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CITY COUNCIL AGENDA ITEM NO. 4

Meeting Date: January 27, 2004

Subject/Title: Refunding of CIFP 94-1 Infrastructure Revenue Bonds, Series 1999

Submitted by: Pam Ehler, Director of Finance and Information Services

Approved by: John Stevenson, City Manager

RECOMMENDATION
Approve a Resolution Approving Form and Substance of an Amended and Restated Trust Agreement in connection with the Issuance by the BIFA of its Infrastructure Revenue Refunding Bonds, Series 2004A and Subordinated Series 2004B and Authorizing Changes Thereto and Execution Thereof.

PREVIOUS ACTION
None.

BACKGROUND
The City of Brentwood and the Brentwood Infrastructure Financing Authority have previously issued bonds to finance improvements for CIFP 94-1, which comprised approximately 3,535 residential units in the City. Due to favorable market interest rates and the fact that approximately 80% of those units are now completed and occupied, it is possible to refinance those bonds and achieve lower interest rates. It is also possible to substitute a surety bond for a portion of the reserve fund which was originally funded with cash. In all, based on today’s market interest rates, the refinancing and substitution of the reserve fund can produce up to $250,000 per year over the remaining life of the financing in new proceeds which can be used for additional capital improvements. The staff is recommending that these proceeds be applied toward the cost of the new city hall, which currently is not fully funded, as well as other CIFP improvements]. This method of generating new proceeds through refinancing was successfully used by the City in 2001 with the refinancing of several prior series of the bonds for CIFPs 98-1 and 99-1.

The Refunding Bonds will be issued in two series, a senior series representing approximately 80%% of the issue, which will be insured and rated “AAA” and a subordinate series representing approximately 20% of the issue which will be non-rated. This senior/subordinate is similar to the refinancing of the CIFP 98-1 and CIFP 99-1 bonds which the City completed in 2002.

The refinancing will not affect the assessment installments payable by any property owner in the district and their assessments will remain the same, although the change in the reserve fund amount for the bonds may reduce or eliminate any reserve fund credits available.


FISCAL IMPACT
This action could generate up to $3 million in new funding for public capital improvements without raising assessments or taxes or using the City’s other funds.

Attachments:

Resolution
Form of Amended and Restated Trust Agreement
Form of Bond Purchase Agreement
Form of Escrow Agreement
Form of Preliminary Official Statement

CITY OF BRENTWOOD
RESOLUTION NO. 2004 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING FORM AND SUBSTANCE OF AN AMENDED AND RESTATED TRUST AGREEMENT IN CONNECTION WITH THE ISSUANCE BY THE BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY OF ITS INFRASTRUCTURE REVENUE REFUNDING BONDS, SERIES 2004A AND SUBORDINATED SERIES 2004B AND AUTHORIZING CHANGES THERETO AND EXECUTION THEREOF

WHEREAS, in connection with the funding for the acquisition and construction of public improvements under the Capital Improvement Financing Plan 94-1 (“CIFP 94-1”) the Brentwood Infrastructure Financing Authority (the “Authority”), acting through its Board Members (the “Authority Board”), authorized and issued its CIFP 94-1 Infrastructure Revenue Bonds, Series 1999 (the “Prior Bonds”), pursuant to a Trust Agreement dated as of November 1, 1995, as supplemented by a First Supplemental Trust Agreement dated as of October 1, 1996, a Second Supplemental Trust Agreement dated as of October 1, 1997, a Third Supplemental Trust Agreement dated as of January 1, 1999 (collectively the “Prior Trust Agreement”), by and among the Authority, the City of Brentwood (the “City”) and U.S. Bank National Association (the “Trustee”);
WHEREAS, it is proposed that the Authority authorize, issue and sell to RBC Dain Rauscher Inc., as underwriter (the “Underwriter”), its Infrastructure Revenue Refunding Bonds, Series 2004A and Subordinated Series 2004B (collectively, the “Bonds”), with the net proceeds of sale thereof, together with certain funds on hand under the Prior Trust Agreement, (after funding a reserve fund and payment of costs of issuance) to be utilized (a) to refund the outstanding Prior Bonds and (c) to fund certain public capital improvements;
WHEREAS, in furtherance of implementing the proposed financing, there has been filed with the City Clerk for consideration and approval by this City Council an Amended and Restated Trust Agreement amending and restating the Prior Trust Agreement (the “Amended and Restated Trust Agreement”) dated as of January 1, 2004 by and among the Authority, the City and the Trustee. The Bonds are to be issued by the Authority under the terms of the Amended and Restated Trust Agreement; and
WHEREAS, being fully advised in the matter, this City Council wishes to approve the form and substance of the Amended and Restated Trust Agreement and to authorize execution thereof on behalf of the City;
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. The form and substance of the Amended and Restated Trust Agreement is hereby approved. The City Manager or designee thereof is hereby authorized to approve modifications and changes to the Amended and Restated Trust Agreement not inconsistent with its essential terms, such approval to be conclusively established by execution thereof. The City Manager or designee thereof is hereby authorized to execute the Amended and Restated Trust Agreement, as modified.
Section 3. The City Manager, Director of Finance and Information Services, City Attorney, City Engineer and all other officers, employees and agents of the City are hereby authorized and directed to take any and all actions and execute any and all agreements, documents, certificates and other instruments, necessary or convenient to carry out the purposes of this Resolution and to assist in the issuance, sale and delivery of the Bonds.

Section 4. This resolution shall take effect immediately.

PASSED AND ADOPTED this 27th day of January, 2004, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAINED:


_______________________________
Brian Swisher
Mayor
(SEAL)


ATTEST:


__________________________
Karen Diaz, CMC
City Clerk

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 special meeting of the City Council of said City duly held at the regular meeting place thereof on the 27th day of January, 2004, 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:
NOES:
ABSENT:
ABSTAINED:
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: _______________, 2004



City Clerk of
the City of Brentwood


[SEAL]


ESCROW AGREEMENT
This ESCROW AGREEMENT (the “Escrow Agreement”), executed and entered into as of January 1, 2004, by and between the BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Authority”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States of America and being qualified to accept and administer the escrow hereby created (the “Escrow Agent”);
WITNESSETH:
WHEREAS, the Escrow Agent is the trustee and paying agent for the Brentwood Infrastructure Financing Authority CIFP 94 1 Infrastructure Revenue Bonds, Series 1999 (the “Prior Bonds”) issued under and pursuant to a Trust Agreement dated as of November 1, 1995, as supplemented by a First Supplemental Trust Agreement dated as of October 1, 1996, a Second Supplemental Trust Agreement dated as of October 1, 1997, a Third Supplemental Trust Agreement dated as of January 1, 1999 (collectively the “Trust Agreement”) entered into by and among the Authority, the City of Brentwood (the “City”) and the Escrow Agent, as trustee (the “Trustee”);
WHEREAS, the Authority has determined that it is in the best interests of the Authority and the residents of the City to refund the outstanding Prior Bonds as herein provided;
WHEREAS, the Authority has issued $_______ aggregate principal amount of its CIFP 94 1 Infrastructure Revenue Refunding Bonds, Series 2004A and Subordinated Series 2004B (collectively, the “Bonds”) pursuant to an Amended and Restated Trust Agreement dated as of January 1, 2004 by and among the Authority, the City and the Trustee for the purpose of providing funds, in part, for refunding all of the outstanding Prior Bonds as provided therein;
WHEREAS, the Authority will cause to be transferred to the Escrow Agent for deposit in the Redemption Fund hereinafter referred to $_______from the proceeds of the Bonds, and $_____________from the Trustee representing money remaining in the Reserve Fund for the Prior Bonds held under the Trust Agreement;
WHEREAS, the Authority has taken action to cause to be made available for purchase by the Escrow Agent, from amounts on deposit in the Redemption Fund, Government Obligations (as defined in the Trust Agreement), listed on Schedule I attached hereto and made a part hereof, in an aggregate principal amount which, together with the money deposited in the Redemption Fund hereinafter referred to at the same time as such deposit and the income to accrue on such securities, will be sufficient, as certified by ______________, independent certified public accountants, to provide for the payment of the interest on the Prior Bonds, as such interest becomes due and payable, and for the payment of all principal and any redemption premium on the Prior Bonds;
WHEREAS, the provisions of the Trust Agreement are incorporated herein by reference as if set forth herein in full;
NOW, THEREFORE, the Authority and the Escrow Agent hereby agree as follows:
Section 1. Establishment and Maintenance of Redemption Fund. The Escrow Agent agrees to establish and maintain the Redemption Fund (the “Redemption Fund”) until the Prior Bonds have been paid as provided herein, and, except as provided in Sections 2 and 3 hereof, to hold the Government Obligations and the money (whether constituting the initial deposit in the Redemption Fund or constituting receipts on the Government Obligations) in the Redemption Fund at all times as a separate redemption account wholly segregated from all other securities, investments or money held by it. The Authority hereby directs the Escrow Agent to deposit in the Redemption Fund the sum of $___________, being the sum of $_________ transferred to it by the Trustee from the Reserve Funds for the Prior Bonds, and $_________transferred to it by the Trustee representing a portion of the proceeds of the Bonds. The Escrow Agent shall immediately apply all of the money on deposit in the Redemption Fund to acquire on the date of issuance of the Bonds the Government Obligations set forth, at the prices set forth, in Schedule I. All securities and money in the Redemption Fund are hereby irrevocably pledged, subject to the provisions of Sections 2 and 3 hereof, to secure the payment of the Prior Bonds as provided herein; provided, that any money held in the Redemption Fund that is not used for the payment of the Prior Bonds shall be repaid to the Authority free from the escrow created by the Escrow Agreement.
Section 2. Investment of Money in the Redemption Fund. The Escrow Agent shall purchase the Government Obligations with amounts in the Redemption Fund. If amounts of interest on or payments of principal of the Government Obligations deposited in the Redemption Fund are received by the Escrow Agent in excess amounts or prior to the date on which such receipts are to be applied pursuant to Section 4 to the refunding of the Prior Bonds, the Escrow Agent shall, upon the written request of the Authority, invest such receipts until the next interest or principal payment of the Prior Bonds in Government Obligations (including obligations issued or held in book-entry form on the books of the Department of the Treasury). Any receipts on investments made pursuant to this section in excess of the cost of such investments which are not needed for the refunding of the Prior Bonds as shown in the verification report of ____________ dated ________, 2004 or a more recent report required to be delivered pursuant to Section 3 hereof, shall be remitted to the Authority free from the escrow created by the Escrow Agreement. The Escrow Agent shall not be liable or responsible for any loss resulting from any investment made pursuant to this section and in full compliance with the provisions hereof. The Escrow Agent and its affiliates may act as principal agent, sponsor, depository or advisor with respect to the holding or making of any investments.
Section 3. Substitution of Securities in the Redemption Fund; Reinvestments. Upon written request of the Authority, and after receiving from the Authority an unqualified opinion of a nationally recognized bond counsel that such substitution will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Prior Bonds or the Bonds and after receiving from the Authority a written report of a firm of independent certified public accountants (the “Verification Report”) to the effect that the substitute securities will mature in such principal amounts and earn interest in such amounts and at such times so that sufficient money excluding reinvestment earnings will be available to provide for the payment of the interest on all outstanding Prior Bonds as such interest becomes due and payable, for the payment of all principal and any redemption premium on the Prior Bonds, the Escrow Agent shall sell, redeem or otherwise dispose of any securities in the Redemption Fund if, but only if, there are first substituted therefor, from the proceeds of such securities, other Government Obligations (including obligations issued or held in book-entry form on the books of the Department of the Treasury). Any excess proceeds of the sale, redemption or other disposition of such securities in the Redemption Fund (derived in connection with a substitution as provided in this Section) shall be remitted to the Authority, upon its written request, free from the escrow created by the Escrow Agreement as shown in the Verification Report. The Escrow Agent shall not be liable or responsible for any loss resulting from any investment made pursuant to this section and in full compliance with the provisions hereof.
The Escrow Agent shall, solely at the written request of the Authority, reinvest amounts received as principal and interest upon the maturity of the Government Obligations in Government Obligations maturing in each case on or before the date such amounts are required to pay the amounts set forth in Schedule II, in an amount at least equal to the purchase price of such Government Obligations and with a yield less than or equal to ________% per annum; provided, however, that the Escrow Agent may reinvest in Government Obligations with a greater yield solely if the Escrow Agent has received (1) a written request of the Authority requesting reinvestment with such other yield, and (2) an opinion of nationally recognized bond counsel to the effect that such greater yield will not adversely affect the exemption from federal and state income taxes of interest on the Prior Bonds or the Bonds.
Under no circumstances shall the Authority direct that any moneys held hereunder be reinvested in securities or obligations, the acquisition of which would cause the Prior Bonds or the Bonds to be an “arbitrage bond” as defined in Section 148(a) of the Internal Revenue Code of 1986 and relevant regulations of the United States Agency of the Treasury, or in securities other than Government Obligations.
Section 4. Payment from the Redemption Fund. The Escrow Agent is hereby irrevocably instructed to, and the Escrow Agent hereby agrees to, collect and deposit in the Redemption Fund the interest on and principal of all Government Obligations held in the Redemption Fund promptly as such interest and principal become due, and to use such interest and principal, together with any other money and the interest and principal of any other securities deposited in the Redemption Fund, to provide for the payment of the interest on, and principal and redemption premiums of, all outstanding Prior Bonds and for the redemption of all remaining principal of the Prior Bonds on September 2, 2004, all as set forth in Schedule II attached hereto.
Section 5. Deficiencies in the Redemption Fund. If at any time the Escrow Agent shall have actual knowledge that the money in the Redemption Fund, including the anticipated proceeds of the Government Obligations, will not be sufficient to make all payments required by Section 4 hereof, the Escrow Agent shall notify the Authority in writing as soon as reasonably practicable of such fact, stating the amount of such deficiency and the reason therefor (if known to it), and the Authority shall use its best efforts to obtain and deposit with the Escrow Agent for deposit in the Redemption Fund, but only from funds, if any, lawfully available for such purpose, such additional money as may be required to provide for the making of all such payments. The Authority shall incur no liability if funds lawfully available are not sufficient for such purpose. The Escrow Agent shall in no event or manner be responsible for the failure of the Authority to make any such deposit.
Section 6. Notice to Holders of the Prior Bonds. The Escrow Agent is further instructed to give notice of the redemption of the Prior Bonds at the time and in the manner provided in the Trust Agreement, the First Supplemental Trust Agreement and the Second Supplemental Trust Agreement for a redemption date of September 2, 2004.
Section 7. Compensation and Indemnification of the Escrow Agent.
(a) The Authority shall pay the Escrow Agent a fee for its services hereunder and shall reimburse the Escrow Agent for its out-of-pocket expenses (including but not limited to the fees and expenses, if any, of its counsel or accountants) incurred by the Escrow Agent in connection with these services, all as more particularly agreed upon by the Authority and the Escrow Agent; provided, that these fees and expenses shall in no event be deducted from the Redemption Fund. Under no circumstances shall the Escrow Agent assert a lien on the Redemption Fund for any of its fees or expenses.
(b) The Authority agrees to indemnify the Escrow Agent, its agents and its officers or employees for, and hold the Escrow Agent, its agents and its officers or employees harmless from, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind (including, without limitation, reasonable fees and disbursements of counsel or accountants for the Escrow Agent) which may be imposed on, incurred by, or asserted against the Escrow Agent or such other party at any time by reason of its performance of Escrow Agent’s services, in any transaction arising out of the Escrow Agreement or any of the transactions contemplated herein, unless due to the negligence or willful misconduct of the particular indemnified party. Such indemnity shall survive the discharge of this Escrow Agreement or resignation or removal of the Escrow Agent.
Section 8. Functions of the Escrow Agent.
(a) The Escrow Agent is entering into this Escrow Agreement in its capacity as Paying Agent under the Trust Agreement, the First Supplemental Trust Agreement and the Second Supplemental Trust Agreement. Moneys held by the Escrow Agent hereunder are to be held and applied for the payment of Prior Bonds in accordance with the Trust Agreement, the First Supplemental Trust Agreement and the Second Supplemental Trust Agreement.
(b) The Escrow Agent undertakes to perform only such duties as are expressly and specifically set forth in the Escrow Agreement and no implied duties or obligations shall be read into the Escrow Agreement against the Escrow Agent.
(c) The Escrow Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, and shall be protected and indemnified as stated in the Escrow Agreement, in acting, or refraining from acting, upon any written notice, instruction, request, certificate, document, report or opinion furnished to the Escrow Agent and reasonably believed by the Escrow Agent to have been signed or presented by the proper party, and it need not investigate any fact or matter stated in such notice, instruction, request, certificate, document, report or opinion.
(d) The Escrow Agent shall not have any liability hereunder except to the extent of its own negligence or willful misconduct. In no event shall the Escrow Agent be liable for any special, indirect or consequential damages, even if parties know of the possibility of such damages. The Escrow Agent shall have no duty or responsibility under the Escrow Agreement in the case of any default in the performance of covenants or agreements contained in the Resolutions or in the case of the receipt of any written demand with respect to such default. The Escrow Agent is not required to resolve conflicting demands to money or property in its possession under the Escrow Agreement.
(e) The Escrow Agent may consult with counsel of its own choice (which may be counsel to the Authority) and the opinion of such counsel shall be full and complete authorization to take or suffer in good faith any action in accordance with such opinion of counsel.
(f) The Escrow Agent shall not be responsible for any of the recitals or representations contained herein or in the Trust Agreement, the First Supplemental Trust Agreement and the Second Supplemental Trust Agreement.
(g) The Escrow Agent may become the owner of, or acquire any interest in, any of the Bonds or the Bonds with the same rights that it would have if it were not the Escrow Agent, and may engage or be interested in any financial or other transaction with the Authority.
(h) The Escrow Agent shall not be liable for the accuracy of the calculations as to the sufficiency of the Government Obligations and moneys to make the payments of principal and interest evidenced and represented by the Bonds in accordance with Section 4.
(i) The Escrow Agent shall not be liable for any action or omission of the Authority under the Escrow Agreement or the Trust Agreement, the First Supplemental Trust Agreement and the Second Supplemental Trust Agreement.
(j) Whenever in the administration of this Escrow Agreement the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Escrow Agent, be deemed to be conclusively proved and established by a certificate of the Authority, and such certificate shall, in the absence of negligence or willful misconduct on the part of the Escrow Agent, be full warrant to the Escrow Agent for any action taken or suffered by it under the provisions of the Escrow Agreement upon the faith thereof.
(k) The Escrow Agent may at any time resign by giving written notice to the Authority of such resignation, whereupon the Authority shall promptly appoint a successor Escrow Agent by the resignation date. Resignation of the Escrow Agent will be effective given as stated above or upon appointment of a successor Escrow Agent, whichever first occurs. If the Authority does not appoint a successor Escrow Agent by the resignation effective date, the resigning Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor Escrow Agent (or may deposit with the court the Government Obligations and money or other property held by it in trust under the Escrow Agreement), which court may thereupon, after such notice, if any, as it may deem proper and prescribe and as may be required by law, appoint a successor Escrow Agent. After receiving a notice of resignation of an Escrow Agent, the Authority may appoint a temporary Escrow Agent to replace the resigning Escrow Agent until the Authority appoints a successor Escrow Agent. Any such temporary Escrow Agent so appointed by the Authority shall immediately and without further act be superseded by the successor Escrow Agent so appointed.
(l) The Escrow Agent will provide the Authority with annual statements for the Redemption Fund maintained hereunder.
Section 9. Merger or Consolidation. Any company into which the Escrow Agent 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 Escrow Agent may sell or transfer all or substantially all of its corporate trust business shall be the successor to such Escrow Agent, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
Section 10. Amendment. This Escrow Agreement may not be revoked or amended by the parties hereto unless there shall first have been filed with the Authority and the Escrow Agent (i) a written opinion of nationally recognized bond counsel stating that such amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest evidenced by the Prior Bonds or the Bonds and (ii) unless such amendment is not materially adverse to the interests of the registered owners of the Prior Bonds or the Bonds, the written consent of all the registered owners of the Prior Bonds or the Bonds then outstanding.
Section 11. Notices. All notices and communications hereunder shall be in writing and shall be deemed to be duly given if received or sent by first class mail, as follows:
If to the Authority:
Brentwood Infrastructure Financing Authority
150 City Park Way
Brentwood, California 94513
Attention: Treasurer/Controller
If to the Escrow Agent:
U.S. Bank National Association
One California Street, Suite 2550
San Francisco, California 94111
Attention: Corporate Trust Department
Section 12. Severability. If any section, paragraph, sentence, clause or provision of the Escrow Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, sentence, clause or provision shall not affect any of the remaining provisions of the Escrow Agreement.
Section 13. Governing Law. This Escrow Agreement shall be construed and governed in accordance with the laws of the State of California.
Section 14. Headings. Any headings preceding the text of the several Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Escrow Agreement, nor shall they affect its meaning, construction or effect.
Section 15. Execution. The Escrow Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same agreement.
IN WITNESS WHEREOF, the Authority and the Escrow Agent have caused the Escrow Agreement to be executed each on its behalf as of the day and year first above written.
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY


By
Pam Ehler, Treasurer/Controller


U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent


By
Authorized Officer

SCHEDULE I
Government Obligations










ESCROW AGREEMENT
by and between the
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
and
U.S. BANK NATIONAL ASSOCIATION
as Escrow Agent

Dated as of January 1, 2004

RELATING TO THE

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
CIFP 94 1 INFRASTRUCTURE REVENUE BONDS
SERIES 1999
WITNESSETH 1
Section 1. Establishment and Maintenance of Redemption Fund 2
Section 2. Investment of Money in the Redemption Fund 2
Section 3. Substitution of Securities in the Redemption Fund; Reinvestments 2
Section 4. Payment from the Redemption Fund 3
Section 5. Deficiencies in the Redemption Fund 3
Section 6. Notice to Holders of the Prior Bonds 4
Section 7. Compensation and Indemnification of the Escrow Agent 4
Section 8. Functions of the Escrow Agent 4
Section 9. Merger or Consolidation 6
Section 10. Amendment 6
Section 11. Notices 6
Section 12. Severability 6
Section 13. Governing Law 7
Section 14. Headings 7
Section 15. Execution
AMENDED AND RESTATED TRUST AGREEMENT
This Amended and Restated Trust Agreement, dated as of January 1, 2004, 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 “City”) 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 Issuer is empowered under the provisions of the Government Code of the State of California to issue its bonds for the purpose of financing certain improvements and purchasing various obligations issued by certain local agencies;
WHEREAS, pursuant to a Trust Agreement dated as of November 1, 1995, as supplemented by a First Supplemental Trust Agreement dated as of October 1, 1996, a Second Supplemental Trust Agreement dated as of October 1, 1997, a Third Supplemental Trust Agreement dated as of January 1, 1999 (collectively the “Trust Agreement”), the Issuer issued its CIFP 94-1 Infrastructure Revenue Bonds, Series 1999 (the “1999 Bonds”), to finance certain capital improvements and purchase the 1999 Local Obligations (as defined herein) as determined by the Issuer and to refund its CIFP 94-1 Infrastructure Revenue Bonds, Series 1995, CIFP 94-1 Infrastructure Revenue Bonds, Series 1996, and CIFP 94-1 Infrastructure Revenue Bonds, Series 1997;
WHEREAS, the Issuer desires to amend and restate the Trust Agreement in the form of this Amended and Restated Trust Agreement in order to refund and to defease the 1999 Bonds in the outstanding principal amounts of $_____________ (the “Prior Bonds”) and has authorized and undertaken to issue the Brentwood Infrastructure Financing Authority Infrastructure Revenue Refunding Bonds, Series 2004A (the “Series 2004A Bonds”) and the Brentwood Infrastructure Financing Authority Infrastructure Revenue Refunding Bonds, Subordinated Series 2004B (the “Series 2004B Bonds” and, together with the Series 2004A Bonds, the “Bonds”) pursuant to this Amended and Restated Trust Agreement;
WHEREAS, it has been determined that the estimated amount necessary to refund and to defease the outstanding Prior Bonds pursuant to the Trust Agreement, to fund a Reserve Fund for the Bonds, and to pay the costs of issuance of the Bonds will require the issuance of the Bonds in the aggregate principal amount of _____________________________ dollars ($__________);
WHEREAS, all things necessary to make the Bonds, when authenticated by the Trustee and issued as provided in this Amended and Restated Trust Agreement, the valid, binding and legal obligations of the Issuer according to the import thereof and hereof have been done and performed; and
NOW, THEREFORE, THIS AMENDED AND RESTATED TRUST AGREEMENT WITNESSETH:
That the Trust Agreement is hereby amended and restated in its entirety as follows:
GRANTING CLAUSE
That the Issuer and the City, 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 this Amended and Restated Trust Agreement, and to secure the observance and performance by the Issuer and the City 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 City in, to and under, subject to the provisions of this Amended and Restated 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 Amended and Restated Trust Agreement, except amounts in the Rebate Fund;
(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 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 this Amended and Restated Trust Agreement), upon the trusts and subject to the agreements, conditions, covenants and terms hereinafter set forth;
AND THIS AMENDED AND RESTATED 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 City 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 this Amended and Restated 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.
“Accountant’s Certificate” shall mean a certificate signed by an independent certified public accountant of recognized national standing selected by the Issuer, or a firm of independent certified public accountants of recognized national standing.
“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.
“Amended and Restated Trust Agreement” shall mean this Amended and Restated Trust Agreement dated as of January 1, 2004, among the City, 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.
“Annual Debt Service” shall mean, for each Fiscal Year and for each Series of Bonds, the sum of (1) the interest falling due on all Outstanding Bonds of such Series 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 of such Series, payable in such Fiscal Year.
“Assessment Districts” means the City of Brentwood Assessment District Nos. 93-2, 93-3, 94-2, 94-3 and 95-1, for which the Local Obligations were issued.
“Average Annual Debt Service” shall mean the average Fiscal Year Annual Debt Service over all Fiscal Years during which the Bonds of any Series are scheduled to remain Outstanding.
“Authorized Denominations,” with respect to the Series 2004A Bonds, shall mean five thousand dollars ($5,000) and any integral multiple thereof, but not exceeding the principal amount of the Series 2004A Bonds maturing on any one date, and with respect to the Series 2004B Bonds, shall mean one thousand dollars ($1,000) and any integral multiple thereof, but not exceeding the principal amount of the Series 2004B 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 this Amended and Restated Trust Agreement, and, when used with reference to the City, shall mean the City Manager, City Treasurer, Director of Finance and Information Systems or any other Person authorized by the City in a Written Order or resolution to perform an act or sign a document on behalf of the City for the purposes of this Amended and Restated Trust Agreement.
“Bond” or “Bonds” shall mean any or all of the Series 2004A Bonds and the Series 2004B Bonds, authorized and issued by the Issuer and authenticated by the Trustee and delivered under this Amended and Restated Trust Agreement.
“Bond Insurer” means [INSURER], a_______________________, or any successor thereto or assignee thereof.
“Bond Insurance Policy” means the policy of municipal bond insurance insuring the payment of principal and interest on the Series 2004A Bonds when due, issued by the Bond Insurer.
“Bond Counsel” shall mean Orrick, Herrington & Sutcliffe LLP or another 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.
“Bond Year” shall mean the 12 month period ending September 2, provided, that the first Bond Year shall commence on the Dated Date and end on September 2, 2004.
“Book-Entry Bonds” shall mean any Bonds designated as Book-Entry Bonds pursuant to this Amended and Restated 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.
“Capital Improvement Fund” means the fund by that name established pursuant to Section 5.03.
“Cash Flow Certificate” shall mean a written certificate executed by a Cash Flow Consultant.
“Cash Flow Consultant” shall mean RBC Dain Rauscher; provided, that the Issuer may appoint as the Cash Flow Consultant any other 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, approved by the Bond Insurer appointed and paid by the City or the Issuer and who, or each of whom:
(1) is in fact independent and not under the domination of the City or the Issuer;
(2) does not have any substantial interest, direct or indirect, with the City or the Issuer; and
(3) is not connected with the City or the Issuer as a member, officer or employee of the City or the Issuer, but who may be regularly retained to make annual or other reports to the City 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.
“City” shall mean the City of Brentwood, California, and its successors.
“City Manager” shall mean the City Manager of the City.
“Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
“Continuing Disclosure Agreement” shall mean that certain Continuing Disclosure Agreement, dated as of ______________, 2004 by and among the Issuer, the City and the Trustee.
“Corporate Trust Office” shall mean the office of the Trustee in San Francisco, California, 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 or such other office specified by the Trustee.
“Dated Date” shall mean ___________, 2004.
“Depository” shall mean the securities depository acting as Depository pursuant to Section 2.06.
“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.
“Expense Fund” shall mean the Fund by that name established pursuant to Section 5.01.
“Expenses” shall mean all administrative costs of 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 fees and expenses, amounts necessary to pay to the United States or otherwise to satisfy requirements of the Code and the regulations thereunder 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 Issuer or charges required to be paid by it to comply with the terms hereof or of the Bonds.
“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 Series 2004A Interest Fund, the Series 2004A Principal Fund, the Series 2004A Reserve Fund, the Series 2004B Interest Fund, the Series 2004B Principal Fund, the Series 2004B Reserve Fund, the Redemption Fund, the Expense Fund, the Capital Improvement Fund, the Obligation Fund and the Rebate Fund, including all accounts therein.
“Government Obligations” shall mean and include any of the following securities: lawful currency of the United States; State and Local Government Series issued by the United States Treasury (SLGS); United States Treasury bills, notes and bonds; and certificates, receipts or other obligations evidencing direct ownership of, or the right to receive, a specified portion of one or more interest payments or principal payments, or any combination thereof, to be made on any United States Treasury bill, note or bond (“STRIPS”).
“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 Payment Date” shall mean March 2 and September 2 in each year, commencing on September 2, 2004.
“Investment Securities” shall mean and include any of the following securities, to the extent permitted by the laws of the State (the Trustee is entitled to rely upon investment directions of the Issuer as a certification such investment is permitted by such laws):
1. (a) Direct obligations (other than an obligation subject to variation to principal repayment) of the United States of America (“United States Treasury Obligations”), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated.
2. Federal Housing Administration debentures.
3. The listed obligations of government sponsored agenda which are not backed by the full faith and credit of the United States of America:
- Federal Home Loan Mortgage Corporation (FHLMC):
Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts)
Senior Debt obligations
- Farm Credit Banks (formerly Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives):
Consolidated system-wide bonds and notes
- Federal Home Loan Banks (FHL Banks):
Consolidated debt obligations
- Federal National Mortgage Association (FNMA):
Senior debt obligations
Mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts)
- Student Loan Marketing Association (SLMA):
Senior debt obligations (excluded are securities that do net have a fixed par value and/or whose terms do not promise a fixed dollar amount at maturity or cap date)
- Financing Corporation (FICO):
Debt obligations
- Resolution Funding Corporation (REFCORP):
Debt obligations
4. Unsecured certificates of deposit, time deposits, and bankers’ acceptances (having maturities of not more than 30 days) of any bank the short term obligations of which are rated “A-1” or better by S&P.
5. Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks which issue capital and surplus of at least $5 million-
6. Commercial paper (having original maturities of not more than 270 days) rated “A-1+” by S&P and “Prime-1” by Moody’s.
7. Money market funds rated “AAm” or “AAm-G” by S&P, or better, including such funds for which the Trustee or an affiliate provides investment advice or other services.
8. “State Obligations”. which means:
A. Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated “A3” by Moody’s and “A” by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated.
B. Direct general short-term obligations of any state agency or subdivision or agency thereof described in (A) above and rated “A-1+” by S&P and “MIG-1” by Moody’s.
C. Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (A) above and rated “AA” or better by S&P and “Aa” or better by Moody’s.
9. Pre-refunded municipal obligations rated “AAA” by S & P and “Aaa” by Moody’s meeting the following requirements:
A. the municipal obligations are (1) not subject to redemption prior to maturity or (2) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions;
B. the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations;
C. the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification”);
D. the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations;
E. no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification; and
F. the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent.
10. Repurchase agreements:
With (1) any domestic bank, or domestic branch of a foreign bank. the long term debt of which is rated at least “A” by S&P and Moody’s; or (2) any broker-dealer with “retail customers” or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least “A” by S&P and Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (3) any other entity rated “A” or better by S&P and Moody’s and acceptable to the Insurer, provided that:
A. The market value of the collateral is maintained at levels and upon such conditions as would be acceptable to S&P and Moody’s to maintain an “A” rating in an “A rated structured financing (with a market value approach);
B. The Trustee or a third party acting solely as agent therefor or for the issuer (the “Holder of the Collateral”) has possession of the collateral or the collateral has been transferred to the Holder of the Collateral in accordance with applicable state and federal laws (other than by means of entries on the transferors books);
C. The repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession);
D. All other requirements of S&P in respect of repurchase agreements shall be met.
E. The repurchase agreement shall provide that if during its term the provider’s rating by either Moody’s or S&P is withdrawn or suspended or falls below “A-” by S&P or “A3” by Moody’s, as appropriate, the provider must, at the direction of the Issuer or the Trustee (who shall give such direction if so directed by the Insurer), within 10 days of receipt of such direction, repurchase all collateral and terminate the agreement, with no penalty or premium to the Issuer or Trustee.
Notwithstanding the above, if a repurchase agreement has a term of 270 days or less (with no evergreen provision), collateral levels need not be as specified in (A) above, so long as such collateral levels are 103% or better and the provider is rated at least “A” by S&P and Moody’s, respectively.
11. Investment agreements with a domestic or foreign tank or corporation (other than a life or property casualty insurance company) the long-term debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least “AA” by S&P and “Aa” by Moody’s; provided that. by the terms of the investment agreement:
A. interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service (or, if the investment agreement is for the construction fund, construction draws) on the Bonds;
B. the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days’ prior notice; the Issuer and the Trustee hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid;
C. the investment agreement shall state that is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors;
D. the Issuer or the Trustee receives the opinion of domestic counsel (which opinion shall be addressed to the Issuer and the insurer) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the Insurer,
E. the investment agreement shall provide that if during its term
i) the provider’s rating by either S&P or Moody’s falls below “AA-“ or “Aa3”, respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (i) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the providers books) to the Issuer, the Trustee or a third party acting solely as agent therefor (the “Holder of the Collateral”) collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S&P and Moods to maintain an “A” rating in an “A” rated structured financing (with a market value approach); or (ii) repay the principal of and accrued but unpaid interest on the investment, and
ii) the providers rating by either S&P or Moody’s is withdrawn or suspended or falls below “A-” or “A3”, respectively, the provider must, at the direction of the issuer or the Trustee (who shall give such direction if so directed by the Insurer), within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Issuer or Trustee, and
F. The investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession);
G. the Investment agreement must provide that if during its term
i) the provider shall default in its payment obligations, the providers obligations under the Investment agreement shall, at the direction of the Issuer or the Trustee (who shall give such direction if so directed by the Insurer), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Issuer or Trustee, as appropriate, and
ii) the provider shall become Insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. (“event of Insolvency”), the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Issuer or Trustee, as appropriate.
12. 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 Amended and Restated Trust Agreement.
13. 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 City and the Redevelopment Agency of the City of Brentwood, and the laws of the State, and its successors.
“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.
“Local Obligation Resolutions” shall mean the resolutions of the City authorizing issuance of the Local Obligations in its Assessment District Nos. 93-2, 93-3, 94-2, 94-3 and 95 1, as supplemented.
“Local Obligations” shall mean the following Local Obligations held by the Trustee in the Obligation Fund hereunder.
Assessment Districts Series 1995
Local Obligations Series 1996
Local Obligations Series 1997
Local Obligations Series 1999
Local Obligations
Assessment District No. 93-2 Series 1995A
Original Principal Amount: $2,445,004
Resolution No. 95 251 adopted 10/24/95
Series 1996A
Original Principal Amount: $3,327,947
First Supplemental Resolution No. 96 167 adopted 9/24/96 Series 1997A
Original Principal Amount: $239,605
Second Supplemental Resolution No. 97-228
adopted 11/12/97 Series 1999A
Original Principal Amount: $2,203,438
Third Supplemental Resolution No. 99-36
adopted 1/20/99
Assessment District No. 93-3 Series 1995B
Original Principal Amount: $3,424,994
Resolution No. 95 252 adopted 10/24/95 Series 1996B
Original Principal Amount: $4,422,371
First Supplemental Resolution No. 96 168 adopted 9/24/96 Series 1997B
Original Principal Amount: $1,164,036
Second Supplemental Resolution No. 97 229
adopted 11/12/97 Series 1999B
Original Principal Amount: $9,800,657
Third Supplemental Resolution No. 99-37
adopted 1/20/99
Assessment District No. 94-2 Series 1995C
Original Principal Amount: $484,336
Resolution No. 95 253 adopted 10/24/95 None None Series 1999C
Original Principal Amount: $2,295,085
First Supplemental Resolution No. 99-38
adopted 1/20/99
Assessment District No. 94-3 Series 1995D
Original Principal Amount: $5,164,122
Resolution No. 95 254 adopted 10/24/95 Series 1995C
Original Principal Amount: $559,682
First Supplemental Resolution No. 96-169 adopted 9/24/96 Series 1997C
Original Principal Amount: $4,346,359
Second Supplemental Resolution No. 97-230
adopted 11/12/97 Series 1999D
Original Principal Amount: $1,970,820
Third Supplemental Resolution No. 99-39
adopted 1/20/99

Assessment District No. 95-1 Series 1995E
Original Principal Amount: $301,544
Resolution No. 95 255 adopted 10/24/95 None None None

“Maximum Annual Debt Service” shall mean, for each Series of Bonds, the largest Annual Debt Service during the period from the date of such determination through the final maturity date of any Outstanding Bonds of such Series.
“Nominee” shall mean the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.06.
“Obligation Fund” shall mean the fund by that name established pursuant to Section 5.01.
“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 this Amended and Restated 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 this Amended and Restated 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.
“Participating Underwriter” has the meaning ascribed thereto in the Continuing Disclosure Agreement.
“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.
“Prepayment” shall mean any payment with respect to a Local Obligation as a result of prepayments of assessments by property owners which, pursuant to the terms of such Local Obligation, would require all or any portion of such Local Obligation to be redeemed prior to the maturity thereof, in either case whether or not such payment includes any premium or prepayment penalty.
“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.
“Property Owner” shall mean an owner or property within the City of Brentwood Assessment District Nos. 93-2, 93-3, 94-2, 94-3 and 95-1.
“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 Amount” means (i) with respect to any Bond, the amount of the principal amount thereof plus the redemption premium, if any, applicable as of the date of calculation, and (ii) with respect to any Local Obligations, 103% of the principal amount thereof.
“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 5.15.
“Reserve Policy” means the Municipal Bond Debt Service Reserve Insurance Policy issued by the Bond Insurer to fund the Series 2004A Reserve Requirement.
“Revenue Fund” shall mean the Fund by that name established pursuant to Section 5.01.
“Revenues” shall mean (i) 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 (ii) 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.
“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” means a separate series of Bonds, being either the Series 2004A Bonds or the Series 2004B Bonds.
“Series 2004A Bonds” shall mean the Brentwood Infrastructure Financing Authority, Infrastructure Revenue Refunding Bonds, Series 2004A authorized and issued hereunder.
“Series 2004A Interest Fund” shall mean the Fund by that name established pursuant to Section 5.01.
“Series 2004A Principal Fund” shall mean the Fund by that name established pursuant to Section 5.01.
“Series 2004A Reserve Fund” shall mean the Fund by that name created pursuant to Section 5.01.
“Series 2004A Reserve Requirement” shall mean, as of any date of calculation, the Maximum Annual Debt Service on the Series 2004A Bonds. The Series 2004A Reserve Requirement with respect to the Series 2004A Bonds as of Dated Date is $_______________.
“Series 2004B Bonds” shall mean the Brentwood Infrastructure Financing Authority, Infrastructure Revenue Refunding Bonds, Subordinated Series 2004B authorized and issued hereunder.
“Series 2004B Interest Fund” shall mean the Fund by that name established pursuant to Section 5.01.
“Series 2004B Principal Fund” shall mean the Fund by that name established pursuant to Section 5.01.
“Series 2004B Reserve Fund” shall mean the Fund by that name created pursuant to Section 5.01.
“Series 2004B Reserve Requirement” shall mean, as of any date of calculation, the Maximum Annual Debt Service on the Series 2004B Bonds. The Series 2004B Reserve Requirement with respect to the Series 2004B Bonds as of Dated Date is $_______________.
“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 2.01 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 this Amended and Restated Trust Agreement which is duly executed and delivered in accordance with the provisions of this Amended and Restated 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 City on the date each Series of 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.
“Trustee” shall mean U.S. Bank National Association, a national banking association, duly organized and existing under the laws of the United States of America, in its capacity as trustee hereunder, and any successor as trustee under this Amended and Restated 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 City, shall mean a written direction of the City 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 this Amended and Restated Trust Agreement. The headings and Table of Contents herein are solely for convenience of reference and shall not constitute a part of this Amended and Restated Trust Agreement, nor shall they affect its meanings, construction or effect.
ARTICLE II

TERMS OF THE BONDS
SECTION 2.01. The Bonds.
(a) There shall be issued under and secured by this Amended and Restated Trust Agreement bonds in the form of fully registered bonds to be designated “Brentwood Infrastructure Financing Authority Infrastructure Revenue Refunding Bonds, Series 2004A” in the aggregate principal amount of ___________________________ dollars ($__________). The Series 2004A Bonds shall be dated as of __________, 2004 and shall bear interest at the rates specified in the table below, such interest being payable semiannually on each Interest Payment Date, and shall mature on the Principal Payment Dates in the following years in the following principal amounts, namely:
Principal
Payment Date
(September 2)
Principal
Amount
Interest
Rate
2004 $ %
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
20__
20__
*20__
*20__

* Term Bonds
(b) There shall be issued under and secured by this Amended and Restated Trust Agreement bonds in the form of fully registered bonds to be designated “Brentwood Infrastructure Financing Authority Infrastructure Revenue Refunding Bonds, Subordinated Series 2004B” in the aggregate principal amount of __________________________ dollars ($___________). The Series 2004B Bonds shall be dated as of ___________, 2004 and shall bear interest at the rates specified in the table below, such interest being payable semiannually on each Interest Payment Date, and shall mature on the Principal Payment Dates in the following years in the following principal amounts, namely:
Principal
Payment Date
(September 2)
Principal
Amount
Interest
Rate
2004 $ %
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
20__
20__
*20__

* Term Bonds
(c) 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 and each Series shall be numbered in consecutive numerical order from 1 upwards. Each Bond shall bear interest from and including the Interest Payment Date next preceding the date of authentication thereof unless it is authenticated during the period from the Record Date preceding an Interest Payment Date to and including such Interest Payment Date, in which event it shall bear interest from and including such Interest Payment Date, or unless it is authenticated prior to September 2, 2004, in which event it shall bear interest from the Dated Date; provided, that if at the time of authentication of any Bond interest is then in default or overdue on the Bonds, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid in full or made available for payment in full on all Outstanding Bonds. 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 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 any Series 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. The principal of and redemption premiums, if any, on the Bonds shall be payable at the Corporate Trust Office of the Trustee, 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.
(d) 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 Bonds 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 2.02. 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 to differentiate among the Series of Bonds and as are not inconsistent herewith.
SECTION 2.03. Temporary Bonds. Until the Bonds in definitive form are ready for delivery, the Issuer may execute and, upon its request in writing, the Trustee shall authenticate and deliver in lieu of any thereof and subject to the same provisions, limitations and conditions one or more Bonds in temporary form, in substantially of the tenor of the Bonds hereinbefore in this article described, with appropriate omissions, variations and insertions as the Issuer shall determine.
Until exchanged for the Bonds in definitive form, such Bonds in temporary form shall be entitled to the lien and benefit of this Amended and Restated Trust Agreement. The Issuer shall, without unreasonable delay, prepare, execute and deliver to the Trustee and, upon the presentation and surrender of the Bond or Bonds in temporary form to the Trustee at its Corporate Trust Office, the Trustee shall authenticate and deliver, in exchange therefor, a Bond or Bonds of the same Series, maturity and interest rate, in definitive form, in Authorized Denominations, and for the same aggregate Outstanding principal amount, as the Bond or Bonds in temporary form surrendered. Such exchange shall be made at the Issuer’s own expense and without making any charge therefor to any Owner.
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 Series, 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 this Amended and Restated Trust Agreement equally and proportionally with any and all other Bonds of such Series duly issued under this Amended and Restated 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. Special Covenants as to Book-Entry Only System for Bonds. (a) Except as otherwise provided in subsections (b) and (c) of this Section, all of the Bonds initially issued shall be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), or such other nominee as DTC shall request pursuant to the Letter of Representation. Payment of the interest on any Bond registered in the name of Cede & Co. shall be made on each Interest Payment Date for such Bonds to the account, in the manner and at the address indicated in or pursuant to the Letter of Representation.
(b) The Bonds initially shall be issued in the form of a single authenticated fully registered bond for each stated maturity of such Bonds, representing the aggregate principal amount of the Bonds of such maturity. Upon initial issuance, the ownership of all such Bonds shall be registered in the registration records maintained by the Trustee pursuant to Section 2.07 in the name of Cede & Co., as nominee of DTC, or such other nominee as DTC shall request pursuant to the Letter of Representation. The Trustee, the Issuer and any paying agent may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal or redemption price of and interest on such Bonds, selecting the Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Owners hereunder, registering the transfer of Bonds, obtaining any consent or other action to be taken by Owners of the Bonds and for all other purposes whatsoever; and neither the Trustee nor the Issuer or any paying agent shall be affected by any notice to the contrary. Neither the Trustee nor the Issuer or any paying agent shall have any responsibility or obligation to any Participant (which shall mean, for purposes of this Section, securities brokers and dealers, banks, trust companies, clearing corporations and other entities, some of whom directly or indirectly own DTC), any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant, or any other person which is not shown on the registration records as being a Owner, with respect to (i) the accuracy of any records maintained by DTC or any Participant, (ii) the payment by DTC or any Participant of any amount in respect of the principal or redemption price of or interest on the Bonds, (iii) any notice which is permitted or required to be given to Owners of Bonds hereunder, (iv) the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Bonds, or (v) any consent given or other action taken by DTC as Owner of Bonds. The Trustee shall pay all principal of and premium, if any, and interest on the Bonds only at the times, to the accounts, at the addresses and otherwise in accordance with the Letter of Representation, and all such payments shall be valid and effective to satisfy fully and discharge the Issuer’s obligations with respect to the principal of and premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of its then existing nominee, the Bonds will be transferable to such new nominee in accordance with subsection (f) of this Section.
(c) In the event that the Issuer determines that it is in the best interests of the beneficial owners of the Bonds that they be able to obtain bond certificates, the Trustee shall, upon the written instruction of the Issuer, so notify DTC, whereupon DTC shall notify the Participants of the availability through DTC of bond certificates. In such event, the Bonds will be transferable in accordance with subsection (f) of this Section . DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice of such discontinuance to the Issuer or the Trustee and discharging its responsibilities with respect thereto under applicable law. In such event, the Bonds will be transferable in accordance with subsection (f) of this Section. Whenever DTC requests the Issuer and the Trustee to do so, the Trustee and the Issuer will cooperate with DTC in taking appropriate action after reasonable notice to arrange for another securities depository to maintain custody of all certificates evidencing the Bonds then Outstanding. In such event, the Bonds will be transferable to such securities depository in accordance with subsection (f) of this Section, and thereafter, all references in this Amended and Restated Trust Agreement to DTC or its nominee shall be deemed to refer to such successor securities depository and its nominee, as appropriate.
(d) Notwithstanding any other provision of this Amended and Restated Trust Agreement to the contrary, so long as all Bonds Outstanding are registered in the name of any nominee of DTC, all payments with respect to the principal of and premium, if any, and interest on each such Bond and all notices with respect to each such Bond shall be made and given, respectively, to DTC as provided in the Letter of Representation.
(e) The Trustee is hereby authorized and requested to execute and deliver any letter of representation or operating memorandum required by DTC and, in connection with any successor nominee for DTC or any successor depository, enter into comparable arrangements, and shall have the same rights with respect to its actions thereunder as it has with respect to its actions under this Amended and Restated Trust Agreement.
(f) In the event that any transfer or exchange of Bonds is authorized under subsection (b) or (c) of this Section, such transfer or exchange shall be accomplished upon receipt by the Trustee from the registered owner thereof of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee, all in accordance with the applicable provisions of Sections 2.07 and 2.08. In the event Bond certificates are issued to Owners other than Cede & Co., its successor as nominee for DTC as Owner of all the Bonds, another securities depository as Owner of all the Bonds, or the nominee of such successor securities depository, the provisions of Sections 2.07 and 2.08 shall also apply to, among other things, the registration, exchange and transfer of the Bonds and the method of payment of principal of, premium, if any, and interest on the Bonds.
SECTION 2.07. Transfer, Registration and Exchange of Bonds. The Bonds may be transferred or exchanged and title thereto shall pass only in the manner provided in this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 such Series in 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 Amended and Restated Trust Agreement and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds of such Series so surrendered.
SECTION 2.09. Authentication of Bonds. No Bond shall be secured by this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated Trust Agreement and the execution and delivery by the Issuer of this Amended and Restated 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) 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 this Amended and Restated Trust Agreement; and
(d) 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 this Amended and Restated 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 Obligations payable in the event of early retirement of the 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.
(e) An original executed counterpart of this Amended and Restated Trust Agreement.
(f) An Opinion of Bond Counsel, dated the date of delivery of the Bonds, to the effect that (i) the Bonds constitute the valid and binding special, limited obligations of the Issuer, (ii) the Amended and Restated Trust Agreement has been duly and validly authorized, executed and delivered by, and (assuming valid execution and delivery by the Trustee) constitutes a valid and binding obligation of, the Issuer and (iii) the interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from State personal income taxation; provided, that with respect to (i) and (ii) above, no opinion need be expressed as to the effect of bankruptcy, insolvency, reorganization, arrangement, moratorium and other laws affecting creditors’ rights, the application of equitable principles and exercise of judicial discretion in appropriate cases.
SECTION 3.02. No Additional Bonds. Other than the Series 2004A Bonds and the Series 2004B Bonds, the Issuer shall not issue any additional Bonds hereunder.
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 this Amended and Restated 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 this Amended and Restated 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 therefor 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 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 Sections 5.11 and 5.14(b) at a redemption price equal to the principal amount thereof, together with a redemption premium equal to (i) if Bonds are redeemed on or prior to March 2, 20__, [two] percent ([2.0]%) of the principal amount of the Bonds to be redeemed or (ii) if Bonds are redeemed on or after September 2, 20__, without premium, in each case plus accrued interest to the redemption date. The Trustee shall select the Series 2004B Bonds and Series 2004A Bonds to be redeemed in accordance with the Redemption Instructions delivered pursuant to Section 4.05.
All prepayments of the Local Obligations must be gross funded (including any call premium) to the next call date.
SECTION 4.03. Optional Redemption of Bonds.
(a) The Series 2004A Bonds maturing on or after September 2, 20__ shall be subject to optional redemption as a whole or in part on any date on or after September 2, 20__, 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, without premium, plus accrued interest to the redemption date.
(b) The Series 2004B Bonds maturing on or after September 2, 20__ shall be subject to optional redemption as a whole or in part on any date on or after September 2, 20__, 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, without premium, plus accrued interest to the redemption date; provided, that the Issuer shall certify in the Written Order delivered pursuant to Section 4.05 prior to such redemption that, after giving effect to such redemption and any simultaneous redemption of the Series 2004A Bonds, the total principal amount of Local Obligations remaining outstanding shall be equal to or greater than the total principal amount of the Series 2004A Bonds remaining Outstanding.
(c) 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 Sections 5.11 and 5.14(b), if any, available therefor 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) 2004A Bonds
(i) The Series 2004A Bonds maturing on September 2, 20__ 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) Redemption
Amount
20__ $
20__
20__
20__
20__
*20__


* Maturity
(ii) The Series 2004A Bonds maturing on September 2, 20__ 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) Redemption
Amount
20__ $
20__
20__
20__
20__
*20__



* Maturity
(b) 2004B Bonds
The Series 2004B Bonds maturing on September 2, 20__ 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) Redemption
Amount
20__ $
20__
20__
20__
20__
*20__



* Maturity
(c) 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.
(d) In the event the mandatory sinking fund redemption installments are paid by the Bond Insurer pursuant to the Bond Insurance Policy, upon receipt of the moneys due, the Trustee shall authenticate and deliver to affected Owners who surrender their Bonds a new Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond surrendered. The Trustee shall designate any portion of payment of principal on Bonds paid by the Bond Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Bonds registered to the then current Owner, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Bond Insurer, registered in the name of _______________________, in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Trustee’s failure to so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable by the Issuer on any Bond or the subrogation rights of the Bond Insurer.
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 City and the Issuer shall deliver to the Trustee and the Bond Insurer at least forty-five (45) days prior to the redemption date the following:
(i) A Written Order of the Issuer to the Trustee including the following items:
(A) designation of the maturities, Series and amounts of Bonds to be redeemed; provided, that except as necessary to meet the requirements of subsection (D) below, the Series 2004A Bonds and the Series 2004B Bonds shall be redeemed pro rata (as nearly as possible given minimum authorized denominations) in proportion to the total principal amount Outstanding of each such Series at the time of redemption;
(B) designation of the reduction, if any, in the Series 2004B Reserve Requirement required pursuant to the Cash Flow Certificate delivered pursuant to subsection (ii) below, resulting from such redemption; and
(C) a certification to the effect that after giving effect to this redemption, the sum of (i) total Redemption Amount of outstanding Local Obligations, plus (ii) the amount on deposit in the Series 2004B Reserve Fund, will be equal to or greater than the total Redemption Amount of Outstanding Series 2004A Bonds.
(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 Amended and Restated 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, if any, on deposit in the Series 2004B Reserve Fund which shall be transferred to the Redemption Fund to redeem Bonds as provided in Sections 5.14(b) and 6.02(c). For purposes of the Local Obligation Resolution, the amount funded in cash in the Series 2004B Reserve Fund, shall be the amount available to transfer to the Redemption Fund. The Cash Flow Certificate shall indicate the amount which must be withdrawn from the Series 2004B Reserve Fund to redeem a portion of the Bonds pursuant to Section 5.14(b) provided, that such withdrawal shall not result in 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 Amended and Restated Trust Agreement and available therefor 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 4.05, 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 this Amended and Restated 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. Such notice may specify that it is conditional upon the receipt of funds to pay the redemption price of the Bonds to be redeemed on or prior to the redemption date and that if such funds are not available, the redemption will be canceled and such Bonds shall remain Outstanding.
At the time 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.
(a) Whenever less than all the Outstanding Series 2004A Bonds of any one Series and maturity are to be redeemed on any one date, the Trustee shall select the particular Series 2004A Bonds to be redeemed by lot and in selecting the Bonds for redemption the Trustee shall treat each Series 2004A Bond of a denomination of more than five thousand dollars ($5,000) as representing that number of Series 2004A Bonds of five thousand dollars ($5,000) denomination which is obtained by dividing the principal amount of such Series 2004A Bond by five thousand dollars ($5,000), and the portion of any Series 2004A 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 Series 2004A Bonds so selected for redemption in whole or in part on such date.
(b) Whenever less than all the Outstanding Series 2004B Bonds of any one Series and maturity are to be redeemed on any one date, the Trustee shall select the particular Series 2004B Bonds to be redeemed by lot and in selecting the Bonds for redemption the Trustee shall treat each Series 2004B Bond of a denomination of more than one thousand dollars ($1,000) as representing that number of Series 2004B Bonds of one thousand dollars ($1,000) denomination which is obtained by dividing the principal amount of such Series 2004B Bond by one thousand dollars ($1,000), and the portion of any Series 2004B Bond of a denomination of more than one thousand dollars ($1,000) to be redeemed shall be redeemed in an Authorized Denomination. The Trustee shall promptly notify the Issuer in writing of the numbers of the Series 2004B 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 this Amended and Restated 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 Sections 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. Upon any purchase of Term Bonds, an amount equal to the aggregate principal amount of Term Bonds so purchased shall be credited towards a part or all of any one or more Mandatory Sinking Fund Installments for such Term Bonds in the same manner as if redeemed pursuant to Sections 4.02, 4.03 or 4.04 hereof, as applicable, and all Term Bonds so purchased shall be delivered to the Trustee for cancellation. The portion of any such Mandatory Sinking Fund Installments remaining after the deduction of any such amounts credited toward the same (or the original amount of any such Mandatory Sinking Fund Installment if no such amounts shall have been credited toward the same) shall constitute the unsatisfied balance of such Mandatory Sinking Fund Installment for the purpose of the calculation of Mandatory Sinking Fund Installments due on any future date.
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 Series 2004A Interest Fund, the Series 2004A Principal Fund, the Series 2004A Reserve Fund, the Series 2004B Interest Fund, the Series 2004B Principal Fund, the Series 2004B Reserve Fund, the Redemption Fund, the Expense Fund, the Capital Improvement Fund, the Obligation Fund and the Rebate Fund.
SECTION 5.02. Deposit of Proceeds of Bonds and Other Funds. The Trustee shall apply the new proceeds (principal amount of the Bonds, less Underwriter’s Discount, less bond insurance premium and reserve policy premium) received from the sale of the Bonds and the funds held by the Trustee under the Prior Trust Agreement in an amount of $_________ as follows:
(a) The Trustee shall deposit the sum of $____________ in the Series 2004B Reserve Fund;
(b) The Trustee shall apply the sum of $________________ to pay the redemption price of the Prior Bonds on March 2, 2004; and
(c) The Trustee shall deposit the sum of $____________ in the Expense Fund for the payment of costs of issuance for the Bonds.
(d) The trustee shall deposit the sum of $_____________ in the Capital Improvement Fund.
SECTION 5.03. Capital Improvement Fund. The Trustee shall establish and maintain a fund to be designated the Capital Improvement Fund. Amounts in the Capital Improvement Fund shall be withdrawn by the Trustee and transferred to or upon the order of the Local Agency for the purpose of paying the cost of public capital improvements (as defined in the Act) upon receipt of one or more sequentially numbered written requisitions of the City stating the following:
(i) the amount, purpose and payee of the payment;
(ii) that the payment is for a public capital improvement as defined in the Act; and
(iii) that the payment is for a cost which has not been previously paid for from the Capital Improvement Fund.
SECTION 5.04. Obligation Fund.
(a) All Local Obligations shall be held in the Obligation Fund, which the Trustee is hereby directed to establish and maintain.
(b) The City further covenants that it will not cause any Local Obligation to be refunded (in whole or in part) unless at the time of such refunding no Bonds will be Outstanding hereunder.
SECTION 5.05. Covenant Respecting Redemption Funds for the Obligations.
(a) The City expressly acknowledges that, pursuant to the Local Obligation Statute and the Local Obligation Resolutions pursuant to which the Local Obligations were issued by the City and sold to the Issuer, the City is legally obligated to establish and maintain a separate redemption fund for the Obligations (the “Local Obligation Redemption Fund”) which, for the Obligations, is held by U.S. Bank National Association in its capacity as Fiscal Agent under the Local Obligation Resolutions and, so long as any part of the Local Obligations remains outstanding, to deposit into the Local Obligation Redemption Fund, upon receipt, any and all Local Obligation Revenues received by the City. The City further acknowledges that, pursuant to the Local Obligation Statute and the Local Obligation Resolutions, 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 City 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, the Bond Insurer 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 Resolutions, and this Amended and Restated Trust Agreement.
(c) The City further covenants that, no later than ten (10) Business Days prior to each Interest Payment Date and Principal Payment Date on the Bonds, the City 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. Reserved.
SECTION 5.07. Revenues Derived From Property Owner Prepayments.
(a) The City and the Issuer acknowledge that the Local Obligation Statute requires that amounts received by the City 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 Amended and Restated Trust Agreement that Revenues received by the Trustee which constituted Property Owner Prepayments when received by the City 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 Bond Insurer and 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 Property Owner Prepayments to the redemption of Bonds.
(c) All Revenues derived from Property Owner Prepayments (except the portion of such Revenues relating to accrued interest, which shall be deposited in the Revenue Fund) 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. Revenue Fund. All Revenues, other than Revenues derived from Property Owner Prepayments (which shall be identified in writing to the Trustee by the City 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 5.09 through 5.15 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 5.09. Series 2004A Interest Fund. The Trustee shall deposit in the Series 2004A Interest Fund before each Interest Payment Date from the Revenue Fund an amount of Revenues which together with any amounts then on deposit in the Series 2004A Interest Fund is equal to the interest on the Series 2004A Bonds due on such date. On each Interest Payment Date, the Trustee shall pay the interest due and payable on the Series 2004A Bonds on such date from the Series 2004A Interest Fund. All amounts in the Interest Fund shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Series 2004A Bonds as it shall become due and payable.
SECTION 5.10. Series 2004A Principal Fund. Having first satisfied the requirements of the foregoing Section 5.09, the Trustee shall next deposit in the Series 2004A Principal Fund before each Principal Payment Date from the Revenue Fund an amount of Revenues which together with any amounts then on deposit in the Series 2004A 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 Series 2004A Bonds when due on such Principal Payment Date. The Trustee shall pay the Principal Installments when due upon presentation and surrender of the subject SeriesA Bonds.
SECTION 5.11. Series 2004A Reserve Fund. The Trustee shall deposit in the Series 2004A Reserve Fund the Reserve Policy. All amounts available under the Reserve Policy 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 Series 2004A Bonds; but solely in the event that insufficient moneys are available in the Series 2004A Interest Fund, the Series 2004A Principal Fund, or the Redemption Fund for such purpose. Having first satisfied the requirements of the foregoing Sections 5.09 and 5.10, the Trustee shall next deposit in the Series 2004A Reserve Fund an amount of Revenues which, together with the amount of the Reserve Policy and any other amounts on deposit in the Series 2004A Reserve Fund, equal the Series 2004A Reserve Requirement. Such amounts shall be applied in the following order of priority: first, to reimburse the Bond Insurer pursuant to Section 14.01 for any principal draws on the Reserve Policy, provided, that such reimbursement shall result in reinstatement of the Reserve Policy in the amount of such reimbursement; second, to add to the amount of cash on deposit in the Series 2004A Reserve Fund such that the amount of such cash, plus the amount available under the Reserve Policy, is equal to the Series 2004A Reserve Requirement; and third to the payment of any other amounts owing to the Bond insurer pursuant to Section 13.09.
SECTION 5.12. Series 2004B Interest Fund. Having first satisfied the requirements of the foregoing Sections 5.09, 5.10, and 5.11, the Trustee shall next deposit in the Series 2004B 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 Series 2004B Interest Fund is equal to the interest on the Series 2004B Bonds due on such date. On each Interest Payment Date, the Trustee shall pay the interest due and payable on the Series 2004B Bonds on such date from the Interest Fund. All amounts in the Series 2004B Interest Fund shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Series 2004B Bonds as it shall become due and payable.
SECTION 5.13. Series 2004B Principal Fund. Having first satisfied the requirements of the foregoing Sections 5.09, 5.10, 5.11 and 5.12, the Trustee shall next deposit in the Series 2004B Principal Fund before each Principal Payment Date from the Revenue Fund an amount of Revenues which together with any amounts then on deposit in the Series 2004B 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 Series 2004B Bonds when due on such Principal Payment Date. The Trustee shall pay the Principal Installments when due upon presentation and surrender of the subject Series 2004B Bonds.
SECTION 5.14. Series 2004B Reserve Fund.
(a) The Trustee shall deposit in the Series 2004B Reserve Fund the amount transferred to the Series 2004B Reserve Fund pursuant to Section 5.02. Except as provided in subsection (b) (c), and (d) below, all moneys in the Series 2004B 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 Series 2004B Bonds; but solely in the event that insufficient moneys are available in the Series 2004B Interest Fund, the Series 2004B Principal Fund, or the Redemption Fund for such purpose. Having first satisfied the requirements of the foregoing Sections 5.09, 5.10, 5.11, 5.12 and 5.13, the Trustee shall next deposit in the Series 2004B Reserve Fund an amount of Revenues which, together with any amounts on deposit in the Series 2004B Reserve Fund, equal the Series 2004B Reserve Requirement.
(b) Upon any partial redemption of the Series 2004B Bonds pursuant to Sections 4.02, 4.03 or 4.04, the Trustee shall withdraw an amount from the Series 2004B Reserve Fund equal to the reduction in the Series 2004B 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; provided, that such withdrawal, if any, shall not exceed the amount of cash on deposit in the Series 2004B Reserve 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 any cash on deposit in the Series 2004B Reserve Fund an amount equal to the amount specified in such Written Order. The Series 2004B Reserve Requirement shall be reduced by the amount of such transfer. The Trustee shall notify the City of such amounts to be transferred.
(c) Except as provided in Section 6.02(d), the Trustee shall retain in the Series 2004B Reserve Fund all earnings on cash amounts on deposit in the Series 2004B Reserve Fund which amounts shall be applied as provided in subsection (a) of this Section 5.14.
(d) Notwithstanding any other provision hereof, the failure to maintain an amount in the Series 2004B Reserve Fund equal to the 2000B Reserve Requirement shall not be an Event of Default hereunder.
SECTION 5.15. 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 5.09, 5.10, 5.11, 5.12, 5.13 and 5.14, 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 5.15. 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 City. Any amounts so transferred shall be subject to the provisions of Section 5.16.
SECTION 5.16. Transfer to Capital Improvement Fund. Having first satisfied the requirements of the foregoing Sections 5.09, 5.10, 5.11, 5.12, 5.13, 5.14 and 5.15, the Trustee shall transfer any remaining Revenues to the Capital Improvement Fund.
SECTION 5.17. Redemption Fund.
(a) All moneys held in or transferred to the Redemption Fund pursuant to Sections 5.07, 5.14 and 6.02(c) 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 5.18. 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 Amended and Restated 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 this Amended and Restated 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 Series 2004A Interest Fund, the Series 2004A Principal Fund, the Series 2004A Reserve Fund, the Series 2004B Interest Fund, the Series 2004B Principal Fund, the Series 2004B Reserve Fund, the Capital Improvement 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 Amended and Restated 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 Amended and Restated 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 (7) 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) Notwithstanding anything to the contrary contained in this Amended and Restated 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 Amended and Restated 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 Series 2004A Interest Fund, the Series 2004A Principal Fund, the Series 2004A Reserve Fund, the Series 2004B Interest Fund, the Series 2004B Principal Fund, the Series 2004B Reserve Fund, the Capital Improvement 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 Amended and Restated Trust Agreement.
(c) Except as provided in this subsection (c), all earnings on the investment of the moneys on deposit in any fund shall remain a part of such fund. Amounts on deposit in the Series 2004A Reserve Fund in excess of the Series 2004A Reserve Requirement shall be held in the Series 2004A Reserve Fund until each February 15 and August 15, respectively, and shall be applied as directed in Section 5.11; provided, that on each August 15, after making any transfer to the Redemption Fund on such date as required by Section 5.11, any remaining amounts on deposit in said 2004A Reserve Fund in excess of the Series 2004A Reserve Requirement first to reimbursement of Policy Costs shall be transferred to the City for deposit in the redemption funds for the Local Obligations in proportion to the aggregate amount of each series of Local Obligations held by the Trustee hereunder.
(d) Except as provided in this subsection (d), all earnings on the investment of the moneys on deposit in any fund shall remain a part of such fund. Amounts on deposit in the Series 2004B Reserve Fund in excess of the Series 2004B Reserve Requirement shall be held in the Series 2004B Reserve Fund until each February 15 and August 15, respectively, provided that on each August 15, any remaining amounts on deposit in said Series 2004B Reserve Fund in excess of the Series 2004B Reserve Requirement shall be transferred to the City for deposit in the redemption funds for the Local Obligations in proportion to the aggregate amount of each series of Local Obligations held by the Trustee hereunder.
ARTICLE VII

COVENANTS OF THE ISSUER AND THE CITY
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 this Amended and Restated Trust Agreement at the place, on the dates and in the manner specified in this Amended and Restated 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 Obligations. The City, the Issuer and Trustee shall enforce all of their rights with respect to the Obligations to the fullest extent necessary to preserve the rights and protect the security of the Bond Insurer and the Owners under this Amended and Restated Trust Agreement.
The City, the Issuer and the Trustee may, without the consent of or notice to the Owners, but with the consent of the Bond Insurer, consent to any amendment, change or modification of any Local Obligation that may be required (a) to conform to the provisions of this Amended and Restated 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.
Except for amendments, changes or modifications provided for in the preceding paragraph, neither the City, the Issuer nor the Trustee shall consent to any amendment, change or modification of any Local Obligation without the consent of the Bond Insurer and 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 City, 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 15.03 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 and the Bond Insurer, 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 this Amended and Restated 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. The Issuer covenants and agrees to take such action as is necessary from time to time to perfect or otherwise preserve the priority of the pledge of Trust Estate under applicable law.
SECTION 7.04. Tax Covenants.
(a) The Issuer and the City 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 City 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 City 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 City 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. Continuing Disclosure. The City 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. Any provisions of the Continuing Disclosure Agreement may, however, be modified or waived only if there is filed with the Trustee, and the City 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 Amended and Restated Trust Agreement, failure of the City 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 City 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 City or the Trustee, as the case may be, to comply with its obligations under this Section 7.06.
SECTION 7.07. Reserved.
SECTION 7.08. No additional assessment indebtedness. The City hereby covenants that it will not issue or incur any additional bonds or other indebtedness payable from the assessments securing the Local Obligations.
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 City shall fail to observe or perform in any material way any other agreement, condition, covenant or term contained in this Amended and Restated 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 City, as the case may be, by the Trustee, the Bond Insurer or by the Owner(s) of not less than twenty-five percent (25%) in aggregate principal amount of each Series of the Bonds Outstanding with the consent of the Bond Insurer, 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 City 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, with the Bond Insurer’s consent and shall, at the Bond Insurer’s direction or at the written request of the Owners of not less than twenty-five percent (25%) in aggregate principal amount of each Series of Bonds Outstanding shall with the consent of the Bond Insurer (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 Obligations or Investment Securities as the Trustee shall deem necessary and appropriate, subject to Section 8.04 and to the terms of such 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. Notwithstanding any other provision hereof, an Event of Default which only affects the Series 2004B Bonds shall not be treated as an Event of Default with respect to the Series 2004A Bonds and the Trustee shall not take any action hereunder with respect to such Event of Default which would materially adversely affect the rights of the holders of the Series 2004A Bonds or the Bond Insurer.
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, the Bond Insurer and the Owners shall be restored to their former positions and rights under this Amended and Restated 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 this Amended and Restated 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 each Series of the Bonds then Outstanding with the consent of the Bond Insurer 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, have the right to direct the method and place of conducting all remedial proceedings to be taken by the Trustee under this Amended and Restated Trust Agreement.
The Trustee may refuse to follow any direction that conflicts with law or this Amended and Restated 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 therefor.
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 this Amended and Restated Trust Agreement, or any other remedy under this Amended and Restated 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 each Series 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 this Amended and Restated 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 this Amended and Restated Trust Agreement or for any other remedy under this Amended and Restated Trust Agreement, it being understood and intended that no one or more Owners of the Bonds secured by this Amended and Restated Trust Agreement shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Amended and Restated Trust Agreement, or to enforce any rights under this Amended and Restated Trust Agreement or under the Bonds, except in the manner provided in this Amended and Restated Trust Agreement, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner provided in this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated Trust Agreement or under any of the Bonds secured by this Amended and Restated 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 this Amended and Restated Trust Agreement.
SECTION 8.07. Remedies Not Exclusive. No remedy in this Amended and Restated Trust Agreement conferred upon or reserved to the Trustee, the Bond Insurer 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 this Amended and Restated 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 Bond Insurer or the Owners of at least a majority in aggregate principal amount of all Outstanding with the consent of the Bond Insurer 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 with the consent of the Bond Insurer. 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, the Bond Insurer 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 of the Series 2004A Bonds entitled thereto of all installments of interest then due on the Series 2004A 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 of the Series 2004A Bonds entitled thereto of the unpaid principal of and redemption premiums, if any, on any of the Series 2004A Bonds which shall have become due (other than the Series 2004A Bonds matured or called for redemption for the payment of which moneys are held pursuant to the provisions of this Amended and Restated 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 Series 2004A 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;
THIRD - To the payment of the Owners of the Series 2004B Bonds entitled thereto of all installments of interest then due on the Series 2004B 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;
FOURTH - To the payment of the Owners of the Series 2004B Bonds entitled thereto of the unpaid principal of and redemption premiums, if any, on any of the Series 2004B Bonds which shall have become due (other than the Series 2004B Bonds matured or called for redemption for the payment of which moneys are held pursuant to the provisions of this Amended and Restated 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 Series 2004B 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;
FIFTH - To be held for the payment to the Owners of the Series 2004B Bonds entitled thereto as the same shall become due of the principal of and redemption premiums, if any, on and interest on the Series 2004A 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; and
SIXTH - To be held for the payment to the Owners of the Series 2004B Bonds entitled thereto as the same shall become due of the principal of and redemption premiums, if any, on and interest on the Series 2004B 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 THIRD and FOURTH 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 and Reserve Replenishment, then any remaining moneys received by the Trustee pursuant to this article shall be transferred to the City.
(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.
(e) Unless the Bond Insurer otherwise directs, upon the occurrence and continuance of an Event of Default or the occurrence and continuance of an event which with notice or lapse of time or both would constitute an Event of Default, amounts on deposit in the Capital Improvement Fund shall not be disbursed but shall instead be applied to the payment of debt service or redemption price of the Series 2004A Bonds.
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 this Amended and Restated Trust Agreement, and no implied duties or obligations shall be read into this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated Trust Agreement.
(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 this Amended and Restated Trust Agreement.
(l) The Trustee shall provide a monthly accounting of all Funds held pursuant to this Amended and Restated 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 Obligation Fund) created under this Amended and Restated 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 City 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 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 this Amended and Restated Trust Agreement, including performance of its duties hereunder, or related to the 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 Obligations; (iii) the sale of any Bonds or the purchase of the Obligations and the carrying out of any of the transactions contemplated by the Bonds or the 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 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 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 this Amended and Restated 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 Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated 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 therefor 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 AMENDED AND RESTATED TRUST
AGREEMENT AND SUPPLEMENTAL TRUST AGREEMENTS
SECTION 11.01. Supplemental Trust Agreements Without Consent of Owners. The Issuer and the City may, without the consent of the Owners but with the consent of the Bond Insurer, enter into a Supplemental Trust Agreement or Supplemental Trust Agreements, which thereafter shall form a part of this Amended and Restated Trust Agreement, for any one or more of the following purposes:
(a) to add to the agreements and covenants of the Issuer or the City contained in this Amended and Restated Trust Agreement other agreements and covenants thereafter to be observed, or to surrender any right or power in this Amended and Restated Trust Agreement reserved to or conferred upon the Issuer or the City; 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 this Amended and Restated 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 this Amended and Restated Trust Agreement additional collateral or to add other agreements of the Issuer or the City;
(f) to modify this Amended and Restated 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;
(g) to evidence the succession of a new Trustee; or
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 this Amended and Restated Trust Agreement and any such determination shall be binding and conclusive on the Issuer, the City 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 this Amended and Restated Trust Agreement of any Owner.
In determining whether any amendment, consent or other action to be taken, or any failure to act hereunder would adversely affect the security for the Bonds or the rights of the Owners, the Trustee shall consider the effect of any such amendment, consent, action or inaction as if there were no Bond Insurance Policy.
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 City authorized or permitted by the terms of this Amended and Restated 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 this Amended and Restated Trust Agreement.
SECTION 11.03. Supplemental Trust Agreements With Consent of Owners. Any modification or alteration of this Amended and Restated Trust Agreement or of the rights and obligations of the Issuer, the City or the Owners of the Bonds may be made with the consent of the Bond Insurer and the Owners of not less than a majority in aggregate principal amount of each Series 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 City of any lien prior to or on a parity with the lien of this Amended and Restated 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 this Amended and Restated 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 this Amended and Restated Trust Agreement by the Issuer, including all fees and expenses of the Trustee, then and in that case, this Amended and Restated 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 this Amended and Restated Trust Agreement, and the Trustee shall assign and transfer all property to the City (in excess of the amounts required for the foregoing) then held by the Trustee free and clear of any encumbrances 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 this Amended and Restated Trust Agreement, those provisions of this Amended and Restated 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 15.09, 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 this Amended and Restated 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 City shall remain in effect and shall be binding upon the Trustee, the City and the Issuer.
To accomplish defeasance, the Issuer shall satisfy the conditions as required by the Bond Insurer under Section 13.12 hereof.
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 therefor 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 15.09, 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

BOND INSURANCE
SECTION 13.01. Provisions of this Article to Govern. Notwithstanding anything to the contrary set forth herein, the provisions of this Article XIII shall govern the interpretation of the Amended and Restated Trust Agreement with respect to the Series 2004A Bonds.
SECTION 13.02. Bond Insurer Deemed Holder of Bonds. The Bond Insurer shall be deemed to be the sole holder of the Series 2004A Bonds for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the holders of the Series 2004A Bonds insured by it are entitled to take pursuant to Article VIII hereof pertaining to defaults and remedies and XI hereof pertaining to the duties and obligations of the Trustee. The Trustee shall take no action except with the consent, or at the written direction, of the Bond Insurer. The maturity of the Series 2004A Bonds insured by the Bond Insurer shall not be accelerated without the consent of the Bond Insurer.
SECTION 13.03. Covenant Defaults.
(a) No grace period for a default on a covenant of the Amended and Restated Trust Agreement shall exceed 30 days, nor be extended for more than 60 days, without the prior written consent of the Bond Insurer.
(b) After payment of reasonable expenses of the Trustee, the application of funds realized upon default shall be applied to payment of expenses of the Issuer or rebate only after the payment of debt service due and past due on the Series 2004A Bonds, together with replenishment of the Series 2004A Reserve Fund.
SECTION 13.04. Bond Insurer as Third Party Beneficiary. The Bond Insurer shall be a third party beneficiary of this Amended and Restated Trust Agreement.
SECTION 13.05. Actions Requiring Consent of the Bond Insurer.
(a) No modification, amendment or supplement to the Amended and Restated Trust Agreement or any Related Document (as defined in the Bond Insurer’s commitment letter dated __________, 2004, shall mean the Amended and Restated Trust Agreement, Local Obligation Resolutions, Local Obligations and any other transaction documents) may become effective except upon obtaining the prior written consent of the Bond Insurer.
(b) No contract shall be entered into nor any action taken by which the rights of the Bond Insurer or security for or sources of payment of the Bonds may be impaired or prejudiced except upon obtaining the prior written consent of the Bond Insurer.
(c) No credit instrument provided in lieu of a cash deposit shall be deposited by the Issuer into the Series 2004A Reserve Fund except upon obtaining the prior written consent of the Bond Insurer.
SECTION 13.06. Bond Insurer’s Rights. The rights granted to the Bond Insurer under the Amended and Restated Trust Agreement or any other Related Document to request, consent to or direct any action are rights granted to the Bond Insurer in consideration of its issuance of the Bond Insurance Policy. Any exercise by the Bond Insurer of such rights is merely an exercise of the Bond Insurer’s contractual rights and shall not be construed or deemed to be taken for the benefit or on behalf of the Owners nor does such action evidence any position of the Bond Insurer, positive or negative, as to whether Owner consent is required in addition to consent of the Bond Insurer.
SECTION 13.07. Discharge of Amended and Restated Trust Agreement. Amounts paid by the Bond Insurer under the Insurance Policy shall not be deemed paid for purposes of the Amended and Restated Trust Agreement and shall remain Outstanding and continue to be due and owing until paid by the Issuer in accordance with the Amended and Restated Trust Agreement. The Amended and Restated Trust Agreement shall not be discharged unless all amounts due or to become due to the Bond Insurer have been paid in full or duly provided for.
SECTION 13.08. Subrogation of Bond Insurer’s Rights. The Bond Insurer shall, to the extent it makes any payment of principal of or interest on the Series 2004A Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Bond Insurance Policy.
SECTION 13.09. Authority Reimbursement of Bond Insurer. The Issuer shall pay or reimburse the Bond Insurer any and all charges, fees, costs and expenses which the Bond Insurer may reasonably pay or incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in any Related Document; (ii) the pursuit of any remedies under the Amended and Restated Trust Agreement or any other Related Document or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to, the Amended and Restated Trust Agreement or any other Related Document whether or not executed or completed, (iv) the violation by the Issuer of any law, rule or regulation, or any judgment, order or decree applicable to it or (v) any litigation or other dispute in connection with the Amended and Restated Trust Agreement or any other Related Document or the transactions contemplated thereby, other than amounts resulting from the failure of the Bond Insurer to honor its obligations under the Bond Insurance Policy. The Bond Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Amended and Restated Trust Agreement or any other Related Document.
SECTION 13.10. Bond Insurer’s Entitlement to Pay Principal or Interest on the Series 2004A Bonds. The Bond Insurer shall be entitled to pay principal or interest on the Series 2004A Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Bond Insurance Policy) and any amounts due on the Series 2004A Bonds as a result of acceleration of the maturity thereof in accordance with the Amended and Restated Trust Agreement, whether or not the Bond Insurer has received a Notice of Nonpayment (as such terms are defined in the Bond Insurance Policy) or a claim upon the Bond Insurance Policy.
SECTION 13.11. Information to be Provided to the Bond Insurer. The Bond Insurer shall be provided with the following information by the Issuer:
(a) The Issuer and the City’s annual audited financial statements within 180 days after the end of the Issuer’s fiscal year and the Issuer and the City’s annual budget within 30 days after the approval thereof;
(b) Notice of any default known to the Trustee within five Business Days after knowledge thereof;
(c) Prior notice of the advance refunding or redemption of any of the Bonds, including the principal amount, maturities and CUSIP numbers thereof;
(d) Notice of the resignation or removal of the Trustee and the appointment of, and acceptance of duties by, any successor thereto;
(e) Notice of the commencement of any proceeding by or against the Issuer commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an “Insolvency Proceeding”);
(f) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Series 2004A Bonds;
(g) A full original transcript of all proceedings relating to the execution of any amendment or supplement to the Related Documents; and
(h) All reports, notices and correspondence to be delivered under the terms of the Related Documents.
SECTION 13.12. Defeasance of Series 2004A Bonds.
(a) Only (1) cash, (2) non-callable direct obligations of the United States of America (“Treasuries”), (3) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (4) pre-refunded municipal obligations rated “AAA” and “Aaa” by S&P and Moody’s, respectively or (5) securities eligible for “AAA” defeasance under then existing criteria of S & P or any combination thereof, shall be authorized to be used to effect defeasance of the Series 2004A Bonds unless the Bond Insurer otherwise approves.
(b) To accomplish defeasance the Issuer shall cause to be delivered (i) a report of an independent firm of nationally recognized certified public accountants or such other accountant as shall be acceptable to the Bond Insurer (“Accountant”) verifying the sufficiency of the escrow established to pay the Series 2004A Bonds in full on the maturity or redemption date (“Verification”), (ii) an Escrow Deposit Agreement (which shall be acceptable in form and substance to the Bond Insurer), (iii) an opinion of nationally recognized bond counsel to the effect that the Series 2004A Bonds are no longer “Outstanding” under this Amended and Restated Trust Agreement and (iv) a certificate of discharge of the Trustee with respect to the Series 2004A Bonds; each Verification and defeasance opinion to be acceptable in form and substance, and addressed, to the Issuer, the Trustee and the Bond Insurer. The Bond Insurer shall be provided with final drafts of the above referenced documentation not less than five (5) business days prior to the funding of the escrow.
SECTION 13.13. Claims under the Bond Insurance Policy and Payment by and to the Bond Insurer.
(a) If, on the third Business Day prior to the related scheduled interest payment date or principal payment date or the date to which the Series 2004A Bond maturity has been accelerated (“Payment Date”) there is not on deposit with the Trustee, after making all transfers and deposits required hereunder, moneys sufficient to pay the principal of and interest on the Series 2004A Bonds due on such Payment Date, the Trustee shall give notice to the Bond Insurer and to its designated agent (if any) (the “Insurer’s Fiscal Agent”) by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the second Business Day prior to the related Payment Date, there continues to be a deficiency in the amount available to pay the principal of and interest on the Series 2004A Bonds due on such Payment Date, the Trustee shall make a claim under the Bond Insurance Policy and give notice to the Bond Insurer and the Bond Insurer’s Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the Series 2004A Bonds and the amount required to pay principal of the Series 2004A Bonds, confirmed in writing to the Bond Insurer and the Bond Insurer’s Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling in the form of Notice of Claim and Certificate delivered with the Bond Insurance Policy.
(b) The Trustee shall keep a complete and accurate record of all funds deposited by the Bond Insurer into the Policy Payments Account and the allocation of such funds to payment of interest on and principal paid in respect of any Series 2004A Bond. The Bond Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Trustee.
(c) Upon payment of a claim under the Bond Insurance Policy the Trustee shall establish a separate special purpose trust account for the benefit of Owners referred to herein as the “Policy Payments Account” and over which the Trustee shall have exclusive control and sole right of withdrawal. The Trustee shall receive any amount paid under the Bond Insurance Policy in trust on behalf of Owners and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Trustee to Owners in the same manner as principal and interest payments are to be made with respect to the Series 2004A Bonds under the sections hereof regarding payment of the Series 2004A Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments.
(d) Funds held in the Policy Payments Account shall not be invested by the Trustee and may not be applied to satisfy any costs, expenses or liabilities of the Trustee.
(e) Any funds remaining in the Policy Payments Account following a Series 2004A Bond payment date shall promptly be remitted to the Bond Insurer.
ARTICLE XIV

DEBT SERVICE RESERVE INSURANCE POLICY
SECTION 14.01. Debt Service Reserve Insurance Policy. The following provisions shall govern notwithstanding anything to the contrary set forth herein with respect to the Series 2004A Bonds:
(a) The Issuer shall repay any draws under the Reserve Policy and pay all related reasonable expenses incurred by the Bond Insurer, acting as the Reserve Policy Insurer (the “Reserve Policy Insurer”). Interest shall accrue and be payable on such draws and expenses from the date of payment by the Reserve Policy Insurer at the Late Payment Rate. “Late Payment Rate” means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by _____________________ at its principal office in the City of New York, as its prime or base lending rate (“Prime Rate”) (any change in such Prime Rate to be effective on the date such change is announced by _____________________) plus 3%, and (ii) the then applicable highest rate of interest on the Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. In the event _____________________ ceases to announce its Prime Rate publicly, Prime Rate shall be the publicly announced prime or base lending rate of such national bank as the Reserve Policy Insurer shall specify.
Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, “Policy Costs”) shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw.
Amounts in respect of Policy Costs paid to the Reserve Policy Insurer shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the Reserve Policy Insurer on account of principal due, the coverage under the Reserve Policy will be increased by a like amount, subject to the terms of the Reserve Policy.
(b) If the Issuer shall fail to pay any Policy Costs in accordance with the requirements of 14.01(a) hereof, the Reserve Policy Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under this Amended and Restated Trust Agreement other than (i) acceleration of the maturity of the Series 2004A Bonds or (ii) remedies which would adversely affect owners of the Series 2004A Bonds.
(c) The Amended and Restated Trust Agreement shall not be discharged until all Policy Costs owing to the Reserve Policy Insurer shall have been paid in full. The Issuer’s obligation to pay such amounts shall expressly survive payment in full of the Series 2004A Bonds.
(d) In order to secure the Issuer’s payment obligations with respect to the Policy Costs there shall be granted and perfected in favor of the Reserve Policy Insurer a security interest (subordinate only to that of the owners of the Series 2004A Bonds) in all revenues and collateral pledged as security for the Series 2004A Bonds.
(e) The Trustee is hereby required to ascertain the necessity for a claim upon the Reserve Policy and to provide notice to the Reserve Policy Insurer in accordance with the terms of the Reserve Policy at least five Business Days prior to each date upon which interest or principal is due with respect to the Series 2004A Bonds.
(f) The Reserve Policy may not be drawn upon to fund the Series 2004A Bond redemption associated with assessment prepayments.
ARTICLE XV
MISCELLANEOUS
SECTION 15.01. Concerning the Bond Insurer. The provisions as set forth in Article XIII shall govern with respect to the Series 2004A Bonds, notwithstanding anything to the contrary set forth in this Amended and Restated Trust Agreement.
SECTION 15.02. Dissolution of Issuer. In the event of the dissolution of the Issuer, all the agreements, conditions, covenants and terms contained in this Amended and Restated 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 15.03. Parties Interested Herein. Except as in this Amended and Restated Trust Agreement otherwise specifically provided, nothing in this Amended and Restated Trust Agreement expressed or implied is intended or shall be construed to confer upon any Person other than the Issuer, the City, the Trustee, the Bond Insurer, and the Owners of the Bonds any right, remedy or claim under or by reason of this Amended and Restated Trust Agreement, this Amended and Restated Trust Agreement being intended to be for the sole and exclusive benefit of the Issuer, the City, the Trustee, the Bond Insurer, and the Owners of the Bonds.
SECTION 15.04. Severability of Invalid Provisions. If any clause, provision or section of this Amended and Restated 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 this Amended and Restated Trust Agreement, and this Amended and Restated Trust Agreement shall be construed and enforced as if such illegal or invalid clause, provision or section had not been contained herein.
SECTION 15.05. 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/Controller
Telephone: (925) 516-5400
FAX: (925) 516-5401
If to the City: City of Brentwood
150 City Park Way
Brentwood, CA 94513
Attention: Director of Finance and Information Systems
Telephone: (925) 516-5400
FAX: (925) 516-5401
If to the Bond Insurer: _______________________
_____________________
________, _____________
Attention: Managing Director-Surveillance
Re: Policy No. ________
Telephone: (___) ___-____
FAX: (___) ___-____
If to the Trustee: U.S. Bank National Association
One California Street, Suite 2550
San Francisco, CA 94111
Attention: Corporate Trust
Telephone: (415) 273-____
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 this Amended and Restated 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 15.06. Counterparts. This Amended and Restated 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 15.07. Governing Law. This Amended and Restated Trust Agreement shall be governed as to validity, construction and performance by the laws of the State.
SECTION 15.08. 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 this Amended and Restated 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 this Amended and Restated Trust Agreement, and no interest shall accrue for the period from and after such nominal date.
SECTION 15.09. 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 15.10. 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.

IN WITNESS WHEREOF, the Issuer has caused this Amended and Restated Trust Agreement to be executed by its Treasurer/Controller, the City has caused this Amended and Restated Trust Agreement to be executed by its City Manager, and Trustee has caused this Amended and Restated 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

CITY OF BRENTWOOD

By _________________________________
City Manager

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By _________________________________
Authorized Officer



EXHIBIT A

FORM OF BOND
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
INFRASTRUCTURE REVENUE REFUNDING BOND
SERIES 2004A[SUBORDINATED SERIES 2004B]
No. R-__ $______________
INTEREST
RATE MATURITY
DATE DATED
DATE CUSIP
NUMBER
____% September 2, ____ ________, 2004 _______

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 September 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 San Francisco, California, or such other place as designated by the Trustee (together with any successor as trustee under the Amended and Restated 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 ($1,000,000) or more in aggregate principal amount of Bonds, upon written request of such owner to the Trustee received not later than the Record Date, such interest shall be paid on the interest payment date in immediately available funds by wire transfer to an account in the United States. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months.
The Issuer and the Trustee may deem and treat the owner of this Bond as the absolute owner hereof for the purpose of receiving payment as herein provided and for all other purposes, and the Issuer and the Trustee shall not be affected by notice to the contrary.
This Bond is one of a duly authorized issue of bonds of the Issuer designated as “Brentwood Infrastructure Financing Authority Infrastructure Revenue Refunding Bonds, Series [2004A/B]” issued in the aggregate principal amount of ______________________________ Dollars ($________________) 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 an amended and restated trust agreement dated as of January 1, 2004 (the “Amended and Restated Trust Agreement”), by and among the Issuer, the City of Brentwood (the “City”) and the Trustee. The Bonds are issued for the purpose of current refunding and defeasing the Issuer’s outstanding CIPF 94-1 Infrastructure Revenue Bonds, Series 1999, and reference is hereby made to the Amended and Restated 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 thereunder 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 City, and the rights and obligations of the Issuer thereunder, to all the provisions of which Amended and Restated 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 Amended and Restated 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 Amended and Restated Trust Agreement (including proceeds of the sale of the Bonds), subject only to the provisions of the Amended and Restated Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth in the Amended and Restated 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 AMENDED AND RESTATED 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 CITY) 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 Amended and Restated 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/$1,000] 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 Amended and Restated 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 Amended and Restated 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 Amended and Restated 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 Amended and Restated Trust Agreement.
The Amended and Restated 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 Amended and Restated 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 Amended and Restated Trust Agreement.
This Bond shall not be entitled to any benefit under the Amended and Restated 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

[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within-mentioned Amended and Restated Trust Agreement, which has been authenticated on the date below.
Dated: ________________, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee

By
Authorized Signatory


[STATEMENT OF INSURANCE]

[2004A BONDS ONLY]

[TO COME]



[FORM OF 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:






AMENDED AND RESTATED 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
INFRASTRUCTURE REVENUE REFUNDING BONDS
SERIES 2004A
and
SUBORDINATED SERIES 2004B
______________________
Dated as of January 1, 2004





ARTICLE I DEFINITIONS 3
SECTION 1.01. Definitions 3
SECTION 1.02. Rules of Construction 16
ARTICLE II TERMS OF THE BONDS 17
SECTION 2.01. The Bonds 17
SECTION 2.02. Form of Bonds 19
SECTION 2.03. Temporary Bonds 19
SECTION 2.04. Bonds Mutilated, Destroyed, Stolen or Lost 19
SECTION 2.05. Execution of Bonds 20
SECTION 2.06. Special Covenants as to Book-Entry Only System for Bonds 20
SECTION 2.07. Transfer, Registration and Exchange of Bonds 22
SECTION 2.08. Regulations with Respect to Exchanges or Transfers of Bonds 22
SECTION 2.09. Authentication of Bonds 23
SECTION 2.10. Cancellation of Bonds 23
SECTION 2.11. Bonds as Special Obligations 23
ARTICLE III ISSUANCE OF BONDS 24
SECTION 3.01. Provisions for the Issuance of Bonds 24
SECTION 3.02. No Additional Bonds 25
ARTICLE IV REDEMPTION AND PURCHASE OF BONDS 25
SECTION 4.01. Privilege of Redemption and Redemption Price 25
SECTION 4.02. Extraordinary Redemption 25
SECTION 4.03. Optional Redemption of Bonds 25
SECTION 4.04. Mandatory Redemption of Bonds 26
SECTION 4.05. Redemption Instructions 28
SECTION 4.06. Notice of Redemption 29
SECTION 4.07. Selection of Bonds for Redemption 29
SECTION 4.08. Payment of Redeemed Bonds 30
SECTION 4.09. Purchase in Lieu of Redemption 30

ARTICLE V REVENUES AND FUNDS FOR BONDS 31
SECTION 5.01. Establishment of Funds 31
SECTION 5.02. Deposit of Proceeds of Bonds and Other Funds 31
SECTION 5.03. Capital Improvement Fund 31
SECTION 5.04. Obligation Fund 32
SECTION 5.05. Covenant Respecting Redemption Funds for the Obligations 32
SECTION 5.06. Reserved 32
SECTION 5.07. Revenues Derived From Property Owner Prepayments 33
SECTION 5.08. Revenue Fund 33
SECTION 5.09. Series 2004A Interest Fund 33
SECTION 5.10. Series 2004A Principal Fund 33
SECTION 5.11. Series 2004A Reserve Fund 34
SECTION 5.12. Series 2004B Interest Fund 34
SECTION 5.13. Series 2004B Principal Fund 34
SECTION 5.14. Series 2004B Reserve Fund 34
SECTION 5.15. Expense Fund 35
SECTION 5.16. Transfer to Capital Improvement Fund 36
SECTION 5.17. Redemption Fund 36
SECTION 5.18. Rebate Fund 36
ARTICLE VI SECURITY FOR AND INVESTMENT OF MONEYS 37
SECTION 6.01. Security 37
SECTION 6.02. Investment of Funds 37
ARTICLE VII COVENANTS OF THE ISSUER AND THE CITY 38
SECTION 7.01. Payment of Bonds; No Encumbrances 39
SECTION 7.02. Enforcement and Amendment of Obligations 39
SECTION 7.03. Further Documents 39
SECTION 7.04. Tax Covenants 40
SECTION 7.05. Maintenance of Existence 40
SECTION 7.06. Continuing Disclosure 41
SECTION 7.07. Reserved 41
SECTION 7.08. No additional assessment indebtedness 41
ARTICLE VIII DEFAULTS AND REMEDIES 41
SECTION 8.01. Events of Default 41
SECTION 8.02. Proceedings by Trustee; No Acceleration 42
SECTION 8.03. Effect of Discontinuance or Abandonment 42
SECTION 8.04. Rights of Owners 42
SECTION 8.05. Restriction on Owner’s Action 43
SECTION 8.06. Power of Trustee to Enforce 43
SECTION 8.07. Remedies Not Exclusive 44
SECTION 8.08. Waiver of Events of Default; Effect of Waiver 44
SECTION 8.09. Application of Moneys 44
ARTICLE IX THE TRUSTEE 46
SECTION 9.01. Appointment and Acceptance of Duties 46
SECTION 9.02. Duties, Immunities and Liability of Trustee 46
SECTION 9.03. Merger or Consolidation 48
SECTION 9.04. Compensation and Indemnification 49
SECTION 9.05. Liability of Trustee 49
SECTION 9.06. Right to Rely on Documents 50
SECTION 9.07. Preservation and Inspection of Documents 50
SECTION 9.08. Indemnity for Trustee 51
ARTICLE X EXECUTION OF INSTRUMENTS BY OWNERS AND PROOF OF OWNERSHIP OF BONDS 51
SECTION 10.01. Execution of Instruments; Proof of Ownership 51
ARTICLE XI MODIFICATION OF AMENDED AND RESTATED TRUST AGREEMENT AND SUPPLEMENTAL TRUST AGREEMENTS 51
SECTION 11.01. Supplemental Trust Agreements Without Consent of Owners 51
SECTION 11.02. Trustee Authorized to Enter into Supplemental Trust Agreement 52
SECTION 11.03. Supplemental Trust Agreements With Consent of Owners 53
ARTICLE XII DEFEASANCE 53
SECTION 12.01. Defeasance 53
SECTION 12.02. Bonds Deemed to Have Been Paid 54
SECTION 12.03. Moneys Held for Particular Bonds 54
ARTICLE XIII BOND INSURANCE 55
SECTION 13.01. Provisions of this Article to Govern 55
SECTION 13.02. Bond Insurer Deemed Holder of Bonds 55
SECTION 13.03. Covenant Defaults 55
SECTION 13.04. Bond Insurer as Third Party Beneficiary 55
SECTION 13.05. Actions Requiring Consent of the Bond Insurer 55
SECTION 13.06. Bond Insurer’s Rights 56
SECTION 13.07. Discharge of Amended and Restated Trust Agreement 56
SECTION 13.08. Subrogation of Bond Insurer’s Rights 56
SECTION 13.09. Authority Reimbursement of Bond Insurer 56
SECTION 13.10. Bond Insurer’s Entitlement to Pay Principal or Interest on the Series 2004A Bonds 56
SECTION 13.11. Information to be Provided to the Bond Insurer 57
SECTION 13.12. Defeasance of Series 2004A Bonds 57
SECTION 13.13. Claims under the Bond Insurance Policy and Payment by and to the Bond Insurer 58
ARTICLE XIV DEBT SERVICE RESERVE INSURANCE POLICY 59
SECTION 14.01. Debt Service Reserve Insurance Policy 59
ARTICLE XV MISCELLANEOUS 60
SECTION 15.01. Concerning the Bond Insurer 60
SECTION 15.02. Dissolution of Issuer 60
SECTION 15.03. Parties Interested Herein 60
SECTION 15.04. Severability of Invalid Provisions 60
SECTION 15.05. Notice 61
SECTION 15.06. Counterparts 62
SECTION 15.07. Governing Law 62
SECTION 15.08. Holidays 62
SECTION 15.09. Limitation of Liability 62
SECTION 15.10. Unclaimed Money 62
EXHIBIT A FORM OF BOND A-1




$_____________
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
Infrastructure Revenue Refunding Bonds
Series 2004A
$_____________
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
Infrastructure Revenue Refunding Bonds
Subordinated Series 2004B





BOND PURCHASE AGREEMENT

_______________, 2004


Brentwood Infrastructure Financing Authority
150 City Park Way
Brentwood, California 94513


Ladies and Gentlemen:

The undersigned, RBC Dain Rauscher Inc. (the "Underwriter") offers to enter into this purchase contract (the "Purchase Contract") with the Brentwood Infrastructure Financing Authority (the "Authority"), which will be binding upon the Authority and the Underwriter upon acceptance hereof by the Authority. This offer is made subject to the Authority's acceptance by execution of this Purchase Contract and its delivery to the Underwriter on or before 11:59 p.m., California time, on the date hereof. All terms used herein and not otherwise defined shall have the respective meanings given to such terms in the Trust Agreement (as hereinafter defined).

1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the Authority for offering to the public and the Authority hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the Authority's (i) $_____________ Infrastructure Revenue Refunding Bonds, Series 2004A (the "2004A Bonds") at a purchase price for the Bonds of $____________, being the aggregate principal amount of the Bonds less an underwriter's discount of $____________ and an original issue discount of $____________, and (ii) $_____________ Infrastructure Revenue Refunding Bonds, Series 2004B (the "2004B Bonds" and together with the 2004A Bonds, the "Bonds") at a purchase price for the Bonds of $____________, being the aggregate principal amount of the Bonds less an underwriter's discount of $____________ and an original issue discount of $____________.

2. Description of the Bonds. The Series 2004 Bonds are issued pursuant to the terms of an Amended and Restated Trust Agreement dated as of January 1, 2004 (the "Trust Agreement") among the Issuer, the City and U.S. Bank National Association (the "Trustee"). The Bonds are also issued pursuant to the provisions of the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 (commencing with Section 6584), Division 7, Title 1 of the Government Code of the State of California (the "Law") and by a resolution of the Authority (the “Resolution”) adopted ____________, 2004. The Bonds will be issued as fully registered bonds in book-entry form. The Bonds shall be as described in the Trust Agreement and the Official Statement (defined herein).

A portion of the net proceeds of the Bonds will be used by the Authority to refund its (i) CIFP 94-1 Infrastructure Revenue Bonds, Series 1999 (the "Prior Bonds") in the original principal amount of $_________________. The Prior Bonds were issued to provide the Authority with money to purchase certain local obligations (the "Local Obligations") issued by the City pursuant to the provisions of the Improvement Bond Act of 1915, consisting of Division 10 of the Streets and Highways Code of the State of California to finance the construction and acquisition of certain public improvements within the Districts, and to refund certain bonds of the Authority issued in 1995, 1996 and 1997. Proceeds of the Bonds will also be used to finance capital improvements to City facilities.

The Local Obligations were issued by the City pursuant to the provisions of the Improvement Bond Act of 1915, consisting of Division 10 of the Streets and Highways Code of the State of California (the "Bond Law") to finance the construction and acquisition of certain public improvements within the City's Assessment District Nos. 93-2, 93-3, 94-2, 94-3 and 95-1 (the "Districts"). All of the proceedings of the City to form the Districts and to levy the assessments for the construction and acquisition of the improvements described herein and being refinanced with proceeds of the Bonds have been undertaken pursuant to the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code) (the "Act").

The Bonds are special obligations of the Authority payable from and secured by certain revenues described herein consisting primarily of payments made under the Local Obligations. The 2004A Bonds are secured by a priority lien on and security interest in all of the Revenues and any other amounts (including proceeds of the sale of the 2004A Bonds) held in certain funds established under to the Trust Agreement. The 2004B Bonds are likewise secured by a lien on and security interest in the Revenues, but only to the extent Revenues are available after the obligations to be satisfied with respect to the 2004A Bonds under the Trust Agreement have been satisfied. The Local Obligations are limited obligations of the issuing Local Agency and are secured by an irrevocable pledge of certain revenues of the Local Agency, consisting primarily of annual assessment installments of principal and interest sufficient to meet annual debt service on the Local Obligations, which installments are included on the regular county tax bills sent to owners of property within the Districts against which there are unpaid assessments. These annual assessment installments are to be held by the City and transferred to the Trustee and used to pay debt service on the Bonds. Payments under the Local Obligations are calculated to be sufficient to provide the Authority with money to pay the principal of, premium, if any, and interest on the Bonds when due.

3. The Official Statement. By its acceptance of this proposal, the Authority ratifies, confirms and approves of the use and distribution by the Underwriter prior to the date hereof of the preliminary official statement relating to the Bonds dated ______________, 2004, (including the cover page, all appendices and all information incorporated therein, the "Preliminary Official Statement") that the Authority deemed final as of its date, for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12") except for certain omissions with respect to the pricing of the Bonds permitted to be omitted therefrom by Rule 15c2-12. The Authority hereby agrees to deliver or cause to be delivered to the Underwriter, within seven business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Bonds (including all information previously permitted to have been omitted by Rule 15c2-12, the cover page, all appendices, all information incorporated therein and any amendments or supplements as have been approved by the Authority and the Underwriter) (the "Official Statement") signed on behalf of the Authority by its Treasurer-Controller, in such quantity as the Underwriter shall reasonably request. The Underwriter agrees that it will not confirm the sale of any Bond unless the confirmation of sale is accompanied or preceded by the delivery of a copy of the Official Statement.

The Authority has approved the use and distribution by the Underwriter of the Official Statement, and the Authority and the City hereby authorize the use by the Underwriter of the Trust Agreement in connection with the offer and sale of the Bonds. The Authority will cooperate with the Underwriter in the filing by the Underwriter of the Official Statement with a nationally recognized municipal securities information repository.

4. Public Offering. The Underwriter agrees to make a bona fide public offering of all the Bonds initially at the public offering prices (or yields) set forth on Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices. The Underwriter shall indemnify and hold harmless the Authority and its members, officers, directors, employees, agents and attorneys against any and all losses, claims, damages, liabilities, costs and expenses (including without limitation fees and disbursements of counsel and other expenses) incurred by them or any of them, which arise out of any breach by the Underwriter of the representation and warranty contained in this paragraph.

5. (a) The Closing. At 8:00 o'clock a.m., California time, on ______________, 2004, or at such other time or on such other date as the Authority and the Underwriter may agree, the Authority shall deliver to the Underwriter, at the office of the Depository Trust Company (“DTC”) in New York, New York (or to the Trustee in the event of a Fast Automated Securities Transfer (F.A.S.T.) or at such other location as may be designated by the Underwriter and approved by the Authority),the Bonds in the form of a separate single fully registered Bond (which may be typewritten) for each of the maturities of the Bonds (all Bonds to bear CUSIP numbers) duly executed and authenticated. Concurrently with the delivery of the Bonds to the Underwriter, the Authority will deliver the documents hereinafter mentioned at the offices of Orrick, Herrington & Sutcliffe, LLP, San Francisco, California ("Bond Counsel"), or another place to be mutually agreed upon by the Authority and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer in immediately available funds. This payment for and delivery of the Bonds, together with the delivery of the aforementioned documents, is herein called the "Closing."

The Bonds shall be in book-entry form without coupons, registered in the name of Cede & Co., as nominee of DTC. The 2004A Bonds shall be in denominations of Five Thousand Dollars ($5,000) or any multiples thereof, and the 2004B Bonds shall be in denominations of One Thousand Dollars ($1,000) or any multiples thereof, except as otherwise provided in the Trust Agreement. It shall be the responsibility of the Underwriters to furnish all necessary information to DTC and take all actions as may be required to effectuate the delivery of the Bonds in the book-entry system of DTC, except that Bond Counsel will be responsible for physical delivery of the Bonds to DTC in New York prior to Closing.

6. Representation, Warranties and Covenants of the Authority. The Authority represents, warrants and covenants to the Underwriter that:

(a) Due Organization, Existence and Authority. The Authority is a joint exercise of powers authority, organized and existing under the Constitution and laws of the State of California (the "State"), including Section 6500 et seq. of the California Government Code, as amended, and the Joint Exercise of Powers Agreement dated as of March 14, 1995 (the "JPA Agreement") by and between the City and the Redevelopment Agency of the City of Brentwood and with full right, power, and authority to adopt the Resolution, to issue the Bonds, and to execute, deliver and perform its obligations under the Trust Agreement and this Purchase Contract.

(b) Due Authorization and Approval. By official action of the Authority prior to the date of Closing, the Authority will have duly adopted the Resolution in accordance with the Constitution and the Law. The Authority has, and at the date of the Closing will have, full legal right, power and authority to enter into this Purchase Contract and the Trust Agreement and to issue and deliver the Bonds to the Underwriter as provided herein, and will have duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in the Trust Agreement and this Purchase Contract. As of the date hereof and on the date of Closing, the Resolution is and will be in full force and effect and has and will not be amended or supplemented.

(c) Accuracy of Official Statement. Both at the time of acceptance hereof by the Authority, and at the Closing, to the best knowledge of the Authority, the Official Statement is and will be true and correct in all material respects and the Official Statement does not and will not omit any statement or information which is necessary to make such statements and information therein, in the light of the circumstances under which they were made, not misleading in any material respect.

(d) No Litigation. As of the time of acceptance hereof and the date of the Closing, and except as disclosed in the Official Statement, no litigation is or will be pending or threatened in any court (i) in any way challenging the right of any member of the Authority to his or her office, or (ii) seeking to restrain or enjoin the issuance or delivery of any of the Bonds, or the collection of the Revenues pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds, this Purchase Contract, the Resolution, the Trust Agreement or contesting the powers of the Authority or its authority for the issuance of the Bonds, or the adoption of the Resolution, or (iii) contesting in any way the completeness, accuracy or fairness of the Official Statement.

(e) Continuing Disclosure. The Authority will undertake, pursuant to a Continuing Disclosure Agreement, to provide certain annual financial information and notices of the occurrence of certain events, if material. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the final Official Statement.

7. Closing Conditions. The Underwriter has entered into this Purchase Contract in reliance upon the representations, warranties and covenants herein, both as of the date hereof and as of the date of the Closing. The purchase and sale of the Bonds pursuant to this Purchase Contract are subject to the terms and conditions herein set forth. The purchase and sale of the Bonds pursuant to this Purchase Contract are also subject to the following conditions:

(a) Bring-Down Representation. The representations and warranties of the Authority contained herein shall be true, complete and correct in all material respects at the date hereof and on the date of the Closing, as if made on the date of the Closing.

(b) Executed Resolutions and Performance Thereunder. At the time of the Closing (i) the Trust Agreement shall be in full force and effect, and shall not have been amended, modified or supplemented except with the consent of the Underwriter (which consent will not be unreasonably withheld).

(c) No Default. At the time of the Closing, no default shall have occurred or be existing under the Trust Agreement and the Local Agency shall not be in default in the payment of principal or interest on any of its bonded indebtedness.

(d) Termination Events. In recognition of the desire of the Authority and the Underwriter to effect a successful public offering of the Bonds, and in view of the potential adverse impact of any of the following events on such a public offering, the Underwriter shall have the right to terminate this agreement by notification to the Authority if at any time at or prior to the Closing:

(i) any event shall occur which makes untrue any statement or an omission to state a material fact necessary to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading; or

(ii) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation in or by the Congress of the United States or by the State of California, or the amendment of legislation pending as of the date of this Purchase Contract in the Congress of the United States, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee or by any member thereof, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any Federal or state court or any ruling or regulation (final, temporary or proposed) or official statement on behalf of the United States Treasury Department, the Internal Revenue Service or other federal or State authority affecting the federal or State tax status of the Local Agency or the Authority, or the interest on bonds or notes (including the Bonds); or

(iii) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State shall be rendered which materially adversely affects the market price of the Bonds; or

(iv) a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Trust Agreement need be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or

(v) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Trust Agreement are not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; or

(vi) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; or

(vii) a general banking moratorium shall have been established by federal, State or New York authorities; or

(viii) the United States has become engaged in hostilities which have resulted in a declaration of war or a national emergency or there has occurred any other outbreak of hostilities or a national or international calamity or crisis, financial or otherwise, the effect of such outbreak, calamity or crisis on the financial markets of the United States, being such as, in the reasonable opinion of the Underwriter, would affect materially or adversely affect the ability of the Underwriter to market the Bonds (it being agreed by the Underwriter that there is no outbreak, calamity or crisis of such character as of the date hereof); or

(ix) any rating of the Bonds shall have been downgraded or withdrawn by a national rating service, which, in the Underwriter's opinion, materially adversely affects the market price of the Bonds; or

(x) the occurrence of any event which permits the termination of the Local Agency Purchase Contract.

(e) Closing Documents. At or prior to the Closing, the Underwriter shall receive with respect to the Bonds (unless the context otherwise indicates) the following documents:

(1) Bond Opinion. An approving opinion of Bond Counsel, dated the date of Closing and substantially in the form attached to the Official Statement.

(2) Supplemental Opinion. A supplemental opinion or opinions of Bond Counsel addressed to the Underwriter, in form and substance acceptable to counsel for the Underwriter, and dated the date of the Closing to the following effect:

(i) The statements contained in the Official Statement under the captions "THE BONDS," "TAX EXEMPTION" AND "APPENDIX D - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS" insofar as such statements expressly summarize the Bonds, the Trust Agreement and the opinion of Bond Counsel with respect to the exclusion from gross income of interest on the Bonds for federal income tax purposes, are accurate in all material respects.

(ii) The Bonds are not subject to registration requirements of the Securities Act of 1933, as amended, and the Trust Agreement is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended.

(3) Certificate of the Authority. A certificate of the Authority, dated the date of the Closing, signed on behalf of the Authority by the Treasurer/Controller or other duly authorized representative of the Authority to the effect that to the best of such representative's knowledge:

(i) The Authority is a joint exercise of powers authority duly organized, validly existing and in good standing under the JPA Agreement and the laws of the State of California and has all necessary power and authority to enter into and perform its duties under the Bonds, the Trust Agreement, the Resolution and this Purchase Contract. When executed and delivered by the respective parties thereto, the Bonds, the Trust Agreement and this Purchase Contract will constitute legal, valid and binding obligations of the Authority enforceable in accordance with their respective terms except as the same may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance moratorium or other laws relating to or affecting generally the enforcement of creditors' rights and by the application of equitable principles if equitable remedies are sought.

(ii) By adoption of the Resolution, the Authority has approved the issuance, sale and delivery of and the performance by the Authority of the obligations on its part contained in and contemplated by the Bonds, and in the Trust Agreement and this Purchase Contract.

(iii) The issuance, sale and delivery of the Bonds, and the execution and delivery of the Trust Agreement and this Purchase Contract, and compliance by the Authority with the provisions thereof and performance of its duties thereunder, will not conflict with or constitute a breach of or default under the JPA Agreement or any law, administrative regulation, judgment, decree, note, resolution, charter, by-law or other agreement to which the Authority is a party or is otherwise subject or by which its properties may be affected.

(iv) The Official Statement and the information therein as to the Authority is true and correct in all material respects and such information does not contain any untrue or misleading statement of a material fact or omit to state any material fact which is necessary to make such statements therein, in the light of the circumstances under which they were made, not misleading.

(v) There is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory authority having jurisdiction over the Authority required for the execution, delivery and sale of the Bonds or the consummation by the Authority of the transactions on its part contemplated by the Bonds, the Trust Agreement and this Purchase Contract.

(vi) The Authority is not in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree, agreement or other instrument to which the Authority is a party or is otherwise subject.

(vii) There is no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court or governmental agency or body, pending or, to the best knowledge of the Authority, threatened against the Authority, except as disclosed in the Official Statement, to restrain or enjoin the execution or delivery of the Bonds, or the collection or assignment of the Revenues or in any way contesting or affecting the validity or enforceability of the Bonds, the Trust Agreement and this Purchase Contract or contesting the powers of the Authority to enter into or perform its obligations under any of the foregoing.

(viii) The representations and warranties of the Authority contained in this Purchase Contract are true, accurate and correct in all material respects as of the date of the Closing, as if made on the date of the Closing.

(4) Trustee's Certificate. A certificate of the Trustee dated the date of the Closing, to the effect that:

(i) The Trustee is a national banking association existing under the laws of United States of America, and has full power and is qualified to accept and comply with the terms of the Trust Agreement and to perform its obligations stated therein;

(ii) The Trustee has accepted the duties and obligations imposed on it by the Trust Agreement;

(iii) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the consummation by the Trustee of the transactions contemplated by the Trust Agreement to be undertaken by the Trustee, except as such may be required in connection with the distribution of the Bonds by the Underwriter;

(iv) Compliance with the terms of the Trust Agreement will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which the Trustee is a party or by which it is bound, or, to the best knowledge of the Trustee, after reasonable investigation, any law, rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Trustee or any of its activities or properties (except that no representation, warranty or agreement is made by the Trustee with respect to any Federal or state securities or Blue Sky laws or regulations);

(v) To the best knowledge of the Trustee, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or governmental agency, public board or body served on or threatened against or affecting the existence of the Trustee or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the authentication, execution and delivery of the Bonds or the collection of the Revenues to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds or the Trust Agreement, or contesting the powers of the Trustee or its authority to enter into and perform its obligations under any of the foregoing, wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated herein; or which, in any way, would adversely affect the validity of the Bonds or the Trust Agreement; and

(vi) The Trustee will apply the proceeds of the Bonds to the purposes specified in the Trust Agreement.

(5) Opinion of Authority Counsel. An opinion of counsel to the Authority, dated the date of Closing, to the effect that:

(i) the Authority is a joint powers authority, duly created and lawfully existing under the laws of the State and has full power and authority to enter into this Purchase Contract and to perform its duties and obligations hereunder;

(ii) the resolution of the Authority approving and authorizing the execution and delivery of the Trust Agreement, the Bonds and this Purchase Contract and approving and authorizing the distribution of the Official Statement has been duly adopted, and has not been modified, amended or rescinded;

(iii) to the best knowledge of such counsel, the representations of the Authority contained in subsections (a) and (b) of Section 6 hereof are true and correct;

(iv) The Trust Agreement has been duly authorized, executed and delivered by the Authority and, assuming due execution by the Trustee, constitutes the legal, valid and binding obligation of the Authority enforceable against the Authority in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, to the application of equitable principles where equitable remedies are sought and to the exercise of judicial discretion in appropriate cases;

(v) The authorization, execution and delivery of the Trust Agreement by the Authority and compliance by the Authority with the provisions thereof, will not conflict with, or constitute a breach of or default under, any law, administrative regulation, court decree, resolution, ordinance or other agreement to which the Authority is subject or by which it is bound;

(vi) The information in the Official statement under the caption "THE AUTHORITY" and as to the Authority under the caption "NO LITIGATION" is accurate in all material respects, insofar as such information purports to summarize information with respect to the Authority, the Trust Agreement, and the Joint Exercise of Powers Agreement;

(vii) Except as otherwise disclosed in the Official Statement and to the best knowledge of such counsel after due inquiry, there is no litigation, action, suit, proceeding or investigation at law or in equity before or by any court, government agency or body, pending or threatened against the Authority, challenging the creation, organization or existence of the Authority, or the validity of the Trust Agreement or this Purchase Contract or contesting the authority of the Authority to enter into or perform its obligations under the Trust Agreement or this Purchase Contract, or which, in any manner, questions the right of the Authority to issue the Bonds or the use the Revenues for repayment of the Bonds.

(6) Trustee's Counsel Opinion. An opinion of counsel to the Trustee addressed to the Authority and the Underwriter, dated the date of the Closing to the following effect:

(i) The Trustee is a national banking association with trust powers, duly organized and validly existing and in good standing under the laws of the United States of America, having the legal authority to exercise trust powers in the State of California;

(ii) The Trustee has full legal power and adequate corporate authority to accept the duties and obligations imposed on it by the Trust Agreement and to authenticate the Bonds and the full legal power and authority to own its properties and to carry on its business;

(iii) The Bonds have been duly authenticated by the Trustee;

(iv) No consent, approval, authorization or order of any court, regulatory authority or governmental body is required for the valid authorization, execution and delivery of the Trust Agreement and the authentication of the Bonds except such as have been obtained and except such as may be required under the State securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriter; and

(v) The acceptance of its duties under the Trust Agreement and the authentication of the Bonds by the Trustee and performance by the Trustee of its obligations thereunder will not conflict with or result in a breach of or constitute a default under any of the terms, conditions or provisions of its Articles of Association or Incorporation or its Bylaws or any other agreement or instrument to which the Trustee is a party or by which it is bound or any other existing law, regulation, court order or consent decree to which the Trustee is subject.

(7) Appraiser Certificate. A certificate of Seever Jordan Ziegenmeyer dated the date of Closing, (i) consenting to the use of their appraisal report dated ______________, 2004 in the Official Statement and to the references to their firm in the Official Statement, (ii) certifying that to the best of the appraiser's knowledge, the statements concerning the value of property contained in the Preliminary Official Statement and Official Statement under the heading "OWNERSHIP AND VALUE OF PROPERTY WITHIN THE DISTRICT – Valuation of Property in the District - Appraisal of Certain Property" and "Appraisal Assumptions" are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (iii) certifying that, in the appraiser's opinion, the assumptions made in the Appraisal Report dated ______________, 2004 are reasonable; and (iv) certifying that the appraiser is not aware of any event or act which has occurred since the date of the Appraisal Report which, in the appraiser's opinion, would materially and adversely affect the conclusions as to appraised value reached in the Appraisal Report, in substantially the form attached hereto as Exhibit B.

(8) Resolutions. A copy of the Resolution of the Authority approving the issuance of the Bonds certified by the Secretary to Authority.

(9) Tax Certificate. A tax-certificate of the Authority in form satisfactory to Bond Counsel, together with representations of the Underwriter.

(10) CDIAC Statement. A copy of the Statement of Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and Section 8855(g) of the Government Code.

(11) 2004A Bond Insurance. A municipal bond insurance policy and a Reserve Fund Surety Agreement with respect to the 2004A Bonds.

(12) 2004A Bond Rating. Evidence that the 2004A Bonds have been rated AAA and AAA, respectively, by Standard & Poor's Ratings Services and Fitch Ratings.

(13) Additional Documents. Such additional certificates, instruments and other documents as the Underwriter or its counsel may reasonably deem necessary to evidence the truth and accuracy as of the time of the Closing of the representations of the Authority under this Purchase Contract and the due performance or satisfaction by the Authority and the Local Agency at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Authority.

If the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriter nor the Authority shall be under further obligation hereunder, except as further set forth in Section 10 hereof.

8. Expenses. The costs and expenses incurred by the parties hereto with respect to the Bonds and the proceedings for the sale and issuance thereof shall be paid as follows:

(a) Authority. The Authority shall pay or cause to be paid (but solely from the proceeds of the Bonds and not otherwise) the expenses incident to the performance of the obligations of the Authority hereunder, including but not limited to:

(1) the cost of preparation and printing of the Preliminary Official Statement and the final Official Statement in reasonable quantities and all other documents (other than as set forth in subsection (b) below) prepared in connection with the transactions contemplated hereby;

(2) the fees and disbursements of the Trustee and counsel to the Trustee in connection with the issuance of the Bonds;

(3) the fees and disbursements of Bond Counsel and any other experts or consultants retained by the Authority in connection with the transactions contemplated hereby;

(4) the fees and disbursements of the Authority and of Authority Counsel in connection with the transactions contemplated hereby; and

(5) the costs related to obtaining ratings, including travel expenses of Authority officials to participate in rating agency meetings and the costs of such ratings;

(6) the fees and expenses of disclosure counsel in connection with its preparation of the Official Statement and the rendering of its opinion;

(7) all expenses incurred by it or the Underwriter in connection with the preparation of the Official Statement, including expenses of obtaining information from California Municipal Statistics and other information suppliers; and

(8) fees of the California Debt and Investment Advisory Commission;

(b) Underwriter. The Underwriter shall pay:

(1) the cost of preparation and printing of Blue Sky and Legal Investment Memoranda if any, to be used by it; and

(2) all advertising expenses in connection with the public offering of the Bonds.

9. Notice. Any notice or other communication to be given under this Purchase Contract to the Authority or the Underwriter may be given by delivering the same in writing at the addresses set forth below:

If to the Authority: Brentwood Infrastructure Financing Authority
150 City Park Way
Brentwood, California 94513
Attention: Treasurer

If to the Underwriter: RBC Dain Rauscher Inc.
Two Embarcadero Center, Suite 1200
San Francisco, California 94111
Attention: Manager, Public Finance Department

10. Entire Agreement. This Purchase Contract, when accepted by the Authority, shall constitute the entire agreement among the Authority and the Underwriter and is made solely for the benefit of the Authority and the Underwriter (including the successors or assigns of any Underwriter). Except for Bond Counsel, no other person shall acquire or have any right hereunder by virtue hereof. All the Authority's representations, warranties and agreements in this Purchase Contract shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of the Underwriter, (b) delivery of and payment for the Bonds hereunder, and (c) any termination of this Purchase Contract.

11. Counterparts. This Purchase Contract may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

12. Reliance on Representations and Warranties. The Authority hereby acknowledges that the Underwriter, in executing this Purchase Contract and in paying for the Bonds as provided herein, is relying upon the representations and warranties of the Authority set forth herein.

13. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Purchase Contract shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein.



14. State of California Law Governs. The validity, interpretation and performance of this Purchase Contract shall be governed by the laws of the State of California.





Very truly yours,

RBC DAIN RAUSCHER INC.



By:
Robert L. Williams, Jr.
Managing Director


Accepted as of the date
first stated above:

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY



By:
Treasurer/Controller

EXHIBIT A

Series 2004A Maturity Schedule

Maturity
(September 2)
Principal
Interest Rate
















Series 2004B Maturity Schedule

Maturity
(September 2)
Principal
Interest Rate

















EXHIBIT B

CERTIFICATE OF APPRAISER


The undersigned representative of Seevers Jordan Ziegenmeyer (the "Appraiser") hereby consents to the use of its Appraisal Report dated _________, 2004 and to the references to it in the Official Statement with respect to the Brentwood Infrastructure Financing Authority's $_________ Infrastructure Revenue Refunding Bonds, Series 2004A and Subordinated Series 2004B and certifies that, as of _________, 2004, (i) to the best knowledge of the Appraiser, the statements concerning the value of property contained in the Preliminary Official Statement and Official Statement under the heading "OWNERSHIP AND VALUE OF PROPERTY WITHIN THE DISTRICT – Valuation of Property in the District - Appraisal of Certain Property" and "Appraisal Assumptions" are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) in the Appraiser's opinion, the assumptions made in the Appraisal Report dated _________, 2004 are reasonable; and (iii) the Appraiser is not aware of any event or act which has occurred since the date of the Appraisal Report which, in the appraiser's opinion, would materially and adversely affect the conclusions as to appraised value reached in the Appraisal Report.

Dated: _________, 2004



Seevers Jordan Ziegenmeyer

By:

Title:





PRELIMINARY OFFICIAL STATEMENT DATED ______________, 2004

NEW ISSUE – FULL BOOK-ENTRY SERIES A BONDS RATED (_______ Insured):
S&P: AAA
[ ]: AAA
SERIES B BONDS NOT RATED


In the opinion of Orrick, Herrington & Sutcliffe LLP, San Francisco, California, Bond Counsel, interest on the Bonds is excluded from gross income for federal income tax purposes, based on existing laws, regulations, rulings and court decisions and assuming, among other matters, compliance with certain covenants, and is exempt from California personal income taxes. In the opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that it is included in adjusted current earnings in calculating corporate alternative minimum taxable income. Bond Counsel expresses no opinion regarding other federal or state tax consequences caused by the ownership of, disposition of, or accrual or receipt of interest on, the Bonds. See "TAX EXEMPTION" herein.

$_____________*
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
Infrastructure Revenue Refunding Bonds
Series 2004A
$_____________*
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
Infrastructure Revenue Refunding Bonds
Subordinated Series 2004B


Dated: Date of Delivery Due: September 2, as shown below

The $_____________* Infrastructure Revenue Refunding Bonds, Series 2004A (the "2004A Bonds") and the $_____________* Infrastructure Revenue Refunding Bonds, Subordinated Series 2004B (the "2004B Bonds") (collectively, the 2004A Bonds and the 2004B Bonds are referred to herein as the "2004 Bonds" or the "Bonds") are being issued by the Brentwood Infrastructure Financing Authority (the "Issuer") to assist the City of Brentwood, California (the "City") in the refinancing of certain improvements of benefit to property within the City's Assessment District No. 93-2, 93-3, 94-2, 94-3 and 95-1 (collectively herein, the "Districts"). All of the proceedings of the City to form the Districts and to levy the assessments for the construction and acquisition of the improvements have been undertaken pursuant to the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code) (the "Act").

In 1999 the Authority issued its CIFP 94-1 Infrastructure Revenue Bonds, Series 1999 (the "Prior Bonds"). The Prior Bonds were issued primarily to provide the Issuer with money to refund and to purchase certain local obligations (the "Local Obligations" as described herein) issued by the City pursuant to the provisions of the Improvement Bond Act of 1915, consisting of Division 10 of the Streets and Highways Code of the State of California. The Local Obligations were issued to finance the construction and acquisition of certain public improvements of benefit to the Districts. The 2004 Bonds are being issued to refund the Prior Bonds and to provide money for certain capital improvements, to fund a reserve fund for the 2004B Bonds and to pay the cost of issuance of the 2004 Bonds. The original Local Obligations are not being refunded, will remain outstanding and will secure the 2004 Bonds.

The 2004 Bonds are special obligations of the Authority. The 2004A Bonds are payable solely from Revenues of the Authority pledged under the Trust Agreement, consisting primarily of payments received by the Authority from the City as payment on the Local Obligations, which payments are secured by liens of unpaid assessments as more fully described herein. The 2004B Bonds are also payable from Revenues pledged under the Trust Agreement, but on a subordinate basis to the pledge of Revenues for payment of the 2004A Bonds. Payments under the Local Obligations are calculated to be sufficient to permit the Authority to pay the principal of, premium, if any and interest on the Bonds when due. Installments of principal and interest sufficient to meet annual Local Obligation debt service are included on the regular county tax bills sent to owners of property against which there are unpaid assessments. These annual assessment installments are to be paid into the Local Obligation Redemption Funds (defined herein) and transferred to U.S. Bank National Association, as trustee (the "Trustee") to be used to pay debt service on the 2004 Bonds as it becomes due. See "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR."

The 2004 Bonds are being issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to ultimate purchasers in the denomination of $5,000 (as to the 2004A Bonds) and $1,000 (as to the 2004B Bonds) or any integral multiple thereof, under the book-entry system maintained by DTC. Interest is payable on September 2, 2004, and semiannually thereafter on March 2 and September 2 each year. See "APPENDIX F - The Book-Entry System" herein.

OWNERSHIP OF THE 2004B BONDS IS SUBJECT TO A SIGNIFICANT DEGREE OF RISK. UNCOLLECTED ASSESSMENT INSTALLMENTS WILL FIRST CAUSE A REDUCTION IN THE AMOUNT OF SUBORDINATED REVENUES AVAILABLE FOR PAYMENT OF THE 2004B BONDS PRIOR TO CAUSING A REDUCTION IN THE AMOUNT OF REVENUES AVAILABLE FOR PAYMENT OF THE 2004A BONDS. ACCORDINGLY, THERE MAY BE A LIMITED TRADING MARKET FOR THESE 2004B BONDS. POTENTIAL INVESTORS ARE ADVISED TO CAREFULLY READ "BONDOWNERS' RISKS" HEREIN.

The 2004 Bonds are subject to redemption prior to maturity as described herein. See "THE BONDS - Redemption" herein.

Unpaid assessments do not constitute a personal indebtedness of the owners of the parcels within the Districts and the owners have made no commitment to pay the principal of or interest on the 2004 Bonds. In the event of delinquency, proceedings may be conducted only against the real property securing the delinquent assessment. Thus, the value of the real property within the Districts is a critical factor in determining the investment quality of the 2004 Bonds. The unpaid assessments are not required to be paid upon sale of property within the Districts. There is no assurance the owners shall be able to pay the assessment installments or that they shall pay such installments even though financially able to do so.

A separate Reserve Fund is established for each Series of Bonds under the Trust Agreement. Amounts available from the Reserve Fund for one Series of the Bonds are not available to make up a deficiency for the other Series.

The scheduled payment of principal of and interest on the 2004A Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the 2004A Bonds by __________________________. Payment of the principal of and interest on the 2004B Bonds will not be insured by any municipal bond insurance policy.

[INSURER LOGO]

This cover page contains certain information for general reference only. It is not a summary of this issue. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE ISSUER, THE CITY, THE COUNTY OF CONTRA COSTA, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. NEITHER THE BONDS NOR THE LOCAL OBLIGATIONS CONSTITUTE A DEBT OF THE CITY WITHIN THE MEANING OF ANY STATUTORY OR CONSTITUTIONAL DEBT LIMITATION THE INFORMATION SET FORTH IN THIS OFFICIAL STATEMENT, INCLUDING INFORMATION UNDER THE HEADING "BONDOWNERS' RISKS," SHOULD BE READ IN ITS ENTIRETY.

MATURITY SCHEDULE
(see inside front cover)

The Bonds are offered when, and if issued and accepted by the Underwriter subject to the approval, as to their legality, of Orrick, Herrington & Sutcliffe LLP, San Francisco, California, Bond Counsel. Certain legal matters will be passed upon for the Issuer and the City by the City Attorney, and for the Issuer by Jones Hall, A Professional Law Corporation, San Francisco, California, Disclosure Counsel. It is expected that the Bonds will be available for delivery in book-entry form on or about ________________, 2004.

RBC Dain Rauscher

Dated: ________________, 2004

* Preliminary, subject to change.




MATURITY SCHEDULE

Series 2004A Serial Bonds

Maturity
September 2 Principal
Amount Interest
Rate Price
or Yield Maturity
September 2 Principal
Amount Interest
Rate Price
or Yield









$______________ _______ % Term Bonds due September 2, _______ -Price _______ %
$_______ _______ _______ % Term Bonds due September 2, _______ -Yield _______ %




Series 2004B Serial Bonds


Maturity
September 2 Principal
Amount Interest
Rate Price
or Yield Maturity
September 2 Principal
Amount Interest
Rate Price
or Yield









$______________ _______ % Term Bonds due September 2, _______ -Price _______ %
$_______ _______ _______ % Term Bonds due September 2, _______ -Yield _______ %



BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY

CITY OF BRENTWOOD



City Council and Authority Officers

Brian Swisher, Mayor/Chairperson of the Authority
Annette Beckstrand, Vice Mayor/Vice-Chairperson of the Authority
Ana B. Gutierrez, Councilmember/Boardmember
Bill Hill, Councilmember/Boardmember
Pete Petrovich, Councilmember/Boardmember

___________________________

City Staff

John Stevenson, City Manager
Bailey Grewal, City Engineer
Pam Ehler, Director of Finance and Information Systems
Dennis Beougher, City Attorney
Mitch Oshinsky, Community Development Director

__________________


Special Services

Bond Counsel
Orrick, Herrington & Sutcliffe LLP
San Francisco, California

Trustee
U.S. Bank National Association
San Francisco, California

Appraiser
Seevers Jordan Ziegenmeyer
Rocklin, California

Disclosure Counsel
Jones Hall, A Professional Law Corporation
San Francisco, California

VICINITY MAP


GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT

Use of Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.

Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the Authority, City or Agency, in any press release and in any oral statement made with the approval of an authorized officer of the Authority, City or Agency, the words or phrases "will likely result," "are expected to", "will continue", "is anticipated", "estimate", "project," "forecast", "expect", "intend" and similar expressions identify "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, give rise to any implication that there has been no change in the affairs of the Authority, City or Agency since the date hereof.

Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the Authority or the Underwriter to give any information or to make any representations other than those contained herein and, if given or made, such other information or representation must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Bonds.

Involvement of Underwriter. The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or Agency since the date hereof. All summaries of the Trust Agreement, the Facilities Lease (as such terms are defined herein) or other documents referred to in this Official Statement, are made subject to the provisions of such documents, respectively, and do not purport to be complete statements of any or all of such provisions.
Insurer's Disclaimer. Other than with respect to information concerning ________________________ contained under the caption "SERIES A BOND INSURANCE POLICY - Financial Security Assurance" and "Appendix G -Specimen Municipal Bond Insurance Policy" herein, none of the information in this Official Statement has been supplied or verified by ______________ and Financial Security makes no representation or warranty, express or implied, as to (i) the accuracy or completeness of such information; (ii) the validity of the Series 2004A Bonds; or (iii) the tax exempt status of the interest on the Series 2004A Bonds.

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXCEPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

TABLE OF CONTENTS
INTRODUCTION 1
PLAN OF FINANCE 5
THE BONDS 6
Authority For Issuance 6
Amount and Issuance of the 2004 Bonds 6
Application of Proceeds of the 2004 Bonds 7
Redemption 7
SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR 15
Limited Obligation 15
Revenues 16
Payment of the Local Obligations 18
Reserve Funds 19
Priority of Lien 20
Limited Obligation Upon Delinquency 21
Collection of Assessments 21
Contra Costa County Tax Loss Reserve 22
Covenant to Commence Superior Court Foreclosure 22
No Additional Bonds 23
Refunding Bonds 23
SERIES A BOND INSURANCE POLICY 23
THE CAPITAL IMPROVEMENT FINANCING PROGRAMS 24
THE ASSESSMENT DISTRICTS 25
Development in the Districts 25
Zoning and Environmental Review 26
Flood Zones 26
Method of Assessment 26
The County of Contra Costa and City of Brentwood 27
OWNERSHIP AND VALUE OF PROPERTY WITHIN THE DISTRICTS 29
Ownership of Property 29
Valuation of Property in the Districts 30
Total Value Estimate of All Property 34
Value to Lien Ratios 36
Property Tax Status 38
BONDOWNERS' RISKS 38
General 38
Absence of Market for 2004B Bonds 39
Owners Not Obligated to Pay Bonds or Assessments 39
Bankruptcy and Foreclosure 39
Availability of Funds to Pay Delinquent Assessment Installments 40
Limited Obligation Upon Delinquency 40
Collection of the Assessment 40
Limitations on Enforceability of Remedies 41
Property Values 42
Parity Taxes and Special Assessments 42
Future Overlapping Indebtedness 42
Future Private Indebtedness 43
No Acceleration Provision 43
CONSTITUTIONAL LIMITATIONS ON TAXATION AND APPROPRIATIONS 43
Property Tax Rate Limitations - Article XIIIA 43
Legislation Implementing Article XIIIA 43
Appropriation Limitation - Article XIIIB 44
Property Tax Collection Procedures 45
Proposition 21 45
THE ISSUER 46
CONTINUING DISCLOSURE 47
LEGAL OPINION 47
TAX EXEMPTION 47
NO LITIGATION 48
RATINGS 49
UNDERWRITING 49
MISCELLANEOUS 50

APPENDIX A - EXCERPTS FROM THE APPRAISAL
APPENDIX B - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
APPENDIX C - THE CITY OF BRENTWOOD
APPENDIX D - FORM OF BOND COUNSEL OPINION
APPENDIX E - FORM OF CONTINUING DISCLOSURE AGREEMENT
APPENDIX F - THE BOOK-ENTRY SYSTEM
APPENDIX G - SPECIMEN MUNICIPAL BOND INSURANCE POLICY

__________________________________

OFFICIAL STATEMENT
__________________________________




$_____________*
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
Infrastructure Revenue Refunding Bonds
Series 2004A
$_____________*
BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
Infrastructure Revenue Refunding Bonds
Subordinated Series 2004B






This Official Statement, including the cover page and the appendices hereto, is provided to furnish information regarding the issuance by the Brentwood Infrastructure Financing Authority (the "Issuer" or the "Authority") of its $_____________* aggregate principal amount of Infrastructure Revenue Refunding Bonds, Series 2004A (the "Series 2004A Bonds") and the $_____________* Infrastructure Revenue Refunding Bonds, Subordinated Series 2004B (the "Series 2004B Bonds") (collectively, the 2004A Bonds and the 2004B Bonds shall be referred to herein as the "2004 Bonds" or the "Bonds") .


INTRODUCTION

This introduction is not a summary of this Official Statement, and is qualified by the more complete and detailed information contained in the entire Official Statement and the documents described or summarized herein. The sale of Bonds to potential investors is made only by means of the entire Official Statement.

Purposes of the Bonds. The 2004 Bonds are being issued to assist the City of Brentwood, California (the "City") in the financing and refinancing of certain improvements of benefit to property within the City's Assessment District Nos. Assessment District No. 93-2, 93-3, 94-2, 94-3 and Assessment District No. 95-1 (collectively herein, the "Districts"), to provide money for capital improvements to facilities of the City, to provide for a separate reserve fund for each series of the 2004 Bonds, and to pay the cost of issuance of the 2004 Bonds. See "PLAN OF FINANCE."



* Preliminary, subject to change.

The Prior Bonds and the Local Obligations. In August 1999, the Issuer issued its CIFP 94-1 Infrastructure Revenue Bonds, Series 1999 (the "Prior Bonds") in the original principal amount of $44,070,000 to finance certain capital improvements and purchase the 1999 Local Obligations (as defined herein) and to refund its CIFP 94-1 Infrastructure Revenue Bonds, Series 1995, CIFP 94-1 Infrastructure Revenue Bonds, Series 1996, and CIFP 94-1 Infrastructure Revenue Bonds, Series 1997. The bonds issued in 1995, 1996 and 1997 were issued to purchase certain local obligations (collectively with the 1999 Local Obligations, the "Local Obligations" as described herein) issued by the City in connection with its Capital Improvement Financing Program 94-1 (described herein). The Local Obligations were issued by the City pursuant to the provisions of the Improvement Bond Act of 1915, consisting of Division 10 of the Streets and Highways Code of the State of California (the "Local Obligation Statute") to finance the construction and acquisition of certain public improvements necessary for development in the Districts.

Authority for Issuance. The 2004 Bonds are issued pursuant to the terms of an Amended and Restated Trust Agreement dated as of January 1, 2004 (the "Trust Agreement") among the Issuer, the City and U.S. Bank National Association (the "Trustee").

Security for the Bonds. The 2004 Bonds are special obligations of the Issuer, payable from and secured by Revenues (as defined herein) of the Issuer consisting primarily of payments received by the Issuer from the City in connection with the Local Obligations. The fifteen series of Local Obligations are as follows.


Assessment District Original Principal Amount

Assessment District No. 93-2
Series 1995A $2,445,004
Series 1996A 3,327,947
Series 1997A 239,605
Series 1999A 2,203,438
Assessment District No. 93-3
Series 1995B $3,424,994
Series 1996B 4,422,371
Series 1997B 1,164,036
Series 1999B 9,800,657
Assessment District No. 94-2

Series 1995C $484,336
Series 1999C 2,295,085
Assessment District No. 94-3
Series 1995D $5,164,122
Series 1995C 559,682
Series 1997C 4,346,359
Series 1999D 1,970,820
Assessment District No. 95-1
Series 1995E 301,544

The 2004A Bonds are secured by a priority lien on and security interest in all of the Revenues and any other amounts (including proceeds of the sale of the 2004A Bonds) held in certain funds established under to the Trust Agreement. The 2004B Bonds are likewise secured by a lien on and security interest in the Revenues, but only to the extent Revenues are available after the obligations to be satisfied regarding the 2004A Bonds under the Trust Agreement have been satisfied. See "SECURITY FOR THE BONDS - Revenues."

The Local Obligations were issued upon and are secured by the assessments levied against property in each respective Assessment District, together with interest thereon and such unpaid assessments together with interest thereon constitute a trust fund for the redemption and payment of the principal of the respective Local Obligations and the interest thereon. All the Local Obligations are secured by the monies in the respective Local Obligation Redemption Fund created pursuant to the various assessment proceedings and by the respective assessments levied. Principal of and interest on the Local Obligations are payable exclusively out of the Local Obligation Redemption Funds (described herein). Unpaid assessments do not constitute a personal indebtedness of the owners of the parcels within the Districts and the owners have made no commitment to pay the principal of or interest on the Local Obligations or the 2004 Bonds or to support payment of the 2004 Bonds in any manner. In the event of delinquency, proceedings may be conducted only against the particular parcel securing the delinquent assessment. The unpaid assessments are not required to be paid upon sale of property within the Districts.

Under the Trust Agreement, a separate Reserve Fund is established for each Series of 2004 Bonds. Amounts available from the Reserve Fund for one Series of the Bonds are not available to make up a deficiency for the other Series.

2004A Bond Insurance. Concurrently with issuance of the 2004 Bonds, _______________ (“_______________”) will issue its Municipal Bond Insurance Policy (the “Municipal Bond Insurance Policy”) for the Series 2004A Bonds. The policy unconditionally guarantees the payment of that portion of the principal of and interest on the Series 2004A Bonds which has become due for payment, but which is unpaid. See “MUNICIPAL BOND INSURANCE POLICY” and “APPENDIX G – Specimen Municipal Bond Insurance Policy”. Financial Security will also issue a reserve fund surety, described herein, for the 2004A Bonds. Payment of the principal of and interest on the 2004B Bonds will not be insured by any municipal bond insurance policy.

OWNERSHIP OF THE 2004B BONDS IS SUBJECT TO A SIGNIFICANT DEGREE OF RISK. UNCOLLECTED ASSESSMENT INSTALLMENTS WILL FIRST CAUSE A REDUCTION IN THE AMOUNT OF REVENUES AVAILABLE FOR PAYMENT OF THE 2004B BONDS PRIOR TO CAUSING A REDUCTION IN THE AMOUNT OF REVENUES AVAILABLE FOR PAYMENT OF THE 2004A BONDS. ACCORDINGLY, THERE MAY BE A LIMITED TRADING MARKET FOR THE 2004B BONDS. POTENTIAL INVESTORS ARE ADVISED TO CAREFULLY READ THE SECTION ENTITLED "BONDOWNERS' RISKS."

The Assessment Districts and the Local Obligations. All of the proceedings of the City to form the Districts and to levy the assessments for the construction and acquisition of the improvements were undertaken pursuant to the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code) (the "Act"). The Local Obligations consist of fifteen separate series of limited obligation improvement bonds issued by the City with regard to five different Assessment Districts pursuant to the provisions of the Local Obligation Statute to finance the construction and acquisition of public improvements identified under the City's respective Capital Improvement Financing Program 94-1 (described herein). The Local Obligations are the primary security for the 2004 Bonds and are not being refunded in connection with the issuance of the 2004 Bonds. See "THE CAPITAL IMPROVEMENTS FINANCING PROGRAM".

Each District is comprised of land located within the City developed with single family residences or, as to undeveloped land, zoned for residential development, and was formed to finance a portion of certain infrastructure improvements of benefit to such respective District (collectively, the "Improvements"), consisting generally of a wastewater collection system, wastewater treatment plant, water distribution system, flood control facilities, drainage facilities and roadways. The Improvements financed by the Local Obligations for each District have been completed and over _____% of the homes planned for the Districts have been completed and over _____% of the completed homes have been sold to homeowners. See "THE ASSESSMENT DISTRICTS."

Limited Scope of Official Statement. There follows in this Official Statement descriptions of the Issuer, the Bonds, the Trust Agreement, the City, the Local Obligations, the Local Obligation Resolutions, and certain other documents. The descriptions and summaries of documents herein do not purport to be comprehensive or definitive, and reference is made to each such document for the complete details of all its respective terms and conditions. All statements herein with respect to such documents are qualified in their entirety by reference to each such document for the complete details of all of their respective terms and conditions. All statements herein with respect to certain rights and remedies are qualified by reference to laws and principles of equity relating to or affecting creditors' rights generally. Terms not defined herein shall have the meanings set forth in the Trust Agreement.

The information and expressions of opinion herein speak only as of the date of this Official Statement and are subject to change without notice. Neither delivery of this Official Statement nor any sale made hereunder nor any future use of this Official Statement shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer or the City since the date hereof.

All financial and other information presented in this Official Statement has been provided by the Issuer and the City from their records, except for information expressly attributed to other sources. The presentation of information is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial or other affairs of the owners, the Districts, the Issuer or the City. No representation is made that past experience, as it might be shown by such financial and other information, will necessarily continue or be repeated in the future.

PLAN OF FINANCE

The 2004 Bonds are being issued to refund the Issuer's CIFP 94-1 Infrastructure Revenue Bonds, Series 1999 (the "Prior Bonds") issued in the original principal amount of $44,070,000 and outstanding in the aggregate principal amount of $______________. The Prior Bonds were issued to provide the Issuer with money to purchase the Local Obligations issued to finance the construction and acquisition of certain public improvements within the Districts. Such improvements have been completed. The Local Obligations were purchased by the Issuer at the time they were issued and are security for the 2004 Bonds, however they will not be refunded in connection with the issuance of the 2004 Bonds. Savings generated by the refunding of the Prior Bonds will be used to provide money to be used by the City for improvements to the City's _______________ facility. Proceeds of the 2004 Bonds will also be used to provide a reserve fund for the 2004 Bonds and to pay the cost of issuance of the 2004 Bonds.

On the date of issuance of the 2004 Bonds, a portion of the proceeds will be used to redeem the outstanding Prior Bonds at the redemption price of 103% of the principal amount thereof, plus accrued interest.



THE BONDS

Authority For Issuance

The 2004 Bonds are special obligations of the Issuer payable from and secured by payments made under all of the Local Obligations. The Local Obligations were purchased by the Issuer pursuant to the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, as amended from time to time (the "Marks-Roos Law"). The 2004 Bonds are being issued pursuant to the provisions of a Resolution adopted by the Issuer on ________________, 2004 and the Trust Agreement.

The Districts were established and a specific amount of bonded indebtedness for each District was authorized. The authorization for such bonds was pursuant to provisions of the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code) (the "Act"), the Improvement Bond Act of 1915 (Division 10 of the California Streets and Highways Code) (the "Local Obligation Statute") and proceedings taken by the City pursuant to a resolution of intention adopted by the City Council with respect to each District (the "Resolutions of Intention.") The Prior Local Obligations were issued pursuant to the provisions of resolutions (the respective "Local Obligation Resolution") adopted by the City Council and bonded indebtedness for the Districts has been issued and no additional bonds are contemplated under the Local Obligation Resolutions. The Local Obligations are security for the 2004 Bonds but will not be refunded in connection with the issuance of the 2004 Bonds.

Amount and Issuance of the 2004 Bonds

The 2004 Bonds will be dated the date of original delivery. The Series 2004 Bonds are being issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to ultimate purchasers in the denomination of $5,000 (as to the 2004A Bonds) and $1,000 (as to the 2004B Bonds) or any integral multiple thereof, under the book-entry system maintained by DTC. Ultimate purchasers of Series 2004 Bonds will not receive physical bonds representing their interest in the Series 2004 Bonds. So long as the Series 2004 Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the Holders shall mean Cede & Co., and shall not mean the ultimate purchasers of the Series 2004 Bonds. Payments of the principal of, premium, if any, and interest on the Series 2004 Bonds will be made directly to DTC, or its nominee, Cede & Co., by the Trustee, so long as DTC or Cede & Co. is the registered owner of the Series 2004 Bonds. Disbursements of such payments to DTC's Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's Participants and Indirect Participants, as more fully described herein. See "APPENDIX F - The Book-Entry System" herein.

The principal of and redemption premiums, if any, and interest on the 2004 Bonds shall be payable in lawful money of the United States of America. Interest is payable on September 2, 2004, and semiannually thereafter on March 2 and September 2 each year (each, an "Interest Payment Date"). The 2004 Bonds shall bear interest from the Dated Date. Payment of the interest on any 2004 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 any of 2004 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 2004 Bonds shall be payable at the Corporate Trust Office of the Trustee in San Francisco, California, upon presentation and surrender of such 2004 Bonds. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months.

Application of Proceeds of the 2004 Bonds

The 2004 Bonds are being issued (i) to refund the Prior Bonds, (ii) to provide money for certain capital improvements of benefit to the City, (iii) to provide for a reserve fund for the 2004 Bonds, and (iv) to pay the cost of issuance of the 2004 Bonds. The Local Obligations are security for the 2004 Bonds but will not be refunded in connection with the issuance of the 2004 Bonds.

For a discussion of the accounts and funds established under the Trust Agreement and related to the 2004 Bonds, see "APPENDIX B - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS." For a schedule of the estimated sources and uses of funds related to the issuance of the 2004 Bonds, see "ESTIMATED SOURCES AND USES OF FUNDS."

Redemption

Extraordinary Redemption. The 2004 Bonds shall be subject to extraordinary redemption as a whole or in part on any Interest Payment Date, and shall be redeemed by the Trustee, from moneys transferred from the Revenue Fund to the Redemption Fund pursuant to the Trust Agreement, and derived as a result of Property Owner Prepayments plus, if applicable, amounts transferred from the Reserve Fund in connection therewith, at a redemption price equal to the principal amount thereof, together with a redemption premium equal to (i) if Bonds are redeemed on or prior to March 2, ______, [two percent (2.0%)] of the principal amount of the Bonds to be redeemed or (ii) if Bonds are redeemed on or after September 2, ______, without premium, in each case plus accrued interest to the redemption date. The Trustee shall select 2004B Bonds and 2004A Bonds to be redeemed in accordance with the Redemption Instructions (described below) delivered pursuant to the Trust Agreement.

Optional Redemption – 2004A Bonds. The 2004A Bonds maturing on or after September 2, ______ shall be subject to optional redemption as a whole or in part on any date on or after September 2, ______, 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, without premium, plus accrued interest to the redemption date

Optional Redemption – 2004B Bonds. The 2004B Bonds maturing on or after September 2, ______ shall be subject to optional redemption as a whole or in part on any date on or after September 2, ______, 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, without premium, plus accrued interest to the redemption date; provided, that the Issuer shall certify prior to such redemption that, after giving effect to such redemption and any simultaneous redemption of 2004A Bonds, the total principal amount of Local Obligations remaining outstanding shall be equal to or greater than the total principal amount of Series 2004A Bonds remaining Outstanding.

Mandatory Redemption – 2004A Bonds. The 2004A Bonds maturing on September 2, ______ and September 2, ______, are also subject to mandatory redemption in part by lot on September 2 in each year commencing September 2, ______ and September 2, ______, respectively, at the principal amount thereof plus accrued interest thereon to the date fixed for redemption in accordance with the following schedule:

Term 2004A Bonds of ________

Year
(September 2)
Amount








Term 2004A Bonds of ________

Year
(September 2)
Amount







Mandatory Redemption – 2004B Bonds. The 2004B Bonds maturing on September 2, _______ are also subject to mandatory redemption in part by lot on September 2 in each year commencing September 2, _______, at the principal amount thereof plus accrued interest thereon to the date fixed for redemption in accordance with the following schedule:

Term 2004B Bonds of ______

Year
(September 2)
Amount








In the event that 2004 Bonds subject to the above mandatory redemption are redeemed in part prior to their stated maturity date from any moneys other than Principal Installments, the remaining Principal Installments for such 2004 Bonds shall be reduced proportionately in each year remaining until and including the final maturity date of such 2004 Bonds.

Notice of Redemption. In the case of any redemption of Bonds, the Trustee shall determine that it has in the Funds maintained pursuant to the Trust Agreement and available therefor 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, 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, Series and maturity date, have been called for redemption and, in the case of 2004 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. Such notice may specify that it is conditional upon the receipt of funds to pay the redemption price of the Bonds to be redeemed on or prior to the redemption date and that if such funds are not available, the redemption will be canceled and such Bonds shall remain Outstanding.

Redemption Instructions. In the event a portion, but not all, of the Outstanding Bonds are to be redeemed pursuant to extraordinary redemption or optional redemption, 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 optionally redeem Bonds, 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) designation of the maturities, Series and amounts of Bonds to be redeemed; provided, that the 2004A Bonds and the 2004B Bonds shall be redeemed pro rata (as nearly as possible given minimum authorized denominations) in proportion to the total principal amount Outstanding of each such Series at the time of redemption; (ii) designation of the reduction, if any, in the 2004A Reserve Requirement and/or the 2004B Reserve Requirement required pursuant to a Cash Flow Certificate (described below) resulting from such redemption, and (iii) a certification to the effect that after giving effect to this redemption, the total principal amount of outstanding Local Obligations will be equal to or greater than the total principal amount of Outstanding 2004A Bonds. The Cash Flow Certificate is required to certify 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 Funds 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, if any, on deposit in the 2004B Reserve Fund which shall be transferred to the Redemption Fund to redeem Bonds as provided in the Trust Agreement. For purposes of the Local Obligation Resolution, the amount funded in cash in the 2004B Reserve Fund shall be the amount available to transfer to the Redemption Fund. The Cash Flow Certificate shall specify the amount which must be withdrawn from the 2004B Reserve Fund to redeem a portion of the Bonds pursuant to the reduced amount of the 2004B Reserve Requirement, that such withdrawal shall not result in 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.

Selection of Bonds for Redemption. Whenever less than all the Outstanding 2004 Bonds of any one Series and 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 2004A Bonds and 2004B Bonds for redemption the Trustee shall treat each 2004A Bond of a denomination of more than $5,000 and each 2004B Bond of a denomination of more than $1,000 as representing that number of respective 2004A or 2004B Bonds of $5,000 or $1,000 denomination which is obtained by dividing the principal amount of such Bond by $5,000 or $1,000, and the portion of any Bond of a denomination of more than $5,000 or $1,000 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.

Payment of Redeemed Bonds. 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.

Purchase in Lieu of Redemption. In lieu of redemption of any Bond, amounts on deposit in the Proceeds Fund, the Principal Funds 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 from the Issuer 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 respective 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.

ESTIMATED SOURCES AND USES OF FUNDS

The proceeds from the sale of the 2004 Bonds are estimated to be disbursed as set forth below:

Sources:
Principal Amount of 2004 Bonds
Less: Net Original Issue Discount
Available From Prior Bonds
Total Sources

Uses:
Payment of Prior Bonds
Deposit to Capital Improvements Fund
Deposit to Expense Fund(1)
Deposit to 2004B Reserve Fund
Deposit to Interest Fund(2)
Total Uses

(1) Expenses include legal fees, printing costs, rating agency fees, Underwriter’s discount, bond insurance premium and reserve surety premium (as to the 2004A Bonds only) and other miscellaneous expenses.
(2) Represents a portion of the assessment installments collected for fiscal year 2003-04 which will be applied to interest on the Bonds payable on September 2, 2004.


DEBT SERVICE SCHEDULE AND COVERAGE TABLE

The scheduled payment of principal and interest on the 2004 Bonds reflects the aggregate maturities and interest payments on the underlying Local Obligations. The debt service schedule for the 2004 Bonds is shown below.

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
Infrastructure Revenue Refunding Bonds
Series 2004 A and Subordinated 2004B Bonds
ANNUAL DEBT SERVICE

Year Ending
(Sept 2) Series
2004A
Principal Series
2004A
Interest Series
2004B
Principal Series
2004B
Interest Series
2004A & B
Total































The following table shows the debt service coverage for the 2004A Bonds and for the 2004A Bonds and 2004B Bonds combined, based on scheduled payments of principal and interest on the Local Obligations.

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY
Infrastructure Revenue Refunding Bonds
Series 2004 A and Subordinated 2004B Bonds
DEBT SERVICE COVERAGE


Year Ending
(Sept 2) Local
Obligations
Debt Service Series
2004A
Debt Service Series
2004A
Coverage Series
2004A & B
Debt Service Series
2004A & B
Coverage






























SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR

Limited Obligation

The 2004A Bonds are secured by a lien on and pledge of (i) Revenues, as hereinafter defined, (ii) amounts held by the Trustee in the 2004A Reserve Fund, and (iii) investment income with respect to any moneys held by the Trustee in the funds related to the 2004A Bonds (other than the Rebate Fund). Revenues (as more particularly defined below) consist primarily of payments made under the Local Obligations. The 2004B Bonds are secured by a lien on and pledge of Revenues subordinate to the pledge and lien for payment of the 2004A Bonds, by proceeds of 2004B Bonds held by the Trustee in the 2004B Reserve Fund, and (iii) investment income with respect to any moneys held by the Trustee in the funds related to the 2004B Bonds (other than the Rebate Fund). Revenues (as more particularly defined below) consist primarily of payments made under the Local Obligations.

Each series of Local Obligations are a limited obligation of the City and secured by an irrevocable pledge of certain revenues of the City, consisting primarily of monies received by the City as payment of assessments levied against property within each District which secure such Local Obligations. Payments under the Local Obligations are calculated to be sufficient to provide the Authority with money to pay the principal of, premium, if any, and interest on the Bonds when due.

The Local Obligations and corresponding District are as follows.
Assessment District Series 1995
Local Obligations Series 1996
Local Obligations Series 1997
Local Obligations Series 1999
Local Obligations
Assessment District No. 93-2 Series 1995A
Original Principal Amount: $2,445,004
Series 1996A
Original Principal Amount: $3,327,947 Series 1997A
Original Principal Amount: $239,605 Series 1999A
Original Principal Amount: $2,203,438
Assessment District No. 93-3 Series 1995B
Original Principal Amount: $3,424,994 Series 1996B
Original Principal Amount: $4,422,371 Series 1997B
Original Principal Amount: $1,164,036 Series 1999B
Original Principal Amount: $9,800,657
Assessment District No. 94-2 Series 1995C
Original Principal Amount: $484,336 None None Series 1999C
Original Principal Amount: $2,295,085
Assessment District No. 94-3 Series 1995D
Original Principal Amount: $5,164,122 Series 1995C
Original Principal Amount: $559,682 Series 1997C
Original Principal Amount: $4,346,359 Series 1999D
Original Principal Amount: $1,970,820
Assessment District No. 95-1 Series 1995E
Original Principal Amount: $301,544 None None None


All obligations of the Authority under the Trust Agreement and the Bonds are special obligations of the Authority, payable solely from and secured by Revenues and the amounts in the funds established by the Trust Agreement (except amounts in the Rebate Fund). All obligations of the City under each Local Obligation Resolution are not general obligations of the City, but are limited obligations, payable solely from the assessments and the funds pledged therefor under such Local Obligation Resolution. Neither the faith and credit of the City nor of the State of California (the "State") or any political subdivision thereof is pledged to the payment of the Local Obligations.

The Local Obligations are payable solely from and secured solely by the assessments and the amounts in the Redemption Fund created with respect to such Local Obligations (the "Local Obligation Redemption Fund") under the Local Obligation Resolutions. The City is not obligated to advance available surplus funds from the City treasury to cure any deficiency in any Local Obligation Redemption Fund, provided, however, the City is not prevented, in its sole discretion, from so advancing funds. Moneys in each respective Local Obligation Redemption Fund are available only for use with respect to the series of Local Obligations to which such Local Obligation Redemption Fund relates.

The Bonds are special limited obligations of the Issuer, payable from the Trust Estate described in the Trust Agreement 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.

Revenues

The 2004A Bonds are secured by a lien on and pledge of Revenues made in the Trust Agreement and the 2004B Bonds are secured by a lien on and pledge of such Revenues on a subordinate basis to the pledge and lien for payment of the 2004A Bonds.

Under the Trust Agreement:

"Revenues" means (i) 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 (ii) all investment earnings on any moneys held in the Funds or accounts established under the Trust Agreement, except the Rebate Fund.

"Local Obligations Revenues" means all moneys collected and received by the City on account of unpaid assessments, reassessments, or special taxes securing the Local Obligations including amounts collected in the normal course via the County property tax roll and thereafter remitted to the City, Property Owner Prepayments, and amounts received by the City as a result of superior court foreclosure proceedings brought to enforce payment of delinquent installments, but excluding therefrom 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; and

"Property Owner Prepayments" means that portion of Revenues which are initially paid to the City by or on behalf of a property owner to accomplish pay-off and discharge of a lien securing Local Obligations (except the portion, if any, of such Revenues which represents accrued interest on the respective Local Obligations) and which are thereafter transmitted by the City 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 the provisions of the Trust Agreement.

Under the Trust Agreement, all of the Revenues and the amounts in the Funds established by the Trust Agreement (except amounts in the Rebate Fund) are pledged by the Issuer first to secure the payment of the principal of and interest on the 2004A Bonds, and after such payment has been made or provided for, to secure the payment of the principal of and interest on the 2004B Bonds, all in accordance with their terms and the provisions of the Trust Agreement. Said pledge constitutes a lien on and security interest in the Revenues upon the physical delivery thereof. In the Trust Agreement, the Issuer transfers in trust and assigns to the Trustee, for the benefit of the Owners from time to time of the Bonds, all of the Revenues and all of the right, title and interest of the Issuer in the Local Obligations, if any. The Trustee shall be entitled to and shall collect and receive all of the Revenues, and any Revenues collected or received by the Issuer shall be deemed to be held, and to have been collected or received, by the Issuer and shall forthwith be paid by the Issuer to the Trustee. The Trustee also is entitled to and may take all steps, actions and proceedings reasonably necessary in its judgment to enforce, either jointly with the Issuer or separately, all of the rights of the Issuer and all of the obligations of the City under and with respect to the Local Obligations.

In the Trust Agreement, the City expressly acknowledges that, pursuant to the Local Obligation Statute and the Local Obligation Resolutions, the City is legally obligated to establish and maintain a separate redemption fund for each series of the Local Obligations (each a "Local Obligation Redemption Fund") and, so long as any part of Local Obligations remain outstanding, to deposit into the respective Local Obligation Redemption Fund, upon receipt, any and all respective Local Obligation Revenues received by the City. The City further acknowledges in the Trust Agreement that, pursuant to the Local Obligation Statute and the resolutions under which the Local Obligations were issued, no temporary loan or other use whatsoever may be made of the Local Obligation Revenues, and the Local Obligation Redemption Funds constitute a trust fund for the benefit of the owners of the respective Local Obligations and the City 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 Funds and the Local Obligation Revenues in accordance with their statutes as trust funds as prescribed by the Local Obligation Statute, the resolutions under which the Local Obligations were issued, and the Trust Agreement.

No later than ten Business Days prior to each Interest Payment Date and Principal Payment Date on the Bonds, the City will advance to the Trustee against payment on 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. All Revenues, other than Revenues derived from Property Owner Prepayments (which shall be deposited in the Redemption Fund and administered in accordance with the Trust Agreement), 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 the Trust Agreement, for deposit into the Interest Funds, Principal Funds, Reserve Funds and Expense Fund in the order of priority set forth therein. Any amount remaining in the Revenue Fund after making such deposits shall be transferred to the City.

THE 2004B BONDS ARE SECURED BY A SUBORDINATED PLEDGE OF REVENUES AND OWNERSHIP OF THE 2004B BONDS IS SUBJECT TO A SIGNIFICANT DEGREE OF RISK. IN ADDITION, UNCOLLECTED ASSESSMENT INSTALLMENTS WILL FIRST CAUSE A REDUCTION IN THE AMOUNT OF SUBORDINATED REVENUES AVAILABLE FOR PAYMENT OF THE 2004B BONDS PRIOR TO CAUSING A REDUCTION IN THE AMOUNT OF REVENUES AVAILABLE FOR PAYMENT OF THE 2004A BONDS. ACCORDINGLY, THERE MAY BE A LIMITED TRADING MARKET FOR THESE 2004B BONDS. POTENTIAL INVESTORS ARE ADVISED TO CAREFULLY READ "BONDOWNERS' RISKS" HEREIN.

Payment of the Local Obligations

Payments Under the Local Obligations. The Local Obligations are issued upon and are secured by the assessments levied against property in each respective Assessment District, together with interest thereon and such unpaid assessments together with interest thereon constitute a trust fund for the redemption and payment of the principal of the respective Local Obligations and the interest thereon. All the Local Obligations are secured by the monies in the respective Local Obligation Redemption Fund created pursuant to the various assessment proceedings and by the respective assessments levied. Principal of and interest on the Local Obligations are payable exclusively out of the respective Local Obligation Redemption Fund.

Unpaid assessments do not constitute a personal indebtedness of the owners of the parcels within the District and the owners have made no commitment to pay the principal of or interest on the Bonds or to support payment of the Bonds in any manner. In the event of delinquency, proceedings may be conducted only against the real property securing the delinquent assessment. Thus, the value of the real property within the Districts is a critical factor in determining the investment quality of the Bonds. The unpaid assessments are not required to be paid upon sale of property within the Districts. There is no assurance the owners shall be able to pay the assessment installments or that they shall pay such installments even though financially able to do so.

The assessment installments will be collected and transferred by the County to the City in approximately equal semi-annual installments, together with interest on the declining balances, and are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do general property taxes. The properties upon which the assessments were levied are subject to the same provisions for sale and redemption as are properties for nonpayment of general taxes.

Neither the faith and credit nor the taxing power of the City, the County, the State of California or any political subdivision thereof is pledged to the payment of the Local Obligations.

Reserve Funds

Separate Reserve Funds. A separate reserve fund (the "20002A Reserve Fund" and the "2004B Reserve Fund" and collectively, the "Reserve Funds") for each Series is established by the Trust Agreement to be held by the Trustee in trust for the benefit of the Authority and the Owners of the respective Series of Bonds. The amount in each Reserve Fund shall be maintained at the "Reserve Requirement" which is, as to each Series as of any date of calculation, the Maximum Annual Debt Service on such Series of Bonds in the current or in any future Bond Year. Moneys in each Reserve Fund may only be used for the particular Series of Bonds to which the respective Reserve Fund relates.

2004A Reserve Fund Surety Agreement. The 2004A Bonds Reserve Requirement will initially be met with the issuance of a reserve fund surety bond (the "Reserve Surety") provided by Financial Security Assurance Inc. For information on the provider, see the caption "SERIES 2004A BOND INSURANCE POLICY" below.

Use of 2004A Reserve Fund. Except as otherwise provided in the Trust Agreement, all amounts available under the Reserve Surety and other moneys in the 2004A 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 2004A Bonds; but solely in the event that insufficient moneys are available in the 2004A Interest Fund, the 2004A Principal Fund, or the Redemption Fund for such purpose. Having first satisfied the requirements of the Trust Agreement requiring deposits into the 2004A Interest Fund and 2004A Principal Fund for payment of the 2004A Bonds, the Trustee shall next deposit in the 2004A Reserve Fund an amount of Revenues which, together with the amount of the Reserve Surety and any other amounts on deposit in the 2004A Reserve Fund, equal the 2004A Reserve Requirement. Such amounts shall be applied in the following order of priority: first, to reimburse the Bond insurer pursuant to the Reserve Surety Agreement for any principal draws on the Reserve Surety, provided, that such reimbursement shall result in reinstatement of the Reserve Surety in the amount of such reimbursement; second, to add to the amount of cash on deposit in the 2004A Reserve Fund such that the amount of such cash, plus the amount available under the Reserve Surety, is equal to the 2004A Reserve Requirement; and third to the payment of any other amounts owing to the Bond insurer pursuant to the Reserve Surety Agreement.

Upon any partial redemption of 2004A Bonds, the Trustee shall withdraw an amount from the 2004A Reserve Fund equal to the reduction in the 2004A Reserve Requirement specified in the Written Order of the Issuer delivered in connection with such redemption and transfer such amount to the Redemption Fund; provided, that such withdrawal, if any, shall not exceed the amount of cash on deposit in the 2004A Reserve 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 any cash on deposit in the 2004A Reserve Fund an amount equal to the amount specified in such Written Order. The 2004A Reserve Requirement shall be reduced by the amount of such transfer. The Trustee shall notify the City of such amounts to be transferred. In no event shall the Reserve Surety be drawn upon to make any such transfer.

Use of 2004B Reserve Fund. Except as otherwise provided in the Trust Agreement, , all moneys in the 2004B 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 2004B Bonds; but solely in the event that insufficient moneys are available in the 2004B Interest Fund, the 2004B Principal Fund, or the Redemption Fund for such purpose. Having first satisfied the requirements under the Trust Agreement for the use of Revenues for deposit into the 2004A Principal Fund, 2004A Interest Fund, 2004A Reserve Fund, as well as the 2004B Principal Fund and 2004B Interest Fund, the Trustee shall next deposit in the 2004B Reserve Fund an amount of Revenues which, together with any amounts on deposit in the 2004B Reserve Fund, equal the 2004B Reserve Requirement.
Upon any partial redemption of 2004B Bonds, the Trustee shall withdraw an amount from the 2004B Reserve Fund equal to the reduction in the 2004B Reserve Requirement specified in the Written Order of the Issuer and transfer such amount to the Redemption Fund; provided, that such withdrawal, if any, shall not exceed the amount of cash on deposit in the 2004B Reserve 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 any cash on deposit in the 2004B Reserve Fund an amount equal to the amount specified in such Written Order. The 2004B Reserve Requirement shall be reduced by the amount of such transfer. The Trustee shall notify the City of such amounts to be transferred.
THE ISSUER AND THE CITY HAVE NO OBLIGATION TO REPLENISH THE RESERVE FUNDS EXCEPT TO THE EXTENT THAT DELINQUENT ASSESSMENTS ARE PAID OR PROCEEDS FROM FORECLOSURE SALES ARE REALIZED.

Priority of Lien

The assessments and each installment thereof and any interest and penalties thereon constitute a lien against the parcels on which they were imposed until the same are paid. Such lien is subordinate to all fixed special assessment liens previously imposed upon the same property, but has priority over all private liens and over all fixed special assessment liens which may thereafter be created against the property. Such lien is co-equal to and independent of the lien for general taxes and any lien imposed under the Mello-Roos Community Facilities Act of 1982, as amended.

There are currently no other bonded assessment liens or special taxes on any of the property within the Districts.

Limited Obligation Upon Delinquency

ALL OBLIGATIONS OF THE ISSUER UNDER THE TRUST AGREEMENT AND THE BONDS ARE SPECIAL OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM AND SECURED BY REVENUES AND THE AMOUNTS IN THE RESERVE FUND. THE LOCAL OBLIGATIONS ARE LIMITED OBLIGATION IMPROVEMENT BONDS UNDER SECTION 8769 OF THE LOCAL OBLIGATION STATUTE AND ARE PAYABLE SOLELY FROM AND ARE SECURED SOLELY BY THE ASSESSMENTS AND THE AMOUNTS IN THE LOCAL OBLIGATION REDEMPTION FUND.

THE ISSUER AND THE CITY HAVE NO OBLIGATION TO ADVANCE MONIES TO PAY BOND DEBT SERVICE IN THE EVENT OF DELINQUENT ASSESSMENT INSTALLMENTS. BONDOWNERS SHOULD NOT RELY UPON THE CITY TO ADVANCE MONIES TO THE LOCAL OBLIGATION REDEMPTION FUND. NOTWITHSTANDING THE FOREGOING, THE CITY MAY, AT ITS SOLE OPTION AND IN ITS SOLE DISCRETION ELECT TO ADVANCE AVAILABLE SURPLUS FUNDS OF THE CITY TO PAY FOR ANY DELINQUENT INSTALLMENTS PENDING SALE, REINSTATEMENT, OR REDEMPTION OF ANY DELINQUENT PROPERTY.

Collection of Assessments

Pursuant to the Act and the Local Obligation Statute, installments of principal and interest sufficient to meet annual debt service on the Local Obligations will be billed by the County to the owner of each parcel within the respective District to which the issue of Local Obligations relates and against which there are assessments. Upon receipt by the County and transferral to the City, assessment installments are to be deposited into the Local Obligation Redemption Fund, which shall be held by the City and used to pay principal and interest payments on such issue of Local Obligations as they become due. The assessment installments billed against each parcel each year represent pro rata shares of the total principal and interest coming due that year, based on the percentage which the assessment against that parcel bears to the total of assessments in connection with the financing. Pursuant to the Local Obligation Resolutions, payment of the principal of and interest on each series of Local Obligations is secured by moneys in the respective Local Obligation Redemption Fund. Moneys in each Local Obligation Redemption Fund will be available to the Trustee for payment of principal of and interest on the Bonds.

The City has no obligation to advance funds to a Local Obligation Redemption Fund except to the extent that delinquent assessments are paid or proceeds from foreclosure sales are realized. Additionally, the City has covenanted to cause the institution of judicial foreclosure proceedings following a delinquency, and thereafter to diligently cause prosecution to completion of such foreclosure proceedings upon the lien of delinquent unpaid assessments as set forth herein. See "Covenant to Commence Superior Court Foreclosure" below. The City is not required to bid at the foreclosure sale. The Bonds are a limited obligation of the Issuer and the Issuer has no obligation to advance funds to pay the Bonds, except as provided in the Trust Agreement.

Contra Costa County Tax Loss Reserve

The County and its subsidiary political subdivisions operate under the provisions of Sections 4701 through 4717, inclusive, of the Revenue and Taxation Code of the State of California, commonly referred to as the "Teeter Plan," with respect to property tax collection and disbursement procedures. These sections provide an alternative method of apportioning secured taxes whereby agencies levying taxes through the County tax roll may receive from the County 100% of their taxes at the time they are levied. The County treasury's cash position (from taxes) is insured by a special tax losses reserve fund (the "Tax Losses Reserve Fund") accumulated from delinquent penalties. Pursuant to the Teeter Plan, each taxing entity in the County may draw on the amount of uncollected taxes and assessments credited to its fund, in the same manner as if the amount credited had been collected. The tax losses reserve fund is used exclusively to cover losses occurring in the amount of tax liens as a result of sales of tax-defaulted property. Monies in this fund are derived from delinquent tax penalty collections.

This method of apportioning taxes extends to all assessments collected on the County tax roll. Although a local agency currently receives the total levy for its special assessments without regard to actual collections, the basic legal liability for assessment deficiencies at all times remains with the sponsoring agency and, therefore, the alternative method of tax apportionment only assists the agency in the current financing of the maturing debt service requirements.

The Board of Supervisors may discontinue the procedures under the Teeter Plan altogether, or with respect to any tax or assessment levying agency in the County, if the rate of secured tax and assessment delinquency in that agency in any year exceeds 3% of the total of all taxes and assessments levied on the secured rolls for that agency.

The assessment installments with respect to the Local Obligations will be collected pursuant to the procedures described above. Thus, so long as the County maintains its policy of collecting Assessments pursuant to said procedures and the City meets the Teeter Plan requirements, the City will receive 100% of the annual assessment installments levied without regard to actual collections in the Districts. There is no assurance, however, that the County Board of Supervisors will maintain its policy of apportioning assessments pursuant to the aforementioned procedures. Additionally, in the event of continued default on payment of an assessment, the assessment is often removed from the tax roll for collection proceedings by the City and upon such removal the Teeter Plan no longer is applicable to such parcel.

Covenant to Commence Superior Court Foreclosure

The Local Obligation Statute provides that in the event any assessment or installment thereof or any interest thereon is not paid when due, the City may order the institution of a court action to foreclose the lien of the unpaid assessment and acquire title to the parcel to which the delinquency relates. In such an action, the real property subject to the unpaid assessment may be sold at judicial foreclosure sale. This foreclosure sale procedure is not mandatory, however, the City has covenanted in the Local Obligation Resolutions 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 within one hundred fifty (150) days following the date of such delinquency, and thereafter diligently prosecute, judicial foreclosure proceedings upon the parcel to which such delinquent assessment or installment thereof and interest thereon relates, 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 applicable Local Obligation Redemption Fund sufficient in both time and amount to pay when due scheduled principal of and interest on the Bonds and (ii) the amounts on deposit in the Reserve Fund held under the Trust Agreement 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.

Prior to July 1, 1983, the statutory right of redemption from such a judicial foreclosure sale was limited to a period of one year from the date of sale. Legislation effective July 1, 1983 amended this statutory right of redemption to provide that before notice of sale of the foreclosed parcel can be given following court judgment of foreclosure, a redemption period of 120 days must elapse. Furthermore, if the purchaser at the sale is the judgment creditor (here, the City) an action may be commenced by the delinquent property owner within six months after the date of sale to set aside such sale. The constitutionality of the aforementioned legislation which repeals the one-year redemption period has not been tested and there can be no assurance that, if tested, such legislation will be upheld. In the event such Superior Court foreclosure or foreclosures are necessary, there may be a delay in payments to Owners pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the foreclosure sale; it is also possible that no bid for the purchase of the applicable property would be received at the foreclosure sale. See also "BONDOWNERS' RISKS - Bankruptcy and Foreclosure" and "- Collection of the Assessment" herein.

No Additional Bonds

The Trust Agreement does not authorize the issuance of any additional bonds payable from or secured by a lien and charge upon the Revenues equal to and on a parity with the lien and charge securing the 2004 Bonds.

Refunding Bonds

In the Trust Agreement, the City covenants that it will not cause any Local Obligation to be refunded (in whole or in part) unless the refunding bonds issued to accomplish such refunding are Additional Local Obligations to be acquired by the Authority pursuant to the Trust Agreement.


SERIES A BOND INSURANCE POLICY

Concurrently with the issuance of the 2004A Bonds, ___________________ ("_______________") will issue its Municipal Bond Insurance Policy for the Series 2004A Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on the Series 2004A Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement. No bond insurance will be provided for the Series 2004B Bonds.





[insurance info to come]






THE CAPITAL IMPROVEMENT FINANCING PROGRAMS

The City's Capital Improvement Financing Program 94-1 was adopted by the City and designed to determine and plan the financing of major regional infrastructure improvements required to accommodate the then-impending development of major residential communities within the Districts. The City caused the preparation of a CIFP 94-1 Report dated May 22, 1995 by Stevenson, Porto & Pierce, Inc., Irvine, California. The report evaluated and established the need for specific infrastructure improvements that would be required by the development of the then-anticipated subdivisions within the City and suggested various methods of payment for the facilities. The Local Obligations were issued to finance a portion of the infrastructure improvements identified in the CIFP Report.

Capital Improvement Financing Programs in General. Generally, a capital improvement financing program is the primary tool which sets forth the listing of the major regional infrastructure improvements necessary to accommodate pending growth. As a community grows, the infrastructure servicing the community needs to grow also. Many times the existing infrastructure facilities have the necessary capacity to accommodate the current population but the addition of new development cannot be accepted by the existing facilities. Typically, as development occurs, the subdivider is conditioned to make certain improvement to the infrastructure to deal with the impacts that the subdivision generates. Most of the facilities that a developer constructs are specifically needed by the subdivision to sustain only that development such as in-tract streets, sewer, water and storm drainage. Traffic impacts assigned to the development can necessitate off-tract construction of signals and intersections and are assumed to be subdivision specific items directly related to the growth induced by the development. Major infrastructure needed to accommodate growth such as expanding sewer treatment plant capacity, water storage and distribution, and regional circulation improvements are a result of the added development, however the individual developments, on their own, cannot shoulder the burden to incrementally add to the major infrastructure. Mechanisms have been developed to encourage developers to band together to seek out alternatives for providing the needed upgrading of existing city infrastructure as well as those new facilities that are necessary as growth occurs in the various subdivisions. A capital improvement financing program is the foremost method of assuring that the needed infrastructure will be in place when development occurs and new people move into the community.

By combining the needs of multiple developments based upon the number of units to be constructed a financial base for the payment of fees for the construction of the major regional infrastructure is established and thus a method of repayment of bonds is also established. A capital improvement financing program in itself does nothing more than set forth the details of the improvements to be constructed, the responsibilities of the various entities involved with providing the facilities and the amount of cost attributable to each residential unit in the various subdivisions. The financing tool is often an assessment district which effectively encumbers the properties (individual residential units) on a proportionate share basis for the security of the bond repayment.

The Improvements Financed with Local Obligations. Proceeds of the Local Obligations were used to fund a portion of the CIFP 94-1 Construction Improvements, as shown in Engineer's Reports prepared by the City Engineer, as the engineer of work under the proceedings for levying assessments in the Districts. The improvements consisted generally of roadway improvements, sewer, water and storm drain facilities and related public infrastructure of benefit to property within each respective District. All of the improvements financed with proceeds of the Local Obligations have been completed.


THE ASSESSMENT DISTRICTS

The Districts are located in areas of new home developments within the City. The area in the vicinity of the Districts generally consists of areas of transition from rural land to recently built homes. Like much of the City, the Districts are part of an area which had previously been used for agricultural or grazing purposes and has become interspersed residential development over the last several years. Residential development continues to be strong in the City and homebuilders currently offer new homes for sale in several subdivisions in and outside of certain of the Districts.

Development in the Districts

Property in the Districts subject to assessments for payment of the Local Obligations is planned for _________ residential units, approximately 3,353 of which have been completed. The following table summarizes the status of homebuilding activity in the Districts as of January 2004.


CITY OF BRENTWOOD
Assessment Districts 93-2, 93-3, 94-2, 94-3 and 95-1
Summary of Development – As of January, 2004

Number of
Residential Percent of
Remaining
Lots Assessments
Finished Homes 3,353 78.85
Homes Under Construction 184 4.76
Final Map/Finished Lots 345 9.12
Unimproved Lots 125 2.90
Unsubdivided Property 2 (1) 4.37

TOTAL 100.00

(1) Two large parcels owned by Signature Properties Inc. projected for ______ units.


Zoning and Environmental Review

All of the properties in the Districts are located within the City and zoned as PD-Planned Developments which are site specific and are typically used in large master planned communities. The zoning designation is primarily residential allowing for development with single family homes.

Flood Zones

The majority of the property within the Districts is located in areas designated as Flood Zone C. The area is described as areas of minimal flooding. Properties located in this zone are not required to purchase flood insurance.

Method of Assessment

The Act does not define specific formulas for allocation of project costs among the parcels within each respective District. The Act, however, requires each parcel to be assessed its share of the project costs in accordance with the benefit conferred on each parcel by construction of the Improvements. Assessment spread formulae are typically based on land area, actual or adjusted street frontage, utility service consumption, and traffic generation or a combination thereof. At the time of formation of the Districts, the Chief Engineer of the City, as the initial Engineer of Work for the Districts, provided the assessment spread formula for each District. The assessment spread formula as originally set forth in the Engineer's Report for each District provided for an assessment amount for each large lot parcel in the District, which per-parcel amount was (and, as to the two large parcels not yet subdivided, will be) allocated to the subdivided lots in the Districts as subdivision of the property occurred.

The outstanding principal amount of assessment per single family residence vary in Districts from approximately $7,500 to $10,200 per residential unit. The Assessment for each parcel is secured by the parcel itself. For ratios of assessments to parcel values, see "OWNERSHIP AND VALUE OF PROPERTY WITHIN THE DISTIRCTS – Value to Lien Ratios" below.

The County of Contra Costa and City of Brentwood

Contra Costa County (the "County") was incorporated in 1850 as one of the original 27 counties of the State of California with the City of Martinez as the County Seat. It is one of the nine counties in the San Francisco-Oakland Bay Area. The County covers about 733 square miles and extends from the northeastern shore of the of San Francisco Bay easterly about 20 miles to San Joaquin County. The County is bordered on the south and west by Alameda County and on the north by Suisun and San Pablo Bays. The western and northern shorelines are highly industrialized while the interior sections are suburban/residential, commercial and light industrial. A large part of the interior of the County is served by the Bay Area Rapid Transit District ("BART") which has contributed to the expansion of residential and commercial development. In addition, economic development along the Interstate 680 corridor in the County has been substantial in the cities of Concord, Walnut Creek, and San Ramon. The County had a population of approximately 994,900 as of January 1, 2003, according to the State Department of Finance.

The City is located adjacent and southeast of the City of Antioch, 25 miles northeast of Walnut Creek, 45 miles northeast of San Francisco, and 65 miles southwest of Sacramento. The City of Tracy is located approximately 12 miles to the southeast and Livermore is located roughly 20 miles to the south. The City is situated in the eastern portion of the County, roughly five miles west of the San Joaquin County line. It is situated between the Mount Diablo foothills to the west, Antioch and Oakley to the north, Discovery Bay to the east and Byron to the south.

The City was incorporated in 1948 and up until the 1980's had retained its agricultural orientation. In recent years, new residential subdivisions have transformed the City into a more suburban environment. Land uses in and around the City are characterized by older farming and retail districts (the older retail districts are primarily located in the downtown area of the City) and rapidly expanding residential neighborhoods in the peripheral areas of the City. The City's population nearly doubled between 1996 and 2001 and in several recent years the City was the fastest growing city in California (excluding Corcoran, where increased population is primarily attributable to an increase in correctional facility inmates) by percentage increase in population.

The rapid expansion of nearby cities and communities including Antioch, Pittsburg, Oakley, Discovery Bay, and Livermore fuels local growth for the area. Highway 4 passes through the City extending easterly through the City of Stockton and intersects with Interstate 5 and State Highway 99. Twenty-five miles to the west, Highway 4 connects to the western portion of the County and connects with Interstate 80, connecting the City to the cities of Berkeley, Richmond, Oakland and San Francisco. Interstate 580 is located within 20 minutes of the City. The newly improved Vasco Road links the City to the Interstate 580 corridor and the cities of Livermore, Tracy, Pleasanton, and Dublin.

The State Route 4 Bypass is a planned nine-mile highway that will run along the eastern boundary of the City of Antioch and the western boundary of the City. It will link the City (and other far east county areas) to the City of Livermore and Interstate 580. Upon completion, it will include four lanes and begin at the confluence of State Highways 160 and 4, at the City of Oakley, and extend southward through the City of Brentwood and eventually intersect with Interstate 580. The first phase of Segment II of State Route 4 Bypass, the stretch from Lone Tree Way to Balfour Road was recently completed. Phase one of Segments I and III of the State Route 4 Bypass are planned for 2004. Once the first phase of each segment is constructed, additional phases (widening) will occur based on traffic demand and funding availability. Ultimately, interchanges are planned for Laurel Road, Lone Tree Way, Sand Creek Road, Balfour Road, Marsh Creek Road, and the recently improved Vasco Road. This route will eventually replace Highway 4 as the main City thoroughfare.

The City is also served by bus lines and railroads. Bay Area Rapid Transit (BART) provides a bus service from nearby Antioch connecting to the existing Bay Point BART Station. Despite measures to alleviate traffic problems, traffic congestion is anticipated to become a major constraint to future growth. For more demographic and economic information regarding the City, See "APPENDIX B THE CITY OF BRENTWOOD."


OWNERSHIP AND VALUE OF PROPERTY WITHIN THE DISTRICTS

Ownership of Property

Unpaid assessments do not constitute a personal indebtedness of the owners of the parcels within the Districts and the owners have made no commitment to pay the principal of or interest on the Bonds or to support payment of the Bonds in any manner. There is no assurance that the owners have the ability to pay the assessment installments or that, even if they have the ability, they will choose to pay such installments. An owner may elect to not pay the assessments when due and cannot be legally compelled to do so. Neither the City nor any Bondholder will have the ability at any time to seek payment from the owners of property within the Districts of any assessment or any principal or interest due on the Bonds, or the ability to control who becomes a subsequent owner of any property within the Districts.

The property in the Districts is comprised principally of homes occupied by homeowners, and to a lesser extent, finished lots, some with homes under construction by homebuilders, lots under construction, and unsubdivided land available for development for single family homes. Approximately 3,353 homes have been constructed and sold to homeowners since the Districts were formed, and the remaining land in the Districts is owned by homebuilders. The following table shows the top ten payers of the assessments of the Districts, all of which are homebuilders developing their land or holding it for development.


City of Brentwood
Assessment Districts 93-2, 93-3, 94-2, 94-3 and 95-1
Top 10 Taxpayers


Owner
Assessed
Value
Remaining
Assessment (1) Percent of Total
Assmts (2) Percent
of Top Ten
Assmts (3)
Signature Properties Inc. $4,123,702 $2,308,707 6.72% 31.77%
Western Pacific Housing Inc. 9,829,587 761,260 2.22 10.48
Home Builders Inc. 7,604,800 731,021 2.13 10.06
Pulte Home Corporation 4,868,762 647,543 1.89 8.91
Brookfield Brentwood Lakes LLC 6,694,035 622,644 1.81 8.57
Lafferty Homes at Deer Ridge 6,333,373 616,258 1.79 8.48
Len-Brentwood II LLC 5,517,750 460,285 1.34 6.33
Shea Homes Limited Partnership 2,514,440 366,652 1.07 5.05
KB Home South Bay Inc. 2,952,301 300,361 .87 4.13
Morrison Homes Inc. 2,860,080 217,503 .63 2.99
Greystone Homes Inc. 2,562,852 207,091 .60 2.85
KB Home Inc. 263,337 27,188 .08 .37

(1) All property of the top ten taxpayers is the subject of tentative or final subdivision map approval except for two parcels owned by Signature Properties Inc. planned for _____ residential lots with aggregate remaining assessments of $1,500,496.
(2) Total remaining Districts Assessments $34,348,853.
(3) Total remaining Top Ten Assessments $7,266,515.


Valuation of Property in the Districts

The value of the land within the Districts is a critical factor in determining the investment quality of the 2004 Bonds. If a property owner defaults in the payment of the Assessment, the City's only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Assessments. See "SECURITY AND SOURCES OF PAYMENT FOR THE 2004 BONDS Covenant to Commence Foreclosure" and "BONDOWNERS' RISKS Bankruptcy and Foreclosure." Reductions in District property values due to a downturn in the economy, natural disasters such as earthquakes or floods, stricter land use regulations or other events could have an adverse impact on the security for payment of the Assessments.

The property in the District is comprised of homes occupied by homeowners, homes under construction by homebuilders and, to a lesser extent, lots and unsubdivided raw land planned for residential development. In connection with valuing property in the District, the City has compiled three sources of information: (i) for property which has an assessed valuation which includes a valuation for structural improvements, the City has obtained the 2003-04 County assessed valuation of such property, (ii) the records of the County Recorder to ascertain the sales price for 26 homes which have been completed and sold to homeowners but are listed by the County Assessor on the 2003-04 tax roll as unimproved, and (iii) for certain unsubdivided land and __________________, the City has ordered preparation of an Appraisal Report dated ____________, 2004 (the “Appraisal”) by Seevers Jordan Ziegenmeyer, Rocklin, California, (the “Appraiser”).

Assessed Valuations. In connection with valuing property in the Districts, the City has obtained the 2003-2004 County assessed valuation (the "Assessed Valuation") of the property in the Districts. Due to the recent and ongoing nature of development of homes in the Districts, the County assessed valuations are not in all cases reflective of most current development status, as is the case with certain properties in the Districts. (See “Visual Inspection for Recent Improvements” and “Market Research Data for Recent Sales” following this paragraph). As provided by Article XIII A of the California Constitution, county assessors' assessed values are to reflect market value as of the date the property was last assessed (or 1975, which ever is more recent), increased by a maximum of 2% per year. Properties may be reassessed by the County only upon a change of at least 51% ownership of existing property or upon new construction. The assessed values of parcels in the Districts thus reflect, for undeveloped parcels, the estimate of the County Assessor (the "Assessor") of market value when acquired (or 1975, whichever is later), possibly increased by 2% per year, and for parcels on which construction has occurred since their date of acquisition, the Assessor's estimate of market value as of the time of construction, possibly increased by 2% per year. The actual market value of parcels in the Districts, if sold at foreclosure, may be higher or lower than the Assessor's assessed values, depending upon the date of the Assessor's most recent assessment. The actual fair market value of any parcel can often be more accurately established through an arms-length sale or an appraisal by an independent appraiser.

Visual Inspection for Recent Improvements. Since the Assessed Valuation of the property in the Districts is not reflective of most current development status of some parcels due to recent completions of home construction and ongoing development of homes in the Districts, the City has ordered a visual inspection of the property in the Districts to ascertain, as of early January 2004, the home development status of the various finished lots in the Districts reported to be unimproved by the Assessor for the 2003-04 secured roll. Such visual inspection was performed by a representative from the appraisal firm of Seevers Jordan Ziegenmeyer, Rocklin, California. The visual inspection revealed that 468 homes in the Districts were completed but not reflected on the Assessor's tax roll. Certain of these homes may be merchant homebuilder inventory, however homes in the area typically become subject to a contract for sale to a homeowner soon after they are made available for sale by the builders.

County Recorder Data for Recent Sales. The City has obtained information maintained by the Contra Costa County Recorder to ascertain the sales price for 26 homes which have been completed and sold to homeowners but are listed by the County Assessor on the 2003-04 tax roll as unimproved (due to customary delays in updating County Assessor information on the tax rolls). To obtain this information, the City consulted with Munifinancial, Temecula, California, which entity provided data from the WINN2DATA database from First American Real Estate Solutions LP., a company which compiles and provides information from county recorders on home sales (closings) in various areas, to determine the number of homes which have been completed and sold to homeowners on parcels in the Districts which are listed by the Assessor on the 2003-04 tax roll as unimproved. This data, compiled from the records of the Contra Costa County Recorder, revealed 26 homes (the "Homeowner Homes/Not on Roll") were sold but are not reflected as improved property on the 2003-04 tax roll. This data also provides the sales price, and the City for purposes of estimating the value of these parcels, the City is using the sales prices reflected in the data provided by First American Real Estate Solutions LP. See “Total Value Estimate of All Property” following this paragraph.

Appraisal of Certain Property. The Appraisal sets forth the market value (described below) of ________ parcels in Assessment District ________ which are not yet reflected on the County Assessor's roll as finished lots (the "Appraised Property"). The Appraisal sets forth a value estimate as of ____________, 2004. The Appraiser’s determination of value was for the fee simple estate as of that date, subject to special tax and assessment liens, including the Assessments of the District. The Appraiser reports that the Appraisal was conducted in accordance with appraisal standards and guidelines found in the Uniform Standards of Professional Appraisal Practice and the Appraisal Standards for Land Secured Financing published by the California Debt Advisory Commission.

The information contained herein is a summary only of certain information contained in the Appraisal. Excerpts from the Appraisal are reprinted herein as Appendix A. The information contained herein is qualified in their entirety by the complete Appraisal.

Appraisal Assumptions. In considering the estimates of value evidenced by the Appraisal, it should be noted that the Appraisal is based upon a number of standard and special assumptions which affected the estimate as to value. The Appraiser’s valuation assumes fee simple ownership of the property, free and clear of any liens or encumbrances other than the lien of the Assessment for the District. The value estimates for the finished lots was discounted based on an assumption that all the subject properties are sold to a single buyer.

Value Conclusion. According to the Appraisal and subject to the assumptions and limiting conditions stated therein, the estimated aggregate retail value of two parcels in Assessment District ________ owned by Signature Properties, Inc. and one parcel owned by Morrison Homes, Inc., as of ____________, 2004 is $____________. This valuation was made by the Appraiser at the request of the City due to the fact that the County Assessor records do not yet reflect the value of the parcels as finished lots. The Appraiser's inquiry to the office of the County Assessor revealed that it may take the County up to 18 months after completion of improvements to include the improved value on the County Assessor records. The Appraisal sets forth the Appraiser’s opinion as to value based upon data available as of ____________, 2004. Consequently, it does not reflect any changes to value that might have occurred due to occurrences after the Appraisal was prepared, including homes completed after such date.

A summary of the Appraiser’s valuation determination is shown in the table appearing under the caption “Value to Lien Ratios” below.

Total Value Estimate of All Property

The aggregate property valuation of the property in the District has been compiled by the City using the County Assessed Valuation, the Appraisal, and, as to 26 homes, using market data reflecting sales prices of homes recently completed and sold. The total estimated valuation of all property in the Districts subject to the Assessments is estimated as shown below. The 442 homes shown as “Finished Homes – Recent Sale” show the Assessed Valuation of the land only and does not reflect the recently completed home on each lot, the existence of which has been verified by the Appraiser. Similarly, the Assessed Valuation shown for the “Developer Property” does not include any lot improvements and/or final map status.

City of Brentwood
Assessment Districts 93-2, 93-3, 94-2, 94-3 and 95-1
Summary of Values

No. Resid. Land Assessed Structure Ass’d Other Total
Lots Value Value Valuation Value
Homeowner Property:
Homeowners On Roll 2,885 $ 919,472,261 $ 919,472,261
Homeowners – Not On Roll 26 8,892,000 2) 8,892,000
Finished Homes – Recent Sale 442 37,347,074(3) unavailable n/a 37,347,074
Total – Homeowners 3,353 956,819,335 8,892,000 965,711,335

Developer Property:
Lots Under Development 654 52,263,456(4) n/a 52,263,456
Unsubdivided Property 2 (5) n/a
Total - Developers
TOTAL

(1) Two large parcels owned by Signature Properties Inc. projected for ______ units.
(2) Based on sales price/WINN2DATA - See “Valuation of Property in the Districts” above.
(3) Visual inspection reveals completed homes, but not yet reflected on County Assessor's tax roll; valuation is assessed value of lot prior to home construction.
(4) Assessed land value only; does not include value of lot improvements or homes under construction on the lots.
(5) Appraised valuation by Seevers Jordan Ziegenmeyer.

An Assessment is levied on each parcel within the Districts and only the respective individual parcel is responsible for such Assessment.


The remaining Assessments on property in the Districts owned by Developers is summarized as follows:

City of Brentwood
Brentwood Infrastructure Financing Authority
Property Under Development

No. Parcels/ Remaining Percent of
Units Assessment Districts
Unsubdivided R-1 2 $1,500,496 4.37%
Homes Under Construction 184 1,635,249 4.76
Finished Lots 345 3,133,681 9.12
Unimproved Lots 125 997,088 2.90
Total Property Under Development 7,266,514 21.16
Total District 34,348,853 100.00



Value to Lien Ratios

The aggregate property valuation of the real property within the Districts has been estimated according to the methods described above to be $______________. See “Valuation of Property” above. The principal amount of the outstanding assessments for the Districts is $34,348,853. Consequently, the aggregate value of the real property within the Districts is _________ times the aggregate principal amount of outstanding assessments.

The following table summarizes the value to lien ratios by land use for property in the Districts.
City of Brentwood
Assessment Districts 93-2, 93-3, 94-2, 94-3 and 95-1
Value to Lien Ratios by Land Use Status

No. Resid. Remaining Percent of VtoL
Lots Value Assessment Ass’mts Ratio
Homeowner Property:
Homeowners On Roll 2,885 919,472,261 $22,948,597 66.81 40.0:1
Homeowners – Not On Roll 26 8,892,000 222,170 .65 40.0:1
Finished Homes – Recent Sale 442 37,347,074 (2) 3,911,571 11.39 9.55:1

Developer Property:
Property Under Development 439 52,263,456 (2) 5,003,542 14.57 10.45:1
Unsubdivided Property (1) 2,262,973 6.58

TOTAL 34,348,853 100.00

(1) [Three] large parcels owned by merchant builders projected for ______ single family homes.
(2) Assessed land value only; does not include value of lot improvements, homes under construction or finished homes on the lots.

In comparing the aggregate value of the real property within the Districts and the principal amount of the 2004 Bonds, it should be noted that only the Assessor’s parcel of real property upon which there is a delinquent Assessment can be foreclosed upon. All of the real property within the Districts cannot be foreclosed upon as a whole to pay delinquent Assessments unless all of the property is subject to delinquent Assessments. Individual parcels may be foreclosed upon to pay delinquent Assessments levied against such parcels only. See "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR.

The principal amount of the 2004 Bonds will not be allocated pro-rata among the parcels within the Districts; rather, the annual Assessment installments for the Districts will be billed annually for each parcel within the Districts. Upon sale of developed parcels, the buyer typically acquires the property subject to the unpaid portion of any special taxes and assessments levied against the parcel purchased. Special taxes and assessments are not required to be removed from the property and are not required to be, but may be, paid off in full upon transfer of property or upon development of the property.


Property Tax Status

The City reports that the delinquency rate for taxes and assessments for property in the Districts has been less than 1% since the levy of the Assessments. See also, "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR – Contra Costa County Tax Loss Reserve."


BONDOWNERS' RISKS

The following information should be considered by prospective investors in evaluating the Bonds. However, the following does not purport to be an exhaustive listing of risks and other considerations which may be relevant to investing in the Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of any such risks.

General

Under the provisions of the Local Obligation Statute, assessment installments, from which funds for the payment of annual installments of principal of and interest on the Bonds are derived, will be billed to properties against which there are assessments on the regular property tax bills sent to owners of such properties. Such assessment installments are due and payable, and bear the same penalties and interest for non-payment, as do regular property tax installments. Scheduled Assessment installments are in aggregate amounts sufficient for payment of the Bonds. A property owner cannot pay the county tax collector less than the full amount due on the tax bill, however it is possible to pay assessment installments directly to the City in satisfaction of the obligation to pay that assessment without paying property taxes also then due. It should also be noted that the unwillingness or inability of a property owner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular property tax payments and assessment installment payments in the future.

Under the flow of funds provided for in the Trust Agreement, uncollected assessment installments will first have impact on the 2004B Bonds. Unpaid assessments do not constitute a personal indebtedness of the owners of the parcels within the District and the owners have made no commitment to pay the principal of or interest on the Bonds or to support payment of the Bonds in any manner. Accordingly, in the event of delinquency, proceedings may be conducted only against the real property securing the delinquent assessment. Thus, the value of the real property within the Districts is a critical factor in determining the investment quality of the Bonds. The unpaid assessments are not required to be paid upon sale of property within the Districts. There is no assurance the owners shall be able to pay the assessment installments or that they shall pay such installments even though financially able to do so. See "Owners Not Obligated to Pay Bonds or Assessments" below.

In order to pay debt service on the Bonds, it is necessary that unpaid installments of assessments on land within the District are paid in a timely manner. Should the installments not be paid on time, the Issuer has established a Reserve Fund for each Series of Bonds from the proceeds of the Bonds to cover delinquencies. The assessments are secured by a lien on the parcels within the District and the City has covenanted to institute foreclosure proceedings to sell parcels with delinquent installments for amounts sufficient to cover such delinquent installments in order to obtain funds to pay debt service on the Local Obligations. No reserve account has been established by the City as a source of payment of the Local Obligations.

Failure by owners of the parcels to pay installments of assessments when due, depletion of the Reserve Fund, delay in foreclosure proceedings, or the inability of the City to sell parcels which have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of assessments levied against such parcels may result in the inability of the City to make full or punctual payments of debt service on the Local Obligations and Bondowners would therefore be adversely affected.

Absence of Market for 2004B Bonds

No application has been made for a credit rating on the 2004B Bonds and it is not known whether a credit rating could be secured either now or in the future for the 2004B Bonds. Additionally, payment of the 2004B Bonds is not insured by any bond insurer. There can be no assurance that there will ever be a secondary market for purchase or sale of the 2004B Bonds, and from time to time there may be no market for them, depending upon prevailing market conditions, the financial condition or market position of firms who may make the secondary market and the financial condition and the status of development of the parcels in the District.

Owners Not Obligated to Pay Bonds or Assessments

Unpaid assessments do not constitute a personal indebtedness of the owners of the parcels within the Districts and the owners have made no commitment to pay the principal of or interest on the Bonds or to support payment of the Bonds in any manner. There is no assurance that the owners have the ability to pay the assessment installments or that, even if they have the ability, they will choose to pay such installments. An owner may elect to not pay the assessments when due and cannot be legally compelled to do so. If an owner decides it is not economically feasible to develop or to continue owning its property encumbered by the lien of the assessment, or decides that for any other reason it does not want to retain title to the property, such owner may chose not to pay assessments and to allow the property to be foreclosed. Such a choice may be made due to a decrease in the market value of the property. A foreclosure of the property will result in such owner's interest in the property being transferred to another party. Neither the City nor any Bondholder will have the ability at any time to seek payment from the owners of property within the Districts of any assessment or any principal or interest due on the Bonds, or the ability to control who becomes a subsequent owner of any property within the Districts.

Bankruptcy and Foreclosure

The payment of assessments and the ability of the City to foreclose the lien of a delinquent unpaid assessment, as discussed in "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR - Covenant to Commence Superior Court Foreclosure," may be limited by bankruptcy, insolvency, or other laws generally affecting creditors' rights or by State law relating to judicial foreclosure. In addition, the prosecution of a foreclosure could be delayed due to lengthy local court calendars or procedural delays.

The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally.

Although bankruptcy proceedings should not cause the assessments to become extinguished, bankruptcy of a property owner could result in a delay in prosecuting superior court foreclosure proceedings and could result in delinquent assessment installments not being paid in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds.

Availability of Funds to Pay Delinquent Assessment Installments

Upon receipt of the proceeds from the sale of the Bonds, the City shall initially establish a separate Reserve Fund for each Series of 2004 Bonds in the amount of the "Reserve Requirement," described herein. Amounts available from the Reserve Fund for one Series of the 2004 Bonds are not available to make up a deficiency for the other Series. The Reserve Requirement in the Reserve Funds shall constitute a trust fund for the benefit of the Owners of the respective Series of 2004 Bonds, shall be held by the Trustee, and shall be administered by the Trustee in accordance with and pursuant to the provisions of the Trust Agreement. If a deficiency occurs in the Interest Fund or the Principal Fund for payment of interest on or principal of the respective Series of 2004 Bonds, the Trustee is required to transfer into such funds an amount out of the Reserve Fund needed to pay debt service, however there is no assurance that the balance in the Reserve Fund will always be adequate to pay the debt service on the Bonds in the event of delinquent assessment installments.

If, during the period of delinquency, there are insufficient funds in either Reserve Fund to pay the principal of and interest on the respective Series of 2004 Bonds as it becomes due, a delay may occur in payments of principal and/or interest to the owners of the respective Series of 2004 Bonds.

Limited Obligation Upon Delinquency

The Issuer's obligation to advance monies to pay Bond debt service in the event of delinquent assessment installments shall not exceed the balance in each Reserve Fund. The City has made an election not to be obligated to advance funds of the City for delinquent assessment installments pursuant to Section 8769(b) of the Local Obligation Statute. During the period of delinquency if there are insufficient funds in the Reserve Fund, a delay may occur in payments to Bondowners. Notwithstanding the foregoing, the City may, at its sole option and at its sole discretion, elect to advance available surplus funds of the City to pay for any delinquent assessment installments pending sale, reinstatement or redemption of any delinquent property.

Collection of the Assessment

In order to pay debt service on the Bonds it is necessary that the assessment installments be paid in a timely manner. Should the installments of assessments not be paid on time, funds in the Reserve Fund may be utilized to pay debt service on the Bonds to the extent other funds are not available therefor.

The assessment installment is to be collected in the same manner as ordinary ad valorem real property taxes are collected and, except as provided in the special covenant for foreclosure described herein and in the Local Obligation Statute, is to be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem real property taxes. Pursuant to these procedures, if taxes are unpaid for a period of five years or more, the property may be deeded to the State and then is subject to sale by the County.

Pursuant to the Local Obligation Statute, in the event any delinquency in the payment of the assessment installment occurs, the City may commence an action in superior court to foreclose the lien therefor within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at judicial foreclosure sale. Such judicial foreclosure action is not mandatory. Amendments to the Local Obligation Statute enacted in 1988 and effective January 1, 1989 provide that under certain circumstances property may be sold upon foreclosure at a lesser Minimum Price or without a Minimum Price. "Minimum Price" as used in the Local Obligation Statute is the amount equal to the delinquent installments of principal or interest of the assessment or reassessment, together with all interest penalties, costs, fees, charges and other amounts more fully detailed in the Local Obligation Statute. The court may authorize a sale at less than the Minimum Price if the court determines that sale at less than the Minimum Price will not result in an ultimate loss to the Bondowners or, under certain circumstances, if owners of 75% or more of the outstanding Bonds consent to such sale. However, there can be no assurance that foreclosure proceedings will occur in a timely manner so as to avoid a delay in payments of debt service on the Bonds. The City has covenanted for the benefit of the owners of the Bonds that the City will commence foreclosure upon the occurrence of a delinquency as provided in the Trust Agreement, and thereafter diligently prosecute, an action in the superior court to foreclose the lien of the delinquent installments of the assessment against parcels of land in each District for which such installment has been billed but has not been paid, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale, all as provided in the Trust Agreement. See "SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR - Covenant to Commence Superior Court Foreclosure" above. In the event that sales or foreclosures of property are necessary, there could be a delay in payments to holders of the Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the City of the proceeds of sale if the other sources of payment for the Bonds, as set forth in the Trust Agreement, are depleted. See "BONDOWNERS' RISKS - Bankruptcy and Foreclosure" herein.

Limitations on Enforceability of Remedies

The payment of assessment installments and the ability of the City to foreclose the lien of a delinquent unpaid assessment may be limited by bankruptcy, insolvency, or other laws generally affecting creditors' rights or by the laws of the State relating to judicial foreclosure.

Although bankruptcy proceedings would not cause the assessment liens to become extinguished, bankruptcy of a property owner could result in a delay in foreclosure proceedings. Such delay, particularly in the case of a major landowner in the District, would increase the likelihood of a delay and a default in payment of the principal of and interest on the Bonds, and the possibility of delinquent assessment installments not being paid in full.

Property Values

A land value determined by a county assessor or an appraiser is an opinion with respect to the market value, and is generally based upon a sales comparison approach, which determines the value of the subject property by comparing it to sales of comparable property, adjusted for differences between the subject and the comparable property. No assurance can be given that if a parcel with delinquent assessment installments is foreclosed, any bid will be received for such property or, if a bid is received, that such bid will be equal to the value determined by the county assessor or an appraiser, or that it will be sufficient to pay delinquent installments of unpaid assessments.

Parity Taxes and Special Assessments

The assessment and each installment thereof and any interest and penalties thereon constitute a lien against the parcels on which they were imposed until the same are paid. Such lien is subordinate to all fixed special assessment liens previously imposed upon the same property, but has priority over all private liens and over all fixed special assessment liens which may thereafter be created against the property. Such lien is co-equal to and independent of the lien for general taxes and any lien imposed under the Mello-Roos Community Facilities Act of 1982, as amended.

There is currently no other bonded assessment lien of the City or special tax on any of the property within the Districts which is prior to the lien of the respective District's assessment.

Future Overlapping Indebtedness

The ability of an owner of land within the Districts to pay the assessments could be affected by the existence of other taxes and assessments imposed upon the property subsequent to the date of issuance of the Local Obligations. In addition, other public agencies whose boundaries overlap those of the Districts could, without the consent of the City, and in certain cases without the consent of the owners of the land within the Districts, impose additional taxes or assessment liens on the property within the Districts to finance public improvements to be located inside of or outside of the Districts.

Future Private Indebtedness

At the present time, most of the property in the Districts is undeveloped. In order to develop any improvements on that land, the property owners will need to construct private improvements over and above those which will not be financed with the proceeds of the Local Obligations. The cost of these additional private improvements may increase the private debt for which the land in the Districts or other land or collateral owned by the property owners is security over that contemplated by the Local Obligations, and such increased debt could reduce the ability or desire of the property owners to pay the assessments secured by the land in the Districts. It should be noted however, that the lien of any private financing secured by the land within the Districts would be subordinate to the lien of the assessments.

No Acceleration Provision

The Trust Agreement does not contain a provision allowing for the acceleration of the principal of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Trust Agreement.


CONSTITUTIONAL LIMITATIONS ON TAXATION AND APPROPRIATIONS

Property Tax Rate Limitations - Article XIIIA

On June 6, 1978, the California voters added Article XIIIA to the California Constitution which limits the amount of any ad valorem taxes on real property to one percent (1%) of its full cash value, except that additional ad valorem property taxes may be levied to pay debt service on indebtedness approved prior to July 1, 1978 and (as a result of an amendment to Article XIIIA approved by California voters on June 3, 1986) on bonded indebtedness for the acquisition or improvement of real property which has been approved on or after July 1, 1978, by two-thirds of the voters voting on such indebtedness. Article XIIIA defines full cash value to mean "the county assessor's valuation of real property as shown on the 1975-76 tax bill under full cash value, or thereafter, the appraised value of real property when purchased, newly constructed or a change in ownership has occurred after the 1975 assessment period." This cash value may be increased at a rate not to exceed two percent (2%) per year to account for inflation. The United States Supreme Court has upheld the validity of Article XIIIA in a case decided in June 1992.

Article XIIIA as originally implemented has been amended to permit reduction of the "full cash value" base in the event of declining property values caused by damage, destruction or other factors, to provide that there would be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a disaster and in various other minor or technical ways.

Legislation Implementing Article XIIIA

Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law, local agencies are no longer permitted to levy directly any ad valorem property tax. The 1% property tax is automatically levied annually by the county and distributed according to a formula among using agencies. The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1978. Any special tax to pay voter-approved indebtedness is levied in addition to the basic 1% property tax.

Increases of assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in the "taxing area" based upon their respective "situs." Any such allocation made to a local agency continues as part of its allocation in future years.

Beginning in the 1981-82 fiscal year, assessors in California no longer record property values on tax rolls at the assessed value of 25% of market value which was expressed as $4.00 per $100 of assessed value. All taxable property is now shown at full market value on the tax rolls. Consequently, the basic tax rate is expressed as $1 per $100 of taxable value.

Appropriation Limitation - Article XIIIB

On November 6, 1979, the voters of the State approved Proposition 4, known as the Gann Initiative, which added Article XIIIB. On June 5, 1990, the voters approved Proposition 111, which amended Article XIIIB in certain respects. Under Article XIIIB, as amended, state and local government entities have an annual "appropriations limit" which limits the ability to spend certain moneys which are called "appropriations subject to limitation" (consisting of most tax revenues and certain state subventions, together called "proceeds of taxes" and certain other funds) in an amount higher than the "appropriations limit." Article XIIIB does not affect the appropriation of moneys which are excluded from the definition of "appropriations limit," including debt service on indebtedness existing or authorized as of January 1, 1979, or bonded indebtedness subsequently approved by two-thirds of the voters.

In general terms, the "appropriations limit" is to be based on the adjusted fiscal year 1986-87 appropriations limit, which is traced back through an annual adjustment process to the 1978-79 fiscal year. Annual adjustments reflect changes in California per capita personal income (or, at the City's option, changes in assessed value caused by local nonresidential new construction), population and services provided by these entities. Among other provisions of Article XIIIB, if the revenues of such entities in any fiscal year and the following fiscal year exceed the amounts permitted to be spent in such years, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years.

Property Tax Collection Procedures

In California, property which is subject to ad valorem taxes is classified as "secured" or "unsecured." The "secured roll" is that part of the assessment roll containing state-assessed public utilities' property and property the taxes on which are a lien on real property sufficient, in the opinion of the county assessor, to secure payment of the taxes. A tax levied on unsecured property does not become a lien against such unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens arising pursuant to State law on such secured property, regardless of the time of the creation of the other liens. Secured and unsecured property are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property.

Property taxes on the secured roll are due in two installments, on November 1 and February 1 of each fiscal year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment. In addition property on the secured roll with respect to which taxes are due is delinquent on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1_% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector.

Historically, property taxes are levied for each fiscal year on taxable real and personal property situated in the taxing jurisdiction as of the preceding January 1. A bill enacted in 1983, SB 813 (Statutes of 1983, Chapter 498), however, provided for the supplemental assessment and taxation of property as of the occurrence of a change of ownership or completion of new construction. Thus, this legislation eliminated delays in the realization of increased property taxes from new assessments. As amended, SB 813 provided increased revenue to taxing jurisdictions to the extent that supplemental assessments of new construction or changes of ownership occur subsequent to the January 1 lien date.

Property taxes on the unsecured roll are due on the January 1 lien date and become delinquent, if unpaid on the following August 31. A ten percent (10%) penalty is also attached to delinquent taxes in respect of property on the unsecured roll, and further, an additional penalty of 1-1/2% per month accrues with respect to such taxes beginning the first day of the third month following the delinquency date. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer, (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer, (3) filing a certificate of delinquency for record in the county recorder's office, in order to obtain a lien on certain property of the taxpayer, and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee. The exclusive means of enforcing the payment of delinquent taxes in respect of property on the secured roll is the sale of the property securing the taxes to the State for the amount of taxes which are delinquent.

Proposition 218

On November 5, 1996, the voters of the State approved Proposition 218, the so-called "Right to Vote on Taxes Act." Proposition 218 added Articles XIIIC and XIIID to the State Constitution, which contain a number of provisions affecting the ability to the Authority top levy and collect both existing and future taxes, assessments, fees and charges.

Article XIIID requires that, beginning July 1, 1997, the proceedings for the levy of any assessment by the City (including, if applicable, any increase in such assessment or any supplemental assessment) must be conducted in conformity with the provisions of Section 4 of Article XIIID. Any challenge (including any constitutional challenge) to the proceedings or the assessment or special tax must be brought within 30 days after the date the assessment or special tax was levied. All of the assessments securing the Local Obligations were levied prior to the enactment of Proposition 218.

Article XIIIC removes limitations on the initiative power in matters of local taxes, assessments, fees and charges. Article XIIIC does not define the term "assessment’, and it is unclear whether this term is intended to include assessments (or reassessments) levied under the Act. Furthermore, this provision of Article XIIIC is not, by its terms, restricted in its application to assessments which were established or imposed on or after July 1, 1997. In the case of the unpaid assessments which are pledged as security for payment of the Bonds, the laws of the State provide a mandatory, statutory duty of the City and the County Auditor to post installments on account of the unpaid assessments to the property tax roll of the County each year while any of the Local Obligations are outstanding, commencing with property tax year 1997-1999, in amounts equal to the principal of and interest on the Bonds coming due in the succeeding calendar year. The City believes that the initiative power cannot be used to reduce or repeal the unpaid assessments which are pledged as security for payment of the Bonds or to otherwise interfere with performance of the mandatory, statutory duty of the City and the County Auditor with respect to the unpaid assessments which are pledged as security for payment of the Bonds.

The interpretation and application of Proposition 218 will ultimately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainly the outcome of such determination.


THE ISSUER

The Issuer is a joint exercise of powers authority duly organized and operating pursuant to Article 1 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code, and pursuant to a Joint Exercise of Powers Agreement dated March 14,1995 by and among the City and the Redevelopment Agency of the City of Brentwood, and is qualified to assist in financing projects and certain public improvements and to issue the Bonds under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5, Division 7, Title 1 of the California Government Code (the "Marks-Roos Law.") The Issuer has no taxing power. The Issuer and the City are each separate and distinct legal entities, and the debts and obligations of one such entity are not debts or obligations of the other entity.


CONTINUING DISCLOSURE

The City has covenanted for the benefit of owners of the 2004 Bonds to provide certain financial information and operating data relating to the City by not later than eight months after the end of the City's fiscal year (presently June 30) in each year commencing with its report for the 2003-04 fiscal year (the "Annual Report") and to provide notices of the occurrence of certain enumerated events. The Annual Report will be filed by the Fiscal Agent on behalf of the City with each Nationally Recognized Municipal Securities Information Repository. The notices of material events will be filed by the Fiscal Agent on behalf of the City with the Municipal Securities Rulemaking Board. These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5). The specific nature of the information to be contained in the Annual Report or the notices of material events by the City is summarized in "APPENDIX E - FORM OF CONTINUING DISCLOSURE AGREEMENT."


LEGAL OPINION

The proceedings in connection with the issuance of the 2004 Bonds are subject to the approval as to their legality of Orrick, Herrington & Sutcliffe LLP, San Francisco, California, Bond Counsel for the Issuer. A copy of the legal opinion, certified by the official in whose office the original is filed, will be printed on each 2004 Bond. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. Certain legal matters will be passed upon by Jones Hall, A Professional Law Corporation, San Francisco, California, Disclosure Counsel. Certain matters will be passed upon for the Issuer and the City by the City Attorney of the City. The fees of Bond Counsel and Disclosure Counsel are contingent upon the issuance and delivery of the 2004 Bonds.


TAX EXEMPTION

In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, based on an analysis of existing statutes, regulations, rulings and court decisions and assuming, among other matters, compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code") and is exempt from State of California personal income taxes. Bond Counsel is further of the opinion that interest on the Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes. However, Bond Counsel observes that interest on the Bonds is included in adjusted current earnings when calculating corporate alternative taxable income. A copy of the proposed opinion of Bond Counsel is set forth in APPENDIX D hereto.

The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal tax purposes of interest on obligations such as the Bonds. The Authority has covenanted to comply with certain guidelines designed to assure that interest on the Bonds will not become includable in federal gross income. Failure to comply with these covenants may result in interest on the Bonds being included in federal gross income, possibly from the date of issuance of the Bonds. The opinion of Bond Counsel assumes compliance with these covenants. Bond Counsel has not undertaken to determine, or to inform any person, whether actions taken, or omitted, or whether events occurring, or not occurring, after the date of issuance of the Bonds may affect the tax status of interest on the Bonds.

Bonds purchased, whether at original issuance or otherwise, for an amount greater than their principal amount payable at maturity (or, in some cases, at their earlier call date) ("Premium Bonds") will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax exempt interest received, and a purchaser's basis in a Premium Bond, will be reduced by the amount of amortizable bond premium property allocable to such purchaser. Owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances.

Certain agreements, requirements and procedures contained or referred to in the Trust Agreements and other relevant documents may be changed and certain actions may be taken or not taken, under the circumstances and subject to the terms and conditions set forth in such documents, upon the advice or with the approving opinion of nationally recognized bond counsel. Bond Counsel expresses no opinion as to any Bond or the interest thereon if any such change occurs or action is taken or not taken upon the advice or approval of bond counsel other than Orrick, Herrington & Sutcliffe LLP.

Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from federal gross income, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may otherwise affect an Owner's tax liability. The nature and extent of these other tax consequences will depend upon the Owner's particular tax status and the Owner's other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences caused by the ownership or disposition or the accrual or receipt of interest on, the Bonds.


NO LITIGATION

There is no action, suit, or proceeding known by the Issuer or the City to be pending or threatened at the present time restraining or enjoining the delivery of the Local Obligations or the 2004 Bonds or the collection of assessments levied by the City in the Districts or in any way contesting or affecting the validity of the 2004 Bonds, the Trust Agreement, the Local Obligations, the 2004 Local Obligation Resolutions or any proceedings of the Issuer or the City taken with respect to the execution or delivery thereof.


RATINGS

THE SERIES B BONDS ARE NOT INSURED AND NOT RATED. As to the 2004A Bonds only, Standard & Poor’s Rating Services (“S&P”) and _________________ ("_________") have assigned the ratings shown on the cover page hereof, with the understanding that upon delivery of the 2004A Bonds, a municipal bond insurance policy insuring the payment when due of the principal of and interest on the 2004A Bonds will be issued by _________________________. Such ratings reflect only the view of these rating organizations and an explanation of the significance of such ratings may be obtained only from S&P at the following address: Standard & Poor’s Rating Services, 55 Water Street, New York, New York 10041 and [[Fitch Ratings, One State Street Plaza, New York, New York 10004]]. There is no assurance that any such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by a rating agency, if in the judgment of the rating agency, circumstances so warrant. Any such downward revision or withdrawal of any such rating may have an adverse effect on the market price of the 2004A Bonds. The District assumes no obligation to attempt to maintain any rating on the 2004A Bonds. The Issuer has not made, and does not contemplate making, application to any rating agency for the assignment of a rating to the 2004B Bonds.


UNDERWRITING

RBC Dain Rauscher Inc., the Underwriter of the 2004 Bonds, has agreed to purchase (i) the 2004A Bonds from the Authority at a purchase price of $_______________, being the aggregate principal amount of the 2004A Bonds less an Underwriter's discount of $_______________ and a net original issue discount of $_______________, and (ii) the 2004B Bonds from the Authority at a purchase price of $_______________, being the aggregate principal amount of the 2004B Bonds less an Underwriter's discount of $_______________ and an original issue discount of $_______________. The purchase contract pursuant to which the Underwriter is purchasing the 2004 Bonds provides that the Underwriter will purchase all of each Series of the 2004 Bonds if any are purchased. The obligation of the Underwriter to make such purchase is subject to certain terms and conditions set forth in such contract of purchase.

The public offering prices of the 2004 Bonds may be changed from time to time by the Underwriter. The Underwriter may offer and sell 2004 Bonds to certain dealers and others at a price lower than the offering price stated on the cover page hereof.



MISCELLANEOUS

All quotations from, and summaries and explanations of the Trust Agreement, the Local Obligations, the 2004 Local Obligation Resolutions, the 2004 Bonds, the Act, the Local Obligation Statute or other statutes and documents contained herein do not purport to be complete, and reference is made to said documents and statutes for full and complete statements of their provisions.

This Official Statement is submitted only in connection with the sale of the 2004 Bonds by the Issuer. All estimates, assumptions, statistical information and other statements contained herein, while taken from sources considered reliable, are not guaranteed by the Issuer, the Authority, the City or the Underwriter. The information contained herein should not be construed as representing all conditions affecting the Issuer, the Authority, the City or the 2004 Bonds.

All information contained in this Official Statement pertaining to the Issuer and the City has been furnished by the Issuer and the City and the execution and delivery of this Official Statement has been duly authorized by the Issuer and the City.


BRENTWOOD INFRASTRUCTURE
FINANCING AUTHORITY



By:
Treasurer-Controller


CITY OF BRENTWOOD



By:
Treasurer

APPENDIX A

EXCERPTS FROM THE APPRAISAL














APPENDIX B

SUMMARY OF PRINCIPAL LEGAL DOCUMENTS






APPENDIX C

THE CITY OF BRENTWOOD


The following information concerning the City and surrounding areas are included only for the purpose of supplying general information regarding the community. The Bonds are not a debt of the City, the State, or any of its political subdivisions and neither said City, said State, nor any of its political subdivisions is liable therefor. See the section herein entitled “SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR.”

The City is located in eastern Contra Costa County (the “County”) across the San Francisco Bay approximately 45 miles northeast of San Francisco, 65 miles southwest of Sacramento and 10 miles east of the City of Antioch. The City contains approximately 8.65 square miles in total area and has a population which has increased significantly in recent years. Certain demographic information on the County is presented below under the subcaption “Contra Costa County.”

The City was first settled by farmers in 1878 and was incorporated in 1948. Until the past decade, the City had retained its agricultural orientation. In recent years, new residential subdivisions have transformed the City into a more suburban environment, as evidenced by its rapid population growth. Land uses in and around the City are characterized by older farming districts and an original downtown area, contrasted with rapidly expanding residential neighborhoods in the peripheral areas of the City.

The City enjoys close proximity to major regional employment areas, including San Francisco and the northern Bay Area, Walnut Creek and the San Ramon corridor in Contra Costa County and the Stockton and central San Joaquin Valley area to the east. The City also enjoys close proximity to major regional recreation areas, including Mt. Diablo State Park approximately 25 miles to the west, the Sierra Nevada Mountains 90 miles to the east and the Sacramento Delta waterway to the north. Interstate Highway 680, a 20 minute drive from the City's downtown area, and California Highway 4, which runs through the City, provide convenient access to the City. The City is also served by the Southern Pacific Railroad.

Municipal Government

The City was incorporated in 1948 as a general law city. The City government provides for four council members elected at large to serve four-year overlapping terms, at elections held every two years. The mayor is directly elected to serve a two-year term. A city manager is appointed by the council and mayor to administer daily affairs of the City and to implement policies established by the council.

Municipal functions include police protection, water service, highways and streets, sanitation, youth services, public improvements, parks and recreation services, community development and general administrative services. The City has approximately 110 full-time employees and 10 part-time employees.

Population

The following chart indicates historic population estimates of the City, County and the State of California.


HISTORICAL CITY, COUNTY AND STATE POPULATION DATA


Year City of
Brentwood Contra Costa
County State of
California
1999 20,250 924,400 33,766,000
2000 22,250 955,900 34,207,000
2001 25,350 972,100 34,818,000
2002 29,600 980,900 35,000,000
2003 33,000 994,900 35,591,000

Sources: State of California, Department of Finance, as of January 1.

Effective Buying Income

“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor's income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.”

Effective Buying Income
As of January 1, 1998 through 2002




Year


Area
Total Effective Buying Income (000’s Omitted) Median Household Effective Buying Income

1998 Contra Costa County $ 19,979,564 $48,476
California 524,439,600 36,483
United States 4,399,998,410 34,618

1999 Contra Costa County $ 21,772,470 $53,234
California 590,376,663 39,492
United States 4,877,786,658 37,233

2000 Contra Costa County $ 24,823,698 $60,189
California 652,190,282 44,464
United States 5,230,824,904 39,129

2001 Contra Costa County $ 23,902,953 $56,507
California 650,521,407 43,532
United States 5,303,481,498 38,365

2002 Contra Costa County $ 24,571,388 $54,448
California 647,879,427 42,484
United States 5,340,682,818 38,035

Source: Sales & Marketing Management Survey of Buying Power.

Commercial Activity

Total taxable sales during calendar year 2002 in the City were reported to be $199,316,000, a 2.6% decrease over the total taxable sales of $194,323,000 reported during calendar year 2001. The number of establishments selling merchandise subject to sales tax and the valuation of taxable transactions in the City is presented in the following table.


CITY OF BRENTWOOD
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
(Dollars in Thousands)

Retail Stores Total All Outlets


Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions

1998 235 $111,729 432 $132,601
1999 248 129,608 473 151,789
2000 252 149,485 493 177,716
2001 277 161,364 536 194,323
2002 292 169,876 561 199,316

Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).

Total taxable sales during calendar year 2002 in the County were reported to be $12,159,424,000 a 0.8% decrease over the total taxable sales $12,256,721,000 reported during calendar year 2001. The number of establishments selling merchandise subject to sales tax and the valuation of taxable transactions in the County is presented in the following table.

CONTRA COSTA COUNTY
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
(Dollars in Thousands)

Retail Stores Total All Outlets


Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions

1998 11,375 $7,223,699 23,093 $10,093,690
1999 11,008 7,718,261 22,733 11,114,476
2000 10,791 8,649,419 22,674 12,330,560
2001 10,782 8,942,822 22,609 12,256,721
2002 10,836 9,044,346 22,541 12,159,424

Source: State Board of Equalization.

Employment

Contra Costa County and Alameda County comprise the Oakland Metropolitan Statistical Area. The civilian labor force, employment and unemployment for the Oakland Metropolitan Statistical Area is outlined in the following table.

COUNTY OF CONTRA COSTA
Labor Force, Employment and Unemployment

1998 1999 2000 2001 2002
Civilian Labor Force (1) 1,187,800 1,209,900 1,235,300 1,266,900 1,290,900
Employment 1,141,200 1,170,200 1,199,900 1,215,600 1,211,600
Unemployment 46,600 39,700 35,400 51,300 79,300
Unemployment Rate 3.9% 3.3% 2.9% 4.0% 6.1%
Wage and Salary Employment: (2)
Agriculture 1,900 2,300 3,000 3,000 3,100
Natural Resources and Mining 2,200 2,300 2,400 1,600 1,300
Construction 53,200 60,000 65,500 69,700 65,700
Manufacturing 114,600 112,100 116,500 113,200 102,500
Wholesale Trade 49,800 51,500 53,700 55,400 52,900
Retail Trade 105,700 109,500 112,300 113,300 111,400
Transportation, Warehousing and Utilities 40,100 41,700 41,700 41,300 39,700
Information 34,300 35,000 39,000 37,700 34,900
Finance and Insurance 31,800 32,500 33,000 40,300 42,100
Real Estate and Rental and Leasing 16,900 17,600 17,600 18,300 18,300
Professional and Business Services 151,600 160,200 170,200 159,000 151,200
Educational and Health Services 105,800 109,200 110,700 112,500 118,700
Leisure and Hospitality 70,800 72,400 73,700 77,900 80,300
Other Services 30,500 31,000 31,900 35,800 38,100
Federal Government 20,900 20,400 21,000 19,200 18,300
State Government 43,900 45,600 45,900 47,300 49,000
Local Government 104,100 107,100 109,700 112,300 118,200
Total, All Industries 978,100 1,010,200 1,047,600 1,057,800 1,045,700

(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
Source: State of California Employment Development Department.


Construction

The following tables show a five year summary of the valuation of building permits issued in the City and the County.

CITY OF BRENTWOOD
Building Permit Valuation
(Valuation in Thousands of Dollars)

1998 1999 2000 2001 2002
Permit Valuation
New Single-family $96,407.2 $183,465.3 $177,184.1 $226,709.5 $326,206.8
New Multi-family 0.0 171.2 0.0 0.0 0.0
Res. Alterations/Additions 1,000.6 1,324.7 1,349.6 1,605.0 1,445.0
Total Residential 97,407.8 184,961.2 178,533.7 228,314.1 327,651.8
New Commercial 5,035.2 2,154.1 3,384.7 5,245.6 327,651.8
New Industrial 298.7 0.0 2,322.4 0.0 11,179.7
New Other 2,792.0 2,832.3 5,510.8 6,053.1 2,758.2
Com. Alterations/Additions 1,232.3 1,426.0 1,514.3 546.6 14,932.5
Total Nonresidential 9,358.2 6,412.4 12,732.1 11,845.2 5,122.1
33,992.6
New Dwelling Units
Single Family 606 1,128 953 1,255 1,689
Multiple Family 0 2 0 0 0
TOTAL 606 1,130 953 1,255 1,689

Source: Construction Industry Research Board, Building Permit Summary.

According to the Brentwood General Plan, 28,119 new residential units are planned in the City by the year 2010. This is equal to an average of 1,875 new units per year. Approximately 35.9 percent of these new units are anticipated to be multifamily housing with density of 8.0 units per acre and above.


CONTRA COSTA COUNTY
Building Permit Valuation
(Valuation in Thousands of Dollars)

1998 1999 2000 2001 2002
Permit Valuation
New Single-family $651,643.5 $853,526.4 $919,039.8 $917,084.8 $1,219,607.6
New Multi-family 96,238.9 44,769.4 116,450.8 81,836.2 60,107.3
Res. Alterations/Additions 133,446.1 165,018.5 188,993.9 171,687.4 213,248.0
Total Residential 881,328.4 1,063,314.3 1,224,484.5 1,170,608.4 1,492,962.9
New Commercial 56,959.3 127,938.8 216,485.6 262,716.8 134,262.0
New Industrial 16,710.7 18,192.0 12,652.7 8,832.2 9,316.4
New Other 48,242.2 56,939.7 57,254.3 88,750.3 87,959.0
Com. Alterations/Additions 119,968.3 1,289,763.6 193,878.9 164,672.5 143,627.8
Total Nonresidential 241,880.6 332,044.0 480,271.5 524,971.8 375,165.2

New Dwelling Units
Single Family 3,143 4,081 4,344 4,152 5,076
Multiple Family 1,106 508 1,295 984 729
TOTAL 4,249 4,589 5,639 5,136 5,805

Source: Construction Industry Research Board, Building Permit Summary.

Utilities

Gas and electric service in the City is provided by Pacific Gas & Electric. Telephone service is provided by Pacific Bell. Water is supplied by City wells and the East Bay Municipal Utility District through the City water lines and filtration plant. Sewer service is supplied by the City.

Education

The City is part of the Brentwood and Liberty Union School Districts which provide K 12 public education needs. There is one high school, one junior high school and two elementary schools located in the City.

Near the City are four colleges: Los Medanos Community College in Pittsburg, Diablo Valley Community College in Concord and San Joaquin Delta Community College and University of the Pacific in Stockton.

Transportation

The City, located near the cities of Antioch and Stockton, is in close proximity to a highly developed transportation network. State Highway 4 runs in an east/west direction through the City, intersecting Interstate 680 near Martinez and Interstate 80 in Hercules. To the east, Highway 4 leads to Stockton where it intersects with Interstate 5. The highways provide the City with access to major regional workplace and recreation areas. The City is close to both regional and international airports — Concord Airport, Stockton Airport and Oakland International Airport.

Proximity to Major Urban Centers
Proximity Distance Time
Antioch to Brentwood 10 miles 15 minutes
Concord to Brentwood 26 miles 30 minutes
Oakland to Brentwood 46 miles 50 minutes
Stockton to Brentwood 37 miles 30 minutes
San Francisco to Brentwood 54 miles 80 minutes
Sacramento to Brentwood 75 miles 90 minutes
_______________
Source: City of Brentwood

The City is also served by bus lines and railroads. Bay Area Rapid Transit (“BART”) provides a bus service from Antioch connecting to the existing Concord BART station. BART stations in West Pittsburg and Pittsburg have recently opened, further extending the rapid transit system into the east County area.

Contra Costa County

Situated northeast of San Francisco, Contra Costa County (the “County”) is bounded by San Francisco and San Pablo Bays, the Sacramento River Delta, and by Alameda County on the south. Ranges of hills effectively divide the County into three distinct regions. The western portion, with its access to water, contains much of the County’s heavy industry. The central section is rapidly developing from a suburban area into a major commercial and financial headquarters center. The eastern part is also undergoing substantial change, from a rural, agricultural area, to a suburban region. The County has extensive and varied transportation facilities-ports accessible to ocean-going vessels, railroads, freeways, and rapid transit lines connecting the area with Alameda County and San Francisco.

The County is home to more than 972,100 people and thousands of businesses who are served by 18 cities, 201 special districts and the County. The County also provides municipal services for the 154,100 residents of the unincorporated areas.




APPENDIX D

PROPOSED FORM OF FINAL OPINION OF BOND COUNSEL


APPENDIX E

FORM OF CONTINUING DISCLOSURE AGREEMENT



THIS CONTINUING DISCLOSURE AGREEMENT (the “Disclosure Agreement”) dated as of _____________, 2004, is executed and delivered by the City of Brentwood, California (the “City”) and U.S. Bank National Association, as Trustee and as Dissemination Agent (the “Trustee” and “Dissemination Agent”) in connection with the issuance of (i) $____________ Infrastructure Revenue Refunding Bonds, Series 2004A (the "2004A Bonds"), and (ii) $_____________ Infrastructure Revenue Refunding Bonds, Series 2004B (the "2004B Bonds" and together with the 2004A Bonds, the "Bonds"). The Bonds are issued pursuant to the terms of an Amended and Restated Trust Agreement (the “Trust Agreement”) dated as of January 1, 2004 (the "Trust Agreement") among the Brentwood Infrastructure Financing Authority (the “Issuer”), the City and the "Trustee. The Bonds are being issued to refund the Brentwood Infrastructure Financing Authority’s CIFP 94-1 Infrastructure Revenue Bonds, Series 1999, which were issued to assist the City in the financing and refinancing of certain improvements of benefit to property within the City's Assessment District Nos. Assessment District No. 93-2, 93-3, 94-2, 94-3 and 95-1 (collectively, the "Districts") The Bonds are secured by payments received by the Authority from the City of principal and interest on fifteen series of bonds (the "Local Obligations"), as described in the Official Statement dated _______________, 2004 for the Bonds.

Pursuant to Section 7.06 of the Trust Agreement, the City, Dissemination Agent 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 City, the 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 City, the 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 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 Indenture, 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 City pursuant to, and as described in, Sections 2 and 3 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 City Manager of the City or his or her designee, or such other person as the City shall designate in writing to the Dissemination Agent and Trustee from time to time.

“Dissemination Agent” shall mean U. S. Bank National Association, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the City and which has filed with the Trustee a written acceptance of such designation.

“Listed Events” 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.

“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 a state repository for the purpose of the Rule and recognized as such by the Securities and Exchange Commission. As of the date of this Disclosure Agreement, there is no State Repository.

SECTION 3. Provision of Annual Reports.

(a) The City shall, or upon written direction, shall cause the Dissemination Agent to, not later than 8 months after the end of the City’s fiscal year (which end of the fiscal year is presently June 30), commencing with the report for the 2003-04 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 City’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 City shall provide the Annual Report to the Dissemination Agent and the Trustee (if the Trustee is not the Dissemination Agent). If by such date the Trustee has not received a copy of the Annual Report, the Trustee shall contact the City and the Dissemination Agent to determine if the City is in compliance with the first sentence of this subsection (b). The City 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 City 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.

 The Dissemination Agent shall:

(iv) 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 City, 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 City’s Annual Report shall contain or include by reference the following:

1. A statement of the amounts on deposit in each fund or account established under the Trust Agreement (except the Rebate Fund and the Expense Fund).

2. A statement the number of homes within the City of Brentwood Assessment District Nos. 93-2, 93-3, 94-2, 94-3 and 95-1 for which a building permit has been issued by the City.

3. 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.

4. 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.

5. The audited financial statement of the City 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 City for the preceding Fiscal Year; and provided, further, that in each Annual Report or other filing containing the City’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 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 City 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 City 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 4, the City shall give an officer’s certificate including 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 the debt service reserves, if any, reflecting financial difficulties.
9. Unscheduled draws on credit enhancements reflecting financial difficulties.
10. Substitution of credit or liquidity providers, or their failure to perform.
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 City obtains knowledge of the occurrence of a Listed Event, because of a notice from the Trustee pursuant to subsection (b) or otherwise, the City shall as soon as possible determine if such event would be material under applicable federal securities laws.

(d) If the City has determined that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the City 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 City determines that the Listed Event would not be material under applicable federal securities laws, the City shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence.

(f) If the Dissemination Agent has been instructed by the City 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 City. 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 City’s, Trustee's and Dissemination Agent's obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in fall of all of the Bonds or as to the Trustee and Dissemination Agent, the earlier resignation or removal thereof. If the City'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 City and the original City shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Bonds, the City 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 City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such 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 City 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 U. S. Bank National Association The Dissemination Agent may resign by providing thirty days written notice to the City and the Trustee.

SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the City, Agent and the Trustee may amend this Disclosure, Agreement (and the Trustee and Dissemination Agent shall agree to any amendment so requested by the City provided, neither the Trustee or 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 undertaking, 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 City 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 City. 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 an 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 City from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice; of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Disclosure Agreement, the City shall have no obligation under this 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 City 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 way be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City 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 City 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 Agent shall be entitled to the same protections, limitations from liability and indemnities afforded the Trustee thereunder. The Dissemination Agent and the Trustee shall have only such duties as are specifically set forth in this Disclosure Agreement, and the City 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 defaulting against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the 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 per6rmance 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 City, 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 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 City: City of Brentwood
150 City Park Way
Brentwood, CA 94513
Attention; City Manager
(925) 634-6900
FAX (925) 634-6930

To the City: U.S. Bank National Association





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 City, the Trustee, the Dissemination Agent, the Participating Underwriters, and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any 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.

Date: July 18, 2004


CITY OF BRENTWOOD



By:
City Manager


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 Bonds: Infrastructure Revenue Refunding Bonds, Series 2004A and Series 2004B

Name of Local Agency: City of Brentwood, California

Date of Issuance: July 18, 2004

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 7.06 of the Amended and Restated Trust Agreement dated as of June 1, 2004 that the Annual Report will be filed by _________.


Dated: _____________


U. S. BANK NATIONAL ASSOCIATION,
on behalf of the Local Agency


cc: City of Brentwood



APPENDIX F

THE BOOK ENTRY SYSTEM


DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered bonds registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered Bond will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

The information in this Appendix E concerning The Depository Trust Company ("DTC"), New York, New York, and DTC’s book-entry system has been obtained from DTC and the Authority takes no responsibility for the completeness or accuracy thereof. The Authority cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC.

The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered security certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC’s participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (respectively, "NSCC", "GSCC", "MBSCC", and "EMCC", also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments of principal of, premium, if any, and interest evidenced by the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC (nor its nominee), the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal of, premium, if any, and interest evidenced by the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the County or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered.

In the event that the book-entry system is discontinued as described above, the requirements of the Indenture will apply. The foregoing information concerning DTC concerning and DTC’s book-entry system has been provided by DTC, and neither the Authority or the Trustee take any responsibility for the accuracy thereof.

Neither the Authority or the Underwriter can and do not give any assurances that DTC, the Participants or others will distribute payments of principal, interest or premium, if any, evidenced by the Bonds paid to DTC or its nominee as the registered owner, or will distribute any redemption notices or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. Neither the Authority or the Underwriter is responsible or liable for the failure of DTC or any Participant to make any payment or give any notice to a Beneficial Owner with respect to the Bonds or an error or delay relating thereto.

The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility for the accuracy thereof.

Discontinuance of Book-Entry System. DTC may discontinue providing its services with respect to the Bonds at any time by giving notice to the Trustee and discharging its responsibilities with respect thereto under applicable law or the City may terminate participation in the system of book-entry transfers through DTC or any other securities depository at any time. In the event that the book-entry system is discontinued, the Issuer will execute, and the Trustee will authenticate and make available for delivery, replacement Bonds in the form of registered bonds. See "THE BONDS - Amount and Issuance of the Bonds" above.













APPENDIX G

SPECIMEN MUNICIPAL BOND INSURANCE POLICY




 

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