HomeMy WebLinkAboutCont. (Part 3) WATER WELL NUMBER 24
(For Purposes of Reference Only)
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
ORANGE, CITY OF SANTA ANA, DESCRIBED AS FOLLOWS :
THAT PORTION OF SECTION 2, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE
RANCHO LAS BOLSAS, AS SHOWN ON A MAP RECORDED IN BOOK 51, PAGE 12 OF
MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH
THOSE PORTIONS OF LOTS 1, 2 AND 3 OF THE MABURY TRACT, AS SHOWN ON A MAP
MARKED REFEREE'S "EXHIBIT B" AND RECORDED IN BOOK 165, PAGE 301 OF
DEEDS, RECORDS OF LOS ANGELES COUNTY, CALIFORNIA, AND THAT PORTION OF
LOT A OF TRACT NO. 1608, AS SHOWN ON A MAP RECORDED IN BOOK 48, PAGES
21, 22 AND 23 OF SAID MISCELLANEOUS MAPS, DESCRIBED AS A WHOLE AS
FOLLOWS :
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF SEVENTEENTH STREET
WITH THE EASTERLY LINE OF SAID RANCHO LAS BOLSAS; THENCE NORTH 89° 49'
24" WEST 579 . 35 FEET ALONG SAID CENTERLINE; THENCE NORTH 0° 10' 36"
EAST 52 .77 FEET; THENCE NORTH 35° 43 ' 01" EAST 736 . 78 FEET; THENCE NORTH
44° 14 ' 29" EAST 303 . 57 FEET; THENCE NORTH 35° 43 ' 01" EAST 48 . 04 FEET;
THENCE NORTH 36° 44 ' 23" EAST 12 . 47 FEET TO THE TRUE POINT OF BEGINNING,
SAID POINT BEING THE SOUTHERLY CORNER OF THE LAND DESCRIBED IN DEED TO
THE CITY OF SANTA ANA RECORDED SEPTEMBER 2, 1975 IN BOOK 11500, PAGE 174
OF OFFICIAL RECORDS OF SAID ORANGE COUNTY; THENCE CONTINUING NORTH 36°
44 ' 23" EAST 1387 . 75 FEET; THENCE NORTH 35° 43 ' 01" EAST 1505 . 85 FEET TO
THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A
RADIUS OF 540 . 00 FEET; THENCE NORTHEASTERLY 520 .23 FEET ALONG SAID CURVE
THROUGH A CENTRAL ANGLE OF 55° 11' 54" TO A TANGENT LINE; THENCE ALONG
SAID TANGENT LINE SOUTH 89° 05' 05" EAST 206 . 04 FEET TO AN ANGLE POINT
ON THE NORTHERLY LINE OF LOT 30 OF SAID TRACT NO. 1608, WESTERLY 71 . 00
FEET FROM THE NORTHEAST CORNER OF SAID LOT 30, SAID POINT ALSO BEING THE
NORTHEASTERLY CORNER OF THE LAND DESCRIBED IN DEED TO THE CITY OF SANTA
ANA RECORDED OCTOBER 3, 1952 IN BOOK 2392, PAGE 1 OF SAID OFFICIAL
RECORDS; THENCE SOUTHWESTERLY ALONG THE SOUTHEASTERLY LINE OF SAID LAST
MENTIONED LAND TO THE SOUTHEASTERLY CORNER OF SAID LAND; THENCE
• WESTERLY, SOUTHERLY AND EASTERLY ALONG THE BOUNDARY OF THE LAND
DESCRIBED IN DEED TO THE KIWANIS CLUB OF SANTA ANA RECORDED SEPTEMBER
24, 1954 IN BOOK 2826, PAGE 166 OF SAID OFFICIAL RECORDS TO THE
NORTHEASTERLY CORNER OF THE LAND DESCRIBED IN DEED TO THE CITY OF SANTA
ANA RECORDED SEPTEMBER 14 , 1954 IN BOOK 2817, PAGE 86 OF SAID OFFICIAL
RECORDS; THENCE SOUTHWESTERLY ALONG THE SOUTHEASTERLY LINE OF SAID LAST
MENTIONED LAND TO THE SOUTHEASTERLY CORNER THEREOF; THENCE TO AND ALONG
THE EASTERLY BOUNDARY OF THE LAND DESCRIBED IN DEED TO THE CITY OF SANTA
ANA RECORDED JUNE 8, 1953 IN BOOK 2516, PAGE 264 OF SAID OFFICIAL
RECORDS, TO AND ALONG THE SOUTHEASTERLY LINE OF THE LAND DESCRIBED IN
DEED RECORDED APRIL 15, 1922 IN BOOK 418, PAGE 211 OF DEEDS OF SAID
ORANGE COUNTY, AND TO AND ALONG THE SOUTHWESTERLY LINE OF THE LAND
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DESCRIBED IN DEED RECORDED JUNE 4 , 1918 IN BOOK 311, PAGE 255 OF SAID
DEEDS TO THE SOUTHEASTERLY LINE OR ITS SOUTHWESTERLY PROLONGATION OF THE
LAND DESCRIBED IN DEED TO TOWNER MANUFACTURING COMPANY RECORDED MARCH
13 , 1946 IN BOOK 1399, PAGE 362 OF SAID OFFICIAL RECORDS; THENCE
NORTHEASTERLY ALONG SAID PROLONGATION AND/OR SOUTHEASTERLY LINE TO THE
NORTHEASTERLY CORNER THEREOF; THENCE NORTHWESTERLY ALONG THE
NORTHEASTERLY LINE OF SAID LAST MENTIONED LAND AND ITS NORTHWESTERLY
PROLONGATION TO THE MOST EASTERLY CORNER OF SAID LAND DESCRIBED IN DEED
RECORDED SEPTEMBER 2, 1975 IN BOOK 11500, PAGE 174; THENCE ALONG THE
SOUTHERLY LINE OF SAID LAST MENTIONED LAND SOUTH 84° 02' 50" WEST 53 . 72
FEET TO THE TRUE POINT OF BEGINNING.
EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED RECORDED SEPTEMBER 2,
1975 IN BOOK 11500, PAGE 171 OF SAID OFFICIAL RECORDS .
ALSO EXCEPTING FROM PORTIONS OF SAID LAND ALL OIL, PETROLEUM, GAS AND
OTHER HYDROCARBON SUBSTANCES IN OR UNDER THE LAND GRANTED WITH THE RIGHT
OF THE GRANTORS TO EXPLORE FOR, DEVELOP AND PRODUCE THE SAME AS RESERVED
IN DEEDS RECORDED IN BOOK 405, PAGE 27, BOOK 403, PAGE 391, BOOK 418,
PAGE 211 AND BOOK 512, PAGE 396, ALL OF DEEDS OF ORANGE COUNTY.
•
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WATER WELLS NUMBER 27 AND 28
(For Purposes of Reference Only)
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
ORANGE, CITY OF ORANGE, DESCRIBED AS FOLLOWS :
THAT PORTION OF THE ABEL STEARNS ALLOTMENT OF THE RANCHO SANTIAGO DE
SANTA ANA ACQUIRED BY THE STATE OF CALIFORNIA BY DEED RECORDED JUNE 9,
1964, IN BOOK 7079, PAGE 754 AND BY PARCEL 1 OF DEED RECORDED JUNE 23 ,
1965, IN BOOK 7604, PAGE 500, BOTH OF OFFICIAL RECORDS,- IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY, BOUNDED NORTHEASTERLY BY THE
FOLLOWING DESCRIBED LINE:
BEGINNING AT A POINT IN THE SOUTHEASTERLY LINE OF SAID PARCEL 1, DISTANT
THEREON NORTH 38° 52' 08" EAST, 220 .48 FEET FROM THE MOST SOUTHERLY
CORNER OF SAID PARCEL 1; THENCE NORTH 59° 43' 30" WEST, 141 . 96 FEET;
THENCE NORTH 56° 51' 41" WEST, 102 . 26 FEET; THENCE NORTH 49° 37' 08"
WEST, 126 . 13 FEET TO THE SOUTHWESTERLY LINE OF SAID DEED RECORDED IN
BOOK 7079 .
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LAI-70616.1
WATER WELL NUMBER 31
(For Purposes of Reference Only)
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
ORANGE, CITY OF SANTA ANA, DESCRIBED AS FOLLOWS :
PARCEL 1 :
ACREAGE LOTS 3 AND 4 OF TRACT NO. 24 , AS SHOWN ON A MAP. RECORDED IN BOOK
9, PAGE 23 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA,
AND THAT PORTION OF LOT A OF THE STAFFORD AND TUSTIN TRACT, AS SHOWN ON
A MAP RECORDED IN BOOK 2, PAGE 618 OF MISCELLANEOUS RECORDS OF LOS
ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS :
BEGINNING AT A POINT OF INTERSECTION OF THE EASTERLY LINE OF SAID LOT A,
WITH THE SOUTHERLY LINE OF FIRST STREET; THENCE SOUTH 89° 07' 30" WEST,
ALONG SAID SOUTHERLY LINE OF FIRST STREET 363 . 18 FEET; THENCE SOUTH 89°
11' 20" WEST, ALONG SAID SOUTHERLY LINE OF FIRST STREET, 15 . 82 FEET;
THENCE SOUTH 0° 14 ' 50" EAST, PARALLEL WITH THE EASTERLY LINE OF SAID
LOT A, 1240 . 75 FEET TO THE NORTHERLY LINE OF MAIN STREET; THENCE NORTH
89° 05' 30" EAST, ALONG SAID NORTHERLY LINE OF MAIN STREET, 379 FEET TO
THE EASTERLY LINE OF SAID LOT A; THENCE NORTH 0° 14' 50" WEST ALONG SAID
EASTERLY LINE 1240 . 52 FEET TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THOSE PORTIONS LYING NORTHEASTERLY OF THE FOLLOWING
DESCRIBED LINE:
BEGINNING AT A POINT IN THE CENTER LINE OF FIRST STREET (66 FEET WIDE) ,
DISTANT THEREON NORTH 89° 32' 45" EAST, 193 .48 FEET FROM A CHISELED
CROSS IN THE PAVEMENT MARKING THE INTERSECTION OF SAID CENTER LINE WITH
THE SOUTHERLY PROLONGATION OF THE WESTERLY LINE OF THAT CERTAIN STRIP OF
LAND, AS SHOWN "25 FEET FOR ROAD" ON MAP OF MABURY TRACT, RECORDED IN
BOOK 36, PAGE 65 OF SAID MISCELLANEOUS RECORDS; THENCE SOUTH 36° 32' 44"
EAST, 340 . 84 FEET; THENCE SOUTH 35° 08' 11" EAST, 412 . 05 FEET; THENCE
SOUTH 43° 12' 36" EAST, 250 . 00 FEET; THENCE SOUTH 49° 39' 34" EAST,
313 . 61 FEET; THENCE SOUTH 57° 20' 34" EAST, 567. 02 FEET TO A POINT IN
THE CENTER LINE OF MAIN STREET, (80 FEET WIDE) DISTANT THEREON NORTH 89°
30 ' 25" EAST, 218 . 87 FEET FROM THE INTERSECTION OF SAID CENTER LINE OF
MAIN STREET, WITH THE CENTER LINE OF WILLIAMS STREET, (66 FEET WIDE) AS
SHOWN ON SAID MAP OF STAFFORD AND TUSTIN TRACT.
PARCEL 2 :
THAT PORTION OF ACREAGE LOT 1 OF TRACT NO. 24 , AS SHOWN ON A MAP
RECORDED IN BOOK 9, PAGE 23 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:
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IAI-70616.1
BEGINNING AT THE SOUTHWESTERLY CORNER OF SAID LOT 1; THENCE NORTH 0° 10'
25" EAST, ALONG THE WESTERLY LINE THEREOF, 422 . 99 FEET; THENCE SOUTH 36°
08 ' 57" EAST, 48 . 45 FEET; THENCE SOUTH 31° 34 ' 33 " EAST, 113 . 79 FEET;
THENCE SOUTH 35° 13 ' 51" EAST, 105 . 68 FEET; THENCE SOUTH 37° 08 ' 09"
EAST, 188 . 34 FEET; THENCE SOUTH 42° 39' 08" EAST, 65 . 13 FEET TO A POINT
ON THE SOUTHERLY LINE OF SAID LOT 1, DISTANT THEREON 308 . 26 FEET
EASTERLY FROM SAID SOUTHWESTERLY CORNER; THENCE WESTERLY ALONG SAID
SOUTHERLY LINE, 308 .26 FEET TO THE POINT OF BEGINNING.
EXCEPTING FROM SAID PARCEL 2 ALL MINERALS, OILS, GASES AND OTHER
HYDROCARBONS BY WHATSOEVER NAME KNOWN, THAT MAY BE WITHIN OR UNDER THE
PARCEL OF LAND HEREINABOVE DESCRIBED WITHOUT, HOWEVER, THE RIGHT TO
DRILL, DIG OR MINE THROUGH THE SURFACE THEREOF, AS RESERVED IN A DEED
RECORDED IN BOOK 3964, PAGE 128 OF OFFICIAL RECORDS.
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•
WATER WELL NUMBER 32
(For Purposes of Reference Only)
•
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
ORANGE, CITY OF SANTA ANA, DESCRIBED AS FOLLOWS:
PARCEL 1:
THAT PORTION OF THE NORTH ONE-HALF OF LOT 13 , POTTS, BORDEN AND SIDWELL
TRACT, AS PER MAP RECORDED IN BOOK 4, PAGE 624 OF MISCELLANEOUS RECORDS
OF LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF THE NORTH ONE-HALF OF SAID LOT 13 ;
THENCE NORTH 0° 01' 57" EAST 397. 79 FEET; THENCE SOUTH 89° 53 ' 46" EAST
530. 50 FEET; THENCE SOUTH 0° 12 ' 17" EAST 237. 06 FEET TO A TANGENT CURVE
CONCAVE NORTHWESTERLY AND HAVING A RADIUS OF 200. 00 FEET; THENCE
SOUTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 23° 50' 15" ,
AN ARC DISTANCE OF 83 .21 FEET, TO A TANGENT CURVE CONCAVE SOUTHEASTERLY
AND HAVING A RADIUS OF 200. 00 FEET; THENCE SOUTHWESTERLY ALONG SAID
CURVE THROUGH A CENTRAL ANGLE OF 23° 31' 37" , AN ARC DISTANCE OF 82 . 12
FEET, TO A NON-TANGENT LINE; THENCE NORTH 89° 53 ' 34" WEST 498 . 06 FEET
TO THE POINT OF BEGINNING.
PARCEL 2 :
THE NORTHERLY 145 .00 FEET OF THE WEST 362.43 FEET OF THE SOUTH ONE-HALF
OF LOT 13 , POTTS, BORDEN AND SIDWELL TRACT, AS PER MAP RECORDED IN BOOK
4, PAGE 624 OF MISCELLANEOUS RECORDS OF LOS ANGELES COUNTY, CALIFORNIA.
PARCEL 3 :
THAT PORTION OF THE SOUTH ONE-HALF OF LOT 13 , POTTS, BORDEN AND SIDWELL
TRACT, AS PER MAP RECORDED IN BOOK 4, PAGE 624 OF MISCELLANEOUS RECORDS
OF LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 13, SAID CORNER BEING ON
THE CENTER LINE OF MEMORY LANE AS SHOWN ON A RECORD OF SURVEY RECORDED
IN BOOK 58, PAGE 27 OF RECORDS OF SURVEYS, IN THE OFFICE OF THE COUNTY
RECORDER OF ORANGE COUNTY, CALIFORNIA; THENCE NORTH 0° 01' 50" EAST
660 .98 FEET TO THE NORTHWEST CORNER OF THE SOUTH ONE-HALF OF SAID LOT
13 ; THENCE SOUTH 89° 53' 50" EAST 30 . 00 FEET; THENCE SOUTH 0° 01' 50"
WEST 243 .29 FEET ALONG A LINE PARALLEL WITH AND 30. 00 FEET EASTERLY
MEASURED AT RIGHT ANGLES FROM THE WEST LINE OF SAID LOT 13 AND TO THE
BEGINNING OP A TANGENT CURVE CONCAVE NORTHWESTERLY AND HAVING A RADIUS
OF 180.00 FEET; THENCE SOUTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL
ANGLE OF 21° 02 ' 23" AN ARC DISTANCE OF 66 . 10 FEET TO A TANGENT CURVE
u1406M.i A-43
CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 120 . 00 FEET; THENCE
SOUTHWESTERLY ALONG SAID TANGENT CURVE THROUGH A CENTRAL ANGLE OF 21°
02 ' 23 " AN ARC DISTANCE OF 44 .07 FEET TO A TANGENT LINE; THENCE SOUTH 0°
01' 50" WEST 234 . 97 FEET ALONG A LINE PARALLEL WITH AND 10 . 00 FEET
EASTERLY MEASURED AT RIGHT ANGLES FROM THE WEST LINE OF SAID LOT 13 AND
TO A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 25 . 00
FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF
89° 55' 40" AN ARC DISTANCE OF 39 .24 FEET TO A NON-TANGENT LINE; THENCE
SOUTH 0° 06' 10" WEST 50 . 00 FEET TO THE CENTER LINE OF SAID MEMORY LANE;
THENCE NORTH 89° 53 ' 50" WEST 34 .91 FEET TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THOSE PORTIONS PREVIOUSLY DEDICATED FOR STREET
PURPOSES .
ALSO EXCEPTING THEREFROM ANY PORTION THEREOF INCLUDED WITHIN PARCEL 1
DESCRIBED ABOVE.
•
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WATER WELL NUMBER 33
(For Purposes of Reference Only)
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
ORANGE, CITY OF SANTA ANA, DESCRIBED AS FOLLOWS :
LOT 20 IN BLOCK P OF THE HEIL TRACT, AS SHOWN ON A MAP RECORDED IN BOOK
23, PAGE 28 OF MISCELLANEOUS RECORDS OF LOS ANGELES COUNTY, CALIFORNIA.
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LA1-70616.1
WATER WELL NUMBER 36
(For Purposes of Reference Only)
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
ORANGE, CITY OF SANTA ANA, DESCRIBED AS FOLLOWS :
PARCEL 1 :
THAT PORTION OF LOTS 10 AND 11 OF THE BATES TRACT, AS SHOWN ON A MAP
RECORDED IN BOOK 1, PAGE 96 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS :
BEGINNING AT THE NORTHWEST CORNER OF SAID LOT 10 ; THENCE SOUTH 84° 15'
00" EAST 743 . 16 FEET TO THE NORTHEAST CORNER OF SAID LOT 10; THENCE
SOUTH 1° 15' 00" WEST 248 . 16 FEET; THENCE NORTH 89° 30' 00" WEST 419 . 10
FEET; THENCE SOUTH 1° 15' 00" WEST 269 . 35 FEET; THENCE NORTH 89° 30' 00"
WEST 323 . 40 FEET TO THE WEST LINE OF SAID LOT 10; THENCE NORTH 1° 15 '
00" EAST 608 . 52 FEET TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS :
BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 10; THENCE SOUTH 1° 15 '
00" WEST 248 . 16 FEET; THENCE NORTH 89° 30' 00" WEST 419 . 10 FEET; THENCE
NORTH 1° 15 ' 00" EAST TO A POINT ON THE NORTH LINE OF SAID LOT 10;
THENCE SOUTH 84° 15' 00" EAST ALONG THE NORTHERLY LINE OF SAID LOT 10 TO
THE POINT OF BEGINNING.
ALSO EXCEPTING THEREFROM THAT PORTION LYING NORTHERLY OF THE FOLLOWING
DESCRIBED LINE:
BEGINNING AT A POINT ON THE WEST LINE OF SAID LOT 10, AS SAID WEST LINE
IS SHOWN ON THE MAP OF TRACT NO. 6007, RECORDED IN BOOK 220, PAGES 33
AND 34 OF SAID MISCELLANEOUS MAPS, DISTANT THEREON SOUTH 0° 41' 10" WEST
80 . 60 FEET ALONG SAID WEST LINE FROM THE SOUTHWEST CORNER OF SAID TRACT
NO. 6007; THENCE SOUTH 82° 20' 00" EAST 434 . 14 FEET TO THE BEGINNING OF
A TANGENT CURVE, CONCAVE NORTHERLY AND HAVING A RADIUS OF 1640 . 00 FEET,
SAID CURVE ALSO BEING TANGENT TO THE WESTERLY PROLONGATION OF THE
SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED TO THE CITY OF SANTA ANA
RECORDED MAY 7, 1953 IN BOOK 2499, PAGE 412 OF OFFICIAL RECORDS OF SAID
ORANGE COUNTY; THENCE EASTERLY 289 . 18 FEET ALONG SAID CURVE THROUGH A
CENTRAL ANGLE OF 10° 06' 10" TO ITS POINT OF TANGENCY WITH SAID WESTERLY
PROLONGATION; THENCE NORTH 87° 33 ' 50" EAST 19 . 78 FEET ALONG SAID
WESTERLY PROLONGATION TO THE EAST LINE OF SAID LOT 10 .
AJ+6
IAI-70616.1
PARCEL 2 :
THAT PORTION OF LOT 10 OF THE BATES TRACT, AS SHOWN ON A MAP RECORDED IN
BOOK 1, PAGE 96 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY,
CALIFORNIA, DESCRIBED AS FOLLOWS :
BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 10 ; THENCE SOUTH 1° 15'
00" WEST 248 . 16 FEET; THENCE NORTH 89° 30' 00" WEST 419 . 10 FEET; THENCE
NORTH 1° 15' 00" EAST TO A POINT ON THE NORTH LINE OF SAID LOT 10;
THENCE SOUTH 84° 15' 00" EAST ALONG THE NORTHERLY LINE OF SAID LOT 10 TO
THE POINT OF BEGINNING.
EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS :
BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 10 ; THENCE SOUTH 0° 38 '
10" WEST ALONG THE EASTERLY LINE OF SAID LOT 10 A DISTANCE OF 91 . 74 FEET
TO A POINT, SAID POINT BEING ON THE CENTERLINE OF BAKER STREET; THENCE
NORTH 89° 26 ' 00" WEST 30 . 00 FEET TO THE TRUE POINT OF BEGINNING; THENCE
SOUTH 0° 38 ' 10" WEST 156 . 75 FEET; THENCE SOUTH 89° 56' 00" WEST 114 . 60
FEET; THENCE NORTH 0° 33 ' 10" EAST 158 . 02 FEET; THENCE SOUTH 89° 26' 00"
EAST 114 . 83 FEET TO THE TRUE POINT OF BEGINNING.
ALSO EXCEPTING THEREFROM THAT PORTION LYING NORTHERLY OF THE FOLLOWING
DESCRIBED LINE:
BEGINNING AT A POINT ON THE WEST LINE OF SAID LOT 10, AS SAID WEST LINE
IS SHOWN ON THE MAP OF TRACT NO. 6007, RECORDED IN BOOK 220, PAGES 33
AND 34 OF SAID MISCELLANEOUS MAPS, DISTANT THEREON SOUTH 0° 41' 10" WEST
80 . 60 FEET ALONG SAID WEST LINE FROM THE SOUTHWEST CORNER OF SAID TRACT
NO. 6007; THENCE SOUTH 82° 20' 00" EAST 434 . 14 FEET TO THE BEGINNING OF
A TANGENT CURVE, CONCAVE NORTHERLY AND HAVING A RADIUS OF 1640 . 00 FEET,
SAID CURVE ALSO BEING TANGENT TO THE WESTERLY PROLONGATION OF THE
SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED TO THE CITY OF SANTA ANA
RECORDED MAY 7, 1953 IN BOOK 2499, PAGE 412 OF OFFICIAL RECORDS OF SAID
ORANGE COUNTY; THENCE EASTERLY 289 . 18 FEET ALONG SAID CURVE THROUGH A
CENTRAL ANGLE OF 10° 06' 10" TO ITS POINT OF TANGENCY WITH SAID WESTERLY
PROLONGATION; THENCE NORTH 87° 33 ' 50" EAST 19 .78 FEET ALONG SAID
WESTERLY PROLONGATION TO THE EAST LINE OF SAID LOT 10 .
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EXHIBIT B
Base Rental Payment Schedule
Base Rental Principal Interest Total Base
Payment Date Component Component Rental
January 1, 1995 $ 0 $ 5,240,320 $ 5,240,320
July 1, 1995 0 3,188,889 3,188,889
January 1, 1996 0 3,188,889 3,188,889
July 1, 1996 0 3,188,889 3,188,889
January 1, 1997 0 3,188,889 3,188,889
July 1, 1997 0 3,188,889 3,188,889
January 1, 1998 0 3,188,889 3,188,889
July 1, 1998 0 3,188,889 3,188,889
January 1, 1999 0 3,188,889 3,188,889
July 1, 1999 0 3,188,889 3,188,889
January 1, 2000 0 3,188,889 3,188,889
July 1, 2000 0 3,188,889 3,188,889
January 1, 2001 0 3,188,889 3,188,889
July 1, 2001 270,000 3,188,889 3,458,889
January 1, 2002 0 3,188,889 3,188,889
July 1, 2002 770,000 3,188,889 3,958,889
January 1, 2003 0 3,188,889 3,188,889
July 1, 2003 1,285,000 3,188,889 4,473,889
January 1, 2004 0 3,188,889 3,188,889
July 1, 2004 1,820,000 3,188,889 5,008,889
January 1, 2005 0 3,141,114 3,141,114
July 1, 2005 2,465,000 3,141,114 5,606,114
January 1, 2006 0 3,075,791 3,075,791
July 1, 2006 3,075,000 3,075,791 6,150,791
January 1, 2007 0 2,992,766 2,992,766
July 1, 2007 3,240,000 2,992,766 6,232,766
January 1, 2008 0 2,903,666 2,903,666
July 1, 2008 3,420,000 2,903,666 6,323,666
January 1, 2009 0 2,807,906 2,807,906
July 1, 2009 3,610,000 2,807,906 6,417,906
January 1, 2010 0 2,706,375 2,706,375
July 1, 2010 3,800,000 2,706,375 6,506,375
January 1, 2011 0 2,597,125 2,597,125
July 1, 2011 4,000,000 2,597,125 6,597,125
January 1, 2012 0 2,482,125 2,482,125
July 1, 2012 4,200,000 2,482,125 6,682,125
January 1, 2013 0 2,361,375 2,361,375
July 1, 2013 4,500,000 2,361,375 6,861,375
January 1, 2014 0 2,232,000 2,232,000
July 1, 2014 4,700,000 2,232,000 6,932,000
January 1, 2015 0 2,096,875 2,096,875
July 1, 2015 5,030,000 2,096,875 7,126,875
LA1-63219.5 B-1
Base Rental Principal Interest Total Base
Payment Date Component Component Rental
January 1, 2016 0 1,939,688 1,939,688
July 1, 2016 5,345,000 1,939,688 7,284,688
January 1, 2017 0 1,772,656 1,772,656
July 1, 2017 5,680,000 1,772,656 7,452,656
January 1, 2018 0 1,595,156 1,595,156
July 1, 2018 6,035,000 1,595,156 7,630,156
January 1, 2019 0 1,406,563 1,406,563
July I, 2019 6,410,000 1,406,563 7,816,653
January 1, 2020 0 1,206,250 1,206,250
July 1, 2020 6,815,000 1,206,250 8,021,250
January 1, 2021 0 993,281 993,281
July 1, 2021 7,240,000 993,281 8,233,281
January 1, 2022 0 767,031 767,031
July 1, 2022 7,690,000 767,031 8,457,031
January 1, 2023 0 526,719 526,719
July 1, 2023 8,170,000 526,719 8,696,719
January 1, 2024 0 271,406 271,406
July 1, 2024 8,685,000 271,406 8,956,406
LA1-63219.5 B-2
ACCEPTANCE AND CONSENT
OF REAL PROPERTY INTEREST
This is to certify that the interest in the real property conveyed by that certain Lease, dated
March 1, 1994, from the Santa Ana Financing Authority, a joint powers authority, duly
organized and validly existing under the Constitution and laws of the State of California, as
Lessor, to the City of Santa Ana, a political corporation and governmental agency, as Lessee,
is hereby accepted by the undersigned officer or agency on behalf of the City Council pursuant
to authority conferred by Resolution of the City Council, adopted on February 22, 1994, and
the grantee consents to recordation thereof by its duly authorized officer.
March 16, 1994 74("7-
Dated City Manager of the City of Santa Ma
LA1-63219.4
Recording Requested By And
When Recorded Mail To:
William W. Bothwell, Esq.
ORRICK, HERRINGTON & SUTCLIFFE
777 South Figueroa Street, Suite 3200
Los Angeles, California 90017
ASSIGNMENT AGREEMENT
by and between the
SANTA ANA FINANCING AUTHORITY
and
MERIDIAN TRUST COMPANY,
as Trustee
Dated as of March 1, 1994
•
This transaction is exempt from California documentary transfer tax pursuant to Section 11929
of the California Revenue and Taxation Code. This document is recorded for benefit of the
Santa Ana Financing Authority and such recording fee is exempt under Section 6103 of the
California Government Code.
LAI-63377.2
ASSIGNMENT AGREEMENT
This Assignment Agreement (the "Assignment Agreement"), dated as of March
1, 1994, by and between the Santa Ana Financing Authority, a joint powers authority, duly
organized and existing under and by virtue of the Constitution and laws of the State of California
(the "Authority"), and Meridian Trust Company, a national banking association duly organized
and existing under and by virtue of the laws of the United States as Trustee (the "Trustee");
WITNESSETH:
WHEREAS, the Authority and the City of Santa Ana, a municipal corporation
organized and existing under and by virtue of the Constitution and laws of the State of California
(the "City"), have executed and entered into a Ground J ease (the "Ground Lease") and a J ease
(the "Lease"), both dated as of March 1, 1994; and
WHEREAS, under and pursuant to the Lease, the City is obligated to make
scheduled base rental payments (the "Base Rental") to the Authority; and
WHEREAS, the Authority desires to assign to the Trustee without recourse all
its rights to receive the Base Rental to be paid by the City under and pursuant to the J ease and
certain other rights thereunder and under the Ground Lease; and
WHEREAS, in consideration of such assignment and the execution and entering
into of an Indenture, dated as of March 1, 1994 (the "Indenture"), by and between the Authority
and the Trustee, the Trustee will authenticate and deliver the Santa Ana Financing Authority
Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A (the "Bonds"),
which Bonds shall be payable solely from payments made by the City pursuant to the Lease; and
WHEREAS, the Authority hereby certifies that all acts, conditions and things
required by law to exist, to have happened and to have been performed precedent to and in
connection with the execution and entering into of the Assignment Agreement do exist, have
happened and have been performed in regular and due time, form and manner as required by
law, and the parties hereto are now duly authorized to execute and enter into the Assignment
Agreement;
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF
• THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR
OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE
AS FOLLOWS:
SECTION 1. Assignment. The Authority, for one dollar ($1.00) and for other
good and valuable consideration in hand received, does hereby sell, assign and transfer, without
recourse, to the Trustee for the benefit of the registered owners of the Bonds each and all of its
rights under the Ground I ease and Lease (but not including the right of the Authority to receive
LA1-63377.2
payment of its fees, expenses and reimbursements), including its right to receive the Base Rental
from the City under the Lease and its right to exercise such rights and remedies conferred on
the Authority under the Ground Lease and Lease as may be necessary to enforce payment of the
Base Rental when due or otherwise to protect its interests in the event of a default by the City,
and all rights of entry in and upon the Project, as defined in the Lease, as provided in the
Ground Lease and Lease. This assignment is absolute and is presently effective, and all Base
Rental shall be applied and the rights so assigned shall be exercised by the Trustee as provided
in the Indenture.
SECTION 2. Acceptance. The Trustee hereby accepts the foregoing assignment
for the benefit of registered owners of the Bonds, subject to the conditions and terms of the
Indenture, and all Base Rental received by the Trustee shall be applied and all such rights so
assigned shall be exercised by the Trustee as provided in the Indenture.
SECTION 3. Conditions. The Assignment Agreement shall confer no rights and
shall impose no obligations upon the Trustee beyond those expressly provided in the Indenture.
SECTION 4. California Law. The Assignment Agreement shall be governed by
and construed and interpreted in accordance with the laws of the State of California.
SECTION 5. Severability. If any agreement, condition, covenant or term hereof
or any application hereof shall be held by a court of competent jurisdiction to be invalid, void
or unenforceable, in whole or in part, all agreements, conditions, covenants and terms hereof
and all applications thereof not held invalid, void or unenforceable shall continue in full force
and effect and shall in no way be affected, impaired or invalidated thereby.
LA1-63377.2 2
SECTION 6. Execution in Counterparts. The Assignment Agreement may be
executed and entered into in several counterparts, each of which shall be deemed an original,
and all of which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and entered into the
Assignment Agreement by their officers thereunto duly authorized as of the day and year first
above written.
SANTA ANA FI NCING AUTHORITY Nibc
By /271-e-- /Y t°GGIvL_.
t
Executive Director
MERIDIAN TRUST COMPANY OF
CALIFORNIA, as Trustee
By
Authorized Officer
APPROVED AS TO FORM:
Edward J. Coop r,
City Attorney
LAI-63377.2 3
SECTION 6. Execution in Counterparts. The Assignment Agreement may be
executed and entered into in several counterparts, each of which shall be deemed an original,
and all of which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and entered into the
Assignment Agreement by their officers thereunto duly authorized as of the day and year first
above written.
SANTA ANA FINANCING AUTHORITY
By
Executive Director
MERIDIAN TRUST COMPANY OF
CALIFORNIA, as Trustee
"3 °1-76(
Authoriz Officer
APPROVED AS TO FORM:
Edward J. Cooper,
City Attorney
LA1-63377.2
STATE OF CALIFORNIA
ss.
COUNTY OF ORANGE
On March 16, 1994 before me Laura C. Johnson, Notary Public
(here insert name and title of the officer) , personally appeared
David N. Ream, Executive Director
of Santa Ana Financing Authoritpersonally known to me
^'en—tht basis of saLt to be the person(s<whose
name(,sf is/.ar-e subscribed to the within instrument and acknowledged
to me that he/she/they executed the same in histheefthetr
authorized capacityliegj; and that by his/her/their signature( n
the instrument the person(,; or the entity upon behalf of which
the person acted, executed the instrument.
OFFICIAL SEAL
WITNESS my hand and official seal. LAURA C. JOHNSON
Notary Public•Callfornla
ORANGE COUNIY
T. v My Commission Expires
rift
January 30, 1995
Signature
v
La ra C. Jo son otary
LkI-62435.1
STATE OF CALIFORNIA
) ss.
COUNTY OF SAN FRANCISCO )
t� On Ana&ti ((Li I9 H before me, the undersigned,
personally appeared oDD N. , lluv.cg J , personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
STIMOTHYJ. CAMPBELL
NOTARY PUBLIC-CALIFOANR �
CITYAND COUNTY OF
Signature ) My Commission Expires io 2p 95�
LA1-63377.2
STATE OF CALIFORNIA
ss.
COUNTY OF ORANGE
On March 16, 1994 before me Laura C. Johnson, Notary Public
(here insert name and title of the officer) , personally appeared
Edward J. Cooper, City Attorneypersonally known to me (sr--proved Lu sue
-en--theta—b of bati-sfaeter-y-evidence.) to be the person,cs) whose
namecsl is,[ar-e subscribed to the within instrument and acknowledged
to me that he/she/they executed the same in his/hcr/thcir
authorized capacity(.ies) , and that by his,.114 ;thelr si nature
9 .(s-r'on
the instrument the person(s4-, or the entity upon behalf of which
the person acted, executed the instrument.
b
WITNESS my hand and official seal. OFFICIAL SEAL
LAURA C. JOHNSON
W % Notary Fubnc-California
•-3 ORANGE COUNN
1 1 r My Commission Expires
Signatur January NIL1995
L ra C. Joh Notary
LAI- 2435.1
AUCTION AGENT AGREEMENT
between
MERIDIAN TRUST COMPANY OF CALIFORNIA,
as Trustee
and
THE BANK OF NEW YORK,
as Auction Agent
Dated as of March 1, 1994
Relating to
Santa Ma Financing Authority Police Administration
and Holding Facility Lease Revenue Bonds,
Series 1994A
Auction Rate Securities
Inverse Rate Securities
LA1-69756.2
TABLE OF CONTENTS
Page
Section 1. Definitions and Rules of Construction 1
Section 2. The Auction 4
Section 3. Fixing and Separating ARS and IRS 11
Section 4. Tender of ARS 12
Section 5. Representations and Warranties of the Trustee 14
Section 6. The Auction Agent 14
Section 7. Miscellaneous 17
Exhibit A Indenture A-1
Exhibit B Form of Broker-Dealer Agreement B-1
Exhibit C Auction Procedures and Settlement Procedures C-1
Exhibit D Purchaser's Letter D-1
Exhibit E Notice of Conversion E-1
Exhibit F Notice of Fee Rate Change F-1
Exhibit G Notice of ARS Not Fixed G-1
Exhibit H Notice of Failure to Receive Certificate H-1
Exhibit I Notice of Failure to Receive Opinion I-1
Exhibit J Notice of Payment Default J-1
Exhibit K List of Broker-Dealers K-1
LA1-69756.2 i
AUCTION AGENT AGREEMENT
This AUCTION AGENT AGREEMENT, dated as of March 1, 1994 (the
"Agreement"), between Meridian Trust Company of California, a banking corporation duly
created and lawfully existing pursuant to the laws of the State of California, as trustee (the
"Trustee") under an Indenture of Trust, dated as of March 1, 1994 (the "Indenture") between the
Santa Ma Financing Authority (the "Authority") and the Trustee, and the Bank of New York; a
New York corporation, as auction agent (together with its successors and assigns, the "Auction
Agent").
WHEREAS, the Authority proposes to cause the Trustee to authenticate and
deliver $107,399,438.50 aggregate principal amount of its Santa Ma Financing Authority Police
Administration and Holding Facility Lease Revenue Bonds, Series 1994A, consisting of
$10,600,000 aggregate principal amount of Auction Rate Securities (the "ARS") and $10,600,000
aggregate principal amount of Inverse Rate Securities (the "IRS") pursuant to the Indenture. The
Trustee is entering into this Agreement as agent for the Beneficial Owners of the ARS and IRS
pursuant to the Indenture.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the adequacy and sufficiency of which are hereby acknowledged, and intending
to be legally bound, the Trustee and the Auction Agent agree as follows:
Section 1. Definitions and Rules of Construction.
1.1. Terms Defined by Reference. Capitalized terms used herein and not
otherwise defined shall have the meanings given such terms in the Indenture or Appendix A
thereto.
1.2. Terms Defined Herein. As used herein and in each Exhibit hereto, the
following terms shall have the following meanings, unless the context otherwise requires:
"Auction" shall have the meaning specified in Section 2.1 hereof.
"Auction and Settlement Procedures" shall mean those procedures set forth in
Exhibit C hereto.
"Auction Agent Fee" shall have the meaning specified in Section 6.4 hereof.
"Auction Period" shall mean the period from and including the Closing Date to,
but not including, the first Auction Period Accrual Date and, thereafter, from and including each
Auction Period Accrual Date to, but not including, the next succeeding Auction Period Accrual
Date; provided, however, that if such date is later than the maturity date of a maturity of ARS,
the last day of such Auction Period shall be the maturity date of such ARS.
LA1-69756.2 '..
"Auction Period Accrual Date" shall mean September 20, 1994 and every 5th
Tuesday thereafter (or such other day that the Market Agent shall establish as an Auction Period
Accrual Date); provided, however, that if such day is not a Business Day, the Auction Period
Accrual Date shall be the next succeeding Business Day.
"Auction Procedures" shall mean the provisions that are set forth in Section 2 of
the Auction and Settlement Procedures.
"Auction Record Date" shall mean the Business Day preceding each Auction Date.
"Authorized Broker-Dealer" shall mean each person listed in Exhibit K hereto.
"Authorized Officer" shall mean each Senior Vice President, Vice President,
Assistant Vice President, Trust Officer and Assistant Manager of the Auction Agent assigned to
its Corporate Trust Group and every other officer or employee of the Auction Agent designated
as an "Authorized Officer" for purposes hereof in a written communication to the Trustee.
"Authorized Trustee Representative" shall mean the Senior Vice President, Vice
President, Assistant Vice President, Assistant Secretary and Trust Officer of the Trustee and
every other officer or employee of the Trustee designated as an "Authorized Trustee
Representative" for purposes hereof in a communication to the Auction Agent.
"Beneficial Owner" shall mean the person who is (i) the beneficial owner of ARS
or IRS according to the records of the Securities Depository while such ARS and IRS are in
book-entry form or (ii) the registered holder of ARS or IRS according to the records of the
Trustee while such ARS and IRS are not in book-entry form.
"Broker Dealer Agreement" shall mean each agreement between the Auction
Agent and a Broker-Dealer substantially in the form attached hereto as Exhibit B.
"Broker-Dealer Fee" shall have the meaning specified in Section 6.5 hereof.
"Closed Period" shall mean each period (i) commencing at 11:00 a.m., New York
City time, on the Business Day immediately preceding any Auction Record Date and ending
immediately prior to the opening of business on the Auction Period Accrual Date succeeding such
Auction Record Date and (ii) commencing at 11:00 a.m., New York City time, on a Redemption
Record Date and ending immediately prior to the opening of business on the related redemption
date.
"Existing Holder Registry" shall mean the register maintained by the Auction
Agent pursuant to Section 2.2(a)(i) hereof.
"Fixed" shall mean Regular ARS, the beneficial ownership of which has been
linked with an equal aggregate principal amount of Regular IRS, and recorded as such as Newly
Fixed AIRS or as Regular Fixed AIRS under the Applicable CUSIP Number at the Securities
Depository.
LA1-69756.2 2
"Interest Payment Date" shall mean January 1, 1995, semi-annually thereafter on
each January 1 and July 1 and at maturity; provided, however, that if any such day is not a
Business Day, interest due on such day shall be paid on the next succeeding Business Day
without accrual of any additional interest.
"Notice of Conversion" shall mean a notice to the Securities Depository
substantially in the form of Exhibit E hereto.
"Notice of ARS Not Fixed" shall mean a notice substantially in the form of Exhibit
G hereto.
"Notice of Failure to Deliver" shall mean a notice substantially in the form of
Exhibit D to the Broker-Dealer Agreement.
"Notice of Failure to Receive Certificate" shall mean a notice substantially in the
form of Exhibit H hereto.
"Notice of Failure to Receive Opinion" shall mean a notice substantially in the
form of Exhibit I hereto.
"Notice of Payment Default" shall mean a notice substantially in the form of
Exhibit J hereto.
"Notice of Fee Rate Change" shall mean a notice substantially in the form of
Exhibit F hereto.
"Notice of Transfer" shall mean a notice substantially in the form of Exhibit C to
the Broker-Dealer Agreement.
"Participant" shall mean a person who is a participant in or member of the
Securities Depository, as determined by the rules or bylaws of the Securities Depository.
"Purchaser's Letter" shall mean a letter addressed to the Auction Agent, a
Broker-Dealer and a Participant, in the form of Exhibit D hereto.
"Record Date" shall mean, the Business Day next preceding each Interest Payment
Date.
"Representation Letter" shall mean the letter of representations from the
Authority, the Trustee and the Auction Agent to The Depository Trust Company dated as of
March 23, 1994 relating to the ARS and IRS.
"Request to Fix" shall mean a notice substantially in the form of Exhibit E to the
Broker-Dealer Agreement.
"Request to Separate" shall mean a notice substantially in the form of Exhibit F to
the Broker-Dealer Agreement.
IA1 69756.2 3
"Separated" shall mean Newly Fixed AIRS or Regular Fixed AIRS, the beneficial
ownership of which has been separated into equal aggregate principal amounts of ARS and IRS
and recorded as Regular ARS and Regular IRS under the Applicable CUSIP Numbers at the
Securities Depository.
"Settlement Procedures" shall mean the procedures that are set forth in Section 3
of the Auction and Settlement Procedures.
"Tender Date" shall have the meaning specified in Section 4.1 hereof.
"Tender Demand" shall have the meaning specified in Section 4.2 hereof.
"Tender Notice" shall have the meaning specified in Section 4.3 hereof.
"Tender Price" shall have the meaning specified in Section 4.1 hereof.
1.3. Rules of Construction. Unless the context or use indicates another or
different meaning or intent, the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the plural number and vice
versa.
(b) The captions and headings herein are solely for convenience of reference and
shall not constitute a part of this Agreement nor shall they affect its meaning, construction or
effect.
(c) The words "hereof," "herein," "hereto," and other words of similar import
refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to New York City
time.
(e) All references herein to ARS, IRS and AIRS shall be references to ARS, IRS
and AIRS of each maturity.
Section 2. The Auction.
2.1. Auction Procedures and Settlement Procedures.
(a) The Indenture provides that the Applicable ARS Rate for each Auction Period
after the first Auction Period, except as provided in Section 3(c) of Appendix A thereof, shall
equal the sum of the Service Charge Rate and the rate per annum that the Auction Agent
appointed by the Trustee advises results from implementation of the Auction and Settlement
Procedures set forth herein. The Trustee, acting on behalf of the Beneficial Owners, has duly
appointed the Bank of New York as Auction Agent for purposes of the Auction and Settlement
Procedures and to perform such other obligations and duties as are herein set forth. The Bank of
New York hereby accepts such appointment and agrees that it shall follow the procedures set
IA1-69756.2 4
forth in this Section and the Auction and Settlement Procedures for the purpose of, among other
things, determining the Applicable ARS Rate for each Auction Period after the first Auction
Period. Each periodic operation of such procedures is hereinafter referred to as an "Auction".
(b) All of the provisions contained in the Auction and the Settlement Procedures
set forth in Appendix C hereto are incorporated herein by reference in their entirety and shall be
deemed to be a part hereof to the same extent as if such provisions were fully set forth herein.
2.2. Preparation of Each Auction.
(a) (i) The Auction Agent shall maintain a current registry of persons, compiled as
described below, that beneficially own ARS that are not Fixed (such registry being herein
called the "Existing Holder Registry"). Such persons shall constitute the Existing Holders
for purposes of each Auction. The Auction Agent shall indicate in the Existing Holder
Registry the identity of the respective Broker-Dealer of each Existing Holder, if any, on
whose behalf such Broker-Dealer submitted the most recent Order in any Auction which
resulted in such Existing Holder continuing to hold or purchasing the ARS. Smith Barney
Shearson Inc., initially as the sole Broker-Dealer, shall provide or cause to be provided to
the Auction Agent on the Closing Date a list of the initial Existing Holders of ARS. The
Auction Agent may rely upon, as evidence of the identities of the Existing Holders, (A)
such list, (B) the results of each Auction and (C) notices from any Broker-Dealer of such
Existing Holder, Participant of such Existing Holder or the Existing Holder as described
in the first sentence of Section 2.2(a)(iii) hereof, and notices from any Broker-Dealers as
described in Section 4 hereof. The Auction Agent shall only be required to enter into a
Broker-Dealer Agreement with any Broker-Dealer at least seven (7) days prior to any
Auction Date if it shall have received a manually executed Broker-Dealer Agreement from
a Broker-Dealer, or the Trustee, reasonably acceptable to the Auction Agent.
(ii) The Trustee shall notify the Auction Agent when any notice of redemption is
sent to the Securities Depository with respect to ARS or IRS not later than 11:00 a.m.,
New York City time, on the date such notice is sent. In the event the Auction Agent
receives from the Trustee written notice of any partial redemption or notice from any
Broker-Dealer of any mandatory tender of any ARS, the Auction Agent shall, at least
three Business Days prior to the Redemption Date or Tender Date with respect to such
ARS, request the Securities Depository to notify the Auction Agent of the identities of the
Participants (and the respective principal amounts) from the accounts of which ARS have
been called for redemption or mandatory tender and the person or department at such
Participant to contact regarding such redemption or mandatory tender and, at least two
Business Days prior to the Redemption Date or Tender Date with respect to ARS being
partially redeemed or tendered, the Auction Agent shall request each Participant so
identified to disclose to the Auction Agent (upon selection by such Participant of the
Existing Holders whose ARS are to be redeemed or tendered) the aggregate principal
amount of such ARS of each such Existing Holder, if any, which are to be redeemed or
tendered; provided the Auction Agent has been furnished with the name and telephone
number of a person or department at such Participant from which it is to request such
information. Upon any refusal of a Participant to release such information, the Auction
Agent shall deliver to such Participant a copy of the Existing Holder's Purchaser's Letter,
which authorizes and instructs such Participant to release such information to the Auction
LA1-69756.2 5
Agent. In the absence of receiving any such information with respect to any Existing
Holder from such Existing Holder's Participant or otherwise, the Auction Agent may
continue to treat such Existing Holder as the Beneficial Owner of the principal amount of
ARS shown in the Existing Holder Registry.
(iii) The Auction Agent shall register in the Existing Holder Registry a transfer of
ARS only if such transfer is made to a person that has delivered a signed Purchaser's
Letter to the Auction Agent and if(A) such transfer is pursuant to an Auction or (B) if
such transfer is made other than pursuant to an Auction, the Auction Agent has been
notified of such transfer in writing by a Notice of Transfer, by the Broker-Dealer of such
Existing Holder, the Participant of such Existing Holder or the Existing Holder. The
Auction Agent is not required to accept any notice of transfer delivered prior to an
Auction unless it is received by the Auction Agent by 3:00 p.m., New York City time, on
the Business Day next preceding the applicable Auction Date. The Auction Agent shall
rescind a transfer made on the Existing Holder Registry if the Auction Agent has been
notified in writing by a Notice of a Failure to Deliver by the Participant or the
Broker-Dealer of any person that (i) purchased any ARS or (ii) sold any ARS and the
purchaser failed to make payment to such person upon delivery to the purchaser of such
ARS. The Auction Agent is not required to accept any notice of recision to transfer
delivered prior to an Auction unless it is received by the Auction Agent by 3:00 p.m.,
New York City time, on the Business Day next preceding the applicable Auction Date.
(iv) The Auction Agent shall remove an Existing Holder and the ARS beneficially
owned by such Existing Holder from the Existing Holder Registry with respect to ARS
Fixed by the Auction Agent in accordance with Section 3.1 hereof. The Auction Agent
shall add a person and the ARS beneficially owned by such person to the Existing Holder
Registry if(a) the Auction Agent has Separated such ARS and (b) such person has
delivered a signed Purchaser's Letter to the Auction Agent.
(b) Not later than 9:30 a.m., New York City time, on each Auction Date, the
Auction Agent shall notify the Broker-Dealers of the aggregate principal amount of ARS which
are not then Fixed by delivering a Notice of ARS Not Fixed to the Broker-Dealers by telecopy or
other similar means.
(c) The Auction Agent may request that the Broker-Dealers, as set forth in the
Broker-Dealer Agreements, provide the Auction Agent with a list of their respective customers
that such Broker-Dealers believe are Existing Holders of ARS and the aggregate amount held by
such Broker-Dealer. The Auction Agent shall keep confidential any such information and shall
not disclose any such information so provided to any person other than the relevant
Broker-Dealer, the Authority and the Trustee, provided that the Auction Agent reserves the right
to disclose any such information if it is advised by its counsel that its failure to do so would be
unlawful.
(d) In the event that any day that is scheduled to be an Auction Date shall be
changed after the Auction Agent shall have given the notice referred to in Section 3(a)(vii) of the
Auction and Settlement Procedures, the Auction Agent, by such means as the Auction Agent
deems practicable, shall give notice of such change to the Broker-Dealers not later than 9:15
a.m., New York City time, on the earlier of the new Auction Date or the old Auction Date.
LA1-69756.2 6
(e) The Auction Agent is not required to accept the Purchaser's Letter of any
Potential Holder who wishes to submit a Bid for the first time in an Auction or any Potential
Holder or Existing Holder who wishes to amend its Purchaser's Letter unless it is received by the
Auction Agent by 3:00 p.m., New York City time, on the Business Day preceding such Auction.
2.3. Minimum and Maximum Rates.
(a) On the date hereof the Applicable Percentage is 175%. If there is any change
in the ratings then assigned to the ARS by Moody's or S&P (or substitute or successor rating
agencies) which results in a change to the Applicable Percentage after the date of this Agreement
or if the Applicable Percentage is adjusted by the Market Agent in accordance with Section 6 of
Appendix A of the Indenture, the Trustee shall notify the Auction Agent in writing of such
change in the Applicable Percentage prior to 9:00 a.m., New York City time, on the Auction
Date next succeeding such change. In determining the Maximum Rate on any Auction Date as
set forth in Section 2.3(b)(i) hereof, the Auction Agent shall be entitled to rely on the Applicable
Percentage of which it has most recently received notice from the Trustee or, in the absence of
such notice, the Applicable Percentage set forth in the first sentence of this subsection (a).
(b) (i) On each Auction Date, the Auction Agent shall determine the "AA"
Composite Commercial Paper Rate, the Minimum Rate and the Maximum Rate. Pursuant
to the Market Agent Agreement, not later than 9:00 a.m., New York City time, on each
Auction Date, the Market Agent shall notify the Auction Agent by telephone of the Index
for use by the Auction Agent in connection with such determination. Not later than 9:30
a.m., New York City time, on each Auction Date, the Auction Agent shall notify the
Trustee and the Broker-Dealers of the Minimum Rate and the Maximum Rate so
determined and the "AA" Composite Commercial Paper Rate or the Index, as the case
may be, used to make such determinations.
(ii) If at the close of business on the Auction Record Date immediately preceding
any Auction Period all of the outstanding ARS are Fixed, the next succeeding Auction
will not be held.
(iii) If, after delivery to the Auction Agent of the notice referred to in Section 6 of
Appendix A of the Indenture, the Market Agent delivers to the Auction Agent either of
the certificates referred to in Sections 2.6(c) or (d) hereof, the next succeeding Auction
will not be held and the Auction Agent shall notify the Trustee of the Maximum Rate
determined for the next succeeding Auction Period on the first day of such Auction Period
pursuant to Section 2.3(b)(i) above.
(iv) Upon the occurrence of a Payment Default, Auctions will be suspended and
the Applicable ARS Rate for each Auction Period commencing after the occurrence of
such Payment Default to and including the Auction Period, if any, during which, or
commencing less than two Business Days after, such Payment Default is cured or waived
in accordance with the Indenture will equal the Non-Payment Rate, as determined by the
Trustee in accordance with the provisions of the Indenture, plus the Service Charge Rate.
The Applicable ARS Rate for each Auction Period commencing at least two Business
Days after any cure or waiver of a Payment Default shall be the rate determined through
implementation of the Auction Procedures plus the Service Charge Rate.
LAI-69756.2 7
(v) If the ownership of the ARS is no longer maintained in book-entry form by the
Securities Depository, no further Auctions will be held and the Applicable ARS Rate for
each Auction Period commencing after the delivery of certificates pursuant to Section
3.01 of the Indenture will equal the Maximum Rate as determined by the Trustee on the
Business Day immediately preceding the first day of such Auction Period as provided in
the Indenture.
(vi) If any "AA" Composite Commercial Paper Rate is not quoted on an interest
basis but is quoted on a discount basis, the Auction Agent shall convert the quoted rate to
the interest equivalent thereof, as set forth in the definition of "AA" Composite
Commercial Paper Rate in Appendix XX of the Indenture; or, if the rate obtained by the
Auction Agent is not quoted on an interest or discount basis, the Auction Agent shall
convert the quoted rate to an interest rate after consultation with the Market Agent as to
the method of such conversion.
(vii) If the Federal Reserve Bank of New York has not made available its 30-day
commercial paper rate for purposes of determining the "AA" Composite Commercial
Paper Rate, the Trustee shall request that the Authority appoint by Officer's Certificate at
least three commercial paper dealers to provide commercial paper quotes for purposes of
determining the "AA" Composite Commercial Paper Rate, as further provided in Section
4(b) of Appendix A of the Indenture.
2.4. Auction Schedule. The Auction Agent shall conduct Auctions in
accordance with the schedule set forth below. Such schedule may be changed by the Auction
Agent with the consent of the Trustee and the Market Agent, which consent shall not be
unreasonably withheld or delayed. The Auction Agent shall give notice pursuant to Section 7.2
hereof of any such change to each Broker-Dealer. Such notice shall be given prior to the first
Auction Date on which any such change shall be effective.
By 9:00 a.m. The Market Agent provides the Auction Agent with the Index.
By 9:30 a.m. The Auction Agent advises the Trustee and the Broker-Dealers of
the Maximum Rate, the Minimum Rate and the "AA" Composite
Commercial Paper Rate or the Index, as the case may be, used in
determining such Maximum Rate and Minimum Rate, as set forth
in Section 2.3(b)(i) hereof.
9:30 a.m.-1:00 p.m. The Auction Agent assembles information communicated to it by
Broker-Dealers as provided in Section 2(b)(i) of the Auction and
Settlement Procedures. The Submission Deadline is 1:00 p.m.,
New York City time.
Not earlier than
1:00 p.m. The Auction Agent makes the determination pursuant to Section
2(c)(i) of the Auction and Settlement Procedures.
By approximately
LA1-69756.2 8
3:00 p.m. The Auction Agent advises the Trustee and the Broker-Dealers of
the Auction Rate for the next Auction Period and the results of the
Auction as provided in Section 2(c)(ii) of the Auction and
Settlement Procedures. Submitted Bids and Submitted Sell Orders
are accepted and rejected in whole or in part and principal amount
of ARS is allocated as provided in Section 2(d) of the Auction and
Settlement Procedures.
The Auction Agent shall follow the notification procedures set forth in Section 3(a) of the
Auction and Settlement Procedures.
2.5. Applicable IRS Rate. The Auction Agent shall make information with
respect to the Applicable IRS Rate for each Auction Period available by telephone during its
normal business hours to any person requesting such information.
2.6. Changes in Applicable Percentage and Other Rates.
(a) The Auction Agent shall mail any notice delivered to it pursuant to Section
6(b) of Appendix A of the Indenture to the Existing Holders within two Business Days of its
receipt thereof.
(b) The Auction Agent shall deliver any notice delivered to it pursuant to Section
6(c)(i) of Appendix A of the Indenture to the Broker-Dealers not later than 3:00 p.m., New York
City time, on the Business Day on which it receives such certificate.
(c) If, after delivery to the Auction Agent of the notice referred to in subsection
(a) of this Section, the Auction Agent fails to receive the certificate referred to in Section 6(c)(i1
of Appendix A of the Indenture by 11:00 a.m., New York City time, on the Business Day
immediately preceding the next succeeding Auction Date, the Auction Agent shall deliver a
Notice of Failure to Receive Certificate to the Broker-Dealers not later than 3:00 p.m., New
York City time, on such Business Day.
(d) If, after delivery to the Auction Agent of the notice referred to in subsection
(a) of this Section, the Auction Agent fails to receive the Opinion of nationally recognized bond
counsel referred to in ,Section 6(c)(ii) of Appendix A of the Indenture by 9:30 a.m. on the next
succeeding Auction Date, the Auction Agent shall deliver a Notice of Failure to Receive Opinion
to the Broker-Dealers promptly by telecopy or other similar means.
2.7. Notice of Fee Rate Change. If the Auction Agent and the Trustee agree to
a change in the rate at which the Auction Agent Fee accrues pursuant to the terms of Section
6.4(a) hereof or if the Trustee determines to change the rate at which the Broker-Dealer Fee
accrues pursuant to the terms of 6.5(a) hereof, the Auction Agent shall mail a Notice of Fee Rate
Change to the Existing Holders and the Trustee shall mail a Notice of Fee Rate Change to the
Beneficial Owners, in each case within two Business Days of such change.
2.8. Notices to Existing Holders. The Auction Agent shall be entitled to rely
upon the address of each Existing Holder as such address appears in the Purchaser's Letter
L41-69756.2 9
delivered by such Existing Holder in connection with any notice to Existing Holders required to
be given by the Auction Agent.
2.9. Payment Default.
(a) After delivery by the Trustee to the Auction Agent of a notice pursuant to
Section 3(h) of Appendix A of the Indenture that a Payment Default shall have occurred, the
Auction Agent shall deliver a Notice of Payment Default to the Broker-Dealers on the Business
Day following its receipt of the same by telecopy or other similar means.
(b) The Auction Agent shall deliver a copy of any notice received by it from the
Trustee to the effect that a Payment Default has been cured to the Broker-Dealers on the Business
Day following its receipt of the same by telecopy or other similar means.
2.10. Broker-Dealers.
(a) If the Auction Agent is provided with a copy of a Broker-Dealer Agreement,
which has been manually signed, with any Authorized Broker-Dealer to which it shall have
consented (such consent not to be unreasonably withheld), it shall enter into such Broker-Dealer
Agreement with such person.
(b) The Auction Agent may, with the written approval of the Trustee (given at the
direction of the Authority) who shall be deemed to have the approval of Smith Barney Shearson
Inc. so long as Smith Barney Shearson Inc. acts as a Broker-Dealer hereunder, which approval
shall not be unreasonably withheld, enter into a Broker-Dealer Agreement with any other broker
or dealer (each as defined in the Securities Exchange Act of 1934 as amended), commercial bank
or other entity permitted by law to perform the functions required of a broker-dealer and that is a
Participant and has executed and delivered a Broker-Dealer Agreement. The Auction Agent shall
enter into a Broker-Dealer Agreement with each Broker-Dealer prior to the participation of any
such Broker-Dealer in any Auction; provided, however, such Broker-Dealer Agreement may be
effective with respect to an Auction only if the Auction Agent shall have received a manually
signed copy of such Broker-Dealer Agreement at least 7 days prior to such Auction.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as set forth
therein if so directed by the Trustee.
2.11. Access to and Maintenance of Auction Records. The Auction Agent shall
afford to the Trustee, its agents, independent public accountants and counsel, access at reasonable
times during normal business hours to review and make extracts or copies (at no cost to the
Auction Agent) of all books, records, documents and other information concerning the conduct
and results of Auctions, provided that any such agent, accountant, or counsel shall furnish the
Auction Agent with a letter from the Trustee requesting that the Auction Agent afford such
person access. The Auction Agent shall maintain records relating to any Auction for a period of
two years after such Auction (unless requested by the Trustee to maintain such records for such
longer period not in excess of four years, then for such longer period), and such records shall, in
reasonable detail, accurately and fairly reflect the actions taken by the Auction Agent hereunder.
The Trustee agrees to keep any information regarding the customers of any Broker-Dealer
received from the Auction Agent in connection with this Agreement or any Auction confidential
LA1469756.2 10
and shall not disclose such information or permit the disclosure of such information without the
prior written consent of the applicable Broker-Dealer to anyone except such agent, accountant or
counsel engaged to audit or review the results of Auctions as permitted by this Section. Any
such agent, accountant or counsel, before having access to such information, shall agree to keep
such information confidential and not to disclose such information or permit disclosure of such
information without the prior written consent of the applicable Broker-Dealer, except as may
otherwise be required by law.
Section 3. Fixing and Separating ARS and IRS.
3.1. Fixing ARS and IRS. So long as ownership of the ARS and IRS is
maintained in book-entry form by the Securities Depository, if, on any Business Day, other than
during a Closed Period, the Auction Agent shall receive a Request to Fix from a Broker-Dealer
on behalf of a Beneficial Owner in accordance with Section 2.7(a) of a Broker-Dealer
Agreement, which requests that specified equal principal amounts of Regular ARS be combined,
or Fixed, with Regular IRS having the same maturity date, in the account of the Participant of
such Beneficial Owner at the Securities Depository designated in such request, then the Auction
Agent shall promptly deliver appropriate instructions to the Securities Depository to debit such
aggregate principal amount of Regular ARS and Regular IRS having the same maturity date,
from, and credit an equal aggregate principal amount of Newly Fixed AIRS, in the case of
Regular ARS and Regular IRS Fixed prior to an Interest Payment Date, or Regular Fixed AIRS
Fixed on an Interest Payment Date, to the account of such Participant at the Securities
Depository. Any such Newly Fixed AIRS or Regular Fixed AIRS, as the case may be, shall
have the same maturity date as the ARS and IRS relating to such Request to Fix. If the Auction
Agent shall have received the completed Request to Fix referred to above on or prior to 12:00
noon, New York City time, on any Business Day other than during a Closed Period, then the
Auction Agent shall deliver such instructions to the Securities Depository not later than the close
of business on the next Business Day.
ARS and IRS which have been Fixed as provided herein may not be transferred
separately.
3.2. Separating ARS and IRS. So long as ownership of the ARS and IRS is
maintained in book-entry form by the Securities Depository, if, on any Business Day, other than
during a Closed Period, during a seven-day period immediately prior to a Record Date the
Auction Agent shall receive a Request to Separate from a Broker-Dealer on behalf of a Beneficial
Owner in accordance with Section 2.7 of the Broker-Dealer Agreement, which requests that a
principal amount of ARS and IRS in the account of the Participant of such Beneficial Owner at
the Securities Depository designated in such request that are Fixed be Separated, thereby allowing
them to be traded separately, then the Auction Agent shall promptly deliver appropriate
instructions to the Securities Depository to debit such principal amount of Regular Fixed AIRS or
Newly Fixed AIRS, as the case may be, from, and credit an equal aggregate principal amount of
Regular ARS and Regular IRS to the account of such Participant at the Securities Depository on
the following Interest Payment Date; provided, however, that if such Interest Payment Date falls
within a Closed Period, such separation shall be effective on the next succeeding Auction Period
Accrual Date. My such Regular ARS and Regular IRS shall have the same maturity date as the
Regular Fixed AIRS or Newly Fixed AIRS, as the case may be. If the Auction Agent shall have
LA1-6975e.2 11
received the completed Request to Separate referred to above on or prior to 12:00 noon, New
York City time, on any Business Day during the seven-day period prior to a Record Date, other
than during a Closed Period, then the Auction Agent shall deliver such instructions to the
Securities Depository not later than the close of business on the next Business Day.
ARS and IRS that have been Separated as provided herein may be transferred
separately.
3.3. Conversion of Newly Fixed AIRS. At least two Business Days prior to
each Interest Payment Date, the Auction Agent shall send a Notice of Conversion to the
Securities Depository. The Auction Agent shall make available to the Securities Depository such
other information as the Securities Depository may require in order to cause all Newly Fixed
AIRS to become Regular Fixed AIRS on such Interest Payment Date.
3.4. Membership in the Securities Depository. As of the date hereof, the
Auction Agent is a member of, or participant in, the Securities Depository. The Auction Agent
will provide the Trustee with notice at least 90 days prior to the date, if any, on which the
Auction Agent resigns as a member of, or participant in, the Securities Depository.
3.5 Conflicts with Letter of Representations. Notwithstanding anything herein
to the contrary, while DTC is the Securities Depository, in the event of any conflict between the
provisions of Sections 3.1 or 3.2 hereof and of any agreement with DTC, the latter provisions
shall govern.
Section 4. Tender of ARS.
4.1 Mandatory Tender of ARS. Any Beneficial Owner of IRS may, at any
time and from time to time, notify a Broker-Dealer that such Beneficial Owner intends to submit
a Bid for a specified principal amount of ARS (having the same maturity date as such IRS) on the
next succeeding Auction Date in order to cause such ARS to be Fixed with all or a portion of
such IRS, and that if such Bid is unsuccessful, in whole or in part, such Beneficial Owner
requires that ARS (which are not Fixed) in an aggregate principal amount equal to the
unsuccessful portion of such Bid be tendered to such Beneficial Owner for purchase on the
seventh Business Day prior to the next succeeding Auction Date following the Auction in which
such bid proved unsuccessful (a "Tender Date"). Such ARS shall be tendered for purchase at a
price equal to the principal amount thereof, plus accrued but unpaid interest to the Tender Date
less an amount equal to the Service Charge, if any, applicable to any such ARS multiplied by a
fraction, the numerator of which is the number of days from and including the immediately
preceding Interest Payment Date to but not including the Tender Date and the denominator of
which is 180 (the "Tender Price"). My such purchase shall be effected by book-entry transfer
of such ARS to the account of the Participant of such Beneficial Owner identified in such notice.
4.2 Tender Demand. If any such Bid is unsuccessful, in whole or in part,
such Broker-Dealer shall give the Trustee and the Auction Agent written notice (a "Tender
Demand") stating that a Beneficial Owner of IRS is the Beneficial Owner of a specified principal
amount of IRS of a specified maturity and that such Beneficial Owner wishes to purchase an
equal principal amount of ARS (having the same maturity date as such IRS) on a specified
LAI-69756.2 - 12
Tender Date to be Fixed with such IRS. Such notice shall be given to the Trustee and the
Auction Agent not later than the Business Day following the Auction in which such Bid proved
unsuccessful. The Auction Agent shall, not later than the next Business Day, deliver such
Tender Demand to the Securities Depository.
4.3 Tender Notice. On the second Business Day following the day of the
Securities Depository's receipt of a Tender Demand, the Securities Depository shall select, by lot
in such manner as it shall determine from a position listing of the aggregate stated amounts of
Regular ARS as of the close of business on the date of such Tender Demand, the Regular ARS to
be tendered. Such Regular ARS shall have the same maturity date as the maturity date of the
IRS held by the Beneficial Owner relating to the Tender Demand. The Securities Depository
shall give the Participant for the Regular ARS so selected and the Auction Agent written notice (a
"Tender Notice") thereof. Such Tender Notice shall specify the Tender Date set forth in such
Tender Demand, the amount of Regular ARS to be tendered by such Participant on the Tender
Date and the Tender Price thereof. Each Tender Notice shall be mailed to such Participant and
the Auction Agent by first-class mail, postage prepaid no later than the second Business Day
following the Securities Depository's receipt of such Tender Demand. On receipt of the Tender
Notice, the Auction Agent may contact such Participant to request such Participant to disclose to
the Auction Agent the names of the Beneficial Owners of the Regular ARS so specified in the
Tender Notice.
The giving of a Tender Notice with respect to Regular ARS shall supersede any
Order (as defined in the Auction Agent Agreement) given by the Existing Holder of such ARS
with respect to such ARS for the Auction occurring on the Auction Date following the Tender
Date specified in the Tender Notice.
4.4 Tender and Purchase. The ARS specified in a Tender Notice are subject
to mandatory tender on the Tender Date specified therein against payment of the Tender Price
specified therein. On such Tender Date the Beneficial Owner of IRS who caused the Tender
Demand to be submitted shall forward such Tender Price to such Beneficial Owner's
Broker-Dealer and such Broker-Dealer shall forward such Tender Price in immediately available
funds by 2:00 p.m., New York City time to the Broker-Dealer for the Beneficial Owner of such
tendered ARS. The Securities Depository shall deliver such ARS against payment therefor by the
Broker-Dealer by book-entry transfer on the Tender Date to the account of the Broker-Dealer
without any action on the part of or on behalf of the Beneficial Owners of the ARS. Upon
receipt of such ARS on the Tender Date, the Broker-Dealer shall deliver such ARS against
payment therefor by book-entry transfer to the account of the Participant specified by the
Beneficial Owner of IRS if not such Broker-Dealer. Such Beneficial Owner of IRS and the
Broker-Dealer who submitted the Tender Demand shall thereupon take all actions required to
have such IRS and the Regular ARS so purchased Fixed pursuant to Section 8 of Appendix A of
the Indenture prior to the next succeeding Closed Period.
4.5 Failure by the Beneficial Owner of IRS to Pay Tender Price. In the event
any Beneficial Owner of IRS who has submitted a Tender Demand fails to provide the Tender
Price for the purchase of the principal amount of ARS specified therein on the Tender Date
therefor, the purchase of such ARS shall not take place on such Tender Date, and in such event
such principal amount of ARS shall be deemed to be subject to a Submitted Sell Order (as
defined in the Auction Agent Agreement) for purposes of the next succeeding Auction. The
IA1-69756.2 13
foregoing sentence shall not, however, be deemed to limit the obligations of a Beneficial Owner
of IRS to pay the Tender Price specified in any Tender Demand given by or on behalf of such
Beneficial Owner, or to reimburse any Participant or other person on account of the payment of
such Tender Price.
Each Beneficial Owner of ARS shall be required, if such Beneficial Owner receives any
payment in connection with any tender transaction to which it is not entitled (as a result of failure
of a Beneficial Owner of IRS to provide the Tender Price or otherwise), to take such actions
(including return of funds and repayment of interest to any party who provided funds to such
Beneficial Owner which such party was not obligated to provide) so that all interested parties
(including any Broker-Dealer) are restored to the positions which would have resulted if the
tender transaction were effected, or not effected, as the case may be, in accordance with the
provisions of this Section.
Section 5. Representations and Warranties of the Trustee.
5.1. The Trustee hereby represents and warrants to the Auction Agent that, to
the best knowledge of the corporate trust officer assigned to this financing, it has all necessary
authority, approvals, consents (whether from the Authority or otherwise) to enter into and
perform its obligations under this Agreement and that this Agreement has been duly and validly
authorized, executed and delivered by the Trustee and constitutes the legal, valid and binding
obligation of the Trustee.
5.2. To the best knowledge of the corporate trust officer assigned to this
financing, neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby nor the fulfillment of or compliance with the terms and
conditions of this Agreement will, to the best knowledge of the corporate trust officer assigned to
this financing, conflict with, violate or result in a material breach of, the material terms,
conditions or provisions of, or constitute a material default under, any applicable law or
regulation, order or decree of any court or public authority having jurisdiction over the Trustee,
or any other agreement to which the Trustee is a party or by which it is bound.
5.3. To the best knowledge of the corporate trust officer assigned to this
financing, all required approvals, consents and orders of any governmental authority, legislative
body, board, agency or commission having jurisdiction over the Trustee which would constitute a
condition precedent to or the absence of which would materially adversely affect the due
performance by the Trustee of its obligations under this Agreement have been obtained.
Section 6. The Auction Agent.
6.1. Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Trustee hereunder and
owes no fiduciary duties to any person whatsoever.
LAI-69756.2 14
(b) The Auction 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 by means of the provisions of the Indenture or otherwise against the Auction
Agent.
(c) In the absence of bad faith or negligence on its part, the Auction Agent shall
not be liable for any action taken, suffered or omitted or for any error of judgment made by it in
the performance of its duties under this Agreement. The Auction Agent shall not be liable for
any error of judgment made in good faith unless the Auction Agent shall have been negligent in
ascertaining the pertinent facts.
6.2. Rights of the Auction Agent.
(a) The Auction Agent may rely on and shall be protected in acting or refraining
from acting upon any communication authorized hereby and upon any written instruction, notice,
request, direction, consent, report, certificate, form or bond certificate or other Instrument, paper
or document believed by it to be genuine. The Auction Agent shall not be liable for acting upon
any telephone communication authorized hereby which the Auction Agent believes in good faith
to have been given by the Trustee or by a Broker-Dealer or by their designated or appointed
agents or representatives. The Auction Agent may record telephone communications with the
Trustee or with the Broker-Dealers or both.
(b) The Auction Agent may consult with counsel of its choice, and the advice of
such counsel shall be full and complete authorization and protection in respect of any action.
taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or risk its own
funds or otherwise incur or become exposed to financial liability in the performance of its duties
hereunder.
(d) The Auction Agent may perform its duties and exercise its rights hereunder
either directly or by or through agents or attorneys and shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed by it with due care
hereunder.
6.3. Auction Agent's Disclaimer. The Auction Agent makes no representation
as to the validity or adequacy of this Agreement, the Broker-Dealer Agreements or the ARS or
the IRS.
6.4. Compensation. Remedies and Indemnification.
(a) On each Auction Period Accrual Date so long as ownership of the ARS is
maintained in book-entry form by the Securities Depository, the Auction Agent shall be entitled
to receive a fee, which fee will be payable on the next succeeding Interest Payment Date, in
respect of the preceding Auction Period in an amount initially equal to (i) .03 of 1% per annum,
multiplied by (ii) (A) in the case of the first Auction Period Accrual Date, the aggregate principal
amount of outstanding Regular ARS on the Closing Date or (B) in the case of each Auction
Period Accrual Date thereafter, the aggregate principal amount of outstanding Regular ARS and
LA1-69756.2 15
one-half of the aggregate principal amount of outstanding Newly Fixed AIRS, at the close of
business on the Auction Record Date immediately preceding such Auction Period Accrual Date,
multiplied by (iii) the actual number of days in the applicable Auction Period, divided by (iv) 360
(the "Auction Agent Fee"). The Auction Agent Fee shall be payable solely out of amounts
received by the Auction Agent in accordance with Section 6.5(b) hereof. The rate at which the
Auction Agent Fee accrues shall be such that the Auction Agent receives as compensation for all
services rendered by it under this Agreement and the Broker-Dealer Agreements an amount
comparable to that received by the Auction Agent and other institutions performing similar
functions for rendering comparable services to others and which at least reflects the actual costs
to the Auction Agent of rendering such services, including the amount of any fees payable by the
Auction Agent to the Market Agent. The Auction Agent and the Trustee each agree to negotiate
in good faith from time to time to determine the appropriate rate at which the Auction Agent Fee
should accrue; provided, however, that if the entity serving as Trustee is also serving as Auction
Agent, the appropriate rate at which the Auction Agent Fee should accrue shall be determined
through good faith negotiations between the Auction Agent and the Market Agent pursuant to the
Market Agent Agreement in accordance with this subsection (a); provided further that in the
event Smith Barney Shearson Inc. is a Broker-Dealer, it shall consent to any change in the rate at
which the Auction Agent Fee should accrue. Any change in the rate at which the Auction Agent
Fee accrues shall be effective on the Auction Date next succeeding such change.
(b) The Trustee shall indemnify and hold harmless the Auction Agent to the extent
and only to the extent that the Trustee is reimbursed therefor by the Authority pursuant to the
Indenture for and against any loss, liability or expense incurred without negligence or bad faith
on the Auction Agent's part, arising out of or in connection with its agency under this Agreement
and the Broker-Dealer Agreements, including the reasonable costs and expenses (including the
reasonable fees and expenses of its counsel) of defending itself against any such claim or liability
in connection with its exercise or performance of any of its duties hereunder and thereunder and
of enforcing this indemnification provision; provided that the Trustee shall not indemnify the
Auction Agent pursuant to this subsection (b) for any fees and expenses incurred by the Auction
Agent in the normal course of performing its duties hereunder and under the Broker-Dealer
Agreements.
6.5. Compensation of the Broker-Dealers.
(a) On the first Auction Period Accrual Date and each Auction Period Accrual
Date immediately following an Auction Date, the Broker-Dealers shall be entitled to receive a
fee, which fee will be payable on the next succeeding Interest Payment Date, for all services
rendered by them under the Broker-Dealer Agreements with respect to the Auction held on such
Auction Date in an amount equal initially to (i) J.251 of 1% per annum, multiplied by (ii) (A) in
the case of the first Auction Period Accrual Date, the aggregate principal amount of outstanding
Regular ARS on the Closing Date or (B) in the case of each subsequent Auction Period Accrual
Date, the aggregate principal amount of outstanding Regular ARS and one-half of the aggregate
principal amount of outstanding Newly Fixed AIRS at the close of business on the Auction
Record Date immediately preceding such Auction Period Accrual Date, multiplied by (iii) the
number of days in the applicable Auction Period, divided by (iv) 360 (the "Broker-Dealer Fee").
The accrued Broker-Dealer Fee shall be payable solely out of amounts received by the Auction
Agent on each Interest Payment Date in accordance with Section 6.5(b) hereof. The rate at
which the Broker-Dealer Fee accrues shall be the prevailing rate received by broker-dealers for
LA1-69756.2 16
rendering comparable services to others. The Auction Agent shall advise the Trustee at least
annually, at the Trustee's request, of the then current prevailing rate. If the then-current rate at
which the Broker-Dealer Fee accrues is not equal to such prevailing rate, the Trustee, with the
consent of the Market Agent, shall change the rate at which the Broker-Dealer Fee accrues so
that it equals such prevailing rate. If the Trustee changes the Broker-Dealer Fee Rate pursuant to
the terms hereof, the Trustee shall notify the Auction Agent thereof. Any change in the rate at
which the Broker-Dealer Fee accrues shall be effective on the Interest Payment Date next
succeeding such change.
(b) On the first Interest Payment Date and each Interest Payment Date thereafter
as described above, the Trustee shall pay to the Auction Agent an amount in cash equal to the
accrued Auction Agent Fee and the accrued Broker-Dealer Fee payable pursuant to Sections
6.4(a) and 6.5(a) hereof. The Auction Agent shall pay itself an amount equal to the Auction
Agent Fee out of such moneys, and pay the remainder of such moneys to the Broker-Dealers in
payment of the Broker-Dealer Fee as set forth in Section 2.5(b) of each Broker-Dealer
Agreement.
Section 7. Miscellaneous.
7.1. Term of Agreement.
(a) This Agreement shall terminate on the earlier of(i) the satisfaction and
discharge of the Indenture or this Agreement and (ii) the date on which this Agreement is
terminated in accordance with this Section. The Trustee may terminate this Agreement in
accordance with Section 11 of Appendix A of the Indenture. The Auction Agent may terminate
this Agreement upon written notice to the Trustee, the Authority and the Market Agent on the
date specified in such notice, which date shall be no earlier than 90 days after the date of
delivery of such notice. Notwithstanding the foregoing, the provisions of Section 2 hereof shall
terminate upon the delivery of certificates representing the ARS pursuant to Section 5 of the
Indenture and the provisions of Section 3 herein shall terminate upon the delivery of certificates
representing the ARS or the IRS pursuant to Section 5 of the Indenture. Notwithstanding the
foregoing, the Auction Agent may terminate this Agreement if, after notifying the Trustee, the
Authority and the Market Agent that it has not received payment of any Auction Agent Fee due it
in accordance with the terms hereof, the Auction Agent does not receive such payment within 30
days.
(b) Except as otherwise provided in this subsection (b), the respective rights and
duties of the Trustee and the Auction Agent under this Agreement shall cease upon termination of
this Agreement. The Trustee's representations, warranties, covenants and obligations to the
Auction Agent under Sections 5 and 6.4 hereof and to the Broker-Dealer under Section 6.5
hereof shall survive the termination of this Agreement. Upon termination of this Agreement, the
Auction Agent shall promptly deliver to the Trustee copies of all books and records maintained
by it with respect to the ARS in connection with its duties hereunder.
7.2. Communications.
LAI-69756.2 17
Except for (i) communications authorized to be made by telephone pursuant to this
Agreement or the Auction Procedures or Settlement Procedures and (ii) communications in
connection with Auctions (other than those expressly required to be in writing), all notices,
requests and other communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party addressed to it at its address, or facsimile
number set below:
If to the Trustee, addressed: Meridian Trust Company of California
650 California Street, 8th Floor
San Francisco, California 94108
Attention: Corporate Trust Department
Telephone: 415-705-6034
Facsimile: 415-986-6098
If to the Authority, addressed: Santa Ma Financing Authority
2030 Civic Center Plaza
Santa Ma, California 92701
Attention: Executive Director
Telephone: 714-647-5360
Facsimile: 714-647-6549
If to the Auction Agent, addressed: The Bank of New York
101 Barclay Street
22nd Floor
New York, New York 10286
Attention: Corporate Trust Group
Telephone: 212-815-2132
Facsimile: 212-571-3050
or such other address, telephone or facsimile number as such party may hereafter specify for
such purpose by notice in writing to the other party. Each such notice, request or communication
shall be effective when delivered at the address specified herein. Communications shall be given
on behalf of the Trustee by an Authorized Trustee Representative and on behalf of the Auction
Agent by an Authorized Officer.
7.3. Entire Agreement. This Agreement contains the entire agreement between
the parties relating to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or inferred between the
parties relating to the subject matter hereof.
7.4. Benefits. Nothing herein, express or implied, shall give to any person,
other than the Trustee, acting on behalf of the Beneficial Owners, the Auction Agent and their
respective successors and assigns, any benefit of any legal or equitable right, remedy or claim
hereunder.
7.5. Amendment: Waiver.
LAI-69756.2 18
(a) This Agreement shall not be deemed or construed to be modified, amended,
rescinded, canceled or waived, in whole or in part, except by a written instrument signed by a
duly authorized representative of the parties hereto.
(b) Failure of either party hereto to exercise any right or remedy hereunder in the
event of a breach hereof by the other party shall not constitute a waiver of any such right or
remedy with respect to any subsequent breach.
7.6. Successor and Assigns. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by, the respective successors and assigns of each of the Trustee
and the Auction Agent. This Agreement may not be assigned by either party hereto absent the
prior written consent of the other party, which consent shall not be unreasonably withheld.
7.7. Severability. If any clause, provision or section hereof shall be ruled
invalid or unenforceable by any court of competent jurisdiction, the invalidity or unenforceability
of such clause, provision or section shall not affect any of the remaining clauses, provisions or
sections hereof.
7.8. Execution in Counterparts. This 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.
7.9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made and to be
performed in said state.
7.10. Trustee. All privileges, rights and immunities given to the Trustee in the
Indenture are hereby extended to and applicable to the Trustee's obligations hereunder.
7. 11. Effective Date. This Agreement shall become effective on the date of
initial delivery of the ARS and the IRS.
LA1-69756.2 19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of the date first above
written.
MERIDIAN TRUST COMP Y OF CALIFORNIA, as Trustee
By:
Authorized Officer
THE BANK OF(NEW YORK, as Auction Agent
By: /J�76/2-L/
Authorized Re esentative
LA I-69756.2 20
Exhibit A
Auction Agent
Agreement
INDENTURE OF TRUST
Please see TabM 1 of this transcript.
LAI-69756.2 A-1
Exhibit B
Auction Agent
Agreement
FORM OF BROKER-DEALER AGREEMENT
Please see Tab# 7 of this transcript.
LA1-69756.2 B_1
Exhibit C
Auction Agent
Agreement
AUCTION AND SETTLEMENT PROCEDURES
Section 1. Definitions. Capitalized terms used herein and not otherwise defined
shall have the meanings given such terms in the Indenture.
"Available ARS" has the meaning set forth in Section 2(c)(i)(A) hereof.
"Bid"has the meaning set forth in Section 2(a)(i) hereof.
"Bidder" has the meaning set forth in Section 2(a)(i) hereof.
"Buyer's Broker-Dealer" has the meaning set forth in Section 3(a) hereof.
"Hold Order"has the meaning set forth in Section 2(a)(i) hereof.
"Order" has the meaning set forth in Section 2(a)(i) hereof.
"Sell Order"has the meaning set forth in Section 2(a)(i) hereof.
"Seller's Broker Dealer" has the meaning set forth in Section 3(a) hereof.
"Submitted Bid" has the meaning set forth in Section 2(c)(i) hereof.
"Submitted Hold Order"has the meaning set forth in Section 2(c)(i) hereof.
"Submitted Order"has the meaning set forth in Section 2(c)(i) hereof.
"Submitted Sell Order" has the meaning set forth in Section 2(c)(i) hereof.
"Sufficient Clearing Bids" has the meaning set forth in Section 2(c)(i) hereof.
"Winning Bid Rate" has the meaning set forth in Section 2(c)(i) hereof.
Section 2. Auction Procedures. So long as the ownership of the ARS is
maintained in book-entry form by the Securities Depository, an Existing Holder may sell, transfer
or otherwise dispose of ARS that are not Fixed only pursuant to a Bid or Sell Order placed in an
Auction or through a Broker-Dealer, provided that, in the case of all transfers other than pursuant
to Auctions, such Existing Holder, its Broker-Dealer or its Participant advises the Auction Agent
of such transfer. Subject to the provisions of the Indenture, Auctions shall be conducted on each
Auction Date, if there is an Auction Agent on such Auction Date, in the following manner:
LA1-6975e.2 C-1
(a) (i) Prior to the Submission Deadline on each Auction Date;
(A) each Existing Holder of ARS may submit to a Broker-Dealer by telephone or
otherwise any information as to:
(I) the principal amount of outstanding ARS, if any, held by such Existing
Holder which such Existing Holder desires to continue to hold without regard to
the Auction Rate for the next succeeding Auction Period;
(II) the principal amount of outstanding ARS, if any, which such Existing
Holder offers to sell if the Auction Rate for the next succeeding Auction Period
shall be less than the rate per annum specified by such Existing Holder; and/or
(III) the principal amount of outstanding ARS, if any, held by such
Existing Holder which such Existing Holder offers to sell without regard to the
Auction Rate for the next succeeding Auction Period; and
(B) one or more Broker-Dealers may contact Potential Holders to determine the
principal amount of ARS which each Potential Holder offers to purchase, if the Auction
Rate for the next succeeding Auction Period shall not be less than the rate per annum
specified by such Potential Holder.
The statement of an Existing Holder or a Potential Holder referred to in (A) or (B) of this
paragraph (i) is hereinafter referred to as an "Order," and each Existing Holder and each
Potential Holder placing an Order is hereinafter referred to as a "Bidder"; an Order described in
clause (A)(I) is hereinafter referred to as a "Hold Order"; an Order described in clauses (A)(II)
or (B) is hereinafter referred to as a "Bid"; and an Order described in clause (a)(III) is
hereinafter referred to as a "Sell Order."
(ii) (A) Subject to the provisions of Section 2(b) hereof, a Bid by an Existing
Holder shall constitute an irrevocable offer to sell (in each case for settlement in same day
funds on the next Auction Period Accrual Date therefor at a price equal to 100% of the
principal amount thereof):
(I) the principal amount of outstanding ARS specified in such Bid if the
Auction Rate determined as provided herein shall be less than the rate specified in
such Bid; or
(II) such principal amount or a lesser principal amount of outstanding ARS
to be determined as set forth in Section 2(d)(i)(D), if the Auction Rate determined
as provided herein shall be equal to the rate specified in such Bid; or
(III) such principal amount or a lesser principal amount of outstanding
ARS to be determined as set forth in Section 2(d)(ii)(C) if the rate specified
therein shall be higher than the Maximum Rate and Sufficient Clearing Bids have
not been made.
LA1-69756.2 C-2
(B) Subject to the provisions of Section 2(b) hereof, a Sell Order by an Existing
Holder shall constitute an irrevocable offer to sell (in each case for settlement in same day
funds on the next Auction Period Accrual Date therefor at a price equal to 100% of the
principal amount thereof):
(I) the principal amount of outstanding ARS specified in such Sell Order if
Sufficient Clearing Bids exist; or
(II) such principal amount or a lesser principal amount of outstanding ARS
set forth in Section 2(d)(i)(C), if Sufficient Clearing Bids have not been made.
(C) Subject to the provisions of Section 2(b) hereof, a Bid by a Potential Holder
shall constitute an irrevocable offer to purchase (in each case for settlement in same day
funds on the next Auction Period Accrual Date therefor at a price equal to 100% of the
principal amount thereof):
(I) the principal amount of outstanding ARS specified in such Bid if the
Auction Rate determined as provided herein shall be higher than the rate specified
in such Bid; or
(II) such principal amount or a lesser principal amount of outstanding ARS
set forth in Section 2(d)(i)(E), if the Auction Rate determined as provided herein
shall be equal to the rate specified in such Bid.
(b) (i) Each Broker-Dealer shall submit in writing to the Auction Agent prior to
the Submission Deadline on each Auction Date all Orders obtained by such Broker-Dealer and
shall specify with respect to each such Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate principal amount of ARS that are the subject of such Order;
(C) to the extent that such Bidder is an Existing Holder:
(I) the principal amount of ARS, if any, subject to any Hold Order placed
by such Existing Holder;
(II) the principal amount of ARS, if any, subject to any Bid placed by such
Existing Holder and the rate specified in such Bid; and
(III) the principal amount of ARS, if any, subject to any Sell Order placed
by such Existing Holder; and
(D) to the extent such Bidder is a Potential Holder, the rate specified in such
Potential Holder's Bid.
LA1-69756.2 C-3
(ii) If any rate specified in any Bid contains more than three figures to the right of
the decimal point, the Auction Agent shall round such rate up to the next higher one thousandth
(.001) of 1%.
(iii) If an Order or Orders covering all outstanding ARS held by an Existing
Holder is not submitted to the Auction Agent prior to the Submission Deadline, the Auction
Agent shall deem a Hold Order to have been submitted on behalf of such Existing Holder
covering the principal amount of outstanding ARS held by such Existing Holder and not subject
to an Order submitted to the Auction Agent.
(iv) None of the Authority, the Trustee or the Auction Agent shall be responsible
for any failure of a Broker-Dealer to submit an Order to the Auction Agent on behalf of any
Existing Holder or Potential Holder, nor shall any such party be responsible for failure by any
Securities Depository to effect any transfer or to provide the Auction Agent with current
information regarding registration of transfers.
(v) If any Existing Holder submits through a Broker-Dealer to the Auction Agent
one or more Orders covering in the aggregate more than the principal amount of outstanding
ARS held by such Existing Holder, such Orders shall be considered valid as follows and in the
following order of priority:
(A) All Hold Orders shall be considered valid, but only up to and including in the
aggregate the principal amount of outstanding ARS held by such Existing Holder, and if
the aggregate principal amount of ARS subject to such Hold Orders exceeds the aggregate
principal amount of ARS held by such Existing Holder, the aggregate principal amount of
ARS subject to each such Hold Order shall be reduced so that the aggregate principal
amount of ARS subject to such Hold Orders equals the aggregate principal amount of
outstanding ARS held by such Existing Holder.
(B) (I) any Bid shall be considered valid up to and including the excess of the
principal amount of outstanding ARS held by such Existing Holder over the
aggregate principal amount of ARS subject to any Hold Order referred to in
subsection (v)(A) above;
(II) subject to subsection (v)(B)(I) above, if more than one Bid with the
same rate is submitted on behalf of such Existing Holder and the aggregate
principal amount of outstanding ARS subject to such Bids is greater than such
excess, such Bids shall be considered valid up to and including the amount of such
excess;
(III) subject to subsections (v)(B)(I) and (v)(B)(II) above, if more than one
Bid with different rates is submitted on behalf of such Existing Holder, such Bids
shall be considered valid first in the ascending order of their respective rates until
the highest rate is reached at which such excess exists and then at such rate up to
and including the amount of such excess; and
LA1-69756.2 C-4
(IV) in any such event, the amount of outstanding ARS, if any, subject to
Bids not valid under this subsection (B) shall be treated as the subject of a Bid by
a Potential Holder at the rate therein specified; and
(C) All Sell Orders shall be considered valid up to and including the excess of the
principal amount of outstanding ARS held by such Existing Holder over the aggregate
principal amount of ARS subject to Hold Orders referred to in subsection (v)(A) and valid
Bids referred to in subsection (v)(B).
(vi) If more than one Bid for ARS is submitted on behalf of any Potential Holder,
each Bid submitted shall be a separate Bid with the rate and principal amount therein specified.
(vii) Any Bid or Sell Order submitted by an Existing Holder covering an
aggregate principal amount of ARS not equal to an Authorized Denomination shall be rejected
and shall be deemed a Hold Order. Any Bid submitted by a Potential Holder covering an
aggregate principal amount of ARS not equal to an Authorized Denomination shall be rejected.
(viii) Any Bid specifying a rate higher than the Maximum Rate will be treated as a
Sell Order if submitted by an Existing Holder and will not be accepted if submitted by a Potential
Holder. Any Bid submitted by an Existing Holder or on behalf of a Potential Holder specifying
a rate lower than the Minimum Rate shall be treated as a Bid specifying the Minimum Rate, and
each such Bid shall be considered as valid and shall be selected in the ascending order of their
respective rates contained in the Submitted Bids.
(ix) Any Order submitted in an Auction by a Broker-Dealer to the Auction Agent
prior to the Submission Deadline on any Auction Date shall be irrevocable.
(x) A Tender Notice given by a Beneficial Owner of IRS with respect to Regular
ARS shall supersede any Order given by the Existing Holder of such ARS with respect to such
ARS for the Auction occurring on the Auction Date following the Tender Date specified in such
Tender Notice.
(xi) If a Beneficial Owner of IRS who submitted a Tender Demand fails to provide
the Tender Price for the purchase of the ARS specified therein on the Tender Date therefor, such
ARS shall be deemed to be subject to a Submitted Sell Order for the Auction occurring on the
Auction Date following such Tender Date and such deemed Submitted Sell Order shall supersede
any Order given by the Existing Holder of such ARS for such Auction.
(c) (i) Not earlier than the Submission Deadline on each Auction Date, the
Auction Agent shall assemble all valid Orders submitted or deemed submitted to it by the
Broker-Dealers (each such Order as submitted or deemed submitted by a Broker-Dealer being
hereinafter referred to individually as a "Submitted Hold Order," a "Submitted Bid" or a
"Submitted Sell Order," as the case may be, or as a "Submitted Order" and collectively as
"Submitted Hold Orders," "Submitted Bids" or "Submitted Sell Orders," as the case may be, or
as "Submitted Orders") and shall determine:
LAI-69756.2 C-5
(A) the excess of the total principal amount of outstanding ARS over the sum of
the aggregate principal amount of outstanding ARS subject to Submitted Hold Orders
(such excess being hereinafter referred to as the "Available ARS"), and
(B) from the Submitted Orders whether:
(I) the aggregate principal amount of outstanding ARS subject to Submitted
Bids by Potential Holders specifying one or more rates equal to or lower than the
Maximum Rate
exceeds or is equal to the sum of:
(II) the aggregate principal amount of outstanding ARS subject to
Submitted Bids by Existing Holders specifying one or more rates higher than the
Maximum Rate, and
(III) the aggregate principal amount of outstanding ARS subject to
Submitted Sell Orders
(in the event such excess or such equality exists, other than because all of the
outstanding ARS are subject to Submitted Hold Orders, such Submitted Bid described in
subclause (I) above shall be referred to collectively as "Sufficient Clearing Bids"); and
(C) if Sufficient Clearing Bids exist, the lowest rate specified in such Submitted
Bids (the "Winning Bid Rate") such that if:
(I) (aa) each such Submitted Bid from Existing Holders specifying such
lowest rate and (bb) all other Submitted Bids from Existing Holders specifying
lower rates were rejected, thus entitling such Existing Holders to continue to hold
the principal amount of ARS subject to such Submitted Bids, and
(II) (aa) each such Submitted Bid from Potential Holders specifying such
lowest rate and (bb) all other Submitted Bids from Potential Holders specifying
lower rates were accepted,
the result would be that such Existing Holders described in subsection (C)(I)
above would continue to hold an aggregate principal amount of outstanding ARS which,
when added to the aggregate principal amount of outstanding ARS to be purchased by
such Potential Holders described in subsection (C)(II) above, would equal not less than
the Available ARS.
(ii) Promptly after the Auction Agent has made the determinations pursuant to
Section 2(c)(i) hereof, the Auction Agent shall advise the Trustee of the Maximum Rate and the
Minimum Rate and the components thereof on the Auction Date and, based on such
determinations, the Auction Rate for the next succeeding Auction Period as follows:
(A) if Sufficient Clearing Bids exist, that the Auction Rate for the next succeeding
Auction Period shall be equal to the Winning Bid Rate so determined;
LA1-69756.2 C-6
(B) if Sufficient Clearing Bids do not exist (other than because all of the
outstanding ARS are subject to Submitted Hold Orders), that the Auction Rate for the
next succeeding Auction Period shall be equal to the Maximum Rate; or
(C) if all outstanding ARS are subject to Submitted Hold Orders, that the Auction
Rate for the next succeeding Auction Period shall be equal to the Minimum Rate.
(d) Existing Holders shall continue to hold the principal amount of ARS that are
subject to Submitted Hold Orders, and, based on the determinations made pursuant to Section
2(c)(i) hereof, Submitted Bids and Submitted Sell Orders shall be accepted or rejected and the
Auction Agent shall take such other action as set forth below:
(i) if Sufficient Clearing Bids have been made, all Submitted Sell Orders shall be
accepted and, subject to the provisions of Sections 2(d)(iv) and 2(d)(v), Submitted Bids shall be
accepted or rejected as follows in the following order of priority and all other Submitted Bids
shall be rejected:
(A) Existing Holders' Submitted Bids specifying any rate that is higher than the
Winning Bid Rate shall be accepted, thus requiring each such Existing Holder to sell the
aggregate principal amount of ARS subject to such Submitted Bids;
(B) Existing Holders' Submitted Bids specifying any rate that is lower than the
Winning Bid Rate shall be rejected, thus entitling each such Existing Holder to continue
to hold the aggregate principal amount of ARS subject to such Submitted Bids;
(C) Potential Holders' Submitted Bids specifying any rate that is lower than the
Winning Bid Rate shall be accepted;
(1)) each Existing Holders' Submitted Bid specifying a rate that is equal to the
Winning Bid Rate shall be rejected, thus entitling such Existing Holder to continue to
hold the aggregate principal amount of ARS subject to such Submitted Bid, unless the
aggregate principal amount of outstanding ARS subject to all such Submitted Bids shall be
greater than the principal amount of ARS (the "remaining principal amount") equal to the
excess of the Available ARS over the aggregate principal amount of ARS subject to
Submitted Bids described in subsections (B) and (C) of this Section 2(d)(i), in which event
such Submitted Bid of such Existing Holder shall be rejected in part, and such Existing
Holder shall be entitled to continue to hold the principal amount of ARS subject to such
Submitted Bid, but only in an amount equal to the aggregate principal amount of ARS
obtained by multiplying the remaining principal amount by a fraction, the numerator of
which shall be the principal amount of outstanding ARS held by such Existing Holder
subject to such Submitted Bid and the denominator of which shall be the sum of the
principal amount of outstanding ARS subject to such Submitted Bids made by all such
Existing Holders that specified a rate equal to the Winning Bid Rate; and
(E) Each Potential Holder's Submitted Bid specifying a rate that is equal to the
Winning Bid Rate shall be accepted, but only in an amount equal to the principal amount
of ARS obtained by multiplying the excess of the aggregate principal amount of Available
ARS over the aggregate principal amount of ARS subject to Submitted Bids described in
L I-69756.2 C-7
subsections (B), (C) and (D) of this Section 2(d)(i) by a fraction the numerator of which
shall be the aggregate principal amount of outstanding ARS subject to such Submitted Bid
and the denominator of which shall be the sum of the principal amount of outstanding
ARS subject to Submitted Bids made by all such Potential Holders that specified a rate
equal to the Winning Bid Rate.
(ii) If Sufficient Clearing Bids have not been made (other than because all of the
outstanding ARS are subject to submitted Hold Orders), subject to the provisions of Section
2(d)(iv), Submitted Orders shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids shall be rejected:
(A) Existing Holders' Submitted Bids specifying any rate that is equal to or lower
than the Maximum Rate shall be rejected, thus entitling such Existing Holders to continue
to hold the aggregate principal amount of ARS subject to such Submitted Bids;
(B) Potential Holders' Submitted Bids specifying any rate that is equal to or lower
than the Maximum Rate shall be accepted, and specifying any rate that is higher than the
Maximum Rate shall be rejected; and
(C) each Existing Holder's Submitted Bid specifying any rate that is higher than
the Maximum Rate and the Submitted Sell Order of each Existing Holder shall be
accepted, thus entitling each Existing Holder that submitted any such Submitted Bid or
Submitted Sell Order to sell the ARS subject to such Submitted Bid or Submitted Sell
Order, but in both cases only in an amount equal to the aggregate principal amount of
ARS obtained by multiplying the aggregate principal amount of ARS subject to Submitted
Bids described in subsection (B) of this Section 2(d)(ii) by a fraction the numerator of
which shall be the aggregate principal amount of outstanding ARS held by such Existing
Holder subject to such Submitted Bid or Submitted Sell Order and the denominator of
which shall be the aggregate principal amount of outstanding ARS subject to all such
Submitted Bids and Submitted Sell Orders.
(iii) If all outstanding ARS are subject to Submitted Hold Orders, all Submitted
Bids shall be rejected.
(iv) If, as a result of the procedures described in Sections 2(d)(i) or 2(d)(ii), any
Existing Holder would be entitled or required to sell, or any Potential Holder would be entitled
or required to purchase, a principal amount of ARS that is not equal to an Authorized
Denomination the Auction Agent shall, in such manner as in its sole discretion it shall determine,
round up or down the principal amount of ARS to be purchased or sold by any Existing Holder
or Potential Holder so that the principal amount of ARS purchased or sold by each Existing
Holder or Potential Holder shall be equal to an Authorized Denomination.
(v) If, as a result of the procedures described in Section 2(d)(ii), any Potential
Holder would be entitled or required to purchase less than an Authorized Denomination of ARS,
the Auction Agent shall, in such manner as in its sole discretion it shall determine, allocate ARS
for purchase among Potential Holders so that only ARS in Authorized Denominations are
purchased by any Potential Holder, even if such allocation results in one or more of such
Potential Holders not purchasing any ARS.
LA1-69756.2 C-8
(vi) The Authority, Trustee and Auction Agent shall have no liability in the event
that there are not Sufficient Clearing Bids from time to time pursuant to the Auction Procedures.
(e) Based on the result of each Auction, the Auction Agent shall determine the
aggregate principal amount of ARS to be purchased and the aggregate principal amount of ARS
to be sold by Potential Holders and Existing Holders on whose behalf each Broker-Dealer
submitted Bids or Sell Orders and, with respect to each Broker-Dealer, to the extent that such
aggregate principal amount of ARS to be sold differs from such aggregate principal amount of
ARS to be purchased, determine to which other Broker-Dealer or Broker Dealers acting for one
or more purchasers such Broker-Dealer shall deliver, or from which other Broker-Dealer or
Broker-Dealers acting for one or more sellers such Broker-Dealer shall receive, as the case may
be, ARS.
(1) The Authority may not submit an Order in any Auction, or purchase, call for
redemption or otherwise acquire ARS or IRS unless it purchases, calls for redemption or
otherwise acquires (i) Regular Fixed AIRS or Newly Fixed AIRS or (ii) an equal aggregate
principal amount of ARS and IRS on the day of any purchase, redemption or other acquisition.
(g) Any calculation by the Auction Agent (or the Trustee, if applicable) of the
Applicable ARS Rate, the Service Charge Rate, the Applicable IRS Rate, the Fixed Rate, the
"AA" Composite Commercial Paper Rate, the Maximum Rate, the Minimum Rate and the Non-
Payment Rate shall, in the absence of manifest error, be binding on all Beneficial Owners and all
other parties.
Section 3. Settlement Procedures.
(a) Not later than 3:00 p.m., New York City time, on each Auction Date, the
Auction Agent shall notify by telephone each Broker-Dealer that participated in the Auction held
on such Auction Date and submitted an Order on behalf of an Existing Holder or Potential
Holder of:
(i) the Auction Rate fixed for the next Auction Period;
(ii) whether there were Sufficient Clearing Bids in such Auction;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer") submitted a Bid or a Sell
Order on behalf of an Existing Holder, whether such Bid or Sell Order was accepted or
rejected, in whole or in part, and the principal amount of ARS, if any, to be sold by such
Existing Holder;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer") submitted a Bid on behalf
of a Potential Holder, whether such Bid was accepted or rejected, in whole or in part, and
the principal amount of ARS, if any, to be purchased by such Potential Holder;
(v) if the aggregate amount of ARS to be sold by all Existing Holders on whose
behalf such Broker-Dealer submitted a Bid or a Sell Order exceeds the aggregate principal
amount of ARS to be purchased by all Potential Holders on whose behalf such
LA1-69756.2 C-9
Broker-Dealer submitted a Bid, the name or names of one or more Buyer's
Broker-Dealers (and the name of the Participant, if any, of each such Buyer's
Broker-Dealer) acting for one or more purchasers of such excess principal amount of
ARS and the principal amount of ARS to be purchased from one or more Existing
Holders on whose behalf such Broker-Dealer acted by one or more Potential Holders on
whose behalf each of such Buyer's Broker-Dealers acted;
(vi) if the principal amount of ARS to be purchased by all Potential Holders on
whose behalf such Broker-Dealer submitted a Bid exceeds the amount of ARS to be sold
by all Existing Holders on whose behalf such Broker-Dealer submitted a Bid or a Sell
Order, the name or names of one or more Seller's Broker-Dealers (and the name of the
Participant, if any, of each such Seller's Broker-Dealer) acting for one or more sellers of
such excess principal amount of ARS and the principal amount of ARS to be sold to one
or more Potential Holders on whose behalf such Broker-Dealer acted by one or more
Existing Holders on whose behalf each of such Seller's Broker-Dealers acted; and
(vii) the Auction Date for the next succeeding Auction.
(b) On each Auction Date, each Broker-Dealer that submitted an Order on behalf
of any Existing Holder or Potential Holder shall:
(i) advise each Existing Holder and Potential Holder on whose behalf such
Broker-Dealer submitted a Bid or Sell Order in the Auction on such Auction Date
whether such Bid or Sell Order was accepted or rejected, in whole or in part;
(ii) in the case of a Broker-Dealer that is a Buyer's Broker-Dealer, advise each
Potential Holder on whose behalf such Broker-Dealer submitted a Bid that was accepted,
in whole or in part, to instruct such Potential Holder's Participant to pay to such
Broker-Dealer (or its Participant) through the Securities Depository the amount necessary
to purchase the principal amount of ARS to be purchased pursuant to such Bid against
receipt of such ARS;
(iii) in the case of a Broker-Dealer that is a Seller's Broker-Dealer, instruct each
Existing Holder on whose behalf such Broker-Dealer submitted a Sell Order that was
accepted, in whole or in part, or a Bid that was accepted, in whole or in part, to instruct
such Existing Holder's Participant to deliver to such Broker-Dealer (or its Participant)
through the Securities Depository the principal amount of ARS to be sold pursuant to
such Order against payment therefor;
(iv) advise each Existing Holder on whose behalf such Broker-Dealer submitted an
Order and each Potential Holder on whose behalf such Broker-Dealer submitted a Bid of
the Auction Rate for the next Auction Period;
(v) advise each Existing Holder on whose behalf such Broker-Dealer submitted an
Order of the next Auction Date; and
(vi) advise each Potential Holder on whose behalf such Broker-Dealer submitted a
Bid that was accepted, in whole or in part, of the next Auction Date.
cn145975e.2 C-10
(c) On the basis of the information provided to it pursuant to Section 3(a), each
Broker-Dealer that submitted a Bid or Sell Order in an Auction is required to allocate any funds
received by it in connection with such Auction pursuant to Section 3(b)(ii), and any ARS received
by it in connection with such Auction pursuant to Section 3(b)(iii) among the Potential Holders, if
any, on whose behalf such Broker-Dealer submitted Bids, the Existing Holders, if any on whose
behalf such Broker-Dealer submitted Bids or Sell Orders in such Auction, and any
Broker-Dealers identified to it by the Auction Agent following such Auction pursuant to Sections
3(a)(v) or 3(a)(vi).
(d) On each Auction Date:
(i) each Potential Holder and Existing Holder with an Order in the Auction on
such Auction Date shall instruct its Participant as provided in Sections 3(b)(ii) or 3(b)(iii),
as the case may be;
(ii) each Seller's Broker-Dealer that is not a Participant of the Securities
Depository shall instruct its Participant to (A) pay through the Securities Depository to the
Participant of the Existing Holder delivering ARS to such Broker-Dealer following such
Auction pursuant to Section 3(b)(iii) the amount necessary to purchase such ARS against
receipt of such ARS, and (B) deliver such ARS through the Securities Depository to a
Buyer's Broker-Dealer (or its Participant) identified to such Seller's Broker-Dealer
pursuant to Section 3(a)(v) against payment therefor; and
(iii) each Buyer's Broker-Dealer that is not a Participant in the Securities
Depository shall instruct its Participant to (A) pay through the Securities Depository to
Seller's Broker-Dealer (or its Participant) identified following such Auction pursuant to
Section 3(a)(vi) the amount necessary to purchase the ARS to be purchased pursuant to
Section 3(b)(ii) against receipt of such ARS, and (B) deliver such ARS through the
Securities Depository to the Participant of the purchaser thereof against payment therefor.
(e) On the Business Day following each Auction Date:
(i) each Participant for a Bidder in the Auction on such Auction Date referred to
in Section 3(d)(i) shall instruct the Securities Depository to execute the transactions
described under Sections 3(b)(ii) or 3(b)(iii) for such Auction, and the Securities
Depository shall execute such transactions;
(ii) each Seller's Broker-Dealer or its Participant shall instruct the Securities
Depository to execute the transactions described in Section 3(d)(ii) such Auction, and the
Securities Depository shall execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Participant shall instruct the Securities
Depository to execute the transactions described in Section 3(d)(iii) for such Auction, and
the Securities Depository shall execute such transactions.
(0 If an Existing Holder selling ARS in an Auction fails to deliver such ARS (by
authorized book-entry), a Broker-Dealer may deliver to the Potential Holder on behalf of which it
submitted a Bid that was accepted a principal amount of ARS that is less than the principal
LA1-69756.2 C-11
amount of ARS that otherwise was to be purchased by such Potential Holder. In such event, the
principal amount of ARS to be so delivered shall be determined solely by such Broker-Dealer.
Delivery of such lesser principal amount of ARS shall constitute good delivery. Notwithstanding
the foregoing terms of this subsection, any delivery or nondelivery of ARS which shall represent
any departure from the results of an Auction, as determined by the Auction Agent, shall be of no
effect unless and until the Auction Agent shall have been notified of such delivery or nondelivery
in accordance with the provisions of the Auction Agent Agreement and the Broker-Dealer
Agreements.
IA1a4756.2 C-12
Exhibit D
Auction Agent
Agreement
PURCHASER'S LETTER
To: The Auction Agent
A Broker-Dealer
A Participant
Other Persons
1. This letter is designed to apply to auctions for publicly or privately offered debt or
equity securities ("Securities") of any issuer ("Issuer") which are described in any fmal
prospectus or other offering materials relating to such Securities as the same may be amended or
supplemented (collectively, with respect to the particular Securities concerned, the "Prospectus"),
and which involve periodic rate settings through auctions ("Auctions"). This letter shall be for the
benefit of any Issuer and of any trust company or auction agent (collectively, "trust company"),
broker-dealer, agent member, securities depository or other interested person in connection with
any Securities and related Auctions (it being understood that such persons may be required to
execute specified agreements and nothing herein shall alter such requirements). The terminology
used herein is intended to be general in its application and not to exclude any Securities in respect
of which (in the Prospectus or otherwise) alternative terminology is used.
2. We may from time to time offer to purchase, purchase, offer to sell and/or sell
Securities of any Issuer as described in the Prospectus relating thereto. We agree that this letter
shall apply to all such purchases, sales and offers and to Securities owned by us. We understand
that the interest rate on Securities may be based from time to time on the results of Auctions as
set forth in the Prospectus.
3. We agree that any bid or sell order placed by us shall constitute an irrevocable
offer by us to purchase or sell the Securities subject to such bid or sell order, or such lesser
amount of Securities as we shall be required to sell or purchase as a result of such Auction, at
the applicable price, all as set forth in the Prospectus, and that if we fail to place a bid or sell
order with respect to Securities owned by us with a broker-dealer on any auction date, or a
broker-dealer to which we communicate a bid or sell order fails to submit such bid or sell order
to the trust company concerned, we shall be deemed to have placed a hold order with respect to
such Securities as described in the Prospectus. We authorize any broker-dealer that submits a bid
or sell order as our agent in Auctions to execute contracts for the sale of Securities covered by
such bid or sell order. We recognize that the payment by such broker-dealer for Securities
purchased on our behalf shall not relieve us of any liability to such broker-dealer for payment for
such Securities.
4. We agree that, during the applicable period as described in the Prospectus,
dispositions of Securities can be made only in the denominations set forth in the Prospectus and
we will sell, transfer or otherwise dispose of any Securities held by us from time to time only
pursuant to a bid or sell order placed in an Auction, to or through a broker-dealer or, when
LAI-69756.2 D-1
permitted in the Prospectus, to a person that has signed and delivered, or caused to be delivered
on its behalf, to the applicable trust company a letter substantially in the form of this letter (or
other applicable purchaser's letter), provided that in the case of all transfers other than pursuant
to Auctions, we or our broker-dealer or our agent member shall advise such trust company of
such transfer. We understand that a restrictive legend will be placed on certificates representing
the Securities and stop-transfer instructions will be issued to the transfer agent and/or registrar,
all as set forth in the Prospectus. We agree to comply with any other transfer restrictions or
other related procedures as described in the Prospectus.
5. We agree that, during the applicable period as described in the Prospectus,
ownership of Securities shall be represented by a global certificate registered in the name of the
applicable securities depository or its nominee, that we will not be entitled to receive any
certificate representing the Securities and that our ownership of any Securities will be maintained
in book-entry form by the securities depository for the account of our agent member, which in
turn will maintain records of our beneficial ownership. We authorize and instruct our agent
member to disclose to the applicable trust company such information concerning our beneficial
ownership of Securities as such trust company shall request.
6. We acknowledge that partial deliveries of Securities purchased in Auction may be
made to us and such deliveries shall constitute good delivery as set forth in the Prospectus.
7. This letter is not a commitment by us to purchase any Securities.
8. This letter supersedes any prior-dated version of this purchaser's letter, and
supplements any prior or post-dated purchaser's letter specific to particular Securities; any
recipient of this letter may rely upon it until such recipient has received a signed writing
amending or revoking this letter.
9. The descriptions of the Auction procedures set forth in each applicable Prospectus
are incorporated by reference herein and, in case of any conflict between this letter and any such
description, such description shall control.
10. Any photocopy or other reproduction of this letter shall be deemed of equal affect
as a signed original.
11. Our agent member of the securities depository currently is
12. Our personnel authorized to place orders with broker-dealers for the purposes set
forth in the Prospectus in Auctions is/are listed below:
Telephone Number
LA14975ez D-2
13. Our taxpayer identification number is
14. We agree that, during the applicable periods described in the Prospectus, if we
decided to link our beneficial ownership of any Securities with our beneficial ownership of other
debt or equity securities of the Authority, or if we decide to separate any such linkage, we will
instruct our agent member and our broker-dealer to link such beneficial ownership or to separate
such linkage in accordance with the procedures set forth in the Prospectus, and we acknowledge
that such instructions must be submitted through the applicable trust company and may not be
given during certain periods described in the Prospectus.
Dated:
[Name of Purchaser]
JAuthorized Signature]
JPrinted Name of Authorized Signature]
JTitlel
[Mailing Address]
LAI-69756.2 D-3
Exhibit E
Auction Agent
Agreement
NOTICE OF CONVERSION
Santa Ana Financing Authority
Police Administration and Holding Facility
Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
Manager, Mandatory Exchanges
Reorganization Window
The Depository Trust Company
7 Hanover Square - 23rd Floor
New York, New York 10004
Please be advised that positions maintained by you as of the close of business on the next
succeeding Interest Payment Date ( ) as Newly Fixed AIRS on the
above-captioned issue (CUSIP No. ), should be exchanged for an equal principal amount
of Regular Fixed AIRS on such issue (CUSIP No. ) effective as of the opening of
business on the following Business Day.
Terms used herein have the meanings set forth in the Indenture relating to the
above-referenced issue.
THE BANK OF NEW YORK, as Auction Agent
By:
Title:
Date:
u1-69756.2 E-1
Exhibit F
Auction Agent
Agreement
NOTICE OF FEE RATE CHANGE
Santa Ana Financing Authority
Police Administration and Holding Facility Lease
Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
NOTICE IS HEREBY GIVEN that the rate at which the [Auction Agent Fee/
Broker-Dealer Feel accrues has been changed in accordance with Section [6.4 or 6.51 of the
Auction Agent Agreement. The new rate at which the [Auction Agent Fee/Broker-Dealer Feel
accrues shall be f 1 of 1% per annum and the total Service Charge Rate shall be f 1 of 1%
per annum.
Terms used herein have the meanings set forth in the Indenture relating to the
above-referenced issue.
THE BANK OF NEW YORK, as Auction Agent
By:
Title:
Date:
LA1-69756.2 F-1
Exhibit G
Auction Agent
Agreement
NOTICE OF ARS NOT FIXED
Santa Ma Financing Authority
Police Administration and Holding
Facility Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
NOTICE IS HEREBY GIVEN that $ aggregate principal amount of the ARS
were not Fixed at the close of business on the immediately preceding Auction Record Date.
Such aggregate principal amount of the ARS will be available on the next succeeding Auction
Date to be held on
Terms used herein have the meanings set forth in the Indenture relating to the
above-referenced issue.
THE BANK OF NEW YORK, as Auction Agent
By:
Title:
Date:
LA1-69756.2 G-1
Exhibit H
Auction Agent
Agreement
NOTICE OF FAILURE TO RECEIVE CERTIFICATE
Santa Ma Financing Authority
Police Administration and Holding
Facility Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
NOTICE IS HEREBY GIVEN that a condition to changing the percentage used to
determine the Minimum Rate, the Applicable Percentage used to determine the Maximum Rate
and the percentage of the Index used to determine the Non-Payment Rate has not been met. The
existing percentages and Applicable Percentage will be used to determine the Minimum Rate, the
Maximum Rate and the Non-Payment Rate, as the case may be, on the next succeeding Auction
Date. An Auction will be conducted on the next succeeding Auction Date unless otherwise not
held pursuant to the terms of the ARS.
Terms used herein have the meanings set forth in the Indenture relating to the
above-referenced issue.
THE BANK OF NEW YORK, as Auction Agent
By:
Title:
Date:
IA1-69756.2 H-1
Exhibit I
Auction Agent
Agreement
NOTICE OF FAILURE TO RECEIVE OPINION
Santa Ana Financing Authority
Police Administration and Holding
Facility Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
NOTICE IS HEREBY GIVEN that a condition to changing the percentage used to
determine the Minimum Rate, the Applicable Percentage used to determine the Maximum Rate
and the percentage of the existing percentages and Applicable Percentage will be used to
determine the Minimum Rate, the Maximum Rate and the Non-Payment Rate, as the case may
be. The interest rate on the ARS for the next succeeding Auction Period will be equal to the sum
of the Service Charge Rate and the Maximum Rate or, if the Non-Payment Rate is the applicable
interest rate, will be equal to the Non-Payment Rate.
Terms used herein have the meanings set forth in the Indenture relating to the
above-referenced issue.
THE BANK OF NEW YORK, as Auction Agent
By:
Title:
Date:
LA1-69756.2 I-1
Exhibit J
Auction Agent
Agreement
NOTICE OF A PAYMENT DEFAULT
Santa Ana Financing Authority
Police Administration and Holding
Facility Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
NOTICE IS HEREBY GIVEN that a Payment Default has occurred and not been cured.
Determination of the interest rate on the ARS pursuant to the Auction Procedures will be
suspended. The interest rate on the ARS for each Auction Period commencing after
will equal the Non-Payment Rate as it is determined by the
Trustee on the first day of such Auction Period. All terms used herein and not otherwise defined
shall have the meanings given such terms in the Indenture.
Terms used herein have the meanings set forth in the Indenture relating to the
above-referenced issue.
THE BANK OF NEW YORK, as Auction Agent
By:
Title:
Date:
IA1-69756.2 J-1
Exhibit K
Auction Agent
Agreement
LIST OF INITIAL BROKER-DEALERS
Smith Barney Shearson Inc.
I A1sm56.2 K-1
MARKET AGENT AGREEMENT
between
SMITH BARNEY SHEARSON INC.,
as Market Agent
and
MERIDIAN TRUST COMPANY OF CALIFORNIA,
as Trustee
Dated as of March 1, 1994
Relating to
Santa Ana Financing Authority
Police Administration and Holding Facility
Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
LA1-69758.1
MARKET AGENT AGREEMENT
This MARKET AGENT AGREEMENT, dated as of March 1, 1994 (the
"Agreement"), by and between Meridian Trust Company of California, a state banking corporation
duly organized and existing pursuant to the laws of the State of California, as Trustee (the
"Trustee"), under an Indenture of Trust, dated as of March 1, 1994 (the "Indenture"), by the Santa
Ana Financing Authority (the "Authority") and Smith Barney Shearson Inc., a Delaware corporation
(in its role as market agent hereunder, the "Market Agent").
WHEREAS, the Authority proposes to cause the Trustee to authenticate and deliver
$107,399,438.50 aggregate principal amount of the its Police Administration and Holding Facility
Lease Revenue Bonds, Series 1994A, consisting of $10,600,000 aggregate principal amount of
Auction Rate Securities (the "ARS") and $10,600,000 aggregate principal amount of Inverse Rate
Securities (the "IRS") pursuant to the Indenture. The Trustee is entering into this Agreement as
agent for the Beneficial Owners of the ARS and IRS pursuant to the Indenture.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the adequacy and sufficiency of which are hereby acknowledged, and intending to
be legally bound, the Trustee and the Market Agent agree as follows:
Section 1. Definitions. Capitalized terms used herein and not otherwise defined
shall have the respective meanings given such terms in the Indenture.
Section 2. Appointment of Market Agent. At the written direction of the
Authority, the Trustee hereby appoints Smith Barney Shearson Inc., as Market Agent with respect
to any ARS and IRS to be executed and delivered under and pursuant to the Indenture. The Market
Agent hereby accepts such appointment for the purpose of determining the Index and adjusting the
percentage used in determining the Minimum Rate, the Applicable Percentage used in determining
the Maximum Rate and the percentage of the Index used in determining the Non-Payment Rate, if
any such adjustment is necessary to reflect any Change of Tax Law such that ARS paying the
Maximum Rate, ARS paying the Minimum Rate and ARS paying the Non-Payment Rate in each case
shall have substantially equal market values before and after such Change of Tax Law, upon the
terms and conditions set forth herein.
Section 3. Determination of the Index
(a) On the Business Day immediately preceding each Auction Period Accrual
Date, other than an Auction Period Accrual Date commencing after (i) the occurrence and during
the continuance of a Payment Default and (ii) ownership of the ARS and IRS is no longer maintained
in book-entry form by the Securities Depository, the Market Agent shall determine the Index. Not
later than 9:00 a.m., New York City time, on such Business Day, the Market Agent shall notify the
Auction Agent by telephone of the Index so determined.
LA1-69758.1 1
(b) On the first day of each Auction Period commencing after (i) the occurrence
of a Payment Default or (ii) ownership of the ARS and IRS is no longer maintained in book-entry
form by the Securities Depository to and including the Auction Period, if any, during which such
Payment Default is cured in accordance with the Indenture, or ownership of the ARS and IRS
becomes maintained in book-entry form by a Securities Depository, as the case may be, the Market
Agent shall determine the Index. Not later than 9:00 a.m., New York City time, on such day, the
Market Agent shall notify the Trustee by telephone of the Index so determined.
(c) Notice delivered in writing pursuant to this Section 3 shall be substantially in
the form of Exhibit A hereto.
Section 4. Changes in Percentages Used to Determine the Maximum Rate, the
Minimum Rate and the Non-Payment Rate. The Market Agent agrees that it will comply with the
provisions set forth in Section 6 of Appendix A of the Indenture with respect to its duties as Market
Agent in connection with adjusting the percentage used in determining the Minimum Rate, the
Applicable Percentage used in determining the Maximum Rate and the percentage of the Index used
in determining the Non-Payment Rate, including the preparation and delivery of such notices at the
times and containing such information as referred to therein. Any notices delivered in writing
pursuant to this Section 4 shall be substantially in the form of Exhibit C or Exhibit D, as the case
may be, hereto.
Section 5. Changes in Statutory Corporate Tax Rate.
(a) The Market Agent agrees that it will notify the Trustee and the Auction Agent
in writing in the event of a change in the Statutory Corporate Tax Rate.
(b) Notices delivered pursuant to this Section 5 shall be substantially in the form
of Exhibit B hereto.
Section 6. Other Duties. The Market Agent agrees to perform such other duties
in accordance with the Indenture as are set forth therein.
Section 7. Fees. The Market Agent agrees that initially it will receive no fees
for its services as Market Agent under this Agreement.
Section 8. Rights and Liabilities of the Market Agent.
(a) The Market Agent shall incur no liability for, or in respect of, any action
taken or omitted to be taken, or suffered by it in reliance upon the Indenture, any ARS or IRS,
written instruction, notice, request, direction, certificate, consent, report, affidavit, statement, order
or other instrument, paper, document or communication reasonably believed by it in good faith to
be genuine and on which it reasonably believed it is entitled to reply. Any order, certificate,
affidavit, instruction, notice, request, direction, statement or other comment from the Trustee or
LA1-69758.1 2
given by it and sent, delivered or directed to the Market Agent under, pursuant to, or as permitted
by, any provision of this Agreement shall be sufficient for purposes of this Agreement if such
comment is in writing and signed by any officer of the Trustee. In the absence of bad faith or
negligence on its part, neither the Market Agent nor its officers or employees shall be liable for any
action taken, suffered or omitted or for any error of judgment made in the performance of its duties
under this Agreement. The Market Agent shall not be liable for any error of judgment made in good
faith unless the Market Agent shall have been negligent in ascertaining (or failing to ascertain) the
pertinent facts. No party shall be liable for any default resulting from force majeure, which shall
be deemed to include any circumstances beyond the reasonable control of the party affected. No
action, regardless of form, arising out of or pertaining to the role of the Market Agent hereunder
may be brought by any party hereto or beneficiary hereof more than twelve (12) months after the
cause of action has occurred.
(b) In acting under this Agreement, and in connection with the ARS and the IRS,
the Market Agent is acting solely as agent of the Trustee and does not assume any obligation or
relationship of agency or trust for or with any of the Beneficial Owners of the ARS or the IRS.
(c) The Market Agent may consult with counsel satisfactory to it, and the advice
of such counsel shall be full and complete authorization and protection in respect of any action taken
or omitted to be taken or suffered by it hereunder in good faith and in accordance with the advice
of such counsel.
(d) The Market Agent, its directors, officers and employees may become the
owner of, or acquire an interest in, any ARS or IRS, with the same rights that such Market Agent,
director, officer or employee would have if the Market Agent were not Market Agent hereunder, and
the Market Agent, its directors, officers and employees may engage or be interested in any financial
or other transaction with the Authority and may act on, or as depository, paying agent or agent for,
any committee or body of holders of ARS or IRS or other obligations of the Authority as freely as
if the Market Agent were not a Market Agent hereunder.
(e) The Market Agent shall not incur any liability with respect to the validity of
any of the ARS or the IRS.
Section 9. Duties of the Market Agent. The Market Agent shall be obligated only
to perform such duties as are specifically set forth herein and no other duties or obligations on the
part of the Market Agent, in its capacity as such, shall be implied by this Agreement.
Section 10. Termination. This Agreement shall terminate upon the final payment
on account of the ARS and the IRS. The Market Agent may resign and may be discharged as
provided for in Section 10 of Appendix A of the Indenture.
Section 11. Communications.
(a) Except for communications authorized to be made by telephone by this
Agreement, all notices, requests and other communications to the Authority, the Market Agent, the
LA1-69758.1 3
Auction Agent or the Trustee shall be in writing (including facsimile or similar writing) and shall
be given to such entity, addressed to it, at its address or facsimile number set forth below:
If to the Market Agent, addressed: SMITH BARNEY SHEARSON INC.
1345 Avenue of the Americas
44th Floor - Short Term Products
New York, New York 10105
Attention: Theresa M. Gallagher
Telephone: (212) 698-3785
Facsimile: (212) 698-5672
If to the Auction Agent, addressed: THE BANK OF NEW YORK
101 Barclay Street
22nd Floor
New York, New York 10286
Attention: Corporate Trust Group
Telephone: 212-815-2132
Facsimile: 212-571-3050
If to the Trustee, addressed: MERIDIAN TRUST COMPANY OF CALIFORNIA
650 California Street
8th Floor
San Francisco, California 94108
Attention: Corporate Trust Department
Telephone: 415-705-6034
Facsimile: 415-986-6098
If to the Authority, addressed: SANTA ANA FINANCING AUTHORITY
20 Civic Center Plaza
Santa Ana, California 92701
Attention: Executive Director
Telephone: 714-647-5360
Facsimile: 714-647-6549
Each entity listed above may change the address for service of notice upon it by a
notice in writing to the other entities named above. Each such notice, request or communication
shall be effective when delivered at the address specified herein.
The Market Agent may rely upon, and is authorized to honor, any telephonic requests
or directions which the Market Agent reasonably believes in good faith to emanate from an
authorized representative of the Trustee. Any telephonic request or direction to the Market Agent
shall promptly be confirmed in writing; provided, however, that failure to receive any such notice
shall not affect the authority of the Market Agent to rely and act upon such request or direction.
LA1-69758.1 4
Section 12. Miscellaneous.
(a) This Agreement contains the entire agreement between the parties relating to
the subject matter hereof, and there are no other representations, endorsements, promises,
agreements or understandings, oral, written or inferred, between the parties relating to the subject
matter hereof.
(b) The terms of this Market Agent Agreement as set forth herein shall not be
waived, altered, modified, amended or supplemented in any manner whatsoever except by written
instrument signed by the parties hereto.
(c) This Agreement shall be binding upon, and inure to the benefit of, the
Trustee, as agent for the Beneficial Owners of the ARS and the IRS, and the Market Agent and their
respective successors and assigns.
(d) If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or unenforceability of such
clause, provision or section shall not affect any of the remaining clauses, provisions or sections
hereof.
(e) This 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.
(f) This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements executed and performed in such state.
(g) The Agreement shall become effective on the date of initial delivery of the
ARS and the IRS.
(h) All privileges, rights and immunities given to the Trustee in the Indenture are
hereby extended to and applicable to the Trustee's obligations hereunder.
LA1-69758.1 5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective proper and duly authorized officers as of the date first
above written.
SMITH BARNEY SHEARSON INC.,
as Market Agent
ezra-
) orized epresentative
MERIDIAN TRUST COMPANY OF CALIFORNIA,
as Trustee
By
Authorized Representative
LA1-69758.1 6
Exhibit A
Market Agent
Agreement
THE INDEX
Santa Ana Financing Authority
Police Administration and Holding Facility
Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
The Index on , is %.
SMITH BARNEY SHEARSON INC.,
as Market Agent
By:
Name:
Its:
LA1-69758.1 A-1
Exhibit B
Market Agent
Agreement
CHANGE IN STATUTORY CORPORATE TAX RATE
Santa Ana Financing Authority
Police Administration and Holding Facility
Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
Pursuant to Section 5 of the Market Agent Agreement, please be advised that the
Statutory Corporate Tax Rate for all Auctions commencing after has been
changed. The new Statutory Corporate Tax Rate commencing on shall be
%.
SMITH BARNEY SHEARSON INC.,
as Market Agent
By:
Name:
Its:
LAI-69758.1 B-1
Exhibit C
Market Agent
Agreement
NOTICE OF PROPOSED PERCENTAGE CHANGE
[The Market Agent shall deliver this notice by 11:00 a.m., New York City time,
on the Business Day immediately preceding the Auction Date on which such
changes shall be effective, by telex, telecopy or similar means]
Santa Ana Financing Authority
Police Administration and Holding Facility
Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
NOTICE IS HEREBY GIVEN to the Trustee and the Auction Agent that Smith Barney
Shearson Inc., as Market Agent for the above-captioned issue, proposes to change the percentages
used to determine the Maximum Rate and the Minimum Rate to reflect a Change of Tax Law in
accordance with the Indenture. Assuming the conditions set forth in the Indenture are met, such
change will be effective on (the "Effective Date").
[Insert a description of the changes in the Minimum Rate, the Applicable
Percentages used to determine the Maximum Rate and the percentage of the
Index used to determine the Non-Payment Rate, as the case may be]
The Market Agent hereby confirms that Bond Counsel expects to be able to give an opinion
on or prior to the Effective Date to the effect that the adjustment in the percentage used to determine
the Minimum Rate, the Applicable Percentages used to determine the Maximum Rate and the
percentage of the Index used to determine the Non-Payment Rate is authorized by the Indenture, is
permitted under the Code and will not have an adverse effect on the exclusion of interest on the ARS
and IRS from gross income for federal income tax purposes.
If any of the conditions referred to in the paragraph above are not met, the existing
percentages used to determine the [ ] shall remain in effect and the Applicable ARS Rate
for the next succeeding Auction Period shall equal the sum of the Maximum Rate on the Effective
Date and the Service Charge Rate.
Dated ,
SMITH BARNEY SHEARSON INC.,
as Market Agent
By:
Name:
Its:
LA1-69758.1 C-1
Exhibit D
Market Agent
Agreement
NOTICE OF PERCENTAGE CHANGE
Authority
Police Administration and Holding Facility
Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
NOTICE IS HEREBY GIVEN to the Trustee and the Auction Agent that Smith Barney
Shearson Inc., as Market Agent for the ARS and IRS identified above, hereby authorized a change
effective the date hereof in the percentages used to determine the Maximum Rate and the Minimum
Rate to reflect a Change of Tax Law in accordance with the Indenture.
[Insert a description of the changes in the Minimum Rate, the Applicable
Percentages used to determine the Maximum Rate and the percentage of the
Index used to determine the Non-Payment Rate, as the case may be]
The Market Agent also confirms that Bond Counsel has delivered its opinion dated the date
hereof to the effect that the adjustment in the percentage used to determine the Minimum Rate, the
Applicable Percentages used to determine the Maximum Rate and the percentage of the Index used
to determine the Non-Payment Rate is authorized by the Indenture, is permitted under the Code and
will not have an adverse effect on the exclusion of interest on the ARS and IRS from gross income
for federal income tax purposes.
Dated
SMITH BARNEY SHEARSON INC.,
as Market Agent
By:
Name:
Its:
1.A1-69758.1 D-1
BROKER-DEALER AGREEMENT
between
THE BANK OF NEW YORK,
as Auction Agent
and
SMITH BARNEY SHEARSON INC.,
as Broker-Dealer
Dated as of March 1, 1994
Relating to
Santa Ana Financing Authority
Police Administration and Holding Facility
Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
•
TABLE OF CONTENTS
Page
Section 1. Definitions and Rules of Construction
1.1. Terms Defined by Reference i
1.2. Terms Defined Herein 1
1.3. Rules of Construction 3
Section 2. The Auction
2.1. Auction Procedures and Settlement Procedures 4
2.2 Preparation for Each Auction 4
2.3. Auction Schedule 5
2.4. Notices 6
2.5. Service Charge to Be Paid to Smith Barney 7
2.6. Settlement 7
2.7. Fixing and Separating of ARS and IRS 8
2.8 Mandatory Tender of ARS 8
Section 3. The Auction Agent
3.1. Duties and Responsibilities 10
3.2. Right of the Auction Agent 10
LA1-69760.2 i
Page
Section 4. Miscellaneous
4.1. Termination 11
4.2. Participant 11
4.3. Communications 11
4.4. Entire Agreement 12
4.5. Benefits 12
4.6. Amendment; Waiver 12
4.7. Successors and Assigns 12
4.8. Severability 12
4.9. Execution in Counterparts 12
Section 5. Governing Law
Exhibit A Settlement Procedures A-1
Exhibit B Order Form B-1
Exhibit C Notice of Transfer C-1
Exhibit D Notice of Failure to Deliver D-1
Exhibit E Request to Fix E-1
Exhibit F Request to Separate F-1
IAI-69760.2 ii
BROKER-DEALER AGREEMENT
This BROKER-DEALER AGREEMENT, dated as of March 1, 1994 (the
"Agreement"), by and between THE BANK OF NEW YORK, a New York corporation acting
as auction agent (together with its successors and assigns, the "Auction Agent") and SMITH
BARNEY SHEARSON INC. (together with its successor and assigns hereinafter referred to as
"Smith Barney").
WHEREAS, the Santa Ana Financing Authority (the "Authority") proposes to
cause the Trustee to authenticate and deliver$107,399,438.50 aggregate principal amount of its
Police Administration and Holding Facility Jpase Revenue Bonds, Series 1994A, consisting of
$10,600,000 aggregate principal amount of Auction Rate Securities (the "ARS") and
$10,600,000 aggregate principal amount of Inverse Rate Securities (the "IRS") pursuant to an
Indenture of Trust, dated as of March 1, 1994 (the "Indenture") between the Authority and the
Trustee. The Trustee is entering into this Agreement as agent for the Beneficial Owners of the
ARS and IRS pursuant to the Indenture.
WHEREAS, the Indenture provides that the interest rate with respect to the ARS
for each Auction Period after the initial Auction Period shall, except under certain conditions,
equal the sum of the Service Charge Rate and the rate per annum that the Auction Agent advises
results from implementation of the Auction Procedures (the "Auction Rate").
WHEREAS, pursuant to Section 2.10 of the Auction Agent Agreement, the
Trustee has requested and directed the Auction Agent to execute and deliver this Agreement.
WHEREAS, the Auction Procedures require the participation of one or more
Broker-Dealers.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Auction Agent, as agent of the Trustee, and Smith Barney agree as follows:
Section 1. Definitions and Rules of Construction
1.1. Terms Defined by Reference. Capitalized terms used herein and not
otherwise defined shall have the meanings given such terms in the Auction Agent Agreement.
1.2. Terms Defined Herein. As used herein and in each Exhibit hereto, the
following terms shall have the following meanings, unless the context otherwise requires:
"Auction" shall have the meaning specified in Section 2.1 hereof.
LA1-69760.2
"Auction Agent Agreement" shall mean the Auction Agent Agreement dated as of
March 1, 1994, by and between the Trustee and the Auction Agent.
"Auction Period" shall mean the period from and including the Closing Date to,
but not including, the first Auction Period Accrual Date and, thereafter, from and including each
Auction Period Accrual Date to, but not including, the next succeeding Auction Period Accrual
Date; provided, however, that if such date is later than the maturity date of a maturity of ARS,
the last day of such Auction Period shall be the maturity date of such ARS.
"Auction Period Accrual Date" shall mean September 20, 1994 and every 5th
Tuesday thereafter (or such other day that the Market Agent shall establish as an Auction Period
Accrual Date); provided, however, that if such day is not a Business Day, the Auction Period
Accrual Date shall be the next succeeding Business Day.
"Auction Procedures" shall mean the provisions that are set forth in Section 2 of
Exhibit C of the Auction Agent Agreement.
"Auction Record Date"shall mean the Business Day preceding each Auction Date.
"Authorized Officer" shall mean each Senior Vice President, Vice President,
Assistant Vice President, Trust Officer and Assistant Manager of the Auction Agent assigned
to its Corporate Trust Group and every other officer or employee of the Auction Agent
designated as an "Authorized Officer" for purposes of this Agreement in a communication to
Smith Barney.
"Beneficial Owner" shall mean the person who is (i) the beneficial owner of ARS
or IRS according to the records of the Securities Depository while such ARS and IRS are in
book-entry form or (ii) the registered holder of ARS or IRS according to the records of the
Trustee while such ARS and IRS are not in book-entry form.
"Closed Period"shall mean each period(i)commencing at 11:00 a.m., New York
City time, on the Business Day immediately preceding any Auction Record Date and ending
immediately prior to the opening of business on the Auction Period Accrual Date succeeding
such Auction Record Date and (ii) commencing at 11:00 a.m., New York City time, on a
Redemption Record Date and ending immediately prior to the opening of business on the related
redemption date.
"Notice ofARS Not Fixed"shall mean a notice substantially in the form of Exhibit
G to the Auction Agent Agreement.
"Notice of Failure to Deliver" shall mean a notice substantially in the form of
Exhibit D hereto.
"Notice of Transfer" shall mean a notice substantially in the form of Exhibit C
hereto.
LA1-69760.2 2
"Order Form" shall mean the form to be submitted by any Broker-Dealer on any
Auction Date substantially in the form of Exhibit B hereto.
"Participant" shall mean a member of, or participant in, the Securities
Depository.
"Purchaser's Letter" shall mean a letter addressed to the Authority, the Auction
Agent, a Broker-Dealer and a Participant, in form of Exhibit D to the Auction Agent
Agreement.
"Request to Fix" shall mean a notice substantially in the form of Exhibit E hereto.
"Request to Separate" shall mean a notice substantially in the form of Exhibit F
hereto.
"Settlement Procedures" shall mean the Settlement Procedures attached hereto as
Exhibit A.
"Smith Barney Officer" shall mean each officer or employee of Smith Barney
designated as a "Smith Barney Officer" for purposes of this Agreement in a communication to
the Auction Agent.
1.3. Rules of Construction. Unless the context or use indicates another or
different meaning or intent, the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the plural number and
vice versa.
(b) The captions and headings herein are solely for convenience of reference
and shall not constitute a part of this Agreement nor shall they affect its meaning, construction
or effect.
(c) The words "hereof," "herein," "hereto,"and other words of similar import
refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to New York City
time.
(e) All references herein to ARS, IRS and AIRS shall be references to ARS,
IRS and AIRS of each maturity.
LAI-69760.2 3
Section 2. The Auction
2.1. Auction Procedures and Settlement Procedures.
(a) On each Auction Date, the provisions of the Auction Procedures will be
followed by the Auction Agent for the purpose of determining the Applicable ARS Rate for the
next Auction Period. Each periodic operation of such procedures is hereinafter referred to as
an "Auction."
(b) All of the provisions contained in the Auction Procedures and the
Settlement Procedures are incorporated herein by reference in their entirety and shall be deemed
to be a part of this Agreement to the same extent as if such provisions were fully set forth
herein.
(c) Smith Barney agrees to act as, and assumes the obligations of and
limitations and restrictions placed upon, a Broker-Dealer under the Indenture and as otherwise
set forth in this Agreement. Smith Barney understands that other persons meeting the
requirements specified in the definition of "Broker-Dealer" contained in Appendix A to the
Indenture may enter into an agreement with the Auction Agent and participate as Broker-Dealers
in Auctions.
(d) Smith Barney and other Broker-Dealers may participate in Auctions for
their own accounts. However, the Trustee may, by notice to Smith Barney and all other Broker-
Dealers, prohibit all Broker-Dealers from submitting Bids in Auctions for their own accounts,
provided that Broker-Dealers may continue to submit Hold Orders and Sell Orders. Neither the
Auction Agent nor the Trustee shall have any duty or liability with respect to monitoring or
enforcing the requirements of this subsection (d).
2.2 Preparation for Each Auction.
(a) Not later than 9:30 a.m., New York City time, on each Auction Date for
the ARS, the Auction Agent shall advise Smith Barney by telephone of the Minimum Rate,
Maximum Rate and the "AA" Composite Commercial Paper Rate or the Index, as the case may
be, used in determining such rates.
(b) In the event the Auction Date for any Auction shall be changed after the
Auction Agent has given notice of such Auction Date pursuant to clause (vii) of paragraph (a)
of the Settlement Procedures, the Auction Agent, by such means as the Auction Agent deems
practicable, shall give notice of such change to Smith Barney not later than the earlier of 9:15
a.m., New York City time, on the new Auction Date and 9:15 a.m., New York City time, on
the old Auction Date. Thereafter, Smith Barney shall use its best efforts to promptly notify its
customers who are Existing Holders of such change in the Auction Date.
(c) The Auction Agent may request, from time to time, Smith Barney to
provide it with a list of the respective customers Smith Barney believes are Existing Holders and
the aggregate amount held by Smith Barney. Smith Barney shall promptly comply with any such
LA1-69760 2 4
request, and the Auction Agent shall keep confidential any such information, including
information received as to the identity of Bidders in any Auction, and shall not disclose any such
information so provided to any person other than the Trustee, the Authority and Smith Barney,
provided that the Auction Agent reserves the right to disclose any such information if it is
advised by its counsel that its failure to do so would be unlawful.
(d) Not later than 9:30 a.m., New York City time, on each Auction Date, the
Auction Agent shall notify Smith Barney of the aggregate principal amount of ARS which are
not then Fixed by delivering a Notice of ARS Not Fixed to Smith Barney by telecopy or other
similar means.
(e) The Auction Agent is not required to accept the Purchaser's Letter of any
Potential Holder who wishes to submit a Bid for the first time in an Auction or of any Potential
Holder or Existing Holder who wishes to amend its Purchaser's Letter unless it is received by
the Auction Agent by 3:00 p.m., New York City time, on the Business Day preceding such
Auction.
2.3. Auction Schedule. The Auction Agent shall conduct Auctions in
accordance with the schedule set forth below. Such schedule may be changed by the Auction
Agent with the consent of the Trustee and the Market Agent, which consent shall not be
unreasonably withheld or delayed. The Auction Agent shall give notice pursuant to Section 4.3
hereof of any such change to each Broker-Dealer. Such notice shall be given prior to the first
Auction Date on which any such change shall be effective.
By 9:00 a.m. The Market Agent provides the Auction Agent with the Index.
By 9:30 a.m. The Auction Agent advises the Trustee and the Broker-Dealers of
the Maximum Rate, the Minimum Rate and the "AA" Composite
Commercial Paper Rate or the Index, as the case may be, used in
determining such Maximum Rate and Minimum Rate, as set forth
in Section 2.2(a) hereof.
9:30 a.m.-1:00 p.m. The Auction Agent assembles information communicated to it by
Broker-Dealers as provided in Section 2(b)(i) of the Auction
Procedures. The Submission Deadline is 1:00 p.m., New York
City time.
Not earlier than
1:00 p.m. The Auction Agent makes the determination pursuant to Section
2(c)(i) of the Auction Procedures.
By approximately
3:00 p.m. The Auction Agent advises the Trustee and the Broker-Dealers of
the Auction Rate for the next Auction Period and the results of the
Auction as provided in Section 2(c)(ii)of the Auction Procedures.
Submitted Bids and Submitted Sell Orders are accepted and
cn1-69760.2 - 5
rejected in whole or in part and principal amount of ARS is
allocated as provided in Section 2(d) of the Auction Procedures.
The Auction Agent gives notice of Auction results as set forth in
paragraph (a) of the Settlement Procedures.
(b) Smith Barney agrees not to sell, assign or dispose of any ARS which are
not Fixed to any person who has not delivered a signed Purchaser's Letter to the Auction Agent.
(c) Smith Barney shall submit Orders to the Auction Agent pursuant to an
Order Form. Smith Barney shall submit separate Orders to the Auction Agent for each Potential
Holder or Existing Holders on whose behalf Smith Barney is submitting an Order and shall not
net or aggregate the Orders of different Potential Holders or Existing Holders on whose behalf
Smith Barney is submitting Orders.
(d) Smith Barney shall deliver to the Auction Agent (i) a Notice of Transfer
in writing of any transfer of ARS made through Smith Barney by an Existing Holder to another
person other than pursuant to an Auction, and shall deliver or cause to be delivered the related
Purchaser's Letter executed by such person if such person has not previously so delivered a
Purchaser's Letter, and (ii) a Notice of a Failure to Deliver in writing of the failure of any ARS
to be transferred to or by any person that purchased or sold ARS through Smith Barney pursuant
to an Auction. The Auction Agent is not required to accept any notice delivered pursuant to the
terms of the foregoing sentence with respect to an Auction unless it is received by the Auction
Agent by 3:00 p.m., New York City time, on the Business Day next preceding the applicable
Auction Date.
(e) Smith Barney has delivered to the Auction Agent its executed Purchaser's
Letter. Smith Barney and other Broker-Dealers which have delivered duly executed Purchaser's
Letters may submit Orders in Auctions for their own accounts; provided, however, that any
Broker-Dealer that is an affiliate of the Authority must submit at the next Auction therefor a Sell
Order covering all ARS held for its own account. The Auction Agent shall have no duty or
liability with respect to monitoring or enforcing the requirements of this subsection (e).
(t) Smith Barney agrees to handle its customers' Orders in accordance with
its duties under applicable securities laws and rules.
2.4. Notices.
(a) On each Auction Date, the Auction Agent shall notify Smith Barney by
telephone of the results of the Auction as set forth in paragraph (a)of the Settlement Procedures.
The Auction Agent shall by 10:30 a.m., New York City time, on the Business Day next
succeeding such Auction Date if previously requested by Smith Barney notify Smith Barney in
writing of the disposition of all Orders submitted by Smith Barney in the Auction held on such
Auction Date.
(b) Smith Barney shall notify each Existing Holder or Potential Holder on
whose behalf Smith Barney has submitted an Order as set forth in paragraph (b) of the
IA1-69760.2
Settlement Procedures and take such other action as is required by Smith Barney pursuant to the
Settlement Procedures.
(c) The Auction Agent shall deliver to Smith Barney after receipt of all notices
and certificates which the Auction Agent is required to deliver to Smith Barney pursuant to
Section 2 of the Auction Agent Agreement at the times and in the manner set forth in the
Auction Agent Agreement.
2.5. Service Charge to Be Paid to Smith Barney. On the first Interest Payment
Date and each Interest Payment Date thereafter, unless ownership of the ARS is not then
maintained in book-entry form by the Securities Depository, the Auction Agent shall pay to
Smith Barney from moneys received from the Trustee pursuant to Section 6.5(b) of the Auction
Agent Agreement an amount equal to (i) .25 of 1% per annum, multiplied by (ii) (A) in the case
of the first Interest Payment Date, the aggregate principal amount of outstanding Regular ARS
on the Closing Date or (B) in the case of each Interest Payment Date thereafter, the sum of(x)
for each Auction Period during the Interest Period for which an Auction was held, the aggregate
principal amount of the ARS placed by Smith Barney in such Auction that were the subject of
(a) Submitted Bids of Existing Holders submitted by Smith Barney and continued to be held as
a result of such submission, (b) Submitted Bids of Potential Holders submitted by Smith Barney
and purchased as a result of such submission and (c) valid Hold Orders (determined in
accordance with the Auction Agent Agreement) that were previously acquired by an Existing
Holder through Smith Barney, (y) for each Auction Period during the Interest Period in which
an Auction was not held, the aggregate principal amount of Regular ARS that were acquired by
Existing Holders through Smith Barney and (z)with respect to Newly Fixed AIRS, the aggregate
principal amount of the ARS with respect to such Newly Fixed AIRS that were acquired by
Existing Holders through Smith Barney, multiplied by (iii) the number of days in such Interest
Period, divided by (iv)360. For purposes of the foregoing sentence, if any Existing Holder who
acquired ARS through Smith Barney transfers those ARS to another person other than pursuant
to an Auction, then the Broker-Dealer for the ARS so transferred shall continue to be Smith
Barney; provided, however, that if the transfer was effected by, or if the transferee is a Broker-
Dealer other than Smith Barney, then such Broker-Dealer shall be the Broker-Dealer for such
ARS.
2.6. Settlement.
(a) If any Existing Holder on whose behalf Smith Barney has submitted a Bid
or Sell Order for ARS that was accepted in whole or in part fails to instruct its Participant to
cause to deliver the ARS subject to such Bid or Sell Order against payment therefor, Smith
Barney shall instruct such Participant to cause to be delivered such ARS against payment
therefor and Smith Barney may deliver to the Potential Holder on whose behalf Smith Barney
submitted a Bid that was accepted in whole or in part, a principal amount of the ARS that is less
than the principal amount of the ARS specified in such Bid to be purchased by such Potential
Holder. Notwithstanding the foregoing terms of this Section, any delivery or nondelivery of
ARS which represents any departure from the results of an Auction, as determined by the
Auction Agent, shall be of no effect unless and until the Auction Agent shall have been notified
LA1-69760.2 7
of such delivery or non-delivery in accordance with the terms of Section 2.3(d) hereof. The
Auction Agent shall have no duty or liability with respect to enforcement of this subsection (a).
(b) None of the Auction Agent, the Trustee, or the Authority shall have any
responsibility or liability with respect to the failure of an Existing Holder, a Potential Holder
or its respective Participant to deliver ARS or to pay for ARS sold or purchased pursuant to the
Auction Procedures or otherwise.
2.7. Fixing and Separating of ARS and IRS.
(a) Upon receipt of instructions to cause an equal amount of Regular ARS to
be Fixed with Regular IRS from any Beneficial Owner of such ARS and IRS, Smith Barney
shall, on a Business Day other than during a Closed Period, promptly deliver to the Auction
Agent (at the address specified herein) a Request to Fix. Smith Barney shall submit a separate
Request to Fix to the Auction Agent for each Beneficial Owner requesting ARS and IRS to be
Fixed. A Request to Fix delivered to the Auction Agent pursuant to this Section 2.7 shall only
be effective for Regular ARS and Regular IRS for which Smith Barney requests that specified
equal principal amounts of such Beneficial Owner's Regular ARS be Fixed with Regular IRS
(which shall have the same maturity date) in the designated account of the Participant of such
Beneficial Owner at the Securities Depository.
(b) Upon receipt of instructions to cause Regular Fixed AIRS or Newly Fixed
AIRS to be Separated from any Beneficial Owner of Regular Fixed AIRS or Newly Fixed AIRS,
as the case may be, Smith Barney shall, on a Business Day during the seven-day period, other
than during a Closed Period, immediately prior to a Record Date, deliver to the Auction Agent
(at the address specified herein) a completed Request to Separate. Smith Barney shall submit
a Request to Separate to the Auction Agent for each Beneficial Owner requesting that its Regular
Fixed AIRS or Newly Fixed AIRS be Separated. A Request to Separate delivered to the Auction
Agent pursuant to this Section 2.7 shall only be effective for Regular Fixed AIRS or Newly
Fixed AIRS, as the case may be, for which Smith Barney requests that specified equal amounts
of such Beneficial Owners' Regular Fixed AIRS or Newly Fixed AIRS be Separated in the
designated account of the Participant of such Beneficial Owner at the Securities Depository on
the following Interest Payment Date or, if such Interest Payment Date falls within a Closed
Period, on the next succeeding Auction Period Accrual Date.
(c) Notwithstanding anything herein to the contrary (i) ARS and IRS may be
Fixed and Separated only so long as the ownership thereof is maintained in book-entry form and
(ii) while DTC is the Securities Depository, in the event of any conflict between the provisions
of Sections 2.7(a) or 2.7(b) hereof and of any agreement with DTC, the latter provisions shall
govern.
2.8 Mandatory Tender of ARS.
(a) Any Beneficial Owner of IRS may, at any time and from time to time,
notify a Broker-Dealer that such Beneficial Owner intends to submit a Bid for a specified
principal amount of ARS (having the same maturity date as such IRS) on the next succeeding
LA1-69760a 8
Auction Date in order to cause such ARS to be Fixed with all or a portion of such IRS, and that
if such Bid is unsuccessful, in whole or in part, such Beneficial Owner requires that ARS (which
are not Fixed) in an aggregate principal amount equal to the unsuccessful portion of such Bid
be tendered to such Beneficial Owner for purchase on the seventh Business Day prior to the next
succeeding Auction Date following the Auction in which such bid proved unsuccessful (a
"Tender Date"). Such ARS shall be tendered for purchase at a price equal to the principal
amount thereof, plus accrued but unpaid interest to the Tender Date less an amount equal to the
Service Charge, if any, applicable to any such ARS multiplied by a fraction, the numerator of
which is the number of days from and including the immediately preceding Interest Payment
Date to but not including the Tender Date and the denominator of which is 180 (the "Tender
Price"). Any such purchase shall be effected by book-entry transfer of such ARS to the account
of the Participant of such Beneficial Owner identified in such notice.
(b) If any such Bid is unsuccessful, in whole or in part, such Broker-Dealer
shall give the Trustee and the Auction Agent written notice (a "Tender Demand") stating that
a Beneficial Owner of IRS is the Beneficial Owner of a specified principal amount of IRS of a
specified maturity and that such Beneficial Owner wishes to purchase an equal principal amount
of ARS (having the same maturity date as such IRS)on a specified Tender Date to be Fixed with
such IRS. Such notice shall be given to the Trustee and the Auction Agent not later than the
Business Day following the Auction in which such Bid proved unsuccessful. The Auction Agent
shall, not later than the next Business Day, deliver such Tender Demand to the Securities
Depository.
(c) On the second Business Day following the day of the Securities
Depository's receipt of a Tender Demand, the Securities Depository shall select, by lot in such
manner as it shall determine from a position listing of the aggregate stated amounts of Regular
ARS as of the close of business on the date of such Tender Demand, the Regular ARS to be
tendered. Such Regular ARS shall have the same maturity date as the maturity date of the IRS
held by the Beneficial Owner relating to the Tender Demand. The Securities Depository shall
give the Participant for the Regular ARS so selected and the Auction Agent written notice (a
"Tender Notice") thereof. Such Tender Notice shall specify the Tender Date set forth in such
Tender Demand, the amount of Regular ARS to be tendered by such Participant on the Tender
Date and the Tender Price thereof. Each Tender Notice shall be mailed to such Participant and
the Auction Agent by first-class mail, postage prepaid no later than the second Business Day
following the Securities Depository's receipt of such Tender Demand. On receipt of the Tender
Notice, the Auction Agent may contact such Participant to request such Participant to disclose
to the Auction Agent the names of the Beneficial Owners of the Regular ARS so specified in the
Tender Notice.
(d) The giving of a Tender Notice with respect to Regular ARS shall supersede
any Order (as defined in the Auction Agent Agreement) given by the Existing Holder of such
ARS with respect to such ARS for the Auction occurring on the Auction Date following the
Tender Date specified in the Tender Notice. The Securities Depository shall deliver such ARS
against payment therefor by the Broker-Dealer by book-entry transfer on the Tender Date to the
account of the Broker-Dealer without any action on the part of or on behalf of the Beneficial
Owners of the ARS. Upon receipt of such ARS on the Tender Date, the Broker-Dealer shall
LAL69760.2 9
deliver such ARS against payment therefor by book-entry transfer to the account of the
Participant specified by the Beneficial Owner of IRS if not such Broker-Dealer. Such Beneficial
Owner of IRS and the Broker-Dealer who submitted the Tender Demand shall thereupon take
all actions required to have such IRS and the Regular ARS so purchased Fixed pursuant to
Section 8 of Appendix A of the Indenture prior to the next succeeding Closed Period.
Section 3. The Auction Agent.
3.1. Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Trustee hereunder and
owes no fiduciary duties to any person by reason of this Agreement.
(b) The Auction Agent undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement against the Auction Agent.
(c) In the absence of bad faith or negligence on its part, the Auction Agent
shall not be liable for any action taken suffered, or omitted or for any error of judgment made
by it in the performance of its duties under this Agreement. The Auction Agent shall not be
liable for any error of judgment made in good faith unless the Auction Agent shall have been
negligent in ascertaining (or failing to ascertain) the pertinent facts.
3.2. Right of the Auction Agent.
(a) The Auction Agent may rely and shall be protected in acting or refraining
from acting upon any communication authorized by this Agreement and upon any written
instruction, notice, request, direction, consent, report, certificate, share certificate or other
instrument, paper or document believed by it to be genuine. The Auction Agent shall not be
liable for acting upon any telephone communication authorized by this Agreement which the
Auction Agent believes in good faith to have been given by the Trustee or by a Broker-Dealer.
The Auction Agent may record telephone communications with the Broker-Dealers.
(b) The Auction Agent may consult with counsel of its own choice, and the
advice of such counsel shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or risk its own
funds or otherwise incur or become exposed to financial liability in the performance of its duties
hereunder.
(d) The Auction Agent may perform its duties and exercise its rights hereunder
either directly or by or through agents or attorneys and shall not be responsible for any willful
misconduct or negligence on the part of any agent or attorney appointed by it with due care
hereunder.
LAI-69760.2 10
Section 4. Miscellaneous.
4.1. Termination. Any party may terminate this Agreement at any time upon
five days' prior notice to the other party; provided, however, neither Smith Barney nor the
Auction Agent may terminate this Agreement without first obtaining prior written consent of the
Trustee of such termination, which consent shall not be unreasonably withheld or delayed. This
Agreement shall automatically terminate upon the delivery of certificates representing the ARS
pursuant to Section 3.01 of the Indenture or upon termination of the Auction Agent Agreement.
4.2. Participant. Smith Barney is, and shall remain for the term of this
Agreement, a member of, or participant in, the Securities Depository (or an affiliate of such a
member or participant).
4.3. Communications. Except for (i) communications authorized to be made
by telephone pursuant to this Agreement or the Auction Procedures and (ii) communications in
connection with the Auctions (other than those expressly required to be in writing), all notices,
requests and other communications to any party hereunder shall be in writing (including
facsimile or similar writing) and shall be given to such party, addressed to it, at its address or
facsimile number set forth below:
If to Smith Barney, addressed: SMITH BARNEY SHEARSON INC.
1345 Avenue of the Americas
44th Floor - Short Term Products
New York, New York 10105
Attention: Theresa M. Gallagher
Telephone: (212) 698-3785
Facsimile: (212) 698-5672
If to the Auction Agent,
addressed: THE BANK OF NEW YORK
101 Barclay Street
22nd Floor
New York, New York 10286
Attention: Corporate Trust Group
Telephone: (212) 815-2132
(212) 571-3050
If to the Trustee,
addressed: MERIDIAN TRUST COMPANY OF CALIFORNIA
650 California Street, 8th Floor
San Francisco, California 94108
Attention: Corporate Trust Department
Telephone: (415) 705-6034
Facsimile: (415) 986-6098
LA1-69760.2 11
If to the Authority,
addressed: SANTA ANA FINANCING AUTHORITY
70 Civic Center Plaza
Santa Ma, California 92701
Attention: Executive Director
Telephone: (714) 647-5360
Facsimile: (714) 647-6549
or such other address or facsimile number as such party may hereafter specify for such purpose
by notice to the other party. Each such notice, request or communication shall be effective
when delivered at the address specified herein. Communications shall be given on behalf of
Smith Barney by a Smith Barney Officer and on behalf of the Auction Agent by an Authorized
Officer. Smith Barney may record telephone communications with the Auction Agent.
4.4. Entire Agreement. This Agreement contains the entire agreement between
the parties relating to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or inferred, between the
parties relating to the subject matter hereof.
4.5. Benefits. Nothing in this Agreement, express or implied, shall give to any
person, other than the Auction Agent, Smith Barney and their respective successors and assigns,
any benefit of any legal or equitable right, remedy or claim under this Agreement.
4.6. Amendment: Waiver.
(a) This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written instrument
signed by a duly authorized representative of the parties hereto.
(b) Failure of either party to this Agreement to exercise any right or remedy
hereunder in the event of a breach of this Agreement by the other party shall not constitute a
waiver of any such right or remedy with respect to any subsequent breach.
4.7. Successors and Assigns. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by, the respective successors and permitted assigns of each
of Smith Barney and the Auction Agent.
4.8. Severability. If any clause, provision or section of this Agreement shall
be ruled invalid or unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any remaining clause,
provision or sections hereof.
4.9. Execution in Counterparts. This 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.
LA1fi4760.2 12
Section 5. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed in said State.
LAI-69760.2 13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officer as of the date first above
written.
THE BANK OF NEW YORK, as Auction Agent
By: e
Authorized Officer
SMITH BA Y SHEARSON INC., as Broker-Dealer
By.
ir,"'" ...._
Authorized Representative
LA1-69760.2 14
Exhibit A
Broker-Dealer
Agreement
SETTLEMENT PROCEDURES
Capitalized terms used herein shall have the meanings given such terms in the Indenture.
(a) Not later than 3:00 p.m., New York City time, on each Auction Date, the Auction
Agent shall notify by telephone each Broker-Dealer that participated in the Auction held on such
Auction Date and submitted an Order on behalf of an Existing Holder or Potential Holder of:
(i) the Auction Rate fixed for the next Auction Period;
(ii) whether there were Sufficient Clearing Bids in such Auction;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer") submitted a Bid or
a Sell Order on behalf of an Existing Holder, whether such Bid or Sell Order was
accepted or rejected, in whole or in part, and the principal amount of ARS, if
any, to be sold by such Existing Holder;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer") submitted a Bid
on behalf of a Potential Holder, whether such Bid was accepted or rejected, in
whole or in part, and the principal amount of ARS, if any, to be purchased by
such Potential Holder;
(v) if the aggregate amount of ARS to be sold by all Existing Holders on
whose behalf such Broker-Dealer submitted a Bid or a Sell Order exceeds the
aggregate principal amount of ARS to be purchased by all Potential Holders on
whose behalf such Broker-Dealer submitted a Bid, the name or names of one or
more Buyer's Broker-Dealers (and the name of the Participant, if any, of each
such Buyer's Broker-Dealer) acting for one or more purchasers of such excess
principal amount of ARS and the principal amount of ARS to be purchased from
one or more Existing Holders on whose behalf such Broker-Dealer acted by one
or more Potential Holders on whose behalf each of such Buyer's Broker-Dealers
acted;
(vi) if the principal amount of ARS to be purchased by all Potential
Holders on whose behalf such Broker-Dealer submitted a Bid exceeds the amount
of ARS to be sold by all Existing Holders on whose behalf such Broker-Dealer
submitted a Bid or a Sell Order, the name or names of one or more Seller's
Broker-Dealers (and the name of the Participant, if any, of each such Seller's
Broker-Dealer) acting for one or more sellers of such excess principal amount of
ARS and the principal amount of ARS to be sold to one or more Potential
Holders on whose behalf such Broker-Dealer acted by one or more Existing
Holders on whose behalf each of such Seller's Broker-Dealers acted; and
ra1-69760.2 A-1
(vii) the Auction Date for the next succeeding Auction.
(b) On each Auction Date, each Broker-Dealer that submitted an Order on behalf of any
Existing Holder or Potential Holder shall:
(i) advise each Existing Holder and Potential Holder on whose behalf such
Broker-Dealer submitted a Bid or Sell Order in the Auction on such Auction Date
whether such Bid or Sell Order was accepted or rejected, in whole or in part;
(ii) in the case of a Broker-Dealer that is a Buyer's Broker-Dealer, advise
each Potential Holder on whose behalf such Broker-Dealer submitted a Bid that
was accepted, in whole or in part, to instruct such Potential Holder's Participant
to pay to such Broker-Dealer(or its Participant)through the Securities Depository
the amount necessary to purchase the principal amount of ARS to be purchased
pursuant to such Bid against receipt of such ARS;
(iii) in the case of a Broker-Dealer that is a Seller's Broker-Dealer,
instruct each Existing Holder on whose behalf such Broker-Dealer submitted a
Sell Order that was accepted, in whole or in part, or a Bid that was accepted, in
whole or in part, to instruct such Existing Holder's Participant to deliver to such
Broker-Dealer (or its Participant) through the Securities Depository the principal
amount of ARS to be sold pursuant to such Order against payment therefor;
(iv) advise each Existing Holder on whose behalf such Broker-Dealer
submitted an Order and each Potential Holder on whose behalf such
Broker-Dealer submitted a Bid of the Auction Rate for the next Auction Period;
(v) advise each Existing Holder on whose behalf such Broker-Dealer
submitted an Order of the next Auction Date; and
(vi) advise each Potential Holder on whose behalf such Broker-Dealer
submitted a Bid that was accepted, in whole or in part, of the next Auction Date.
(c) On the basis of the information provided to it pursuant to paragraph (a) above, each
Broker-Dealer that submitted a Bid or Sell Order in an Auction is required to allocate any funds
received by it in connection with such Auction pursuant to paragraph (b)(ii)above, and any ARS
received by it in connection with such Auction pursuant to paragraph (b)(iii) above among the
Potential Holders, if any, on whose behalf such Broker-Dealer submitted Bids, the Existing
Holders, if any on whose behalf such Broker-Dealer submitted Bids or Sell Orders in such
Auction, and any Broker-Dealers identified to it by the Auction Agent following such Auction
pursuant to paragraph (a)(v) or (a)(vi) above.
(d) On each Auction Date:
IAt-69760.2 A-2
(i)each Potential Holder and Existing Holder with an Order in the Auction
on such Auction Date shall instruct its Participant as provided in (b)(ii) or (b)(iii)
above, as the case may be;
(ii) each Seller's Broker-Dealer that is not a Participant of the Securities
Depository shall instruct its Participant to (A) pay through the Securities
Depository to the Participant of the Existing Holder delivering ARS to such
Broker-Dealer following such Auction pursuant to (b)(iii) above the amount
necessary to purchase such ARS against receipt of such ARS, and (B) deliver
such ARS through the Securities Depository to a Buyer's Broker-Dealer (or its
Participant) identified to such Seller's Broker-Dealer pursuant to (a)(v) above
against payment therefor; and
(iii) each Buyer's Broker-Dealer that is not an Participant in the Securities
Depository shall instruct its Participant to (A) pay through the Securities
Depository to Seller's Broker-Dealer (or its Participant)identified following such
Auction pursuant to (a)(vi) above the amount necessary to purchase the ARS to
be purchased pursuant to (b)(ii) above against receipt of such ARS, and (B)
deliver such ARS through the Securities Depository to the Participant of the
purchaser thereof against payment therefor.
(e) On the Business Day following each Auction Date:
(i) each Participant for a Bidder in the Auction on such Auction Date
referred to in (d)(i) above shall instruct the Securities Depository to execute the
transactions described under (b)(ii) or (b)(iii) above for such Auction, and the
Securities Depository shall execute such transactions;
(ii) each Seller's Broker-Dealer or its Participant shall instruct the
Securities Depository to execute the transactions described in (d)(ii) above for
such Auction, and the-Securities Depository shall execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Participant shall instruct the
Securities Depository to execute the transactions described in (d)(iii) above for
such Auction, and the Securities Depository shall execute such transactions.
(f) If an Existing Holder selling ARS in an Auction fails to deliver such ARS (by
authorized book-entry), a Broker-Dealer may deliver to the Potential Holder on behalf of which
it submitted a Bid that was accepted a principal amount of ARS that is less than the principal
amount of ARS that otherwise was to be purchased by.such Potential Holder. In such event,
the principal amount of ARS to be so delivered shall be determined solely by such
Broker-Dealer. Delivery of such lesser principal amount of ARS shall constitute good delivery.
Notwithstanding the foregoing terms of this paragraph (f), any delivery or nondelivery of ARS
which shall represent any departure from the results of an Auction, as determined by the Auction
Agent, shall be of no effect unless and until the Auction Agent shall have been notified of such
Ln1-69760.2 A-3
delivery or nondelivery in accordance with the provisions of the Auction Agent Agreement and
the Broker-Dealer Agreements.
LAI-69760.2 A-4
Exhibit B
Broker-Dealer
Agreement
ORDER FORM
Santa Ana Financing Authority
Police Administration and Holding
Facility Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
[to be inserted]
LA1fi9760.2 B-1
Exhibit C
Broker-Dealer
Agreement
NOTICE OF TRANSFER
(To be used only for transfers made other than pursuant to an Auction)
Santa Ana Financing Authority
Police Administration and Holding
Facility Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
We are (check one)
the Existing Holder named below; or
the Broker-Dealer for such Existing Holder; or
the Participant for such Existing Holder.
We hereby notify you that such Existing Holder has transferred $ (must in
units of$50,000) of ARS to
(Name of Existing Holder)
(Name of Broker-Dealer)
(Name of Participant)
By:
Name:
Title:
I.A1-69760.2 C-1
Exhibit D
Broker-Dealer
Agreement
NOTICE OF FAILURE TO DELIVER
(To be used only for failure to deliver ARS sold pursuant to an Auction)
Santa Ana Financing Authority
Police Administration and Holding Facility
I ease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
We are (check one) -
a Broker-Dealer for (the "Purchaser"), which
purchased $ (must be in units of $50,000) of the
ARS in the Auction held on from the sale of such
ARS.
a Broker-Dealer for (the "Seller"), which sold
$ (must be in units of $50,000) of the ARS in the
Auction held on
We hereby notify you that (check one) -
the Seller failed to deliver such ARS to the Purchaser.
the Purchaser failed to make payment to the Seller upon delivery of such ARS.
(Name of Broker-Dealer)
By:
Name:
Title:
LAI-69760.2 D-1
Exhibit E
Broker-Dealer
Agreement
REQUEST TO FIX
Santa Ana Financing Authority
Police Administration and Holding Facility
Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
To: CHEMICAL BANK (as Auction Agent):
The undersigned Broker-Dealer has been requested by the Beneficial Owner
named below to, and does hereby, request that you take all action necessary to cause
$ (must be in units of$50,000) aggregate principal amount of Regular ARS
(CUSIP No. ) to be Fixed with an equal aggregate principal amount of Regular
IRS (CUSIP No. ) pursuant to the Auction Agent Agreement.
Such aggregate principal amounts of Regular ARS and Regular IRS are in the
account of the Participant of the Beneficial Owner named below (Account No.
)•
$ aggregate principal amount of[Newly Fixed AIRS][Regular
Fixed AIRS]* (CUSIP No. ) will be credited to the aforementioned account of
the Beneficial Owner's Participant.
(Name of Beneficial Owner)
(Name of Broker-Dealer)
By:
Name:
Title:
Call the Auction Agent at f(212) 623-49471 for information
* Newly Fixed AIRS will be redelivered if ARS and IRS were delivered on a day other
than an Interest Payment Date and Regular Fixed AIRS will be redelivered if the ARS
and IRS were delivered on an Interest Payment Date.
LA1fi9760.2 E-1
Exhibit F
Broker-Dealer
Agreement
REOUEST TO SEPARATE
Santa Ana Financing Authority
Police Administration and Holding Facility
Lease Revenue Bonds, Series 1994A
Auction Rate Securities
Inverse Rate Securities
To: CHEMICAL BANK (as Auction Agent):
The undersigned Broker-Dealer has been requested by the Beneficial Owner
named below to, and does hereby, request that you take all action necessary to cause
$ (must be in units of $100,000) aggregate principal amount of [Regular
Fixed AIRS][Newly Fixed AIRS] (CUSIP No. ) to be Separated pursuant to the
Auction Agent Agreement.
Such aggregate principal amounts of [Regular Fixed AIRS][Newly Fixed AIRS]
are in the account of the Participant of the Beneficial Owner named below (Account No.
)•
$ (must be in units of$50,000) aggregate principal amount
of Regular ARS (CUSIP No. ) and $ (must be in units of
$50,000) aggregate principal amount of Regular IRS (CUSIP No. ) will be
credited to the aforementioned account of the Beneficial Owner's Participant.
(Name of Beneficial Owner)
(Name of Broker-Dealer)
By:
Name:
Title:
Call the Auction Agent at 1(2121 623-4947] for information
LAI-69760.2 F-1
[CONFORMED COPY]
PURCHASE CONTRACT
$107, 399,438 . 50
SANTA ANA FINANCING AUTHORITY
POLICE ADMINISTRATION AND HOLDING FACILITY
LEASE REVENUE BONDS, SERIES 1994A
March 8, 1994
Santa Ana Financing Authority
c/o City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92702
City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92702
Ladies and Gentlemen:
The undersigned (the "Representative") , acting as
representative of the underwriters listed on the execution page
hereof (hereinafter referred to as the "Underwriters") , offers,
on behalf of itself and the other Underwriters, to enter into
this purchase contract (the "Purchase Contract") with the Santa
Ana Financing Authority (the "Authority") and the City of Santa
Ana (the "City") , which will be binding upon the Authority, the
City and the Underwriters upon the acceptance hereof by the
Authority and the City. This offer is made subject to its
acceptance by the Authority and the City by execution of this
Purchase Contract and its delivery to the Representative on or
before 5 : 00 p.m. , California time, on the date hereof . All terms
used herein and not otherwise defined shall have the meanings
given to such terms in the Indenture referred to below.
1. Purchase and Sale. Upon the terms and conditions and
upon the basis of the representations, warranties and agreements
hereinafter set forth, the Underwriters jointly and severally
agree to purchase, and the Authority and the City hereby agree to
cause to be delivered to the Underwriters, all (but not less than
all) of the Authority' s $107, 399, 438 .50 aggregate principal
amount of Santa Ana Financing Authority Police Administration and
Holding Facility Lease Revenue Bonds, Series 1994A (the "Bonds")
at a purchase price of $110, 279, 880.64 (consisting of the
aggregate principal amount of the Bonds less $777,459 . 01 of
underwriters' discount and a premium of $3 , 657, 901 . 15) plus
accrued interest on the Bonds (other than capital appreciation
bonds and auction and inverse rate securities described below)
from the date of the Bonds to the date of Closing (as hereafter
defined) . The Bonds are issued pursuant to an Indenture, dated
as of March 1, 1994 between the Authority and Meridian Trust
Company of California, San Francisco, California, as trustee (the
"Trustee") . The Bonds shall be dated as of March 1, 1994, except
the Bonds maturing in the years 2001 through 2003 , inclusive,
which are capital appreciation bonds and which shall be dated the
date of original delivery and except the Bonds maturing in 2014
which are Auction and Inverse Rate Securities and which shall be
dated the date of original delivery. The Bonds shall be
authenticated and delivered by the Trustee pursuant to the
Indenture and shall be as described in the Indenture and the
Official Statement relating to the Bonds.
The Bonds are secured by Revenues of the Authority described
in the Indenture, including certain Base Rental payments received
by the Authority from the City pursuant to a Lease, dated as of
March 1, 1994, between the Authority and the City (the "Lease" )
for certain police administration and holding facilities
described therein. The Authority will use the proceeds of the
Bonds to (i) acquire and construct certain police administration
and holding facilities described in the Lease, (ii) fund a
reserve fund, and (iii) pay certain costs of issuance.
The Authority has received a written commitment from
Municipal Bond Investors Assurance Corporation (the "Insurer") to
issue, upon fulfillment of certain conditions, a municipal bond
insurance policy (the "Policy") insuring payment of principal of,
and interest with respect to, the Bonds, as the same become due,
as described in the Official Statement.
2 . Public Offering. The Underwriters agree to make a bona
fide public offering of all the Bonds initially at the public
offering prices (or yields) set forth on Appendix A attached
hereto and incorporated herein by reference. Subsequent to the
initial public offering, the Underwriters reserve the right to
change the public offering prices (or yields) as it deems
necessary in connection with the marketing of the Bonds, provided
that the Underwriters shall not change the interest rates set
forth on Appendix A. The Bonds may be offered and sold to
certain dealers at prices lower than such initial public offering
prices .
3 . Delivery of Official Statement on the Date Hereof.
Pursuant to the authorization of the Authority and the City, the
Underwriters have distributed copies of the Preliminary Official
Statement dated February 25, 1994, relating to the Bonds, which,
together with the cover page and appendices thereto, is herein
called the "Preliminary Official Statement. " By its acceptance
of this proposal, the Authority and the City hereby ratifies the
2
use by the Underwriters of the Preliminary Official Statement and
the Authority and the City agree to execute and deliver the final
Official Statement which will consist of the Preliminary Official
Statement with such changes as may be made thereto, with the
consent of the Authority, the City and the Representative, and to
provide copies thereof to the Underwriters as set forth in
Paragraphs 5 (o) and 6 (n) hereof (the "Official Statement") . The
Authority and the City hereby authorize the Underwriters to use
and distribute, in connection with the offer and sale of the
Bonds: the Preliminary Official Statement, the Official
Statement, the Indenture, the Ground Lease, dated as of March 1,
1994, between the City and the Authority (the "Ground Lease" ) ,
the Lease, the Assignment Agreement, dated as of March 1, 1994,
between the Authority and the Trustee (the "Assignment
Agreement") and other documents or contracts to which the
Authority and the City are parties in connection with the
transactions contemplated by this Purchase Contract, including
this Purchase Contract and all information contained herein, and
all other documents, certificates and statements furnished by the
Authority and the City to the Representative in connection with
the transactions contemplated by this Purchase Contract.
4. The Closing. At 8 :00 a.m. , California time, on
March 23, 1994 or at such other time or on such earlier or later
business day as shall have been mutually agreed upon by the
Authority, the City and the Representative, the Authority and the
City will cause to be executed and delivered (i) the Bonds in
definitive form to The Depository Trust Company in New York, New
York on behalf of the Underwriters, and (ii) the closing
documents hereinafter mentioned at the offices of Orrick
Herrington & Sutcliffe, Los Angeles, California ( "Bond Counsel")
or another place to be mutually agreed upon by the Authority, the
City and the Representative. The Representative will accept such
delivery and pay the purchase price of the Bonds as set forth in
Paragraph 1 hereof in immediately available funds to the order of
the Authority. This payment and delivery, together with the
delivery of the aforementioned documents, is herein called the
"Closing. " The Bonds will be delivered in such denominations and
deposited in the account or accounts specified by the
Representative pursuant to written notice not later than five
business days prior to Closing. The Bonds will be made available
to the Representative for inspection and packaging not less than
24 hours prior to the Closing.
5. Authority Representations, Warranties and Covenants.
The Authority represents, warrants and covenants to the
Underwriters that:
(a) Due Organization, Existence and Authority. The
Authority is a joint exercise of powers agency duly
organized and existing under the Joint Exercise of Powers
Agreement, dated as of August 1, 1993, between the Community
Redevelopment Agency of the City of Santa Ana (the
3
"Redevelopment Agency") and the City (the "JPA Agreement" )
and the Constitution and laws of the State of California
(the "State") , with full right, power and authority to
execute, deliver and perform its obligations under this
Purchase Contract, the Indenture, the Ground Lease, the
Lease and the Assignment Agreement (collectively, the
"Authority Documents") and to carry out and consummate the
transactions contemplated by the Authority Documents, the
JPA Agreement and the Official Statement.
(b) Due Authorization and Approval . By all necessary
official action of the Authority, the Authority has duly
authorized and approved the execution and delivery of, and
the performance by the Authority of the obligations
contained in the Authority Documents and the JPA Agreement
and as of the date hereof, such authorizations and approvals
are in full force and effect and have not been amended,
modified or rescinded.
(c) Official Statement Accurate and Complete. The
Preliminary Official Statement was as of its date, and the
Official Statement is, and at all times subsequent to the
date of the Official Statement up to and including the
Closing will be, true and correct in all material respects,
and the Preliminary Official Statement and the Official
Statement contain and up to and including the Closing will
contain no misstatement of any material fact and do not, and
up to and including the Closing will not, omit any statement
necessary to make the statements contained therein, in the
light of the circumstances in which such statements were
made, not misleading.
(d) Representative's Consent to Amendments and
Supplements to Official Statement. The Authority will
advise the Representative promptly of any proposal to amend
or supplement the Official Statement and will not effect or
consent to any such amendment or supplement without the
consent of the Representative, which consent will not be
unreasonably withheld. The Authority will advise the
Representative promptly of the institution of any
proceedings known to it by any governmental agency
prohibiting or otherwise affecting the use of the Official
Statement in connection with the offering, sale or
distribution of the Bonds .
(e) Authority Agreement to Amend or Supplement
Official Statement. If after the date of this Purchase
Contract and until 25 days after the end of the
"underwriting period" (as defined in Section 240. 15c2-12 in
Chapter II of Title 17 of the Code of Federal Regulations
( "Rule 15c2-12") ) , any event occurs as a result of which the
Official Statement as then amended or supplemented would
include an untrue statement of a material fact, or omit to
4
state any material fact necessary in order to make the
statements contained therein, in the light of the
circumstances under which they were made, not misleading,
and, in the reasonable opinion of the Representative, an
amended or supplemented Official Statement should be
delivered in connection with the offers or sales of the
Bonds to reflect such event, the Authority promptly will
prepare at its expense an amendment or supplement which will
correct such statement or omission and the Authority shall
promptly furnish to the Representative a reasonable number
of copies of such amendment or supplement .
(f) No Material Change in Finances. Except as
disclosed to the Representative in writing, there have been
no material adverse changes in the financial condition of
the Authority since June 30, 1993 .
(g) No Breach or Default. The Authority (i) is not in
default, nor has it been in default, as to principal or
interest with respect to an obligation issued or incurred by
the Authority and (ii) is not and will not, in any manner
which would materially adversely affect the transactions
contemplated by the Authority Documents or the JPA
Agreement, be in breach of or in default under any
applicable constitutional provision, law or administrative
rule or regulation of the State or the United States, or any
applicable judgment or decree or any trust agreement, loan
agreement, bond, note, resolution, ordinance, agreement or
other instrument to which the Authority is a party or is
otherwise subject, and no event has occurred and is
continuing which, with the passage of time or the giving of
notice, or both, would constitute, in any manner which would
materially adversely affect the transactions contemplated by
the Authority Documents, a default or event of default under
any such instrument; and, as of such times, the
authorization, execution and delivery of the Authority
Documents and compliance with the provisions of each of such
agreements or instruments and of the JPA Agreement do not
and will not, in any manner which would materially adversely
affect the transactions contemplated by the Authority
Documents or the JPA Agreement, conflict with or constitute
a breach of or default under any applicable constitutional
provision, law or administrative rule or regulation of the
State or the United States, or any applicable judgment,
decree, license, permit, trust agreement, loan agreement,
bond, note, resolution, ordinance, agreement or other
instrument to which the Authority (or any of its officers in
their respective capacities as such) is subject, or by which
it or any of its properties is bound, nor will any such
authorization, execution, delivery or compliance result in
the creation or imposition of any lien, charge or other
security interest or encumbrance of any nature whatsoever
upon any of its assets or properties or under the terms of
5
any such law, regulation or instrument, except as may be
provided by the Authority Documents or the JPA Agreement .
(h) No Litigation. No action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by
any court, government agency, public board or body, is
pending or, to the best knowledge of the Authority after due
investigation, threatened (i) in any way questioning the
existence of the Authority or the titles of the officers of
the Authority to their respective offices; (ii) affecting,
contesting or seeking to prohibit, restrain or enjoin the
execution or delivery of any of the Bonds, or in any way
contesting or affecting the validity of the Bonds, the
Authority Documents or the JPA Agreement or the consummation
of the transactions contemplated thereby, or contesting the
exclusion of the interest on the Bonds from gross income for
federal income tax purposes or contesting the powers of the
Authority to enter into the Authority Documents; (iii) which
may result in any material adverse change to the financial
condition of the Authority; or (iv) contesting the
completeness or accuracy of the Preliminary Official
Statement or the Official Statement or any supplement or
amendment thereto or asserting that the Preliminary Official
Statement or the Official Statement contained any untrue
statement of a material fact or omitted to state any
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,
and there is no basis for any action, suit, proceeding,
inquiry or investigation of the nature described in clauses
(i) through (iv) of this sentence.
(i) No Liens on Revenues. The Authority will not have
outstanding any indebtedness which indebtedness is secured
by a lien on the Revenues.
(j ) Further Cooperation; Blue Sky. The Authority will
furnish such information, execute such instruments and take
such other action in cooperation with the Representative as
the Representative may reasonably request in order (i) to
qualify the 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 as the
Representative may designate and (ii) to determine the
eligibility of the Bonds for investment under the laws of
such states and other jurisdictions, and will use its best
efforts to continue such qualifications in effect so long as
required for the distribution of the Bonds; provided,
however, that the Authority shall not be required to execute
a general or special consent to service of process or
qualify to do business in connection with any such
qualification or determination in any jurisdiction.
6
(k) Consents and Approvals . All authorizations,
approvals, licenses, permits, consents and orders of or
filings with any governmental authority, legislative body,
board, agency or commission having jurisdiction in the
matters which are required for the due authorization of,
which would constitute a condition precedent to or the
absence of which would materially adversely affect the due
performance by the Authority of its obligations in
connection with, the Authority Documents or the JPA
Agreement have been duly obtained or made, except as may be
required under the Blue Sky or securities laws of any state
in connection with the offering and sale of the Bonds.
(1) Validity of Authority Documents and JPA Agreement.
The JPA Agreement is, and the Authority Documents when
executed and delivered by the Authority, will be legally
valid and binding obligations of the Authority enforceable
against the Authority in accordance with their respective
terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors'
rights generally.
(m) No Other Obligations. Between the date of this
Purchase Contract and the date of Closing, the Authority
will not, without the prior written consent of the
Representative, offer or issue any bonds, notes or other
obligations for borrowed money, or incur any material
liabilities, direct or contingent.
(n) Certificates . Any certificate signed by any
official of the Authority and delivered to the
Representative shall be deemed to be a representation and
warranty by the Authority to the Underwriters as to the
statements made therein.
(o) Compliance With Rule 15c2-12 . The Preliminary
Official Statement heretofore delivered to the
Representative is deemed final by the Authority 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) (1) of Rule 15c2-12; provided, however,
that the foregoing certification as to the finality of the
Official Statement does not include a certification as to
the section entitled "BOND INSURANCE" therein or Appendix F
thereto. The Underwriters' obligations under this Contract
of Purchase shall be subject to the receipt, on the date
hereof, of a certificate dated the date of the Preliminary
Official Statement from the Insurer to the effect that the
portions of the Official Statement under the caption "BOND
INSURANCE" and in Appendix F thereto are final as of its
date for purposes of Rule 15c2-12 except for information
permitted to be omitted therefrom by Rule 15c2-12 . The
7
Authority hereby covenants and agrees that, within seven
business days from the date hereof and within sufficient
time to accompany any confirmation requesting payment from
any customers of the Underwriters, the Authority shall cause
a final printed form of the Official Statement to be
delivered to the Representative in sufficient quantity to
comply with paragraph (b) (4) of Rule 15c2-12 and Rules of
the Municipal Securities Rulemaking Board.
(p) Authority Resolutions . The resolutions of the
Authority approving and authorizing the execution and
delivery of the Authority Documents and approving the
Official Statement, have been duly adopted at meetings of
the governing body of the Authority which were called and
held pursuant to law and with all public notice required by
law and at which a quorum was present and acting throughout
and the resolutions are in full force and effect and have
not been modified, amended or rescinded.
6. City Representations, Warranties and Covenants . The
City represents, warrants and covenants to the Underwriters that:
(a) Due Organization, Existence and City. The City is
a municipal corporation duly organized and existing under
the Constitution and laws of the State of California,
including the Charter of the City (the "Charter") with full
right, power and authority to execute, deliver and perform
its obligations under this Purchase Contract, the Ground
Lease and the Lease (collectively, the "City Documents" ) and
the JPA Agreement and to carry out and consummate the
transactions contemplated by the City Documents, the JPA
Agreement and the Official Statement.
(b) Due Authorization and Approval . By all necessary
official action of the City, the City has duly authorized
and approved the execution and delivery of, and the
performance by the City of the obligations contained in the
City Documents and the JPA Agreement and as of the date
hereof, such authorizations and approvals are in full force
and effect and have not been amended, modified or rescinded.
(c) Official Statement Accurate and Complete. The
Preliminary Official Statement was as of its date, and the
Official Statement is, and at all times subsequent to the
date of the Official Statement up to and including the
Closing will be, true and correct in all material respects,
and the Preliminary Official Statement and the Official
Statement contain and up to and including the Closing will
contain no misstatement of any material fact and do not, and
up to and including the Closing will not, omit any statement
necessary to make the statements contained therein, in the
light of the circumstances in which such statements were
made, not misleading; provided, however, that no warranty,
8
representation or agreement is made as to information
contained under the caption "BOND INSURANCE" or in
Appendix F thereto.
(d) Representative' s Consent to Amendments and
Supplements to Official Statement. The City will advise the
Representative promptly of any proposal to amend or
supplement the Official Statement and will not effect or
consent to any such amendment or supplement without the
consent of the Representative, which consent will not be
unreasonably withheld. The City will advise the
Representative promptly of the institution of any
proceedings known to it by any governmental agency
prohibiting or otherwise affecting the use of the Official
Statement in connection with the offering, sale or
distribution of the Bonds.
(e) City Agreement to Amend or Supplement Official
Statement. If after the date of this Purchase Contract and
until 25 days after the end of the "underwriting period" (as
defined in Section 240 . 15c2-12 in Chapter II of Title 17 of
the Code of Federal Regulations ("Rule 15c2-12") ) , any event
occurs as a result of which the Official Statement as then
amended or supplemented would include an untrue statement of
a material fact, or omit to state any material fact
necessary in order to make the statements contained therein,
in the light of the circumstances under which they were
made, not misleading, and, in the reasonable opinion of the
Representative, an amended or supplemented Official
Statement should be delivered in connection with the offers
or sales of the Bonds to reflect such event, the City will
promptly cause the Authority to prepare at the Authority' s
expense an amendment or supplement which will correct such
statement or omission and the City shall cause the Authority
to promptly furnish to the Representative a reasonable
number of copies of such amendment or supplement.
(f) No Material Change in Finances. There have been
no material adverse changes in the financial condition of
the City since June 30, 1993 .
(g) No Breach or Default. The City (i) is not in
default, nor has it been in default, as to principal or
interest with respect to an obligation issued or incurred by
the City, and (ii) is not and will not, in any manner which
would materially adversely affect the transactions
contemplated by the City Documents or the JPA Agreement, be
in breach of or in default under any applicable
constitutional provision, law , Charter provision or
administrative rule or regulation of the State or the United
States, or any applicable judgment or decree or any trust
agreement, loan agreement, bond, note, resolution,
ordinance, agreement or other instrument to which the City
9
is a party or is otherwise subject, and no event has
occurred and is continuing which, with the passage of time
or the giving of notice, or both, would constitute, in any
manner which would materially adversely affect the
transactions contemplated by the City Documents, a default
or event of default under any such instrument; and, as of
such times, the authorization, execution and delivery of the
City Documents and compliance with the provisions of each of
such agreements or instruments and of the JPA Agreement do
not and will not, in any manner which would materially
adversely affect the transactions contemplated by the City
Documents or the JPA Agreement, conflict with or constitute
a breach of or default under any applicable constitutional
provision, law, Charter provision or administrative rule or
regulation of the State or the United States, or any
applicable judgment, decree, license, permit, trust
agreement, loan agreement, bond, note, resolution,
ordinance, agreement or other instrument to which the City
(or any of its officers in their respective capacities as
such) is subject, or by which it or any of its properties is
bound, nor will any such authorization, execution, delivery
or compliance result in the creation or imposition of any
lien, charge or other security interest or encumbrance of
any nature whatsoever upon any of its assets or properties
or under the terms of any such law, regulation or
instrument, except as may be provided by the City Documents
or the JPA Agreement.
(h) No Litigation. No action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by
any court, government agency, public board or body, is
pending or, to the best knowledge of the City after due
investigation, threatened (i) in any way questioning the
existence of the City or the titles of the officers of the
City to their respective offices; (ii) affecting, contesting
or seeking to prohibit, restrain or enjoin the execution or
delivery of any of the Bonds, or in any way contesting or
affecting the validity of the Bonds, the City Documents or
the JPA Agreement or the consummation of the transactions
contemplated thereby, or contesting the exclusion of the
interest component of Base Rental payments from gross income
for federal income tax purposes or contesting the powers of
the City to enter into the City Documents or the JPA
Agreement; (iii) which may result in any material adverse
change to the financial condition of the City or to its
ability to pay the Base Rental payments when due; or (iv)
contesting the completeness or accuracy of the Preliminary
Official Statement or the Official Statement or any
supplement or amendment thereto or asserting that the
Preliminary Official Statement or the Official Statement
contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of
10
the circumstances under which they were made, not
misleading, and there is no basis for any action, suit,
proceeding, inquiry or investigation of the nature described
in clauses (i) through (iv) of this sentence.
(i) Further Cooperation: Blue Sky. The City will
furnish such information, execute such instruments and take
such other action in cooperation with the Representative as
the Representative may reasonably request in order (i) to
qualify the 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 as the
Representative may designate and (ii) to determine the
eligibility of the Bonds for investment under the laws of
such states and other jurisdictions, and will use its best
efforts to continue such qualifications in effect so long as
required for the distribution of the Bonds; provided,
however, that the City shall not be required to execute a
general or special consent to service of process or qualify
to do business in connection with any such qualification or
determination in any jurisdiction.
(j ) Consents and Approvals. All authorizations,
approvals, licenses, permits, consents and orders of or
filings with any governmental authority, legislative body,
board, agency or commission having jurisdiction in the
matters which are required for the due authorization of,
which would constitute a condition precedent to or the
absence of which would materially adversely affect the due
performance by the City of its obligations in connection
with, the City Documents and the JPA Agreement have been
duly obtained or made, except as may be required under the
Blue Sky or securities laws of any state in connection with
the offering and sale of the Bonds.
(k) Validity of City Documents and the JPA Agreement.
The JPA Agreement is, and the City Documents when executed
and delivered by the City, will be legally valid and binding
obligations of the City enforceable against the City in
accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors' rights
generally.
(1) No Other Obligations. Between the date of this
Purchase Contract and the date of Closing, the City will
not, without the prior written consent of the
Representative, offer or issue any bonds, notes or other
obligations for borrowed money, or incur any material
liabilities, direct or contingent.
11
(m) Certificates. Any certificate signed by any
official of the City and delivered to the Representative
shall be deemed to be a representation and warranty by the
City to the Underwriters as to the statements made therein.
(n) Compliance With Rule 15c2-12 . The Preliminary
Official Statement heretofore delivered to the
Representative 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) (1) of Rule 15c2-12 ; provided, however, that
the foregoing certification as to the finality of the
Official Statement does not include a certification as to
the section entitled "BOND INSURANCE" therein or Appendix F
thereto. The Underwriters' obligations under this Contract
of Purchase shall be subject to the receipt, on the date
hereof, of a certificate dated the date of the Preliminary
Official Statement from the Insurer to the effect that the
portions of the Official Statement under the caption "BOND
INSURANCE" and in Appendix F thereto are final as of its
date for purposes of Rule 15c2-12 except for information
permitted to be omitted therefrom by Rule 15c2-12 . The City
hereby covenants and agrees that, within seven business days
from the date hereof and within sufficient time to accompany
any confirmation requesting payment from any customers of
the Underwriters, the City shall cause the Authority to
cause a final printed form of the Official Statement to be
delivered to the Representative in sufficient quantity to
comply with paragraph (b) (4) of Rule 15c2-12 and Rules of
the Municipal Securities Rulemaking Board.
(o) City Resolutions. The resolutions of the City
approving and authorizing the execution and delivery of the
City Documents and the JPA Agreement and approving the
Official Statement, have been duly adopted at meetings of
the governing body of the City which were called and held
pursuant to law and with all public notice required by law
and at which a quorum was present and acting throughout and
the resolutions are in full force and effect and have not
been modified, amended or rescinded.
7. Closing Conditions . The Representative has entered
into this Purchase Contract on behalf of the Underwriters in
reliance upon the representations, warranties and covenants
herein and the performance by the Authority and the City of their
obligations hereunder, both as of the date hereof and as of the
date of the Closing. The Underwriters' obligations under this
Purchase Contract are and shall be subject to the following
additional conditions:
(a) Brine-Down Representation. The representations,
warranties and covenants of the Authority and the City
contained herein shall be true, complete and correct at the
12
date hereof and at the time of the Closing, as if made on
the date of the Closing.
(b) Executed Agreements and Performance Thereunder.
At the time of the Closing (i) the Authority Documents, the
City Documents and the JPA Agreement shall be in full force
and effect, and shall not have been amended, modified or
supplemented except with the written consent of the
Representative, (ii) there shall be in full force and effect
such resolutions of the Authority and the City (the
"Resolutions") as, in the opinion of Bond Counsel, shall be
necessary in connection with the transactions contemplated
by the Official Statement, the JPA Agreement, the Authority
Documents and the City Documents, (iii) the Authority shall
perform or have performed its obligations required or
specified in the Authority Documents to be performed at or
prior to Closing, (iv) the City shall perform or have
performed its obligations required or specified in the JPA
Agreement and the City Documents to be performed at or prior
to Closing, and (v) the Official Statement shall not have
been supplemented or amended, except pursuant to Paragraphs
5 (d) and (e) and 6 (d) and (e) or as otherwise may have been
agreed to in writing by the Representative.
(c) No Default. At the time of the Closing, no
default shall have occurred or be existing under the
Resolutions, the JPA Agreement, the Authority Documents or
the City Documents and neither the Authority nor the City
shall be in default in the payment of principal or interest
on any of its bonded or other indebtedness, including but
not limited to lease or other capital obligations, which
default would adversely impact the ability of the Authority
or the City to comply with their obligations under the
Authority Documents, the JPA Agreement or City Documents, as
the case may be.
(d) Termination Events. The Representative shall have
the right to terminate the obligations of the Underwriters
under this Purchase Contract, without liability therefor, by
written notification to the Authority and the City if at any
time at or prior to the Closing:
(i) any event shall occur which causes any
statement contained in the Official Statement to be
materially misleading or results in a failure of the
Official Statement to state a material fact necessary
to make the statements in the Official Statement, in
the light of the circumstances under which they were
made, not misleading; or
(ii) the marketability of the Bonds or the market
price thereof, in the opinion of the Representative,
has been materially adversely affected by an amendment
13
to the Constitution of the United States or by any
legislation in or by the Congress of the United States
or by the State, or the amendment of legislation
pending as of the date of this Purchase Contract in the
Congress of the United States, or the recommendation to
Congress or endorsement for passage (by press release,
other form of notice or otherwise) of legislation by
the President of the United States, the Treasury
Department of the United States, the Internal Revenue
Service or the Chairman or ranking minority member of
the Committee on Finance of the United States Senate or
the Committee on Ways and Means of the United States
House of Representatives, or the proposal for
consideration of legislation by either such Committee
or by any member thereof, or the presentment of
legislation for consideration as an option by either
such Committee, or by the staff of the Joint Committee
on Taxation of the Congress of the United States, or
the favorable reporting for passage of legislation to
either House of the Congress of the United States by a
Committee of such House to which such legislation has
been referred for consideration, or any decision of any
federal or State court or any ruling or regulation
(final, temporary or proposed) or official statement on
behalf of the United States Treasury Department, the
Internal Revenue Service or other federal or State
authority materially adversely affecting the federal or
State tax status of the Authority and the City, or the
interest on bonds or notes or obligations of the
general character of the Lease or the Bonds; or
(iii) any legislation, ordinance, rule or
regulation shall be introduced in, or be enacted by any
governmental body, department or agency of the State,
or a decision by any court of competent jurisdiction
within the State or any court of the United States
shall be rendered which, in the reasonable opinion of
the Representative, materially adversely affects the
market price of the Bonds; or
(iv) legislation shall be enacted by the Congress
of the United States, or a decision by a court of the
United States shall be rendered, or a stop order,
ruling, regulation or official statement by, or on
behalf of, the Securities and Exchange Commission or
any other governmental agency having jurisdiction of
the subject matter shall be issued or made to the
effect that the execution, delivery, offering or sale
of obligations of the general character of the Bonds,
or the execution,, delivery, offering or sale of the
Bonds, including all underlying obligations, as
contemplated hereby or by the Official Statement, is in
violation or would be in violation of, or that
14
obligations of the general character of the Bonds, or
the Bonds, are not exempt from registration under, any
provision of the federal securities laws, including the
Securities Act of 1933 , as amended and as then in
effect, or that the Trust Agreement needs to be
qualified under the Trust Indenture Act of 1939, as
amended and as then in effect; or
(v) additional material restrictions not in force
as of the date hereof shall have been imposed upon
trading in securities generally by any governmental
authority or by any national securities exchange which
restrictions materially adversely affect the ability of
the Underwriters to trade the Bonds; or
(vi) a general banking moratorium shall have been
established by federal or State authorities; or
(vii) the United States has become engaged in
hostilities which have resulted in a declaration of war
or a national emergency or there has occurred any other
outbreak of hostilities or a national or international
calamity or crisis, financial or otherwise, the effect
of such outbreak, calamity or crisis on the financial
markets of the United States, being such as, in the
reasonable opinion of the Representative, would affect
materially and adversely the ability of the
Underwriters to market or deliver the Bonds; or
(viii) any rating of the securities of the Authority
or the City shall have been downgraded, suspended or
withdrawn by a national rating service, which, in the
Representative' s reasonable opinion, materially
adversely affects the marketability or market price of
the Bonds; or
(ix) the commencement of any action, suit or
proceeding described in Paragraph 5 (h) or Paragraph
6 (h) hereof which, in the judgment of the
Representative, materially adversely affects the market
price of the Bonds; or
(x) there shall be in force a general suspension
of trading on the New York Stock Exchange.
(e) Closing Documents . At or prior to the Closing,
the Representative shall receive with respect to the Bonds
(unless the context otherwise indicates) the following
documents:
(1) Bond Opinion. An approving opinion of Bond
Counsel dated the date of the Closing and substantially
in the form included as Appendix C to the Official
15
Statement, together with a letter from such counsel,
dated the date of the Closing and addressed to the
Representative, to the effect that the foregoing
opinion addressed to the Authority may be relied upon
by the Underwriters to the same extent as if such
opinion were addressed to it.
(2) Supplemental Opinion. A supplemental opinion
or opinions of Bond Counsel addressed to the
Representative, in form and substance acceptable to the
Representative, and dated the date of the Closing
substantially to the following effect:
(i) The Purchase Contract, the Ground Lease
and the Lease have been duly authorized, executed
and delivered by the Authority and the City and
constitute valid and binding agreements of the
Authority and the City enforceable in accordance
with their respective terms, except as enforcement
thereof may be limited by bankruptcy, insolvency
or other laws affecting the enforcement of
creditors' rights and by the application of
equitable principles if equitable remedies are
sought; provided however, that no opinion need be
expressed with respect to the effect of Section
1307 of the Charter on the Ground Lease; and
(ii) The statements contained in the Official
Statement on the cover page and under the captions
"INTRODUCTION, " "THE BONDS, " "SECURITY FOR THE
BONDS, " and "TAX MATTERS" and in Appendix A
thereto, insofar as such statements summarize
certain provisions of the Bonds, the Indenture,
the Ground Lease, the Lease, the Assignment
Agreement and federal and State of California tax
matters relating to the Bonds, are accurate in all
material respects.
(3) Authority Counsel Opinion. An opinion of the
City Attorney of the City as counsel to the Authority,
dated the date of the Closing and addressed to the
Representative, in form and substance acceptable to the
Representative substantially to the following effect :
(i) The Authority is a joint exercise of
powers agency duly organized and validly existing
under the constitution and the laws of the State
with full right, power and authority to execute,
deliver and perform its obligations under the
Authority Documents and to carry out and
consummate the transactions contemplated by the
Authority Documents, the JPA Agreement and the
Official Statement;
16
(ii) By all necessary official action of the
Authority, the Authority has duly authorized and
approved the execution and delivery o,f, and the
performance by the Authority of the obligations
contained in the Authority Documents and the JPA
Agreement and the Authority Documents and the JPA
Agreement constitute the legally valid and binding
obligations of the Authority enforceable against
the Authority in accordance with their respective
terms;
(iii) The resolutions of the Authority
approving and authorizing the execution and
delivery of the Authority Documents, and approving
the Official Statement, have been duly adopted at
meetings of the governing body of the Authority,
which were called and held pursuant to law and
with all public notice required by law and at
which a quorum was present and acting throughout
and the resolutions are in full force and effect
and have not been modified, amended or rescinded;
(iv) The Authority is not in default, nor has
it been in default, as to principal or interest
with respect to an obligation issued or incurred
by the Authority and the Authority is not and will
not, in any manner which would materially
adversely affect the transactions contemplated by
the Authority Documents or the JPA Agreement, be
in breach of or in default under any applicable
constitutional provision, law or administrative
rule or regulation of the State or the United
States, or any applicable judgment or decree or
any trust agreement, loan agreement, bond, note,
resolution, ordinance, agreement or other
instrument to which the Authority is a party or is
otherwise subject, and no event has occurred and
is continuing which, with the passage of time or
the giving of notice, or both, would constitute,
in any manner which would materially adversely
affect the transactions contemplated by the
Authority Documents, a default or event of default
under any such instrument;
(v) The authorization, execution and
delivery of the Authority Documents and compliance
with the provisions of each of such agreements or
instruments and of the JPA Agreement do not and
will not, in any manner which would materially
adversely affect the transactions contemplated by
the Authority Documents or the JPA Agreement,
conflict with or constitute a breach of or default
under any applicable constitutional provision, law
17
or administrative rule or regulation of the State
or the United States, or any applicable judgment,
decree, license, permit, trust agreement, loan
agreement, bond, note, resolution, ordinance,
agreement or other instrument to which the
Authority (or any of its officers in their
respective capacities as such) is subject, or by
which it or any of its properties is bound, nor
will any such authorization, execution, delivery
or compliance result in the creation or imposition
of any lien, charge or other security interest or
encumbrance of any nature whatsoever upon any of
its assets or properties or under the terms of any
such law, regulation or instrument, except as may
be provided by the Authority Documents or the JPA
Agreement;
(vi) The information in the Official
Statement under the captions "THE AUTHORITY, " and
"LITIGATION, " is true and accurate to the best of
such counsel's knowledge at and as of the date of
such opinion;
(vii) All authorizations, approvals, licenses,
permits, consents and orders of or filings with
any governmental authority, legislative body,
board, agency or commission having jurisdiction in
the matters which are required for the due
authorization of, which would constitute a
condition precedent to or the absence of which
would materially adversely affect the due
performance by the Authority of its obligations in
connection with, the Authority Documents or the
JPA Agreement have been duly obtained or made,
except as may be required under the Blue Sky or
securities laws of any state in connection with
the offering and sale of the Bonds;
(viii) No action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by
any court, government agency, public board or
body, is pending or, to the best knowledge of the
Authority after due investigation, threatened (i)
in any way questioning the existence of the
Authority or the titles of the officers of the
Authority to their respective offices; (ii)
affecting, contesting or seeking to prohibit,
restrain or enjoin the execution or delivery of
any of the Bonds, or in any way contesting or
affecting the validity of the Bonds, the Authority
Documents or the JPA Agreement or the consummation
of the transactions contemplated thereby, or
contesting the exclusion of the interest on the
18
Bonds from gross income for federal income tax
purposes or contesting the powers of the Authority
to enter into the Authority Documents; (iii) which
may result in any material adverse change to the
financial condition of the Authority; or (iv)
contesting the completeness or accuracy of the
Preliminary Official Statement or the Official
Statement or any supplement or amendment thereto
or asserting that the Preliminary Official
Statement or the Official Statement contained any
untrue statement of a material fact or omitted to
state any 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; provided,
however, that no opinion is given as to
information contained under the caption "BOND
INSURANCE" or in Appendix F thereto, and there is
no basis for any action, suit, proceeding, inquiry
or investigation of the nature described in
clauses (i) through (iv) of this sentence; and
(ix) Nothing has come to such counsel' s
attention which would lead such counsel to believe
that the Official Statement (excluding therefrom
the financial and statistical data and forecasts
included therein, information relating to the
Insurer and the Policy as to which no opinion need
be expressed) contains any untrue statement of a
material fact or omits to state a material fact
necessary to make the statements therein, in the
light of the circumstances under which they were
made, not misleading.
(4) City Attorney Opinion. An opinion of the
City Attorney of the City, dated the date of the
Closing and addressed to the Representative, in form
and substance acceptable to the Representative,
substantially to the following effect :
(i) The City is a municipal corporation duly
organized and existing under the Constitution and
laws of the State of California with full right,
power and authority to execute, deliver and
perform its obligations under the City Documents
and the JPA Agreement and to carry out and
consummate the transactions contemplated by the
City Documents, the JPA Agreement and the Official
Statement;
(ii) By all necessary official action of the
City, the City has duly authorized and approved
the execution and delivery of, and the performance
19
by the City of the obligations contained in the
City Documents and the JPA Agreement and the City
Documents and the JPA Agreement constitute the
legally valid and binding obligations of the City
and the Redevelopment Agency, as the case may be,
enforceable against the Authority in accordance
with their respective terms;
(iii) The resolutions of the City approving
and authorizing the execution and delivery of the
City Documents, the JPA Agreement and approving
the Official Statement, have been duly adopted at
meetings of the governing body of the City , which
were called and held pursuant to law and with all
public notice required by law and at which a
quorum was present and acting throughout and the
resolutions are in full force and effect and have
not been modified, amended or rescinded;
(iv) The City is not in default, nor has it
been in default, as to principal or interest with
respect to an obligation issued or incurred by the
City, and the City is not and will not, in any
manner which would materially adversely affect the
transactions contemplated by the City Documents or
the JPA Agreement, be in breach of or in default
under any applicable constitutional provision,
law, Charter provision (including, but not limited
to, Section 1307 thereof) or administrative rule
or regulation of the State or the United States,
or any applicable judgment or decree or any trust
agreement, loan agreement, bond, note, resolution,
ordinance, agreement or other instrument to which
the City is a party or is otherwise subject, and
no event has occurred and is continuing which,
with the passage of time or the giving of notice,
or both, would constitute, in any manner which
would materially adversely affect the transactions
contemplated by the City Documents, a default or
event of default under any such instrument;
(v) The authorization, execution and
delivery of the City Documents and compliance with
the provisions of each of such agreements or
instruments and of the JPA Agreement do not and
will not, in any manner which would materially
adversely affect the transactions contemplated by
the City Documents or the JPA Agreement, conflict
with or constitute a breach of or default under
any applicable constitutional provision, law,
Charter provision (including, but not limited to,
Section 1307 thereof) or administrative rule or
regulation of the State or the United States, or
20
any applicable judgment, decree, license, permit,
trust agreement, loan agreement, bond, note,
resolution, ordinance, agreement or other
instrument to which the City (or any of its
officers in their respective capacities as such)
is subject, or by which it or any of its
properties is bound, nor will any such
authorization, execution, delivery or compliance
result in the creation or imposition of any lien,
charge or other security interest or encumbrance
of any nature whatsoever upon any of its assets or
properties or under the terms of any such law,
regulation or instrument, except as may be
provided by the City Documents or the JPA
Agreement;
(vi) The information in the Official
Statement under the captions "THE CITY, " and
"LITIGATION, " is true and accurate to the best of
such counsel' s knowledge at and as of the date of
such opinion;
(vii) All authorizations, approvals, licenses,
permits, consents and orders of or filings with
any governmental authority, legislative body,
board, agency or commission having jurisdiction in
the matters which are required for the due
authorization of, which would constitute a
condition precedent to or the absence of which
would materially adversely affect the due
performance by the City of its obligations in
connection with, the City Documents and the JPA
Agreement have been duly obtained or made, except
as may be required under the Blue Sky or
securities laws of any state in connection with
the offering and sale of the Bonds;
(viii) No action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by
any court, government agency, public board or
body, is pending or, to the best knowledge of the
City after due investigation, threatened (i) in
any way questioning the existence of the City or
the titles of the officers of the City to their
respective offices; (ii) affecting, contesting or
seeking to prohibit, restrain or enjoin the
execution or delivery of any of the Bonds, or in
any way contesting or affecting the validity of
the Bonds, the City Documents or the JPA Agreement
or the consummation of the transactions
contemplated thereby, or contesting the exclusion
of the interest component of Base Rental payments
from gross income for federal income tax purposes
21
or contesting the powers of the City to enter into
the City Documents or the JPA Agreement; (iii)
which may result in any material adverse change to
the financial condition of the City or to its
ability to pay the Base Rental payments when due;
or (iv) contesting the completeness or accuracy of
the Preliminary Official Statement or the Official
Statement or any supplement or amendment thereto
or asserting that the Preliminary Official
Statement or the Official Statement contained any
untrue statement of a material fact or omitted to
state any 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; provided,
however, that no opinion need be given as to
information contained under the caption "BOND
INSURANCE" or in Appendix F thereto, and there is
no basis for any action, suit, proceeding, inquiry
or investigation of the nature described in
clauses (i) through (iv) of this sentence; and
(ix) Nothing has come to such counsel's
attention which would lead such counsel to believe
that the Official Statement (excluding therefrom
the financial and statistical data and forecasts
included therein, information relating to the
Insurer and the Policy as to which no opinion need
be expressed) contains any untrue statement of a
material fact or omits to state a material fact
necessary to make the statements therein, in the
light of the circumstances under which they were
made, not misleading.
(5) Trustee Counsel Opinion. The opinion of
counsel to the Trustee, dated the date of the Closing,
addressed to the Representative, to the effect that :
(i) The Trustee is a banking corporation,
duly organized and validly existing under the laws
of the State of California, having full corporate
power to undertake the trust created under the
Indenture and to enter into the Assignment
Agreement (the "Trustee Documents") ;
(ii) The Trustee Documents have been duly
authorized, executed and delivered by the Trustee
and, assuming due authorization, execution and
delivery by the other parties thereto, the Trustee
Documents constitute the valid and binding
obligations of the Trustee enforceable in
accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy,
22
insolvency or other laws affecting the enforcement
of creditors' rights generally and by the
application of equitable principles, if equitable
remedies are sought;
(iii) The Trustee has duly authenticated and
delivered the Bonds;
(iv) The Trustee' s actions in executing and
delivering the Trustee Documents are in full
compliance with, and do not conflict with any
applicable law or governmental regulation and, to
the best of such counsel' s knowledge, after
reasonable inquiry with respect thereto, do not
conflict with or violate any contract to which the
Trustee is a party or any administrative or
judicial decision by which the Trustee is bound;
and
(v) No consent, approval, authorization or
other action by any governmental or regulatory
authority having jurisdiction over the banking or
trust powers of the Trustee that has not been
obtained is or will be required for the
authentication and delivery of the Bonds or the
consummation by the Trustee of its obligations
under the Trustee Documents.
(6) Authority Certificate. A certificate of the
Authority, dated the date of the Closing, signed on
behalf of the Authority by the Chairman or other duly
authorized officer of the Authority to the effect that
the representations, warranties and covenants of the
Authority contained herein are true and correct in all
material respects on and as of the date of the Closing
as if made on the date of the Closing and the Authority
has complied with all of the terms and conditions of
this Purchase Contract required to be complied with by
the Authority at or prior to the date of the Closing.
(7) City Certificate. A certificate of the City,
dated the date of the Closing, signed on behalf of the
City by the mayor or other duly authorized officer of
the City to the effect that the representations,
warranties and covenants of the City contained herein
are true and correct in all material respects on and as
of the date of the Closing as if made on the date of
the Closing and the City has complied with all of the
terms and conditions of this Purchase Contract required
to be complied with by the City at or prior to the date
of the Closing.
23
(8) Trustee' s Certificate. A certificate, dated
the date of Closing, signed by a duly authorized
official of the Trustee satisfactory in form and
substance to the Representative, to the effect that :
(i) The Trustee is duly organized and
existing as a banking corporation under the laws
of the State of California, having the full
corporate power and authority to enter into and
perform its duties under the Trustee Documents;
(ii) The Trustee is duly authorized to enter
into the Trustee Documents and has duly executed
and delivered the Trustee Documents, and assuming
due authorization and execution by the other
parties thereto, the Trustee Documents are legal,
valid and binding upon the Trustee, and
enforceable against the Trustee in accordance with
their terms;
(iii) The Trustee had duly authenticated and
delivered the Bonds to or upon the order of the
Representative; and
(iv) No consent, approval, authorization or
other action by any governmental or regulatory
authority having jurisdiction over the banking or
trust powers of the Trustee that has not been
obtained is or will be required for the execution
and delivery of the Bonds or the consummation by
the Trustee of its obligations under the Trustee
Documents.
(9) Transcripts. Two transcripts of all
proceedings relating to the issuance of the Bonds.
(10) Official Statement. The Official Statement
and each supplement or amendment, if any, thereto,
executed on behalf of the Authority by duly authorized
officers of the Authority.
(11) Documents . An original executed copy of each
of the City Documents and each of the Authority
Documents and a certified copy of the JPA Agreement.
(12) Authority Resolution. Two certified copies
of the Authority Resolution, certified by the Authority
Secretary.
(13) City Resolution. Two certified copies of the
City Resolution, certified by the City Clerk.
24
(14) Trustee Resolution. Two certified copies of
the general resolution of the Trustee authorizing the
execution and delivery of certain documents by certain
officers and employees of the Trustee, which resolution
authorizes the execution and delivery of the Trustee
Documents .
(15) 8038 . Evidence that the federal tax
information form 8038-G has been prepared for filing.
(16) Nonarbitrage Certificate. A tax and
nonarbitrage certificate in form satisfactory to Bond
Counsel and counsel to the Underwriters .
(17) CDAC Statements. A copy of the Notices of
Sale required to be delivered to the California Debt
Advisory Commission pursuant to Sections 8855 (g) and
53583 of the California Government Code.
(18) Ratings . Evidence from Standard & Poor' s
Corporation and Moody' s Investors Service that the
Bonds have been rated "AAA" and "Aaa", respectively.
(19) Insurance. Evidence of compliance with
Sections 6.03 and 6 . 05 of the Lease.
(20) Policy. The Policy, duly executed.
(21) Insurer Counsel Opinion. The opinion of
counsel to the Insurer, dated the date of Closing,
addressed to the Authority, the City and the
Representative, in the form previously submitted to the
Representative.
(22) Certificate of Insurer. A certificate from
the Insurer, dated the date of Closing, in form and
substance satisfactory to the Representative.
(23) Additional Documents . Such additional
certificates, instruments and other documents as the
Representative or counsel to the Underwriters may
reasonably deem necessary.
If the Authority or the City shall be unable to satisfy the
conditions contained in this Purchase Contract, or if the
obligations of the Underwriters shall be terminated for any
reason permitted by this Purchase Contract, this Purchase
Contract shall terminate and neither the Underwriters, the
Authority nor the City shall be under further obligation
hereunder, except as further set forth in Paragraph 8 hereof.
8 . Expenses. The Underwriters shall be under no
obligation to pay and the Authority and the City shall pay or
25
cause to be paid the expenses incident to the performance of the
obligations of the Authority and the City hereunder including but
not limited to (a) the costs of the preparation and printing, or
other reproduction (for distribution on or prior to the date
hereof) of the Authority Documents, the City Documents and the
JPA Agreement and the cost of preparing, printing, issuing and
delivering the Bonds; (b) the fees and disbursements of any
counsel, financial advisors, accountants, trustees or other
experts or consultants retained by the Authority and the City and
of any rating agency; (c) the fees and disbursements of Bond
Counsel; (d) the cost of printing and distributing the
Preliminary Official Statement and any supplements and amendments
thereto and the cost of printing and distributing the Official
Statement, including a reasonable number of copies thereof for
distribution by. the Underwriters; and (e) the bond insurance
premium.
The Underwriters shall pay and the Authority and the City
shall be under no obligation to pay any expenses incurred by the
Underwriters in connection with the public offering and
distribution of the Bonds, including any advertising expenses,
and fees and disbursements of counsel to the Underwriters.
9 . Notice. Any notice or other communication to be given
to the Authority under this Purchase Contract may be given by
delivering the same in writing to: Santa Ana Financing
Authority, c/o City of Santa Ana, 20 Civic Center Plaza, Santa
Ana, California 92702, Attention: Rod Coloma.
Any notice or other communication to be given to the City
under this Purchase Contract may be given by delivering the same
in writing to City of Santa Ana, 20 Civic Center Plaza, Santa
Ana, California 92702, Attention: Rod Coloma.
Any notice or other communication to be given to the
Underwriters under this Purchase Contract may be given by
delivering the same in writing to Smith Barney Shearson, Inc. ,
333 South Grand Avenue, Suite 5100, Los Angeles, California
90071, Attention: Doug Auslander.
10 . Entire Agreement. This Purchase Contract, when
accepted by the Authority and the City, shall constitute the
entire agreement between the Authority, the City and the -
Underwriters and is made solely for the benefit of the Authority,
the City and the Underwriters (including any successors or
assigns of an Underwriter) . No other person shall acquire or
have any right hereunder by virtue hereof, except as provided
herein. All the Authority's and the City's representations,
warranties and agreements in this Purchase Contract shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriters, delivery
of and payment for the Bonds and any termination of this Purchase
Contract .
26
11 . Counterparts. This Purchase Contract may be executed
by the parties hereto in separate counterparts, each of which
when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
instrument.
12 . Severability. In case any one or more of the
provisions contained herein shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provision hereof.
13 . STATE LAW GOVERNS . THE VALIDITY, INTERPRETATION AND
PERFORMANCE OF THIS PURCHASE CONTRACT SHALL BE GOVERNED BY THE
LAWS OF THE STATE.
SMITH BARNEY SHEARSON INC.
PRUDENTIAL SECURITIES INCORPORATED
RAUSCHER PIERCE REFSNES, INC.
By: SMITH BARNEY SHEARSON, INC. ,
as representative
By: /s H as K. Auslander
Title: Vice President
Accepted as of the date
first stated above:
SANTA ANA F-'NANCING A - HORITY
By: /s/ David N. Ream
Title: Executive Director
CITY OF SANTA/ANA)
•
By: /s/ David N. Ream
Title: City Manager
27
Appendix A
Maturity Principal Interest
(August 1) Amount Rate Yield
2001* $ 185, 878 . 80 -0-96 5 .20
2002* 499 , 529 . 80 -0- 5 . 30
2003* 784, 029 .90 -0- 5.40
2004 1, 820, 000 . 00 5 .25 5 . 35
2005 2, 465, 000 .00 5 .30 5 .45
2006 3, 075, 000 . 00 5 .40 5 .55
2007 3, 240, 000. 00 5 .50 5 . 65
2008 3,420, 000 . 00 5 . 60 5 . 70
2009 3, 610, 000 . 00 5 .% 5 .75
2014 21,200, 000 . 00** 5 . 75*** 5. 75
2015 5, 030, 000 .00 6 .25 5. 76
2016 5, 345, 000 .00 6 .25 5 . 77
2017 5, 680, 000. 00 6 .25 5 . 78
2018 6, 035, 000 . 00 6.25 5 . 79
2019 6,410, 000 . 00 6 .25 5 .80
2024 38, 600, 000 . 00 6 .25 5 .85
* Capital Appreciation Bonds
** One-half of the principal amount of the Bonds maturing in 2014 are
Auction Rate Securities, and the other half are Inverse Rate Securities.
*** Represents the fixed interest rate applicable to the combination of
Auction Rate Securities and Inverse Rate Securities.
28
ADDITIONAL INFORMATION
Insofar as any statements made in this Official Statement involve matters of opinion or of estimates,
whether or not expressly stated, they are set forth as such and not as representations of fact. No representation
is made that any of such statements made will be realized. Neither this Official Statement nor any statement
which may have been made verbally or in writing is to be construed as a contract with the owners of the Bonds.
The execution and delivery of this Official Statement have been duly authorized by the Authority.
SANTA ANA FINANCING AUTHORITY
By: /s/ David N. Ream
Executive Director
42
CERTIFICATE
OF THE CITY OF SANTA ANA
AS TO FINALITY OF
PRELIMINARY OFFICIAL STATEMENT
I, Rod Coloma, hereby certify that I am the Executive
Director, Department of Finance of the City of Santa Ana, and as
such I am authorized to execute this Certificate on behalf of the
Santa Ana Financing Authority (the "Authority" ) .
I hereby further certify that there has been delivered to
the underwriters of the $105, 000, 000* aggregate principal amount
of Santa Ana Financing Authority Police Administration and
Holding Facility Lease Revenue Bonds, Series 1994A (the "Bonds" )
a Preliminary Official Statement relating to the Bonds dated
February 25, 1994 (including the cover page, the summary
statement and all appendices thereto, the "Preliminary Official
Statement") , which the Agency deems to be final as of its date
for purposes of Rule 15c2-12 promulgated under the Securities
Exchange Act of 1934 ( "Rule 15c2-12") , except for information
permitted to be omitted therefrom by Rule 15c2-12; provided,
however, that the foregoing certification does not include a
certification as to the finality of the statements and
information contained under the captions "BOND INSURANCE - -
Payment Pursuant to Municipal Bond Insurance Policy" and "MBIA
Corporation" in the Preliminary Official Statement and Appendix F
thereto.
IN WITNESS WHEREOF, I hereunto set my hand this 25th day of
February, 1994 .
CITY OF SANTA ANA
B
o loma
Executive Di ctor, Department
of Finance of the City of
Santa Ana
* Preliminary, subject to change.