HomeMy WebLinkAboutRes 03-70 Silver Spur Ranch AD 01-01 CITY OF PALM DESERT
STAFF REPORT
REQUEST: APPROVAL OF A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM DESERT, CALIFORNIA, AUTHORIZING THE
ISSUANCE AND SALE BY THE CITY OF NOT TO EXCEED
$3,030,000 AGGREGATE PRINCIPAL AMOUNT OF ITS SILVER
SPUR RANCH UTILITY UNDERGROUNDING ASSESSMENT
DISTRICT NO. 01-01 LIMITED IMPROVEMENT OBLIGATION
BONDS, SERIES 2003; APPROVING AS TO FORM AND
AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN
DOCUMENTS IN CONNECTION THEREWITH; AND APPROVING
CERTAIN OTHER MATTERS RELATING THERETO
SUBMITTED BY: DENNIS COLEMAN, REDEVELOPMENT
EDEVELOPMENT FINANCE MANAGER
DATE: MAY 22, 2003
CONTENTS: CITY OF PALM DESERT RESOLUTION NO. 03-70
BOND PURCHASE AGREEMENT
CONTINUING DISCLOSURE AGREEMENT
FISCAL AGENT AGREEMENT
Recommendation:
That by minute motion, the City Council approve Resolution No 03jo authorizing the
issuance and sale by the City of not to exceed $3,030,000 aggregate principal amount of
its Silver Spur Ranch Utility Undergrounding Assessment District No. 01-01 Limited
Improvement Obligation Bonds, Series 2003; approving as to form and authorizing the
execution and delivery of certain documents in connection therewith; and approving certain
other matters relating thereto.
Executive Summary:
The attached resolution of the City of Palm Desert will allow staff to take the necessary
steps to issue tax-exempt Limited Obligation Bonds to the Financing Authority for funding
to pay for the Silver Spur Utility Undergrounding Assessment District capital improvements.
Background:
Staff is recommending that City issue a Limited Obligation Bond, not to exceed
$3,030,000. The purpose of this bond is to fund the capital improvements for the
placement of the utilities underground in the Silver Spur Ranch area. This bond will be
sold to the Financing Authority which will issue a bond to be sold to the public.
G:IRDAIDennis ColemanlDA TAIWPIREPORTSI052203.silver spur.assess.wpd
Staff Report
Approval of a Resolution Authorizing Silver Spur Ranch Limited Obligation Bonds
Page 2
May 22, 2003
The funds from the public offering of the Authority Bonds will be used to purchase the
Limited Obligation Bond from the City, which will generate funds for the capital
improvements for the Silver Spur Ranch Utility Undergrounding District. The bond issue
will net$2,565,641 in project funds for the construction of the capital improvements for the
Silver Spur Assessment District.
SUMMARY OF DOCUMENTS TO BE APPROVED:
Fiscal Agent Agreement
The Fiscal Agent Agreement is an agreement between the City and the Fiscal Agent, to
be signed after the bonds have been priced, but prior to the closing. The agreement sets
forth all of the terms and conditions of the Bond issue (e.g., principal amounts, maturity and
redemption schedules, payment, registration and transfer provisions and the form of the
Bonds), the covenants and other obligations of the City to the bondholder (the Authority),
and the role and the duties of the Fiscal Agent. As presented to the City Council, the
agreement is in substantially final form except for final dollar amounts (to be added after
the Bonds have been priced and sold) and except for the addition of provisions relating to
a rating of the bond issue.
Bond Purchase Agreement
The bond purchase agreement is between the Authority and the City. Pursuant to the
agreement, the Authority agrees to purchase bonds from the City, in exchange for funding
to be used for the capital improvements for Silver Spur Ranch. The agreement specifies
the prices and interest rates for the bonds, subject to certain conditions. The agreement
will be executed contingent upon the sale of the Authority Bonds to the Underwriters.
Continuing Disclosure
The Continuing Disclosure Agreement is between the Authority, City and the Dissemination
Agent. This agreement directs the City to provide an Annual Report to the Dissemination
Agent. The Annual Report contains pertinent financial information on the assessment
districts. The Annual Report is sent to state and national repositories so that this
information is available to the bondholders. This mechanism is used to keep bondholders
informed, on an annual basis, of the financial status of the assessment districts.
G:IRDAIDennis CoIemantDATAIWPIREPORTS1052203.silver spur assess.wpd
Staff Report
Approval of a Resolution Authorizing Silver Spur Ranch Limited Obligation Bonds
Page 3
May 22, 2003
The above-mentioned documents are in preliminary stages and the resolutions allow for
staff to make the necessary changes in order to finalize and execute the documents. Staff
is recommending that the City Council approve the above-mentioned resolution,
authorizing the sale and issuance of the limited obligation bond and approving certain
documents.
Submitted by: Department Head:
Dennis M. Coleman David Yr' y
Redevelopment Finance Manager Directo of Redevelopment
DMC:mh
Approval:
Ju 'cCarthy Carlos L. Ort , City Manager
ssista t City Manage , "ede elopment
CITY COUNCIVACTION:
APPROVED DENIED
RECEIVED OTHER
MEETIN,9 DATE 5- _03
AYES: ep L—o P, �cILI, S:PIP5ei f.5 1/1S/Wl
NOES:
ABSENT:
ABFIE: OK h
G:IRDAIDennis ColemanlDATAIWPIREPORTS1052203.silver spur assess.wpd VERIFIED BY
^riginal on File th ity Clerk' s Office
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RESOLUTION NO. 03-70
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT,
CALIFORNIA, AUTHORIZING THE ISSUANCE AND SALE BY THE CITY OF
NOT TO EXCEED $3,030,000 AGGREGATE PRINCIPAL AMOUNT OF ITS
SILVER SPUR RANCH UTILITY UNDERGROUNDING ASSESSMENT
DISTRICT NO. 01-01 LIMITED OBLIGATION IMPROVEMENT BONDS,
SERIES 2003; APPROVING AS TO FORM AND AUTHORIZING THE
EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION
THEREWITH; AND APPROVING CERTAIN OTHER MATTERS RELATING
THERETO
RECITALS:
WHEREAS, on February 13, 2003, the City Council of the City (the "City Council")
adopted Resolution No. 03-17 (the "Resolution of Intention"), relating to the formation of "Silver
Spur Ranch Utility Undergrounding Assessment District No. 01-01" (the "Assessment District")
in connection with the proposed undergrounding conversion of certain overhead electric and
communication facilities in the Silver Spur Ranch area of the City (the "Project") under and
pursuant to the provisions of the Municipal Improvement Act of 1913, as set forth in Division 12
(commencing with Section 10120) of the California Streets and Highways Code; and
WHEREAS, in the Resolution of Intention, the City Council gave notice that serial bonds,
term bonds, or both, would be issued thereunder pursuant to the provisions of the Improvement
Bond Act of 1915, as set forth in Division 10 (commencing with Section 8500) of the California
Streets and Highways Code; and
WHEREAS, after conducting a duly noticed public hearing, the City Council has adopted
Resolution No. 03-42 on April 10, 2003, ordering improvements relating to the Project and
confirming the proposed assessment against parcels within the Assessment District; and
WHEREAS, notice of the recordation of the assessments and of the time within which
assessments were to be paid in cash was duly published and mailed in the manner provided by
law, and the official who has been designated as collection officer for cash payments of such
assessments will file with the City Clerk a list of all assessments which remain unpaid following the
expiration of the 30-day cash collection period (the"Cash Collection Period"); and
WHEREAS, the City Council at this time desires to adopt this Resolution to authorize the
issuance of the bonds, which shall be designated "City of Palm Desert, Silver Spur Ranch Utility
Undergrounding Assessment District No. 01-01, Limited Obligation Improvement Bonds, Series
2003" (the "Bonds") and approve the execution and delivery of certain documents in connection
with such issuance; and
WHEREAS, the City anticipates that the Bonds, upon issuance, will be sold to the Palm
Desert Financing Authority (the "Authority") pursuant to a Bond Purchase Agreement, to be
entered into by and between the City and the Authority; and
WHEREAS, it is anticipated that the Authority will issue bonds (the "Authority Bonds")
pursuant to the Marks-Roos Local Bond Pooling Act of 1985, as set forth in Section 6584 et seq.
of the California Government Code; and
P6401.1031\733673.2 1
WHEREAS, the sale proceeds of the Authority Bonds will be used for the purchase of
the Bonds and other bonds of the City and the Authority Bonds will be secured by payments to
be made on the Bonds and the other bonds of the City so purchased by the Authority;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES
HEREBY RESOLVE, FIND, DECLARE AND ORDER AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and correct.
Section 2. Authorization to Issue Bonds. The City Council approves and authorizes
the issuance and sale of the Bonds to represent assessments remaining unpaid at the
expiration of the Cash Collection Period, subject to the parameters set forth herein below.
Section 3. Fiscal Agent Agreement. The Fiscal Agent Agreement (the "Fiscal Agent
Agreement"), proposed to be entered into by and between the City and the Fiscal Agent (defined
in Section 4 below), in the form presented at this meeting and on file with the City Clerk of the
City (the "City Clerk"), is hereby approved. Subject to Section 6 below, each of the Mayor, the
Mayor Pro Tempore (in the Mayor's absence), any deputy of such officers (each, an "Authorized
Officer"), acting singly, is hereby authorized and directed, for and in the name and on behalf of
the City, to execute and deliver the Fiscal Agent Agreement in substantially said form, with such
additions or changes as the Authorized Officer executing the same may approve (such approval
to be conclusively evidenced by such Authorized Officer's execution and delivery thereof).
Section 4. Appointment of Fiscal Agent. The appointment of BNY Western Trust
Company as fiscal agent (the "Fiscal Agent") under the Fiscal Agent Agreement is hereby
approved.
Section 5. Bond Purchase Agreement. The Bond Purchase Agreement (the
"Purchase Agreement") proposed to be entered into by and between the City and the Authority,
in the form presented at this meeting and on file with the City Clerk, is hereby approved. Each
of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name
and on behalf of the City, to execute and deliver the Purchase Agreement in substantially said
form, with such additions or changes as the Authorized Officer executing the same may approve
(such approval to be conclusively evidenced by such Authorized Officer's execution and delivery
thereof).
Section 6. Terms of Sale of Bonds. Each of the Authorized Officers, acting singly, is
hereby authorized and directed to act on behalf of the City to establish and determine (i) the
aggregate principal amount of the Bonds, which amount shall not exceed $3,030,000; (ii) the
purchase price of the Bonds and the interest rates thereon, provided that the interest rate shall
not exceed 6.5 percent per annum; (iii) the original purchaser's discount with respect to the
Bonds, which shall not exceed 1.5 percent of the principal amount thereof; and (iv) the final
maturity of the Bonds, which shall not be on a date that is later than 39 years from the second
day of September next succeeding 12 months from the dated date of the Bonds. The
authorization and powers delegated to the Authorized Officers by this Section 6 shall be valid for
'a period of 90 days from the date of adoption of this Resolution.
Section 7. Continuing Disclosure Agreement. The Continuing Disclosure Agreement
(the Continuing Disclosure Agreement") relating to the Authority Bonds, proposed to be entered
into by and among the Authority, the City and MuniFinancial, as Dissemination Agent, in the
form presented at this meeting and on file with the City Clerk, is hereby approved. Each of the
P6401.1031\733673.2 2
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Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on
behalf of the City, to execute and deliver the Continuing Disclosure Agreement in substantially
said form, with such additions or changes therein as the Authorized Officer executing the same
may approve (such approval to be conclusively evidenced by such Authorized Officer's
execution and delivery thereof).
Section 8. Other Acts. The officers of the City are hereby authorized and directed,
jointly and severally, to do any and all things and to execute and deliver any and all documents
which they may deem necessary or advisable in order to effectuate the purposes of this
Resolution, the Fiscal Agent Agreement, the Purchase Agreement and the Continuing
Disclosure Agreement, and to assist the Authority with respect to the issuance and sale of the
Authority Bonds, and any such actions previously taken by such officers are hereby ratified and
confirmed.
Section 9. Effective Date. This Resolution shall take effect immediately upon
adoption.
APPROVED and ADOPTED this 22nd day of May, 2003, by the following vote to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
JEAN M. BENSON, MAYOR
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
P6401.1031\733673.2 3
Jones Hall Draft 5/12/03
CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (the "Disclosure Agreement")
dated as of , 2003, is executed and delivered by the City of Palm Desert,
California (the "City"), the Palm Desert Financing Authority (the "Authority") and
Munifinancial, as Dissemination Agent (the "Dissemination Agent") in connection with the
issuance by the Authority of $ Assessment Revenue Bonds, Series 2003 (the
"Bonds"). The Bonds are issued pursuant to the terms of an Trust Indenture (the "Indenture")
dated as of June 1,2003 (the "Indenture") among the Authority,the City and BNY Western Trust
Company, as Trustee. Proceeds of the Bonds will be used by the Authority to purchase the
following assessment local obligations (the "Local Obligations") issued by the City (i)
$ aggregate principal amount of Assessment District No. 94-2 (Sunterrace) Limited
Obligation Refunding Improvement Bonds, Series 2003; $ aggregate principal
amount of Assessment District No. 94-3 (Merano) Limited Obligation Refunding Improvement
Bonds, Series 2003; and $ aggregate principal amount of Silver Spur Ranch Utility
Undergrounding Assessment District No. 01-01 Limited Obligation Improvement Bonds,Series
2003.
The Authority,the City,and the Dissemination Agent 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 Authority 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 Authority acknowledge that the Authority has delegated to the
City and the Dissemination Agent the responsibilities undertaken hereby, and that the
Authority takes no responsibility with respect to any reports,notices or disclosures provided or
required under this Agreement for compliance with the provisions hereof, except to the extent
that the Authority's responsibilities as an issuer of bonds cannot be delegated under the
provisions of the Rule.
SECTION 2. Definitions. In addition to the definitions set forth in the Indenture,
which apply to any capitalised 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.
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"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 Authority from time to time.
"Dissemination Agent" shall mean Munifinancial, Temecula, California, 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 Authority and the City 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 2002-03 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, or cause to be
provided, the Annual Report to the Dissemination Agent. If an entity other than the
Dissemination Agent prepared the Annual Report, the City shall provide a written certification
with each Annual Report furnished to the Dissemination Agent to the effect that such Annual
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Report constitutes the Annual Report required to be furnished by it hereunder. The
Dissemination Agent may conclusively rely upon such certification of the City and shall have
no duty or obligation to review such Annual Report.
(c) If the Dissemination Agent or the City is unable to verify that an Annual Report
has been provided to the Repositories by the date required in subsection (a), the Dissemination
Agent shall send a notice to each Repository in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) determine each year prior to the final date for providing the Annual
Report the name and address of each National Repository and the State
Repository,if any;and
(ii) file a report with the City and the Authority 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 the Reserve Fund established
for each series of Local Obligations.
2. A statement of the number of homes within the City of Palm Desert
Assessment District No. 94-2, Assessment District No. 94-2 and Assessment District No.
01-01 which are delinquent in the payment of the assessment securing (i) Assessment
District No. 94-2 (Sunterrace) Limited Obligation Refunding Improvement Bonds,Series
2003; Assessment District No. 94-3 (Merano) Limited Obligation Refunding
Improvement Bonds, Series 2003; and Silver Spur Ranch Utility Undergrounding
Assessment District No. 01-01 Limited Obligation Improvement Bonds,Series 2003.
3. A statement of the parcels in each of the Districts named in item 2 above
which is delinquent in payment of the assessment of such District for the fiscal year.
4. 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
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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 Authority 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 Authority 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 City promptly notify the Dissemination Agent in writing whether or not to
report the event pursuant to subsection (f) and promptly direct the Dissemination Agent
whether or not to report such event to the Bondholders. In the absence of such direction the
Dissemination Agent shall not report such event unless otherwise required to be reported by
the Dissemination Agent to the Bondholders under the Indenture. The Dissemination Agent
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 of the City with regular responsibility for the administration of matters related to
the Indenture.
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(c) Whenever the City obtains knowledge of the occurrence of a Listed Event,
because of a notice from the Authority 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 pursuant to subsection W.
(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 Indenture.
SECTION 6. Termination of Reporting Obligation. The City'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 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 City shall be the
Dissemination Agent. The Dissemination Agent may resign by providing thirty days written
notice to the City and the Authority.
SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this
Disclosure Agreement, the City and the Authority may amend this Disclosure, Agreement(and
the Authority and Dissemination Agent shall agree to any amendment so requested by the City
provided, neither the Authority or Dissemination Agent shall be obligated to enter into any
such amendment that modifies or increases its duties or obligations hereunder) and any
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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 Indenture for amendments to the Indenture 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 to comply with any provision
of this Disclosure Agreement, the Dissemination Agent, 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
Dissemination Agent have been provided to it or it has been otherwise indemnified to its
satisfaction from any cost, liability, expense or additional charges of the Dissemination Agent
whatsoever, including, without limitation, fees and expenses of its attorneys., or any Holder or
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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
Authority, as the case may be, to comply with its obligations under this Disclosure Agreement.
A default under this Disclosure Agreement shall not be deemed an Event of Default under the
Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of
the City or the Authority to comply with this Disclosure Agreement shall be an action to compel
performance.
SECTION 11. 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. .
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SECTION 12. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
Date: , 2003
PALM DESERT FINANCING AUTHORITY
By:
Chief Administrative Officer
CITY OF PALM DESERT
By:
City Manager
MUNIFINANCIAL,as Dissemination
Agent
By:
Authorized Officer
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EXHIBIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Palm Desert Financing Authority
Name of Bonds: Assessment Revenue Bonds,Series 2003
Name of City: City of Palm Desert,California
Date of Issuance: ,2003
NOTICE IS HEREBY GIVEN that the City of Palm Desert has not provided an Annual
Report with respect to the above-named Bonds.
Dated:
Munifinancial,
on behalf of the City
cc: City of Palm Desert
B-9
CITY OF PALM DESERT
SILVER SPUR RANCH
UTILITY UNDERGROUNDING ASSESSMENT DISTRICT NO. 01-01
LIMITED OBLIGATION IMPROVEMENT BONDS
BOND PURCHASE AGREEMENT
June , 2003
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, California 92260
Attention: City Treasurer
Ladies and Gentlemen:
The Palm Desert Financing Authority (the "Authority"), acting not as a fiduciary or
agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement
(this "Purchase Agreement") with the City of Palm Desert (the "City"), which upon
acceptance will be binding upon the Authority and the City. Attached hereto as Exhibit
A is a Purchase Contract (the "Authority Purchase Contract") by and between the
Authority and Stinson Securities, LLC, as representative of itself and Kinsell, Newcomb
& DeDios, Inc. (together, the "Underwriters"), whereby the Underwriters have agreed to
purchase the Palm Desert Financing Authority Assessment Revenue Bonds Series
2003 (the "Authority Bonds"), from the Authority and the Authority has agreed to sell the
Authority Bonds to the Underwriters. The agreement of the Authority to purchase the
AD 01-01 Bonds (as hereinafter defined) is contingent upon the Underwriters
purchasing the Authority Bonds from the Authority, and upon the City satisfying all of the
requirements hereof and performing all conditions precedent to be performed by the
City pursuant to the Authority Purchase Contract. This offer is made subject to the
City's acceptance by the execution of this Purchase Agreement and its delivery to the
Authority at or before 11:59 P.M., local time, on the date hereof, and, if not so accepted,
will be subject to withdrawal by the Authority upon notice delivered to the City at any
time prior to the acceptance hereof by the City. Under context clearly requires
otherwise, capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the hereinafter-mentioned Fiscal Agent Agreement.
Section 1. Purchase, Sale and Delivery of the AD 01-01 Bonds.
(a) Subject to the terms and conditions and in reliance upon the
representations, warranties and agreements set forth herein, the Authority hereby
agrees to purchase from the City and the City hereby agrees to sell to the Authority all
(but not less than all) of the $ aggregate principal amount of the City of
Palm Desert Silver Spur Ranch Utility Undergrounding Assessment District No. 01-01
Limited Obligation Improvement Bonds, Series 2003 (the "AD 01-01 Bonds"), to be
P6401.1031\733671.1 RWG 5/6/03
dated as of the Closing Date (as hereinafter defined), bearing interest at the rates and
maturing on the dates and in the principal amounts set forth in Exhibit B hereto. The
purchase price for the AD 01-01 Bonds shall be $ (the aggregate principal
amount of the AD 01-01 Bonds, less original issue premium of $ , and less a
purchaser's discount of $ ). From such purchase price, it is agreed that the
Authority shall retain $ to pay Costs of Issuance on behalf of the City. The
maturity schedule and mandatory sinking fund redemption schedule shall be attached
as Exhibit B to this Purchase Agreement. The AD 01-01 Bonds shall be substantially in
the form described in, shall be issued and secured under the provisions of, and subject
to redemption as provided in, the Fiscal Agent Agreement, to be dated as of June 1,
2003 (the "Fiscal Agent Agreement"), by and between the City and BNY Western Trust
Company (the "Fiscal Agent"), and the Improvement Bond Act of 1915, as set forth in
Division 10 (commencing with Section 8500) of the California Streets and Highways
Code (the "1915 Act"). Pursuant to the Fiscal Agent Agreement and the 1915 Act, the
AD 01-01 Bonds shall be secured by assessments levied by the City on its Silver Spur
Ranch Utility Undergrounding Assessment District No. 01-01 ("AD 01-01"), constituting
a first lien and charge upon the real property within AD 01-01 . The net proceeds of the
AD 01-01 Bonds will be used to fund improvements relating the undergounding
conversion of certain overhead electric and communication facilities in the Silver Spur
Ranch area of the City.
(b) Pursuant to the authorization of the Authority, the Underwriters
have distributed copies of the Preliminary Official Statement dated , 2003,
relating to the Authority Bonds, which, together with the cover page, inside cover page
and appendices thereto, is herein called the "Preliminary Official Statement." Contained
in the Preliminary Official Statement are descriptions of AD 01-01 and the AD 01-01
Bonds. By its acceptance of this proposal, the City hereby ratifies the use by the
Underwriters of the Preliminary Official Statement and authorizes the use by the
Underwriters of a final official statement relating to the Authority Bonds (the "Official
Statement") which will consist of the Preliminary Official Statement with such changes
as may be made thereto, with the approval of the Authority and the Underwriters. The
City hereby authorizes and requires the Underwriters to use and promptly distribute, in
connection with the offer and sale of the Authority Bonds, the Preliminary Official
Statement, the Official Statement and any supplement or amendment thereto. The City
further authorizes the Underwriters to use and distribute, in connection with the offer
and sale of the Authority Bonds, the Fiscal Agent Agreement, this Purchase Agreement
and all information contained herein, and all other documents, certificates and
statements furnished by or on behalf of the City to the Underwriters for such purpose in
connection with the transactions contemplated by this Purchase Agreement and the
Authority Purchase Contract.
(c) Except as the City, the Authority and the Underwriters may
otherwise agree, the City will deliver to the Authority and the Underwriters, at the offices
of Richards Watson & Gershon, A Professional Corporation, as bond counsel ("Bond
Counsel") in Los Angeles, California, or at such other location as may be mutually
agreed upon by the Underwriters, the City and the Authority, the documents hereinafter
mentioned and the City will deliver to the Authority, at a location to be designated by the
P6401.1031\733536.1 -2-
Authority, the AD 01-01 Bonds, in definitive form, duly executed by the City and
authenticated by the Paying Agent in the manner provided for in the Fiscal Agent
Agreement, at 8:30 a.m., California time, , 2003 (the "Closing Date"), and the
Authority will accept such delivery and pay or cause to be paid the purchase price of the
AD 01-01 Bonds as set forth in paragraph (a) of this Section by official bank check or
checks, by wire transfer or by other means, in any case payable in federal or other
immediately available funds (such delivery and payment being herein referred to as the
"Closing"). The AD 01-01 Bonds shall be in fully registered form and shall be registered
in the name of the Authority or in accordance with instructions to be supplied to the City
by the Authority at least two (2) business days prior to the Closing Date.
Section 2. Representations, Warranties and Agreements of the City. The City
represents, warrants to, covenants and agrees with, the Authority that:
(a) the City is a municipal corporation duly organized and existing
under the Constitution and the laws of the State of California, and has, and on the
Closing Date will have, full legal right, power and authority to (i) enter into, execute,
deliver and perform its obligations under this Purchase Agreement, and the Continuing
Disclosure Agreement, to be dated as of June 1 , 2003 (the "Continuing Disclosure
Agreement"), by and among the Authority, the City and Munifinancial as the
Dissemination Agent, (ii) issue the AD 01-01 Bonds, and sell and deliver the AD 01-01
Bonds to the Authority pursuant to the Fiscal Agent Agreement and as provided herein,
and (iii) carry out, give effect to and consummate the transactions contemplated by this
Purchase Agreement, the Authority Purchase Contract, the Fiscal Agent Agreement, the
Continuing Disclosure Agreement and the Official Statement.
(b) The City has complied, and will at the Closing Date be in
compliance, in all respects with the Fiscal Agent Agreement, the 1915 Act, this
Purchase Agreement, and the conditions precedent required to be performed by the
City pursuant to the Authority Contract.
(c) The City Council of the City has duly and validly: (i) adopted the
Resolution and approved and authorized the execution and delivery of the AD 01-01
Bonds, this Purchase Agreement, and the Fiscal Agent Agreement and (ii) authorized
and approved the performance by the City of its obligations contained in, and the taking
of any and all action as may be necessary to carry out, give effect to and consummate
the transactions contemplated by, each of such documents.
(d) Except as described in the Preliminary Official Statement, the City
is not, in any respect material to the transactions referred to herein or contemplated
hereby, in breach of or in default under, any law or administrative rule or regulation of
the State of California, the United States of America, or of any department, division,
agency or instrumentality of either thereof, or under any applicable court or
administrative decree or order, or under any loan agreement, note, resolution,
indenture, contract, agreement or other instrument to which the City is a party, and the
performance by the City of its obligations under the AD 01-01 Bonds, the Fiscal Agent
Agreement, this Purchase Agreement, and the Continuing Disclosure Agreement and
P6401.1031\733536.1 -3-
compliance with the provisions of each thereof, or the performance of the conditions
precedent to be performed by the City pursuant to the Authority Purchase Contract, will
not conflict with or constitute a breach of or default under any applicable law or
administrative rule or regulation of the State of California, the United States of America,
or of any department, division, agency or instrumentality of either thereof, or under any
applicable court or administrative decree or order, or under any loan agreement, note,
resolution, indenture, contract, agreement or other instrument to which the City is a
party, in any manner which would materially and adversely affect the performance by
the City of its obligations under the AD 01-01 Bonds, the Fiscal Agent Agreement, this
Purchase Agreement and the Continuing Disclosure Agreement or the performance of
the conditions precedent to be performed by the City pursuant to the Authority Purchase
Contract.
(e) Except as may be required under the "blue sky" or other securities
laws of any jurisdiction, all approvals, consents, authorizations, elections and orders of,
or filings or registrations with, any governmental authority, board, agency or commission
having jurisdiction which would constitute a condition precedent to, or the absence of
which would materially adversely affect, the performance by the City of its obligations
hereunder and under the Fiscal Agent Agreement, the AD 01-01 Bonds and the
Continuing Disclosure Agreement and the performance of the conditions precedent to
be performed by the City pursuant to the Authority Purchase Contract, have been or will
be obtained at the Closing Date and are or will be in full force and effect at the Closing
Date.
(f) The AD 01-01 Bonds and the Fiscal Agent Agreement conform as
to form and tenor to the descriptions thereof contained in the Preliminary Official
Statement.
(g) The AD 01-01 Bonds are payable from the Assessment Revenues
which have been duly and validly authorized pursuant to the 1915 Act and the
Assessment Revenues will be fixed and levied in an amount which, together with other
available funds, is required for the payment of the principal of, and interest on, the AD
01-01 Bonds when due and payable, all as provided in the Fiscal Agent Agreement.
(h) The Fiscal Agent Agreement creates a valid pledge of, first lien
upon and security interest in, the Assessment Revenues and in the moneys in the
Redemption Fund and Reserve Fund established pursuant to the Fiscal Agent
Agreement, on the terms and conditions set forth in the Fiscal Agent Agreement.
(i) The information relating to the AD 01-01 and the AD 01-01 Bonds
contained in the sections entitled "SILVER SPUR RANCH UTILITY
UNDERGROUNDING ASSESSMENT DISTRICT NO. 01-01," insofar as it describes AD
01-01 , is true, correct and complete in all material respects and does not contain any
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
P6401.1031\733536.1 -4-
(j) If after the date of this Purchase Agreement and until the End of the
Underwriting Period (as hereinafter defined), any event shall occur, of which the City
has notice, as a result of which it may be necessary to supplement the Official
Statement in order to make the statements therein, in the light of the circumstances
existing at such time, not misleading, the City shall forthwith notify the Authority and the
Underwriters of any such event of which it has knowledge and, if in the opinion of the
Underwriters, the City or the Authority, such event requires an amendment or
supplement to the Official Statement, the City, at its own expense, will cooperate with
the Authority and the Underwriters to amend or supplement the Official Statement in a
form and manner jointly approved by the City, the Authority and the Underwriters so that
the statements therein as so amended or supplemented will not be misleading in the
light of the circumstances existing at such time. As used herein the term "End of the
Underwriting Period" means the later of such time as (i) the Authority delivers the
Authority Bonds to the Underwriters, or (ii) the Underwriters do not retain, directly or as
a member of an underwriting syndicate, an unsold balance of the Authority Bonds for
sale to the public. Unless the Underwriters give notice in writing to the contrary, the End
of the Underwriting Period shall be deemed to be the Closing Date. Any notice
delivered pursuant to this provision shall be written notice delivered to the City and the
Authority at or prior to the Closing Date, and shall specify a date (other than the Closing
Date) to be deemed the "End of the Underwriting Period."
(k) Except as disclosed in the Preliminary Official Statement, no action,
suit, proceeding, inquiry or investigation, at law or in equity, before or by any court,
regulatory agency or public board or body to which the City is a party and has been
served with a summons or other notice thereof, is pending, or to the knowledge of the
City threatened, in any way affecting the existence of the City or the titles of their
officers to their respective offices or seeking to restrain or to enjoin the issuance, sale or
delivery of the AD 01-01 Bonds or the Authority Bonds, the application of the proceeds
thereof in accordance with the Fiscal Agent Agreement or the Authority Bonds
Indenture, or the collection or application of the Assessment Revenues pledged or to be
pledged to pay the principal of, and interest on, the AD 01-01 Bonds, or the pledge
thereof, or in any way contesting or affecting the validity or enforceability of the AD 01-
01 Bonds, the Authority Bonds, the Fiscal Agent Agreement, the Authority Bonds
Indenture, this Purchase Agreement, the Continuing Disclosure Agreement, or any
action of the City contemplated by any of such documents, or in any way contesting the
completeness or accuracy of the Official Statement or the powers of the City or the
Authority or their authority with respect to the AD 01-01 Bonds, the Authority Bonds, the
Fiscal Agent Agreement, the Authority Indenture, this Purchase Agreement, the
Continuing Disclosure Agreement, or any action of the City or the Authority
contemplated by any of such documents, or which contests the exclusion from gross
income for federal income tax purposes of interest paid on the Authority Bonds or the
exemption of interest paid on the AD 01-01 Bonds, the Authority Bonds from State of
California personal income taxation.
(1) The City will furnish such information, execute such instruments
and take such other action in cooperation with the Authority and the Underwriters as the
Authority or the Underwriters may reasonably request in order for the Underwriters to
P6401.1031\733536.1 -5-
qualify the Authority Bonds for offer and sale under the "blue sky" or other securities
laws and regulations of such states and other jurisdictions of the United States of
America as the Underwriters may designate; provided, however, that the City shall not
be required to register as a dealer or broker of securities or to consent to service of
process or qualify to do business in any jurisdiction where it is not now so subject. It is
understood that such "blue sky" registration is the sole responsibility of the
Underwriters.
(m) Any certificate signed by any authorized officer or employee of the
City authorized to do so shall be deemed a representation and warranty by the City to
the Authority and the Underwriters as to the statements made therein.
(n) The City will apply the proceeds of the AD 01-01 Bonds in
accordance with the Fiscal Agent Agreement.
(o) Until such time as moneys have been set aside in an amount
sufficient to pay all then outstanding AD 01-01 Bonds at maturity or to the date of
redemption if redeemed prior to maturity, plus unpaid interest thereon and premium, if
any, to maturity or to the date of redemption if redeemed prior to maturity, the City will
faithfully perform and abide by all of the covenants, undertakings and provisions
contained in the Fiscal Agent Agreement.
(p) The information in the Preliminary Official Statement relating to the
City and the AD 01-01 Bonds heretofore delivered to the Underwriters is deemed final
by the City as of its date and as of the date hereof, except for the omission of such
information as is permitted to be omitted in accordance with paragraph (b)(I) of Section
240.15c2-12 in Chapter II of Title 17 of the Code of Federal Regulations ("Rule 15c2-
12"). The City hereby covenants and agrees that, within seven (7) business days from
the date hereof, or upon reasonable written notice from the Authority or the
Underwriters within sufficient time to accompany any confirmation requesting payment
from any customers of the Underwriters, the City shall cooperate with the Authority to
enable the Authority to deliver a final printed form of the Official Statement to the
Underwriters in sufficient quantity to comply with Rule 15c2-12 and the applicable rules
of the Municipal Securities Rulemaking Board.
The execution and delivery of this Purchase Agreement by the City shall
constitute a representation to the Authority and the Underwriters that the
representations and warranties contained in this Section 2 are true as of the date
hereof.
Section 3. Conditions to the Obligations of the Authority.
(a) The obligation of the Authority to accept delivery of and pay for the
AD 01-01 Bonds on the Closing Date shall be subject, at the option of the Authority, to
the sale of the Authority Bonds, to the accuracy in all material respects of the
representations and warranties on the part of the City contained herein, to the accuracy
in all material respects of the statements of the officers and other officials of the City
P6401.1031\733536.1 -6-
made in any certificates or other documents furnished pursuant to the provisions hereof
or pursuant to the Authority Purchase Contract, and to the performance by the City of its
obligations to be performed hereunder and the conditions precedent to be performed by
the City under the Authority Purchase Contract at or prior to the Closing Date. The
obligations of the Authority shall be further subject to the satisfaction of the conditions
contained in Section 3 of the Authority Purchase Contract, and such conditions are
incorporated herein and made a part hereof.
(b) If the City or the Authority shall be unable to satisfy the conditions
to the obligations of the Authority to purchase, accept delivery of and pay for the AD 01-
01 Bonds contained in this Purchase Agreement, or if the obligations of the Authority to
purchase, accept delivery of and pay for the AD 01-01 Bonds shall be terminated for
any reason permitted by this Purchase Agreement, this Purchase Agreement shall
terminate and neither the Authority nor the City shall be under any further obligation
hereunder, except that the respective obligations of the City and the Authority set forth
in Section 4 hereof shall continue in full force and effect.
Section 4. Expenses. Whether or not the Authority accepts delivery of and
pays for the AD 01-01 Bonds as set forth herein, it shall be under no obligation to pay,
and the City shall pay or cause to be paid out of the proceeds of the AD 01-01 Bonds or
any other legally available funds of the City, all expenses incidental to the performance
of the City's obligations hereunder, including but not limited to the cost of printing and
delivering the AD 01-01 Bonds to the Authority the fees and disbursements of the
Authority, Bond Counsel, accountants, engineers, appraisers, economic consultants
and any other experts or consultants retained by the City in connection with the
issuance and sale of the AD 01-01 Bonds.
Section 5. Undertakings of the City. The City agrees (a) to inform the
Authority and the Underwriters, from time to time, upon the reasonable request of the
Authority, of the amount then on deposit in the Reserve Fund and (b) to make available
to the Authority, at the expense of the City, sufficient copies of its audited financial
statements, if any, resolutions of its legislative body with respect to the AD 01-01
Bonds, the Fiscal Agent Agreement, the Official Statement, any amendments or
supplements thereto, and other documents relating to the AD 01-01 Bonds and
pertaining to the City or the Authority, to the extent that such documents are publicly
available, as may be reasonably required from time to time for the prompt and efficient
performance by the Authority of its obligations hereunder (except any portion of any
such document which, by contract, is not subject to disclosure).
Section 6. Notices. Any notice or other communication to be given to the City
under this Purchase Agreement may be given by delivering the same in writing to the
City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert, California 92260,
Attention: City Manager; any notice or other communication to be given to the Authority
under this Purchase Agreement may be given by delivering the same in writing to the
Palm Desert Financing Authority 73-510 Fred Waring Drive, Palm Desert, California
92260, Attention: Chief Executive Officer; any notice or other communication to be
given to the Underwriters under this Purchase Agreement may be given by delivering
P6401.1031\733536.1 -7-
I
the same in writing to Stinson Securities, LLC, 55 Francisco, Suite 800, San Francisco,
CA 94133, Attention: Lonnie Odom, and to Kinsell, Newcomb & De Dios, Inc, 462
Stevens Avenue, Suite 308, Solana Beach, California 92075, Attention: Pamela
Newcomb.
Section 7. Third Party Beneficiary. Inasmuch as the Underwriters are
purchasing the Authority Bonds from the Authority and will underwrite and market the
Authority Bonds to investors through a public offering, thereby enabling the issuance
and sale of the Authority Bonds and the AD 01-01 Bonds, the Underwriters are third
party beneficiaries of this Purchase Agreement, and may enforce the same in all
respects in the same manner and to the same extent as it may be enforced by the
Authority.
Section 8. Parties in Interest. This Purchase Agreement is made solely for the
benefit of the City, the Authority and the Underwriters (including any successors or
assignees of the Underwriters) and no other person shall acquire or have any right
hereunder or by virtue hereof.
Section 9. Survival of Representations and Warranties. The representations
and warranties of the City shall not be deemed to have been discharged, satisfied or
otherwise rendered void by reason of the Closing and regardless of any investigations
made by or on behalf of the Authority or the Underwriters (or statements as to the
results of such investigations) concerning such representations and statements of the
City and regardless of delivery of and payment for the AD 01-01 Bonds.
Section 10. Execution in Counterparts. This Purchase Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 11. No Prior Agreements. This Purchase Agreement supersedes and
replaces all prior negotiations, agreements and understandings among the parties
hereto in relation to the sale of AD 01-01 Bonds by the City.
Section 12. Effective Date. This Purchase Agreement shall become effective
and binding upon the respective parties hereto upon the execution of the acceptance
hereof by the City and shall be valid and enforceable as of the time of such acceptance.
P6401.1031\733536.1 -8-
Section 13. Governing Law. The validity, interpretation and performance of this
Purchase Agreement shall be governed by the laws of the State of California.
Very truly yours,
PALM DESERT FINANCING AUTHORITY
By:
Chief Administrative Officer
CITY OF PALM DESERT
By:
City Treasurer
P6401.1031\733536.1 -9-
EXHIBIT A
(AD 01-01 Purchase Agreement)
AUTHORITY PURCHASE CONTRACT
(see attached)
P6401.1031\733536.1 A-1
EXHIBIT B
(AD 01-01 Purchase Agreement)
I. Maturity Schedule
II. Redemption Provisions
A. Optional Redemption
B. Mandatory Sinking Fund Redemption
P6401.1031\733536.1 B-1
FISCAL AGENT AGREEMENT
by and between
CITY OF PALM DESERT
and
BNY WESTERN TRUST COMPANY
as Fiscal Agent
Dated as of June 1, 2003
Relating to
City of Palm Desert
Silver Spur Ranch Utility Undergrounding Assessment District No. 01-01
Limited Obligation Improvement Bonds
Series 2003
P6401.1031\733669.1 RWG DRAFT: 5/6/03
TABLE OF CONTENTS
Page
ARTICLE I AUTHORITY AND DEFINITIONS 2
Section 1.01 Authority for this Agreement 2
Section 1.02 Agreement for Benefits of Bondowners 2
Section 1.03 Definitions 2
ARTICLE II THE BONDS 10
Section 2.01 Principal Amount; Designation 10
Section 2.02 Terms of Bonds 10
Section 2.03 Redemption 11
Section 2.04 Form of Bonds 14
Section 2.05 Execution of Bonds 14
Section 2.06 Transfer of Bonds 14
Section 2.07 Exchange of Bonds 14
Section 2.08 Bond Register 15
Section 2.09 Temporary Bonds 15
Section 2.10 Bonds Mutilated, Lost, Destroyed or Stolen 15
Section 2.11 Special Obligation 16
Section 2.12 Refunding 16
ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS;
ASSESSMENT FUND 16
Section 3.01 Issuance and Delivery of Bonds 16
Section 3.02 Application of Proceeds of Sale of Bonds 16
Section 3.03 [Reserved] 16
Section 3.04 Assessment Fund 16
ARTICLE IV ASSESSMENT REVENUES; REDEMPTION FUND; RESERVE FUND 18
Section 4.01 Pledge of Assessment Revenues 18
Section 4.02 Redemption Fund 19
Section 4.03 Reserve Fund 20
Section 4.04 Improvement Fund 21
ARTICLE V OTHER COVENANTS, REPRESENTATIONS AND DECLARATIONS OF
THE CITY 22
Section 5.01 Punctual Payment 22
Section 5.02 Special Obligation 22
Section 5.03 Extension of Time for Payment 22
P6401.1031\733669.1 i
Section 5.04 Against Encumbrances 22
Section 5.05 Protection of Security and Rights of Owners 22
Section 5.06 Collection of Assessment Revenues 22
Section 5.07 Further Assurances 23
Section 5.08 Tax Covenants 23
Section 5.09 Covenant to Foreclose 23
ARTICLE VI INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS;
LIABILITY OF THE CITY 24
Section 6.01 Deposit and Investment of Moneys in Funds 24
Section 6.02 Rebate Fund; Rebate to United States 25
Section 6.03 Liability of City 26
Section 6.04 Employment of Agents by the City 26
ARTICLE VII THE FISCAL AGENT 26
Section 7.01 Appointment of Fiscal Agent 26
Section 7.02 Liability of Fiscal Agent 27
Section 7.03 Information 28
Section 7.04 Reliance by Fiscal Agent 28
Section 7.05 Compensation; Indemnification 29
Section 7.06 Books and Accounts 29
ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT 29
Section 8.01 Amendments Permitted 29
Section 8.02 Owners' Meetings 30
Section 8.03 Procedure for Amendment with Written Consent of Owners 30
Section 8.04 Disqualified Bonds 31
Section 8.05 Effect of Supplemental Agreement 31
Section 8.06 Endorsement of Replacement of Bonds; Bonds Issued after
Amendments 32
Section 8.07 Amendatory Endorsement of Bonds 32
Section 8.08 Consent of Fiscal Agent 32
Section 8.09. Notice Requirement; Consent of Authority Bond Insurer 32
ARTICLE IX MISCELLANEOUS 32
Section 9.01 Benefits of Agreement Limited to Parties 32
Section 9.02 Successors Deemed Included in All References to Predecessor 33
Section 9.03 Discharge of Agreement 33
Section 9.04 Execution of Documents and Proof of Ownership by Owners 34
Section 9.05 Waiver of Personal Liability 34
Section 9.06 Notices 34
Section 9.07 Severability 35
Section 9.08 Unclaimed Moneys 35
P6401.1031\733669.1 ii
Section 9.09 Applicable Law 35
Section 9.10 Conflict with 1915 Act 35
Section 9.11 Conclusive Evidence of Regularity 35
Section 9.12 Payment on Business Day 35
Section 9.13 Counterparts 36
EXHIBIT A—FORM OF BOND
EXHIBIT B—FORM OF IMPROVEMENT FUND REQUISITION
P6401.1031\733669.1 iii
FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (the"Agreement") is made and entered into as of
June 1, 2003,by and between the City of Palm Desert, California, a municipal corporation(the
"City"), and BNY Western Trust Company, a state banking corporation organized and existing
under the laws of the State of California, as fiscal agent(the"Fiscal Agent").
WITNESSETH:
WHEREAS, on February 13, 2003, the City Council of the City (the "City Council")
adopted Resolution No. 03-17 (the"Resolution of Intention"),relating to the formation of"Silver
Spur Ranch Utility Undergrounding Assessment District No. 01-01" (the "Assessment District")
in connection with the proposed undergrounding conversion of certain overhead electric and
communication facilities in the Silver Spur Ranch area of the City (the "Project") under and
pursuant to the provisions of the Municipal Improvement Act of 1913; and
WHEREAS, in the Resolution of Intention, the City Council gave notice that serial
bonds, term bonds, or both, would be issued thereunder pursuant to the provisions of the
Improvement Bond Act of 1915 (the"1915 Act"); and
WHEREAS, after conducting a duly noticed public hearing, the City Council has adopted
Resolution Nos. 03-18 and 03-_, on February 13, 2002 and April 10, 2003, approving an
assessment engineer's report, ordering improvements relating to the Project and confirming the
proposed assessment against parcels within the Assessment District; and
WHEREAS, notice of the recordation of the assessments and of the time within which
assessments were to be paid in cash was duly published and mailed in the manner provided by
law, and the time so provided for receiving payment of assessments in cash expired, and the
official who has been designated as collection officer for cash payments of such assessments has
filed with the City Clerk a list of all assessments which remained unpaid; and
WHEREAS, on May _, 2003, the City Council further adopted Resolution No. 03-_,
authorizing the City to issue and sell its City of Palm Desert, Silver Spur Ranch Utility
Undergrounding Assessment District No. 01-01, Limited Obligation Improvement Bonds, Series
2003 (the"Bonds"),pursuant to the 1915 Act; and
WHEREAS, the City anticipates that the Bonds, upon issuance, will be sold to the Palm
Desert Financing Authority(the"Authority"), as the initial purchaser thereof; and
WHEREAS, it is further anticipated that the Authority will issue bonds (the "Authority
Bonds") under pursuant to the Marks-Roos Local Bond Pooling Act of 1985, as set forth in
Section 6584 et seq. of the California Government Code; and
P6401.1031\733669.1 1
WHEREAS, the sale proceeds of the Authority Bonds will be use for the purchase of the
Bonds and other bonds of the City and the Authority Bonds will be secured by payments to be
made on the Bonds and the other bonds of the City so purchased by the Authority; and
WHEREAS, all acts and proceedings required by law necessary to make the Bonds, when
executed by the City, authenticated and delivered by the Fiscal Agent and duly issued, the valid,
binding and legal limited obligations of the City, and to constitute this Fiscal Agent Agreement a
valid and binding agreement for the uses and purposes herein set forth in accordance with its
terms, have been done and taken, and the execution and delivery of this Fiscal Agent Agreement
have been in all respects duly authorized.
NOW, THEREFORE, in consideration of the covenants and provisions herein set forth
and for other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged,the parties hereto do hereby agree as follows:
ARTICLE I
AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement . . This Agreement is entered into pursuant
to the provisions of the 1984 Refunding Act and the Resolution.
Section 1.02. Agreement for Benefit of Rondowners. The provisions, covenants and
agreements herein set forth to be performed by or on behalf of the City shall be for the equal
benefit, protection and security of the Owners of the Bonds. All of the Bonds, without regard to
the time or times of their issuance or maturity, shall be of equal rank without preference,priority
or distinction of any of the Bonds over any other thereof, except as expressly provided in or
permitted by this Agreement. The Fiscal Agent and its officers and employees may become the
owner of any of the Bonds with the same rights it would have if it were not Fiscal Agent.
Section 1.03. Definition.. Unless the context otherwise requires, the terms defined in
this Section 1.03 shall, for all purposes of this Agreement, of any Supplemental Agreement, and
of any certificate, opinion or other document herein mentioned, have the meanings herein
specified. All references herein to "Articles," "Sections" and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Agreement, and the words "herein,"
"hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or subdivision hereof.
"Agreement"means this Agreement, as it may be amended or supplemented from time to
time by any Supplemental Agreement entered into pursuant to the provisions hereof.
"Annual Debt Service" means, for each Bond Year, the sum of(a) the interest due on the
OutstandingBonds in such Bond Year, assumingthat the OutstandingBonds are retired as
scheduled, and (b) the principal amount of the Outstanding Bonds scheduled to be paid in such
Bond Year.
P6401.1031\733669.1 2
"Assessment District" means the City's Silver Spur Utility Underground Assessment
District No. 01-01.
"Assessment Fund" means the fund by that name established and maintained by the
Fiscal Agent pursuant to Section 3.04(a).
"Assessment Prepayment Account" means the account by that name in the Assessment
Fund established and maintained by the Fiscal Agent pursuant to Section 3.04(a).
"Assessment Revenues" means the revenues received by the City in each Fiscal Year
from the collection of the annual installments of the unpaid Assessments and proceeds from the
sale of property for delinquent Assessment installments.
"Assessments"means the unpaid assessments levied on properties within the Assessment
District which secure the payment of Debt Service.
"Authorized Officer" means any officer or employee of the City authorized by the City
Council or by an Authorized Officer to undertake the action referenced in this Agreement as
required to be undertaken by an Authorized Officer.
"Authority"means the Palm Desert Financing Authority.
"Authority Bonds" means the Palm Desert Financing Authority Assessment Revenue
Bonds Series 2003, or such other bonds to be issued by the Authority, which bonds will be
secured, in part,by the payments on the Bonds.
"Authority Bonds Tndenture" means the indenture (or similar instrument) pursuant to
which the Authority Bonds are issued.
"Authority Bonds Insurer" means the issuer of the municipal bond insurance policy, if
any, then insuring the Authority Bonds.
"Authority Bonds Tnistee" means the banking institution or trust company appointment
by the Authority to act as trustee for the Authority pursuant to the Authority Bonds Indenture.
"Bond Counsel" means the law firm of Richards, Watson & Gershon, A Professional
Corporation, Los Angeles, California, or another firm or attorney of favorable reputation in the
field of municipal bond law.
"Bond Year" means the period beginning on the Closing Date and ending on September
2, 2004 and thereafter the period beginning on each September 3 and ending on the following
September 2.
"Bonds" means the City of Palm Desert, Silver Spur Utility Undergounding Assessment
District No. 01-01 Limited Obligation Improvement Bonds, Series 2003, at any time Outstanding
under this Agreement.
P6401.1031\733669.1 3
"Business Day" means any day other than (a) a Saturday or a Sunday or (b) a day on
which banking institutions in the State of California are authorized or obligated by law or
executive order to be closed.
"City"means the City of Palm Desert.
"City Council"means the City Council of the City.
"Closing Date" means the date upon which there is an exchange of the Bonds for the
proceeds representing payment of the purchase price of the Bonds by (or on behalf of) the
Authority.
"Code" means the Internal Revenue Code of 1986 as in effect on the date of original
issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply
to obligations issued on the date of original issuance of the Bonds, together with regulations
promulgated, and official public guidance published,under the Code.
"Costs of Issuance" means all expenses incident to the issuance of the Bonds including,
but not limited to, any bond counsel, financial advisors, underwriters, certified public
accountants, and rating agency fees,printing and advertising costs, filing and recording fees, City
administrative expenses, and the charges of the Fiscal Agent, and the costs of issuance of the
Authority Bonds that are allocable to the Bonds.
"County"means Riverside County, California.
"Debt Service" means the amount of interest and principal payable on the Bonds
scheduled to be paid during the period of computation, excluding amounts payable during such
period which relate to principal of the Bonds which are scheduled to be retired and paid before
the beginning of such period.
"Federal Securities" means any of the following which at the time of investment are
determined by the City to be legal investments under the laws of the State of California for the
moneys proposed to be invested therein:
(i) Cash; and
(ii) Direct general obligations of the United States of America (including
obligations issued or held in book entry form on the books of the Department of the Treasury of
the United States of America), or obligations, the payment of principal of and interest on which
is unconditionally guaranteed by the United States of America.
"Fiscal Agent" means BNY Western Trust Company, the Fiscal Agent appointed by the
City, acting as an independent fiscal agent with the duties and powers herein provided, its
successors and assigns, and any other corporation or association which may at any time be
substituted in its place, as provided in Section 7.01 hereof
P6401.1031\733669.1 4
•
"Fiscal Year" means the twelve-month period extending from July 1 in a calendar year to
June 30 of the succeeding year, both dates inclusive, or any other twelve-month period selected
by the City as its official fiscal year period.
"Improvement Fund" means the fund by that name established and maintained by the
Fiscal Agent pursuant to Section 4.04 hereof.
"independent Financial Consultant" means a firm of certified public accountants, a
financial consulting firm, a consulting engineering firm or an engineer which is not an employee
of,or otherwise controlled by, the City.
"Information Services" means Financial Information, Incorporated's "Daily Called Bond
Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor;
Mergent's "Municipal and Government," 5250 77 Center Drive, Suite 150, Charlotte,NC 28217,
Attention: Called Bonds Department; and Kenny S&P, 55 Water Street, 45th Floor, New York,
New York 10041, Attention: Notification Department; 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 City may indicate in writing
to the Fiscal Agent.
"Interest Payment Dates" means March 2 and September 2 of each year, commencing
March 2, 2004.
"Investment Earnings" means all interest earned and any gains and losses on the
investment of moneys in any fund or account created by this Agreement excluding interest earned
and gains and losses on the investment of moneys in the Rebate Fund.
"Maximum Annual Debt Service," means the amount determined by the City to be the
largest Annual Debt Service for any Bond Year after the calculation is made through the final
maturity date of any Outstanding Bonds.
"Moody's"shall mean Moody's Investors Service, its successors and assigns.
"19R4 Refilnding Act" means the Refunding Act of 1984 for 1915 Improvement Act
Bonds, as set forth in Division 11.5 (commencing with Section 9500) of the California Streets
and Highways Code.
"1913 Act" means the Municipal Improvement Act of 1913, as set forth in Division 12
(commencing with Section 10120)of the California Streets and Highways Code
"191 5 Act" means the Improvement Bond Act of 1915, as set forth in Division 10
(commencing with Section 8500) of the California Streets and Highways Code.
"Officer's Certificate" means a written certificate of the City signed by an Authorized
Officer of the City.
P6401.1031\733669.1 5
"Outstanding," when used as of any particular time with reference to the Bonds, means
(subject to the provisions of Section 8.04 hereof) all Bonds except:
(i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the
Fiscal Agent for cancellation;
(ii) Bonds called for redemption which, for the reasons specified in Section
2.03 (F) hereof, are no longer entitled to any benefit under this Agreement other than the right to
receive payment of the redemption price therefor;
(iii) Bonds paid or deemed to have been paid within the meaning of Section 9.03
hereof; and
(iv) Bonds in lieu of or in substitution for which other Bonds shall have been
authorized, executed, issued and delivered by the City and authenticated by the Fiscal Agent
pursuant to this Agreement or any Supplemental Agreement.
"Owner" or "Bondowner" means any person who shall be the registered owner of any
Outstanding Bond.
"Permitted Tnvestments" means any of the following that at the time of investment are
legal investments under the laws of the State of California for the moneys proposed to be
invested therein:
(a) Direct obligations of the United States (including obligations issued or
held in book-entry form on the books of the Department of the Treasury, and CATS and TIGRS)
or obligations the principal of and interest on which are unconditionally guaranteed by the United
States.
(b) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such obligations are backed by
the full faith and credit of the United States (stripped securities are only permitted if they have
been stripped by the agency itself):
1. U.S. Export-Import Bank("Eximbank")
Direct obligations or fully guaranteed certificates of beneficial ownership
2. Farmers Home Administration("FmHA")
Certificates of beneficial ownership
3. Federal Financing Bank
4. Federal Housing Administration Debentures ("FHA")
5. General Services Administration
Participation certificates
P6401.1031\733669.1 6
6. Government National Mortgage Association("GNMA")
GNMA-guaranteed mortgage-backed bonds
GNMA- guaranteed pass-through obligations
(participation certificates) (not acceptable for certain cash-flow
sensitive issues)
7. United States Maritime Administration
Guaranteed Title XI financing
8. United States Department of Housing and Urban Development
Project Notes
Local Authority Bonds
New Communities Debentures
United States government guaranteed debentures
United States Public Housing Notes and Bonds
United States government guaranteed public housing notes and
bonds
(c) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit United States government agencies
(stripped securities are only permitted if they have been stripped by the agency itself):
1. Federal Home Loan Bank System
Senior debt obligations
2. Federal Home Loan Mortgage Corporation("FHLMC")
Participation Certificates
Senior debt obligations
3. Federal National Mortgage Association("FNMA")
Mortgage-backed securities and senior debt obligations
4. Student Loan Marketing Association("SLMA")
Senior debt obligations
5. Resolution Funding Corporation obligations
6. Farm Credit System
Consolidated system-wide bonds and notes
(d) Money market funds registered under the Federal Investment Company
Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a
rating by S&P of "AAAm-G," "AAA-m" or "AA-m" and if rated by Moody's rated "Aaa,"
"Aal"or"Aa2,"including funds for which the Fiscal Agent or any of its affiliates (including any
holding company, subsidiaries, or other affiliates) provides investment advisory or other
management services,provided such funds satisfy the criteria herein contained.
P6401.1031\733669.1 7
(e) Certificates of deposit secured at all times by collateral described in (a)
and/or (b) above. Such certificates must be issued by commercial banks (including affiliates of
the Fiscal Agent), savings and loan associations or mutual savings banks. The collateral must be
held by a third party and the bondholders must have a perfected first security interest in the
collateral.
(f) Certificates of deposit, savings accounts, deposit accounts or money
market
ar et deposits (including those of the Fiscal Agent and its affiliates) which are fully insured by
FDIC, including BIF and SAIF.
(g) Investment agreements, including guaranteed investment contracts,
forward purchase agreements and reserve fund put agreements acceptable to the Authority Bond
Insurer.
(h) Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's
and"A-1"or better by S&P.
(i) Bonds or notes issued by any state or municipality which are rated by
Moody's and S&P in one of the two highest rating categories assigned by such agencies.
(j) Federal funds or bankers acceptances with a maximum term of one year of
any bank (including those of the Fiscal Agent and its affiliates) which has an unsecured,
uninsured and unguaranteed obligation rating of"Prime - 1" or "A3" or better by Moody's and
"A-1"or"A"or better by S&P.
(k) Repurchase agreements for 30 days or less must follow the following
criteria; provided that repurchase agreements which exceed 30 days must be acceptable to the
Authority Bond Insurer. Repurchase agreements which provide for the transfer of securities from
a dealer bank or securities firm (seller/borrower) to a municipal entity (buyer/lender), and the
transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement
that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in
exchange for the securities at a specified date, and
1. Repurchase agreements must be between the municipal entity and a dealer
bank or securities firm
A. Primary dealers on the Federal Reserve reporting dealer list which
are rated"A"or better by S&P and Moody's, or
B. Banks rated"A"or above by S&P and Moody's.
2. The written repurchase agreements contract must include the following:
A. Securities which are acceptable for transfer are:
(1) Direct United States governments, or
(2) Federal agencies backed by the full faith and credit of the
United States government(and FNMA&FHLMC)
P6401.1031\733669.1 8
B. The term of a repurchase agreement may be up to 30 days
C. The collateral must be delivered to the City,the Fiscal Agent(if the
Fiscal Agent is not supplying the collateral) or third party acting as
agent for the Fiscal Agent (if the Fiscal Agent is supplying the
collateral) before/simultaneous with payment (perfection by
possession of certificated securities).
D. Valuation of Collateral
(1) The securities must be valued weekly, marked-to-market at
current market price plus accrued interest
(2) The value of collateral must be equal to 104% of the
amount of cash transferred by the municipal entity to the
dealer bank or security firm under the repo plus accrued
interest. If the value of securities held as collateral slips
below 104% of the value of the cash transferred by
municipality, then additional cash and/or acceptable
securities must be transferred. If however, the securities
used as collateral are FNMA or FHLMC, then the value of
collateral must equal 105%.
3. A legal opinion must be delivered to the municipal entity to the effect that
the repurchase agreement meets guidelines under state law for legal
investment of public funds.
(1) Any state administered pool investment fund in which the City is statutorily
permitted or required to invest will be deemed a permitted investment, including, but not limited
to the Local Agency Investment Fund in the treasury of the State.
"Principal Office" means the office of the Fiscal Agent in Los Angeles, California, at
which at any particular time corporate trust business shall be administered, or such other office as
the Fiscal Agent shall designate.
"Project" means the improvements described in that certain Engineer's Report prepared
by Municial, as modified from time to time, approved by Resolution No. 03-18 and Resolution
No. 03-_of the City Council, adopted on February 13, 2002 and April 10, 2003,respectively, as
may be modified from time to time in accordance with the 1913 Act.
"Rebate Fund"means the fund by that name established pursuant to Section 6.02.
"Record Date" means the fifteenth (15th) day of the month next preceding the applicable
Interest Payment Date whether or not such day is a Business Day.
"Redemption Fund"means the fund by that name established pursuant to Section 4.02(a).
"Registration Books" means the records maintained by the Fiscal Agent pursuant to
P6401.1031\733669.1 9
Section 2.08 hereof for the registration and transfer of ownership of the Bonds.
"Reserve Fund" means the fund by that name established and maintained by the Fiscal
Agent pursuant to Section 4.03(a).
"Reserve Requirement"means on any date in any Bond Year the least of(i) 10 percent of
the proceeds of the sale of the Bonds (within the meaning of the Code), (ii) Maximum Annual
Debt Service; or (iii) 125 percent of average Annual Debt Service on the Bonds, as determined
by the City.
"Resolution" means Resolution No. 03- of the City Council, referred to in the recitals
hereof.
"S&P" means Standard & Poor's Ratings Services, a division of the McGraw gHill
Companies, Inc., and its successors and assigns.
"Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th
Floor, New York, New York, 10041, Attn: Call Notification Department, Fax (212) 855-7232;
or, in accordance with then current guidelines of the Securities and Exchange Commission, such
other securities depositaries, or no such depositaries, as the City ep may designate in writing to the
Fiscal Agent.
"State"means the State of California.
"Supplemental Agreement" means a Supplemental Agreement entered into by the City
and the Fiscal Agent for the purpose of modifying or amending this Agreement or the rights and
obligations of the City and the Owners pursuant to Section 8.01 hereof.
"Tax Certificate"means the certificate (or similar instrument) delivered by the City upon
the delivery of the Bonds relating to Section 148 of the Code, or any functionally similar
replacement certificate.
ARTICLE II
THE BONDS
Section 2.01. Principal Amount; Designation. The Bonds in the aggregate principal
amount of $ are hereby authorized to be issued by the City for the Assessment
District under and subject to the terms of the Resolutions, this Agreement, the 1915 Act and
other applicable laws of the State. The Bonds shall be designated "City of Palm Desert, Silver
Spur Utility Undergrounding Assessment District No. 01-01, Limited Obligation Improvement
Bonds, Series 2003,"and shall be secured by the Assessments.
Section 2.02. Terms of Bonds. (a) The Bonds. The Bonds shall be issued as fully
registered bonds, without coupons, in the denominations of $5,000 or any integral multiple
P6401.1031\733669.1 10
thereof. The Bonds shall be lettered and numbered in a customary manner as determined by the
City. The Bonds shall be dated the closing date.
(b) Maturities. The Bonds shall mature and become payable on September 2 of each
year, as follows:
Maturity Date Principal Interest Maturity Date Principal Interest
(September 2) Amount Rate (September 2) Amount Rate
(c) Interest. The Bonds shall bear interest at the rates set forth in subsection (b)
above which shall be payable on the Interest Payment Dates in each year. Interest shall be
calculated on the basis of a 360-day year composed of twelve 30-day months. Each Bond shall
bear interest from the Interest Payment Date next preceding the date of authentication thereof
unless (i) it is authenticated after a Record Date and before the close of business on the next
Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or
(ii) it is authenticated on or before the Record Date preceding the first Interest Payment Date, in
which event it shall bear interest from the Closing Date; provided, however, that if at the time of
authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the
Interest Payment Date to which interest has previously been paid or made available for payment
thereon or from the Closing Date, if no interest has previously been paid or made available for
payment thereon.
(d) Method of Payment. Interest on the Bonds is payable by check of the Fiscal Agent
mailed by first class mail, postage prepaid, on each Interest Payment Date, until the principal
amount of a Bond has been paid or made available for payment, to the registered Owner thereof
at such registered Owner's address as it appears on the Registration Books at the close of
business on the Record Date preceding the Interest Payment Date or by wire transfer made on
such Interest Payment Date upon written instructions of any owner of $500,000 or more in
aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the applicable Record
Date. The principal of the Bonds and any premium on the Bonds are payable in lawful money of
the United States of America upon surrender of such Bonds at the Principal Office of the Fiscal
Agent. All Bonds paid by the Fiscal Agent pursuant to this subsection shall be canceled and
destroyed by the Fiscal Agent.
Section 2.03. Redemption. (a) Mandatory Sinking Fund Redemption. The Term Bonds
maturing on September 2, 20_and on September 2, 20_are subject to mandatory sinking fund
redemption in part on September 2 of each year(commencing September 2, 20_and September
2, 20_, respectively) to maturity, by lot, at a redemption price equal to the principal amount
thereof to be redeemed, together with accrued interest to the date fixed for redemption, without
premium, from sinking fund payments as follows:
Bonds Maturing on Bonds Maturing on
September 2, 20_ September 2, 20_
P6401.1031\733669.1 11
* maturity
The amounts in the foregoing schedule shall be reduced pro rata among redemption dates,
in order to maintain substantially level Annual Debt Service, as directed in writing to the Fiscal
Agent by an Authorized Officer, as a result of any prior partial redemption of the Bonds pursuant
to Section 2.03(a)or(b).
In lieu of payment at maturity or redemption under this Section 2.03(a), moneys in the
Redemption Fund may be used and withdrawn by the Fiscal Agent, upon written instructions
from the City, for purchase of Outstanding Bonds, at public or private sale as and when, and at
such prices (including brokerage and other charges) as the City may determine to be appropriate,
but in no event may Bonds be purchased at a price in excess of the principal amount thereof,plus
interest accrued to the date of purchase.
(b) Optional Redemption. The Bonds are subject to redemption prior to their stated
maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of
$5,000, at the option of the City from moneys derived by the City from any source, other than
that identified in Section 2.03(a) at the following redemption prices expressed as percentages of
the principal amount of the Bonds to be redeemed, together with accrued interest to the date of
redemption:
Redemption Dates Redemption Prices
Prior to September 2, 20_ 103%
September 2, 20_and March 2, 20_
September 2, 20_and March 2, 20_
September 2, 20_and thereafter
(c) Notice to Fiscal Agent. An Authorized Officer shall give the Fiscal Agent written
notice of the City's intention to redeem Bonds not less than forty-five (45) days prior to the
applicable redemption date unless a shorter time is acceptable to the Fiscal Agent in its sole
discretion specifying the principal amount and maturities of Bonds to be redeemed. The
provisions of this subsection (c) shall not apply to the purchase of Bonds pursuant to Section
2.03(a)hereof.
(e) Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of
any redemption to be provided by registered or certified mail or by personal service at least thirty
(30) days prior to the date fixed for redemption, to the respective registered Owners of any Bonds
designated for redemption, at their addresses appearing on the Registration Books. In addition to
the foregoing, if the Registration Books shows that any of the Bonds subject to redemption is
then owned by a person or entity other than the Authority, the Fiscal Agent shall send a notice of
P6401.1031\733669.1 12
redemption at least thirty (30) days prior to the redemption date, by registered or certified mail,
postage prepaid, or by overnight delivery service to the following: (i) each of the Securities
Depositories, and(ii)one or more of the Information Services.
Such notice shall state the date of such notice, the date of issue of the Bonds, the place or
places of redemption, the redemption date, the redemption price and, if less than all of the then
Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers (if any)
and Bond numbers of the Bonds to be redeemed, or shall state that all Bonds between two stated
Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more
maturities have been called for redemption, shall state as to any Bond called for redemption in
part the portion of the principal of the Bond to be redeemed, shall require that such Bonds be
then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption
price, and shall state that further interest on such Bonds will not accrue from and after the
redemption date. The cost of the mailing of any such redemption notice shall be paid by the City.
Neither failure to receive any redemption notice nor any defect in such redemption notice
so given shall affect the sufficiency of the proceedings for the redemption of such Bonds. Upon
the payment of the redemption price of Bonds being redeemed, each check or other transfer of
funds issued for such purpose shall, to the extent practicable, identify, by issue, maturity and
Bond number,the Bonds being redeemed with the proceeds of such check or other transfer.
In the event of a redemption or a purchase of Bonds pursuant to Section 2.03(a) hereof,
the Fiscal Agent shall deposit in the Redemption Fund moneys provided by the City in an amount
equal to the redemption price of the Bonds being redeemed or the purchase price of the Bonds
being purchased on or before the fifteenth (15th) day of the month preceding the Interest
Payment Date upon which such Bonds are to be redeemed or the date upon which the Bonds are
to be purchased, as the case may be.
Whenever provision is made in this Agreement for the redemption of less than all of the
Bonds, the Fiscal Agent shall select the Bonds for redemption in such a way that the ratio of
Outstanding Bonds to issued Bonds shall be approximately the same in each maturity of the
Bonds insofar as possible (i.e., on a pro-rata basis), and shall select Bonds for redemption within
each maturity of the Bonds by lot.
Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal
Agent shall authenticate and deliver to the Owner, at the expense of the City, a new Bond or
Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to
the unredeemed portion of the Bond or Bonds. Such partial redemption shall be valid upon
payment of the amount required to be paid to such Owner, and the City and the Fiscal Agent
shall be released and discharged thereupon from all liability to the extent of such payment.
(f) Effect of Redemption. From and after the date fixed for redemption, if funds
available for the payment of the redemption prices of the Bonds called for redemption shall have
been deposited in the Redemption Fund or the Assessment Prepayment Account of the
Assessment Fund, as applicable, such Bonds or portions thereof shall cease to be entitled to any
benefit under this Agreement other than the right to receive payment of the redemption price, and
P6401.1031\733669.1 13
interest shall cease to accrue on the Bonds or portions thereof to be redeemed on the redemption
date specified in the notice of redemption.
All Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section 2.03 shall
be canceled and destroyed by the Fiscal Agent.
Section 2.04. Form of Bonds. The Bonds, the Fiscal Agent's certificate of authentication
and the assignment to appear thereon shall be substantially in the forms, respectively, set forth in
Exhibit A attached hereto and by this reference incorporated herein, with necessary or
appropriate variations, omissions and insertions as permitted or required by this Agreement.
Section 2.05. Execution of Rondt. The Bonds shall be executed by the manual or
facsimile signatures of the Treasurer and the City Clerk of the City, who are in office on the date
of this Agreement or at any time thereafter. If any officer whose signature appears on any Bond
ceases to be such officer before delivery of the Bond to the Owner, such signature shall
nevertheless be as effective as if the officer had remained in office until the delivery of the Bond
to the Owner. Any Bond may be signed and attested by such persons as at the actual date of the
execution of such Bond shall be the proper officers of the City notwithstanding that on the
nominal date of such Bond any such person shall not have been such officer of the City.
Only such Bonds as shall bear thereon a certificate of authentication in substantially the
form set forth in Exhibit A hereto, manually executed by the Fiscal Agent, shall be valid or
obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of
authentication of the Fiscal Agent shall be conclusive evidence that such Bonds have been duly
authenticated, registered and delivered hereunder, and are entitled to the benefits of this
Agreement.
Section 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred, upon the books required to be kept pursuant to the provisions of Section 2.08 hereof,
by the person in whose name it is registered, in person or by his or her duly authorized attorney,
upon surrender of such Bond for cancellation, accompanied by delivery of a duly executed
written instrument of transfer in a form acceptable to the Fiscal Agent. The cost for any services
rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall
be paid by the City. The Fiscal Agent shall collect from the Owner requesting transfer of a Bond
any tax or other governmental charge required to be paid with respect to such transfer.
Whenever any Bond or Bonds shall be surrendered for transfer,the City shall execute and
the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of like aggregate principal
amount of authorized denominations.
No transfers of Bonds shall be required to be made (a) during the fifteen (15) days
preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (b)
with respect to Bonds which have been selected for redemption.
Section 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Office of the
Fiscal Agent only for a like aggregate principal amount of Bonds of authorized denominations
P6401.1031\733669.1 14
and of the same maturity. The cost for any services rendered or any expense incurred by the
Fiscal Agent in connection with any such exchange shall be paid by the City. The Fiscal Agent
shall collect from the Owner requesting exchange of a Bond any tax or other governmental
charge required to be paid with respect to such exchange.
No exchanges of Bonds shall be required to be made (i) during the fifteen (15) days
preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii)
with respect to Bonds which have been selected for redemption.
Section 2.08. Bond Register. The Fiscal Agent shall keep, or cause to be kept, sufficient
books for the registration and transfer of the Bonds which books shall show the series, number,
CUSIP identification number (if any), date of issuance, amount, rate of interest and Owner of
each Bond and shall at all times be open to inspection by the City during regular business hours
upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall, under
such reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred, on said books,the ownership of the Bonds as hereinbefore provided.
Section 2.09. Temporary Bonds. The Bonds may be initially issued in temporary form
exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be
printed, lithographed or typewritten, shall be of such denominations as may be determined by the
City, and may contain such reference to any of the provisions of this Agreement as may be
appropriate. Every temporary Bond shall be executed by the City upon the same conditions and
in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds, it
will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall
be surrendered, for cancellation, in exchange for the definitive Bonds at the Principal Office of
the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal
Agent shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate
principal amount of definitive Bonds of authorized denominations. Until so exchanged, the
temporary Bonds shall be entitled to the same benefits under this Agreement as definitive Bonds
authenticated and delivered hereunder.
Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the City, at the expense of the Owner of said Bond, shall execute, and the Fiscal Agent
shall authenticate and deliver, a replacement Bond of like tenor and principal amount in
exchange and substitution for the Bond so mutilated,but only upon surrender to the Fiscal Agent
of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be
canceled and destroyed by the Fiscal Agent. If any Bond shall be lost, destroyed or stolen,
evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such
evidence be satisfactory to it and indemnity satisfactory to it shall be given, the City, at the
expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a
replacement Bond of like tenor and principal amount in lieu of and in substitution for the Bond
so lost, destroyed or stolen. The City or Fiscal Agent may require payment of a sum not
exceeding the actual cost of preparing each replacement Bond delivered under this Section 2.10
and of the expenses which may be incurred by the City and the Fiscal Agent for the preparation,
execution, authentication and delivery thereof. Any Bond delivered under the provisions of this
Section 2.10 in replacement of any Bond alleged to be lost, destroyed or stolen shall constitute an
P6401.1031\733669.1 15
original additional contractual obligation of the City whether or not the Bond so alleged to be
lost, destroyed or stolen is at any time enforceable by anyone, and shall be equally and
proportionately entitled to the benefits of this Agreement with all other Bonds issued pursuant to
this Agreement.
Section 2.11. Special Obligation. All obligations of the City under this Agreement and
the Bonds and interest thereon shall be special obligations of the City, payable solely from the
Assessment Revenues. Neither the faith and credit nor the taxing power of the City or the State
of California or any political subdivision thereof is pledged to the payment of the Bonds or the
interest thereon and no Owner of the Bonds may compel the exercise of any taxing power by the
City or force the forfeiture of any of its property. The principal of, and premium (if any) and
interest on the Bonds are not a debt of the City nor a legal or equitable pledge, charge, lien or
encumbrance upon any of its property, or upon any of its income, receipts or revenues.
Section 2.12. Refirnding. . At any time necessary or appropriate, the City may issue
bonds to refund all or any portion of the Bonds as permitted by and in accordance with law
including,but not limited to,the 1984 Refunding Act.
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS;
ASSESSMENT FUND
Section 3.01. Issuance and Delivery of Bonds. At any time after the execution and
delivery of this Agreement, the City may issue the Bonds in the aggregate principal amount set
forth in Section 2.01 hereof and deliver the Bonds to the Original Purchaser. The Authorized
Officers of the City are hereby authorized and directed to deliver any and all documents and
instruments necessary to cause the issuance of the Bonds in accordance with the provisions of the
1915 Act, the Resolution and this Agreement and to do and cause to be done any and all acts and
things necessary or convenient for delivery of the Bonds to the Original Purchaser.
Section 3.02. Application of Proceeds of Sale of Bonds. The proceeds of the sale of the
Bonds shall be applied as follows:
(a) $ shall be retained by the Authority to pay, on behalf of the City, for Costs of
Issuance;
(b) $ shall be deposited in the Reserve Fund to satisfy the initial Reserve
Requirment; and
(c) The remaining proceeds, in the amount of $ shall be deposited in the
Improvement Fund.
Section 3.03. [Reserved] .
Section 3.04. Assessment Fund. (a)Establishment of Assessment Fund. There is hereby
P6401.1031\733669.1 16
established, as a separate account to be held by the Fiscal Agent, the "Assessment Fund" to the
credit of which the Fiscal Agent shall deposit all Assessment Revenues received by the Fiscal
Agent from the City except for the prepayment of assessments. Upon receiving any Assessment
Revenues from the County, the City shall deduct therefrom the amounts included therein, or a
portion thereof, for payment of the City's expenses associated with the collection of the
Assessment Revenues and payment of the annual costs associated with the registration of the
Bonds and the other duties of the Fiscal Agent provided for herein, and transfer the remainder
thereof to the Fiscal Agent for deposit in the Assessment Fund. Moneys in the Assessment Fund
shall be held by the Fiscal Agent for the benefit of the City and the Owners of the Bonds, as
hereinafter provided, shall be disbursed as provided below and, pending disbursement, shall be
subject to a lien in favor of the Owners of the Bonds. The Fiscal Agent shall establish and
maintain within the Assessment Fund an"Assessment Prepayment Account."
(b) Disbursements. Not later than the third Business Day preceding each Interest
Payment Date, the Fiscal Agent shall withdraw from the Assessment Fund and deposit in the
Redemption Fund the amount which is necessary to pay Debt Service on the Interest Payment
Date.
On September 3 of each year, beginning on September 3, 2004, the amount on deposit in
the Assessment Fund, together with the amount then on deposit in the Redemption Fund, shall
not exceed the greater of(i) one year's earnings on such amounts, or (ii) one-twelfth (1/12th) of
Annual Debt Service for the then current Bond Year. If on September 3 of any year the amount
on deposit in the Assessment Fund, together with the amount then on deposit in the Redemption
Fund, exceeds the maximum amount allowable pursuant to the preceding sentence and if on such
September 3 the City shall have delivered to the Fiscal Agent an Officer's Certificate containing
the information required below in this paragraph, the excess shall be paid by the Fiscal Agent to
the City as directed by such Officer's Certificate. On September 3 of each year, after any such
excess amount has been transferred as hereinabove provided, the amount on deposit in the
Assessment Fund, together with the amount then on deposit in the Redemption Fund, shall not
exceed in the aggregate the greater of(i) one year's earnings thereon, or (ii) one-twelfth (1/12th)
of Annual Debt Service for the then current Bond Year. An Officer's Certificate delivered by the
City to the Fiscal Agent pursuant to this paragraph shall specify the dollar amount of the excess
determined pursuant to the first sentence of this paragraph which the Fiscal Agent is to pay to the
City. Upon receipt of such an Officer's Certificate, the Fiscal Agent is authorized to act thereon
without further inquiry, shall not be responsible for the accuracy of the statements contained
therein, and shall be absolutely protected and incur no liability in relying on such Officer's
Certificate.
(c) Investment. Moneys in the Assessment Fund shall be invested and deposited in
accordance with Section 6.01 hereof. Investment Earnings shall be retained in the Assessment
Fund to be used for the purposes of such fund.
(d) Prepayment of Assessments. Amounts received from property owners in the
Assessment District as prepayments of the Assessment pursuant to the 1915 Act shall be
deposited by the City Treasurer and held by the Fiscal Agent in the Assessment Prepayment
Account of the Assessment Fund for application pursuant to Section 3.04(e). The City shall
P6401.1031\733669.1 17
identify to the Fiscal Agent in writing the amount of such prepayment. The Fiscal Agent also
shall deposit in the Assessment Prepayment Account amounts transferred thereto from the
Reserve Fund pursuant to Sections 4.03(d) and 4.03 (f). Amounts in the Assessment Prepayment
Account shall be used to pay the principal of and redemption premium on Bonds to be called for
redemption as provided in the next sentence. Whenever and to the extent monies are on deposit
in the Assessment Prepayment Account are sufficient to pay the principal of Bonds in integral
$5,000 amounts plus the redemption premium thereon (if any), the Fiscal Agent shall advance
the maturity of and call Bonds for redemption pursuant to Section 2.03(b). On or after each
redemption date, upon presentation and surrender thereof,the Fiscal Agent shall pay the principal
of and redemption premium on each Bond the maturity of which has been so advanced from
monies in the Assessment Prepayment Account. Interest accrued on each such Bond shall be
paid from monies in the Redemption Fund.
(e) Application of Prepaid Assessments. Upon receiving a prepayment of an
Assessment, the City Treasurer shall transfer it to the Fiscal Agent for deposit in the Assessment
Prepayment Account. All prepayments may be commingled in a single subaccount within the
Assessment Prepayment Account. From the Assessment Prepayment Account (but solely from
money representing prepayment on Assessments described in Section 3.04(d), the Fiscal Agent
shall make disbursements in the following priority as specified by the City as follows:
(i) The administrative fee in the amount specified to the Fiscal Agent by the
City shall be transferred to the City for deposit in the general fund of the City.
(ii) Delinquent principal, interest, and penalties shall be transferred to the
Redemption Fund. If the Reserve Fund has been depleted on account of the delinquencies, the
delinquent amounts and penalties shall be transferred instead to the Reserve Fund.
(iii) The installment of principal due in the Fiscal Year of prepayment shall be
transferred to the Redemption Fund.
(iv) Interest accrued to the next call date shall be transferred to the Redemption
Fund.
(v) The balance in the Assessment Prepayment Account of the Assessment
Fund shall be used to advance the maturity of Bonds to the next call date as provided in Section
2.03(b)hereof. The amount of Bonds to be retired shall be the maximum for which principal and
redemption premium may be paid in full from the Assessment Prepayment Account. Accrued
interest on Bonds to be retired shall be paid from the Redemption Fund.
ARTICLE IV
ASSESSMENT REVENUES;
REDEMPTION FUND; RESERVE FUND
Section 4.01. Pledge of Assessment Revenues. The Bonds shall be secured by a pledge
P6401.1031\733669.1 18
(which pledge shall be effected in the manner and to the extent herein provided) of all of the
Assessment Revenues and all moneys deposited in the Redemption Fund and the Reserve Fund.
The Assessment Revenues and all moneys deposited into such funds are hereby dedicated in their
entirety to the payment of the principal of the Bonds as provided herein, and interest and any
premium on, the Bonds, until all of the Bonds have been paid and retired or until moneys or
Federal Securities have been set aside irrevocably for that purpose in accordance with Section
9.03 hereof.
Section 4.02. Redemption Fund. (a) Deposits. There is hereby established, as a separate
account to be held by the Fiscal Agent, the "Redemption Fund" to the credit of which deposits
shall be made as required by the provisions of this Agreement. Moneys in the Redemption Fund
shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed
for the payment of the principal of, and interest and any premium on, the Bonds as provided
below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the
Bonds.
(b) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw
from the Redemption Fund and pay to the Owners of the Bonds the principal of and interest and
anypremium then due and payable on the Bonds
p y o ds on the Interest Payment Date.
If, on any Interest Payment Date, there will be insufficient funds in the Redemption Fund
to make the payments provided for in the first paragraph of this Section 4.02(b), the Fiscal Agent
shall apply the available funds first to the payment of interest on the Bonds, and then to the
payment of principal due on the Bonds.
As provided in the form of the Bonds attached hereto as Exhihit A, the City Council
has determined, pursuant to Section 8769(b) of the California Streets and Highway Code
that the City will not obligate itself to advance available funds from the City Treasury to
cure any deficiency which may occur in the Redemption Fund.
On September 3 of each year, beginning on September 3, 2004, the amount on deposit in
the Redemption Fund, together with the amount then on deposit in the Assessment Fund, shall
not exceed the greater of(i) one year's earnings on such amounts, or(ii) one-twelfth (1/12th) of
Annual Debt Service for the then current Bond Year. If on September 3 of any year the amount
on deposit in the Redemption Fund, together with the amount then on deposit in the Assessment
Fund, exceeds the maximum amount allowable pursuant to the preceding sentence and if on such
September 3 the City shall have delivered to the Fiscal Agent an Officer's Certificate containing
the information required below in this paragraph, the excess shall be paid by the Fiscal Agent to
the City as directed by such Officer's Certificate. On September 3 of each year, after any such
excess amount has been paid as hereinabove provided, the amount on deposit in the Redemption
Fund, together with the amount then on deposit in the Assessment Fund, shall not exceed the
greater of(i) one year's earnings thereon, or (ii) one-twelfth (1/12th) of Annual Debt Service for
the then current Bond Year. An Officer's Certificate delivered by the City to Fiscal Agent
pursuant to this paragraph shall specify the dollar amount of the excess determined pursuant to
the first sentence of this paragraph which the Fiscal Agent is to pay to the City. Upon receipt of
such an Officer's Certificate, the Fiscal Agent is authorized to act thereon without further
P6401.1031\733669.1 19
•
inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be
absolutely protected and incur no liability in relying on such Officer's Certificate.
Amounts in the Redemption Fund shall also be withdrawn and deposited in the Rebate
Fund as provided in Section 6.02 hereof.
(c) Investment. Moneys in the Redemption Fund shall be invested and deposited in
accordance with Section 6.01 hereof. Investment Earnings shall be retained in the Redemption
Fund, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate
Fund in accordance with Section 6.02 hereof.
Section 4.03. Reserve Fund. (a)Establishment of Fund; Disbursement. There is hereby
established, as a separate account to be held by the Fiscal Agent,the"Reserve Fund"to the credit
of which a deposit shall be made as required by Section 3.02(b), which deposit is equal to the
Reserve Requirement as of the Closing Date, and to which deposits shall be made as provided in
Section 4.03(d). Moneys in the Reserve Fund shall be held by the Fiscal Agent for the benefit of
the Owners of the Bonds as a reserve for the payment of the principal of and interest and any
premium on the Bonds and shall be subject to a lien in favor of the Owners of the Bonds.
(b) Use of Fund. Except as otherwise provided in this Section, all amounts deposited
in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of
making transfers to the Redemption Fund in the event of any deficiency at any time in the
Redemption Fund of the amount then required for payment of the principal of, and interest and
any premium on the Bonds or, in accordance with the provisions of Section 4.03(e), or for the
purpose of redeeming Bonds.
Amounts transferred from the Reserve Fund to the Redemption Fund pursuant to this
subsection shall be restored by the City from the collection of delinquent installments on the
Assessments levied on parcels for which such installments are delinquent, and penalties and
interest thereon, whether by judicial foreclosure proceedings or otherwise, as soon as is
reasonably possible following the receipt by the City of such delinquent installments, penalties
and interest.
(c) Transfer Due to Deficiency in Redemption Fund. Whenever transfer is made from
the Reserve Fund to the Redemption Fund due to a deficiency in the Redemption Fund,the Fiscal
Agent shall report such fact to the City.
(d) Transfers on Payment of Assessment. Whenever an Assessment levied on a lot or
parcel of property within the Assessment District is paid off, the Fiscal Agent shall, upon
receiving an Officer's Certificate regarding such Assessment, transfer from the Reserve Fund to
the Assessment Prepayment Account an amount equal to the reduction in such Assessment
determined pursuant to Section 8881 of the California Streets and Highways Code, which
amount shall be specified in the Officer's Certificate. Upon receipt of such an Officer's
Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be
responsible for the accuracy of the statements contained therein, and shall be absolutely protected
and incur no liability in relying on such Officer's Certificate.
P6401.1031\733669.1 20
(e) Transfer of Excess of Reserve Requirement. Whenever, on any September 3, the
amount in the Reserve Fund, less Investment Earnings resulting from the investment of the funds
therein which pursuant to Section 6.02 hereof must be rebated to the United States, exceeds the
then applicable Reserve Requirement, the Fiscal Agent shall provide written notice to the City of
the amount of the excess and shall, subject to the requirements of Section 6.02 hereof, transfer an
amount equal to the excess from the Reserve Fund to the Redemption Fund to be used for the
payment of Debt Service on the next succeeding Interest Payment Date in accordance with Sec-
tion 4.02 hereof.
(f) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the
Reserve Fund exceeds the amount required to redeem or pay all of the then Outstanding Bonds,
including interest accrued to the date of payment or redemption and premium, if any, due upon
redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer,
transfer money from the Reserve Fund to the Assessment Prepayment Account and the
Redemption Fund as provided in the next succeeding sentence to redeem all of the Outstanding
Bonds in accordance with Sections 3.04(d) and 2.03(b) on the next succeeding Interest Payment
Date. To effect such redemption, the Fiscal Agent shall make the following transfers from the
Reserve Fund: (i) an amount equal to the principal and premium on the Bonds due upon
redemption to the Assessment Prepayment Account, and (ii) an amount equal to the interest
thereon accrued to the redemption date to the Redemption Fund. In the event that the amounts so
transferred from the Reserve Fund to the Assessment Prepayment Account and the Redemption
Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the
Reserve Fund shall be transferred by the Fiscal Agent to the City to be applied as provided in
Section 8885 of the California Streets and Highways Code. Upon receipt of such an Officer's
Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be
responsible for the accuracy of the statements contained therein, and shall be absolutely protected
and incur no liability in relying on such Officer's Certificate.
(d) Investment. Moneys in the Reserve Fund shall, except as provided in subsection
(d)above,be invested and deposited in accordance with Section 6.01 hereof.
Section 4.04. Improvement Fund. (a) Establishment of Fund. There is hereby
established, as a separate account to be held by the Fiscal Agent, the "Improvement Fund"to the
credit of which a deposit shall be made as required by Section 3.02(c)hereof.
(b) Use of Fund. Moneys in the Improvement Funds shall be held by the Fiscal Agent
for the benefit of the City and shall be disbursed by the Fiscal Agent for the payment or
reimbursement of costs of the Project. The Fiscal Agent shall make the requested payment upon
receipt of a requisition therefor executed by an Authorized Officer of the City, in the general
form and content attached hereto as Exhibit R.
(c) Completion of Project. Upon the filing with the Fiscal Agent of a certificate by
the City Engineer stating that the Project has been completed and that all costs of the Project
have been paid or are not required to be paid from the Improvement Fund, the Fiscal Agent shall
transfer the amount, if any, remaining in the Improvement Fund in accordance with written
P6401.1031\733669.1 21
instructions from the City Treasurer as directed by the City Council, which directions shall be
pursuant to the Resolution of Intention and to the applicable provisions of the 1913 Act, and the
Improvement Fund shall be closed.
(d) Investment. Moneys in the Improvement Fund shall be invested and deposited in
accordance with Section 6.01 hereof. Investment Earnings shall be retained in the Improvement
Fund, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate
Fund in accordance with Section 6.02 hereof.
ARTICLE V
OTHER COVENANTS, REPRESENTATIONS AND DECLARATIONS OF THE CITY
Section 5.01. Punctual Payment. The City will punctually pay or cause to be paid the
principal of and interest and any premium on the Bonds when and as due in strict conformity
with the terms of this Agreement and any Supplemental Agreement to the extent that the
Assessment Revenues are available therefor, and it will faithfully observe and perform all of the
conditions, covenants and requirements of this Agreement and all Supplemental Agreements and
of the Bonds.
Section 5.02. Special Obligation. The Bonds are special obligations of the City and are
payable solely from and secured solely by the Assessment Revenues and the amounts in the
Redemption Fund,the Reserve Fund and the Assessment Fund.
Section 5.03. Extension of Time for Payment. In order to prevent any accumulation of
claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to the
extension of the time for the payment of any claim for interest on any of the Bonds and shall not,
directly or indirectly, be a party to the approval of any such arrangement by purchasing or
funding said claims for interest or in any other manner. In case any such claim for interest shall
be extended or funded, whether or not with the consent of the City, such claim for interest so
extended or funded shall not be entitled, in case of default hereunder, to the benefits of this
Agreement, except subject to the prior payment in full of the principal of all of the Bonds then
Outstanding and of all claims for interest which shall not have been so extended or funded.
Section 5.04. Against Encumbrances. The City shall not encumber, pledge or place any
charge or lien upon any of the Assessment Revenues or other amounts pledged to the Bonds
superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds,
except as permitted by this Agreement.
Section 5.05. Protection of Security and Rights of Owners. The City will preserve and
protect the security of the Bonds and the rights of the Owners, and will warrant and defend their
rights against all claims and demands of all persons. From and after the delivery of any of the
Bonds by the City, the Bonds shall be incontestable by the City.
Section 5.06. Collection of Assessment Revenues. The City shall comply with all
requirements of the 1915 Act so as to assure the timely collection of Assessment Revenues,
P6401.1031\733669.1 22
including without limitation, the enforcement of the payment or collection of delinquent
Assessments.
Section 5.07.Further Assurrances. The City will adopt,make, execute and deliver any and
all such further ordinances, resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Agreement,
and for better assuring and confirming unto the Owners of the Bonds the rights and benefits
provided in this Agreement.
Section 5.08. Tax Covenants. The City hereby covenants that:
(a) It will not take any action or omit to take any action, which action or omission, if
reasonably expected on the date of the initial issuance and delivery of the Bonds, would have
caused any of the Bonds to be "arbitrage bonds" within the meaning of Section 103(b) and
Section 148 of the Code;
(b) It will not take any action or omit to take any action, which action or omission, if
reasonably expected on the date of initial issuance and delivery of the Bonds,would result in loss
of exclusion from gross income for purposes of federal income taxation under Section 103(a) of
the Code of interest paid with respect to the Bonds;
•
(c) It will not take any action or omit to take any action, which action or omission, if
reasonably expected on the date of initial issuance and delivery of the Bonds, would have caused
any of the Bonds to be"private activity bonds"within the meaning of Section 141 of the Code;
(d) It will comply with the Tax Certificate as a source of guidance for achieving
compliance with the Code; and
(e) In order to maintain the exclusion from gross income for purposes of federal
income taxation of interest paid with respect to the Bonds, it will comply with each applicable
requirement of Section 103 and Sections 141 through 150 of the Code.
The covenants of the City contained in this Section 5.08 shall survive the payment,
redemption or defeasance of Bonds pursuant to Section 9.03 hereof. The Fiscal Agent makes no
warranties, covenants or representations regarding the current or future tax status of interest on
the Bonds.
Section 5.09. Covenant to Foreclose. The City hereby covenants with and for the benefit
of the Owners of the Bonds that it will order, and cause to be commenced,judicial foreclosure
proceedings against properties with delinquent Assessment installments in excess of$5,000 by
the October 1 following the close of the Fiscal Year in which such installments were due, and
will commence judicial foreclosure proceedings against all properties with delinquent
Assessment installments by the October 1 following the close of each Fiscal Year in which it
receives Assessment Revenues in an amount which is less than ninety-five percent (95%) of the
total Assessment Revenues which were to be received in the Fiscal Year and diligently pursue to
completion such foreclosure proceedings; provided, however, the City may elect to defer the
P6401.1031\733669.1 23
commencement of foreclosure proceedings with respect to any property so long as (i)the amount
on deposit in the Reserve Fund is equal to the Reserve Requirement and (ii) the City is current in
the payment of Debt Service.
Notwithstanding the foregoing, if at any time, the County's Teeter Plan(adopted pursuant
to Sections 4701 through 4717 of the California Revenue and Taxation Code) is in effect and is
made applicable to the Assessment District and the Assessment being levied in connection with
the Bonds, the City may, in its discretion, elect not to commence any judicial foreclosure
proceeding pursuant to this Section 5.09 or defer the commencement of such proceedings until
such time as the City deems appropriate.
ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT
PROCEEDS; LIABILITY OF THE CITY
Section 6.01. Deposit and Investment of Moneys in Funds. Subject in all respects to the
provisions of Section 6.02 hereof, moneys in any fund or account created or established by this
Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted
Investments, as directed pursuant to an Officer's Certificate filed with the Fiscal Agent at least
two (2) Business Days in advance of the making of such investments; provided that moneys in
the Reserve Fund shall be invested in Permitted Investments which shall mature not more than
five years from the date of such investment. In the absence of any such Officer's Certificate, the
Fiscal Agent shall invest any such moneys in Permitted Investments described in paragraph(d) of
the definition of Permitted Investments in Section 1.03 hereof. Except as specifically provided
herein, the Fiscal Agent shall have no obligation to pay additional interest or maximize
investment income on any funds held by it. Neither the City nor the Owners of the Bonds shall
have any claim of any kind against the Fiscal Agent in connection with investments properly
made pursuant to this Section 6.01. Obligations purchased as an investment of moneys in any
fund or account shall be deemed to be part of such fund or account, subject, however, to the
requirements of this Agreement for transfer of Investment Earnings in funds and accounts.
The Fiscal Agent shall be entitled to rely conclusively upon the written instructions of the
City directing investments in Permitted Investments as to the fact that each such investment is
permitted by the laws of the State, and shall not be required to make further investigation with
respect thereto. With respect to any restrictions contained in the definition of Permitted
Investments in Section 1.03 hereof which embody legal conclusions (e.g., the existence, validity
and perfection of security interests in collateral), the Fiscal Agent shall be entitled to rely
conclusively on an opinion of counsel obtained at the City's expense.
The Fiscal Agent may act as principal or agent in the acquisition or disposition of any
investment and may engage in or be interested in any financial or other transaction with the City.
The Fiscal Agent shall not incur any liability for losses arising from any investments made
pursuant to this Section 6.01. For purposes of determining the amount on deposit in any fund or
account held hereunder, all Permitted Investments or investments credited to such fund or
P6401.1031\733669.1 24
account shall be valued at the cost thereof (excluding accrued interest and brokerage
commissions, if any).
Subject in all respects to the provisions of Section 6.02 hereof, investments in any and all
funds and accounts may be commingled in a single fund for purposes of making, holding and
disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the
credit of particular funds or accounts of amounts received or held by the Fiscal Agent hereunder,
provided that the Fiscal Agent shall at all times account for such investments strictly in
accordance with the funds and accounts to which they are credited and otherwise as provided in
this Agreement.
The Fiscal Agent shall sell or present for redemption, any investment security whenever it
shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or
disbursement from the fund or account to witch such investment security is credited, and the
Fiscal Agent shall not be liable or responsible for any loss resulting from the acquisition or
disposition of any such investment security in accordance herewith.
The City acknowledges that to the extent regulations of the Comptroller of the Currency
or any other applicable regulatory agency grant the City the right to receive brokerage
confirmations of security transactions as they occur, the City specifically waives receipt of such
confirmations to the extent permitted by law. The Fiscal Agent shall be provided periodic cash
transaction statements which include detail for all investment transactions made by the Fiscal
Agent hereunder.
The Fiscal Agent or any of its affiliates may act as sponsor, advisor or manager in
connection with any investments made by the Fiscal Agent hereunder.
Section 6.02. Rebate Fund, Rebate to I Tnited States. There is hereby created, to be held
by the Fiscal Agent, as a separate account distinct from all other funds and accounts held by the
Fiscal Agent under this Agreement, the Rebate Fund. Pursuant to the written direction of the
City, the Fiscal Agent shall deposit into the Rebate Fund moneys transferred by the City to the
Fiscal Agent pursuant to the Tax Certificate. The Rebate Fund shall be held either uninvested or
invested only in Federal Securities at the direction of the City. Moneys on deposit in the Rebate
Fund shall be applied only to payments made to the United States, to the extent such payments
are required by the Tax Certificate. The Fiscal Agent shall, upon written direction of the City,
make such payments to the United States.
The Fiscal Agent's sole responsibilities under this Section 6.02 are to follow the written
instructions of the City pertaining hereto and the Fiscal Agent shall have no independent
responsibility to monitor or enforce compliance by the City with the Tax Certificate. The City
shall be responsible for any fees and expenses incurred by the Fiscal Agent pursuant to this
Section 6.02.
The Fiscal Agent shall, upon written request and direction from the City, transfer to or
upon the order of the City any moneys on deposit in the Rebate Fund in excess of the amount, if
any, required to be maintained or held therein in accordance with the Tax Certificate. Upon
P6401.1031\733669.1 25
receipt of such a written request and direction the Fiscal Agent is authorized to act thereon
without further inquiry, shall not be responsible for the accuracy thereof, and shall be absolutely
protected and incur no liability in relying thereon.
Section 6.03. Liability of City. The City shall not incur any responsibility in respect of
the Bonds or this Agreement other than in connection with the duties or obligations explicitly
herein or in the Bonds assigned to or imposed upon it. The City shall not be liable in connection
with the performance of its duties hereunder, except for its own negligence or willful default.
In the absence of bad faith, the City may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the City and conforming to the requirements of this Agreement. The City shall not
be liable for any error of judgment made in good faith unless it shall be proved that it was
negligent in ascertaining the pertinent facts.
No provision of this Agreement shall require the City to expend or risk its own general
funds or otherwise incur any financial liability (other than with respect to the Assessment
Revenues) in the performance of any of its obligations hereunder, or in the exercise of and of its
rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to it.
The City may rely and shall be protected in acting or refraining from acting upon any
notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or
document believed by it to be genuine and to have been signed or presented by the proper party
or proper parties. The City may consult with counsel, who may be counsel to the City, with
regard to legal questions, and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered by it hereunder in good
faith and in accordance therewith.
Section 6.04. Fmployment of Agents by the City. In order to perform its duties and
obligations hereunder, the City may employ such persons or entities as it deems necessary or
advisable. The City shall not be liable for any of the acts or omissions of such persons or entities
employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected
in doing so, upon the opinions, calculations, determinations and directions of such persons or
entities.
ARTICLE VII
THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent. BNY Western Trust Company is hereby
appointed Fiscal Agent, registrar and paying agent for the Bonds. The Fiscal Agent undertakes to
perform such duties, and only such duties, as are specifically set forth in this Agreement, and no
implied covenants or obligations shall be read into this Agreement against the Fiscal Agent.
Any financial institution into which the Fiscal Agent may be merged or converted or with
P6401.1031\733669.1 26
which it may be consolidated or any financial institution resulting from any merger, conversion
or consolidation to which it shall be a party or any financial institution to which the Fiscal Agent
may sell or transfer all or substantially all of its corporate trust business, provided such financial
institution shall be eligible under the following paragraph of this Section 7.01, shall be the
successor to the Fiscal Agent without the execution or filing of any paper or any further act,
anything herein to the contrary notwithstanding.
The City may remove the Fiscal Agent initially appointed, and any successor thereto, and
the City may appoint a successor or successors thereto, but any such successor shall be a
financial institution having (or in the case of a corporation or trust company included in a bank
holding company system, the related bank holding company shall have) a combined capital
(exclusive of borrowed capital) and surplus of at least $50,000,000, and subject to supervision or
examination by federal or state authority. If such financial institution 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 purposes of this Section 7.01, combined
capital and surplus of such financial institution shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
The Fiscal Agent may at any time resign by giving thirty (30) days' written notice to the
City and by giving to the Owners notice by mail of such resignation. Upon receiving notice of
such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in
writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance
of appointment by the successor Fiscal Agent.
If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing
provisions of this Section 7.01 within forty-five (45) days after the Fiscal Agent shall have given
to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred
by reason of its inability to act, the Fiscal Agent, at the expense of the City, or any Owner may
apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may
thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal
Agent.
Section 7.02. Liability of Fiscal Agent. The recitals of facts, covenants and agreements
herein and in the Bonds contained shall be taken as statements, covenants and agreements of the
City and the Fiscal Agent assumes no responsibility for the correctness of the same, nor makes
any representations as to the validity or sufficiency of this Agreement or of the Bonds, nor shall
the Fiscal Agent incur any responsibility in respect thereof, other than in connection with the
duties or obligations herein or in the Bonds expressly assigned to or imposed upon it. The Fiscal
Agent shall not be liable in connection with the performance of its duties hereunder, except for
its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability
for any information, statement or recital in any offering memorandum or other disclosure
material prepared or distributed with respect to the issuance of the Bonds.
In the absence of willful misconduct, the Fiscal Agent may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon certificates,
written directions or opinions furnished to the Fiscal Agent and conforming to the requirements
P6401.1031\733669.1 27
of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be
protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding,
in accordance with the terms of this Agreement, upon any resolution, order, notice, request,
consent or waiver, certificate, statement, affidavit, or other paper or document which it shall
reasonably believe to be genuine and to have been adopted or signed by the proper person or to
have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal
Agent shall not be under any duty to make any investigation or inquiry as to any statements
contained or matters referred to in any such instrument.
The Fiscal Agent shall not be liable for any error of judgment made by a responsible
officer of the Fiscal Agent unless it shall be proved that the Fiscal Agent was negligent in
ascertaining the pertinent facts.
No provision of this Agreement shall require the Fiscal Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers unless an indemnity and security satisfactory to
the Fiscal Agent shall have been provided to the Fiscal Agent.
The Fiscal Agent shall not be responsible for accounting for, or paying to, any party to
this Agreement, including, but not limited to the City and the Owners, any returns on or benefit
from funds held for payment of unredeemed Bonds or outstanding checks and no calculation of
the same shall affect, or result in any offset against, fees due to the Fiscal Agent under this
Agreement.
The Fiscal Agent shall have no responsibility with respect to the payment of Debt Service
by the City or with respect to the observance or performance by the City of the other conditions,
covenants and terms contained herein, or with respect to the investment of any moneys in any
fund or account established, held or maintained by the City pursuant to this Fiscal Agent
Agreement or otherwise.
All indemnification and releases from liability granted herein to the Fiscal Agent shall
extend to the directors, officers and employees of the Fiscal Agent. The Fiscal Agent may
execute any of its trusts or powers or perform its duties through attorneys, agents or receivers.
Section 7.03. Tnformation. The Fiscal Agent shall provide to the City such information
relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the
City shall reasonably request, including, but not limited to, quarterly statements reporting funds
held and transactions by the Fiscal Agent.
Section 7.04. Reliance by Fiscal Agent. The Fiscal Agent may rely and shall be protected
in acting or refraining from acting upon any notice,resolution,request, consent, order, certificate,
written direction, report, warrant, Bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or proper parties. The Fiscal Agent may
consult with counsel, who may be counsel to the City, with regard to legal questions, and the
opinion of such counsel shall be full and complete authorization and protection in respect of any
action taken or suffered by the Fiscal Agent hereunder in accordance therewith.
P6401.1031\733669.1 28
Whenever in the administration of its duties under this Agreement the Fiscal Agent shall
deem it necessary or desirable that a matter be proved or established prior to taking or suffering
any action hereunder, such matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed
to be conclusively proved and established by a certificate of the City, and such certificate shall be
full warranty to the Fiscal Agent for any action taken or suffered under the provisions of this
Agreement or any Supplemental Agreement upon the faith thereof,but in its discretion the Fiscal
Agent may, in lieu thereof, accept other evidence of such matter or may require such additional
evidence as to it may seem reasonable.
Section 7.05. Compensation; Indemnification. The City shall pay to the Fiscal Agent
from time to time reasonable compensation for all services rendered as Fiscal Agent under this
Agreement, and also all reasonable expenses, charges, fees and other disbursements, including
those of its attorneys (including the allocated costs and disbursements of in-house counsel),
agents and employees, incurred in and about the performance of its powers and duties under this
Agreement, and the Fiscal Agent shall have a lien therefor on any funds at any time held by it
under this Agreement. The City further agrees, to the extent permitted by applicable law, to
indemnify and save the Fiscal Agent, its officers, employees, directors and agents, harmless
against any costs, claims, expenses or liabilities, including, without limitation fees and expenses
of its attorneys, which it may incur in the exercise and performance of its powers and duties
hereunder which are not due to its negligence or willful misconduct. The obligation of the City
under this Section 7.05 shall survive resignation or removal of the Fiscal Agent under this
Agreement and payment of the Bonds and discharge of this Agreement.
Section 7.06. Books and Accounts. The Fiscal Agent shall keep, or cause to be kept,
proper books of record and accounts, separate from all other records and accounts of the Fiscal
Agent, in which complete and correct entries shall be made of all transactions made by it with
respect to the expenditure of amounts disbursed from the Redemption Fund, the Assessment
Fund and the Reserve Fund. Such books of record and accounts shall, upon reasonable notice, at
all times during business hours be subject to the inspection of the City and the Owners of not less
than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding, or their
representatives duly authorized in writing.
ARTICLE VIII
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted. (a) Subject to Section 8.09 below, this Agreement
and the rights and obligations of the City and of the Owners of the Bonds may be modified or
amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting
of the Owners, or with the written consent, without a meeting, of the Owners of at least sixty
percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds
disqualified as provided in Section 8.04 hereof. No such modification or amendment shall (i)
extend the maturity of any Bond or the time for paying interest thereon, or otherwise alter or
impair the obligation of the City to pay the principal of, and the interest and any premium on, any
P6401.1031\733669.1 29
Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation of any
pledge of or lien upon the Assessment Revenues, or the moneys on deposit in the Redemption
Fund, superior to or on a parity with the pledge and lien created for the benefit of the Bonds
(except as otherwise permitted by the 1915 Act), the laws of the State or this Agreement), (iii)
reduce the percentage of Bonds required for the amendment hereof, (iv) reduce the principal
amount of or redemption premium on any Bond or reduce the interest rate thereon, or(v)modify
the rights or obligations of the Fiscal Agent without its prior consent.
(b) Subject to Section 8.09 below, this Agreement and the rights and obligations of
the City and the Owners may also be modified or amended at any time by a Supplemental
Agreement, without the consent of any Owners, only to the extent permitted by law and only for
any one or more of the following purposes:
(i) to add to the covenants and agreements of the City in this Agreement
contained, other covenants and agreements thereafter to be observed, or to limit or surrender any
right or power herein reserved to or conferred upon the City;
(ii) to make such provisions for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provisions of this Agreement, or in regard to
questions arising under this Agreement, as the City and the Fiscal Agent may deem necessary or
desirable and not inconsistent with this Agreement, and which shall not be materially adverse to
the interests of the Owners of the Bonds; or
(iii) to make such additions, deletions or modifications as may be necessary or
desirable to assure compliance with Section 148 of the Code relating to required rebate of
moneys to the United States or otherwise as may be necessary to assure exclusion from gross
income for federal income tax purposes of interest on the Bonds or to conform with the Code.
(iv) to modify, amend or supplement this Agreement in such manner as to
permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar
federal statute hereafter in effect; and
(v) to make other modifications not adversely affecting any Outstanding Bonds
in any material respect.
Section 8.02. Owners' Meetings. The City may at any time call a meeting of the Owners.
In such event the City is authorized to fix the time and place of any such meeting and to provide
for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of the
meeting.
Section 8.03. Procedure for Amendment with Written Consent of Owners. The City may
at any time enter into a Supplemental Agreement amending the provisions of the Bonds or of this
Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by
Section 8.01(A) hereof, to take effect when and as provided in this Section 8.03. A copy of the
Supplemental Agreement, together with a request to Owners for their consent thereto, shall be
mailed by first class mail, postage prepaid, by the City to each Owner of Bonds Outstanding,but
P6401.1031\733669.1 30
failure to mail copies of the Supplemental Agreement and request shall not affect the validity of
the Supplemental Agreement when assented to as in this Section provided.
Such a Supplemental Agreement shall not become effective unless there shall be filed
with the City the written consents of the Owners of at least sixty percent (60%) in aggregate
principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in
Section 8.04 hereof) and a notice shall have been mailed as hereinafter in this Section provided.
Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for
which such consent is given, which proof shall be such as is permitted by Section 9.04 hereof.
Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any
subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such
consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing
such revocation with the City prior to the date when the notice hereinafter in this Section
provided for has been mailed.
After the Owners of the required percentage of Bonds shall have filed their consents to
the Supplemental Agreement, the City shall mail a notice to the Owners in the manner
hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in
substance that the Supplemental Agreement has been consented to by the Owners of the required
percentage of Bonds and will be effective as provided in this Section (but failure to mail copies
of said notice shall not affect the validity of the Supplemental Agreement or consents thereto).
Proof of the mailing of such notice shall be filed with the City. A record, consisting of the papers
required by this Section 8.03 to be filed with the City, shall be proof of the matters therein stated
until the contrary is proved. The Supplemental Agreement shall become effective upon the filing
with the City of the proof of mailing of such notice, and the Supplemental Agreement shall be
deemed conclusively binding (except as otherwise hereinabove specifically provided in this
Article) upon the City and the Owners of all Bonds then Outstanding at the expiration of sixty
(60) days after such filing, except in the event of a final decree of a court of competent
jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose
commenced within such sixty(60)day period.
Section 8.04. Disqualified Bonds. Bonds owned or held for the account of the City,
excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of
any vote, consent or other action or any calculation of Outstanding Bonds provided for in this
Article VIII, and shall not be entitled to vote upon, consent to, or participate in any action
provided for in this Article VIII.
Section 8.05. Effect of Supplemental Agreement. From and after the time any
Supplemental Agreement becomes effective pursuant to this Article VIII,this Agreement shall be
deemed to be modified and amended in accordance therewith, and the respective rights, duties
and obligations under this Agreement of the City and all Owners of Bonds Outstanding shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such Supplemental
Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and
all purposes.
P6401.1031\733669.1 31
Section 8.06. Endorsement of Replacement of Ronds Issued after Amendments. The City
may determine that Bonds issued and delivered after the effective date of any action taken as
provided in this Article VIII shall bear a notation,by endorsement or otherwise, in form approved
by the City, as to such action. In that case, upon demand of the Owner of any Bond Outstanding
at such effective date and upon presentation of his or her Bond for that purpose at the Principal
Office of the Fiscal Agent or at such other office as the Fiscal Agent may select and designate for
that purpose, a suitable notation shall be made on such Bond. The City may determine that new
Bonds, so modified as in the opinion of the City is necessary to conform to such action, shall be
prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then
Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent
without cost to any Owner, for like Bonds then Outstanding,upon surrender of such Bonds.
Section 8.07. Amendatory Endorsement of Bonds. The provisions of this Article shall
not prevent any Owner from accepting any amendment as to the particular Bonds held by the
Owner,provided that due notation thereof is made on such Bonds.
Section 8.08. Consent of Fiscal Agent. The Fiscal Agent shall not be required to enter
into or consent to any Supplemental Agreement which, in the sole judgment of the Fiscal Agent,
might adversely affect the rights, obligations, powers, privileges, indemnities, and immunities
provided to the Fiscal Agent herein. The Fiscal Agent upon request, shall be provided an opinion
of counsel that any such Supplemental Agreement complies with the provisions of this Article
VIII and the Fiscal Agent may conclusively rely upon such opinion.
Section 8.09. Requirements for Authority-owned Bonds; Consent of Authority Bonds
Insurer. So long as any Bonds are owned by the Authority, the City and the Fiscal Agent shall
comply with the following requirements:
(a) No amendment to this Agreement shall be effective unless it is permitted under
Section 5.08 of the Authority Bonds Indenture; and
(b) So long as the bond insurance policy with respect to the Authority Bonds is in
effect and the Authority Bonds Insurer has not failed to comply with its payment obligations
thereunder, (i)not less than 15 days prior to the effective date of any amendment pursuant to this
Article VIII, the City shall mail notice of the proposed amendment and the text of the proposed
amendment to each rating agency that has assigned a rating to the Authority Bonds, the
Authority, the Authority Bonds Trustee and the Authority Bonds Insurer; (ii) the City shall have
obtained the written consent of the Bond Insurer before executing any amendment pursuant to
Section 8.01(a), and (iii) the Authority Bond Insurer shall be provided with a copy of all
Supplemental Agreements.
ARTICLE lX
MISCELLANEOUS
Section 9.01. Benefits of Agreement Limited to Parties. Nothing in this Agreement,
expressed or implied, is intended to give to any person other than the City, the Fiscal Agent and
P6401.1031\733669.1 32
1
the Owners, any right, remedy or claim under or by reason of this Agreement. Any covenants,
stipulations, promises or agreements in this Agreement contained by and on behalf of the City
shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent.
Section 9.02. Successors Deemed Included in All References to Predecessor. Whenever
in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named
or referred to, such reference shall be deemed to include the successors or assigns thereof, and all
the covenants and agreements in this Agreement contained by or on behalf of the City or the
Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof
whether so expressed or not.
Section 9.03. Discharge of Agreement._. If the City shall pay and discharge the
entire indebtedness on all Bonds in any one or more of the following ways:
(A) by well and truly paying or causing to be paid the principal of and interest and any
premium on all Bonds, as and when the same become due and payable;
(B) by depositing with the Fiscal Agent, in trust, at or before maturity, an amount of
money which, together with the amounts then on deposit in the Redemption Fund, the
Assessment Fund and the Reserve Fund, is fully sufficient to pay all Bonds, including all
principal, interest and redemption premiums, if any; or
(C) by irrevocably depositing with the Fiscal Agent or another fiduciary, in trust, cash
or noncallable Federal Securities in such amount as the City shall determine, as confirmed by an
Independent Financial Consultant, will, together with the interest to accrue thereon and amounts
then on deposit in the Redemption Fund, the Assessment Fund and the Reserve Fund, be fully
sufficient to pay and discharge the indebtedness on all Bonds(including all principal, interest and
redemption premiums) at or before their respective maturity dates; and if such Bonds are to be
redeemed prior to the maturity thereof, notice of such redemption shall have been given as in this
Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the
giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall
not have been surrendered for payment, the pledge of the Assessment Revenues and other funds
provided for in this Agreement and all other obligations of the City under this Agreement with
respect to all Bonds shall cease and terminate, except the obligation of the City to pay or cause to
be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, the
obligation of the City to pay all amounts owing to the Fiscal Agent pursuant to Section 7.05
hereof, and the obligations of the City pursuant to the covenants contained in Section 5.08
hereof, and thereafter Assessment Revenues shall not be payable to the Fiscal Agent. Notice of
such election shall be filed with the Fiscal Agent. The satisfaction and discharge of this
Agreement shall be without prejudice to the rights of the Fiscal Agent to charge and be
reimbursed by the City for the expenses which it shall thereafter incur in connection herewith.
Any funds held by the Fiscal Agent to pay and discharge the indebtedness on all Bonds,
upon payment of all fees and expenses of the Fiscal Agent, which are not required for such
purpose, shall be paid over to the City.
P6401.1031\733669.1 33
Section 9.04. Execution of Documents and Proof of Ownership by Owners. . Any
request, declaration or other instrument which this Agreement may require or permit to be
executed by Owners may be in one or more instruments of similar tenor, and shall be executed by
Owners in person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by any
Owner or his or her attorney of such a request, declaration or other instrument, or of a writing
appointing such an attorney, may be proved by the certificate of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded in the state in which he or she
purports to act, that the person signing such request, declaration or other instrument or writing
acknowledged to him or her the execution thereof, or by an affidavit of a witness of such
execution, duly sworn to before such a notary public or other officer.
Except as otherwise herein expressly provided, the ownership of registered Bonds and the
amount, maturity, number and date of holding the same shall be proved by the Registration
Books.
Any request, declaration, consent or other instrument or writing of the Owner of any
Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be
done by the City or the Fiscal Agent in accordance therewith.
Section 9.05. Waiver of Personal Liability. . No member, officer, agent or employee of
the City shall be individually or personally liable for the payment of the principal of, or interest
or any premium on, the Bonds- but nothing herein contained shall relieve any such member,
officer, agent or employee from the performance of any official duty provided by law.
Section 9.06. Notices. Any notice, request, complaint, demand or other communication
under this Resolution shall be given by first class mail or personal delivery to the party entitled
thereto at its address set forth below, or by telecopy or other form of telecommunication,
confirmed by telephone at its number set forth below. Notice shall be effective either (a) upon
transmission by telecopy or other form of telecommunication, (b) 48 hours after deposit in the
United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon
actual receipt.
If to the City: City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, California 92260
Attention: City Manager
Telecopier: (760) 340-0574
If to the Authority: Palm Desert Financing Authority
73-510 Fred Waring Drive
Palm Desert, California 92260
Attention: Chief Administrative Officer
Telecopier: (760) 340-0574
P6401.1031\733669.1 34
r
If to the Fiscal Agent: BNY Western Trust Company
700 South Flower Street, Fifth Floor
Los Angeles, California 90017-4104
Attention: Corporation Trust Department
Telecopier: (213) 630-6215
The above parties may designate any further or different addresses to which subsequent notices,
certificates or other communications shall be sent. Notices to the Authority Bonds Insurer shall
be governed by the Authority Bonds Indenture.
Section 9.07. Severahility. If any section, paragraph, sentence, clause or phrase of this
Agreement shall for any reason be held by a court of competent jurisdiction to be illegal or
unenforceable, such holding shall not affect the validity of the remaining portions of this
Agreement. The City hereby declares that it would have executed and delivered this Agreement
and each and every other section,paragraph, sentence, clause or phrase hereof and authorized the
issue of the Bonds pursuant thereto irrespective of the fact that any one or more sections,
paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or
unenforceable.
Section 9.08. Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding, any moneys held by the Fiscal Agent in trust for the payment and discharge of
the principal of, and the interest and any premium on, the Bonds which remains unclaimed for
two (2) years after the date when the payment of such principal, interest and premium have
become payable, if such moneys were held by the Fiscal Agent at such date, shall be repaid by
the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent shall
have no responsibility or liability for such moneys.
Section 9.09. Applicable T,aw. This Agreement shall be governed by and enforced in
accordance with the laws of the State applicable to contracts made and performed in the State of
California.
Section 9.10. Conflict with 1915 Act. In the event of a conflict between any provision of
this Agreement with any provision of the 1915 Act as in effect on the Closing Date,the provision
of the 1915 Act, as applicable, shall prevail over the conflicting provision of this Agreement.
Section 9.11. Conclusive Evidence of Regularity. Bonds issued pursuant to this
Agreement shall constitute conclusive evidence of the regularity of all proceedings under the
1984 Refunding Act relative to their issuance.
Section 9.12. Payment on Business Day. In any case where the date of the payment of
interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption is
other than a Business Day, the payment of interest or principal (and premium, if any)need not be
made on such date but may be made on the next succeeding day which is a Business Day with the
same force and effect as if made on the date required, and no interest shall accrue for the period
from and after such date.
P6401.1031\733669.1 35
Section 9.13. CounterpartR. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
[Remainder of Page Intentionally Left Blank]
P6401.1031\733669.1 36
IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name
and attested, and the Fiscal Agent, in acknowledgment of its acceptance of the duties created
hereunder, has caused this Agreement to be executed in its name, all as the date first written
above.
CITY OF PALM DESERT
By:
[Name]
[Title]
BNY WESTERN TRUST COMPANY
as Fiscal Agent
By:
Authorized Officer
P6401.1031\733669.1 37
EXHIBIT A
[FORM OF BOND]
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
REGISTERED REGISTERED
NO. R- $
CITY OF PALM DESERT
SILVER SPUR UTILITY UNDERGROUNDING ASSESSMENT DISTRICT NO. 01-01
LIMITED OBLIGATION IMPROVEMENT BOND
SERIES 2003
INTEREST RATE MATURITY DATE BOND DATE
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Under and by virtue of the Improvement Bond Act of 1915, as set forth in Division 10
(commencing with Section 8500) of the California Streets and Highways Code (the "1915 Act")
the City of Palm Desert, County of Riverside, California (the "City"), will, out of the
Redemption Fund for the payment of the Bonds issued upon the unpaid Assessments made for
the for the acquisition, work and improvements more fully described in proceedings taken
pursuant to Resolution No. 03-17, adopted by the City Council of the City on February 13, 2003
(the "Resolution of Intention"), pay to the registered owner hereof, or registered assigns, on the
maturity date stated above, the principal sum shown hereon in lawful money of the United States
of America and in like manner will pay interest at the rate per annum stated above, payable
semiannually on March 2 and September 2 (each an "Interest Payment Date") in each year
commencing on March 2, 2004. This Bond bears interest from the Interest Payment Date next
preceding its date of authentication and registration, unless this Bond is authenticated and
registered (i) on an Interest Payment Date, in which event interest shall be payable from such
date of authentication and registration, (ii)prior to an Interest Payment Date and after the close of
business on the fifteenth (15th) day of the month immediately preceding such Interest Payment
Date, in which event it shall bear interest from such Interest Payment Date, or (iii) prior to the
close of business on the 15th day of the month immediately preceding the first Interest Payment
Date, in which event it shall bear interest from the Bond Date stated above,until payment of such
principal sum shall have been discharged; provided, however, that if at the time of authentication
P6401.1031\733669.1 A-1
of such Bond, interest is in default, interest on that Bond shall be payable from the last Interest
Payment Date to which the interest has been paid or made available for payment. Both the
principal hereof and redemption premium hereon are payable upon presentation and surrender
hereof at the corporate trust office of BNY Western Trust Company, or its successor, as Fiscal
Agent (the "Fiscal Agent"), in Los Angeles, California, or such other place as may be designated
by the Fiscal Agent and the interest hereon is payable by check mailed, by first-class mail, to the
owner hereof at such owner's address as it appears on the registration books of the Fiscal Agent
of the fifteenth(15th) day of the month immediately preceding each Interest Payment Date, or by
wire transfer made on the Interest Payment Date upon instructions of any owner of$500,000 or
more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the fifteenth
(15th)day of the month immediately preceding the Interest Payment Date.
This Bond will continue to bear interest after maturity at the rate above stated, provided
that it is presented at maturity and payment thereof is refused upon the sole ground that there are
not sufficient moneys in the Redemption Fund with which to pay same. If it is not presented at
maturity interest hereon will run only until maturity.
This Bond is one of several annual series of bonds of like date, tenor and effect, but
differing in amounts, maturities and interest rates, issued by the City of Palm Desert under the
1915 Act, Resolution No. 03- of the City Council of the City, adopted on May_, 2003 (the
"Resolution of Issuance") and a Fiscal Agent Agreement dated as of June 1, 2003 (the "Fiscal
Agent Agreement") by and between the City and the Fiscal Agent in the aggregate principal
amount of$ for the purpose of providing means for the improvements described in the
proceedings, and is secured by the moneys in the Redemption Fund and by the unpaid
Assessments made for the payment of such improvements, and, including principal and interest,
is payable exclusively out of the Redemption Fund and certain other funds and accounts as
provided in the Fiscal Agent Agreement. The City will not obligate itself to advance available
funds from the City treasury to cure any deficiency which may occur in the Redemption
Fund.
Bonds maturing on September 2, 20 , and September 2, 20_, are subject to mandatory
sinking fund redemption by lot, at a redemption price equal to the principal amount thereof to be
redeemed, without premium, on September 2 of each year (commencing September 2, 20 and
September 2, 20_ respectively) in the aggregate respective principal amounts set forth in the
Fiscal Agent Agreement,by giving at least 30 days' notice by registered or certified mail,postage
prepaid, or by personal service to the registered owners thereof at the owners' address as they
appear on the registration books of the Fiscal Agent; provided, however, that in lieu of
redemption thereof such Bonds may be purchased by the City pursuant to the Fiscal Agent
Agreement.
In addition, this Bond or any portion of it in the amount of five thousand dollars ($5,000),
or any integral multiple thereof, may be redeemed and paid in advance of maturity upon March 2
or September 2 in any year by giving at least 30 days' notice by registered or certified mail,
postage prepaid, or by personal service to the registered owner hereof at the registered owner's
address as it appears on the registration books of the Fiscal Agent at the following redemption
prices expressed as percentages of the principal amount of the Bonds to be redeemed together
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with interest accrued to the date of redemption:
Redemption Dates Redemption Prices
Prior to September 2, 2008 103%
March 2, 2009 and September 2, 2009
March 2,2010 and September 2, 2010
March 2, 2011 and thereafter
This Bond is subject to refunding pursuant to the procedure of Division 11 (commencing
with Section 9000) or Division 11.5 (commencing with Section 9500) of the Streets and
Highways Code of the State of California prior to maturity.
This Bond is transferable by the registered owner hereof, in person or by the owner's
attorney duly authorized in writing, at the office of the Fiscal Agent, subject to the terms and
conditions provided in the Fiscal Agent Agreement including the payment of certain charges, if
any, upon surrender and cancellation of this Bond. Upon transfer, a new registered Bond or
Bonds, of any authorized denomination or denominations, of the same maturity, and for the same
aggregate principal amount,will be issued to the transferee in exchange therefor.
Bonds not owned by and registered in the name of the Palm Desert Financing Authority
shall be registered only in the name of an individual (including joint owners), a corporation, a
partnership or a trust.
Neither the City nor the Fiscal Agent shall be required to exchange or to register the
transfer of Bonds during the fifteen days immediately preceding any interest payment date or of
any Bonds selected for redemption in advance of maturity.
The City and the Fiscal Agent may treat the owner hereof as the absolute owner for all
purposes, and the City and the Fiscal Agent shall not be affected by any notice to the contrary.
This Bond shall not be entitled to any benefit under the 1915 Act, the Resolution of
Issuance or the Fiscal Agent Agreement, or become valid or obligatory for any purpose, until the
certificate of authentication and registration hereon endorsed shall have been dated and manually
signed by the Fiscal Agent.
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IN WITNESS WHEREOF, the City of Palm Desert has caused the Bond to be signed and
attested by the facsimile signatures of the City Treasurer and by the City Clerk, and has caused its
corporate seal to be reproduced hereon all the Bond Date above.
CITY OF PALM DESERT
By
Treasurer
[SEAL]
Attest:
Secretar
y
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CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described in the within mentioned Fiscal Agent Agreement
which has been authenticated and registered on
BNY WESTERN TRUST COMPANY,
as Fiscal Agent
By:
Authorized Officer
ASSIGNMENT
For value received,the undersigned do(es)hereby sell, assign and transfer unto
the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s)
attorney,
to transfer the same on the books kept for registration hereof with full power of substitution in
the premises.
Dated: , 20
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the within
Bond in every particular,without
alteration or enlargement or any
change whatsoever.
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EXHIBIT B
[FORM OF IMPOVEMENT FUND REQUISITION]
Requisition No.
with reference to
City of Palm Desert
Silver Spur Ranch Utility Undergrounding Assessment District No. 01-01
Limited Obligation Improvement Bonds
Series 2003
1. The City of Palm Desert (the "City") hereby requests BNY Western Trust
Company, as Fiscal Agent under the Fiscal Agent Agreement, dated as of June 1, 2003(the
"Fiscal Agent Agreement"), to pay from the moneys in the Improvement Fund, the amounts
shown on Schedule I attached hereto to the parties indicated in Schedule I.
2. The payees, the purposes for which the costs have been incurred, and the amount
of the disbursements requested are itemized on Schedule T and Schedule T hereto.
3. Each obligation mentioned in Schedule T hereto has been properly incurred and is
a proper charge against the Improvement Fund. None of the items for which payment is
requested has been reimbursed previously from the Improvement Fund.
Capitalized terms not defined herein have to meanings ascribed to them in the Fiscal
Agent Agreement.
Dated: , 20_
CITY OF PALM DESERT
By:
[Name]
[Title]
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