003
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
Authorized Signatory

ASSIGNMENT
For value received, the undersigned sells, assigns and transfers unto ______________________________________ this registered Bond and irrevocably constitutes and appoints _______________________________________________ attorney to transfer the same on the books of the Trustee, with full power of substitution in the premises.
Dated:

SIGNATURE GUARANTEED BY:

NOTE: The signature(s) to this Assignment must correspond with the name(s) as written on the face of this Bond in every particular, without alteration or enlargement or any change whatsoever. The signature(s) must be guaranteed by an eligible guarantor institution (being banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program) pursuant to Securities and Exchange Commission Rule 17A(d)15.
Social Security Number, Taxpayer Identification Number or other Identifying Number of Assignee:


ARTICLE I DEFINITIONS 2
SECTION 1.01. Definitions 2
SECTION 1.02. Rules of Construction 11
ARTICLE II THE BONDS; TERMS OF THE BONDS 12
SECTION 2.01. Authorization 12
SECTION 2.02. The Bonds 12
SECTION 2.03. Form of Bonds 13
SECTION 2.04. Bonds Mutilated, Destroyed, Stolen or Lost 13
SECTION 2.05. Execution of Bonds 14
SECTION 2.06. Book-Entry System 14
SECTION 2.07. Transfer and Exchange of Bonds 15
SECTION 2.08. Regulations with Respect to Exchanges or Transfers of Bonds 15
SECTION 2.09. Authentication of Bonds 16
SECTION 2.10. Cancellation of Bonds 16
SECTION 2.11. Bonds as Special Obligations 16
ARTICLE III ISSUANCE OF BONDS 17
SECTION 3.01. Provisions for the Issuance of Bonds 17
SECTION 3.02. No Issuance of Additional Parity Bonds; Refunding Bonds 17
ARTICLE IV REDEMPTION AND PURCHASE OF BONDS 18
SECTION 4.01. Privilege of Redemption and Redemption Price 18
SECTION 4.02. Extraordinary Redemption 18
SECTION 4.03. Optional Redemption of Bonds 18
SECTION 4.04. Mandatory Redemption of Bonds 18
SECTION 4.05. Redemption Instructions 19
SECTION 4.06. Notice of Redemption 20
SECTION 4.07. Selection of Bonds for Redemption 20
SECTION 4.08. Payment of Redeemed Bonds 21
SECTION 4.09. Purchase in Lieu of Redemption 21
ARTICLE V REVENUES AND FUNDS FOR BONDS 21
SECTION 5.01. Establishment of Funds 21
SECTION 5.02. Deposit of Proceeds of Bonds 22
SECTION 5.03. Proceeds Fund. 22
SECTION 5.04. Local Obligation Fund 22
SECTION 5.05. Covenant Respecting Redemption Funds for the Local Obligations 22
SECTION 5.06. Revenue Fund 23
SECTION 5.07. Revenues Derived From Property Owner Prepayments 23
SECTION 5.08. Interest Fund 23
SECTION 5.09. Principal Fund 24
SECTION 5.10. Reserve Fund 24
SECTION 5.11. Expense Fund 24
SECTION 5.12. Transfer to Local Agency 25
SECTION 5.13. Redemption Fund 25
SECTION 5.14. Rebate Fund 25
ARTICLE VI SECURITY FOR AND INVESTMENT OF MONEYS 26
SECTION 6.01. Security 26
SECTION 6.02. Investment of Funds 26
ARTICLE VII COVENANTS OF THE ISSUER AND THE LOCAL AGENCY 27
SECTION 7.01. Payment of Bonds; No Encumbrances 27
SECTION 7.02. Enforcement and Amendment of Local Obligations 27
SECTION 7.03. Further Documents 28
SECTION 7.04. Tax Covenants 28
SECTION 7.05. Maintenance of Existence 29
SECTION 7.06. [Reserved] 29
SECTION 7.07. Continuing Disclosure 29
ARTICLE VIII DEFAULTS AND REMEDIES 30
SECTION 8.01. Events of Default 30
SECTION 8.02. Proceedings by Trustee; No Acceleration 30
SECTION 8.03. Effect of Discontinuance or Abandonment 31
SECTION 8.04. Rights of Owners 31
SECTION 8.05. Restriction on Owner’s Action 31
SECTION 8.06. Power of Trustee to Enforce 32
SECTION 8.07. Remedies Not Exclusive 32
SECTION 8.08. Waiver of Events of Default; Effect of Waiver 32
SECTION 8.09. Application of Moneys 32
ARTICLE IX THE TRUSTEE 33
SECTION 9.01. Appointment and Acceptance of Duties 33
SECTION 9.02. Duties, Immunities and Liability of Trustee 34
SECTION 9.03. Merger or Consolidation 36
SECTION 9.04. Compensation and Indemnification 36
SECTION 9.05. Liability of Trustee 37
SECTION 9.06. Right to Rely on Documents 37
SECTION 9.07. Preservation and Inspection of Documents 37
SECTION 9.08. Indemnity for Trustee 38
ARTICLE X EXECUTION OF INSTRUMENTS BY OWNERS AND PROOF OF OWNERSHIP OF BONDS 38
SECTION 10.01. Execution of Instruments; Proof of Ownership 38
ARTICLE XI MODIFICATION OF TRUST AGREEMENT AND SUPPLEMENTAL TRUST AGREEMENTS 38
SECTION 11.01. Supplemental Trust Agreements Without Consent of Owners 38
SECTION 11.02. Trustee Authorized to Enter into Supplemental Trust Agreement 39
SECTION 11.03. Supplemental Trust Agreements With Consent of Owners 39
ARTICLE XII DEFEASANCE 40
SECTION 12.01. Defeasance 40
SECTION 12.02. Bonds Deemed to Have Been Paid 40
SECTION 12.03. Moneys Held for Particular Bonds 41
ARTICLE XIII MISCELLANEOUS 41
SECTION 13.01. Dissolution of Issuer 41
SECTION 13.02. Parties Interested Herein 41
SECTION 13.03. Severability of Invalid Provisions 41
SECTION 13.04. Notice 42
SECTION 13.05. Counterparts 42
SECTION 13.06. Governing Law 42
SECTION 13.07. Holidays 43
SECTION 13.08. Limitation of Liability 43
SECTION 13.09. Unclaimed Money 43
EXECUTION 47
EXHIBIT A - BOND FORM A-1

CITY OF BRENTWOOD
LIMITED OBLIGATION IMPROVEMENT BONDS
ASSESSMENT DISTRICT NO. 2003-1

LOCAL OBLIGATIONS PURCHASE CONTRACT

dated as of _______________, 2003

City of Brentwood
150 City Park Way
Brentwood, California 94513

Ladies and Gentlemen:

The undersigned Brentwood Infrastructure Financing Authority (the “Authority”), offers to enter into this Local Obligations Purchase Contract (the “Local Obligations Purchase Contract”) with you, the City of Brentwood (the “City”), which, upon acceptance, will be binding upon the City and the Authority. Except as otherwise provided herein, capitalized terms used herein shall have the meanings attributed to them in the Trust Agreement (the “Trust Agreement”), dated as of August 1, 2003, by and among the Authority, the City and U.S. Bank Trust National Association, as trustee (the “Trustee”).

Section 21. Purchase, Sale and Delivery of the Obligations.
(a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Authority hereby agrees to purchase from the City, and the City hereby agrees to sell to the Authority, all (but not less than all) of its City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2003-1 (the “Local Obligations”), dated the date of their delivery, bearing interest payable on the dates and at the interest rates, and maturing on the dates and in the amounts and subject to the mandatory redemption provisions set forth in Exhibit A attached hereto. Notwithstanding any other provision hereof or of the Local Obligation Resolution, so long as the Local Obligations are held by the Trustee, there shall be one Local Obligation for each maturity and series thereof in the denomination of the entire outstanding principal amount of such maturity of such series of Local Obligations.
The purchase price for the Local Obligations shall be:
Principal Amount $[PAR]
Less 6Discount ([DISC])
Purchase Price $[PROCEED]

The total purchase price shall be payable from amounts held by the Trustee under the Trust Agreement, subject to the terms and conditions thereof. Said purchase price reflects the lack of a reserve fund for the Local Obligations under the Resolution defined below and the funding of the Reserve Fund and all costs of issuance under the Trust Agreement, which amount the City deems applied for the benefit of the Local Obligations and as additional consideration therefore.
The Local Obligations shall be substantially in the forms described in, shall be issued and secured under the provisions of, and shall be payable as provided in Resolution No. ____ adopted by the City Council of the City on July 8, 2003, and providing for the issuance of the Local Obligations (the “Resolution”) and registered in the name of the Trustee.

Pursuant to the Resolution, the Treasurer shall deposit or cause to be deposited from the proceeds of the Local Obligations the amounts in the funds and accounts established under the Resolution as shown in Exhibit A.

(b) At 8:00 a.m., California time, on _______________, 2003, or at such earlier or later time or date as shall be agreed by the City and the Authority (such time and date being herein referred to as the “Closing Date”), the City will deliver to the Authority at the offices of Orrick, Herrington & Sutcliffe LLP, San Francisco, California (or such other location as may be designated by the Authority and approved by the City) the Local Obligations in definitive forms, duly executed by the City and authenticated by the Treasurer of the City, and will deliver to the Authority at said location, the other documents herein mentioned; and the Authority will accept such delivery and pay the total purchase price of the Local Obligations as set forth in paragraph (a) of this Section by wire transfer payable as provided in the Trust Agreement (such delivery and payment being herein referred to as the “Closing”). The Local Obligations shall be made available to the Authority not later than one business day before the Closing Date for purposes of inspection.
Section 22. Representations, Warranties and Agreements of the City. The City represents and warrants to and agrees with the Authority that:
(a) The City is and will be at the Closing Date duly organized and existing under the Constitution and laws of the State of California, with the full power and authority to issue the Local Obligations, and to carry out and consummate the transactions contemplated by this Local Obligations Purchase Contract, the Trust Agreement and the Resolution, and this Local Obligations Purchase Contract, the Trust Agreement and the Resolution are and will be at the Closing Date valid and binding obligations of the City;
(b) When delivered to and paid for by the Authority at the Closing in accordance with the provisions of this Local Obligations Purchase Contract, the Local Obligations will have been duly authorized, executed, issued and delivered and will constitute valid and binding obligations of the City in conformity with, and entitled to the benefit and security of, the Resolution;
(c) By official action of the City prior to or concurrently with the acceptance hereof, the City has adopted the Resolution, authorized and approved the execution and delivery of the Local Obligations, the Trust Agreement and this Local Obligations Purchase Contract, and authorized and approved the performance by the City of the obligations on its part contained in the Local Obligations, the Resolution, the Trust Agreement and this Local Obligations Purchase Contract and has authorized and approved the consummation by the City of all other transactions contemplated by this Local Obligations Purchase Contract;
(d) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or, to the knowledge of the City, threatened against the City or its properties or operations (i) seeking to restrain or enjoin the issuance, sale, execution or delivery of the Local Obligations, (ii) in any way contesting or affecting the validity or enforceability of the Local Obligations, the Resolution, the Trust Agreement or this Local Obligations Purchase Contract, any proceedings of the City taken concerning the issuance or sale of the Local Obligations, the collection of assessments levied by the City in Assessment District No. 2003-1 (the “Assessment District”) or the existence or powers of the City relating to the issuance of the Local Obligations or (iii) which, if determined adversely to the City or its interests, would have a material and adverse effect on the consummation of the transactions contemplated by or the validity of the Local Obligations, the Resolution, the Trust Agreement or this Local Obligations Purchase Contract or on the operations of the City;
(e) The adoption of the Resolution and the execution and delivery of the Local Obligations, the Trust Agreement and this Local Obligations Purchase Contract, and the consummation of the transactions therein and herein contemplated, and the fulfillment of or compliance with the terms and conditions thereof and hereof will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the City is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Local Obligations Purchase Contract, the Resolution, the Trust Agreement, the Local Obligations or the operations of the City;
(f) The City is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, which breach or default may have consequences that would materially and adversely affect the consummation of the transactions described in the Resolution, the Trust Agreement, the Local Obligations or this Local Obligations Purchase Contract, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute such a breach or default under any such instrument;
(g) All approvals, consents, authorizations, certifications and other orders of any governmental authority, board, agency or commission having jurisdiction, and all filings with any such entities, which would constitute conditions precedent to or the failure to obtain which would materially adversely affect the performance by the City of its obligations hereunder or under the Resolution, the Trust Agreement or the Local Obligations, have been duly obtained and no further consent, approval, authorization or other action or filing with or by any governmental or regulatory authority having jurisdiction over the City is or will be required for the issue and sale of the Local Obligations or the consummation by the City of the other transactions described in this Local Obligations Purchase Contract, the Resolution, the Trust Agreement or the Local Obligations;
(h) The assessments constituting the security for the Local Obligations have been duly and lawfully levied under and pursuant to the Municipal Improvement Act of 1913 (being Division 12 of the Streets and Highways Code) and such assessments constitute a valid and legally binding lien on the land in the Assessment Districts;
(i) The City has authorized and will annually levy and collect assessments, in addition to amounts necessary to pay debt service on the Local Obligations, in an amount sufficient (subject to any maximum assessment permitted by law) to pay the Authority extraordinary or additional Expenses (as defined in the Trust Agreement) arising directly from the administration or enforcement of the Local Obligations plus a pro-rata share of all other Expenses, and will pay such amounts (when, as and if received by the City) to the Fiscal Agent for deposit in the Expense Fund held by the Trustee under the Trust Agreement. Such pro-rata share shall be determined by the ratio which the aggregate principal amount of the Outstanding Local Obligations bear to the aggregate principal amount of all other obligations held by the Trustee in each Local Obligation Fund under the Trust Agreement, both as of the date of calculation.
(j) The City has complied with all requirements of the California Environmental Quality Act with respect to formation of the Assessment District, the approval of the Final Engineer’s Report therefore, the levy of the Assessments, the ordering of the work in the Assessment District, the adoption of the Resolution by the City Council and the authorization, execution and delivery of the Local Obligations, the Funding, Acquisition and Disclosure Agreements, the Trust Agreement, the Continuing Disclosure Agreement and this Purchase Contract.
The execution and delivery of this Local Obligations Purchase Contract by the City shall constitute a representation by the City to the Authority that the representations, warranties and agreements contained in this Section 2 are true as of the date hereof; provided that as to all matters of law the City is relying on the advice of counsel to the City; and provided further that no member of the City Council shall be individually liable for the breach of any representation, warranty or agreement contained herein.

Section 23. Conditions to the Local Obligations of the Authority. The obligation of the Authority to accept delivery of and pay for the Local Obligations on the Closing Date shall be subject, at the option of the Authority, to the accuracy in all material respects of the representations, warranties and agreements on the part of the City contained herein as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates, or other documents furnished pursuant to the provisions hereof, and to the performance by the City of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions:
(a) At the Closing Date, the Resolution, the Trust Agreement and this Local Obligations Purchase Contract shall be in full force and effect in the form heretofore submitted to the Authority and there shall have been taken in connection with the issuance of the Local Obligations and with the transactions contemplated thereby and by this Local Obligations Purchase Contract, all such actions as, in the opinion of Orrick, Herrington & Sutcliffe LLP (“Bond Counsel”), shall be necessary and appropriate;
(b) At the Closing Date, the Resolution, the Trust Agreement and this Local Obligations Purchase Contract shall not have been amended, modified or supplemented, except as may have been agreed to by the Authority;
(c) At or prior to the Closing Date, the Authority and the Trustee shall have received the following documents, in each case satisfactory in form and substance to the Authority:
(i) A certified copy of the Resolution;
(ii) An executed copy of the Trust Agreement;
(iii) An unqualified approving opinion of Bond Counsel, dated the Closing Date and addressed to the City, as to the validity of the Local Obligations;
(iv) An opinion of the City Attorney, dated the Closing Date and addressed to the City and the Authority, in substantially the form attached hereto as Exhibit B; and
(v) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Authority or Bond Counsel may reasonably request to evidence compliance by the City with legal requirements, the truth and accuracy, as of the Closing Date, of the representations of the City contained herein, and the due performance or satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the City.
If the City shall be unable to satisfy the conditions to the Authority’s obligations contained in this Local Obligations Purchase Contract, this Local Obligations Purchase Contract shall terminate and neither the Authority nor the City shall have any further obligation hereunder.

Section 24. Expenses. All expenses and costs of the City and the Authority incident to the authorization, issuance and sale of the Local Obligations including fees and expenses of consultants, the Trustee, the Fiscal Agent, the appraiser, fees and expenses of Bond Counsel and counsel for the City, shall be paid by the City. All ongoing Expenses shall be paid by the City to the Trustee as described in Section 2(i) above. The City agrees that it will pay, from the proceeds of the Local Obligations, the underwriting fees and expenses incurred by the Authority in connection with the sale of the Authority’s CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003 (the “Bonds”).
Section 25. Notices. Any notice or other communication to be given to the City under this Local Obligations Purchase Contract may be given by delivering the same in writing at the City’s address set forth above, Attention: City Manager, and any such notice or other communications required to be given to the Authority may be given by delivering the same in writing to the Authority at 150 City Park Way, Brentwood, CA 94513, Attention: Treasurer/Controller. The approval of the Authority when required hereunder or the determination of their satisfaction as to any document referred to herein shall be in writing signed by the Authority and delivered to the City.
Section 26. Parties In Interest; Governing Law. This Local Obligations Purchase Contract is made solely for the benefit of the City, the Authority and the Trustee and no other persons, partnership, association or corporation shall acquire or have any right hereunder or by
Section 27. virtue hereof. This Local Obligations Purchase Contract shall be governed by the laws of the State of California.
Section 28. Pledge; Assignment. The City hereby approves the Trust Agreement and the pledge and assignment of all of the Authority’s right, title and interest in this Local Obligations Purchase Contract and the Local Obligations to the Trustee under the Trust Agreement for the benefit of the Owners of the Bonds (as provided in the Trust Agreement).
Section 29. Limitation on Liability. The Authority shall incur no liability hereunder or by reason hereof or arising out of the transactions contemplated hereby, and shall be under no obligation to purchase the Local Obligations hereunder, except from proceeds of the Bonds available therefore held by the Trustee under, and subject to the conditions set forth in, the Trust Agreement. The City shall incur no liability hereunder or by reason hereof or arising out of the transactions contemplated hereunder, except as otherwise provided in Sections 4 and 5 hereof, or be obligated to make any payments with respect to the Local Obligations, except from amounts pledged to the payment of the Local Obligations (including assessments levied and collected in the Assessment District) pursuant to the terms thereof.
Section 30. Counterparts. This Local Obligations Purchase Contract may be signed in two or more counterparts; all such counterparts, when signed by all parties, shall constitute but one single agreement.
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY

By_____________________________________
Treasurer/Controller


ACCEPTED AND AGREED TO:

CITY OF BRENTWOOD

By_____________________________________
Treasurer



Exhibit A

Maturity Schedules and Deposits of Local Obligations Proceeds

CITY OF BRENTWOOD
LIMITED OBLIGATION IMPROVEMENT BONDS
ASSESSMENT DISTRICT NO. 2003-1

Maturity Schedules


Maturity Date
(September 2)
Principal Amount
Interest Rate

2004 $ %
2005
2006
2007
2008
2009
2010
2011
20__
20__*
20__*



* Term bonds

Interest on the Local Obligations shall be payable semiannually on March 2 and September 2 of each year, commencing on March 2, 2004.



Term Bonds Maturing September 2, 20__
Principal: $_________
Interest Rate: _____%

Schedule of Mandatory Term Bond Redemptions


Year
(September 2) Mandatory
Term Bond
Redemption

20__ $
20__
20__
20__
20__
20__
20__
20__ (maturity)
Total


Term Bonds Maturing September 2, 20
Principal: $____________
Interest Rate: _______%

Schedule of Mandatory Term Bond Redemptions


Year
(September 2) Mandatory
Term Bond
Redemption

20__ $
20__
20__
20__
20__
20__
20__
20__
20__
20__ (maturity)
Total



Deposits of Local Obligations Proceeds

City of Brentwood
Limited Obligation Improvement Bonds
Assessment District No. 2003-1


A. Local Obligations Proceeds are computed as follows:

Principal Amount $[PAR]

Less Discount ([DISC])

Local Obligations Proceeds $[PROCEED]

B. Distribution of Local Obligations Proceeds by Fiscal Agent:

Total

Transfer to City for:
City Fees paid out of Improvement Fund
Wastewater Facilities Fees $
Parks and Trails Fees
Water Facilities Fees
Roadway Improvement Fees $

Total wire transferred to the City $

Deposit in Acquisition Account within the Improvement Fund


Transfer to U.S. Bank National Association for prepayment of Assessment District No. 93-3 liens as described in the final Engineer’s Report




Transfer to U.S. Bank National Association for prepayment of Reassessment District No. 96-1 liens as described in the final Engineer’s Report




Total Local Obligations Proceeds $


Exhibit B


[Form of City Attorney Opinion]

_____________, 2003


Brentwood Infrastructure RBC Dain Rauscher, Inc.
Financing Authority 201 California Street
150 City Park Way San Francisco, CA 94111
Brentwood, CA 94513

City of Brentwood Orrick, Herrington & Sutcliffe LLP
150 City Park Way 400 Sansome Street
Brentwood, CA 94513 San Francisco, CA 94111-3143


RE: CITY OF BRENTWOOD
LIMITED OBLIGATION IMPROVEMENT BONDS
ASSESSMENT DISTRICT NO. 2003-1

Ladies and Gentlemen:

I serve as City Attorney for the City of Brentwood and General Counsel for the Brentwood Infrastructure Financing Authority (the “Authority”). I have been asked by Bond Counsel to render an opinion in connection with the City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2003-1 (the “Local Obligations”) in the aggregate principal amount of $[PAR].

As of the date hereof, it is my opinion that:

(i) the City is duly organized and validly existing as a municipal corporation under the Constitution and laws of the State of California, with the legal right to issue the Local Obligations and to perform all of its obligations under the Local Obligations Purchase Contract dated as of _____________, 2003, between the City and the Authority, as purchaser (the “Local Obligations Purchase Contract”);
(ii) Resolution No. ____ (the “Resolution”) has been duly adopted by the City Council of the City on July 8, 2003;
(iii) the Local Obligations Purchase Contract and the Trust Agreement dated as of August 1, 2003, (the “Trust Agreement”), by and among the City, the Authority and U.S. Bank Trust National Association, as trustee, and the Local Obligations have been duly authorized and executed by the City;
(iv) the Resolution, the Local Obligations Purchase Contract, the Trust Agreement and the Local Obligations are valid and binding obligations of the City enforceable in accordance with their respective terms except as such enforcement may be limited by bankruptcy, insolvency and other similar laws affecting the creditor’s rights generally and by equitable principles if equitable remedies are sought; and
(v) there is no action, suit or proceeding at law or in equity, before or by any court pending against or affecting the existence of the city or the titles of its officers to their respective offices, or seeking to restrain or enjoin the issuance, sale or delivery of the Local Obligations, the application of the proceeds thereof in accordance with the Resolution or the Trust Agreement, or the collection or application of the assessments and the interest thereon to pay the principal of and interest on the Local Obligations, or in any way contesting or affecting the validity or enforceability of the Local Obligations, the Resolution, the Trust Agreement, the Local Obligations Purchase Contract, or the powers of the City or its authority with respect to the Local Obligations, the Resolution, the Trust Agreement, the Local Obligations Purchase Contract, or any action on the part of the City contemplated by any of said documents.
My opinion is limited to the laws of the State of California, and I assume no responsibility as to the applicability or the effect of the laws (including securities, blue sky and insolvency laws) of any other jurisdiction or of federal or state income tax laws. This opinion is limited to the matters stated herein, and no opinion is implied beyond the matters expressly stated. This opinion is given for your used and benefit only in connection with transactions described herein, and it may not be relied upon in any other transaction or by any other person, nor may copies be delivered to any person other than your counsel without prior written consent.
Very truly yours,

By:
City Attorney of the City of Brentwood

cc: John Stevenson, City Manager



CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the “Disclosure Agreement”) is executed and delivered by the City of Brentwood, California (the “Local Agency”) and U.S. Bank National Association, as Trustee and Dissemination Agent (the “Trustee” and “Dissemination Agent”) in connection with the issuance of $__________ Brentwood Infrastructure Financing Authority CIFP 2003-1 Infrastructure Revenue Bonds, Series 2003 (the “Bonds”). The Bonds are being issued pursuant to a Trust Agreement dated as of August 1, 2003 among the Brentwood Infrastructure Financing Authority (the “Issuer”), the Local Agency and the Trustee (the “Trust Agreement”). The proceeds of the Bonds are being used by the Issuer to acquire the City of Brentwood Limited Obligation Improvement Bonds, Assessment District No. 2003-1, of the Local Agency (the “Local Obligations”).
Pursuant to Section 7.07 of the Trust Agreement the Local Agency and the Trustee covenant and agree as follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Local Agency, Dissemination Agent and the Trustee for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule (defined below). The Local Agency, Dissemination Agent and the Trustee acknowledge that the Issuer has undertaken no responsibility with respect to any reports, notices or disclosures provided or required under this Disclosure Agreement, and has no liability to any person, including any Holder or Beneficial Owner of the Bonds, with respect to the Rule.
SECTION 2. Definitions. In addition to the definitions set forth in the Trust Agreement, which apply 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 Local Agency 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, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.
“ Disclosure Representative” shall mean the Director of Finance and Information Systems of the Local Agency or his or her designee, or such other person as the Local Agency shall designate in writing to the Dissemination Agent and Trustee from time to time.
“ Dissemination Agent” shall mean the Trustee, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Local Agency and which has filed with the Trustee a written acceptance of such designation.
“ Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Agreement.
“ National Repository” shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. as they may be designated from time to time pursuant to the Rule. Information on the National Repositories as of a particular date is currently available on the Internet as www.sec.gov/consumer/nrmsir.htm.
“ Participating Underwriter” shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds.
“ Repository” shall mean each National Repository and each State Repository.
“ Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“ State” shall mean the State of California.
“ State Repository” shall mean any public or private repository or entity designated by the State as the state repository for the purpose of the Rule and recognized as such by the Securities and Exchange Commission. As of the date of this Agreement, there is no State Repository.
SECTION 3. Provision of Annual Reports.
(a) The Local Agency shall, or upon written direction, shall cause the Dissemination Agent to, not later than 8 months after the end of the Local Agency’s fiscal year (presently June 30), commencing with the report for the 2002-2003 Fiscal Year, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement. If the Local Agency’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(f).
(b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report to the Repositories, the Local Agency shall provide the Annual Report to the Dissemination Agent and the Trustee (if the Trustee is not the Dissemination Agent). If by such date the Trustee has not received a copy of the Annual Report, the Trustee shall contact the Local Agency and the Dissemination Agent to determine if the Local Agency is in compliance with the first sentence of this subsection (b). The Local Agency shall provide a written certification with each Annual Report furnished to the Dissemination Agent and the Trustee to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent and Trustee may conclusively rely upon such certification of the Local Agency and shall have no duty or obligation to review such Annual Report.
(c) If the Trustee is unable to verify that an Annual Report has been provided to the Repositories by the date required in subsection (a), the Trustee shall send a notice to-each Repository in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) determine each year prior to the final date for providing the Annual Report the name and address of each National Repository and the State Repository, if any; and
(ii) file a report with the Local Agency, the Issuer and (if the Dissemination Agent is not the Trustee) the Trustee certifying that the Annual Report has been-provided pursuant to this Disclosure Agreement, stating the date it was provided, and listing all the Repositories to which it was provided to the extent such information is accessible to the Dissemination Agent.
SECTION 4. Content of Annual Reports. The Local Agency’s Annual Report shall contain or include by reference the following:
1. A schedule showing, for the CIFP 2003-1 District, the aggregate amount of the Local Obligations issued, including the debt service schedule for such Local Obligations.
2. A statement of the amounts on deposit in the Improvement Fund (including all accounts therein) and the Reserve Fund.
3. A statement of the status of the construction of the Improvements, including the percentage completed, any material construction delays or cost overruns (but only with respect to Improvements being constructed by or under the direction and supervision of the Local Agency) and the estimated completion date. This information need not be reported in any Annual Report after all Improvements are completed.
4. A table showing the current development in each District, including the number of parcels that are developed, under development and undeveloped; assessed values; and the remaining assessment lien. The information with respect to the parcels can be as reflected on the most recent secured property tax roll of the County unless more current information is available to the City.
5. A table showing the principal property owners as reflected on the most recent secured property tax roll of the County responsible for greater than 5% of the remaining assessment lien.
6. To the extent available, the current status of any tentative or final subdivision maps covering the property in the Districts.
7. Information concerning any delinquencies in the payment of assessment installments securing the Local Obligations including (i) the total amount of delinquencies in District, both as a dollar amount and as a percentage of the total levy for the Fiscal Year and (ii) with respect to any delinquency of an owner which holds land subject to more than 5% of the assessment liens securing Local Obligations, the following information:
a. Assessor’s Parcel Number
b. Record owner of the parcel;
c. Amount of delinquency, including separate statement of amounts representing principal on Local Obligations, interest on Local Obligations, administrative expenses levy, penalties and interest on delinquency;
d. Due date of first delinquent installment; and
e. Status of foreclosure action, if any.
8. A statement describing any changes in land use entitlements or zoning within the District (including information concerning any growth control or similar ordinances or enactments) since the later of (i) the date of the Official Statement or (ii) the date of the immediately preceding Annual Report.
9. The audited financial statement of the Local Agency for the preceding Fiscal Year prepared in accordance with generally accepted accounting practices; provided, that if the audited financial statements are not available at the time of filing of the Annual Report, they may be filed separately after filing of the Annual Report but the Annual Report shall contain unaudited financial statements of the Local Agency for the preceding Fiscal Year; and provided, further, that in each Annual Report or other filing containing the Local Agency’s financial statements, the following statement shall be included in bold type:
“ THE FOLLOWING FINANCIAL STATEMENT IS PROVIDED SOLELY TO COMPLY WITH THE SECURITIES EXCHANGE COMMISSION STAFF’S INTERPRETATION OF RULE 15C2-12. NO FUNDS OR ASSETS OF THE CITY OF BRENTWOOD (OTHER THAN THE ASSESSMENTS LEVIED IN THE CIFP 2003-1 ASSESSMENT DISTRICT) ARE REQUIRED TO BE USED TO PAY DEBT SERVICE ON THE BONDS AND THE CITY IS NOT OBLIGATED TO ADVANCE AVAILABLE FUNDS FROM THE CITY TREASURY TO COVER ANY DELINQUENCIES. INVESTORS SHOULD NOT RELY ON THE FINANCIAL CONDITION OF THE CITY IN EVALUATING WHETHER TO BUY, HOLD OR SELL THE BONDS.”
Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Local Agency is an “obligated person” (as defined by the Rule), which have been filed with each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Local Agency shall clearly identify each such other document so included by reference.
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Local Agency shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material:
1. principal and interest payment delinquencies;
2. non-payment related defaults;
3. modifications to rights of Bondholders;
4. optional, contingent or unscheduled bond calls;
5. defeasances;
6. rating changes;
7. adverse tax opinions or events affecting the tax-exempt status of the Bonds;
8. unscheduled draws on debt service reserves reflecting financial difficulties;
9. unscheduled draws on credit enhancements reflecting financial difficulties;
10. substitution of credit or liquidity providers, or their failure to perform; and
11. release, substitution or sale of property securing repayment of the Bonds.
(b) The Trustee shall, within one (1) Business Day, or as soon as reasonably practicable thereafter, of obtaining actual knowledge of the occurrence of any of the Listed Events (provided the Trustee shall not be responsible to determine the materiality of any such Listed Event) contact the Disclosure Representative, inform such person of the event, and request that the Local Agency promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (f) and promptly direct the Trustee whether or not to report such event to the Bondholders. In the absence of such direction the Trustee shall not report such event unless otherwise required to be reported by the Trustee to the Bondholders under the Trust Agreement. The Trustee may conclusively rely upon such direction (or lack thereof). For purposes of this Disclosure Agreement, “actual knowledge” of the occurrence of such Listed Events shall mean actual knowledge by the officer at the Corporate Trust Office of the Trustee with regular responsibility for the administration of matters related to the Trust Agreement.
(c) Whenever the Local Agency obtains knowledge of the occurrence of a Listed Event, because of a notice from the Trustee pursuant to subsection (b) or otherwise, the Local Agency shall as soon as possible determine if such event would be material under applicable federal securities laws.
(d) If the Local Agency has determined that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Local Agency shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (f).
(e) If in response to a request under subsection (b), the Local Agency determines that the Listed Event would not be material under applicable federal securities laws, the Local Agency shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (f).
(f) If the Dissemination Agent has been instructed by the Local Agency to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the Municipal Securities Rulemaking Board and each State Repository with a copy to the Local Agency. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(4) and (5) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Holders of affected Bonds pursuant to the Trust Agreement.
SECTION 6. Termination of Reporting Obligation. The Local Agency’s, Trustee’s and Dissemination Agent’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds or as to the Trustee and Dissemination Agent, the earlier resignation or removal thereof. If the Local Agency’s obligations under the Local Obligations are assumed in full by some other entity, such person shall be responsible for compliance with this Disclosure Agreement in the same manner as if it were the Local Agency and the original Local Agency shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Bonds, the Local Agency shall give notice of such termination or substitution in the same manner as for a Listed Event under Section 5(f).
SECTION 7. Dissemination Agent. The Local Agency may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Local Agency pursuant to this Disclosure Agreement. If at any time there is not any other designated Dissemination Agent, the Trustee shall be the Dissemination Agent. The initial Dissemination Agent shall be the Trustee. The Dissemination Agent may resign by providing thirty days written notice to the Local Agency and the Trustee.
SECTION 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Local Agency, Dissemination Agent and the Trustee may amend this Disclosure Agreement (and the Trustee and Dissemination Agent shall agree to any amendment so requested by the Local Agency provided, neither the Trustee or the Dissemination Agent shall be obligated to enter into any such amendment that modifies or increases its duties or obligations hereunder) and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;
(b) The Disclosure Agreement, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Trust Agreement for amendments to the Trust Agreement with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds.
In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Local Agency shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Local Agency. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(f), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Local Agency from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Local Agency chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Disclosure Agreement, the Local Agency shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
SECTION 10. Default. In the event of a failure of the Local Agency or the Trustee to comply with any provision of this Disclosure Agreement, the Trustee, at the written request of any Participating Underwriter or the Holders of at least 25% aggregate principal amount of Outstanding Bonds, shall but only to the extent funds in an amount satisfactory to the Trustee have been provided to it or it has been otherwise indemnified to its satisfaction from any cost, liability, expense or additional charges of the Trustee whatsoever, including, without limitation, fees and expenses of its attorneys, or any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Local Agency or the Trustee, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Trust Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the Local Agency or the Trustee to comply with this Disclosure Agreement shall be an action to compel performance.
SECTION 11. Duties, Immunities and Liabilities of Trustee and Dissemination Agent. Article IX of the Trust Agreement is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Trust Agreement and the Dissemination Agent shall be entitled to the same protections, limitations from liability and indemnities afforded the Trustee there under. The Dissemination Agent and the Trustee shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Local Agency agrees to indemnify and save the Dissemination Agent, and Trustee, their officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of their powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the Local Agency under this Section shall survive resignation or removal of the Dissemination Agent or Trustee and payment of the Bonds. The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent and the Trustee shall have no duty or obligation to review any information provided to them hereunder and shall not be deemed to be acting in any fiduciary capacity for the Local Agency, the Issuer, the Bondholders, or any other party. Neither the Trustee or the Dissemination Agent shall have any liability to the Bondholders or any other party for any monetary damages or financial liability of any kind whatsoever related to or arising from any breach of this Disclosure Agreement.
SECTION 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Agreement may be given as follows:
To the Local Agency: City of Brentwood
150 City Park Way
Brentwood, CA 94513
Attention: Director of Finance and Information Systems
(925) 516-5440
FAX: (925) 516-5441
To the Trustee: U.S. Bank National Association
One California Street, Suite 2550
San Francisco, CA 94111
Attention: Corporate Trust

Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent.

SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Local Agency, the Trustee, the Dissemination Agent, the Participating Underwriter, and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

SECTION 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Dated: ___________, 2003.
CITY OF BRENTWOOD


BY __________________________________
Director of Finance and Information Systems


U.S. BANK NATIONAL ASSOCIATION, as Trustee and Dissemination Agent


By ___________________________________
Authorized Officer



EXHIBIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer. BRENTWOOD INFRASTRUCTURE FINANCING
AUTHORITY

Name of Bond Issue: CIFP 2003-1 INFRASTRUCTURE REVENUE
BONDS, SERIES 2003

Name of Local Agency: CITY OF BRENTWOOD, CALIFORNIA

Date of Issuance: ___________, 2003

NOTICE IS HEREBY GIVEN that the City of Brentwood has not provided an Annual Report with respect to the above-named Bonds as required by Section 7.07 of the Trust Agreement dated as of August 1, 2003 among the Issuer, the Local Agency and the Trustee. The City of Brentwood anticipates that the Annual Report will be filed by ______________.
Dated:________________
U.S. BANK NATIONAL ASSOCIATION,
on behalf of the Local Agency

cc: Local Agency

CITY OF BRENTWOOD
CAPITAL IMPROVEMENT FINANCING PLAN 2003-1
ASSESSMENT DISTRICT NO. 2003-1


FUNDING, ACQUISITION AND DISCLOSURE AGREEMENT

BY AND BETWEEN
CITY OF BRENTWOOD
AND
________________________________

Dated as of July 8, 2003



CITY OF BRENTWOOD
ASSESSMENT DISTRICT NO. 2003-1
FUNDING, ACQUISITION AND DISCLOSURE AGREEMENT
Recitals
A. The parties to this Funding, Acquisition and Disclosure Agreement (the “Agreement”) are the CITY OF BRENTWOOD, a municipal corporation organized under the laws and constitution of the State of California (the “City”), and __________________, (the “Developer”).
B. The effective date of this Agreement is July 8, 2003.
C. The Council of the City (the “City Council”) has adopted a Resolution of Intention to form an assessment district known as “City of Brentwood Assessment District No. 2003-1” (the “Assessment District”), pursuant to the provisions of the Municipal Improvement Act of 1913 (the “1913 Act”), being Division 12 of the California Streets and Highways Code (the “Code”), and to issue bonds (the “Local Obligations”) under the terms and provisions of the “Improvement Bond Act of 1915” (the “1915 Act”), being Division 10 of the Code. The Assessment District will be confirmed following a public hearing pursuant to the 1913 Act and Article XIIID of the California Constitution. The land included within the Assessment District is described on the assessment diagram which will be approved by resolution of the City Council and subsequently recorded with the Contra Costa County Recorder.
D. The purpose of the Assessment District is to prepay certain City development fees and to provide for funding to acquire and/or construct certain authorized public improvements and related incidental costs and expenses of improvement design, construction inspection and management, Assessment District formation and administration, bond issuance and administration, and related miscellaneous incidental costs and expenses authorized by the 1913 and 1915 Acts. Attached hereto as Exhibits A are descriptions of the authorized public improvements to be acquired from the Developer (collectively, the “Acquisition Improvements”), which description is subject to modification by either written amendment of this Agreement or by action of the City Council pursuant to further proceedings for the Assessment District under Sections 10350 and following of the Code (pertaining to change proceedings).
E. Developer is a part of the City’s Capital Improvement Financing Plan 2003-1, adopted by the City Council on August 13, 2002 (“CIFP 2003-1”). Certain of the improvements to be financed by the Assessment District are provided for in CIFP 2003-1. Some of the improvements provided for in CIFP 2003-1 are to be constructed by other developers who are participants in CIFP 2003-1 (“CIFP 2003-1 Participants”) and acquired by the City with the proceeds of assessment bonds issued for such other participants as well as the proceeds of Local Obligations.
F. The parties anticipate that, upon completion of the Acquisition Improvements and subject to the terms and conditions of this Agreement, the City will acquire such completed Acquisition Improvements with a portion of the proceeds of the Local Obligations, to be issued and sold in one series.
G. Any and all monetary obligations of the City arising out of this Agreement are the special and limited obligations of the City payable only from proceeds of the Local Obligations and other amounts in the CIFP 2003-1 Brentwood Partners Acquisition Account, and no other funds whatsoever of the City shall be obligated therefore.
H. In consideration of Recitals A through G, inclusive, and the mutual covenants, undertakings and obligations set forth below, the City and the Developer agree as stated below.

Agreement
ARTICLE XIV

DEFINITIONS; ASSESSMENT DISTRICT FORMATION AND
FINANCING PLAN
SECTION 14.01. Definitions. As used herein, the following capitalized terms shall have the meanings ascribed to them below:
“ Acceptable Title” means free and clear of all monetary liens, encumbrances, assessments, whether any such item is recorded or unrecorded, and taxes, except those items which are reasonably determined by the City Engineer in his sole discretion not to interfere with the intended use and therefore are not required to be cleared from the title.
“ Acquisition Improvements” shall have the meaning assigned to such term in Recital D.
“ Acquisition Price” means the amount paid to the Developer upon acquisition of any Acquisition Improvement as provided in Section 2.03.
“ Act” means Article 4, Chapter 5, Division 7, Title 1 of the Government Code of the State of California.
“ Actual Cost” means the cost of construction of an Acquisition Improvement, as documented by the Developer to the satisfaction of the City, as certified by the City Engineer in an Actual Cost Certificate.
“ Actual Cost Certificate” shall mean a certificate prepared by the Developer detailing the Actual Cost of each Acquisition Improvement to be acquired hereunder, as revised by the City Engineer pursuant to Section 2.03.
“ Agreement” means this Funding, Acquisition and Disclosure Agreement, dated as of July 8, 2003.
“ Assessment District” means City of Brentwood Assessment District No. 2003-1, as the same may be modified by the City Council from time to time.
“ Assessment Notice” means a notice in the form attached hereto as Exhibit B, incorporated herein by this reference.
“ BIFA” means the Brentwood Infrastructure Financing Authority, a joint exercise of powers authority established under the laws of the State of California.
“ Budgeted Amount” means the amount shown in Exhibit A, attached hereto and incorporated herein, as the budgeted cost of each Acquisition Improvement to be acquired hereunder.
“ CIFP 2003-1” shall have the meaning assigned to such term in Recital E.
“ CIFP 2003-1 Brentwood Partners Acquisition Account” means the account by that name established within the Improvement Fund for the purpose of paying the Acquisition Price of the Acquisition Improvements.
“ CIFP 2003-1 Participant” means each signatory to CIFP 2003-1 (other than the Developer) and its successors and assigns.
“ City” means the City of Brentwood, a municipal corporation organized and existing under the laws of the State of California.
“ Code” means the Streets and Highways Code of the State of California.
“Developer” means _______________________________.
“ District Engineer” means the City Engineer of the City of Brentwood, the Engineer of Work for the Assessment District appointed by the City Council.
“ Excess Credit Amount” means the aggregate amount by which the Actual Cost of the Acquisition Improvements acquired by the City hereunder exceeds the Budgeted Amount of such Acquisition Improvements, as calculated from time to time pursuant to Section 2.03.
“ Expenses” means all costs of issuance of the Revenue Bonds and the Local Obligations, including underwriting discount, trustee fees and charges, printing, legal fees and expenses, appraisal costs, assessment engineering costs, and city administrative costs and all amounts required to be reimbursed to the Developer pursuant to the Deposit Agreement.
“ Improvement Fund” means the fund by that name established and maintained by the Trustee as Fiscal Agent under the Resolution.
“ Local Obligations” means the City’s Limited Obligation Improvement Bonds, Assessment District No. 2003-1, issued under and pursuant to the Resolution.
“ Project” means the Developer’s development of the property in the Assessment District, including the design and construction of the Acquisition Improvements and the other public and private improvements to be constructed by the Developer within the Assessment District.
“ Resolution” means the City resolution providing for the authorization and issuance of the Local Obligations, as it may be amended and supplemented from time to time.
“ Revenue Bonds” means the infrastructure revenue bonds issued by BIFA secured by the Local Obligations issued in connection with CIFP 2003-1.
“ Title Documents” means, for each Acquisition Improvement acquired hereunder, a grant deed or similar instrument necessary to transfer title to any real property or interests therein (including easements) necessary or convenient to the operation, maintenance, rehabilitation and improvement by the City of the Acquisition Improvement (including, if necessary, easements for ingress and egress) and a Bill of Sale or similar instrument evidencing transfer of title to the Acquisition Improvement (other than said real property interests) to the City, where applicable.
“ Trust Agreement” means the trust agreement entered into among the City, BIFA, and U.S. Bank, N.A., as trustee, in connection with the issuance of the Revenue Bonds, as it may be amended and supplemented from time to time.
“ 1913 Act” means the Municipal Improvement Act of 1913 (Division 12 of the Streets and Highways Code).
“ 1915 Act” means the Improvement Bond Act of 1915 (Division 10 of the Streets and Highways Code).
SECTION 14.02. Formation of Assessment District. The 1913 Act legal proceedings described in Recitals C and D have been completed by (1) adoption of the resolution specified by Section 10312 of the Code, following the public hearing and assessment ballot proceedings; and (2) recording thereafter with the Contra Costa County Recorder of the assessment diagram and the Notice of Assessment, as prescribed by Section 3114 of the Code. Each of the parties agrees to exercise due diligence and to take all additional actions under its control as reasonably required to complete future Assessment District proceedings (including modification of the District).
SECTION 14.03. Reserved.
SECTION 14.04. Sale of Local Obligations. Following completion of Assessment District formation, the City will proceed as provided herein with issuance and sale of Local Obligations upon the security of the recorded and unpaid special assessments levied upon the respective parcels of land within the Assessment District. Exhibit A contains the present best estimate of the costs and expenses of the Acquisition Improvements and related incidental costs and expenses of the Acquisition Improvements, the 1913 Act proceedings and the financing to be either reimbursed (if advanced by the Developer) or paid from the Local Obligation proceeds. Said Exhibit A has been reviewed by the District Engineer. Said estimate remains subject to modification and refinement and represents only a present best estimate. Subject to the terms and conditions of this Agreement, each of the parties agrees to exercise due diligence and to take all actions under its control as reasonably required to accomplish issuance, sale and delivery of the Local Obligations. Prior to the issuance of the Local Obligations, the City and the Developer may execute an amendment to Exhibit A, as appropriate, to reflect the description and estimated costs of the Acquisition Improvements to be financed by such Local Obligations.
SECTION 14.05. Brentwood Infrastructure Financing Authority. (a) All Local Obligations will be sold by the City to BIFA. BIFA will provide an umbrella financing vehicle for the CIFP 2003-1 District to finance and refinance the cost of infrastructure for the Assessment District. The proceeds of the Revenue Bonds will be used to acquire the Local Obligations.
(b) The Revenue Bonds will be issued by BIFA pursuant to the Act and the Trust Agreement. The Trust Agreement will provide that no additional bonds may be issued on a parity with the Revenue Bonds. Proceeds of the Revenue Bonds (net of costs of issuance and reserves) will be paid to the City to purchase the Local Obligations.
(c) The Local Obligations will be purchased at a price equal to their par amount, less underwriters discount, less costs of issuance (except any Expenses to be paid from the Expense Fund described in Section 1.06) and less the amount of the Revenue Bond reserve fund attributable to the Local Obligations, plus accrued interest and less original issue discount, if any. The Revenue Bond reserve fund will be held under the Trust Agreement as a common reserve for the Revenue Bonds. No separate reserve fund will be established for the Local Obligation at the Assessment District level.
(d) Local Obligations will not be sold by the City or purchased by BIFA unless, at the time of purchase, the following criteria are met:
(i) The Local Obligations are eligible to be acquired by BIFA under the Trust Agreement, dated as of September 1, 2002 by and among the City, BIFA and U.S. Bank, N.A., as trustee.
(ii) The CIFP 2003-1 Report shall have been approved by the City. Any improvements not provided for in the Assessment District shall be secured by other improvement security satisfactory to the City in accordance with the City’s Municipal Code.
(iii) There shall be no property tax delinquency or assessment installment delinquency on any of the Developer’s property within the Assessment District.
(iv) No Developer or owner of property within the Assessment District shall be the subject of any bankruptcy proceeding, receivership or other similar arrangement.
SECTION 14.06. Deposit and Use of Local Obligation Proceeds.
(a) Assuming sale and delivery of the Local Obligations, upon receipt of bond sale proceeds, and subject to the terms and conditions of the Resolution, the City shall deposit or cause the deposit of the proceeds received into the appropriate funds or accounts in the amounts and as otherwise specified by the Resolution.
(b) An amount equal to the estimated cost of the Acquisition Improvements to be funded with the Local Obligations shall be deposited in the CIFP 2003-1 Brentwood Partners Acquisition Account.
(c) The City shall establish and maintain the CIFP 2003-1 Brentwood Partners Acquisition Account for the purpose of holding all funds for the Acquisition Improvements paid from the Improvement Fund. All earnings on amounts in the CIFP 2003-1 Brentwood Partners Acquisition Account shall remain in the CIFP 2003-1 Brentwood Partners Acquisition Account for use as provided herein. The amounts in the CIFP 2003-1 Brentwood Partners Acquisition Account shall be used by the City upon completion of the Acquisition Improvements within 30 days (or as soon thereafter as reasonably practicable) of receipt by the City of the certification of the City Engineer required by Section 2.03 of this Agreement, and subject to satisfaction of all other conditions precedent to such acquisition pursuant to Section 2.04 of this Agreement, to pay the Acquisition Price of such completed Acquisition Improvements, as specified in Article II hereof. Upon completion of all of the Acquisition Improvements and the payment of all costs thereof, any remaining funds in the CIFP 2003-1 Brentwood Partners Acquisition Account (less any amount determined by the City as necessary to reserve for claims against such account) shall be applied (i) to any additional improvements eligible for acquisition with respect to the Assessment District and, to the extent not so used, (ii) as provided in Section 10427.1 of the Code.
SECTION 14.07. No City Liability; City Discretion; No Effect on Other Agreements. In no event shall any actual or alleged act by the City or any actual or alleged omission or failure to act by the City with respect to the sale or proposed sale of the Local Obligations subject the City to monetary liability therefore. Nothing contained herein shall be construed as limiting the discretion of the City as stated above respecting the terms and conditions of any proposed issuance, sale and delivery of the Local Obligations, it being expressly acknowledged by the Developer that exercise by the City of the discretion reserved by the City in this Section 1.07 may result in an indefinite postponement of any such proposed sale or in no sale at all. Further, nothing in this Agreement shall be construed as affecting the Developer’s or the City’s duty to perform their respective obligations under any other agreements, land use regulations or subdivision requirements related to the Project, which obligations are and shall remain independent of the Developer’s and the City’s rights and obligations under this Agreement.
SECTION 14.08. Failure to Form Assessment District or Sell Bonds. In the event that the Local Obligations are not sold prior to December 31, 2002, the City agrees that, upon the written request of the Developer, it will take all steps necessary to abandon the proceedings for the Assessment District and record a Resolution of Abandonment as provided in Section 3117 of the Streets and Highways Code. Nothing in this Agreement or any other agreement or arrangement between the City and the Developer shall require the City to make any payments or reimbursements to the Developer with respect to advances, costs of Acquisition Improvements or otherwise except from the proceeds of the Local Obligations.
SECTION 14.09. Future Apportionments of Assessment. To assure compliance with Section 66493 of the California Government Code, the Developer shall submit a signed application for the division of land and assessment and be responsible to pay all costs associated with the apportionment of assessment for any parcel owned by it in the Assessment District prior to recordation of a final map and to divide such parcel. The Developer shall forward to the City, within fifteen (15) days of the Developer’s receipt of the request by the City Engineer, the amount, as determined by the City Engineer, to cover the cost of said apportionment. Furthermore, the Developer agrees to ensure that all future subdividers in the District with whom the Developer is in privity submit signed applications for the division of land and assessment to the City and pay cost, as determined by the City Engineer, associated with any such apportionment.
ARTICLE XV

DESIGN, CONSTRUCTION AND ACQUISITION OF ACQUISITION IMPROVEMENTS
SECTION 15.01. Letting and Administering Design Contracts. The parties presently anticipate that the Developer has awarded and administered or will award and administer engineering design contracts for the Acquisition Improvements to be acquired from Developer. To the extent that funding of such design contracts was included in the Budgeted Amount for such Acquisition Improvements, all eligible expenditures of the Developer (whether as an advance to the City or directly to the design consultant) shall be reimbursed at the time of acquisition of such Acquisition Improvements. The Developer shall be entitled to reimbursement for any design costs of the Acquisition Improvements only out of the Acquisition Price as provided in Section 2.03 and shall not be entitled to any payment for design costs independent of the acquisition of Acquisition Improvements.
SECTION 15.02. Letting and Administration of Construction Contracts. The 1913 Act requires that all Acquisition Improvements shall be constructed as if they were constructed under the direction and supervision of the City. In order to assure compliance with those provisions, except for any contracts entered into prior to the date hereof, Developer agrees to comply with the Private Contracting Guidelines for Assessment Proceedings adopted by the City, attached hereto as Exhibit B and by this reference incorporated herein.
SECTION 15.03. Sale of Acquisition Improvements. The Developer agrees to sell to the City the Acquisition Improvements to be constructed by Developer (including any rights-of-way or other easements necessary for the operation and maintenance of the Acquisition Improvements, to the extent not already publicly owned) when completed to the satisfaction of the City for an amount not to exceed the lesser of (i) the Budgeted Amount for such Acquisition Improvement, or (ii) the Actual Cost of such Acquisition Improvement. Exhibit A, attached hereto and incorporated herein, contains a list of each Acquisition Improvement. The Budgeted Amount for each Acquisition Improvement is shown as the “Total” amount in Exhibit A. At the time of completion of each Acquisition Improvement, the Developer shall deliver to the City Engineer a written request for acquisition, accompanied by an Actual Cost Certificate and executed Title Documents for the transfer of the Acquisition Improvement, where necessary. In the event that the City Engineer finds that the supporting paperwork submitted by the Developer fails to demonstrate the required relationship between the subject Actual Cost and eligible work, the City Engineer shall advise the Developer that the determination of the Actual Cost (or the ineligible portion thereof) has been disallowed and shall request further documentation from the Developer. If such further documentation is still not adequate, the City Engineer may revise the Actual Cost Certificate to delete any disallowed items and such determination shall be final and conclusive.
In the event that the Actual Cost is in excess of the Budgeted Amount, the City shall withdraw the Budgeted Amount from the CIFP 2003-1 Brentwood Partners Acquisition Account and transfer said amount to the Developer, and the Excess Credit Amount shall be increased by the difference between the Actual Cost and the Budgeted Amount. In the event that the Actual Cost is less than the Budgeted Amount, the City shall withdraw an amount from the CIFP 2003-1 Brentwood Partners Acquisition Account equal to the lesser of (i) the sum of the Actual Cost and the Excess Credit Amount, or (ii) the Budgeted Amount, and shall transfer said amount to the Developer, and the Excess Credit Amount shall be reduced by the difference between the Actual Cost and the amount so transferred. Upon completion of the acquisition of all Acquisition Improvements, the City shall withdraw from the CIFP 2003-1 Brentwood Partners Acquisition Account and transfer to the Developer an amount equal to the lesser of (i) the Excess Credit Amount or (ii) the remaining amount on deposit in the Improvement Fund.

Notwithstanding any other provision hereof, the City Engineer may in his or her sole and absolute discretion allow the acquisition of the Acquisition Improvements to be accomplished in phases; provided that all of the following apply: (i) each phase of the Acquisition Improvement to be acquired is a completed facility or improvement able to be used for its intended public purpose; (ii) the Acquisition Price of each such phase does not exceed the amount then on deposit (and not otherwise encumbered) in the CIFP 2003-1 Brentwood Partners Acquisition Account; and (iii) after the acquisition of such phase of the Acquisition Improvements, the amounts remaining in the CIFP 2003-1 Brentwood Partners Acquisition Account, together with other funds available to the City and the Developer for the completion of the Acquisition Improvements, will be sufficient to complete the Acquisition Improvements.

Any funds remaining on deposit in the CIFP 2003-1 Brentwood Partners Acquisition Account after said transfer shall be applied (i) to any additional improvements eligible for acquisition with respect to the Assessment District and, to the extent not so used, (ii) as provided in Section 10427.1 of the Code. In no event shall the City be required to pay the Developer more than the amount on deposit in the CIFP 2003-1 Brentwood Partners Acquisition Account at the time such payment is requested.

SECTION 15.04. Conditions Precedent to Payment of Acquisition Price. Payment by the City to the Developer from the CIFP 2003-1 Brentwood Partners Acquisition Account of the Acquisition Price for any Acquisition Improvement shall be conditioned first upon the determination of the City Engineer, pursuant to Section 2.03, that such Acquisition Improvement is complete and ready for acceptance by the City, and shall be further conditioned upon prior satisfaction of the following additional conditions precedent:
(a) The Developer shall have provided the City with lien releases or other similar documentation satisfactory to the City as evidence that the property which is subject to the special assessment liens is not subject to any prospective mechanics lien claim respecting the Acquisition Improvement to be acquired.
(b) The Developer shall be current in the payment of all due and payable property taxes and installments for the special assessments of the Assessment District on property owned by the Developer or under option to the Developer.
(c) The Developer shall have provided the City with Title Documents needed to provide the City with title to the site, right-of-way, or easement upon which the subject Acquisition Improvement is situated. All such Title Documents shall be in a form acceptable to the City (or applicable governmental agency) and shall convey Acceptable Title. The Developer shall provide a policy of title insurance as of the date of transfer in a form acceptable to the City Engineer insuring the City as to the interests acquired in connection with the acquisition of any interest for which such a policy of title insurance is not required by another agreement between the City and the Developer. Each title insurance policy required hereunder shall be in the amount equal to or greater than the Acquisition Price.
ARTICLE XVI

PROPERTY OWNER DISCLOSURE
SECTION 16.01. Disclosures to Purchasers of Residential Lots from the Developer. This Section 3.01 shall apply to all Residential Lots. From and after the date of this Agreement, the Developer shall give or cause to be given to each prospective purchaser of a Residential Lot an Assessment Notice in substantially the form attached hereto as Exhibit B. The Developer shall require as a condition precedent to the execution of any purchase and sale agreement or deposit receipt as to a Residential Lot that the prospective purchaser sign and return to the Developer a copy of the Assessment Notice, acknowledging receipt thereof. The Developer shall deliver to the City a copy of such executed Assessment Notice promptly upon its receipt thereof from the prospective buyer. The Developer shall cause the Assessment Notice to be included in all applications for Final Subdivision Reports required by the California Department of Real Estate which are filed on Residential Lots within the Assessment District after the effective date of this Agreement. Developer acknowledges and agrees that it is the City’s policy to encourage prospective purchasers to arrange for the pay-off of assessment liens at the time of purchase of Residential Lots and agrees to cooperate with purchasers who wish to do so.
SECTION 16.02. Bulk Purchasers of Residential Property from the Developer. This Section 3.02 shall apply to those persons or entities (other than persons described in Section 3.01) who purchase property from the Developer for the purpose of subdividing such property or constructing residential dwelling units thereon, or both (each a “Residential Developer”). From and after the date hereof, the Developer shall: (1) require as a condition precedent to its obligation to close an escrow for the sale of real property to a Residential Developer that such Residential Developer agree in writing to deliver the Assessment Notice to purchasers of Residential Lots from such Residential Developer as provided in Section 3.01 as if such Residential Developer was the Developer, and (2) require each Residential Developer to deliver the executed Assessment Notice to the Developer for each purchase of a dwelling unit or custom lot immediately after the close of escrow. The Residential Developer shall deliver the executed Assessment Notice to City. The City shall expressly be made a third-party beneficiary in the agreement described in (1) above with respect to the Residential Developer’s duty to deliver the Assessment Notice.
SECTION 16.03. Purchasers of Commercial Property from the Developer. This Section 3.03 shall apply to the Developer and to those persons or entities that purchase property from the Developer for the purpose of constructing a commercial or industrial facility thereon (each a “Commercial Developer”). From and after the date hereof, the Developer shall notify each Commercial Developer of the existence of the Assessment District and the assessment levied against the property being purchased by such Commercial Developer.
ARTICLE XVII

MISCELLANEOUS
SECTION 17.01. Termination of Agreement. In the event that the City has not formed the Assessment District and sold the Local Obligations prior to December 31, 2002 or such later date as may be agreed to in writing by the parties, this Agreement shall automatically terminate and be of no further force or effect.
SECTION 17.02. Indemnification and Hold Harmless. The Developer hereby assumes the defense of, and indemnifies and saves harmless the City, and each of its respective officers, directors, employees and agents, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from or alleged to have resulted from the acts or omissions of the Developer or its agents and employees in the performance of this Agreement, or arising out of any contract for the design, engineering and construction of the Acquisition Improvements or arising out of any alleged misstatements of fact or alleged omission of a material fact made by the Developer, its officers, directors, employees or agents to the City’s underwriter, financial advisor, appraiser, district engineer or bond counsel or regarding the Developer, its proposed developments, its property ownership and its contractual arrangements contained in the official statement relating to the Local Obligations and/or Revenue Bonds (provided that the Developer shall have been furnished a copy of such official statement and shall not have objected thereto); and provided, further, that nothing in this Section 3.02 shall limit in any manner the City’s rights against any of the Developer’s architects, engineers, contractors or other consultants. Except as set forth in this Section 3.02, no provision of this Agreement shall in any way limit the extent of the responsibility of the Developer for payment of damages resulting from the operations of the Developer, its agents and employees. Nothing in this Section 3.02 shall be understood or construed to mean that the Developer agrees to indemnify the City, or any of its respective officers, directors, employees or agents, for any negligent or wrongful acts or omissions to act of the City, its officers, employees, agents or any consultants or contractors.
SECTION 17.03. Audit. The City Manager or the Director of Finance and Information System, or his/her designee specified in writing, shall have the right, during normal business hours and upon the giving of ten days’ written notice to the Developer, to review all books and records of the Developer pertaining to costs and expenses incurred by the Developer (for which the Developer seeks reimbursement) in constructing the Acquisition Improvements.
SECTION 17.04. Cooperation. The City and the Developer agree to cooperate with respect to the formation of the Assessment District, confirmation of the assessments, the timing, amounts and other aspects connected with the sale of the Local Obligations and the Revenue Bonds, the design of the Acquisition Improvements, content and specifications of the contracts for the Acquisition Improvements, construction standards, all schedules and financial reports for completion of the Project. The City and the Developer agree to meet in good faith to resolve any differences on future matters which are not specifically covered by this Agreement.
SECTION 17.05. General Standard of Reasonableness. Any provision of this Agreement which requires the consent, approval or acceptance of either party hereto or any of their respective employees, officers or agents shall be deemed to require that such consent, approval or acceptance not be unreasonably withheld or delayed, unless such provision expressly incorporates a different standard. The foregoing provision shall not apply to provisions in the Agreement which provide for decisions to be in the sole discretion of the party making the decision.
SECTION 17.06. Third Party Beneficiaries. It is expressly agreed that, except for the Brentwood Infrastructure Financing Authority, as issuer of the Revenue Bonds there are no third party beneficiaries of this Agreement, including without limitation any owners of bonds, any of the City’s or the Developer’s contractors for the Acquisition Improvements and any of the City’s or the Developer’s agents and employees.
SECTION 17.07. Conflict with Other Agreements. Nothing contained herein shall be construed as releasing the Developer or the City from any condition of development or requirement imposed by any other agreement between the City and the Developer, and, in the event of a conflicting provision, such other agreement shall prevail unless such conflicting provision is specifically waived or modified in writing by the City and the Developer. [The Developer has previously executed a Reimbursement Agreement, dated ________, 2003, with the City (the “Reimbursement Agreement”). Notwithstanding any other term(s) provided in this Agreement, if the term(s) of the Reimbursement Agreement conflict with this Agreement, then the term(s) of the Reimbursement Agreement shall be the prevailing term(s).]
SECTION 17.08. Notices. All invoices for payment, reports, other communication and notices relating to this Agreement shall be mailed to:
If to the City:
City of Brentwood
Engineering Department
150 City Park Way
Brentwood, California 94513
Attention: City Engineer

If to the Developer:
__________________________

Either party may change its address by giving notice in writing to the other party.
SECTION 17.09. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible.
SECTION 17.10. Governing Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California.
SECTION 17.11. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not Constitute a waiver of such party’s right to insist and demand strict compliance by the other party with the terms of this Agreement.
SECTION 17.12. Singular and Plural; Gender. As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine.
SECTION 17.13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
SECTION 17.14. Successors and Assigns. This Agreement is binding upon the heirs, assigns and successors-in-interest of the parties hereto. The Developer may not assign its rights or obligations hereunder, except to successors-in-interest to the property within the District, without the prior written consent of the City.
SECTION 17.15. Remedies in General. It is acknowledged by the parties that the City would not have entered into this Agreement if it were to be liable in damages under or with respect to this Agreement or the application thereof, other than for the payment to the Developer of any (i) moneys owing to the Developer hereunder, or (ii) moneys paid by the Developer pursuant to the provisions hereof which are misappropriated or improperly obtained, withheld or applied by the City.
In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that the City shall not be liable in damages to the Developer, or to any assignee or transferee of the Developer other than for the payments to the Developer specified in the preceding paragraph. Subject to the foregoing, the Developer covenants not to sue for or claim any damages for any alleged breach of, or dispute which arises out of, this Agreement.

SECTION 17.16. Incorporation of Exhibits. The exhibits listed below comprise all exhibits to the Agreement and are incorporated herein by this reference.
A - Description of Acquisition Improvements and Budgeted Amounts
B - Private Contracting Guidelines For Assessment Districts


[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written above.
CITY OF BRENTWOOD

_________________________
City Manager

ATTEST:



City Clerk

By:

Name:

Title:



EXHIBIT A

DESCRIPTION OF ACQUISITION IMPROVEMENTS AND BUDGETED AMOUNTS
ASSESSMENT DISTRICT NO. 2003-1
CITY OF BRENTWOOD

ACQUISITION IMPROVEMENTS BUDGETED AMOUNT
$




* Please refer to the CIFP 2003-1 Report dated July 8, 2003 for a detailed description of the improvements and budgeted amounts.



EXHIBIT B

NOTICE OF ASSESSMENT DISTRICT LIEN
ASSESSMENT DISTRICT NO. 2003-1
CITY OF BRENTWOOD
TO: The prospective purchaser of the real property known as:
Lot No.___________ Tract No. __________.
THIS IS A NOTIFICATION TO YOU PROVIDED PRIOR TO, OR AT THE TIME OF, PURCHASE OF THIS PROPERTY. THE SELLER IS REQUIRED TO GIVE YOU THIS NOTICE, AND TO OBTAIN A COPY SIGNED BY YOU TO INDICATE THAT YOU HAVE RECEIVED AND READ A COPY OF THIS NOTICE.
The City of Brentwood has established an Assessment District which includes the area in which the new home you are considering purchasing is located. The purpose of the Assessment District is to pay for the design and construction of major infrastructure such as streets, sewers, storm drain improvements, water systems, parks, a fire station, utilities, and other improvements which benefit the community in general, and the property you are considering purchasing in particular.
These improvements may not yet have been constructed or acquired and it is possible that some may not be constructed or acquired.
The costs of these improvements will be allocated among the properties within the area of benefit within the Assessment District. The Assessment District lien is in addition to the regular property taxes and other charges and benefit assessments on the parcel. The assessment lien will be added to the real estate property tax bill distributed annually by the City to each property owner within the Assessment District boundary. The maximum annual amount of this assessment in fiscal years 20__ to 20__ and following will be approximately $_______________. If you fail to pay the Assessment District lien when due, the property may be foreclosed upon and sold.
The estimated total principal amount of Assessment District lien applicable to your home (approximately $____________) will be fully amortized over a period of _________ years through payments on your real estate tax bill with interest at a rate equal to ____% approximately per year [insert bond rate]. This tax is used to finance the above described public facilities that benefit your parcel. YOU SHOULD TAKE THIS LIEN AND THE BENEFITS FROM THE PUBLIC FACILITIES INTO ACCOUNT IN DECIDING WHETHER TO PURCHASE THIS PROPERTY.
You have the option to pay off the total amount of the Assessment District lien at any time, plus a bond redemption fee. If you wish to pay off the lien in total prior to escrow closing, please notify your escrow officer. If an impound account for taxes and assessments is a requirement of your home loan, you should notify your lender of the total annual amount of the assessment. The annual cost of the special assessments when added to other amounts on your consolidated property tax bill, may exceed the amount collected for the impound account.
You may contact the City of Brentwood by calling _____________ at telephone number ____________________ for information concerning the Assessment District or about early assessment district lien retirement after escrow closing.
Please acknowledge receipt of this information at or prior to the time of purchase by signing your name in the space provided below.
Acknowledged:
Date Prospective Buyer


Date Prospective Buyer


Lot No. Tract No.



EXHIBIT C

CITY OF BRENTWOOD

PRIVATE CONTRACTING GUIDELINES FOR

ASSESSMENT DISTRICTS
Definitions
As used herein, the following capitalized terms shall have the meanings ascribed to them below.
The term “1913 Act” means the Municipal Improvement Act of 1913, Division 12 of the Streets and Highways Code) as amended.
The term “Bid Documents” means the plans, specifications, financial requirements schedules and all other documents delivered to prospective bidders in connection with a Contract.
The term “Bonds” means bonds issued by the City under and pursuant to the Improvement Bond Act of 1915 (Division 10 of the Streets and Highways Code) upon 1913 Act assessment liens.
The term “City” means the City of Brentwood, California.
The term “Contract” means any construction contract entered into by one or more private parties for the construction of Improvements; provided, that the term “Contract” shall not include any contract entered into exclusively by one or more Related Parties.
The term “Contracting Party” means the property owner or developer or other private party who is contracting for the construction of Improvements.
The term “Improvements” means any improvements authorized under the 1913 Act which are to be acquired by the City with the proceeds of Bonds, the construction of which has not been completed at the time the City adopts a resolution of intention describing such improvements pursuant to the 1913 Act.
The term “Related Parties” means parties which are corporations, partnerships or other business enterprises which are owned, managed or controlled entirely by the same entity. For purposes of these Guidelines, a wholly owned subsidiary corporation and its parent corporation, or a limited partnership and all of its general partners, are Related Parties.
Bid Requirements
The following requirements shall apply to all Contracts and shall be specified in the Bid Documents:
(a) The employees performing the work shall be paid prevailing wages as specified in Labor Code Section 1720.
(b) Bidders shall provide evidence that, if their bid is accepted, bidders will be ready, willing and able to post a performance bond or other security as specified in the Bid Documents at least equal to 100% of the amount of the bid.
(c) Bidders shall provide evidence of insurance coverage as to worker’s compensation, public liability and property damage in amounts as specified in the Bid Documents. All such policies of insurance shall be endorsed to name the City as an additional insured.
(d) The Bid Documents shall specify a Completion Date for the work.
(e) The Bid Documents shall specify the date until which all bidders must hold their bids open.
The following requirements may be imposed in addition to the requirements stated above at the option of the Contracting Party:
(a) Additional insurance requirements, including professional errors and omissions coverage, first party property damage coverage for property necessary to the performance of the work or any other insurance related to the performance of the work or the protection of the Contracting Party, and the City.
(b) The provision of references and/or evidence of related experience as specified in the Bid Documents;
(c) The provision of intermediate completion dates for phases of the work and/or the provision of projected completion schedules by bidders at the time of submission of bids.
(d) Liquidated damages provisions.
(e) Any other provision related to the timely, workmanlike and/or cost-effective completion of the work which is approved by the City.
Preparation, Review and Distribution of Bid Documents
The Bid Documents shall be prepared by the Contracting Party and shall be delivered to the City for review at least 15 days prior to the advertisement for bids. Any changes requested by the City in writing within five days of the advertisement for bids shall be made by the Contracting Party prior to distribution of any Bid Documents.
The Bid Documents shall include the plans and specifications of the project and all applicable contract requirements and shall be complete except for any changes required by the City as a result of the plan checking and certification process.
Copies of the Bid Documents shall be provided to all prospective bidders upon written request and payment of any deposit or charge specified in the notice; provided, that such deposit or charge may not exceed the reasonable cost of preparing and duplicating the Bid Documents. Each prospective bidder shall be given an identical copy of the Bid Documents, except that each copy may be labeled with a number to distinguish it from other copies. The Contracting Party shall keep a record of the name, address and telephone number of each prospective bidder who received a copy of the Bid Documents, which record shall be available for inspection by the City upon request.
Award of Contract
The Contracting Party shall open all bids at the time specified in the Bid Documents and shall determine whether each bid complies with the Bid Documents. All bids found to be in compliance with the Bid Documents shall be reviewed and the lowest such bid shall be determined. The Contract Party may, in its sole discretion, review the bids to determine whether any bid contains any arithmetic errors. If any such errors are found, the Contracting Party may contact the bidder and confirm the error and recalculate the bid amount. After correction of any such errors, the Contracting Party shall award the Contract to the lowest responsible bidder.
The bids shall be opened at a place chosen by the Contracting Party. The City shall have the option to have a representative present at the bid opening, and copies of all bids received shall be delivered to the City representative at the bid opening. All review of calculations and consideration of bids shall be made in the presence of the City representative.
Disputes Regarding Bids; Claim Procedure
All complaints regarding the award of any Contract shall be made in compliance with these guidelines. In addition to any other requirements prescribed by law, any bidder who wishes to complain regarding the award of any Contract shall deliver a letter of protest, describing the Contract and the nature of the protest, to the City no later than 5 days after the award of the Contract. If so requested in the letter, the City shall hear the complaint within 30 days of receipt of the protest letter and shall direct such relief as it may determine. The failure to deliver such letter of protest in the time required herein shall bar the complaining party from pursuing any further action on the claim.
Interpretation of Guidelines; Waiver of Time Requirements
The City Engineer shall interpret these Guidelines and shall make determinations in the event any ambiguity arises hereunder concerning the application of these Guidelines to any Contract. Upon the written request of any Contracting Party, the City Engineer may, in his or her sole discretion, waive or shorten any time requirement hereunder as applied to a specific Contract; provided, that the time requirement for publication of Notice Inviting Bids shall not be waived or shortened.

Recitals 1
Agreement 3
ARTICLE I DEFINITIONS; ASSESSMENT DISTRICT FORMATION AND FINANCING PLAN 3
Section 1.01. Definitions 3
Section 1.02. Formation of Assessment District 5
Section 1.03. Reserved 5
Section 1.04. Sale of Local Obligations 5
Section 1.05. Brentwood Infrastructure Financing Authority 5
Section 1.06. Deposit and Use of Local Obligation Proceeds 6
Section 1.07. No City Liability; City Discretion; No Effect on Other Agreements 7
Section 1.08. Failure to Form Assessment District or Sell Bonds 7
Section 1.09. Future Apportionments of Assessment 7
ARTICLE II DESIGN, CONSTRUCTION AND ACQUISITION OF ACQUISITION IMPROVEMENTS 7
Section 2.01. Letting and Administering Design Contracts 7
Section 2.02. Letting and Administration of Construction Contracts 8
Section 2.03. Sale of Acquisition Improvements 8
Section 2.04. Conditions Precedent to Payment of Acquisition Price 9
ARTICLE III PROPERTY OWNER DISCLOSURE 9
Section 3.01. Disclosures to Purchasers of Residential Lots from the Developer 9
Section 3.02. Bulk Purchasers of Residential Property from the Developer 10
Section 3.03. Purchasers of Commercial Property from the Developer 10
ARTICLE IV MISCELLANEOUS 10
Section 4.01. Termination of Agreement 10
Section 4.02. Indemnification and Hold Harmless 10
Section 4.03. Audit 11
Section 4.04. Cooperation 11
Section 4.05. General Standard of Reasonableness 11
Section 4.06. Third Party Beneficiaries 11
Section 4.07. Conflict with Other Agreements 11
Section 4.08. Notices 11
Section 4.09. Severability 12
Section 4.10. Governing Law 12
Section 4.11. Waiver 12
Section 4.12. Singular and Plural; Gender 12
Section 4.13. Counterparts 12
Section 4.14. Successors and Assigns 12
Section 4.15. Remedies in General 12
Section 4.16. Incorporation of Exhibits 13
EXHIBIT A DESCRIPTION OF ACQUISITION IMPROVEMENTS AND BUDGETED AMOUNTS A-1
EXHIBIT B NOTICE OF ASSESSMENT DISTRICT LIEN B-1
EXHIBIT C CITY OF BRENTWOOD PRIVATE CONTRACTING GUIDELINES FOR ASSESSMENT DISTRICTS C-1

City Administration
City of Brentwood City Council
150 City Park Way
Brentwood, CA 94513
(925) 516-5440
Fax (925) 516-5441
E-mail allcouncil@brentwoodca.gov