Loading...
HomeMy WebLinkAboutTC Agd Pkt 2016-07-20 (2)TOWN OF TIBURON 1505 Tiburon Boulevard Tiburon, CA 94920 Town Council Meeting/Tiburon Public Financing Authority July 20, 2016 Agenda Item: j_ STAFF REPORT To: From: Subject: Reviewed By: Mayor and Members of the Town Council Chairman and Members of the Board of Directors of the Tiburon Public Financing Authority Office of the Town Manager and Authority Executive Director Issuance of Revenue Bonds by the Tiburon Public Financing Authority and Reassessment Bonds by the Town of Tiburon to refund outstanding Town assessment bonds to provide savings to property owners GC/BS BACKGROUND In connection with funding of utility undergrounding in various neighborhoods in the Town over the past years, the Town established several assessment districts and issued several series of assessment bonds. The Main Street assessment district was also established to finance improvements to sidewalk and building access, and assessment bonds were issued for that district, as well. Staff has been exploring the possibility of refinancing these bonds with lower interest rates in order to reduce payments for property owners currently being assessed to pay the Prior Bonds. Preliminary analysis indicates that debt service savings are available, if market interest rates do not change significantly in the near term. Summary of Actions to be considered Town Council will consider adoption of resolutions which form a consolidated reassessment district to refinance up to six series of the Town's utility undergrounding assessment bonds and the Town's Main Street assessment bonds (the "Prior Bonds"), authorize the levy of reassessments, and authorize the issuance of reassessment bonds and their sale to the Tiburon Public Financing Authority. The Board of Directors of the Tiburon Public Financing Authority will consider adoption of a resolution authorizing the issuance and sale of its revenue bonds to investors, with the proceeds of the sale to be used to purchase the Town's reassessment bonds. FISCAL IMPACT If the refunding program is undertaken and the Authority Revenue Bonds are issued, property owners in the participating assessment districts will begin seeing reduced annual assessment TOWN OF TIBURON PAGE 1 OF 4 Town Council \icclingi 'Fiburon Public Financing Authority July 20, 2016 levies on their property tax bills commencing with the 2016-17 property tax bill. All costs related to the refunding program will be paid with proceeds of the Authority Revenue Bonds. All costs of administration of the Authority's revenue bonds will be paid for with a portion of the revenue arising from payments to the Authority on the Town's reassessment bonds. It is estimated, depending on interest rates not changing significantly between now and pricing, that total savings to the property owners will be in excess of $2,000,000 over the remaining life of the reassessment bonds. The savings per individual property owner will vary depending on when their Prior Assessment Bonds were issued and the related interest rate differential from the new reassessment bonds, their original assessment lien, and other factors. ANALYSIS The financing structure will involve two distinct issuances of bonds. First, the Town will issue reassessment bonds and sell them to the Authority, the proceeds of which sale will be deposited into a refunding escrow and used to refund the Prior Bonds on September 2, 2016. (If interest rates increase substantially between now and the proposed pricing date, it is possible that one or more series of the Prior Bonds will no longer have the required savings, and any such series will be dropped from the final financing structure.) These reassessment bonds will be purchased by the Authority using funds obtained by the sale by the Authority of its revenue bonds, which will be marketed and sold to the public. Staff and the Town's consultants have prepared the necessary documents for the issuance of the Town's reassessment bonds and the issuance, marketing and sale of the Authority's revenue bonds, and now recommend that the Town Council and the Board of Directors take the actions needed to authorize the financing program, as described below. RECOMMENDATION Staff recommends that the Town Council adopt the following resolutions: 1. A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON OF INTENTION TO LEVY REASSESSMENTS AND TO ISSUE REFUNDING BONDS UPON THE SECURITY THEREOF This resolution expresses the intention of the Town to form the 2016 consolidated reassessment district and issue the reassessment bonds, and directs the preparation of a reassessment report. 2. A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON ADOPTING REASSESSMENT REPORT FOR THE 2016 CONSOLIDATED REASSESSMENT DISTRICT, CONFIRMING AND ORDERING THE REASSESSMENTS PURSUANT TO SUMMARY PROCEEDINGS AND DIRECTING ACTIONS WITH RESPECT THERETO This resolution approves the reassessment report, which was prepared by the Town's reassessment consultant, NBS, in order to demonstrate that the savings required by the Streets & Highways Code have been met; approves the levy of the reassessments and directs certain actions related thereto. TOWN;TIP>1TKO r;tgc2of4 Town Council \dcctingl Tiburon Public Financing Authority July 20, 2016. 3. A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON AUTHORIZING ISSUANCE OF REFUNDING BONDS FOR THE 2016 CONSOLIDATED REASSESSMENT DISTRICT PROVIDING FOR EXECUTION OF A FISCAL AGENT AGREEMENT AND OTHER MATTERS WITH RESPECT THERETO, MAKING FINDINGS WITH RESPECT TO AND APPROVING THE ISSUANCE OF BONDS BY THE TIBURON PUBLIC FINANCING AUTHORITY This resolution authorizes the issuance of the reassessment bonds and their sale to the Authority; authorizes the call and redemption of the prior assessment bonds; approves as to form the documents needed for the issuance of the reassessment bonds and makes findings with respect to and approves the issuance of the Authority Refunding Bonds. This resolution approves the following documents: • the Fiscal Agent Agreement, which governs the terms and conditions relating to the reassessment bonds; • the Escrow Agreement, which establishes the escrow fund that will be used to repay in full the outstanding assessment bonds on September 2, 2016; • the Bond Purchase Contract (Reassessment Bonds), pursuant to which the reassessment bonds will be sold to the Authority; and • the Preliminary Official Statement, which is the disclosure document by which the Authority's revenue bonds will be marketed and sold to the public. Staff then recommends that the Board of Directors of the Authority adopt the following resolution. A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TIBURON PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE AND SALE OF REVENUE BONDS FOR THE PURPOSE OF FINANCING THE ACQUISITION OF REASSESSMENT BONDS FOR THE TOWN OF TIBURON 2016 CONSOLIDATED REASSESSMENT DISTRICT, AND APPROVING RELATED AGREEMENTS AND ACTIONS This resolution authorizes the issuance of the Authority's revenue bonds in a principal amount not to exceed $10.5 million; and approves as to form the documents needed for the issuance and sale of the revenue bonds: • the Indenture of Trust, which governs the terms and conditions relating to the revenue bonds; • the Bond Purchase Contract (Reassessment Bonds), pursuant to which the Authority will purchase the Town's reassessment bonds, • the Bond Purchase Agreement, pursuant to which the Authority's revenue bonds will be purchased by Wulff, Hansen & Co., as underwriter, who will in turn sell the revenue bonds to investors; and To\v': OF Ti B171:O\ 1'.i4e • of 4 TO w11 Cncil Mccting' Tiburon Public Financing Authority July° 20, 2016 • the Preliminary Official Statement, which is the disclosure document by which the Authority's revenue bonds will be marketed and sold to the public. The Preliminary Official Statement is the disclosure document required to be approved by the Town and the Authority under federal securities laws, which require that the Preliminary Official Statement not contain any misstatements of material facts or omit to state any material facts if necessary to make the disclosure not misleading. These resolutions appoint U.S. Bank National Association as fiscal agent for the reassessment bonds and trustee for the revenue bonds. Timeline It is expected that, if these resolutions are adopted, the Authority's revenue bonds would be sold to Wulff, Hansen & Co. in late July, and the transactions would close on or about August 25th. The outstanding assessment bonds would be redeemed on September 2, 2016. There is currently $10,573,976 principal amount of the Prior Bonds outstanding. The escrow requirement to retire the current assessment bonds on September 2, 2016, is $11,056,490.58. The escrow will be funded primarily from the proceeds of the sale of the Town's reassessment bonds to the Authority, together with assessment revenues and reserve funds on hand. Exhibits 1. Town Resolution of Intention to Levy Reassessments 2. Town Resolution Adopting Reassessment Report 3. Town Resolution Authorizing the Issuance of Reassessment Bonds and Approving Issuance of Authority Revenue Bonds 4. Authority Resolution Authorizing the Issuance of Revenue Bonds 5. Fiscal Agent Agreement 6. Escrow Agreement 7. Bond Purchase Contract (Reassessment Bonds) 8. Indenture of Trust 9. Bond Purchase Agreement 10. Preliminary Official Statement Prepared by: Paul Thimmig, Bond Counsel Benjamin Stock, Town Attorney TowN or T1131 "RCN Page 4of4 RESOLUTION NO. -2016 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON OF INTENTION TO LEVY REASSESSMENTS AND TO ISSUE REFUNDING BONDS UPON THE SECURITY THEREOF WHEREAS, this Town Council has heretofore conducted special assessment proceedings pursuant to Resolution of Intention Nos. 15-2003, 03-2006, 14-2001, 3326, 19-2003, and 30-2010, adopted on May 21, 2003, January 4, 2006, March 21, 2001, April 7, 1999, June 4, 2003, and June 2, 2010, respectively, and in said proceedings this Town Council confirmed unpaid assessments upon the parcels in the Lyford Cove Utility Undergrounding Assessment District, the Lyford Cove Utility Undergrounding Supplemental Assessment District, the Stewart Drive Undergrounding Assessment District, the Main Street Assessment District, the Del Mar Valley Utility Undergrounding Assessment District, and the Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (collectively, the "Prior Districts"), and special assessment bonds, entitled Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Series 2005-2, Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Supplemental Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Stewart Drive Undergrounding Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Main Street Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley Utility Undergrounding Assessment District, and Town of Tiburon Subordinate Lien Limited Obligation Improvement Bonds, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (collectively, the "Prior Assessment Bonds") were issued and delivered and portions of which Prior Assessment Bonds are now outstanding and are secured by said unpaid assessments; and WHEREAS, the public interest requires the refunding of the Prior Assessment Bonds and this Town Council intends to accomplish said refunding through the formation of a consolidated reassessment district, and the levy of reassessments and the issuance of refunding bonds upon the security thereof, the purpose of which refunding bonds will be to refund the Prior Assessment Bonds. NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of Tiburon as follows: 1. The proceedings for the levy and collection of reassessments as security for the issuance and payment of refunding bonds shall be conducted for the Prior Districts pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 (commencing with section 9500) of the California Streets and Highways Code (the "Act"). It is intended that the six Prior Districts be consolidated into a single Town of Tiburon 2016 Consolidated Reassessment District (the "Reassessment District"), as permitted by the Act. 2. Said contemplated reassessment and refunding, in the opinion of this Town Council, is of more than local or ordinary public benefit, and the costs and expenses thereof are made chargeable upon the Reassessment District, the exterior boundaries of which are shown on the reassessment diagram referred to in clause (e) of Section 4 below. 3. This Town Council declares that all public streets, highways, lanes and alleys within the Reassessment District are in use in the performance of a public function, and all lands owned by any public entity, including the United States and the State of California, or any departments thereof, shall be omitted from the reassessment hereafter to be made to cover the costs and expenses of said refunding. 4. Said reassessment and refunding are hereby referred to NBS Government Finance Group, Temecula, California, a qualified firm employed by this Town for the purpose hereof, and said firm is hereby directed to make and file with the Town Clerk a report for the Reassessment District in writing, presenting the following: (a) A schedule setting forth the unpaid principal and interest on the Prior Assessment Bonds and the total amounts thereof. (b) The total estimated principal amount of the reassessment and of the refunding bonds and the maximum interest rate thereon, together with an estimate of cost of the respective reassessment and of issuing the refunding bonds, including all costs of issuing the refunding bonds, as defined by subdivision (a) of section 9600 of the Act. (c) The applicable auditor's record kept pursuant to section 8682 of the California Streets and Highways Code showing the schedule of principal installments and interest on all applicable unpaid original assessments and the total amounts thereof. (d) The estimated amount of each reassessment, identified by reassessment number corresponding to the reassessment number on the reassessment diagram, together with a proposed auditor's record for the reassessment prepared in the manner described in said section 8682. (e) A reassessment diagram showing the Reassessment District and the boundaries and dimensions of the subdivisions of land within the Reassessment District. Each subdivision shall be given a separate number upon the diagrams. When any portion or percentage of the costs and expenses of said refunding and reassessment is to be paid from sources other than reassessments, the amount of such portion or percentage shall first be deducted from the total estimated cost and expenses of said refunding and reassessment, and said reassessments shall include only the remainder of the estimated cost and expenses. 5. If any excess shall be realized from the reassessments it shall be used, in such amounts as this Town Council may determine, in accordance with the provisions of law, in a manner or manners to be provided in these proceedings. 6. Notice is hereby given that serial and/or term bonds to represent reassessments relating to the Reassessment District, and bear interest at the rate of not to exceed twelve percent (12%) per annum, will be issued in the manner provided by the Act, the last installment of which bonds shall mature not to exceed September 2, 2040. 7. The provisions of Part 11.1 of Division 10 of the Streets and Highways Code, providing for an alternative procedure for the advance payment of assessments and the calling of bonds, shall apply to the refunding bonds issued pursuant to proceedings under this Resolution. 8. Reference is hereby made to the proceedings heretofore had pursuant to Division 4 of the Streets and Highways Code with respect to the Prior Districts and the Prior Assessment Bonds, which are on file in the office of the Town Clerk. -2- 9. It is the intention of this Council not to create a separate special reserve fund pursuant to and as authorized by Part 16 of Division 10 of the California Streets and Highways Code with respect to the refunding bonds. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Tiburon on July 20th, 2016, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: Town Clerk 20034.O1:J14103 7/12/16 -3- APPROVED: Mayor RESOLUTION NO. -2016 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON ADOPTING A REASSESSMENT REPORT FOR THE 2016 CONSOLIDATED REASSESSMENT DISTRICT, CONFIRMING AND ORDERING THE REASSESSMENTS PURSUANT TO SUMMARY PROCEEDINGS AND DIRECTING ACTIONS WITH RESPECT THERETO WHEREAS, this Town Council has adopted a Resolution entitled "A Resolution of the Town Council of the Town of Tiburon of Intention to Levy Reassessments and to Issue Refunding Bonds Upon the Security Thereof" (the "Resolution of Intention"), wherein this Town Council directed the making and filing of a reassessment report (the "Report") in accordance with and pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 of the California Streets and Highways Code (the "Act"); WHEREAS, this Town Council has determined, with the assistance of consultants to the Town engaged for such purpose, that it is desirable and that the public interest requires the refunding of the outstanding improvement bonds (as more particularly described below, the "Prior Assessment Bonds") of the Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District, the Town of Tiburon, Lyford Cove Utility Undergrounding Supplemental Assessment District, the Town of Tiburon, Stewart Drive Undergrounding Assessment District, the Town of Tiburon, Main Street Assessment District, the Town of Tiburon, Del Mar Valley Utility Undergrounding Assessment District, and the Town of Tiburon, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (collectively, the "Prior Districts") by means of the formation of a consolidated reassessment district (the "Reassessment District") and the levy of reassessments therein; WHEREAS, the Report was duly made and filed, and duly considered by this Town Council and found to be sufficient in every particular, and the Report shall stand for all subsequent proceedings pertaining to the Reassessment District under and pursuant to the aforesaid Resolution of Intention; and WHEREAS, the Town desires to issue refunding bonds of the Reassessment District (the "Refunding Bonds"), pursuant to the Act, the proceeds of which Refunding Bonds will be used to refund the following Prior Assessment Bonds; the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Series 2005-2, the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Supplemental Assessment District, the Town of Tiburon Limited Obligation Improvement Bonds, Stewart Drive Undergrounding Assessment District, the Town of Tiburon Limited Obligation Improvement Bonds, Main Street Assessment District, the Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley Utility Undergrounding Assessment District, and the Town of Tiburon Subordinate Lien Limited Obligation Improvement Bonds, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District. NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of Tiburon as follows: 1. Conditions Satisfied. Pursuant to Section 9525 of the Act and based upon the Report, this Town Council finds that all of the following conditions are satisfied: (a) With respect to the Reassessment District, each estimated annual installment of principal and interest on the reassessment, as set forth in the Report, is less than the corresponding annual installment of principal and interest on the portion of the original assessment being superseded and supplanted as also set forth in the Report, by the same percentage for all subdivisions of land within the Reassessment District; (b) With respect to the Reassessment District, the number of years to maturity of all refunding bonds proposed to be issued under the Resolution of Intention for the Reassessment District is not more than the number of years to the last maturity of the Prior Assessment Bonds; and (c) With respect to the Reassessment District, the principal amount of the reassessment on each subdivision of land within the Reassessment District is less than the unpaid principal amount of the portion of the original assessment being superseded and supplanted by the same percentage for each subdivision of land in the Reassessment District. 2. Public Interest. The public interest, convenience and necessity require that said reassessment with respect to each of the Prior Districts be made. 3. Boundaries Approved. The Reassessment District benefited by the reassessments on the land therein and to be reassessed to pay the costs and expenses thereof, and the exterior boundaries thereof, are as shown by the reassessment diagram thereof on file in the office of the Town Clerk, which diagram is made a part hereof by this reference thereto. 4. Report Approved. Pursuant to the findings hereinabove expressed with respect to Section 9525 of the Act, said conditions and all of thein are deemed satisfied and the following elements of the Report are hereby finally approved and confirmed without further proceedings, including without the conduct of a public hearing under the Act, to wit: (a) for the Reassessment District, a schedule setting forth the unpaid principal and interest on the Prior Assessment Bonds and the total amounts thereof; (b) for the Reassessment District, an estimate of the principal amount of the reassessment and of the issue of the Refunding Bonds and the maximum interest rate thereon, together with an estimate of cost of the applicable reassessment and of issuing the Refunding Bonds, including expenses incidental thereto; (c) for each of the Prior Districts, the auditor's record kept pursuant to section 8682 of the California Streets and Highways Code showing the schedule of principal installments and interest on all unpaid original assessments and the total amounts thereof; (d) for the Reassessment District, the estimated amount of each reassessment, identified by reassessment number corresponding to the reassessment number of the reassessment diagram, together with a proposed auditor's record for the reassessment prepared in the manner described in said section 8682; and (e) for the Reassessment District, a reassessment diagram showing the Reassessment District and the boundaries and dimensions of the subdivisions of land therein, assigning a separate number to each such subdivision of land. -2- Final adoption and approval of the Report as a whole, the estimate of the costs and expenses, the reassessment diagram and the reassessment, as contained in the Report, as hereinabove determined and ordered, is intended to and shall refer and apply to the Report, or any portion thereof, as amended, modified, revised or corrected by, or pursuant to and in accordance with, any resolution or order, if any, heretofore duly adopted or made by this Town Council. 5. Findings and Determinations. Based on the oral and documentary evidence, including the Report, offered and received by this Town Council, this Town Council expressly finds and determines, with respect to the Reassessment District: (a) that each of said several subdivisions of land within the Reassessment District will be specially benefited by said reassessment at least in the amount, if not more than the amount, of the reassessment apportioned against said subdivisions of land, respectively, and (b) that there is substantial evidence to support, and the weight of said evidence preponderates in favor of, the aforesaid finding and determination as to special benefits. 6. Reassessment Levy. Said reassessment with respect to the Reassessment District, including all costs and expenses thereof, is hereby approved, confirmed and levied. Pursuant to the provisions of the Act, reference is hereby made to said Resolution of Intention for further particulars. Said reassessment with respect to the Reassessment District shall be reduced in the event that Town staff determines that to do so is necessary and advisable to further the purposes of this Resolution, and, if such determination is made, Town staff is hereby authorized and directed to record said reduced reassessment in the manner set forth in Section 9 hereof, and to take any further actions required to finalize said reduction, without further action of this Town Council. 7. Recordings Directed. The Town Clerk shall forthwith cause: (a) the reassessment with respect to the Reassessment District to be delivered to the official of the Town who is the Superintendent of Streets of the Town, together with the reassessment diagram, as approved and confirmed by this Town Council, with a certificate of such confirmation and of the date thereof, executed by the Town Clerk, attached thereto. The Superintendent of Streets shall record said reassessments and reassessment diagram in a suitable book to be kept for that purpose, and append thereto a certificate of the date of such recording, and such recordation shall be and constitute the applicable reassessment roll herein; (b) a copy of the reassessment diagram and a notice of reassessment for the Reassessment District, substantially in the form specified in section 3114 of the California Streets and Highways Code and executed by the Town Clerk, to be filed and recorded, respectively, in the office of the County Recorder of the County of Marin; and (c) a copy of this Resolution to be provided to the Auditor of the County of Marin. From the date of recording of said notice of reassessment for the Reassessment District, all persons shall be deemed to have notice of the contents of such reassessment for the Reassessment District, and such reassessment shall thereupon be a lien upon the property against which it is made, and, unless sooner discharged, such liens shall so continue for the period of ten (10) years from the date of said recordation, or in the event bonds are issued to represent said -3- reassessments, until the expiration of four (4) years after the due date of the last installment upon said bonds or of the last installment of principal of said bonds. The appropriate officer or officers of the Town are hereby authorized to pay any and all fees required by law in connecting with the above. 8. Collection of Reassessments. The Town Treasurer shall keep the record showing the installments of principal and interest on the reassessments which are to be collected each year during the term of the Refunding Bonds. An annual apportionment of each reassessment, together with annual interest on said reassessment, shall be payable in the same manner and at the same time and in the same installments as the general property taxes of the Town and shall be payable and become delinquent at the same time and in the same proportionate amount; provided that any reassessments on possessory interests shall be collected on the unsecured tax roll and shall be payable and become delinquent at the same time as other taxes levied on said unsecured roll. Each year the annual installments shall be submitted to the County Auditor - Controller for purposes of collection, and the County Auditor -Controller shall, at the close of the tax collecting period, promptly render to the Town Treasurer a detailed report showing the amount of such installments, interest, penalties and percentages so collected. 9. Amendments. The Treasurer is hereby authorized and directed (a) to revise the Report to reduce the applicable reassessments, as confirmed pursuant to Section 6 hereof, if and to the extent necessary so that the aggregate amount thereof does not exceed the initial principal amount of the Refunding Bonds and as may otherwise be necessary to eliminate reassessments with respect to any of the Prior Districts so as to satisfy the requirements of Section 9525 of the Act upon final pricing of the Refunding Bonds, (b) to amend the reassessment and reassessment diagram to reflect such reductions, and (c) to promptly record the reassessment, together with the reassessment diagram, as so amended, in the office of the Superintendent of Streets of the Town. Immediately thereafter, a copy of the reassessment diagram, as so amended, shall be filed in the office of the County Recorder and a Notice of Assessment, referring to said diagram, shall be recorded in the office of the County Recorder, all pursuant to the provisions of Division 4.5 of the California Streets and Highways Code. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Tiburon on July 20th, 2016, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: Town Clerk 20034.01:J14104 7/12/16 -4- APPROVED: Mayor ��xl� � �� RESOLUTION NO. 2016- A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON AUTHORIZING ISSUANCE OF REFUNDING BONDS FOR THE 2016 CONSOLIDATED REASSESSMENT DISTRICT, PROVIDING FOR EXECUTION OF A FISCAL AGENT AGREEMENT AND OTHER MATTERS WITH RESPECT THERETO, AND MAKING FINDINGS WITH RESPECT TO AND APPROVING THE ISSUANCE OF BONDS BY THE TIBURON PUBLIC FINANCING AUTHORITY WHEREAS, this Town Council has heretofore conducted special reassessment proceedings pursuant to Resolution of Intention Nos. 15-2003, 03-2006, 14-2001, 3326, 19-2003, and 30-2010 adopted on May 21, 2003, January 4, 2006, March 21, 2001, April 7, 1999, June 4, 2003, and June 2, 2010, respectively, and in said proceedings this Town Council confirmed unpaid assessments upon the parcels in the Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District, the Town of Tiburon, Lyford Cove Utility Undergrounding Supplemental Assessment District, the Town of Tiburon, Stewart Drive Undergrounding Assessment District, the Town of Tiburon, Main Street Assessment District, the Town of Tiburon, Del Mar Valley Utility Undergrounding Assessment District, and the Town of Tiburon, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (collectively, the "Prior Districts"), and special assessment bonds, entitled Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Series 2005-2, Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Supplemental Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Stewart Drive Undergrounding Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Main Street Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley Utility Undergrounding Assessment District, and Town of Tiburon Subordinate Lien Limited Obligation Improvement Bonds, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (collectively, the "Prior Assessment Bonds") were issued and delivered and a portion of which Prior Assessment Bonds are now outstanding and are secured by said unpaid assessments; WHEREAS, this Town Council has adopted a Resolution of Intention (the "Resolution of Intention") relating to the formation of a consolidated reassessment district (the "Reassessment District"), and the levy and collection of reassessments as security for the issuance and payment of a series of refunding bonds for the Reassessment District the proceeds of which will be used to refund the Prior Assessment Bonds, and in said Resolution of Intention this Town Council provided that serial and/or term bonds would be issued thereunder pursuant to the provisions of the Refunding Act of 1984 for 1915 Act Improvement Bonds, Division 11.5 of the California Streets and Highways Code (the "Refunding Act"), for the Reassessment District, and reference to said Resolution of Intention is hereby expressly made for further particulars; WHEREAS, a list of all reassessments which remain unpaid in respect of the Reassessment District has been filed with the Town; and WHEREAS, this Town Council duly considered said list and determined that the same were accurate statements thereof; WHEREAS, this Town Council has determined that due to favorable interest rates, it is in the best interests of the owners of the property in the Reassessment District that bonds be issued secured by the reassessments to refund the Prior Assessment Bonds; WHEREAS, there has been submitted to this Town Council an agreement (the "Fiscal Agent Agreement"), by and between the Town and U.S. Bank National Association as fiscal agent (the "Fiscal Agent"), providing for the issuance of an issue of refunding bonds of the Town (the "2016 Reassessment Bonds"), for and on behalf of the Reassessment District, and this Town Council, with the aid of Town staff, has reviewed the Fiscal Agent Agreement and found it to be in proper order, and now desires to approve the Fiscal Agent Agreement and the issuance of the 2016 Reassessment Bonds; WHEREAS, there has been presented to the Town Council an escrow agreement (the "Escrow Agreement"), providing for the creation of escrow funds which will be used to refund and redeem the Prior Assessment Bonds and the Town Council now desires to approve such agreement in connection with the refunding of the Prior Assessment Bonds; WHEREAS, the Town proposes to sell the 2016 Reassessment Bonds to the Tiburon Public Financing Authority (the "Authority") pursuant to the terms of a Bond Purchase Contract (Reassessment Bonds) (the "Purchase Contract") by and between the Town and the Authority, and the Authority proposes to purchase the Bonds with the proceeds of its bonds (the "Authority Bonds") and to sell the Authority Bonds to the investing public by means of a preliminary official statement (the "Preliminary Official Statement"); WHEREAS, it appears that each of said documents and instruments which are now before this meeting is in appropriate form and is an appropriate document or instrument to be executed and delivered for the purpose intended; WHEREAS, this Town Council now desires to make a finding of significant public benefit, pursuant to Section 6586 of the California Government Code, and to approve of the transactions contemplated by the 2016 Reassessment Bonds and the Authority Bonds; and WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of the 2016 Reassessment Bonds as contemplated by this Resolution and the documents referred to herein exist, have happened and have been performed in due time, form and manner as required by the laws of the United States of America, including the Refunding Act. NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of Tiburon as follows: 1. This Town Council hereby finds that significant public benefits will arise from the use of proceeds of the Authority Bonds to refund the Prior Assessment Bonds (and thereby the refinancing of the improvements funded with proceeds of the Prior Assessment Bonds), in accordance with Section 6586 of the California Government Code, in that the financing will result in demonstrable savings in effective interest rates, bond preparation, bond underwriting and bond issuance costs. 2. The reassessments for the Reassessment District now remaining unpaid are as shown on said List of Unpaid Reassessments for the Reassessment District (the "Reassessments"); the aggregate amount thereof is $9,889,321.29; and for a particular description of the lots or parcels of land bearing the respective reassessment numbers set forth in said list, reference is hereby made to the reassessment and to the diagram, and any amendments thereto, recorded in the office of the Superintendent of Streets of the Town for the Reassessment District. -2- 3. The 2016 Reassessment Bonds shall be issued in the aggregate principal amount as hereinafter provided upon the security of the unpaid Reassessments and the proceedings heretofore taken with respect to said Resolution of Intention. The 2016 Reassessment Bonds shall be issued at such rate or rates of interest, in such form or forms, at such maturities and upon such provisions, covenants and conditions, all of which shall be as specified by the Town pursuant to the terms of the Fiscal Agent Agreement to be executed by the Town in furtherance of the issuance of the 2016 Reassessment Bonds hereby authorized; provided, however, no such 2016 Reassessment Bonds shall be authorized in excess of the total aggregate amount of said unpaid Reassessments hereinabove specified. 4. The Fiscal Agent Agreement, in the form presented to this Town Council, which Fiscal Agent Agreement provides, in substance, provisions for the payment of and covenants relating to the 2016 Reassessment Bonds, is hereby approved. The Town Manager and the Town Director of Administrative Services (each, an "Authorized Officer"), each acting alone, are hereby authorized to execute the Fiscal Agent Agreement on behalf of the Town in such form, together with such changes thereto as may be approved by the officer of the Town executing the same upon consultation with the Town Attorney and Bond Counsel, the approval of such changes to be conclusively evidenced by the execution and delivery of the Fiscal Agent Agreement by an Authorized Officer. The Town Council hereby approves the refunding of the Prior Assessment Bonds with the proceeds of the 2016 Reassessment Bonds in accordance with the provisions of the documents pursuant to which such Prior Reassessment Bonds were sold and delivered and the Escrow Agreement. The Town Council hereby approves the Escrow Agreement in the form on file with the Town Clerk. The Town Council hereby authorizes the Authorized Officers, each acting alone, to execute and deliver the Escrow Agreement for and in the name and on behalf of the Town in such form, together with any changes therein or additions thereto deemed advisable by the officer executing the same upon consultation with Bond Counsel and the Town Attorney. The Town Council hereby authorizes the delivery and performance by the Town of the Escrow Agreement. The Town Council hereby authorizes the establishment of a reserve fund or account, which shall be held and administered under the indenture of trust for the Authority Bonds, as described in the Preliminary Official Statement approved in Section 8 below. 5. The Fiscal Agent shall perform the actions and duties required of the Fiscal Agent under the Fiscal Agent Agreement, including those for the authentication, transfer, registration, and payment of the 2016 Reassessment Bonds. 6. The form of the Purchase Contract between the Authority and the Town presented at this meeting is hereby approved. The Authorized Officers, each acting alone, are hereby authorized to execute the Purchase Contract for the acquisition by the Authority, with the proceeds of the Authority Bonds, of the 2016 Reassessment Bonds in the form hereby approved, with such additions therein and changes thereto as the officer executing the same upon consultation with the Town Attorney and Bond Counsel, deems necessary or desirable, with such approval to be conclusively evidenced by the execution and delivery of such agreement by an Authorized Officer. The Town Council hereby approves the issuance of the Authority Bonds by the Authority and hereby authorizes the delivery and performance by the Town of the Purchase Contract. 7. The 2016 Reassessment Bonds, when executed, shall be delivered to the Fiscal Agent for authentication. The Fiscal Agent is hereby requested and directed to authenticate the 2016 Reassessment Bonds by executing the Fiscal Agent's certificate of authentication and registration appearing thereon, and to deliver the 2016 Reassessment Bonds, when duly executed and -3- authenticated, to the Authority or its designee in accordance with the Purchase Contract, upon payment of the purchase price therefor. 8. The form of the Preliminary Official Statement for the Authority Bonds presented at this meeting is hereby approved and Wulff, Hansen & Co. (the "Underwriter") is hereby authorized to distribute the Preliminary Official Statement to prospective purchasers of the Authority Bonds in the form hereby approved, together with such additions thereto and changes therein as are determined necessary or desirable by the Town Manager, or his written designee, to make such Preliminary Official Statement final as of its date for purposes of Rule 15c2-12 of the Securities and Exchange Commission. The Town Manager is hereby authorized to execute a final Official Statement in the form of the Preliminary Official Statement, together with such changes as are determined necessary by the Town Manager, or his written designee, to make such Official Statement complete and accurate as of its date. The Underwriter is further authorized to distribute the final Official Statement for the Authority Bonds and any supplement thereto to the purchasers of the Authority Bonds following its execution by the Authority. 9. The Mayor, Town Manager, Town Director of Administrative Services, Town Clerk and Town Treasurer and any other officers or staff of the Town are hereby authorized and directed to take any actions and execute and deliver any and all documents (including, but not limited to, a Continuing Disclosure Agreement referenced in the Fiscal Agent Agreement) as are necessary to accomplish the issuance, sale and delivery of the 2016 Reassessment Bonds and the refunding of the Prior Assessment Bonds in accordance with the provisions of this Resolution and the fulfillment of the purposes of the 2016 Reassessment Bonds as described in the Fiscal Agent Agreement and the Escrow Agreement. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Tiburon on July 20th, 2016, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: Town Clerk 20034.01:314105 7/12/16 -4- APPROVED: Mayor Yxr ��� RESOLUTION NO. A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TIBURON PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE AND SALE OF REVENUE BONDS FOR THE PURPOSE OF FINANCING THE ACQUISITION OF REASSESSMENT BONDS FOR THE TOWN OF TIBURON 2016 CONSOLIDATED REASSESSMENT DISTRICT, AND APPROVING RELATED AGREEMENTS AND ACTIONS WHEREAS, the Town of Tiburon, California (the "Town") has heretofore issued its Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, its Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Series 2005-2, its Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Supplemental Assessment District, its Town of Tiburon Limited Obligation Improvement Bonds, Stewart Drive Undergrounding Assessment District, its Town of Tiburon Limited Obligation Improvement Bonds, Main Street Assessment District, its Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley Utility Undergrounding Assessment District, and its Town of Tiburon Subordinate Lien Limited Obligation Improvement Bonds, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (collectively, the "Prior Assessment Bonds"); WHEREAS, the Town has determined that it is in the best financial interests of the Town to refinance the Prior Assessment Bonds at this time by the issuance of its Town of Tiburon Limited Obligation Refunding Bonds 2016 Consolidated Reassessment District (the "2016 Reassessment Bonds"); WHEREAS, in order to refinance the Prior Assessment Bonds on advantageous terms and conditions, the Tiburon Public Financing Authority (the "Authority") proposes to issue its revenue bonds in the maximum initial principal amount of $10,500,000, designated as the "Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District)" (the "Authority Bonds") under Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Bond Law"), and to use the proceeds thereof to acquire the 2016 Reassessment Bonds; WHEREAS, the Board of Directors of the Authority wishes at this time to authorize all proceedings relating to the issuance of the Authority Bonds to acquire the 2016 Reassessment Bonds, and to approve the execution and delivery of all agreements and documents relating thereto; and WHEREAS, there have been submitted to the Board of Directors certain documents providing for the sale of the Authority Bonds, including the form of a Preliminary Official Statement and Bond Purchase Agreement, and the Board of Directors, with the aid of Authority staff, has reviewed the Preliminary Official Statement to assure proper disclosure of all material facts relating to the Authority Bonds. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Tiburon Public Financing Authority as follows: 16018.02 1. Findings and Determinations. Pursuant to the Bond Law, the Board of Directors hereby finds and determines that the issuance of the Authority Bonds will result in savings in effective interest rates, bond underwriting costs and bond issuance costs and thereby result in significant public benefits to the Town and the Authority within the contemplation of Section 6586 of the Bond Law. 2. Issuance of Authority Bonds; Approval of Indenture. The Board of Directors hereby authorizes the issuance of the Authority Bonds under and pursuant to the Bond Law, in the maximum principal amount of $10,500,000. The Authority Bonds shall be issued pursuant to an Indenture of Trust (the "Indenture"), by and between the Authority and U.S. Bank National Association, as trustee (the "Trustee"). The Board of Directors hereby approves the Indenture in the form on file with the Secretary, together with any changes therein or additions thereto approved by the Executive Director upon consultation with the Authority's General Counsel and Bond Counsel, and the execution thereof by the Chair, the Executive Director or the Treasurer (each an "Authorized Officer") shall be conclusive evidence of the approval of any such changes or additions. The Board of Directors hereby authorizes the Authorized Officers, each acting alone, to execute the final form of the Indenture for and in the name of the Authority. The Board of Directors hereby authorizes the delivery and performance of the Indenture. 3. Purchase of 2016 Reassessment Bonds. The Board of Directors hereby authorizes and approves the purchase of the 2016 Reassessment Bonds from the Town by the Trustee on behalf of the Authority pursuant to and in accordance with the provisions of the Bond Purchase Contract (Reassessment Bonds) (the "Purchase Contract") between the Town and the Authority. The Board of Directors hereby approves the Purchase Contract in the form on file with the Secretary, together with any changes therein or additions thereto deemed advisable by the Executive Director upon consultation with the Authority's General Counsel and Bond Counsel, and the execution thereof by an Authorized Officer shall be conclusive evidence of the approval of any such changes or additions. The Board of Directors hereby authorizes the Authorized Officers, each acting alone, to execute the final form of the Purchase Contract for and in the name of the Authority. 4. Sale of Authority Bonds. The Board of Directors hereby approves the sale of the Authority Bonds by negotiation with Wulff, Hansen & Co. (the "Underwriter"). The Authority Bonds shall be sold pursuant to a Bond Purchase Agreement (the "Bond Purchase Agreement") by and between the Authority and the Underwriter in the form on file with the Secretary, together with any changes therein or additions thereto approved by the Executive Director upon consultation with the Authority's General Counsel and Bond Counsel, and the execution thereof by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. The Bond Purchase Agreement shall be executed in the name and on behalf of the Authority by an Authorized Officer, each of whom is hereby authorized, acting alone, to so execute the Bond Purchase Agreement upon submission of a proposal by the Underwriter to purchase the Authority Bonds; provided, however, that such proposal is consistent with the requirements of this Resolution. The amount of Underwriter's discount shall be not more than 2.0% of the par amount of the Authority Bonds and the true effective rate of interest to be borne by the Authority Bonds (not taking into account any original issue discount on the sale thereof) shall not exceed 4.0% per annum. 5. Official Statement. The Board of Directors hereby approves, and hereby deems nearly final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934, the preliminary Official Statement describing the Authority Bonds in the form on file with the Secretary. The Executive Director is hereby authorized to execute an appropriate certificate stating the Board's determination that the Preliminary Official Statement has been deemed nearly final within the meaning of such Rule. Distribution of the preliminary Official Statement in connection with the -2- sale of the Bonds is hereby approved. The Executive Director is hereby authorized and directed to approve any changes in or additions to a final form of said Official Statement, and the execution thereof by the Executive Director shall be conclusive evidence of the approval of any such changes and additions. The Board hereby authorizes the distribution of the final Official Statement by the Underwriter. The final Official Statement shall be executed in the naive and on behalf of the Authority by the Executive Director. 6. Official Actions. The Chair, the Vice Chair, the Executive Director, the Treasurer, the Secretary, the Authority General Counsel and any and all other officers of the Authority are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the issuance and sale of the Authority Bonds and any of the other transactions contemplated by the documents approved pursuant to this Resolution. Whenever in this Resolution any officer of the Authority is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. 7. Effective Date. This Resolution shall become effective upon its adoption. PASSED AND ADOPTED at a regular meeting of the Tiburon Public Financing Authority on July 20th, 2016, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: Secretary 20034.O1:J14106 7112/16 -3- APPROVED: Chair 4,(ht.-\5 Quint & Thimmig LLP 6/22/16 7/12/16 FISCAL AGENT AGREEMENT by and between the TOWN OF TIBURON, CALIFORNIA and U.S. BANK NATIONAL ASSOCIATION, as Fiscal Agent Dated as of August 1, 2016 Relating to: $ Town of Tiburon Limited Obligation Refunding Bonds, 2016 Consolidated Reassessment District 20034.01:J14110 TABLE OF CONTENTS ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 1.01. Authority for this Agreement 3 Section 1.02. Agreement for Benefit of Bondowners 3 Section 1.03. Definitions 3 ARTICLE II THE ASSESSMENT BONDS Section 2.01. Principal Amount; Designation 8 Section 2.02. Terms of Reassessment Bonds 8 Section 2.03. Redemption 9 Section 2.04. Refunding of Reassessment Bonds 10 Section 2.05. Form of Reassessment Bonds 10 Section 2.06. Execution of Reassessment Bonds 11 Section 2.07. Transfer of Reassessment Bonds 11 Section 2.08. Exchange of Reassessment Bonds 11 Section 2.09. Bond Register 11 Section 2.10. Temporary Reassessment Bonds 11 Section 2.11. Reassessment Bonds Mutilated, Lost, Destroyed or Stolen 12 Section 2.12. Limited Obligation 12 Section 2.13. No Acceleration 12 ARTICLE III ISSUANCE OF REASSESSMENT BONDS Section 3.01. Issuance and Delivery of Reassessment Bonds 13 Section 3.02. Application of Proceeds of Sale of Reassessment Bonds 13 Section 3.03. Validity of Reassessment Bonds 13 Section 3.04. Pledge of Reassessments 13 ARTICLE IV ESTABLISHMENT OF FUNDS Section 4.01. Redemption Fund 14 Section 4.02. Escrow Fund 15 Section 4.03. Costs of Issuance Fund 15 Section 4.04. No Reserve Fund 15 ARTICLE V COVENANTS OF THE CITY Section 5.01. Collection of Reassessments 16 Section 5.02. Foreclosure 17 Section 5.03. Punctual Payment 18 Section 5.04. Extension of Time for Payment 18 Section 5.05. Against Encumbrance 18 Section 5.06. Books and Accounts 18 Section 5.07. Protection of Security and Rights of Owners 18 Section 5.08. Further Assurances 19 Section 5.09. Private Activity Bond Limitation 19 Section 5.10. Private Loan Financing Limitation 19 Section 5.11. Federal Guarantee Prohibition 19 Section 5.12. No Arbitrage 19 Section 5.13. Maintenance of Tax -Exemption 19 Section 5.14. Rebate Requirement 19 Section 5.15. Continuing Disclosure 19 ARTICLE VI INVESTMENTS; LIABILITY OF THE CITY Section 6.01. Investment of Moneys 20 Section 6.02. Liability of City 20 Section 6.03. Employment of Agents by City 21 ARTICLE VII THE FISCAL AGENT Section 7.01. Appointment of Fiscal Agent 22 Section 7.02. Liability of Fiscal Agent 23 Section 7.03. Information; Books and Accounts 24 Section 7.04. Notice to Fiscal Agent 24 Section 7.05. Compensation; Indemnification 24 ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.01. Amendments Permitted 26 Section 8.02. Owners' Meetings 26 Section 8.03. Procedure for Amendment with Written Consent of Owners 26 Section 8.04. Disqualified Reassessment Bonds 27 Section 8.05. Effect of Supplemental Agreement 27 Section 8.06. Endorsement or Replacement of Reassessment Bonds Issued After Amendment 28 Section 8.07. Amendatory Endorsement of Reassessment Bonds 28 ARTICLE IX MISCELLANEOUS Section 9.01. Benefits of Agreement Limited to Parties 29 Section 9.02. Successor is Deemed Included in All Reference to Predecessor 29 Section 9.03. Discharge of Agreement 29 Section 9.04. Execution of Documents and Proof of Ownership by Owners 29 Section 9.05. Waiver of Personal Liability 30 Section 9.06. Notices to and Demand on City and Fiscal Agent 30 Section 9.07. Partial Invalidity 30 Section 9.08. Unclaimed Moneys 30 Section 9.09. Applicable Law 31 Section 9.10. Conflict with Bond Law 31 Section 9.11. Conclusive Evidence of Regularity 31 Section 9.12. Payment on Business Day 31 Section 9.13. Counterparts 31 EXHIBIT A FORM OF BOND FISCAL AGENT AGREEMENT THIS FISCAL AGENT AGREEMENT (the "Agreement") is made and entered into as of August 1, 2016, by and between the TOWN OF TIBURON, CALIFORNIA, a municipal corporation and public body, corporate and politic (the "Town"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as fiscal agent (the "Fiscal Agent"). RECITALS: WHEREAS, the Town Council of the Town has formed six different assessment districts, including the Lyford Cove Utility Undergrounding Assessment District, the Lyford Cove Utility Undergrounding Supplemental Assessment District, the Stewart Drive Undergrounding Assessment District, the Main Street Assessment District, the Del Mar Valley Utility Undergrounding Assessment District and the Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (collectively, the "Prior Districts"), and has issued seven different series of limited obligation improvement bonds (collectively, the "Prior Bonds") payable from annual assessments levied on properties in the Prior Districts; and WHEREAS, on July 20, 2016, the Town Council of the Town adopted Resolution No. (the "Resolution of Intention") which, among other matters, commenced proceedings for the formation of the Town of Tiburon 2016 Consolidated Reassessment District (the "Reassessment District"), and the levy of reassessments and issuance of refunding bonds pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 (commencing with Section 9500) of the California Streets and Highways Code (the "Act") in and for the Reassessment District and, by the Resolution of Intention, the Town Council provided that serial and / or term limited obligation refunding bonds of the Town would be issued thereunder pursuant to the provisions of the Act, and reference to the Resolution of Intention and proceedings had thereunder is hereby expressly made for further particulars; WHEREAS, the purpose of the proceedings under the Resolution of Intention was to provide for the establishment of the Reassessment District, the levy of reassessments to supplant the assessments levied in the Prior Districts, and for the refunding of the Prior Bonds in advance of the scheduled maturities thereof with the proceeds of the Reassessment Bonds; WHEREAS, there is now on file in the office of the Treasurer of the Town a list of the reassessments remaining unpaid for the Reassessment District; WHEREAS, on July 20, 2016, the Town Council of the Town adopted Resolution No. (the "Resolution of Issuance") authorizing, among other matters, the issuance of refunding bonds of the Town designated "Town of Tiburon Limited Obligation Refunding Bonds, 2016 Consolidated Reassessment District" (the "Reassessment Bonds"), the proceeds of which are to be used to refund the Prior Bonds; WHEREAS, it is in the public interest and for the benefit of the Town and the owners of the Reassessment Bonds that the Town enter into this Agreement to provide for the issuance of the Reassessment Bonds, the disbursement of proceeds of the Reassessment Bonds, the disposition of the reassessments securing the Reassessment Bonds and the administration and payment of the Reassessment Bonds; and WHEREAS, all things necessary to cause the Reassessment Bonds, when authenticated by the Fiscal Agent and issued as provided in the Act, the Resolution of Issuance and this Agreement, to be legal, valid and binding and limited obligations in accordance with their terms, and all things necessary to cause the creation, authorization, execution and delivery of this Agreement and the creation, authorization, execution and issuance of the Reassessment Bonds, subject to the terms hereof, have in all respects been duly authorized. AGREEMENT: NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: -2- ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 1.01. Authority for this Agreement. This Agreement is entered into pursuant to the provisions of the Act, the Bond Law and the Resolution of Issuance. Section 1.02. Agreement for Benefit of Bondowners. The provisions, covenants and agreements herein set forth to be performed by or on behalf of the Town shall be for the equal benefit, protection and security of the registered owners of the Reassessment Bonds. All of the Reassessment Bonds, without regard to the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Reassessment Bonds over any other thereof, except as expressly provided in or permitted by this Agreement. The Fiscal Agent may become the owner of any of the Reassessment Bonds in its own or any other capacity with the same rights it would have if it were not Fiscal Agent. Section 1.03. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.03 shall, for all purposes of this Agreement, of any Supplemental Agreement (as herein defined), and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. All references herein to Articles, Sections and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement, and the words herein, "hereof", "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof. "Act" means the Refunding Act of 1984 for 1915 Improvement Act Bonds, as amended, being Division 11.5 of the California Streets and Highways Code. "Agreement" means this Fiscal Agent Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement executed pursuant to the provisions hereof. "Auditor" means the auditor/ controller or tax collector of the County, or such other official of the County who is responsible for preparing real property tax bills. "Authority" means the Tiburon Public Financing Authority, a joint exercise of powers authority established under Sections 6500 and following of the California Government Code. "Authority Bonds" means the Authority's Bonds designated "Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District)," issued by the Authority to, inter alia, purchase the Reassessment Bonds. "Authority Bonds Indenture" means the Indenture of Trust, dated as of August 1, 2016, by and between the Authority and the Trustee, pursuant to which the Authority Bonds were issued. "Authorized Officer" means the Town Manager, the Town Director of Administrative Services, or any other officer or employee authorized by the Town Council of the Town or by an Authorized Officer to undertake the action referenced in this Agreement as required to be undertaken by an Authorized Officer. "Bond Counsel" means (i) Quint & Thimrnig LLP, or (ii) any attorney or firm of attorneys acceptable to the Town and nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities. "Bond Date" means the dated date of the Reassessment Bonds, which is the Closing Date. -3- "Bond Law" means the Improvement Bond Act of 1915, as amended, being Division 10 of the California Streets and Highways Code. "Bond Register" means the books maintained by the Fiscal Agent pursuant to Section 2.09 for the registration and transfer of ownership of the Reassessment Bonds. "Bond Year" means the twelve-month period beginning on September 2 in each year and ending on the day prior to September 2 in the following year except that the first Bond Year shall begin on the Closing Date and end on the day prior to the next succeeding September 2. "Business Day" means any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the state in which the Fiscal Agent has its Principal Office are authorized or obligated by law or executive order to be closed. "CIerk" means the Town Clerk. "Closing Date" means August 25, 2016, being the date upon which there was a physical delivery of the Reassessment Bonds in exchange for the amount representing the purchase price of the Reassessment Bonds by the Original Purchaser. "Code" means the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable, temporary and final regulations promulgated under the Code. "Continuing Disclosure Agreement" means that certain Continuing Disclosure Agreement between the Authority and NBS Government Finance Group as dissemination agent, relating to the Authority Bonds, dated as of August 1, 2016, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "Costs of Issuance" means items of expense payable or reimbursable directly or indirectly by the Town and related to the authorization, sale and issuance of the Reassessment Bonds and the refunding and defeasance of the Prior Bonds, which items of expense shall include, but not be limited to, printing costs, costs of reproducing and binding documents, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent including its first annual administration fee, fees and expenses of Fiscal Agent's counsel, expenses incurred by the Town in connection with the issuance of the Reassessment Bonds and the defeasance and redemption of the Prior Bonds (including, but not limited to, administrative costs and expenses of the Town and the Town Attorney), Escrow Bank fees and expenses, Reassessment Bond discount, legal fees and charges, including bond counsel and disclosure counsel, charges for execution, transportation and safekeeping of the Reassessment Bonds and other costs, charges and fees in connection with the foregoing. "Council" means the Town Council. "County" means the County of Marin, California. "Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Reassessment Bonds in such Bond Year, assuming that the Outstanding Reassessment Bonds are retired as scheduled, and (ii) the principal amount of the Outstanding Reassessment Bonds due in such Bond Year. -4- "Escrow Agreenzent" means the Escrow Agreement dated as of August 1, 2016, by and between the Town and the Escrow Bank, by which the Escrow Fund is administered. "Escrow Bank" means The Bank of New York Mellon Trust Company, N.A., acting in such capacity under the Escrow Agreement. "Escrow Fund" means the fund of that naive established pursuant to the Escrow Agreement. "Federal Securities" means any of the following which are non -callable and which at the time of investment are legal investments under the laws of the United States of America for funds held by the Fiscal Agent: (i) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the United States Department of the Treasury) and obligations, the payment of principal of and interest on which are directly or indirectly guaranteed by the United States of America, including, without limitation, such of the foregoing which are commonly referred to as stripped obligations and coupons; or (ii) any of the following obligations of the following agencies of the United States of America: (a) direct obligations of the Export -Import Bank, (b) certificates of beneficial ownership issued by the Farmers Home Administration, (c) participation certificates issued by the General Services Administration (d) mortgage-backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, (e) project notes issued by the United States Department of Housing and Urban Development, and (f) public housing notes and bonds guaranteed by the United States of America. "Finance Director" means the Director of Administrative Services of the Town, or designee thereof. "Fiscal Agent" means the Fiscal Agent appointed by the Town and acting as an independent fiscal agent with the duties and powers herein provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 7.01 hereof. "Fiscal Year" means the twelve-month period extending from July 1 in a calendar year to June 30 of the succeeding year, both dates inclusive. "Formation Act" means the Municipal Improvement Act of 1913, as amended, being Division 12 of the California Streets and Highways Code. "Independent Financial Consultant" has the meaning given to such term in the Authority Bonds Indenture. "Interest Payment Dates" means March 2 and September 2 of each year, commencing March 2, 2017. "Investment Earnings" means all interest earned and any gains or losses on the investment of moneys in any fund or account created by this Agreement. "List of Unpaid Reassessments" means the list on file with the Treasurer showing the amounts of the Reassessments upon each of the parcels in the Reassessment District. "Maximum Annual Debt Service" means the largest Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Reassessment Bonds. -5- "Moody's" means Moody's Investors Service, its successors and assigns. "Officer's Certificate" means a written certificate of the Town signed by an Authorized Officer of the Town. "Original Purchaser" means the Authority, as the first purchaser of the Reassessment Bonds from the Town. "Outstanding" when used as of any particular time with reference to Reassessment Bonds, means, subject to the provisions of Section 8.04, all Reassessment Bonds except: (i) Reassessment Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) Reassessment Bonds paid or deemed to have been paid within the meaning of Section 9.03; (iii) Reassessment Bonds in lieu of or in substitution for which other Reassessment Bonds shall have been authorized, executed, issued and delivered by the Town pursuant to this Agreement or any Supplemental Agreement. "Owner" or "Bond Owner" means the registered owner of any Outstanding Reassessment Bond as shown on the Bond Register of the Fiscal Agent under Section 2.09 hereof. "Principal Office" means the principal office of the Fiscal Agent in San Francisco, California, located at such address as shall be specified in a written notice by the Fiscal Agent to the Town under Section 9.06 hereof or such other office designated for payment, transfer or exchange of bonds. "Prior Bond Resolutions" means, collectively, Resolution Nos. 01-2005, 42-2005, 20-2006, 33- 2001 and 40-2001, 3388, 33-2005 and 46-2010, adopted by the Town Council of the Town on February 2, 2005, September 7, 2005, April 19, 2006, June 20, 2001 and July 18, 2001, December 1, 1999, July 13, 2005 and August 25, 2010, respectively, pursuant to which the Prior Bonds were issued. "Prior Bonds" means, collectively, (i) the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, (ii) the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Series 2005-2, (iii) the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Supplemental Assessment District, (iv) the Town of Tiburon Limited Obligation Improvement Bonds, Stewart Drive Undergrounding Assessment District, (v) the Town of Tiburon Limited Obligation Improvement Bonds, Main Street Assessment District, (vi) the Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley Utility Undergrounding Assessment District, and (vii) the Town of Tiburon Subordinate Lien Limited Obligation Improvement Bonds, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District, issued pursuant to the applicable Prior Bond Resolution. "Prior Districts" means, collectively, the (i) the Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District, (ii) the Town of Tiburon, Lyford Cove Utility Undergrounding Supplemental Assessment District, (iii) the Town of Tiburon, Stewart Drive Undergrounding Assessment District, (iv) the Town of Tiburon, Main Street Assessment District, (v) the Town of Tiburon, Del Mar Valley Utility Undergrounding Assessment District, and (vi) the Town of Tiburon, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District, each established pursuant to the applicable Prior Resolution. "Prior Resolutions" means, collectively, Resolution Nos. 15-2003, 03-2006, 14-2001, 3326, 19-2003, and 30-2010 of the Town, adopted on May 21, 2003, January 4, 2006, March 21, 2001, April -6- 7, 1999, June 4, 2003, and June 2, 2010, respectively, declaring its intention to form the Prior Districts, and the Prior Bond Resolutions. "Project" means the acquisitions and improvements authorized to be financed by the Prior Districts under the Prior Resolutions. "Purchase Contract" means the written agreement between the Town and the Original Purchaser for the sale of the Reassessment Bonds. "Reassessment Bond" or "Reassessment Bonds" means the "Town of Tiburon Limited Obligation Refunding Bonds, 2016 Consolidated Reassessment District", at any time Outstanding under this Agreement or any Supplemental Agreement. "Reassessment District" means the area within the Town designated "Town of Tiburon 2016 Consolidated Reassessment District" formed by the Town under the Act. "Reassessments" means the unpaid reassessments levied within the Reassessment District by the Council under the proceedings taken pursuant to the Act and the Resolution of Intention. "Record Date" means the fifteenth (15th) day of the calendar month immediately preceding the applicable Interest Payment Date, whether or not such day is a Business Day. "Redemption Fund" means the fund established and administered under Section 4.01(A) hereof. "Resolution of Intention" means Resolution No. , adopted by the Town Council on July 20, 2016. "Resolution of Issuance" means Resolution No. , adopted by the Town Council on July 20, 2016, authorizing, among other matters, the issuance of the Reassessment Bonds. "Standard & Poor's" or "S&P" means Standard & Poor's Ratings Services, its successors and assigns. "Supplemental Agreement" means an agreement the execution of which is authorized by a resolution which has been duly adopted by the Council under the Bond Law and which agreement is amendatory of or supplemental to this Agreement, but only if and to the extent that such agreement is specifically authorized hereunder. "Town" means the Town of Tiburon, California, and any successor thereto. "Town Attorney" means the Town Attorney of the Town or other designated counsel to the Town with respect to the Reassessment District. "Treasurer" means the Treasurer of the Town, or designee thereof. "Trustee" means U.S. Bank National Association in its capacity as trustee for the Authority Bonds, or any successor thereto as trustee under the Authority Bonds Indenture. -7- ARTICLE II THE ASSESSMENT BONDS Section 2.01. Principal Amount; Designation. Reassessment Bonds in the aggregate principal amount of million hundred thousand dollars and cents ($ ) are hereby authorized to be issued by the Town under and subject to the terms of the Resolution of Issuance and this Agreement, the Act, the Bond Law and other applicable laws of the United States of America. The Reassessment Bonds shall be designated "Town of Tiburon Limited Obligation Refunding Bonds, 2016 Consolidated Reassessment District," and shall be secured by the Reassessments and moneys in the Redemption Fund. Section 2.02. Terns of Reassessment Bonds. (a) Denominations. The Reassessment Bonds shall be issued as fully registered Reassessment Bonds without coupons in the denomination of $0.01 or any integral multiple thereof. Reassessment Bonds shall be lettered and numbered in a customary manner as determined by the Fiscal Agent. (b) Date of Reassessment Bonds. The Reassessment Bonds shall be dated the Bond Date. (c) Maturities. The Reassessment Bonds shall mature and become payable on September 2 of each year and shall bear interest at the rates per annum as follows: Maturity Date Principal Interest (September 2) Amount Rate (d) Interest. The Reassessment Bonds shall bear interest at the rates set forth above payable on the Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360 -day year composed of twelve 30 -day months. Each Reassessment Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated and registered as of an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated prior to the first Interest Payment Date, in which event it shall bear interest from the Bond Date. (e) Method of Payment. Interest on the Reassessment Bonds (including the final interest payment upon maturity or earlier redemption) is payable by check of the Fiscal Agent mailed by first class mail on an Interest Payment Date to the registered Owner thereof at such registered -8- Owner's address as it appears on the Bond Register maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date, or by wire transfer made on such Interest Payment Date (i) upon written instructions of any Owner of $1,000,000 or more in aggregate principal amount of Reassessment Bonds delivered to the Fiscal Agent prior to the applicable Record Date, or (ii) to the Trustee, with respect to any Reassessment Bonds owned by the Authority or registered in the name of the Trustee. The principal of the Reassessment Bonds and any premium on the Reassessment Bonds are payable in lawful money of the United States of America upon surrender of the Reassessment Bonds at the Principal Office of the Fiscal Agent. All Reassessment Bonds paid by the Fiscal Agent pursuant this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Reassessment Bonds and, upon request of the Town, issue a certificate of destruction of such Reassessment Bonds to the Town. Section 2.03. Redemption. (a) Redemption. (i) Each Reassessment Bond, or any portion of the principal thereof in the principal amount of $1.00 or any integral multiple of $0.01 in excess thereof, may be redeemed and paid in advance of maturity on any Interest Payment Date in any year by giving at least 30 days notice to the Owner thereof and by paying the principal amount thereof, plus interest to the date of redemption, unless sooner surrendered, in which event said interest will be paid to the date of payment, together with a redemption premium of (i) if the redemption occurs on or prior to September 2, percent ( %) of the principal amount of the Bonds being redeemed, and (ii) if the redemption occurs after September 2, percent ( %) of the principal amount of the Bond being redeemed. (ii) The provisions of Part 11.1 of the Bond Law are applicable to the advance payment of Reassessments and to the calling of the Reassessment Bonds. With respect to the calling of the Reassessment Bonds, the Treasurer shall obtain a certificate of an Independent Financial Consultant verifying that, following such redemption of the Reassessment Bonds and related redemption of Authority Bonds pursuant to Section 2.2(b)(1) of the Authority Bonds Indenture, the scheduled principal and interest on the Reassessment Bonds to remain outstanding is adequate in time and amount to make the timely payment of the scheduled principal and interest due on the Authority Bonds that will remain outstanding following such redemption of Reassessment Bonds. The Treasurer shall notify the Fiscal Agent of Reassessment Bonds to be called for redemption upon prepayment of Reassessments in amounts sufficient therefor, or whenever sufficient surplus funds are available therefor in the Redemption Fund, consistent with the certificate of the Independent Financial Consultant referred to in the preceding paragraph. The Fiscal Agent shall select Reassessment Bonds for retirement as designated by the Treasurer of the Authority in writing to the Fiscal Agent. Within each annual series, the Fiscal Agent shall select Reassessment Bonds for retirement by lot. (b) Notice to Fiscal Agent. The Treasurer shall give the Fiscal Agent written notice of the aggregate amount of Reassessment Bonds to be redeemed pursuant to subsection (A) (i) not less than forty-five (45) days prior to the applicable redemption date, or such lesser period as is acceptable to the Fiscal Agent. (c) Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, or sent by such other means as is acceptable to the recipient thereof, to the respective Owners of any Reassessment Bonds -9- designated for redemption, at their addresses appearing on the Bond Register in the Principal Office of the Fiscal Agent; provided that (i) no notice of redemption need be given with respect to Reassessment Bonds registered in the name of the Trustee, and (ii) the failure to so send notice of redemption or of any person or entity to receive any such notice, or any defect in any notice of redemption, shall not affect the validity of the proceeding for the redemption of such Reassessment Bonds. Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding Reassessment Bonds are to be called for redemption, shall designate the Bond numbers of the Reassessment Bonds to be redeemed by giving the individual Bond number of each Reassessment Bond to be redeemed or shall state that all Reassessment Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Reassessment Bonds of one or more maturities have been called for redemption, shall state as to any Bond called in part the principal amount thereof to be redeemed, and shall require that such Reassessment Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Reassessment Bonds, or the portion thereof to be redeemed, will not accrue from and after the redemption date. Upon surrender of Reassessment Bonds redeemed in part only, the Town shall execute and the Fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the Town, a new Reassessment Bond or Reassessment Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Reassessment Bond or Reassessment Bonds. (d) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of, and interest and any premium on, the Reassessment Bonds so called for redemption shall have been deposited in the Redemption Fund on the date fixed for redemption, such Reassessment Bonds so called shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price, and no interest shall accrue thereon on or after the redemption date specified in such notice. All Reassessment Bonds redeemed by the Fiscal Agent pursuant to this Section 2.03 shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Reassessment Bonds and, upon request of the Town, issue a certificate of destruction of such Reassessment Bonds to the Town. Section 2.04. Refunding of Reassessment Bonds. The Reassessment Bonds may be refunded by the Town pursuant to Divisions 11 or 11.5 of the Bond Law upon the conditions as set forth in appropriate proceedings therefor; provided, however, that so long as the Authority is the Owner of the Reassessment Bonds, the Reassessment Bonds may be refunded only with the prior written consent of the Authority. This Section shall not apply to or in any manner limit advancement of the maturity of any of the Reassessment Bonds as provided in Parts 8, 9, 11, or 11.1 of the Bond Law, nor shall this Section 2.04 apply to or in any manner limit the redemption and payment of any Reassessment Bond pursuant to subsequent proceedings providing for the payment of amounts to eliminate previously imposed fixed lien assessments, including the Reassessments. Section 2.05. Form of Reassessment Bonds. The Reassessment Bonds, the form of Fiscal Agent's certificate of authentication and the form of assignment, to appear thereon, shall be substantially in the forms, respectively, set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Agreement, the Resolution of Issuance and the Bond Law. -10- Section 2.06. Execution of Reassessment Bonds. The Reassessment Bonds shall be executed on behalf of the Town by the facsimile signatures of its Treasurer and its Town Clerk. If any officer whose signature appears on any Reassessment Bond ceases to be such officer before delivery of the Reassessment Bonds to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Reassessment Bonds to the Owner. Any Reassessment Bond may be signed and attested on behalf of the Town by such persons as at the actual date of the execution of such Reassessment Bond shall be the proper officers of the Town although at the nominal date of such Reassessment Bond any such person shall not have been such officer of the Town. Only such Reassessment Bonds as shall bear thereon a certificate of authentication and registration in substantially the form set forth in Exhibit A, executed and dated by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of authentication and registration of the Fiscal Agent shall be conclusive evidence that the Reassessment Bonds registered hereunder have been duly authenticated, registered and delivered hereunder and are entitled to the benefits of this Agreement. Section 2.07. Transfer of Reassessment Bonds. Any Reassessment Bond may, in accordance with its terms, be transferred, upon the Bond Register by the person in whose name it is registered, in person or by such person's duly authorized attorney, upon surrender of such Reassessment Bond for cancellation, accompanied by delivery of a duly written instrument of transfer in a form approved by the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the Town. The Fiscal Agent shall collect from the Owner requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer. Whenever any Reassessment Bond or Reassessment Bonds shall be surrendered for transfer, the Town shall execute and the Fiscal Agent shall authenticate and deliver a new Reassessment Bond or Reassessment Bonds, for like aggregate principal amount(s), inaturity(ies) and interest rate(s) in the denominations herein authorized. Neither the Town nor the Fiscal Agent shall be required to make such transfer of Reassessment Bonds on or after a Record Date or any such transfer after an Reassessment Bond has been called for redemption. Section 2.08. Exchange of Reassessment Bonds. Reassessment Bonds may be exchanged at the Principal Office of the Fiscal Agent for a like aggregate principal amount of Reassessment Bonds of authorized denominations and of the same maturity. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such exchange shall be paid by the Town. The Fiscal Agent shall collect from the Owner requesting such exchange any tax or other governmental charge required to be paid with respect to such exchange. Neither the Town nor the Fiscal Agent shall be required to make such exchange of Reassessment Bonds between a Record Date and an Interest Payment Date or after an Reassessment Bond has been called for redemption. Section 2.09. Bond Register. The Fiscal Agent will keep or cause to be kept, at its Principal Office sufficient books for the registration and transfer of the Reassessment Bonds which books shall show the series number, date, maturity amount, rate of interest and last registered Owner of each Reassessment Bond and shall at all times be open to inspection by the Town during regular business hours on arty Business Day, upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Reassessment Bonds as hereinbefore provided. Section 2.10. Temporary Reassessment Bonds. The Reassessment Bonds may be initially issued in temporary form exchangeable for definitive Reassessment Bonds when ready for -11- delivery. The temporary Reassessment Bonds may be printed, lithographed or typewritten, shall be of such authorized denominations as may be determined by the Town, and may contain such reference to any of the provisions of this Agreement as may be appropriate. Every temporary Reassessment Bond shall be executed by the Town and authenticated by the Fiscal Agent upon the same conditions and in substantially the same manner as the definitive Reassessment Bonds. If the Town issues temporary Reassessment Bonds it will execute and furnish definitive Reassessment Bonds without delay and thereupon the temporary Reassessment Bonds shall be surrendered, for cancellation, in exchange for the definitive Reassessment Bonds at the Principal Office of the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate and deliver in exchange for such temporary Reassessment Bonds an equal aggregate principal amount of definitive Reassessment Bonds of authorized denominations. Until so exchanged, the temporary bonds shall be entitled to the same benefits under this Agreement as definitive bonds authenticated and delivered hereunder. Section 2.11. Reassessment Bonds Mutilated, Lost, Destroyed or Stolen. If any Reassessment Bond shall become mutilated, the Town, at the expense of the Owner of said Reassessment Bond, shall execute, and the Fiscal Agent shall authenticate and deliver, a new Reassessment Bond of like tenor and principal amount in exchange and substitution for the Reassessment Bond so mutilated, but only upon surrender to the Fiscal Agent of the Reassessment Bond so mutilated. Every mutilated Reassessment Bond so surrendered to the Fiscal Agent shall be canceled by it and destroyed by the Fiscal Agent who shall, upon request of the Town, deliver a certificate of destruction thereof to the Town. If any Reassessment Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory to the Fiscal Agent and indemnity for the Town and the Fiscal Agent satisfactory to the Fiscal Agent shall be given, the Town, at the expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a new Reassessment Bond of like tenor and principal amount in lieu of and in substitution for the Reassessment Bond so lost, destroyed or stolen. The Town may require payment of a sum not exceeding the actual cost of preparing each new Reassessment Bond delivered under this Section 2.11 and of the expenses which may be incurred by the Town and the Fiscal Agent for the preparation, execution, authentication and delivery. Any Reassessment Bond delivered under the provisions of this Section in lieu of any Reassessment Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Town whether or not the Reassessment Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Agreement with all other Reassessment Bonds issued pursuant to this Agreement. Section 2.12. Limited Obligation. All obligations of the Town under this Agreement and the Reassessment Bonds shall not be general obligations of the Town, but shall be limited obligations, payable solely from the Reassessments and the funds pledged therefore hereunder. Neither the faith and credit of the Town nor of the State of California or any political subdivision thereof is pledged to the payment of the Reassessment Bonds. The Town hereby determines under Section 8769 of the Bond Law that it will not be obligated to advance available surplus funds from the Town treasury to cure any deficiency in the Redemption Fund. The Reassessment Bonds are payable solely from and secured solely by the Reassessments and the amounts in the Redemption Fund created hereunder. Section 2.13. No Acceleration. The principal of the Reassessment Bonds shall not be subject to acceleration hereunder. Nothing in this Section 2.13 shall in any way prohibit the prepayment or redemption of Reassessment Bonds under Section 2.03 hereof, or the defeasance of the Reassessment Bonds and discharge of this Agreement under Section 9.03 hereof. -12- ARTICLE III ISSUANCE OF REASSESSMENT BONDS Section 3.01. Issuance and Delivery of Reassessment Bonds. At any time after the execution of this Agreement, the Town may issue the Reassessment Bonds in the aggregate principal amount set forth in Section 2.01 hereof and deliver the Reassessment Bonds to the Original Purchaser. Pursuant to the Resolution of Issuance, the Authorized Officers of the Town are authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the Reassessment Bonds in accordance with the provisions of the Act, the Bond Law, the Resolution of Issuance and this Agreement, and to do and cause to be done any and all acts and things necessary or convenient for delivery of the Reassessment Bonds to the Original Purchaser and the disposition of the proceeds thereof as provided herein. Section 3.02. Application of Proceeds of Sale of Reassessment Bonds. The proceeds of the purchase of the Reassessment Bonds by the Original Purchaser ($ ) shall be paid to the Escrow Bank, who shall forthwith set aside, pay over and deposit such proceeds on the Closing Date into the Escrow Fund. In addition to the foregoing, on the Closing Date the Town shall transfer or cause to be transferred (i) to the Escrow Bank for deposit in the Escrow Fund, $ from amounts in the reserve funds and the redemption funds relating to the Prior Bonds, and (ii) to the Credit Account referred to in Section 5.01(d), $233,449.18 to the Del Mar 2006 Subaccount therein and $169,444.53 to the Del Mar 2010 Subaccount therein. Section 3.03. Validity of Reassessment Bonds. The validity of the authorization and issuance of the Reassessment Bonds shall not be dependent upon the completion of the Project or upon the performance by any person or such person's obligation with respect to the Project. Section 3.04. Pledge of Reassessments. The Reassessment Bonds shall be secured by a first pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Reassessments and all moneys deposited in the Redemption Fund. The Reassessments and all moneys deposited into said fund (except as otherwise provided herein) are hereby dedicated to the payment of the principal of, and interest and any premium on, the Reassessment Bonds as provided herein and in the Bond Law until all of the Reassessment Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in accordance with Section 9.03. -13- ARTICLE IV ESTABLISHMENT OF FUNDS Section 4.01. Redemption Fund. (a) Establishment of Redemption Fund. The Redemption Fund is hereby established as a separate fund to be held by the Finance Director to the credit of which deposits shall be made as required by Section 5.01 hereof, Section 4.4 of the Authority Bonds Indenture, and any other amounts required to be deposited therein by this Agreement or the Bond Law. Moneys in the Redemption Fund shall be held by the Finance Director for the benefit of the Town and the Owners of the Reassessment Bonds, and shall be disbursed for the payment of the principal of, and interest and any premium on, the Reassessment Bonds, and for payment of administrative expenses of the Reassessment District and Administrative Expenses (as defined in the Authority Bonds Indenture), as provided below. Within the Redemption Fund the Finance Director shall establish a Prepayment Subaccount into which shall be placed the proceeds of the prepayment of any Reassessment and which Prepayment Account shall be administered in accordance with the provisions of Section 8767 of the Bond Law. (b) Disbursements. (i) General. At least eight Business Days prior to each Interest Payment Date, the Finance Director shall withdraw from the Redemption Fund and pay to the Fiscal Agent, who shall remit the same to the Owners of the Reassessment Bonds an amount equal to the principal of, and interest and any premium, then due and payable on the Reassessment Bonds. Fifteen (15) Business Days prior to each Interest Payment Date, the Finance Director shall determine if the amounts then on deposit in the Redemption Fund are sufficient to pay the debt service due on the Reassessment Bonds on such Interest Payment Date. If there are insufficient funds in the Redemption Fund to make the payments provided for in the preceding sentence the Fiscal Agent shall apply the available funds transferred to it in the manner provided in the Bond Law, as directed by the Town in writing. Past due payments of principal and interest shall continue to bear interest at the rate of interest on the Reassessment Bonds. In the event of any delinquency in payment of the Reassessment Bonds, such delinquency shall be paid from the first available moneys in the Redemption Fund arising from the collection of delinquent Reassessments. (ii) Redemption of Reassessment Bonds. Funds placed in the Prepayment Account of the Redemption Fund shall be disbursed therefrom by the Finance Director to the Fiscal Agent for the call and redemption of Reassessment Bonds on the redemption date, and in the amounts as set forth in Section 2.03(a)(i) hereof. (iii) Payment of Administrative Expenses. Funds placed in the Redemption Fund attributable to the administrative costs of prepayment of Reassessments and any amounts collected pursuant to Sections 8682 and 8682.1 of the Bond Law (as further described in Section 5.01(c) hereof) shall be used by the Town to pay the costs of the Town in complying with the provisions of this Agreement and the administration of the Reassessment District and Administrative Expenses (as defined in the Authority Bonds Indenture). (iv) Credits and Rebate. Any earnings on investments not required to be disbursed under Section 4.01(b) (i), (ii) and (iii) above, shall be credited against Debt -14- Service or, in the sole discretion of the Town, applied to the call and redemption or defeasance of Reassessment Bonds; provided, however, that before any such credit shall be made, such earnings shall be available for the payment of any rebate that may be owed under Section 5.14 hereof. (c) Investment. Moneys in the Redemption Fund shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from such investment and deposit shall be retained in the Redemption Fund to be used for the purposes of such fund. (d) Additional Funds. The Fiscal Agent may establish additional funds, accounts or subaccounts of the funds established hereunder as the Fiscal Agent deems necessary or prudent in furtherance of its duties under this Fiscal Agent Agreement. Section 4.02. Escrow Fund. On the Closing Date, the Finance Director is hereby directed and authorized to cause to be established the Escrow Fund to be held by the Escrow Bank under the Escrow Agreement. The purpose of the establishment of the Escrow Fund shall be to assure the timely retirement of the Prior Bonds in advance of their respective stated maturities, using a portion of the proceeds of the Reassessment Bonds and other funds held by the Town with respect to the Prior Bonds and investment earnings thereon, all as specified in the Escrow Agreement. Section 4.03. Costs of Issuance Fund. It is hereby acknowledged that there has been created under the Authority Bonds Indenture a Costs of Issuance Fund (as such tern is defined in the Authority Bonds Indenture). Such fund shall be administered as provided in the Authority Bonds Indenture. Section 4.04. No Reserve Fund. No reserve fund has been created for the Reassessment Bonds. -15- ARTICLE V COVENANTS OF THE TOWN Section 5.01. Collection of Reassessments. The Town shall comply with all requirements of the Act, the Bond Law and this Agreement to assure the timely collection of the Reassessments, including, without limitation, the enforcement of delinquent Reassessments. Any funds received by the Town in and for the Reassessment District, including, but not limited to, collections of Reassessments upon the secured tax rolls, collections of delinquent Reassessments and penalties thereon, through foreclosure proceedings and the prepayment of Reassessments or portions thereof, shall be immediately deposited into the Redemption Fund. To that end, the following shall apply: (a) The Reassessments as set forth on the list thereof on file with the Treasurer together with the interest thereto, shall be payable in annual series corresponding in number to the number of serial maturities of the Reassessment Bonds issued. An annual proportion of each Reassessment shall be payable in each year preceding the date of maturity of each of the several series of Reassessment Bonds issued sufficient to pay the Reassessment Bonds when due and such proportion of each Reassessment coming due in any year, together with the annual interest thereon, shall be payable in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interests after delinquency as do the general taxes on real property. All sums received from the collection of the Reassessments and of the interest and penalties thereon shall be transmitted by the Town to the Finance Director, to be placed in the Redemption Fund. Any prepayments of Reassessments shall be placed in the Prepayment Subaccount established under and administered in accordance with Section 4.01(A) hereof. (b) The Finance Director shall, before the final date on which the Auditor will accept the transmission of the Reassessments for the parcels within the Reassessment District for inclusion on the next tax roll, prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the installments of the Reassessments on the next secured tax roll. The Finance Director is hereby authorized to employ consultants to assist in computing the installments of the Reassessments hereunder and in reconciling Reassessments billed to amounts received as provided in subsection (C) of this Section 5.01. (c) The Reassessments shall be payable and be collected in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and have the same priority, become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the general taxes on real property. In addition to any amounts authorized pursuant to Section 8682 of the Bond Law to be included with the annual amounts of installments as aforesaid, the Town, pursuant to Section 8682.1 of the Bond Law, may cause to be entered on the Reassessment roll on which taxes will next become due, opposite each lot or parcel of land within the Reassessment District in the manner set forth in said Section 8682, each lot's pro rata share of the estimated annual expenses of the Town in connection with the administrative duties thereof for the Reassessment Bonds and the Administrative Expenses (as defined in the Authority Bonds Indenture), including, but not limited to, the costs of registration, authentication, transfer and compliance with the provisions of this Article V, which amounts shall be placed in the -16- Redemption Fund. Delinquent Reassessments shall be subject to foreclosure pursuant to Section 5.02 hereof. (d) Notwithstanding the foregoing, it is hereby acknowledged that there were excess improvement funds available to be credited to the assessments to be levied in the Del Mar Valley Utility Undergrounding Assessment District (the "Del Mar 2006 District") and in the Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (the "Del Mar 2010 District"). To that end, on the Closing Date, the Finance Director shall establish a Credit Account, and in the Credit Account a Del Mar 2006 Subaccount to which the Finance Director shall cause to be deposited $233,449.18, and a Del Mar 2010 Subaccount to which the Finance Director shall cause to be deposited $169,444.53, said deposits in each case to be made from the remaining excess improvement fund held for the related Prior District. Amounts in the Del Mar 2006 Subaccount shall be credited against the Reassessments to be levied on parcels formerly in the Del Mar 2006 District, and shall be transferred to the Redemption Fund as follows: (i) at least eight Business Days prior to March 2, 2017, $ , (ii) at least eight Business Days prior to September 2, 2017, $ , (iii) at least eight Business Days prior to March 2, 2018, $ , and (iv) at least eight Business Days prior to September 2, 2018, any remaining amount in such Subaccount. Amounts in the Del Mar 2010 Subaccount shall be credited against the Reassessments to be levied on parcels formerly included in the Del Mar 2010 District, and shall be transferred to the Redemption Fund as follows: (i) at least eight Business Days prior to March 2, 2017, $ , (ii) at least eight Business Days prior to September 2, 2017, $ , (iii) at least eight Business Days prior to March 2, 2018, $ , and (iv) at least eight Business Days prior to September 2, 2018, any remaining amount in such Subaccount. Section 5.02. Foreclosure. The Town hereby covenants with and for the benefit of the Owners of the Reassessment Bonds that it will order, and cause to be commenced as hereinafter provided, and thereafter diligently prosecute to judgment (unless such delinquency is theretofore brought current), an action in the superior court to foreclose the lien of any Reassessment or installment thereof not paid when due as provided in the following paragraph. On or about February 15 and June 15 of each Fiscal Year, the Finance Director shall compare the amount of Reassessments due and payable to the amount of Reassessment Payments theretofore received by the Town, and: (a) If the Finance Director detennines that any single parcel subject to a Reassessment is delinquent in the payment of three or more installments of the Reassessments, then the Finance Director shall send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner within 45 days of such determination, and (if the delinquency remains uncured) foreclosure proceedings shall be commenced by the Town within 90 days of such determination; and (b) If the Finance Director determines that the total amount of delinquent Reassessments for the prior Fiscal Year for the entire Reassessment District (including the total of delinquencies under subsection (a) above), exceeds 4% of the total Reassessment levied for the prior Fiscal Year, the Finance Director shall notify or cause to be notified property owners who are then delinquent in the payment of Reassessments and demand immediate payment of the delinquency within 45 days of such determination, and the Town shall commence foreclosure proceedings within 90 days of such determination -17- against each parcel of land in the Reassessment District with a Reassessments delinquency. Nothing in this Section 5.02 shall, however, prevent the Finance Director or the Town Attorney from commencing foreclosure proceedings before the occurrence of any of clause (a) or (b) of the preceding paragraph. Notwithstanding the foregoing, the Town may elect to defer foreclosure proceedings with respect to any delinquent parcel if the Town has received funds equal to the delinquent Reassessments from any source, and those funds are available to contribute toward the payment of the principal of (including sinking fund payments) and interest on the Reassessment Bonds when due (including without limitation funds received under the Teeter Plan and funds from the sale of the receivables associated with delinquent Reassessments). The Finance Director shall notify the Town Attorney of any such delinquency of which the Finance Director is aware, and the Town Attorney shall commence, or cause to be commenced, such foreclosure proceedings. The Town Attorney is hereby authorized to employ counsel to conduct any such foreclosure proceedings. Section 5.03. Punctual Payment. The Town will punctually pay or cause to be paid the principal of, and interest and any premium on, the Reassessment Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Agreement and all Supplemental Agreements and of the Reassessment Bonds. Section 5.04. Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the Town shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Reassessment Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the Town, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subject to the prior payment in full of the principal of all of the Reassessment Bonds then Outstanding and of all claims for interest which shall not have so extended or funded. Section 5.05. Against Encumbrance. The Town will not encumber, pledge or place any charge or lien upon any of the unpaid Reassessments or other amounts pledged to the Reassessment Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Reassessment Bonds, except as permitted by this Agreement, the Act or the Bond Law. Section 5.06. Books and Accounts. The Town will keep, or cause to be kept, proper books of record and accounts, separate from an other records and accounts of the Town, in which complete and correct entries shall be made of all transactions relating to the Redemption Fund and the Reassessments, which records shall be subject to inspection by the Fiscal Agent upon reasonable prior notice on any Business Day. Section 5.07. Protection of Security and Rights of Owners. The Town will preserve and protect the security of the Reassessment Bonds and the rights of the Owners thereto, and will warrant and defend their rights to such security against all claims and demands of all persons. From and after the delivery of any of the Reassessment Bonds by the Town, the Reassessment Bonds shall be incontestable by the Town. -18- Section 5.08. Further Assurances. The Town will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for the better assuring and confirming unto the Owners of the rights and benefits provided in this Agreement. Section 5.09. Private Activity Bond Limitation. The Town shall assure that the proceeds of the Prior Bonds and of the Reassessment Bonds are not so used as to cause the Authority Bonds to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section 141(b) of the Code. Section 5.10. Private Loan Financing Limitation. The Town shall assure that the proceeds of the Prior Bonds and of the Reassessment Bonds are not so used as to cause the Authority Bonds to satisfy the private loan financing test of section 141(c) of the Code. Section 5.11. Federal Guarantee Prohibition. The Town shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Authority Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code. Section 5.12. No Arbitrage. The Town shall not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the Prior Bonds and of the Reassessment Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Authority Bonds would have caused the Authority Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. Section 5.13. Maintenance of Tax -Exemption. The Town shall take all actions necessary to assure the exclusion of interest on the Authority Bonds from the gross income of the owners of the Authority Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Authority Bonds. Section 5.14. Rebate Requirement. The Town shall take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, as applicable to the Prior Bonds and the Authority Bonds. Section 5.15. Continuing Disclosure. The Town hereby covenants and agrees that it will assist the Authority in complying with and carrying out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this Agreement, failure of the Authority to comply with the Continuing Disclosure Agreement shall not be considered a default hereunder; however, any Participating Underwriter (as defined in the Continuing Disclosure Agreement) or any holder or beneficial owner of the Authority Bonds may take such actions as may be necessary and appropriate to compel performance by the Authority of its obligations thereunder, including seeking mandate or specific performance by court order. -19- ARTICLE VI INVESTMENTS; LIABILITY OF THE TOWN Section 6.01. Investment of Moneys. Subject in all respects to the provisions of Section 6.02, moneys in the Redemption Fund established by this Agreement and held by the Finance Director may be invested in any lawful investment for Town funds. The following shall apply to such investments: (a) Obligations purchased as an investment of moneys in any fund or account shall be deemed to be part of such fund or account, subject, however, to the requirements of this Agreement for transfer of interest earnings and profits resulting from investment of amounts in funds and accounts. (b) The Finance Director may act as principal or agent in the acquisition or disposition of any investment. The Town shall incur no liability for losses arising from any investments made pursuant to this Section. For purposes of determining the amount on deposit in any fund or account held hereunder, all investments credited to such fund or account shall be valued at the lesser of the cost thereof (excluding accrued interest and brokerage commissions, if any) or fair market value. (c) Investments in any and all funds and accounts may at the discretion of the Finance Director be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Town hereunder. Section 6.02. Liability of Town. The Town shall not incur any responsibility in respect of the Reassessment Bonds or this Agreement other than in connection with the duties or obligations explicitly provided herein or in the Reassessment Bonds. The Town shall not be liable to any Owner in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Town shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions covenants or agreements of the Fiscal Agent herein or of any of the documents executed by the Fiscal Agent in connection with the Reassessment Bonds, or as to the existence of a default thereunder. Under this Agreement, the following shall apply to the Town: (a) In the absence of bad faith, the Town, including the Treasurer, may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Town and conforming to the requirements of this Agreement. The Town, including the Treasurer, shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts other than to the extent of money improperly obtained or retained by the Town; (b) No provision of this Agreement shall require the Town to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to (i) imposing and collecting the Reassessments and transferring the same to the Fiscal Agent; and (ii) defending the validity of the Reassessments and the Reassessment Bonds and the proceedings related thereto) in the performance of any of its obligations hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; -20- (c) The Town may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Town may consult with counsel, who may be the Town Attorney, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith; (d) The Town shall not be bound to recognize any person as the Owner of a Reassessment Bond unless duly registered and until such Reassessment Bond is submitted for inspection, if required, and his title thereto satisfactory established, if disputed; and (e) Whenever in the administration of its duties under this Agreement the Town shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Town, be deemed to be conclusively proved and established by a certificate of the Fiscal Agent or other expert retained by the Town for the purposes hereof, and such certificate shall be full warrant to the Town for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Town may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. Section 6.03. Employment of Agents by Town. In order to perform its duties and obligations hereunder, the Town Treasurer may employ such persons or entities as he deems necessary or advisable. The Town shall not be liable for any of the acts or omissions of such persons or entities employed by it with reasonable care and in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities. -21- ARTICLE VII THE FISCAL AGENT Section 7.01. Appointment of Fiscal Agent. U.S. Bank National Association, at its office in San Francisco, California, is hereby appointed Fiscal Agent and Paying Agent for the Reassessment Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent. With respect to the appointment of the Fiscal Agent, the following shall apply: (a) At any time and with or without cause, the Town may (and at the written request of the Owners of fifty-one percent (51%) of the Outstanding Reassessment Bonds shall) remove the Fiscal Agent initially appointed and any successor thereto, and may appoint a successor or successor's thereto, but any Fiscal Agent shall be a corporation, bank or trust company having (or whose bank holding company shall have) a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000) and subject to supervision or examination by federal or state authority. If such corporation, bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7.01, combined capital and surplus of such corporation, bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) The Fiscal Agent may at any time resign by giving written notice to the Town and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the Town shall promptly appoint a successor Fiscal Agent, satisfying the requirements of Section 7.01(A) above, by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective only upon acceptance of appointment by a successor Fiscal Agent. (c) If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section within forty-five (45) days after the Fiscal Agent shall have given to the Town written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent or any Reassessment Bond Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent. (d) If, by reason of the judgment of any court, the Fiscal Agent is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Fiscal Agent hereunder shall be assumed by and vest in the Treasurer of the Town in trust for the benefit of the Owners. The Town covenants for the direct benefit of the Owners that its Treasurer in such case shall be vested with all of the rights and powers of the Fiscal Agent hereunder, and shall assume all of the responsibilities and perform all of the duties of the Fiscal Agent hereunder, in trust for the benefit of the Owners of the Reassessment Bonds. (e) Any company into which a successor Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the preceding paragraphs of this Section 7.01 shall -22- be the successor to such Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. The Fiscal Agent shall give the Treasurer written notice of any such succession hereunder. Section 7.02. Liability of Fiscal Agent. With respect to the liability of the Fiscal Agent, the following shall apply: (a) The recitals of facts, covenants and agreements herein and in the Reassessment Bonds contained shall be taken as statements, covenants and agreements of the Town, and the Fiscal Agent assumes no responsibility for the correctness of the same, makes no representations as to the validity or sufficiency of this Agreement or of the Reassessment Bonds, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Reassessment Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any official statement or other disclosure material prepared or distributed with respect to the issuance of the Reassessment Bonds; (b) The Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement; but in the case of any such certificates or opinions by which any provision hereof are specifically required to be furnished to the Fiscal Agent, the Fiscal Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement. Except as provided above in this paragraph, Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document (which may be sent by facsimile, confirmed in writing by mail) which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument; (c) The Fiscal Agent shall not be liable for any error of judgment made in good faith by a responsible officer unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts; (d) No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers; (e) The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners pursuant to this Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; and (f) The Fiscal Agent may become the owner of the Reassessment Bonds with the same rights it would have if it were not the Fiscal Agent. -23- (g) The Fiscal Agent may execute any of the powers hereof and perform any of its duties by and through attorneys, agents, receivers, consultants or employees and shall not be responsible for any loss or damage resulting from any action or nonaction exercised reasonably and in good faith in reliance on the opinion or advice of such attorneys, agents, receivers, consultants or employees. (h) At any and all reasonable times, the Fiscal Agent and its duly authorized agents, attorneys, experts, accountants and representatives shall have the right fully to inspect all books, papers and records of the Town pertaining to the Reassessment Bonds and to make copies of any such books, papers and records such as may be desired but which is not privileged by statute or law. (i) The Fiscal Agent shall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. Section 7.03. Information; Books and Accounts. The Fiscal Agent shall provide to the Town such information relating to the Reassessment Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the Town shall reasonably request, including but not limited to quarterly statements reporting funds held and transactions by the Fiscal Agent. The Fiscal Agent will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions made by it relating to the expenditure of amounts disbursed from the Redemption Fund. Such books of record and accounts shall, upon reasonable notice, at all times during business hours on any Business Day be subject to the inspection of the Town and the Owners of not less than ten percent (10%) of the principal amount of the Reassessment Bonds then Outstanding, or their representatives duly authorized in writing. Section 7.04. Notice to Fiscal Agent. The Fiscal Agent may conclusively rely, without undertaking any investigation or inquiry, and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties, and which may be sent in the form of a facsimile confirmed in writing by mail. The Fiscal Agent may consult with counsel, who may be counsel to the Town, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Fiscal Agent shall not be bound to recognize any person as the Owner of an Reassessment Bond unless and until such person is the registered Owner of such Reassessment Bond and such Reassessment Bond is submitted for inspection, if required, and such Owner's title thereto satisfactorily established, if disputed. Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, the Fiscal Agent may request and such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be conclusively proved and established by a certificate of an Authorized Officer of the Town, and such certificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 7.05. Compensation; Indemnification. The Town shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this -24- Agreement, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of the Fiscal Agent's in house or other attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Agreement, but the Fiscal Agent shall not have a lien therefor on any funds at any time held by it under this Agreement. The Town further agrees, to the extent permitted by applicable law, to indemnify and save the Fiscal Agent, its officers, employees. directors and agents harmless against any liabilities and costs, including, without limitation, attorneys' fees and costs, which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligation of the Town under this Section shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Reassessment Bonds and discharge of this Agreement. -25- ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.01. Amendments Permitted. This Agreement and the rights and obligations of the Town and of the Owners of the Reassessment Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Reassessment Bonds then Outstanding, exclusive of Reassessment Bonds disqualified as provided in Section 8.04. No such modification or amendment, except as provided in Section 8.03, shall (i) extend the maturity of any Reassessment Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the Town to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation by the Town of any pledge or lien upon the Reassessments superior to or on a parity with the pledge and lien created for the benefit of the Reassessment Bonds (except as otherwise permitted by the Act, the Resolution of Issuance, the laws of the United States of America or and this Agreement), or reduce the percentage of Reassessment Bonds required for the amendment hereof. No such amendment may modify any of the rights or increase any of the obligations of the Fiscal Agent (other than pursuant to Section 8.01(D))without its written consent. This Agreement and the rights and obligations of the Town and of the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes: (a) to add to the covenants and agreements of the Town in this Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the Town; (b) to make modifications not adversely affecting any outstanding series of Reassessment Bonds of the Town in any material respect; (c) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Agreement, or in regard to questions arising under this Agreement, as the Town may deem necessary or desirable and not inconsistent with this Agreement, and which shall not adversely affect the rights of the Owners of the Reassessment Bonds; or (d) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the Authority Bonds. Section 8.02. Owners' Meetings. The Town may at any time call a meeting of the Owners. In such event the Town is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of said meeting. Section 8.03. Procedure for Amendment with Written Consent of Owners. The Town and the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of the Reassessment Bonds or of this Agreement or any Supplemental Agreement, to the extent that such amendment is not permitted by Section 8.01 hereof, to take effect when and as provided in this Section 8.03. With respect to such Supplemental Agreement under this Section 8.03, the following shall apply: -26- (a) A copy of such Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, by the Fiscal Agent to each Owner of Reassessment Bonds Outstanding, but failure to mail copies of such Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided; (b) Such Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Reassessment Bonds then Outstanding (exclusive of Reassessment Bonds disqualified as provided in Section 8.04) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Reassessment Bonds for which such consent is given, which proof shall be such as is permitted by Section 9.04. Any such consent shall be binding upon the Owner of the Reassessment Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section provided for has been mailed; and (c) After the Owners of the required percentage of Reassessment Bonds shall have filed their consents to the Supplemental Agreement, the Town shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Reassessment Bonds and will be effective as provided in this Section but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto. Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the papers required by this Section 8.03 to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of matters therein of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the Town and the Owners of all Reassessment Bonds at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty-day period. Section 8.04. Disqualified Reassessment Bonds. Reassessment Bonds owned or held for the account of the Town, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Reassessment Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Article VIII. Section 8.05. Effect of Supplemental Agreement. From and after the time any Supplemental Agreement becomes effective pursuant to this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Agreement of the Town and all Owners of Reassessment Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes. -27- Section 8.06. Endorsement or Replacement of Reassessment Bonds Issued After Amendment. The Town may determine that Reassessment Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form approved by the Town, as to such action. In that case, upon request of the Owner of any Reassessment Bond Outstanding at such effective date and presentation of his Reassessment Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the Town may select and designate for that purpose, a suitable notation shall be made on such Bond. The Town may determine that new Reassessment Bonds, so modified as in the opinion of the Town is necessary to conform to such Owners' action, shall be prepared, executed and delivered. In that case, upon request of the Owner of any Reassessment Bonds then Outstanding, such new Reassessment Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for Reassessment Bonds then Outstanding, upon surrender of such Reassessment Bonds. Section 8.07. Amendatory Endorsement of Reassessment Bonds. The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Reassessment Bonds held by him, provided that due notation thereof is made on such Reassessment Bonds. -28- ARTICLE IX MISCELLANEOUS Section 9.01. Benefits of Agreement Limited to Parties. Nothing in this Agreement, expressed or implied, is intended to give to any person other than the Town, the Fiscal Agent and the Owners any right, remedy, claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the Town shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent. Section 9.02. Successor is Deemed Included in All Reference to Predecessor. Whenever in this Agreement or any Supplemental Agreement either the Town or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the Town or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 9.03. Discharge of Agreement. Subject to the provisions of Section 2.04 hereof, if the Town shall pay and discharge the entire indebtedness on all Reassessment Bonds Outstanding in any one or more of the following ways: (a) by well and truly paying or causing to be paid the principal of, and interest and any premium on, all Reassessment Bonds Outstanding, as and when the same become due and payable; (b) by depositing with the Fiscal Agent, in trust, at or before maturity, money which is fully sufficient to pay all Reassessment Bonds Outstanding, including all principal, interest and redemption premiums; or (c) by irrevocably depositing with the Fiscal Agent, in trust, cash and Federal Securities in such amount as the Town shall determine, as confirmed by Bond Counsel or an independent certified public accountant, which will, together with the interest to accrue thereon and moneys then on deposit in the fund provided for in Section 4.02, be fully sufficient to pay and discharge the indebtedness on all Reassessment Bonds (including all principal, Sinking Fund Payments, interest and redemption premiums) at or before their respective maturity dates; and if such Reassessment Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the Town, and notwithstanding that any Reassessment Bonds shall not have been surrendered for payment, the pledge of the Reassessments and other funds provided for in this Agreement and all other obligations of the Town under this Agreement with respect to all Reassessment Bonds Outstanding shall cease and terminate, except only the obligation of the Town to pay or cause to be paid to the Owners of the Reassessment Bonds not so surrendered and paid all sums due thereon and all amounts owing to the Fiscal Agent pursuant to Section 7.05 hereof; and thereafter Reassessments shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent. Any funds thereafter held by the Fiscal Agent which are not required for said purpose shall be paid over to the Town to be used by the Town as provided in the Act and the Bond Law. Section 9.04. Execution of Documents and Proof of Ownership by Owners. Any request, declaration or other instrument which this Agreement may require or permit to be executed by -29- Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. The ownership of registered bonds and the amount, maturity, number and date of holding the same shall be proved by the registry books. Any consent request, declaration or other instrument or writing of the then registered Owner of any Reassessment Bond shall bind all future Owners of such Reassessment Bond in respect of anything done or suffered to be done by the Town or the Fiscal Agent in good faith and in accordance therewith. Section 9.05. Waiver of Personal Liability. No Councilmember, officer, agent or employee of the Town shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Reassessment Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. Section 9.06. Notices to and Demand on Town and Fiscal Agent. Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Fiscal Agent to or on the Town may be given or served by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the Town with the Fiscal Agent) as follows: Town of Tiburon, California 1505 Tiburon Boulevard Tiburon, CA 94920 Attention: Director of Administrative Services Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Town to or on the Fiscal Agent may be given or served by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the Fiscal Agent with the Town) as follows: U.S. Bank National Association 1 California Street, 10th Floor San Francisco, CA 94111 Attention: Corporate Trust Department Section 9.07. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The Town hereby declares that it would have adopted this Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Reassessment Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Agreement may be held illegal, invalid or unenforceable. Section 9.08. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any moneys held by the Fiscal Agent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Reassessment Bonds which remains unclaimed for two (2) years after the date when such payments of principal, interest or any -30- premium have become payable, shall be repaid by the Fiscal Agent to the Town as its absolute property free from any trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Bond Owners shall look only to the Town for the payment of the principal of, and interest and any premium on, such Reassessment Bonds. Section 9.09. Applicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California. Section 9.10. Conflict with Bond Law. In the event of a conflict between any provision of this Agreement with any provision of the Bond Law, the provision of the Bond Law shall prevail over the conflicting provision of this Agreement. Section 9.11. Conclusive Evidence of Regularity. Reassessment Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act and the Bond Law relative to their issuance and the levy of the Reassessments. Section 9.12. Payment on Business Day. In any case where the date of the maturity of interest or of principal (and premium, if any) of the Reassessment Bonds or the date fixed for redemption of any Reassessment Bonds or the date any action is to be taken pursuant to this Agreement is other than a Business Day, the payment of interest or principal (and premium, if any) or the action need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required and no additional interest shall accrue from such Interest Payment Date until such Business Day. Section 9.13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. -31- IN WITNESS WHEREOF, the Town has caused this Agreement to be executed in its name, and the Fiscal Agent has caused this Agreement to be executed in its name, all as of the date first written above. 20034.O1:J14110 S-1 TOWN OF TIBURON, CALIFORNIA By Greg Chanis, Town Manager U.S. BANK NATIONAL ASSOCIATION, as Fiscal Agent By Authorized Officer EXHIBIT A FORM OF BOND United States of America State of California County of Marin TOWN OF TIBURON LIMITED OBLIGATION REFUNDING BOND 2016 CONSOLIDATED REASSESSMENT DISTRICT INTEREST RATE MATURITY DATE BOND DATE _% September 2, August 25, 2016 REGISTERED OWNER: U.S. Bank National Association, as Trustee for the Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District) PRINCIPAL SUM: DOLLARS Under and by virtue of the Improvement Bond Act of 1915, Division 10 (commencing with Section 8500) of the Streets and Highways Code (the "Act"), the Town of Tiburon, California, County of San Francisco, State of California (the "Town"), will, out of the redemption fund for the payment of the Reassessment Bonds issued upon the unpaid portion of reassessments more fully described in proceedings taken pursuant to Resolution of Intention No. adopted by the Town Council of the Town on July 20, 2016, pay to the registered owner named above or registered assigns, on the maturity date stated above, the principal amount stated above, in lawful money of the United States of America and in like manner will pay interest from the interest payment date next preceding the date on which this bond is authenticated, unless this bond is authenticated and registered as of an interest payment date, in which event it shall bear interest from such interest payment date, or unless this bond is authenticated and registered prior to February 16, 2017, in which event it shall bear interest from the dated date above until payment of the principal amount shall have been discharged, at the rate per annum stated above, payable semiannually on March 2 and September 2 in each year commencing on March 2, 2017. Both the principal hereof and redemption premium hereon are payable upon surrender at the office of U.S. Bank National Association, as Authentication Agent, Fiscal Agent, Registrar and Paying Agent (the "Fiscal Agent"), in San Francisco, California, and the interest hereon is payable by check mailed by first class mail to the registered owner hereof at the owner's address as it appears on the records of the Fiscal Agent as of the 15th day of the month immediately preceding each interest payment date (the "Record Date"), or by wire transfer made on such Interest Payment Date to the original Registered Owner, or upon written instructions of any Owner of $1,000,000 or more in aggregate principal amount of Reassessment Bonds delivered to the Fiscal Agent prior to the applicable Record Date. This bond will continue to bear interest after maturity at the rate above stated; provided it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient moneys in said redemption fund with which to pay same. If it is not presented at maturity, interest thereon will run until maturity. Exhibit A Page 1 This bond is one of several amlual series of bonds of like date, tenor, and effect, but differing in amounts, maturities and interest rates, issued by the Town of Tiburon, California under the Act, the Resolution of Issuance and the Fiscal Agent Agreement for the purpose of providing means for refunding the prior bonds described in the proceedings, and is secured by a pledge of the moneys in said redemption fund and by the unpaid portion of said reassessments made for the payment of the Reassessment Bonds, and, including principal and interest, is payable exclusively out of said fund. This bond is transferable by the registered owner hereof, in person or by the owner's attorney duly authorized in writing, at the office of the Agent, subject to the terms and conditions provided in the Resolution of Issuance and the Fiscal Agent Agreement between the Town and the Agent, including the payment of certain charges, if any, upon surrender and cancellation of this bond. Upon such transfer, a new registered bond or bonds, of any authorized denomination or denominations, of the same maturity, and for the same aggregate principal amount, will be issued to the transferee in exchange therefor. Reassessment Bonds shall be registered only in the name of an individual (including joint owners), a corporation, a partnership, or a trust. Neither the Town nor the Fiscal Agent shall be required to make such exchange or registration of transfer of bonds during the 15 days immediately preceding any interest payment date or after any bond has been called for redemption. The Town and the Fiscal Agent may treat the registered owner hereof as the absolute owner for all purposes, and the Town and the Fiscal Agent shall not be affected by any notice to the contrary. This bond or any portion of it in the amount of one dollar ($1.00), or any integral multiple of $0.01 in excess thereof, may be redeemed and paid in advance of maturity upon the second day of March or September in any year by giving at least 30 days' notice by registered or certified mail or personal service to the registered owner hereof at the registered owner's address as it appears on the registration books of the Fiscal Agent and by paying principal and accrued interest together with a premium, if any, in the amount specified in the Fiscal Agent Agreement. The Reassessment Bonds are subject to refunding under the procedures of Division 11 (commencing with Section 9000) or Division 11.5 (commencing with Section 9500) of the Streets and Highways Code subject to the conditions set forth in the Fiscal Agent Agreement. This bond is a limited obligation refunding bond because, under the Resolution of Issuance and the Fiscal Agent Agreement, the Town is not obligated to advance funds from the Town treasury to cover any deficiency which may occur in the redemption fund for the Reassessment Bonds; however, the Town is not prevented, in its sole discretion, from so advancing funds. This bond shall not be entitled to any benefit under the Act, the Resolution Authorizing Issuance of Bonds (the "Resolution of Issuance") and the Fiscal Agent Agreement dated as of August 1, 2016 between the Town and the Fiscal Agent (the "Fiscal Agent Agreement") executed pursuant to the Resolution of Issuance, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Fiscal Agent. Exhibit A Page 2 IN WITNESS WHEREOF, said Town of Tiburon, California has caused this bond to be signed in facsimile by the Treasurer of said Town and by its Town Clerk, and has caused its corporate seal to be reproduced in facsimile hereon all as of the 25th day of August, 2016. TOWN OF TIBURON, CALIFORNIA By: Treasurer By: Town Clerk CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is one of the Reassessment Bonds described in the within mentioned Resolution of Issuance and Fiscal Agent Agreement. Dated: U.S. BANK NATIONAL ASSOCIATION, as Fiscal Agent By Authorized Signatory Exhibit A Page 3 FORM OF ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within mentioned Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the registration books of the Agent, with full power of substitution in the premises. Dated: Signature: Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. Signature Guaranteed: Note: Signature(s) must be guaranteed by an eligible guarantor. Exhibit A Page 4 IL, c Quint & Thimmig LLP 6/22/16 7/12/16 ESCROW AGREEMENT by and between the TOWN OF TIBURON, CALIFORNIA and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Bank Dated as of August 1, 2016 Relating to: Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Series 2005-2, Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Supplemental Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Stewart Drive Undergrounding Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Main Street Assessment District, Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley Utility Undergrounding Assessment District, and Town of Tiburon Subordinate Lien Limited Obligation Improvement Bonds, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District 20034.O1:J14111 Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. EXHIBIT A EXHIBIT B TABLE OF CONTENTS Establishment of Escrow Fund 2 Deposit into Escrow Fund; Investment of Amounts 2 Instructions as to Application of Deposit 2 Application of Proceeds from Prior Bond Funds 2 Application of Certain Prior Terms 2 Proceedings for Redemption of Prior Bonds 2 Compensation to Escrow Bank 3 Liabilities and Obligations of Escrow Bank 3 Resignation of Escrow Bank 5 Amendment 5 Unclaimed Moneys 5 Execution in Counterparts 5 Applicable Law 5 SCHEDULE OF ORIGINAL FEDERAL SECURITIES SCHEDULE OF PAYMENTS ON PRIOR ASSESSMENT BONDS -i- ESCROW AGREEMENT This ESCROW AGREEMENT (this "Agreement"), is made and entered into as of August 1, 2016, by and between the TOWN OF TIBURON, CALIFORNIA, a municipal corporation and public body, corporate and politic organized and existing under the laws of the United States of America (the "Town") and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, acting as escrow bank hereunder (the "Escrow Bank"). RECITALS: WHEREAS, the Town Council of the Town has conducted proceedings to form (i) the Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District, (ii) the Town of Tiburon, Lyford Cove Utility Undergrounding Supplemental Assessment District, (iii) the Town of Tiburon, Stewart Drive Undergrounding Assessment District, (iv) the Town of Tiburon, Main Street Assessment District, (v) the Town of Tiburon, Del Mar Valley Utility Undergrounding Assessment District, and (vi) the Town of Tiburon, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (collectively, the "Prior Districts"), to levy assessments upon the land within the Prior Districts, and to issue bonds secured by said assessments to finance certain facilities; WHEREAS, the Town authorized the issuance of its (i) Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, (ii) Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Series 2005-2, (iii) Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Supplemental Assessment District, (iv) Town of Tiburon Limited Obligation Improvement Bonds, Stewart Drive Undergrounding Assessment District, (v) Town of Tiburon Limited Obligation Improvement Bonds, Main Street Assessment District, (vi) Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley Utility Undergrounding Assessment District, and (vii) Town of Tiburon Subordinate Lien Limited Obligation Improvement Bonds, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (collectively, the "Prior Assessment Bonds"), said Prior Assessment Bonds having been issued by the Town on March 15, 2005, October 11, 2005, May 10, 2006, July 30, 2001, December 21, 1999, August 24, 2005 and September 9, 2010, respectively, pursuant to Resolution Nos. 01-2005, 42-2005, 20-2006, 33-2001 and 40-2001, 3388, 33-2005 and 46-2010, respectively, of the Town, adopted on February 2, 2005, September 7, 2005, April 19, 2006, June 20, 2001 and July 18, 2001, December 1, 1999, July 13, 2005 and August 25, 2010, respectively (collectively, the "Prior Assessment Bond Resolutions"); WHEREAS, the Town has determined to issue limited obligation refunding bonds in the aggregate principal amount of $ (the "2016 Reassessment Bonds") at this time for the purpose of providing funds to refund the Prior Assessment Bonds; and WHEREAS, the Town and the Escrow Bank wish to enter into this Agreement for the purpose of providing the terms and conditions relating to the deposit and application of moneys and federal securities to provide for the payment and redemption of the Prior Assessment Bonds in full. AGREEMENT: NOW, THEREFORE, in consideration of the above premises and of the mutual promises and covenants herein contained and for other valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: -1- Section 1. Establishment of Escrow Fund. There is hereby created an escrow fund (the "Escrow Fund") to be held in trust by the Escrow Bank as an irrevocable escrow securing the payment of the Prior Assessment Bonds, as hereinafter set forth. The Escrow Bank shall administer the Escrow Fund as provided in this Agreement. All cash in the Escrow Fund is hereby irrevocably pledged as a special fund for the payment of the principal of and interest and premium on the Prior Assessment Bonds in accordance with the provisions of this Agreement, and the respective Prior Bond Resolutions. If at any time the Escrow Bank shall receive actual knowledge that the cash in the Escrow Fund will not be sufficient to make any payment required by Section 3 hereof, the Escrow Bank shall notify the Town of such fact and the Town shall immediately cure such deficiency from any source of legally available funds. The Escrow Bank shall have no obligation whatsoever to use its own funds to cure any such deficiency. Section 2. Deposit into Escrow Fund; Investment of Amounts. Concurrent with delivery of the 2016 Reassessment Bonds, the Town shall cause to be transferred to the Escrow Bank for deposit into the Escrow Fund the amount of $11,056,490.58 in immediately available funds, which shall be derived as follows: (a) the proceeds of sale of the 2016 Reassessment Bonds in the amount of $ , and (b) the moneys on deposit in the funds and accounts established for the Prior Assessment Bonds in the amount of $ (consisting of $ _ from the reserve funds for the Prior Assessment Bonds, and $ from the redemption funds for the Prior Assessment Bonds). The moneys deposited into the Escrow Fund pursuant to the preceding paragraph shall be held in cash, uninvested. The Escrow Bank shall have no lien upon or right of set off against the cash at any time on deposit in the Escrow Fund. The Escrow Bank may utilize any of its corporate affiliates as a depository to hold any uninvested moneys on behalf of the Escrow Bank in accordance with this Agreement. Section 3. Instructions as to Application of Deposit. The total amount of cash deposited in the Escrow Fund hereunder shall be applied by the Escrow Bank for the purpose of paying the principal of and interest and premium on the Prior Assessment Bonds in accordance with the schedules set forth in Exhibit A attached hereto and by this reference incorporated herein. Following payment in full of the principal of and interest and premium, if any, on the Prior Assessment Bonds, all amounts on deposit in the Escrow Fund shall be transferred by the Escrow Bank to the fiscal agent for the 2016 Reassessment Bonds to be deposited in the redemption fund for, and used to pay debt service on, the 2016 Reassessment Bonds. Section 4. Application of Proceeds from Prior Bond Funds. Upon receipt by the Escrow Bank of amounts remaining on deposit in the funds and accounts established for the Prior Assessment Bonds as of the date of delivery of the 2016 Reassessment Bonds ($ ), such amount shall be deposited in the Escrow Fund. Section 5. Application of Certain Prior Terms . All of the terms of the Prior Assessment Bond Resolutions relating to the making of payments of the principal of and interest and premium on, and redeeming, the Prior Assessment Bonds are incorporated in this Agreement as if set forth in full herein. Section 6. Proceedings for Redemption of Prior Bonds. The Town hereby irrevocably elects to redeem all of the outstanding Prior Assessment Bonds in full on September 2, 2016, -2- pursuant to the applicable provisions of the Prior Assessment Bond Resolutions. It is hereby acknowledged that notice of such redemption has been given by the Escrow Bank in accordance with the Prior Assessment Bond Resolutions, at the direction and expense of the Town. Section 7. Compensation to Escrow Bank. The Town shall pay the Escrow Bank full compensation for its duties under this Agreement, including out-of-pocket costs such as publication costs, redemption expenses, legal fees (including fees of outside counsel and the allocated costs of internal attorneys) and other costs and expenses relating hereto and any extraordinary fees and expenses and, in addition, all fees, costs and expenses relating to the purchase of any Federal Securities after the date hereof. Under no circumstances shall amounts deposited in or credited to the Escrow Fund be deemed to be available for said purposes. The obligation of the Town under this Section 10 to pay compensation already earned by the Escrow Bank and to pay costs and expenses already incurred shall survive termination of this Agreement and shall survive the resignation or removal of the Escrow Bank. Section 8. Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no obligation to make any payment or disbursement of any type or incur any financial liability in the performance of its duties under this Agreement unless the Town shall have deposited sufficient funds therefor with the Escrow Bank. The Escrow Bank may rely and shall be fully protected in acting upon the written instructions of the Town or its agents relating to any matter or action as Escrow Bank under this Agreement. The Town shall indemnify, defend and save harmless the Escrow Bank from any and all claims, liabilities, losses, damages, fines, penalties and expenses (including out-of-pocket and incidental expenses and fees and expenses of in house or outside counsel) ("Losses") arising out of or in connection with (i) its execution and performance of this Agreement, except to the extent that such Losses are due to the negligence or willful misconduct of the Escrow Bank, or (ii) its following any instructions or other directions hereunder, except to the extent that its following any such instruction or direction is expressly forbidden by the terms hereof. The indemnifications set forth herein are intended to and shall include the indemnification of all affected agents, directors, officers and employees of the Escrow Bank. The indemnity provided in this Section 8 shall survive the termination of this Agreement and shall survive the resignation or removal of the Escrow Bank. The Escrow Bank shall have such duties as are expressly set forth herein and no implied duties shall be read into this Agreement against the Escrow Bank. The Escrow Bank shall not be liable for any act or omission of the Town under this Agreement, or the Prior Assessment Bond Resolutions. The Escrow Bank shall not be liable for the accuracy of any calculations provided as to the sufficiency of moneys deposited with it to pay the principal, interest or premiums, if any, on the Prior Assessment Bonds. Any bank, federal savings association or trust company into which the Escrow Bank may be merged or with which it may be consolidated shall become the Escrow Bank without any action of the Town. The Escrow Bank shall have no liability or obligation to the holders of the Prior Assessment Bonds, the 2016 Reassessment Bonds or the Authority Bonds with respect to the payment of debt service by the Town or with respect to the observance or performance by the Town of the other conditions, covenants and terms contained in the Prior Assessment Bond -3- Resolutions, or with respect to the investment of any moneys in any fund or account established, held or maintained by the Town pursuant to the Prior Assessment Bond Resolutions. In no event shall the Escrow Bank be liable for any special indirect or consequential damages. The Escrow Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on any certificate or opinion furnished to it in accordance with this Agreement, or the Prior Assessment Bond Resolution. The Escrow Bank may consult with counsel, whose opinion shall be full and complete authorization and protection to the Escrow Bank if it acts in accordance with such opinion. The Escrow Bank shall not be liable for any error of judgment made in good faith by an authorized officer. Nothing herein should be interpreted to require the Escrow Bank to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or the exercise of any of its rights hereunder. The Escrow Bank may execute any of its trusts or powers and perform any of its duties under this Agreement by or through attorneys, agents or employees. In no event shall the Escrow Bank be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Bank has been advised of the likelihood of such loss or damage and regardless of the form of action. Any corporation succeeding to all or substantially all of the corporate trust business of the Escrow Bank shall be the successor of the Escrow Bank hereunder, without the execution or filing of any paper or any further act on the part of the any of the parties hereto. The Escrow Bank shall not be responsible for any of the recitals or representations contained herein. The Escrow Agent may execute any of the trusts or powers under this Agreement or perform any duties under this Agreement either directly or by or through agents, attorneys, custodians or nominees. The Escrow Agent agrees to accept and act upon instructions or directions pursuant to this Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods; provided, however, that, the Escrow Agent shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Town elects to give the Escrow Agent e-mail or facsimile instructions (or instructions by a similar electronic method) and the Escrow Agent in its discretion elects to act upon such instructions, the Escrow Agent's reasonable understanding of such instructions shall be deemed controlling. The Escrow Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Agent's reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Town agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Agent, including without limitation the risk of the Escrow Agent acting on unauthorized instructions, and the risk of interception and misuse by third parties. Notwithstanding the foregoing, the protection afforded to the Fiscal Agent in -4- each provision of this paragraph shall be operative only in the absence of the Fiscal Agent's negligence or willful misconduct. Section 9. Resignation of Escrow Bank. The Escrow Bank may at any time resign by giving written notice to the Town and the Authority, which notice shall indicate the date on which the resignation is to be effective (the "resignation date"). The Town shall promptly appoint a successor Escrow Bank by the resignation date. Resignation of the Escrow Bank will be effective upon acceptance of appointment by a successor Escrow Bank. If the Town does not appoint a successor Escrow Bank by the resignation date, the Escrow Bank may petition any court of competent jurisdiction for the appointment of a successor Escrow Bank, which court may thereupon, after such notice, if any, as it may deem proper and prescribe and as may be required by law, appoint a successor Escrow Bank. Section 10. Amendment. This Agreement may be amended or modified by the parties hereto, but only if there shall have been filed with the Town and the Escrow Bank (a) a written opinion of Bond Counsel stating that such amendment will not materially adversely affect the interests of the owners of the Prior Assessment Bonds, and that such amendment will not cause interest on the Prior Assessment Bonds or the Authority Bonds to become includable in the gross income of the owners thereof for federal income tax purposes, and (b) a certification of an independent certified public accountant that the amount on deposit in the Escrow Fund will at all times be at least sufficient to make the payments specified in Section 3 hereof. Section 11. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any moneys held by the Escrow Bank in trust for the payment and discharge of the principal of, and the interest and any premium on, the Prior Assessment Bonds which remain unclaimed for two (2) years after the date when the payment of such principal, interest and premium have become payable, if such moneys were held by the Escrow Bank at such date, shall be repaid by the Escrow Bank to the Town as its absolute property free from any trust, and the Escrow Bank shall thereupon be released and discharged with respect thereto and the owners of such Prior Assessment Bonds shall look only to the Town or the Authority, as applicable, for the payment of the principal of, and interest and any premium on, such Prior Assessment Bonds. Any right of any owner of the Prior Assessment Bonds to look to the Town for such payment shall survive only so long as required under applicable law. Section 12. 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. Section 13. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in California. -5- IN WITNESS WHEREOF, the Town, the Authority and the Escrow Bank have each caused this Agreement to be executed by their duly authorized individuals all as of the date first above written. 20034.01:J14111 -6- TOWN OF TIBURON, CALIFORNIA By: Greg Chanis, Town Manager THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Bank By: Authorized Officer EXHIBIT A SCHEDULE OF PAYMENTS OF PRIOR ASSESSMENT BONDS Payment Date Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District Called Redemption Principal Interest Premium Total September 2, 2016 $2,945,000.00 $ $56,900.00 $ Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Series 2005-2 Payment Called Date Principal Interest September 2, 2016 $173,415.00 $ Redemption Premium $3,468.30 $ Total Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Supplemental Assessment District Payment Called Date Principal Interest September 2, 2016 $1,992,561.00 $51,853.48 Redemption Premium Total $39,851.22 $2,084,265.70 Town of Tiburon Limited Obligation Improvement Bonds, Stewart Drive Undergrounding Assessment District Payment Called Date Principal Interest September 2, 2016 $920,000.00 $24,026.25 Payment Date September 2, 2016 Redemption Premium Total $26,100.00 $970,126.25 Town of Tiburon Limited Obligation Improvement Bonds, Main Street Assessment District Called Principal Interest $153,000.00 $4,819.50 Exhibit A Page 1 Redemption Premium $3,780.00 Total $161,599.50 Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley Utility Undergrounding Assessment District Payment Called Redemption Date Principal Interest Premium Total September 2, 2016 $2,505,000.00 $59,478.75 $48,500.00 $2,612,978.75 Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District Payment Called Redemption Date Principal Interest Premium Total September 2, 2016 $1,885,000.00 $49,782.50 $37,400.00 $1,972,182.50 Total Escrow Fund Amount Needed $11,056,490.58 Exhibit A Page 2 (6,/.1,q Quint & Thimmig LLP 6/22/16 7/12/16 BOND PURCHASE CONTRACT (REASSESSMENT BONDS) Town of Tiburon Limited Obligation Refunding Bonds 2016 Consolidated Reassessment District This BOND PURCHASE CONTRACT (ASSESSMENT BONDS) (this "Purchase Agreement"), dated August 1, 2016, is by and between the TIBURON PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under and by virtue of the laws of the State of California (the "Authority") and the TOWN OF TIBURON, CALIFORNIA, a municipal corporation and public body, corporate and politic (the "Town"). RECITALS: WHEREAS, the Authority is a joint exercise of powers authority duly organized and existing under the provisions of Articles 1 through 4 (commencing with section 6500) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act"), and is authorized pursuant to Article 4 of the Act (the "Bond Law") to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations to provide financing or refinancing for public capital improvements of local agencies within the State of California; WHEREAS, on the date hereof, the Town is issuing its $ Town of Tiburon Limited Obligation Refunding Bonds 2016 Consolidated Reassessment District (the "Reassessment Bonds"), pursuant to a Fiscal Agent Agreement, dated as of August 1, 2016 (the "Fiscal Agent Agreement"), by and between the Town and U.S. Bank National Association, as fiscal agent, to refund (i) the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, (ii) the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Series 2005-2, (iii) the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Supplemental Assessment District, (iv) the Town of Tiburon Limited Obligation Improvement Bonds, Stewart Drive Undergrounding Assessment District, (v) the Town of Tiburon Limited Obligation Improvement Bonds, Main Street Assessment District, (vi) the Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley Utility Undergrounding Assessment District, and (vii) the Town of Tiburon Subordinate Lien Limited Obligation Improvement Bonds, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (collectively, the "Prior Bonds"); WHEREAS, the Authority has authorized the issuance of its $ Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District) (the "Authority Bonds"), under an Indenture of Trust, dated as of August 1, 2016 (the "Authority Bond Indenture"), by and between the Authority and U.S. Bank National Association, as trustee (the "Trustee"), and under the Bond Law for the purpose of providing the funds required to acquire the Reassessment Bonds; and WHEREAS, the Authority and the Town desire to enter into this Bond Purchase Contract (Reassessment Bonds) providing for the sale of the Reassessment Bonds by the Town to the Authority and containing the other agreements herein set forth. 20034.O1:J14112 AGREEMENT: NOW, THEREFORE, in consideration of the mutual agreements herein contained, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Authority and the Town agree as follows: 1. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Town hereby sells to the Authority, and the Authority hereby purchases from the Town with the proceeds of the Authority Bonds, all of the $ aggregate principal amount of the Reassessment Bonds. The Reassessment Bonds will bear the annual interest rates and mature at the times set forth in Exhibit A attached hereto and hereby made a part hereof. The purchase price of the Reassessment Bonds shall be as set forth in Exhibit A. 2. All terms not herein defined shall have the meanings given such terms in the Authority Bond Indenture. 3. The Town confirms that there are no substantial conditions precedent to the issuance by the Town or to the sale (as provided herein) and the delivery to the Authority of the Reassessment Bonds that have not been satisfied. 4. The parties hereto hereby specify August 25, 2016, as the date of closing of the purchase of the Reassessment Bonds hereunder (the "Closing Date"). The Reassessment Bonds shall be registered in the naive of the Trustee, as assignee of the Authority. On the Closing Date, the Town shall issue and deliver the Reassessment Bonds to the Trustee upon payment by the Trustee of the purchase price of the Reassessment Bonds in the aggregate amount of $ Said purchase price shall be paid from the proceeds of sale of the Authority Bonds and shall be paid by the Trustee from the Purchase Fund established under the Authority Bond Indenture. 5. The Reassessment Bonds shall be as described in the official statement dated as of the date hereof, relating to the Authority Bonds (the "Official Statement") and shall be issued and secured under the provisions of resolutions of the Town adopted to commence proceedings for the levy of reassessments and to authorize issuance of the Reassessment Bonds (collectively, the "Town Resolutions") and the Fiscal Agent Agreement. The Reassessment Bonds and interest thereon will be payable from annual reassessments levied and collected in accordance with the Town Resolutions relating thereto. Proceeds of the Reassessment Bonds will be used to refund the Prior Bonds in accordance with an Escrow Agreement, dated as of August 1, 2016 (the "Escrow Agreement"), by and between the Town and The Bank of New York Mellon Trust Company, N.A., as escrow bank (the "Escrow Bank"). 6. Any action taken by the Authority under this Purchase Contract, including payment for and acceptance of the Reassessment Bonds, and delivery and execution of any receipt for the Reassessment Bonds and any other instruments in connection with the closing on the Closing Date, shall be valid and sufficient for all purposes and binding upon the Authority, provided that any such action shall not impose any obligation or liability upon the Authority other than as may arise as expressly set forth in this Purchase Contract. 7. It is a condition to the Town's sale and delivery of the Reassessment Bonds to the Authority, and to the Authority's purchase of the Reassessment Bonds and the obligations of the Authority to accept delivery of and to pay for the Reassessment Bonds, that the entire aggregate principal amount of the Reassessment Bonds shall be delivered by the Town, and accepted and paid for by the Authority, on the Closing Date. -2- S. The Town hereby authorizes the use of information provided by it in the Official Statement in connection with the public offering and sale of the Authority Bonds. 9. The Town represents and warrants to the Authority that: (a) The Town is a general law city and municipal corporation, duly organized and existing under the Constitution and laws of the State of California, and has, and on the Closing Date will have, full legal right, power and authority (i) to enter into this Purchase Contract, the Fiscal Agent Agreement and the Escrow Agreement, (ii) to adopt the Town Resolutions relating to the Reassessment Bonds, (iii) to issue, sell and deliver the Reassessment Bonds to the Authority as provided herein, and (iv) to carry out and consummate the transactions on its part contemplated by this Purchase Contract, the Fiscal Agent Agreement, the Escrow Agreement, the Town Resolutions and the Official Statement; (b) The Town has complied, and will on the Closing Date be in compliance in all respects, with the Town Resolutions relating to the Reassessment Bonds; (c) By official action of the Town prior to or concurrently with the acceptance hereof, the Town has duly adopted the Town Resolutions, has duly authorized and approved the execution and delivery of, and the performance by the Town of the obligations on its part contained in, the Reassessment Bonds, the Fiscal Agent Agreement, the Escrow Agreement and this Purchase Contract, and has duly authorized and approved the consummation by it of all other transactions on its part contemplated by the Official Statement; (d) The execution and delivery of this Purchase Contract, the Fiscal Agent Agreement, the Escrow Agreement and the Reassessment Bonds, the adoption of the Town Resolutions and compliance by the Town with the provisions of each thereof, and the carrying out and consummation of the transactions on the part of the Town contemplated by the Official Statement, will not conflict with or constitute a breach of or a default by the Town under any applicable law or administrative regulation of the State of California or the United States, or any applicable judgment, decree, agreement or other instrument to which the Town is a party or is otherwise subject; (e) To the knowledge of the Town, at the time of the Town's acceptance hereof and at all times subsequent thereto up to and including the Closing Date, with respect to information describing the Town, the Reassessment District and the proceedings related to the Reassessment Bonds conducted by the Town, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (f) Except as described in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending with respect to which the Town has been served with process or, to the knowledge of the Town, threatened, wherein an unfavorable decision, ruling or finding would: (i) affect the creation, organization, existence or powers of the Town or the titles of its Council members and officers to their respective offices, (ii) enjoin or restrain the issuance, sale and delivery of the Reassessment Bonds, the levy and receipt of the reassessments (the "Reassessments") which secure the Reassessment Bonds, or the pledge thereof under the Fiscal Agent Agreement, (iii) in any way question or affect any of the rights, powers, duties or obligations of the Town with respect to the moneys pledged or to be pledged to -3- pay the principal of, premium, if any, or interest on the Reassessment Bonds, (iv) in any way question or affect any authority for the issuance of the Reassessment Bonds, or the validity or enforceability of the Reassessment Bonds, the Fiscal Agent Agreement, the Escrow Agreement or the Town Resolutions, or (v) in any way question or affect this Purchase Contract or the transactions contemplated by this Purchase Contract, the Official Statement, the Town Resolutions, the Fiscal Agent Agreement, or the Escrow Agreement or the other documents referred to in the Official Statement; (g) The Town will furnish such information, execute such instruments and take such other action in cooperation with the Authority, as the Authority may reasonably request, to qualify the Authority Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Authority may designate, and will assist, if necessary therefor, in the continuance of such qualifications in effect as long as required for the distribution of the Authority Bonds; provided, however, that the Town shall not be required to qualify as a foreign corporation or to file any general consents to service of process under the laws of any state; (h) The issuance and sale of the Reassessment Bonds is not subject to any transfer or other documentary stamp taxes of the State of California or any political subdivision thereof; (i) The Town acknowledges that the Authority will execute a Continuing Disclosure Agreement in connection with issuance of the Authority Bonds, and, in connection therewith, the Town represents and warrants that it has never failed to comply with a continuing disclosure undertaking pursuant to Rule 15c2-12 except as may be described in the Official Statement; and (j) Any certificate signed by any official of the Town authorized to do so and delivered to the Authority under this Purchase Contract shall be deemed a representation and warranty by the Town to the Authority as to the statements made therein. 10. If between the date of this Purchase Contract and the date ninety (90) days after the Closing Date an event occurs which is materially adverse to the purpose for which the Official Statement is to be used which is not disclosed in the Official Statement, the Town shall notify the Authority of such fact. 11. At 8:00 A.M., Pacific Time, on the Closing Date, or at such other time or on such other date as is mutually agreed by the Town and the Authority, the Town will deliver the Reassessment Bonds to the Trustee in definitive form, duly executed, together with the other documents hereinafter mentioned, and, subject to the terms and conditions hereof, the Trustee solely from moneys held in the Purchase Fund under the Authority Bond Indenture will accept such delivery and pay the purchase price of the Reassessment Bonds as referenced in paragraph 1 hereof by wire transfer or other funds which are good funds on the Closing Date payable to the order of the Escrow Agent. Delivery and payment, as aforesaid, shall be made at such place as shall have been mutually agreed upon by the Town, the Escrow Agent and the Authority. 12. The Authority has entered into this Purchase Contract in reliance upon the representations, warranties and agreements of the Town contained herein and to be contained in the documents and instruments to be delivered on the Closing Date, and upon the performance by the Town of its obligations hereunder, both as of the date hereof and as of the Closing Date. Accordingly, the Authority's obligations under this Purchase Contract to purchase, to accept delivery of and to pay for the Reassessment Bonds shall be subject to the performance by the -4- Town of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing Date, and shall also be subject to the following conditions: (a) The representations and warranties of the Town contained herein shall be true and correct on the date hereof and on and as of the Closing Date, as if made on the Closing Date; (b) On the Closing Date the Town Resolutions, the Fiscal Agent Agreement and the Escrow Agreement shall be in full force and effect, and shall not have been amended, modified or supplemented, and the Official Statement shall not have been amended, modified or supplemented, except in either case as may have been agreed to by both the Authority and the Underwriter; (c) As of the Closing Date, all official action of the Town relating to the Reassessment Bonds, the Fiscal Agent Agreement and the Escrow Agreement shall be in full force and effect, and there shall have been taken all such actions as, in the opinion of Quint & Thimmig LLP ("Bond Counsel"), shall be necessary or appropriate in connection therewith, with the issuance of the Authority Bonds and the Reassessment Bonds, and with the transactions contemplated hereby, all as described in the Official Statement; (d) The Authority shall have the right to terminate the Authority's obligations under this Purchase Contract to purchase, to accept delivery of and to pay for the Reassessment Bonds by notifying the Town of its election to do so if for any reason whatsoever the issuance and delivery of the Authority Bonds does not occur on the Closing Date; and (e) On or prior to the Closing Date, the Authority shall have received each of the following documents: (1) An opinion addressed to the Town, in form and substance satisfactory to the Town and the Authority, dated as of the Closing Date, of Bond Counsel, approving, with customary qualifications, the validity of the Reassessment Bonds and the Fiscal Agent Agreement; (2) A letter of Bond Counsel, dated the date of the Closing and addressed to the Authority, to the effect that the opinion referred to in the preceding subparagraph (1) may be relied upon by the Authority to the same extent as if such opinion was addressed to it; (3) A supplemental opinion, dated the date of the Closing and addressed to the Authority, of Bond Counsel to the effect that this Purchase Contract has been duly authorized, executed and delivered by, and, assuming due authorization, execution and delivery by the Authority, constitutes a legal, valid and binding agreement of the Town enforceable in accordance with its terms, except as such enforceability may be limited by the application of equitable principles if equitable remedies are sought, and that the statements contained in the Official Statement under the heading "SECURITY FOR THE REASSESSMENT BONDS" and in Appendix A thereto, are accurate, insofar as such statements purport to summarize certain provisions of the Reassessment Bonds, the Town Resolutions or the Fiscal Agent Agreement; -5- (4) A certificate dated the Closing Date, addressed to the Authority, signed by a Town official having knowledge of the facts to the effect that: (i) The representations and warranties of the Town contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date; (ii) Except as described in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending with respect to which the Town has been served with process or known to be threatened, wherein an unfavorable decision, ruling or finding would: (A) affect the creation, organization, existence or powers of the Town, or the titles of its members and officers to their respective offices, (B) enjoin or restrain the issuance, sale and delivery of the Reassessment Bonds, the levy or collection of the Reassessments or any other moneys or property pledged or to be pledged under the Town Resolutions, or the pledge thereof, (C) in any way question or affect any of the rights, powers, duties or obligations of the Town with respect to the moneys and assets pledged or to be pledged to pay the principal of, premium, if any, or interest on the Reassessment Bonds, (D) in any way question or affect any authority for the issuance of the Reassessment Bonds, or the validity or enforceability of the Reassessment Bonds, the Fiscal Agent Agreement, the Escrow Agreement or the Town Resolutions, or (E) in any way question or affect this Purchase Contract or the transactions on the part of the Town contemplated by this Purchase Contract, the Fiscal Agent Agreement, the Town Resolutions, the Escrow Agreement, the Official Statement or the documents referred to in the Official Statement; (iii) The Town has complied with all agreements, covenants and arrangements, and satisfied all conditions, on its part to be complied with or satisfied under this Purchase Contract on or prior to the Closing Date; and (iv) To the best of such official's knowledge, no event affecting the Town has occurred since the date of the Official Statement which should be disclosed in the Official Statement in order to make the statements therein with respect to the Town, the Reassessment Bonds or the Reassessment District not misleading in any respect; (5) An opinion, dated the date of Closing and addressed to the Authority, of the Town Attorney to the effect that, except as described in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending with respect to which the Town has been served with process or known to be threatened, wherein an unfavorable decision, ruling or finding would: (i) affect the creation, organization, existence or powers of the Town, or the titles of its Councilmembers and officers to their respective offices; (ii) enjoin or restrain the issuance, sale and delivery of the Reassessment Bonds, the receipt of any other moneys or property pledged or to be pledged under the Town Resolutions or the Fiscal Agent Agreement or the pledge thereof; (iii) in any way question or affect any of the rights, powers, duties or obligations of the Town with respect to the moneys and assets pledged or to be pledged to pay the principal of, premium, if any, or interest on the Reassessment Bonds; (iv) in any -6- way question or affect any authority for the issuance of the Reassessment Bonds, or the validity or enforceability of the Reassessment Bonds, the Fiscal Agent Agreement or the Escrow Agreement; and (v) in any way question or affect this Purchase Contract or the transactions on the part of the Town contemplated by this Purchase Contract, the Fiscal Agent Agreement, the Escrow Agreement, the Official Statement; (6) Such additional legal opinions, certificates, instruments and documents as the Authority may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the Town's representations and warranties contained herein and of the statements and information regarding the Town and the Reassessment Bonds contained in the Official Statement; and (7) Executed copies of the Fiscal Agent Agreement and the Escrow Agreement and certified copies of the Town Resolutions. All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Authority, but the approval of the Authority shall not be unreasonably withheld. Receipt of, and payment for, the Reassessment Bonds shall constitute evidence of the satisfactory nature of such as to the Authority. The performance of any and all obligations of the Town hereunder and the performance of any and all conditions contained herein for the benefit of the Authority may be waived by the Authority in its sole discretion. If the Town shall be unable to satisfy the conditions to the obligations of the Authority to purchase, accept delivery of and pay for the Reassessment Bonds contained in this Purchase Contract, or if the obligations of the Authority to purchase, accept delivery of and pay for the Reassessment Bonds shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate, and neither the Authority nor the Town shall be under further obligation hereunder, except that the respective obligations of the Town and the Authority set forth in paragraph 13 hereof shall continue in full force and effect. 13. The expenses incurred by the Town and the Authority in connection with issuance of the Authority Bonds and the Reassessment Bonds shall be paid from proceeds of the Authority Bonds. 14. This Purchase Contract is made solely for the benefit of the Town and the Authority (including their successors and assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. All of the Town's representations, warranties and agreements contained in this Purchase Contract shall remain operative and in full force and effect regardless of: (i) any investigations made by or on behalf of the Authority or (ii) delivery of and payment for the Authority Bonds pursuant to this Purchase Contract. The agreements contained in this paragraph shall survive any termination of this Purchase Contract. 15. 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. 16. 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. -7- IN WITNESS WHEREOF, the Authority and the Town have each caused this Purchase Contract to be executed by their duly authorized officers all as of the date first above written. 20034.01:114112 -8- TIBURON PUBLIC FINANCING AUTHORITY By: Greg Chanis, Executive Director TOWN OF TIBURON, CALIFORNIA By: Greg Chanis, Town Manager EXHIBIT A MATURITY SCHEDULE $ Town of Tiburon Limited Obligation Refunding Bonds 2016 Consolidated Reassessment District Maturity Date (September 2) Final Maturity: Purchase Price: $ Principal Maturity Interest Rate $ % Appendix A zu�� Quint & Thimmig LLP 6/22/16 7/12/16 INDENTURE OF TRUST by and between the TIBURON PUBLIC FINANCING AUTHORITY and U.S. BANK NATIONAL ASSOCIATION, as Trustee Dated as of August 1, 2016 Relating to: $ Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District) 20034.01:J14109 TABLE OF CONTENTS ARTICLE I DEFINITIONS; AUTHORIZATION AND PURPOSE OF AUTHORITY BONDS; EQUAL SECURITY Section 1.1. Definitions 2 Section 1.2. Rules of Construction 9 Section 1.3. Authorization and Purpose of Authority Bonds 9 Section 1.4. Equal Security 9 ARTICLE II ISSUANCE OF AUTHORITY BONDS Section 2.1. Terms of Authority Bonds 10 Section 2.2. Redemption of Authority Bonds 11 Section 2.3. Form of Authority Bonds 13 Section 2.4. Execution of Authority Bonds 14 Section 2.5. Transfer of Authority Bonds 14 Section 2.6. Exchange of Authority Bonds 14 Section 2.7. Temporary Authority Bonds 15 Section 2.8. Bond Register 15 Section 2.9. Authority Bonds Mutilated, Lost, Destroyed or Stolen 15 Section 2.10. CUSIP Numbers 15 Section 2.11. Book -Entry Only System. 15 Section 2.12. Successor Securities Depository; Transfer Outside Book -Entry Only System 16 ARTICLE III DEPOSIT AND APPLICATION OF PROCEEDS Section 3.1. Issuance of Authority Bonds 18 Section 3.2. Application of Proceeds of Authority Bonds and Funds Received from the Reassessment District 18 Section 3.3. Revenue Fund 18 Section 3.4. Costs of Issuance Fund 18 Section 3.5. Purchase Fund 18 Section 3.6. Surplus Fund 18 Section 3.7. Reserve Fund 19 Section 3.8. Validity of Authority Bonds 19 ARTICLE IV REVENUES; FLOW OF FUNDS Section 4.1. Pledge of Revenues; Assignment of Rights 20 Section 4.2. Receipt, Deposit and Application of Revenues; Revenue Fund 20 Section 4.3. Reserve Fund 22 Section 4.4. Surplus Fund 22 Section 4.5. Investments 22 Section 4.6. Valuation and Disposition of Investments 23 ARTICLE V COVENANTS OF THE AUTHORITY Section 5.1. Punctual Payment 24 Section 5.2. Extension of Payment of Authority Bonds 24 Section 5.3. Against Encumbrances 24 Section 5.4. Power to Issue Authority Bonds and Make Pledge and Assignment 24 Section 5.5. Accounting Records and Financial Statements 24 Section 5.6. Tax Covenants 24 Section 5.7. No Parity Debt 25 Section 5.8. Reassessment Bonds 25 Section 5.9. Sale of Reassessment Bonds 26 Section 5.10. Continuing Disclosure 26 Section 5.11. Further Assurances 27 Section 5.12. Small Issuer Exemption from Bank Nondeductibility Restriction 27 ARTICLE VI THE TRUSTEE Section 6.1. Appointment of Trustee ''3 Section 6.2. Acceptance of Trusts '8 Section 6.3. Fees, Charges and Expenses of Trustee 31 Section 6.4. Notice to Bond Owners of Default 31 Section 6.5. Intervention by Trustee 31 -i- Section 6.6. Removal of Trustee 31 Section 6.7. Resignation by Trustee 31 Section 6.8. Appointment of Successor Trustee 32 Section 6.9. Merger or Consolidation 32 Section 6.10. Concerning any Successor Trustee 32 Section 6.11. Appointment of Co -Trustee 32 Section 6.12. Indemnification; Limited Liability of Trustee 33 ARTICLE VII MODIFICATION AND AMENDMENT OF THE INDENTURE Section 7.1. Amendment Hereof 34 Section 7.2. Effect of Supplemental Indenture 34 Section 7.3. Endorsement or Replacement of Authority Bonds After Amendment 35 Section 7.4. Amendment by Mutual Consent 35 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES Section 8.1. Events of Default 36 Section 8.2. Remedies; Rights of Bond Owners 36 Section 8.3. Application of Revenues and Other Funds After Event of Default 37 Section 8.4. Power of Trustee to Control Proceedings 37 Section 8.5. Appointment of Receivers 38 Section 8.6. Non -Waiver 38 Section 8.7. Rights and Remedies of Bond Owners 38 Section 8.8. Termination of Proceedings 39 ARTICLE IX MISCELLANEOUS Section 9.1. Limited Liability of Authority 40 Section 9.2. Benefits of Indenture Limited to Parties 40 Section 9.3. Discharge of Indenture 40 Section 9.4. Successor is Deemed Included in All References to Predecessor 41 Section 9.5. Waiver of Notice; Requirement of Mailed Notice 41 Section 9.6. Execution of Documents by Bond Owners 41 Section 9.7. Disqualified Authority Bonds 41 Section 9.8. Waiver of Personal Liability 42 Section 9.9. Partial Invalidity 42 Section 9.10. Destruction of Canceled Authority Bonds 42 Section 9.11. Funds and Accounts 42 Section 9.12. Notices 42 Section 9.13. Unclaimed Moneys 43 Section 9.14. Payment Due on Other than a Business Day 43 Section 9.15. Governing Laws. 43 Section 9.16. Execution in Several Counterparts. 43 EXHIBIT A: FORM OF BOND INDENTURE OF TRUST THIS INDENTURE OF TRUST (this "Indenture"), made and entered into as of August 1, 2016, is by and between the TIBURON PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the United States of America (the "Authority"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in San Francisco, California, and being qualified to accept and administer the trusts hereby created (the "Trustee"). RECITALS: WHEREAS, the Authority is a joint exercise of powers authority duly organized and existing under and pursuant to the provisions of Articles 1 through 4 (commencing with section 6500) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act"), and is authorized pursuant to Article 4 of the Act (the "Bond Law") to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations of the Town of Tiburon, California (the "Town"), including any reassessment district bonds of the Town; WHEREAS, for the purpose of facilitating the refinancing of certain outstanding indebtedness of the Town, the Authority has determined to issue its Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District) in the aggregate principal amount of $ (the "Authority Bonds") pursuant to and secured by this Indenture in the mariner provided herein; WHEREAS, in order to provide for the authentication and delivery of the Authority Bonds, to establish and declare the terms and conditions upon which the Authority Bonds are to be issued and to secure the payment of the principal thereof and interest thereon, the Authority has authorized the execution and delivery of this Indenture; and WHEREAS, the Authority hereby certifies that all acts and proceedings required by law necessary to make the Authority Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of the Indenture have been in all respects duly authorized. AGREEMENT: NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and the interest and premium (if any) on all Authority Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Authority Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Authority Bonds by the owners thereof, and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Authority Bonds, as follows: -1- ARTICLE I DEFINITIONS; AUTHORIZATION AND PURPOSE OF AUTHORITY BONDS; EQUAL SECURITY Section 1.1 Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture, of any Supplemental Indenture, of the Authority Bonds and of any certificate, opinion, request or other documents herein mentioned have the meanings herein specified. "Act" means Articles 1 through 4 (commencing with section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code, as it may hereafter be amended from time to time. "Administrative Expenses" means the fees and expenses of the Trustee, including legal fees and expenses (including fees and expenses of outside counsel and the allocated costs of internal attorneys) and the out-of-pocket expenses incurred by the Trustee, the Town and the Authority in carrying out their duties hereunder including payment of amounts payable to the United States pursuant to Section 5.7 hereof and in carrying out the purposes of the Reassessment District. "Annual Debt Service" means, for each Bond Year, the sum of (a) the interest payable on the Outstanding Authority Bonds in such Bond Year, and (b) the principal amount of the Outstanding Authority Bonds scheduled to be paid in such Bond Year. "Authorized Representative of the Town" means the Town Manager, the Town Director of Administrative Services, the Town Clerk or any other Town officer so designated in writing by the Town Council or an Authorized Representative of the Town. "Authority" means the Tiburon Public Financing Authority, a joint exercise of powers authority duly organized and existing under and by virtue of the laws of the State. "Authority Bonds" means the Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District), authorized by and at any time Outstanding pursuant to the Bond Law and this Indenture. "Board" means the Board of Directors of the Authority. "Bond Counsel" means (i) Quint & Thimmig LLP, or (ii) any attorney at law or other firm of attorneys selected by the Authority of nationally -recognized standing in matters pertaining to the federal tax exemption of interest on bonds issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America. "Bond Lazo" means the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with section 6584) of the Act, as it may hereafter be amended from time to time. "Bond Register" means the registration books for the Authority Bonds maintained by the Trustee in accordance with Section 2.8 hereof. "Bond Year" means each twelve-month period extending from September 3 in one calendar year to September 2 of the succeeding calendar year, except in the case of the initial Bond Year which shall be the period from the Closing Date to September 2, 2016, both dates inclusive. -2- "Business Day" means a day which is not a Saturday or Sunday or a day of the year on which the New York Stock Exchange or banks in New York, New York or San Francisco, California, or where the Trust Office is located, are not required or authorized to remain closed. "Certificate of the Authority" means a certificate in writing signed by the Executive Director or Treasurer of the Authority, or by any other officer of the Authority duly authorized in writing by the Board for that purpose. "Closing Date" means August 25, 2016, being the date upon which there is a physical delivery of the Authority Bonds in exchange for the purchase price thereof. "Code" means the Internal Revenue Code of 1986, as amended, and the United States Treasury Regulations in effect with respect thereto. "Continuing Disclosure Agreement" means the Continuing Disclosure Agreement, dated as of August 1, 2016, between the Authority and NBS Government Finance Group, as dissemination agent. "Costs of Issuance" means the costs and expenses incurred in connection with the issuance and sale of the Reassessment Bonds and the Authority Bonds and the acquisition of the Reassessment Bonds by the Authority, including the acceptance and initial annual fees and expenses (including legal fees and expenses) of the Trustee, legal fees and expenses, costs of printing the Authority Bonds and any disclosure materials relating to the Authority Bonds, fees of the financial consultant, Costs of Issuance as defined in the Fiscal Agent Agreement for the Reassessment Bonds, and other fees and expenses set forth in a Request of the Authority. "Costs of Issuance Fund" means the fund by that name established in Section 3.4. "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Event of Default" means any of the events described in Section 8.1 hereof. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of Section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, or (iii) the investment is a United States Treasury Security—State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt. "Federal Securities" means any of the following: (a) cash; (b) State and Local Government Series issued by the United States Treasury ("SLGS"); (c) United States Treasury bills, notes and bonds, as traded on the open market; and, (d) zero coupon United States Treasury Bonds. -3- "Fiscal Year" means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Authority as its official fiscal year period. "Indenture" means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the provisions hereof. "Independent Accountant" means any accountant or firm of such accountants appointed and paid by the Authority, and who, or each of whom (a) is in fact independent and not under domination of the Authority or the Town; (b) does not have any substantial interest, direct or indirect, in the Authority or the Town; and (c) is not an officer or employee of the Authority or the Town, but who may be regularly retained to make annual or other audits of the books of or reports to the Authority or the Town, or who may be the Town's administrator for the Reassessment District. "Independent Financial Consultant" means any financial consultant or firm of such consultants appointed and paid by the Authority, and who, or each of whom (a) is in fact independent and not under domination of the Authority or the Town; (b) does not have any substantial interest, direct or indirect, in the Authority or the Town; and (c) is not an officer or employee of the Authority or the Town, but who may be regularly retained to make annual or other audits of the books of or reports to the Authority or the Town, or who may be the Town's administrator for the Reassessment District. "Information Services" means the Electronic Municipal Market Access System (referred to as "EMMA"), a facility of the Municipal Securities Rulemaking Board, (at http:/ /emma.rsrb.org); and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such services providing information with respect to called bonds as the Authority may designate in a Certificate of the Authority delivered to the Trustee. "Initial Reserve Fund Deposit" means an amount equal to $ , to be deposited in the Reserve Fund on the Closing Date. "Interest Account" means the account by that name established and held by the Trustee pursuant to Section 3.3 hereof. "Interest Payment Date" means March 2 and September 2 in each year, beginning March 2, 2017, and continuing thereafter so long as arty Authority Bonds remain Outstanding. "Maximum Annual Debt Service" means, as of the date of any calculation, the largest Annual Debt Service on the Authority Bonds during the current or any future Bond Year. "Maximum Reserve Amount" means, as of any date of calculation, an amount equal to the least of (a) ten percent (10%) of the initial principal amount of the Authority Bonds, (b) the Maximum Annual Debt Service for the then Outstanding Authority Bonds, and (c) one hundred twenty-five percent (125%) of the Annual Debt Service for the then Outstanding Authority Bonds. "Moody's" means Moody's Investors Service, its successors and assigns. "Original Purchaser" means Wulff, Hansen & Co., the first purchaser of the Authority Bonds from the Authority. -4- "Outstanding," when used as of any particular time with reference to Authority Bonds, means (subject to the provisions of Section 9.7 hereof) all Authority Bonds theretofore executed and issued by the Authority and authenticated and delivered by the Trustee under this Indenture except (a) Authority Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation pursuant to Section 2.9 hereof; (b) Authority Bonds paid or deemed to have been paid within the meaning of Section 9.3 hereof or Authority Bonds called for redemption for which funds have been provided as described in Section 2.2(f) hereof; and (c) Authority Bonds in lieu of or in substitution for which other Authority Bonds shall have been executed, issued and delivered pursuant to this Indenture or any Supplemental Indenture. "Owner" or "Bond Owner," when used with respect to any Authority Bond, means the person in whose name the ownership of such Authority Bond shall be registered on the Bond Register. "Permitted Investments" means any of the following which at the time of investment are determined by the Authority (any investment direction by Request of the Authority to the Trustee shall be deemed to be a representation by the Authority that such determination has been made as to such investment by the Authority) to be legal investments under the laws of the United States of America for the moneys proposed to be invested therein: (a) Federal Securities. (b) Obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America, including: Export -Import Bank, Farm Credit System Financial Assistance Corporation, Farmers Home Administration, General Services Administration, U.S. Maritime Administration, Small Business Administration, Government National Mortgage Association, U.S. Department of Housing & Urban Development, and Federal Housing Administration. (c) Senior debt obligations rated AAA by S&P and Aaa by Moody's issued by the Federal National Mortgage Association or the Federal Horne Loan Mortgage Corporation (or any other U.S.-sponsored agency) with remaining maturities not exceeding three (3) years. (d) U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks, including the Trustee, its parent, if any, and its affiliates which have a rating on their short term certificates of deposit on the date of purchase of A-1 or A-1+ by S&P and P-1 by Moody's, and maturing no more than 360 days after the date of purchase. (e) Registered state warrants or treasury notes or bonds of the State, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the State or by a department, board, agency, or authority of the State, in each case, rated at least A by Moody's or S&P. (f) Bonds, notes, warrants, or other evidences of indebtedness of any local agency within the State, including bonds payable solely out of the revenues from a revenue- producing property owned, controlled, or operated by the Town, or by a department, board, agency, or authority of the Town, in each case, rated at least A by Moody's or S&P. (g) Obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank Board, or in obligations, participations, or other instruments of, or issued by, or fully guaranteed -5- as to principal and interest by, the Federal National Mortgage Association; or in guaranteed portions of Small Business Administration notes; or in obligations, participations, or other instruments of, or issued by, a federal agency or a United States government-sponsored enterprise. (h) Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, which are eligible for purchase by the Federal Reserve System. Purchases of bankers acceptances may not exceed 270 days' maturity. (i) Commercial paper which at the time of investment is of "prime" quality of the highest ranking or of the highest letter and numerical rating as provided for by Moody's or S&P. Eligible paper is further limited to issuing corporations that are organized and operating within the United States and having total assets in excess of five hundred million dollars ($500,000,000) and having an A or higher rating for the issuer's debt, other than commercial paper, if any, as provided for by Moody's or S&P. Purchases of eligible commercial paper may not exceed 180 days maturity nor represent more than 10 percent of the outstanding paper of an issuing corporation. (j) Negotiable certificates of deposits issued by a nationally or state -chartered bank or a state or federal association (as defined by Section 5102 of the Financial Code of the State) or by a state -licensed branch of a foreign bank. (k) Investments in fully collateralized repurchase agreements or reverse repurchase agreements of any securities authorized by this definition, so long as the proceeds of the reverse repurchase agreement are invested solely to supplement the income normally received from these securities. For purposes of this paragraph, the term "repurchase agreement" means a purchase of securities by the Trustee or the Authority, as applicable, pursuant to an agreement by which the seller will repurchase the securities on or before a specified date and for a specified amount and will deliver the underlying securities to the Trustee or the Authority, as applicable, by book entry, physical delivery, or by third -party custodial agreement. The transfer of underlying securities to the counterparty bank's customer book -entry account may be used for book -entry delivery. The term "counterparty" for the purposes of this paragraph, means the other party to the transaction whose general obligations are rated "A" or better by Moody's or S&P. A counterparty bank's trust department or safekeeping department may be used for physical delivery of the underlying security. The term of repurchase agreements shall be for one year or less. The term "securities," for purpose of repurchase under this paragraph, means securities of the same issuer, description, issue date, and maturity. The term "reverse repurchase agreement" means a sale of securities by the Trustee or the Authority, as applicable, pursuant to an agreement by which the Trustee or the Authority, as applicable, will repurchase such securities on or before a specified date and for a specified amount. (1) Medium-term notes of a maximum of five years' maturity issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this paragraph shall be rated in a rating category of AA or better by S&P and Aa or better by Moody's. (m) Notes, bonds, or other obligations which are at all times secured by a valid first priority security interest in securities of the types listed by Section 53601 of the Government Code of the State as eligible securities for the purpose of securing local agency deposits having a market value at least equal to that required by said Section 53601 -6- for the purpose of securing local agency deposits. The securities serving as collateral shall be placed by delivery or book entry into the custody of a trust company or the trust department of a bank which is not affiliated with the issuer of the secured obligation, and the security interest shall be perfected in accordance with the requirements of the Uniform Commercial Code or federal regulations applicable to the types of securities in which the security interest is granted. (n) The Local Agency Investment Fund maintained by the Treasurer of the State. (o) Guaranteed investment contracts with financial institutions whose (or whose holding company's) long-term unsecured debt is rated at least A by Moody's or S&P, for all or any portion of the moneys on deposit in the funds and accounts established hereunder, the provisions of which guaranteed investment contracts shall include the right of the Trustee or the Authority to draw in full thereunder in the event of the reduction or loss of the long-term debt rating of the issuer thereof and the maximum term for which guaranteed investment contracts shall be the payment date of the final Authority Bond Outstanding hereunder. (p) Money market mutual funds (including funds for which the Trustee and its affiliates provide investment advisory or other management services) registered under the Investment Company Act of 1940, as amended, that have been rated AAAm-G or AAAm by S&P or Aaa by Moody's; provided that the portfolio of such money market mutual fund is limited to obligations described in subparagraph (a) above and to agreements to repurchase such obligations. (q) Any other investment described in section 53601 of the California Government Code and otherwise permitted under the Town's investment policy as in effect at the time the investment is made. The Trustee shall be entitled to rely on a Request of the Authority as to any investment permitted under this clause (q) constituting a Permitted Investment. "Principal Account" means the account by that name established and held by the Trustee pursuant to Section 3.3 hereof. "Purchase Fund" means the fund by that name established and held by the Trustee pursuant to Section 3.5 hereof. "Reassessment Bonds" means, the Town of Tiburon Limited Obligation Refunding Bonds, 2016 Consolidated Reassessment District, issued by the Town under and pursuant to the Refunding Bond Act. "Reassessment District" means the Town's 2016 Consolidated Reassessment District. "Reassessments" means the unpaid reassessments levied by the Town on parcels in the Reassessment District which have been pledged to repay the Reassessment Bonds pursuant to the Refunding Bond Act. "Record Date" means, with respect to any Interest Payment Date, the fifteenth calendar day of the month preceding the month in which such Interest Payment Date occurs, whether or not such day is a Business Day. "Redemption Fund" means the redemption fund established with respect to the Reassessment Bonds. -7- "Refunding Bond Act" means the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division 11.5 of the California Streets and Highways Code). "Request of the Authority" means a request in writing signed by the Executive Director or Treasurer of the Authority, or by any other officer of the Authority duly authorized in writing by the Board for that purpose. "Request of the Tozon" means a request in writing signed by the Authorized Representative of the Town. "Representation Letter" means the representation letter dated as of the Closing Date among the Authority, the Trustee and DTC. "Reserve Fund" means the fund by that name established and held by the Trustee pursuant to Section 3.7 hereof. "Reserve Requirement" means, as of any date, an amount equal to the Initial Reserve Fund Deposit, plus any investment earnings on amounts in the Reserve Fund in excess of the first $ of such earnings (which $ of earnings is to be transferred to the Surplus Fund pursuant to Section 4.3(c)); not to exceed, in any event, the Maximum Reserve Amount. "Responsible Officer" means any officer of the Trustee assigned to administer the Trustee's duties under this Indenture. "Revenue Fund" means the fund by that name established by the Trustee pursuant to Section 3.3 hereof "Revenues" means: (a) all payments on the Reassessment Bonds received by the Trustee; (b) any proceeds of the Authority Bonds originally deposited with the Trustee and all moneys deposited and held from time to time by the Trustee in the funds and accounts established hereunder with respect to the Authority Bonds (other than the Rebate Fund, the Surplus Fund and the Purchase Fund); and (c) investment income with respect to any moneys held by the Trustee in the funds and accounts established hereunder with respect to the Authority Bonds (other than investment income on moneys held in the Rebate Fund and the Reserve Fund). "Securities Depositories" means The Depository Trust Company, 55 Water Street, 1SL, New York, New York 10041-0099 Attn.: Call Notification Department, Fax (212) 855-3274; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority may designate in a Certificate of the Authority delivered to the Trustee. "Standard & Poor's" means Standard 8z Poor's Ratings Services, its successors and assigns. "State" means the State of California. "Supplemental Indenture" means any indenture, agreement or other instrument hereafter duly executed by the Authority in accordance with the provisions of Article VII of this Indenture. "Surplus Fund" means the fund by that name established pursuant to Section 3.6 hereof. "Tax Certificate" means the arbitrage certificate executed by the Authority on the Closing Date to establish certain facts and expectations and which contains certain covenants relevant to compliance with the Code. -8- "Town" means the Town of Tiburon, California. "Town Council" means the Town Council of the Town. "Trust Office" means the corporate trust office of the Trustee, currently located at 1 California Street, 10th Floor, San Francisco, California 94111; except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted or such other office as may be specified to the Authority by the Trustee in writing. "Trustee" means U.S. Bank National Association, and its successors and assigns, and any other corporation or association which may at any time be substituted in its place as provided in Article VI hereof. Section 1.2 Rules of Construction. All references in this Indenture to "Articles," "Sections," and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; and the words "herein," "hereof," "hereunder," and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. Section 1.3 Authorization and Purpose of Authority Bonds. The Authority has reviewed all proceedings heretofore taken relative to the authorization of the Authority Bonds and has found, as a result of such review, and hereby finds and determines, that all things, conditions and acts required by law to exist, happen and/or be performed precedent to and in the issuance of the Authority Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Authority is now authorized under the Agreement and the Bond Law and each and every requirement of law, to issue the Authority Bonds in the manner and form provided in this Indenture. Accordingly, the Authority hereby authorizes the issuance of the Authority Bonds pursuant to the Bond Law and this Indenture for the purpose of providing funds to acquire the Reassessment Bonds. Section 1.4 Equal Security. In consideration of the acceptance of the Authority Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract between the Authority and the Owners from time to time of the Authority Bonds; and the covenants and agreements herein set forth to be performed on behalf of the Authority shall be for the equal and proportionate benefit, security and protection of all Owners of the Authority Bonds without preference, priority or distinction as to security or otherwise of any of the Authority Bonds over other Authority Bonds by reason of the number or date thereof or the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. -9- ARTICLE II ISSUANCE OF AUTHORITY BONDS Section 2.1 Terms of Authority Bonds. The Authority Bonds authorized to be issued by the Authority under and subject to the Bond Law and the terms of this Indenture shall be dated as of the date of delivery thereof and be designated the "Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District)," and shall be issued in the original aggregate principal amount of million hundred thousand dollars ($ ). The Authority Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof, so long as no Authority Bond shall have more than one maturity date. The Authority Bonds shall be dated the Closing Date shall mature on September 2 in each of the years and in the amounts, and shall bear interest (calculated on the basis of a 360 -day year of twelve 30 -day months) at the rates, as follows: Principal Payment Date Principal Interest (September 2) Amount Rate Interest on the Authority Bonds shall be payable on each Interest Payment Date to the person whose name appears on the Bond Register as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check of the Trustee mailed on such Interest Payment Date by first-class mail, postage prepaid, to the Owner at the address of such Owner as it appears on the Bond Register or by wire transfer to an account in the continental United States of America made on such Interest Payment Date upon -10- instructions of any Owner of $1,000,000 or more in aggregate principal amount of Authority Bonds provided to the Trustee in writing at least five (5) Business Days before the Record Date for such Interest Payment Date. Principal of and premium (if any) on any Authority Bond shall be paid upon presentation and surrender thereof, at maturity or the prior redemption thereof, at the Trust Office of the Trustee. The principal of and interest and premium (if any) on the Authority Bonds shall be payable in lawful money of the United States of America. Each Authority Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) it is authenticated on or before February 15, 2017, in which event it shall bear interest from the Closing Date; provided, however, that if, as of the date of authentication of any Authority Bond, interest thereon is in default, such Authority Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon, or from the Closing Date if no interest has been paid or made available for payment. Section 2.2 Redemption of Authority Bonds. (a) Optional Redemption. The Authority Bonds maturing on or after September 2, , may be redeemed at the option of the Authority, from any source of available funds, on any Interest Payment Date on or after September 2, , as a whole, or in part such that the principal and interest on the Authority Bonds to remain Outstanding due on any Interest Payment Date following such redemption are not in excess of the remaining principal and interest payable on or before such Interest Payment Date on the Reassessment Bonds to remain outstanding following the payment of any Reassessment Bonds being redeemed, if any redemption of Reassessment Bonds is being accomplished in conjunction with such optional redemption, and otherwise from such maturities as are selected by the Authority, and by lot within a maturity, at the following redemption prices (expressed as a percentage of the principal amount of the Authority Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price and and and thereafter % Prior to consenting to any refunding of the Reassessment Bonds, the Authority shall deliver to the Trustee a certificate of an Independent Financial Consultant verifying that, following such refunding of the Reassessment Bonds and redemption of Authority Bonds, the principal and interest generated from the remaining Reassessment Bonds is adequate to make the timely payment of principal and interest due on the Authority Bonds that will remain Outstanding hereunder following such optional redemption. (b) Mandatory Redemption. (1) The Authority Bonds are subject to special redemption on any Interest Payment Date, from proceeds of early redemption of Reassessment Bonds from prepayments of Reassessments, in whole or in part, from maturities as selected by the Authority and by lot within a maturity, at the principal amount thereof, plus accrued interest to the date of redemption thereof, without premium. (2) The Authority Bonds maturing on September 2, , are subject to mandatory sinking payment redemption in part on September 2, , and on each September 2 thereafter to -11- maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking payments as follows: Redemption Date Mandatory (September 2) Sinking Payments The amounts in the foregoing table shall be reduced, as a result of any prior partial redemption of the Authority Bonds maturing on September 2, , pursuant to Section 2.2(a) or 2.2(b)(1) above, as specified by the Authority to the Trustee, such that the remaining scheduled payments of principal and interest on the Reassessment Bonds will be sufficient on a timely basis to pay debt service on the Authority Bonds. The Trustee shall be entitled to rely upon a Certificate of the Authority as proof of such sufficiency. (c) Notice of Redemption. The Trustee, on behalf and at the expense of the Authority, shall mail (by first class mail, postage prepaid), or send by such other means as is acceptable to the recipient thereof, notice of any redemption to (i) the respective Owners of any Authority Bonds designated for redemption at their respective addresses appearing on the Bond Register, (ii) to the Town, (iii) to the Securities Depositories, and (iv) to the Information Services, in each case at least thirty (30) but not more than sixty (60) days prior to the date fixed for redemption. Neither failure to receive any such notice so sent nor any defect therein shall affect the validity of the proceedings for the redemption of such Authority Bonds or the cessation of the accrual of interest thereon. Such notice shall state the date of the notice, the redemption date, the redemption place and the redemption price and shall designate the CUSIP numbers, the Authority Bond numbers and the maturity or maturities (in the event of redemption of all of the Authority Bonds of such maturity or maturities in whole) of the Authority Bonds to be redeemed, and shall require that such Authority Bonds be then surrendered at the Trust Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Authority Bonds will not accrue after the redemption date, and in the event that funds required to pay the redemption price are not on deposit under the Indenture at the time the notice of redemption is sent, a statement to the effect that the redemption is conditioned upon the receipt of the appropriate funds required to pay the redemption price by the Trustee on or prior to the redemption date. In addition to the foregoing notice, further notice shall be given by the Trustee in said form by first class mail to any Bondowner whose Authority Bond has been called for redemption but who has failed to submit his Authority Bond for payment by the date which is sixty days after the redemption date, but no defect in said further notice nor any failure to give or receive all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption. Upon the payment by the Trustee from the Revenue Fund of the redemption price of the Authority Bond being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Authority Bonds being redeemed with the proceeds of such check or other transfer. (d) Selection of Authority Bonds for Redemption. For purposes of the selection by the Authority of Authority Bonds among maturities for redemption pursuant to Section 2.2(a) or -12- 2.2(b)(1), the Authority Bonds shall be selected for redemption among maturities by the Authority (evidenced pursuant to a Certificate of the Authority delivered to the Trustee at least forty-five (45) days prior to the redemption date or such later date as shall be acceptable to the Trustee in its sole discretion specifying the Authority Bonds to be redeemed) on such basis that the remaining scheduled payments of principal and interest on the Reassessment Bonds will be sufficient on a timely basis to pay the remaining scheduled debt service on the Authority Bonds, as shall be demonstrated in a report of an Independent Financial Consultant filed with the Trustee. It is acknowledged that Section 2.03(a)(ii) of the Fiscal Agent Agreement requires that a certificate of an Independent Financial Advisor be delivered in connection with any redemption of the Reassessment Bonds, and any such certificate will satisfy the foregoing requirement in connection with the related redemption of Authority Bonds pursuant to Section 2.2(b)(1) hereof. The Trustee may rely upon a Certificate of the Authority (which, in turn, relies upon the report of the Independent Financial Consultant) required by this Section 2.2(d), and the Trustee is not responsible for reviewing any report of the Independent Financial Consultant. Unless otherwise provided hereunder, whenever provision is made in this Indenture for the redemption of less than all of the Authority Bonds of a maturity, the Trustee shall select the Authority Bonds to be redeemed from all Authority Bonds of such maturity not previously called for redemption, by lot in any manner which the Trustee in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Authority Bonds shall be deemed to be comprised of separate $5,000 authorized denominations, and such separate authorized denominations shall be treated as separate Authority Bonds which may be separately redeemed. (e) Partial Redemption of Authority Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Authority Bond the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Authority Bond or Authority Bonds of the same maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Authority Bond to be redeemed. (f) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of and interest (and premium, if any) on the Authority Bonds so called for redemption shall have been duly provided, such Authority Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice. All Authority Bonds redeemed pursuant to this Section 2.2 shall be canceled and destroyed. (g) Purchase of Authority Bonds. In lieu of redemption of Authority Bonds as provided in this Section 2.2, amounts held by the Trustee for such redemption shall, at the written request of the Authority received by the Trustee prior to the selection of Authority Bonds for redemption, be applied by the Trustee to the purchase of Authority Bonds at public or private sale as and when and at such prices (including brokerage, accrued interest and other charges) as the Authority may in its discretion direct, but not to exceed the redemption price which would be payable if such Authority Bonds were redeemed. The aggregate principal amount of Authority Bonds of the same maturity purchased in lieu of redemption pursuant to this Section 2.2(g) shall not exceed the aggregate principal amount of Authority Bonds of such maturity which would otherwise be subject to such redemption. Any Authority Bonds so purchased in lieu of redemption shall be treated as if such Authority Bonds were redeemed, for all purposes of this Indenture. Section 2.3 Form of Authority Bonds. The Authority Bonds, the form of Trustee's certificate of authentication, and the form of assignment to appear thereon, shall be substantially -13- in the respective forms set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture. Section 2.4 Execution of Authority Bonds. The Authority Bonds shall be signed in the name and on behalf of the Authority with the manual or facsimile signatures of its Chair or Vice Chair and attested with the manual or facsimile signature of its secretary or any assistant secretary duly appointed by the Board, and shall be delivered to the Trustee for authentication by it upon Request of the Authority. In case any officer of the Authority who shall have signed any of the Authority Bonds shall cease to be such officer before the Authority Bonds so signed shall have been authenticated or delivered by the Trustee or issued by the Authority, such Authority Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though the individual who signed the same had continued to be such officer of the Authority. Also, any Authority Bond may be signed on behalf of the Authority by any individual who on the actual date of the execution of such Authority Bond shall be the proper officer although on the nominal date of such Authority Bond such individual shall not have been such officer. Only such of the Authority Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Authority Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture. Section 2.5 Transfer of Authority Bonds. Any Authority Bond may in accordance with its terms, be transferred, upon the Bond Register, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Authority Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee, duly executed. Whenever any Authority Bond shall be surrendered for transfer, the Authority shall execute and the Trustee shall thereupon authenticate and deliver to the transferee a new Authority Bond or Authority Bonds of like tenor, maturity and aggregate principal amount. No Authority Bonds selected for redemption shall be subject to transfer pursuant to this Section nor shall any Authority Bond be subject to transfer during the fifteen days prior to the selection of Authority Bonds for redemption. The cost of printing any Authority Bonds and any services rendered or any expenses incurred by the Trustee in connection with any transfer or exchange shall be paid by the Authority. However, the Owners of the Authority Bonds shall be required to pay any tax or other governmental charge required to be paid for any exchange or registration of transfer and the Owners of the Authority Bonds shall be required to pay the reasonable fees and expenses of the Trustee and Authority in connection with the replacement of any mutilated, lost or stolen Authority Bonds. Section 2.6 Exchange of Authority Bonds. Authority Bonds may be exchanged at the Trust Office for Authority Bonds of the same tenor and maturity and of other authorized denominations. No Authority Bonds selected for redemption shall be subject to exchange pursuant to this Section, nor shall any Authority Bond be subject to exchange during the fifteen days prior to the selection of Authority Bonds for redemption. -14- Section 2.7 Temporary Authority Bonds. The Authority Bonds may be issued initially in temporary form exchangeable for definitive Authority Bonds when ready for delivery. The temporary Authority Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Authority and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Authority Bond shall be executed by the Authority and be registered and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Authority Bonds. If the Authority issues temporary Authority Bonds, it will execute and furnish definitive Authority Bonds without delay, and thereupon the temporary Authority Bonds may be surrendered for cancellation, in exchange therefor at the Trust Office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such temporary Authority Bonds an equal aggregate principal amount of definitive Authority Bonds of authorized denominations. Until so exchanged, the temporary Authority Bonds shall be entitled to the same benefits under this Indenture as definitive Authority Bonds authenticated and delivered hereunder. Section 2.8 Bond Register. The Trustee will keep or cause to be kept at the Trust Office sufficient records for the registration and transfer of the Authority Bonds, which shall be the Bond Register and shall at all times during regular business hours be open to inspection by the Authority and the Town upon reasonable notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said records, Authority Bonds as hereinbefore provided. Section 2.9 Authority Bonds Mutilated, Lost, Destroyed or Stolen. If any Authority Bond shall become mutilated, the Authority, at the expense of the Owner of said Authority Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Authority Bond of like tenor and authorized denomination in exchange and substitution for the Authority Bond so mutilated, but only upon surrender to the Trustee of the Authority Bond so mutilated. Every mutilated Authority Bond so surrendered to the Trustee shall be canceled by it and destroyed in accordance with the retention policy of the Trustee then in effect. If any Authority Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to it and indemnity for the Authority and the Trustee satisfactory to the Trustee shall be given, at the expense of the Authority Bond Owner, the Authority shall execute, and the Trustee shall thereupon authenticate and deliver, a new Authority Bond of like series and tenor in lieu of and in substitution for the Authority Bond so lost, destroyed or stolen (or if any such Authority Bond shall have matured or shall have been called for redemption, instead of issuing a substitute Authority Bond the Trustee may pay the same without surrender thereof upon receipt of indemnity satisfactory to the Trustee). The Trustee may require payment of a reasonable fee for each new Authority Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Authority Bond issued under the provisions of this Section in lieu of any Authority Bond alleged to be lost, destroyed or stolen shall constitute an original contractual obligation on the part of the Authority whether or not the Authority Bond alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Authority Bonds secured by this Indenture. Section 2.10 CUSIP Numbers. The Trustee and the Authority shall not be liable for any defect or inaccuracy in the CUSIP number that appears on any Authority Bond, check, advise of payment or redemption notice and any such document may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Authority nor the Trustee shall be liable for any inaccuracy in such numbers. Section 2.11 Book -Entry Only System. It is intended that the Authority Bonds, be registered so as to participate in a securities depository system with DTC (the "DTC System"), as -15- set forth herein. The Authority Bonds shall be initially issued in the form of a separate single fully registered Authority Bond for each of the maturities of the Authority Bonds in the name of Cede & Co., as nominee of DTC. The Authority and the Trustee are authorized to execute and deliver such letters to or agreements with DTC as shall be necessary to effectuate the DTC System, including a representation letter in the form required by DTC (the "Representation Letter"). In the event of any conflict between the terms of any such letter or agreement, including the Representation Letter, and the terms of this Indenture, the terms of this Indenture shall control. DTC may exercise the rights of an Authority Bondholder only in accordance with the terms hereof applicable to the exercise of such rights. With respect to the Authority Bonds registered in the books of the Trustee in the name of Cede & Co., as nominee of DTC, the Authority and the Trustee, shall have no responsibility or obligation to any broker-dealer, bank or other financial institution for which DTC holds Authority Bonds from time to time as securities depository (each such broker-dealer, bank or other financial institution being referred to herein as a "DTC Participant") or to any person on behalf of whom such a DTC Participant directly or indirectly holds an interest in the Authority Bonds (each such person being herein referred to as an "Indirect Participant"). Without limiting the immediately preceding sentence, Authority and the Trustee shall have no responsibility or obligation with respect to (a) the accuracy of the records of DTC, Cede & Co. or arty DTC Participant with respect to any ownership interest in the Authority Bonds, (b) the delivery to any DTC Participant or any Indirect Participant or any other person, other than an Authority Bondholder, as shown in the Bond Register, of any notice with respect to the Authority Bonds, including any notice of redemption, (c) the payment to any DTC Participant or Indirect Participant or any other Person, other than an Authority Bondholder, as shown in the Bond Register, of any amount with respect to principal of, premium, if any, or interest on, the Authority Bonds, or (d) any consent given by DTC as registered owner. So long as certificates for the Authority Bonds are not issued pursuant to this Section 2.11 and the Authority Bonds are registered to DTC, the Authority, and the Trustee shall treat DTC or any successor securities depository as, and deem DTC or any successor securities depository to be, the absolute owner of the Authority Bonds for all purposes whatsoever, including without limitation (i) the payment of principal and interest on the Authority Bonds, (ii) giving notice of redemption and other matters with respect to the Authority Bonds, (iii) registering transfers with respect to the Authority Bonds and (iv) the selection of Authority Bonds for redemption. While in the DTC System, no person other than Cede & Co., or any successor thereto, as nominee for DTC, shall receive an Authority Bond certificate with respect to any Authority Bond. Notwithstanding any other provision of this Indenture to the contrary, so long as any of the Authority Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Authority Bonds and all notices with respect to such Authority Bonds shall be made and given, respectively, in the manner provided in the Representation Letter. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this Indenture with respect to interest checks being mailed to the registered owner at the close of business on the Record Date applicable to any Interest Payment Date, the name "Cede & Co." in this Indenture shall refer to such new nominee of DTC. Section 2.12 Successor Securities Depository; Transfers Outside Book Entry -Only System. DTC may determine to discontinue providing its services with respect to the Authority Bonds at any time by giving written notice to the Authority and the Trustee and discharging its responsibilities with respect thereto under applicable law. The Authority, without the consent of any other person, but following written notice to the Trustee, may terminate the services of DTC with respect to the Authority Bonds. Upon the discontinuance or termination of the services of DTC with respect to the Authority Bonds pursuant to the foregoing provisions, unless a substitute -16- securities depository is appointed to undertake the functions of DTC hereunder, the Authority, at the expense of the Authority, is obligated to deliver Authority Bond certificates to the beneficial owners of the Authority Bonds, as described in this Indenture, and the Authority Bonds shall no longer be restricted to being registered in the books of the Trustee in the name of Cede & Co. as nominee of DTC, but may be registered in whatever name or name Bondowner transferring or exchanging Authority Bonds shall designate to the Trustee in writing, in accordance with the provisions of this Indenture. The Authority may determine that the Authority Bonds shall be registered in the naive of and deposited with a successor depository operating a securities depository system, qualified to act as such under Section 17(a) of the Securities Exchange Act of 1934, as amended, as may be acceptable to the Authority, or such depository's agent or designee. -17- ARTICLE III DEPOSIT AND APPLICATION OF PROCEEDS Section 3.1 Issuance of Authority Bonds. Upon the execution and delivery of this Indenture, the Authority shall execute and deliver the Authority Bonds in the principal amount set forth in Section 2.1 hereof to the Trustee for authentication and delivery to the Original Purchaser thereof upon the Request of the Authority. Section 3.2 Application of Proceeds of Authority Bonds and Funds Received from the Reassessment District. Upon the receipt of payment for the Authority Bonds on the Closing Date ($ ), the Trustee shall apply such amount as follows: (a) The Trustee shall deposit $ in the Costs of Issuance Fund. (b) The Trustee shall deposit $ in the Reserve Fund (being an amount equal to the Initial Reserve Fund Deposit). (c) The Trustee shall deposit the remainder of such proceeds, $ J into the Purchase Fund to be immediately applied by the Trustee to the acquisition of the Reassessment Bonds as provided in Section 3.5 hereof. Section 3.3 Revenue Fund. The Trustee shall establish and maintain a separate fund to be known as the "Revenue Fund" and a separate Interest Account and Principal Account therein. Except as otherwise provided herein, the Trustee shall deposit all Revenues received after the Closing Date to the Revenue Fund and shall apply amounts in the Revenue Fund as described in Section 4.2 below. Section 3.4 Costs of Issuance Fund. The Trustee shall establish and maintain a fund known as the "Costs of Issuance Fund" into which shall be deposited the amounts set forth in Section 3.2(a) above. The moneys in the Costs of Issuance Fund shall be used to pay Costs of Issuance from time to time upon receipt by the Trustee of a Request of the Authority. On the date which is one hundred eighty (180) days following the Closing Date, or upon the earlier receipt by the Trustee of a Request of the Authority stating that all Costs of Issuance have been paid, the Trustee shall transfer all remaining amounts in the Costs of Issuance Fund to the Revenue Fund. Upon such transfer, the Costs of Issuance Fund shall be closed and the Trustee shall no longer be obligated to make payments for Costs of Issuance. Section 3.5 Purchase Fund. The Trustee shall establish and maintain a separate fund to be known as the "Purchase Fund" into which shall be deposited a portion of the proceeds of sale of the Authority Bonds pursuant to Section 3.2(c) hereof. The Trustee shall use the proceeds of the Authority Bonds to purchase the Reassessment Bonds on the Closing Date; provided, however, that the Reassessment Bonds may be purchased only if the Trustee has received a certificate of the Original Purchaser of the Authority Bonds or an Independent Financial Consultant stating that the Revenues to be available to the Trustee, assuming timely payment of the Reassessment Bonds, will be sufficient to permit the timely payment of the principal of and interest on all Outstanding Authority Bonds. When no amounts remain on deposit in the Purchase Fund, the Purchase Fund shall be closed. Section 3.6 Surplus Fund. The Trustee shall establish and maintain a separate fund to be known as the "Surplus Fund" which shall be administered as described in Section 4.4 hereof. -18- Section 3.7 Reserve Fund. The Trustee shall establish and maintain a separate fund to be known as the "Reserve Fund" which shall be administered as provided in Section 4.3 hereof. Section 3.8 Validity of Authority Bonds. The validity of the authorization and issuance of the Authority Bonds shall not be affected in any way by any proceedings taken by the Authority, the Town or the Reassessment District with respect to the application of the proceeds of the Authority Bonds, and the recital contained in the Authority Bonds that the same are issued pursuant to the Bond Law shall be conclusive evidence of their validity and of the regularity of their issuance. -19- ARTICLE IV REVENUES; FLOW OF FUNDS Section 4.1 Pledge of Revenues; Assignment of Rights. Subject to the provisions of Sections 6.3 and 9.3 hereof, the Authority Bonds shall be secured by a first lien on and pledge (which shall be effected in the manner and to the extent hereinafter provided) of all of the Revenues. The Authority Bonds shall be equally secured by a pledge, charge and lien upon the Revenues without priority for any Authority Bond over any other Authority Bond; and the payment of the interest on and principal of the Authority Bonds and any premiums upon the redemption of any Authority Bonds shall be and are secured by an exclusive pledge, charge and lien upon the Revenues. So long as any of the Authority Bonds are Outstanding, the Revenues shall not be used for any purpose except as is expressly permitted by this Indenture. The Authority hereby transfers in trust, grants a security interest in and assigns to the Trustee, for the benefit of the Owners from time to time of the Authority Bonds, all of the Revenues and all of the right, title and interest of the Authority in the Reassessment Bonds, subject to the terms of this Indenture. The Trustee shall be entitled to and shall collect and receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. Subject to the provisions of Section 8.2, the Trustee also shall be entitled to and shall take all steps, actions and proceedings reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of the obligations of the Town under the Reassessment Bonds. Upon the deposit with the Trustee of moneys sufficient to pay all principal of, premium, if any, and interest on the Authority Bonds, and upon satisfaction of all claims against the Authority hereunder with respect to the Authority Bonds including all fees, charges and expenses of the Trustee and the Authority which are properly payable hereunder, or upon the making of adequate provisions for the payment of such amounts as permitted hereby, all moneys remaining in all funds and accounts pertaining to the Authority Bonds (except any amounts on deposit in the Rebate Fund and except moneys necessary to pay principal of, premium, if any, and interest on the Authority Bonds, which moneys shall be held by the Trustee pursuant to Section 9.3), shall be paid to the Town free of the lien of this Indenture. Section 4.2 Receipt, Deposit and Application of Revenues; Revenue Fund. (a) All Revenues described in clause (a) of the definition thereof in Section 1.1 shall be promptly deposited by the Trustee upon receipt thereof in the Revenue Fund. Any Revenues which represent the payment of delinquent principal of or interest on the Reassessment Bonds, as identified by the Town in writing to the Trustee, shall immediately be deposited to the Reserve Fund to the extent necessary to replenish the amount therein to the amount of the Initial Reserve Fund Deposit, with any amount in excess of that needed to replenish the Reserve Fund to the amount of the Initial Reserve Fund Deposit to be transferred to the Surplus Fund. On each Interest Payment Date and date for redemption of the Authority Bonds, the Trustee shall transfer from the Revenue Fund and deposit into the following respective accounts, the following amounts in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority: -20- (1) Interest Account. On each Interest Payment Date and redemption date, the Trustee shall deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest becoming due and payable on such Interest Payment Date on all Outstanding Authority Bonds or to be paid on the Authority Bonds being redeemed on such date. No deposit need be made into the Interest Account if the amount contained therein is at least equal to the interest becoming due and payable upon all Outstanding Authority Bonds on the next succeeding Interest Payment Date or redemption date, as applicable. All moneys in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Authority Bonds as it shall become due and payable (including accrued interest on any Authority Bonds redeemed prior to maturity). In the event that the amounts on deposit in the Interest Account on any Interest Payment Date or redemption date, after any transfers from the Reserve Fund pursuant to Section 4.3 hereof, are insufficient for any reason to pay the aggregate amount of interest then coming due and payable on the Outstanding Authority Bonds, the Trustee shall apply such amounts to the payment of interest on each of the Outstanding Authority Bonds on a pro rata basis. (2) Principal Account. On each Interest Payment Date and redemption date on which the principal of the Authority Bonds shall be payable, the Trustee shall deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of, and premium (if any) on, the Authority Bonds coming due and payable on such Interest Payment Date, or required to be redeemed on such date pursuant to Section 2.2(a) or (b) hereof. All moneys in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of (i) paying the principal of the Authority Bonds at the maturity thereof or (ii) paying the principal of and premium (if any) on any Authority Bonds upon the redemption thereof pursuant to Section 2.2(a) or (b) hereof. (3) Reserve Fund. On each Interest Payment Date on which the balance in the Reserve Fund is less than the then Reserve Requirement, after making deposits required under (1) and (2) above, the Trustee shall transfer from the Revenue Fund an amount sufficient to increase the balance in the Reserve Fund to the amount of the then Reserve Requirement by depositing the amount necessary to make the amount therein equal the then Reserve Requirement. It is hereby acknowledged that it is expected that investment earnings on amounts in the Reserve Fund will remain on deposit therein so as to increase the amount on deposit therein up to the maximum Reserve Requirement, but that transfers from the Revenue Fund to the Reserve Fund will only be made if there has been a draw on amounts in the Reserve Fund to make payments on the Authority Bonds. (b) If on any Interest Payment Date or date for redemption the amount on deposit in the Revenue Fund is inadequate to make the transfers described in subsection (a) above as a result of a payment default on the Reassessment Bonds, the Trustee shall immediately notify the Town of the amount needed to make the required deposits under subsection (a) above. In the event that following such notice the Trustee receives additional payments from the Town to cure such shortfall, the Trustee shall deposit such amounts to the account designated in writing by the Town. (c) On September 3 of each year, after making the deposits required under subsections (a) and (b) above on the preceding September 2, the Trustee shall transfer all amounts remaining on deposit in the Revenue Fund to the Surplus Fund. -21- Section 4.3 Reserve Fund. (a) Pursuant to Section 3.2(b), there shall be deposited to the Reserve Fund on the Closing Date an amount equal to the Initial Reserve Fund Deposit. Moneys in the Reserve Fund shall be used solely for the purposes set forth in this Section 4.3. (b) If the amounts in the Interest Account or the Principal Account are insufficient to pay the principal of or interest on the Authority Bonds when due, the Trustee shall, subject to the provisions of the last paragraph of Section 4.4, withdraw from the Reserve Fund for deposit in order of priority in the Interest Account and the Principal Account, as applicable, moneys necessary for such purposes. (c) Pursuant to Section 4.5 hereof, interest earned on the investment of moneys on deposit in the Reserve Fund shall be disposed of as follows: (i) the first $ of such earnings shall be transferred to the Surplus Fund to be used for purposes of the Surplus Fund, and (ii) any additional earnings (A) shall be retained in the Reserve Fund until the amount on deposit therein equals the Maximum Reserve Amount, and (B) which would cause the amount therein to exceed the Maximum Reserve Amount shall be transferred to the Surplus Fund on each September 3. (d) On the date on which there are no longer any Authority Bonds Outstanding under this Indenture, all amounts in the Reserve Fund shall be transferred to the Surplus Fund. Section 4.4 Surplus Fund. Any amounts transferred to the Surplus Fund pursuant to subsection 4.2 hereof shall no longer be considered Revenues and are not pledged to repay the Authority Bonds. From and after the date on which the Outstanding principal amount of the Authority Bonds is equal to or less than the Outstanding principal amount of the Reassessment Bonds, any amounts in the Surplus Fund in excess of $ may be used by the Authority for any lawful purpose, including, but not limited to, (i) the payment of expenses of the Town and the Authority relating to the Authority Bonds, the Reassessment Bonds or the Reassessment District, (ii) transfer to the Town to be deposited into the Redemption Fund for the Reassessment Bonds and applied to reduce debt service payments on Reassessment Bonds or credited pursuant to the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code), or (iii) accumulation in and expenditure from the Surplus Fund for any lawful purpose of the Authority; all as directed from time to time by the Authority to the Trustee in writing. Only amounts in excess of $ in the Surplus Fund may be used for the foregoing purposes, with amounts in the Surplus Fund up to such $ to be available for the purposes of the next sentence. In addition to the foregoing, any amounts on deposit in the Surplus Fund shall be used by the Trustee to pay the principal of and interest due on the Authority Bonds on any Interest Payment Date, prior to the use of moneys in the Reserve Fund for such purpose. In addition, on any date, upon the Request of the Authority, any amounts on deposit in the Surplus Fund in excess of $ and identified in such request shall be remitted by the Trustee to the Town (or transferred to the Revenue Fund by the Trustee), to be applied by the Town to pay (or to be credited to) the principal of and interest on any of the Reassessment Bonds. Section 4.5 Investments. All moneys in any of the funds or accounts established with the Trustee pursuant to this Indenture shall be invested by the Trustee solely in Permitted Investments, as directed pursuant to the Request of the Authority filed with the Trustee at least two (2) Business Days in advance of the making of such investments. The Trustee shall be entitled to conclusively rely on any such Request of the Authority and shall be fully protected in relying thereon. In the absence of any such Request of the Authority the Trustee shall invest any such moneys in Permitted Investments described in clause (p) of the definition thereof. Permitted -22- Investments purchased as an investment of moneys in any fund or account established pursuant to this Indenture shall be deemed to be part of such fund or account. All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the fund or account from which such investment was made; provided, however, that all interest or gain derived from the investment of amounts in the Reserve Fund shall be disposed of as follows: (i) the first $ of such earnings shall be transferred to the Surplus Fund to be used for purposes of the Surplus Fund, and (ii) any additional earnings shall be retained in the Reserve Fund until the amount on deposit in the Reserve Fund is equal to the maximum Reserve Requirement as set forth in the definition "Reserve Requirement" in Section 1.1 hereof, and, as provided m Section 4.3(c), any amount in the Reserve Fund in excess of the then maximum Reserve Requirement shall be withdrawn by the Trustee on each September 3 and deposited to the Surplus Fund, to be applied for the purposes of the Surplus Fund. For purposes of acquiring any investments hereunder, the Trustee may commingle moneys held by it in any of the funds and accounts held by it hereunder. The Trustee and its affiliates may act as advisor, sponsor, principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee and its affiliates may make any and all investments permitted herein through its own investment department. The Trustee shall incur no liability for losses arising from any investments made pursuant to this Section 4.5. The Authority acknowledges that to the extent regulations of the Comptroller of the Currency grant the Authority the right to receive brokerage confirmations of security transactions as they occur, the Authority specifically waives receipt of such confirmations to the extent permitted by law. The Trustee shall furnish the Authority periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. Section 4.6 Valuation and Disposition of Investments. The Authority covenants that all investments of amounts deposited in any fund or account created by or pursuant to this Indenture, or otherwise containing gross proceeds of the Authority Bonds (within the meaning of section 148 of the Code), shall be acquired and disposed of and valued at Fair Market Value; provided, however, that investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Code), shall be valued at their present value (within the meaning of section 148 of the Code). For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued at fair market value determined by the Trustee based on accepted industry standards and from accepted industry providers (accepted industry providers shall include but are not limited to pricing services provided by Financial Times Interactive Data Corporation, Merrill Lynch, or Citigroup Global Markets Inc.). -23- ARTICLE V COVENANTS OF THE AUTHORITY Section 5.1 Punctual Payment. The Authority shall punctually pay or cause to be paid the principal and interest and premium (if any) to become due in respect of all the Authority Bonds, in strict conformity with the terms of the Authority Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Revenues and other assets pledged for such payment as provided in this Indenture. Section 5.2 Extension of Payment of Authority Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Authority Bonds or the time of payment of any claims for interest by the purchase of such Authority Bonds or by any other arrangement, and in case the maturity of any of the Authority Bonds or the time of payment of any such claims for interest shall be extended, such Authority Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Authority Bonds then Outstanding and of all claims for interest thereon which shall have been so extended. Nothing in this Section shall be deemed to limit the right of the Authority to issue Authority Bonds for the purpose of refunding any Outstanding Authority Bonds, and such issuance shall not be deemed to constitute an extension of maturity of the Authority Bonds. Section 5.3 Against Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while any of the Authority Bonds are Outstanding, except the pledge and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, including other programs under the Bond Law, and reserves the right to issue other obligations for such purposes. Section 5.4 Power to Issue Authority Bonds and Make Pledge and Assignment. The Authority is duly authorized pursuant to law to issue the Authority Bonds and to enter into this Indenture and to pledge and assign the Revenues, the Reassessment Bonds and other assets purported to be pledged and assigned, respectively, under this Indenture. The Authority Bonds and the provisions of this Indenture are and will be the legal, valid and binding limited, special obligations of the Authority in accordance with their terms, and the Authority and the Trustee shall at all tunes, subject to the provisions of Article VI hereof and to the extent permitted by law, defend, preserve and protect said pledge and assignment of the Revenues, the Reassessment Bonds and other assets and all the rights of the Bond Owners under this Indenture against all claims and demands of all persons whomsoever. Section 5.5 Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with industry standards in which complete and accurate entries shall be made of transactions made by it relating to the proceeds of Authority Bonds, the Revenues, the Reassessment Bonds and all funds and accounts established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Authority and the Town upon reasonable prior notice during regular business hours and under reasonable circumstances, in each case as agreed to by the Trustee. Section 5.6 Tax Covenants. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the Authority Bonds will not be adversely affected for federal income tax purposes, the Authority covenants to -24- comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows: (a) Private Use and Loan. The Authority shall assure that the proceeds of the Authority Bonds are not used in a manner which would cause the Authority Bonds to satisfy the private business tests of Section 141(b) of the Code or the private loan financing test of Section 141(c) of the Code. (b) Federal Guarantee Prohibition. The Authority shall not take any action or permit or suffer any action to be taken by the Trustee or otherwise if the result of the same would be to cause any of the Authority Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. (c) No Arbitrage. The Authority shall not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the Authority Bond proceeds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date, would have caused the Authority Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Code. (d) Maintenance of Tax -Exemption. The Authority shall take all actions necessary to assure the exclusion of interest on the Authority Bonds from the gross income of the owners thereof to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the Closing Date. (e) Rebate of Excess Investment Earnings to United States. The Authority shall calculate or cause to be calculated excess investment earnings with respect to the Authority Bonds which are required to be rebated to the United States of America pursuant to Section 148(f) of the Code, and shall pay the full amount of such excess investment earnings to the United States of America in such amounts, at such times and in such manner as may be required pursuant to the Code. Such payments shall be made by the Authority from any source of legally available funds of the Authority, including amounts paid by the Town from the Redemption Fund under the Fiscal Agent Agreement. In order to provide for the administration of this Section 5.6(e), the Treasurer of the Authority may provide for the employment of independent attorneys, accountants and consultants compensated on such reasonable basis as the Treasurer of the Authority may deem appropriate. The Trustee shall have no responsibility to make any calculations of rebate or to independently review or verify such calculations. Section 5.7 No Parity Debt. Except for the Authority Bonds, the Authority covenants that no additional bonds, notes or other indebtedness shall be issued or incurred which are payable out of the Revenues or assets pledged under this Indenture as security for the Authority Bonds. Section 5.8 Reassessment Bonds. Subject to the provisions of this Indenture (including Article VI), the Trustee shall use reasonable efforts to collect all amounts due from the Town pursuant to the Reassessment Bonds and shall diligently enforce, and take all steps, actions and proceedings which the Trustee determines to be reasonably necessary for the enforcement of all of the rights of the Authority thereunder and for the enforcement of all of the obligations and covenants of the Town thereunder. The Authority shall instruct the Town to authenticate and deliver to the Trustee the Reassessment Bonds registered in the name of the Trustee. The Authority, the Trustee and the Town may at any time consent to, amend or modify the Reassessment Bonds pursuant to the terns thereof, (a) with the prior consent of the Owners -25- of a majority in aggregate principal amount of the Authority Bonds then Outstanding, or (b) without the consent of any of the Owners, if such amendment or modification is for any one or more of the following purposes: (i) to add to the covenants and agreements of the Town contained in the Reassessment Bonds, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power therein reserved to or conferred upon the Reassessment District or the Town, as applicable; or (ii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Reassessment Bonds, or in any other respect whatsoever as the Town may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not materially adversely affect the interests of the Owners of the Authority Bonds in the opinion of Bond Counsel filed with the Trustee; or (iii) to amend any provision thereof to the extent necessary to comply with the Code in the opinion of Bond Counsel filed with the Trustee. Section 5.9 Sale of Reassessment Bonds. Notwithstanding anything in this Indenture to the contrary, the Authority may cause the Trustee to sell, from time to time, all or a portion of the Reassessment Bonds, provided that the Authority shall deliver to the Trustee: (a) a certificate of an Independent Accountant certifying that, following the sale of the Reassessment Bonds, the Revenues to be paid to the Authority (assuming the timely payment of amounts due thereon with respect to the Reassessment Bonds not then in default), together with interest and principal due on any non -callable Federal Securities pledged to the repayment of the Authority Bonds and the Revenues then on deposit in the funds and accounts established hereunder (valuing any Permitted Investments held hereunder at the then fair market value thereof), will be sufficient to pay the principal of and interest on the Authority Bonds when due; and (b) an opinion of Bond Counsel that such sale of Reassessment Bonds is authorized under the provisions of this Indenture and will not adversely affect the exclusion of interest on the Authority Bonds from gross income for purposes of federal income taxation. Upon compliance with the foregoing conditions by the Authority, the Trustee shall transfer the Reassessment Bonds in accordance with the Request of the Authority and disburse the proceeds of the sale of the Reassessment Bonds to the Authority or upon the receipt of a Request of the Authority shall deposit such proceeds in the Revenue Fund. Section 5.10 Continuing Disclosure. (a) The Authority hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this Indenture, failure of the Authority to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default; however, the Trustee may (and, at the request of the Participating Underwriter or the owners of at least 25% aggregate principal amount of Outstanding Authority Bonds, and upon receipt of indemnification satisfactory to it shall) or any Bondholder may, take such actions as may be necessary and appropriate to compel performance by the Authority of its obligations under the Continuing Disclosure Agreement, including seeking mandate or specific performance by court order. -26- (b) Not later than October 30 of each year, commencing October 30, 2016, and until the October 30 following the final maturity of the Authority Bonds, the Treasurer of the Authority shall supply the following information to the California Debt and Investment Advisory Commission ("CDIAC') by mail, postage prepaid, or by such other means as is acceptable to CDIAC, but only to the extent required to be so supplied by CDIAC: (i) the principal amounts of the Authority Bonds and the principal amount of the Reassessment Bonds then outstanding, (ii) that there is no separate reserve fund for the Reassessment Bonds, and the balance in the Reserve Fund, (iii) the costs of issuance, including any ongoing fees, (iv) the total amount of administrative fees collected, (v) the amount of administrative fees charged to the Reassessment Bonds, (vi) the interest earnings and terms of all guaranteed investment contracts, (vii) commissions and fees paid on guaranteed investment contracts, (viii) delinquency rates on the Reassessment Bonds, and (ix) the amount of any balance in the Interest Account representing capitalized interest. (c) Until the final maturity of the Authority Bonds, the Treasurer of the Authority shall notify CDIAC by mail, postage prepaid, to the extent required by CDIAC, within 10 days of (i) any failure to pay principal and interest due on the Reassessment Bonds, or (ii) any withdrawal of funds from the Reserve Fund. (d) The failure by the Authority to comply with the provisions of Section 5.10(a), (b) or (c) shall not be an Event of Default hereunder. The provisions of Section 5.10(b) and (c) shall be amended to reflect any applicable change in Section 6599.1(b) or (c) of the California Government Code, without any action by the Authority or the Trustee. Section 5.11 Further Assurances. The Authority will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Owners of the Authority Bonds the rights and benefits provided in this Indenture. [Section 5.12 Small Issuer Exemption from Bank Nondeductibility Restriction. The Authority hereby designates the Authority Bonds for purposes of paragraph (3) of section 265(b) of the Code and represents that not more than $10,000,000 aggregate principal amount of obligations the interest on which is excludable (under section 103(a) of the Code) from gross income for federal income tax purposes (excluding (i) private activity bonds, as defined in section 141 of the Code, except qualified 501(c)(3) bonds as defined in section 145 of the Code and (ii) current refunding obligations to the extent the amount of the refunding obligation does not exceed the outstanding amount of the refunded obligation), including the Authority Bonds, has been or will be issued by the Authority, including all subordinate entities of the Authority (which include the Town), during the calendar year 2016.] -27- ARTICLE VI THE TRUSTEE Section 6.1 Appointment of Trustee. U.S. Bank National Association, with a corporate trust office presently located in San Francisco, California, is hereby appointed Trustee by the Authority for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Authority agrees that it will maintain a Trustee which is a corporation, trust company or bank of good standing located in or incorporated under the laws of the State, duly authorized to exercise trust powers, with a combined capital and surplus of (or in the case of a corporation, bank or trust company included in a bank holding system, the related bank holding company shall have) at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state authority, so long as any Authority Bonds are Outstanding. If such corporation, bank or trust company publishes a report of condition at least annually pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this Section 6.1, the combined capital and surplus shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee is hereby authorized to pay the principal of and interest and redemption premium (if any) on the Authority Bonds when duly presented for payment at maturity, or on redemption or purchase prior to maturity, to make regularly scheduled interest payments, and to cancel any Authority Bond upon payment thereof. Section 6.2 Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions: (a) The Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants, obligations or duties shall be read into this Indenture against the Trustee. In case an Event of Default hereunder has occurred (which has not been cured or waived), the Trustee may exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of care and skill and diligence in their exercise, as a reasonable person would exercise or use under the circumstances in the conduct of his own affairs. (b) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, but shall not be responsible for the acts of any agents, attorneys or receivers appointed by it with due care. The Trustee may consult with and act upon the advice of counsel (which may be counsel to the Authority) concerning all matters of trust and its duty hereunder and shall be wholly protected in reliance upon the advice or opinion of such counsel in respect of any action taken or omitted by it in good faith and in accordance herewith. (c) The Trustee shall not be responsible for any recital herein, or in the Tax Certificate or the Authority Bonds, or for any of the supplements thereto or instruments of further assurance, or for the validity, effectiveness or the sufficiency of the security for the Authority Bonds issued hereunder or intended to be secured hereby and the Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, conditions or agreements on the part of the Authority hereunder or under the Tax Certificate. The Trustee shall have no responsibility, opinion, or liability with respect to any information, statement, or recital in any offering memorandum, official statement, or other disclosure material prepared or distributed with respect to the issuance of the Authority Bonds. -28- In addition, the Trustee shall not be responsible for (i) the validity, priority, recording, re- recording, filing or re -filing of this Indenture or any Supplemental Indenture, (ii) any instrument or document of further assurance or collateral assignment, (iii) the preparation, filing or re -filing of any financing statements, amendments thereto or continuation statements, (iv) the validity of the execution by the Authority of this Indenture, any Supplemental Indenture or instruments or documents of further assurance, (v) the sufficiency of the security for the Authority Bonds issued hereunder or intended to be secured hereby, (vi) the maintenance of the security hereof, or (vii) the use of any funds disbursed by the Trustee in accordance with the terms of this Indenture. The Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, agreements or obligations on the part of the Authority under the Tax Certificate or other agreement, instrument or document related to this Indenture (the "Related Documents") except as set forth herein; but the Trustee may require of the Authority full information and advice as to the observance or performance of those covenants, agreements and obligations. Except as otherwise provided in this Indenture, the Trustee shall have no obligation to observe or perforin any of the duties of the Authority under the Related Documents. (d) Except as provided in Section 3.2 hereof, the Trustee shall not be accountable for the use of any proceeds of sale of the Authority Bonds delivered hereunder. The Trustee may become the Owner of Authority Bonds secured hereby with the same rights which it would have if not the Trustee; may acquire and dispose of other bonds or evidences of indebtedness of the Authority with the same rights it would have if it were not the Trustee; and may act as a depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Authority Bonds, whether or not such committee shall represent the Owners of the majority in aggregate principal amount of the Authority Bonds then Outstanding. (e) The Trustee shall be protected and shall incur no liability in acting, or refraining from acting in good faith and without negligence, in reliance upon any notice, request, consent, certificate, order, affidavit, letter, telegram, facsimile or other paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons. The Trustee shall not be liable for any error of judgment made in good faith by an officer or employee of the Trustee unless the Trustee was negligent in ascertaining the pertinent facts. Any action taken or omitted to be taken by the Trustee in good faith and without negligence pursuant to this Indenture upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the Owner of any Authority Bond, shall be conclusive and binding upon all future Owners of the same Authority Bond and upon Authority Bonds issued in exchange therefor or in place thereof. The Trustee shall not be bound to recognize any person as an Owner of any Authority Bond or to take any action at such person's request unless the ownership of such Authority Bond by such person shall be reflected on the Bond Register. (f) As to the existence or non-existence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to request and rely upon a Certificate of the Authority as sufficient evidence of the facts therein contained and prior to the occurrence of an Event of Default hereunder of which the Trustee has been given notice or is deemed to have notice, as provided in Section 6.2(h) hereof, shall also be at liberty to accept a Certificate of the Authority to the effect that any particular dealing, transaction or action is necessary or expedient, and shall be fully protected in relying thereon, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound to secure the same. -29- (g) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and notwithstanding any other provision of this Indenture, the Trustee shall not be answerable for other than its negligence or willful misconduct. The immunities and exceptions from liability of the Trustee shall extend to its officers, directors, employees and agents. (h) The Trustee shall not be required to take notice or be deemed to have notice of any Event of Default hereunder except where a Responsible Officer has actual knowledge of such Event of Default and except for a default under Sections 8.1(a) or (b) hereof, unless a Responsible Officer shall be specifically notified in writing of such default by the Authority or by the Owners of at least twenty-five percent (25%) in aggregate principal amount of the Authority Bonds then Outstanding and all notices or other instruments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered to a Responsible Officer at the Trust Office of the Trustee, and in the absence of such notice so delivered the Trustee may conclusively assume there is no Event of Default hereunder except as aforesaid. Delivery of a notice to the officer and address for the Trustee set forth in Section 9.12 hereof, as updated by the Trustee from time to time, shall be deemed notice to a Responsible Officer. (i) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, accountants and representatives, shall have the right fully to inspect all books, papers and records of the Authority pertaining to the Authority Bonds, and to make copies of any of such books, papers and records such as may be desired but which is not privileged by statute or by law. (j) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the performance of its duties hereunder. (k) Notwithstanding anything elsewhere in this Indenture with respect to the execution of any Authority Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, as may be deemed desirable by the Trustee in its sole discretion for the purpose of establishing the right of the Authority to the execution of any Authority Bonds, the withdrawal of any cash, or the taking of any other action by the Trustee. (1) Before taking the action referred to in Sections 6.5 or 8.2, or in this Article, the Trustee may require that an indemnity bond satisfactory to it be furnished for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or wilful misconduct in connection with any such action. (m) All moneys received by the Trustee shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received but need not be segregated from other funds. (n) The Trustee shall not be liable for interest on any cash held by it except as the Trustee may agree with the Authority or as required to be invested pursuant to the terms of this Indenture. (o) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty. -30- (p) The Trustee may, but shall be under no duty to, require of the Authority full information and advice as to the performance of the covenants, conditions and agreements of the Authority in this Indenture or the Related Documents. The Trustee shall have no obligation to perform any of the duties of the Authority under the Indenture or the Related Documents. (q) The Trustee makes no representation as to the validity or adequacy of this Indenture or the Authority Bonds, it shall not be accountable for the use of the proceeds from the Authority Bonds paid either to the Authority and it shall not be responsible for any statements of the Authority in this Indenture or the Related Documents. The Trustee shall not be responsible for the validity of the execution by the Authority of this Indenture, any Supplemental Indenture, the Related Documents or of any instruments of further assurance, or for the sufficiency of the security for this Indenture issued hereunder or intended to be secured hereby. (r) The Trustee may rely upon a facsimile transmission with regard to any requisition or instruction for any transfer, disbursement or investment of funds held by the Trustee. The Authority shall confirm such transmission promptly in writing by mail. Section 6.3 Fees, Charges and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement by the Authority for reasonable fees for its services rendered hereunder and all advances (including any interest on advances), counsel fees and expenses (including fees and expenses of outside counsel and the allocated costs of internal attorneys) and other expenses reasonably and necessarily made or incurred by the Trustee in connection with such services. Upon the occurrence of an Event of Default hereunder, but only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment of any Authority Bond upon the amounts held in funds and accounts hereunder for the foregoing fees, charges and expenses incurred by it respectively. The Trustee's right to payment of its fees and expenses shall survive the discharge and payment or defeasance of the Authority Bonds and termination of this Indenture, and the resignation or removal of the Trustee. Section 6.4 Notice to Bond Owners of Default. If an Event of Default hereunder occurs with respect to any Authority Bonds of which the Trustee has been given, or is deemed to have notice, as provided in Section 6.2(h) hereof, then the Trustee shall promptly give written notice thereof by first-class mail to the Owner of each such Authority Bond, unless such Event of Default shall have been cured before the giving of such notice. Section 6.5 Intervention by Trustee. In any judicial proceeding to which the Authority is a party which, in the opinion of the Trustee and its counsel, has a substantial bearing on the interests of Owners of any of the Authority Bonds, the Trustee may intervene on behalf of such Bond Owners, and subject to Section 6.2(1) hereof, shall do so if requested in writing by the Owners of at least twenty-five percent (25%) in aggregate principal amount of such Authority Bonds then Outstanding. Section 6.6 Removal of Trustee. The Owners of a majority in aggregate principal amount of the Outstanding Authority Bonds may, and the Authority may, upon 30 days' prior written notice to the Trustee and the Town, remove the Trustee initially appointed, and any successor thereto, by an instrument or concurrent instruments in writing delivered to the Trustee. Upon any such removal, the Authority shall appoint a successor or successors thereto; provided that any such successor shall be a corporation, bank or trust company meeting the requirements set forth in Section 6.1 hereof. Section 6.7 Resignation by Trustee. The Trustee and any successor Trustee may at any time give prior written notice of its intention to resign as Trustee hereunder, such notice to be given to the Authority and the Town by registered or certified mail. Upon receiving such notice -31- of resignation, the Authority shall promptly appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. Upon such acceptance, the new Trustee shall cause notice thereof to be given by first class mail, postage prepaid, to the Bond Owners at their respective addresses set forth on the Bond Register. Section 6.8 Appointment of Successor Trustee. In the event of the removal or resignation of the Trustee pursuant to Sections 6.6 or 6.7, respectively, the Authority shall promptly appoint a successor Trustee. In the event the Authority shall for any reason whatsoever fail to appoint a successor Trustee within thirty (30) days following the delivery to the Trustee of the instrument described in Section 6.6 or within thirty (30) days following the receipt of notice by the Authority and the Town pursuant to Section 6.7, the Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee meeting the requirements of Section 6.1 hereof. Section 6.9 Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such company shall meet the requirements set forth in Section 6.1 hereof, shall be the successor to the Trustee and vested with all of the title to the trust estate and all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding. Section 6.10 Concerning any Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authority an instrument in writing accepting such appointment hereunder and to the predecessor Trustee an instrument indemnifying the predecessor Trustee for any costs or claims arising during the time the successor Trustee serves as Trustee hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the Request of the Authority, or of the Trustee's successor, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys held by it as the Trustee hereunder to its successor. Should any instrument in writing from the Authority be required by any successor Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested in the predecessor Trustee, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority. Section 6.11 Appointment of Co -Trustee. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as a trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an additional individual or institution as a separate co -trustee. The following provisions of this Section 6.11 are adopted to these ends. -32- In the event that the Trustee or the Authority appoints an additional individual or institution as a separate or co -trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate or co -trustee but only to the extent necessary to enable such separate or co -trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co -trustee shall run to and be enforceable by either of the Trustee or separate or co -Trustee. Should any instrument in writing from the Authority be required by the separate trustee or co -trustee so appointed by the Trustee or the Authority for more fully and certainly vesting in and confirming to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority. In case any separate trustee or co -trustee, or a successor to either, shall become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co -trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee or co -trustee. Section 6.12 Indemnification; Limited Liability of Trustee. The Authority further covenants and agrees to indemnify and save the Trustee and its officers, officials, directors, agents and employees, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise and performance of its powers and duties hereunder, including attorney fees and the costs and expenses of defending against any claim of liability, but excluding any and all losses, expenses and liabilities which are due to the negligence or intentional misconduct of the Trustee, its officers, directors, agents or employees. No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability hereunder. The Trustee shall not be liable for any action taken or omitted to be taken by it in accordance with the direction of a majority (or any lesser amount that may direct the Trustee in accordance with the provisions of the Indenture) of the Owners of the principal amount of Authority Bonds Outstanding relating to the time, method and place of conducting any proceeding or remedy available to the Trustee under this Indenture. The rights of the Trustee and the obligations of the Authority under Section 6.3 and this Section 6.12 shall survive termination of this Indenture, discharge of the Authority Bonds and resignation or removal of the Trustee. -33- ARTICLE VH MODIFICATION AND AMENDMENT OF THE INDENTURE Section 7.1 Amendment Hereof. This Indenture and the rights and obligations of the Authority and of the Owners of the Authority Bonds may be modified or amended at any time by a Supplemental Indenture which shall become binding when the prior written consent of the Owners of a majority in aggregate principal amount of the Authority Bonds then Outstanding are filed with the Trustee. No such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Authority Bond or otherwise alter or impair the obligation of the Authority to pay the principal, interest or redemption premiums at the time and place and at the rate and in the currency provided therein of any Authority Bond without the express written consent of the Owner of such Authority Bond, (b) reduce the percentage of Authority Bonds required for the written consent to any such amendment or modification, or (c) without written consent of the Trustee, modify any of the rights or obligations of the Trustee. This Indenture and the rights and obligations of the Authority and of the Owners of the Authority Bonds may also be modified or amended at any time by a Supplemental Indenture which shall become binding upon adoption, without consent of any Bond Owners, to the extent permitted by law but only for any one or more of the following purposes - (a) to add to the covenants and agreements of the Authority contained in this Indenture, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or powers herein reserved to or conferred upon the Authority so long as such addition, limitation or surrender of such rights or powers shall not materially adversely affect the Owners of the Authority Bonds; or (b) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Indenture, or in any other respect whatsoever as the Authority may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not materially adversely affect the interests of the Owners of the Authority Bonds; or (c) to amend any provision hereof relating to the Code as may be necessary or appropriate to assure compliance with the Code and the exclusion from gross income of interest on the Authority Bonds; or (d) to amend the provisions of clauses (i), (ii) or (iii) of the first paragraph of Section 4.4 hereof. The Trustee may, as it deems appropriate in its sole discretion, obtain an opinion of Bond Counsel that any such Supplemental Indenture entered into by the Authority and the Trustee complies with the provisions of this Article 7 and the Trustee may conclusively rely upon such opinion and shall be fully protected in relying thereon. Section 7.2 Effect of Supplemental Indenture. From and after the time any Supplemental Indenture becomes effective pursuant to this Article 7, this Indenture shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations of the parties hereto or thereto and all Owners of Outstanding Authority Bonds, as the case may be, shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of this Indenture for any and all purposes. -34- Section 7.3 Endorsement or Replacement of Authority Bonds After Amendment. After the effective date of any action taken as hereinabove provided, the Authority may determine that any affected Authority Bonds shall bear a notation, by endorsement in form approved by the Authority, as to such action, and in that case upon demand of the Owner of any Authority Bond Outstanding at such effective date and presentation of its Authority Bond for that purpose at the Trust Office of the Trustee, a suitable notation as to such action shall be made on such Authority Bond. If the Authority shall so determine, new Authority Bonds so modified as, in the opinion of the Authority, shall be necessary to conform to such Bond Owners' action shall be prepared and executed, and in that case upon demand of the Owner of any Authority Bond Outstanding at such effective date such new Authority Bonds shall be exchanged at the Trust Office of the Trustee, without cost to each Authority Bond Owner, for Authority Bonds then Outstanding, upon surrender of such Outstanding Authority Bonds. Section 7.4 Amendment by Mutual Consent. The provisions of this Article VII shall not prevent any Authority Bond Owner from accepting any amendment as to the particular Authority Bond held by such Owner, provided that due notation thereof is made on such Authority Bond. -35- ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES Section 8.1 Events of Default. The following events shall be Events of Default hereunder. (a) Default in the due and punctual payment of the principal of any Authority Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise; (b) Default in the due and punctual payment of any installment of interest on any Authority Bond when and as such interest installment shall become due and payable; (c) Default by the Authority in the observance of any of the other covenants, agreements or conditions on its part in this Indenture or in the Authority Bonds contained, if such default shall have continued for a period of sixty (60) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Authority by the Trustee, or to the Authority and the Trustee by the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Authority Bonds at the time Outstanding; provided that such default (other than a default arising from nonpayment of the Trustee's fees and expenses, which must be cured within such 60 -day period unless waived by the Trustee) shall not constitute a Event of Default hereunder if the Authority shall commence to cure such default within said sixty (60) day period and thereafter diligently and in good faith shall cure such default within a reasonable period of time; or (d) The filing by the Authority of a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Authority, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Authority or of the whole or any substantial part of its property. Section 8.2 Remedies; Rights of Bond Owners. Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Authority Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture. In the event of an Event of Default arising out of a nonpayment of Trustee's fees and expenses, the Trustee may sue the Authority to seek recovery of its fees and expenses; provided, however, that such recovery may be made only from funds of the Authority and not from Revenues. If an Event of Default shall have occurred and be continuing, if requested to do so by the Owners of at least twenty-five percent (25%) in aggregate principal amount of Outstanding Authority Bonds, and, in each case, if indemnified as provided in Section 6.2(1), the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article VIII and, as applicable, under the Reassessment Bonds, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Authority Bond Owners. No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to the Authority Bond Owners) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or to the Authority Bond Owners hereunder or now or hereafter existing at law or in equity. -36- No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein; such right or power may be exercised from time to time as often as may be deemed expedient. Section 8.3 Application of Revenues and Other Funds After Event of Default. All amounts received by the Trustee pursuant to any right given or action taken by the Trustee, and any funds then held by the Trustee, under the provisions of this Indenture shall be applied by the Trustee in the following order upon presentation of the several Authority Bonds, and the stamping thereon of the amount of the payment if only partially paid, or upon the surrender thereof if fully paid - First, to the payment of the costs and expenses of the Trustee in declaring such Event of Default and in carrying out the provisions of this Article VIII, including reasonable compensation to its agents, attorneys and counsel (including outside counsel and the allocated costs of internal attorneys), and to the payment of all other outstanding fees and expenses of the Trustee; and Second, to the payment of the whole amount of interest on and principal of the Authority Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Authority Bonds; provided, however, that in the event such amounts shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order of priority. (a) first to the payment of all installments of interest on the Authority Bonds then due and unpaid, (b) second, to the payment of all installments of principal of the Authority Bonds then due and unpaid, and (c) third, to the payment of interest on overdue installments of principal and interest on Authority Bonds. Section 8.4 Power of Trustee to Control Proceedings. In the event that the Trustee, upon the happening of a Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of a majority in aggregate principal amount of the Authority Bonds then Outstanding, it may, exercise its discretion for the best interests of the Owners of the Authority Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if there has been filed with it a written request signed by the Owners of a majority in aggregate principal amount of the Outstanding Authority Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other such litigation and provided further that the Trustee shall have the right to decline to comply with such written request unless indemnification satisfactory to it has been provided. Any suit, action or proceeding which any Owner of Authority Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Authority Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Authority Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney in -37- fact of the respective Owners of the Authority Bonds for the purposes of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Authority Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact. Section 8.5 Appointment of Receivers. Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Bond Owners under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Revenues and other amounts pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer. Section 8.6 Non -Waiver. Nothing in this Article VIII or in any other provision of this Indenture, or in the Authority Bonds, shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the interest on and principal of the Authority Bonds to the respective Owners of the Authority Bonds at the respective dates of maturity, as herein provided, out of the Revenues and other moneys herein pledged for such payment. A waiver of any default or breach of duty or contract by the Trustee or any Bond Owners shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission of the Trustee or any Owner of any of the Authority Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy conferred upon the Trustee or Bond Owners by the Bond Law or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Bond Owners, as the case may be. Section 8.7 Rights and Remedies of Bond Owners. No Owner of any Authority Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of all the Authority Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Authority Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of Authority Bonds shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Authority Bonds. The right of any Owner of any Authority Bond to receive payment of the principal of and interest and premium (if any) on such Authority Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the written -38- consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture. Section 8.8 Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the Authority, the Trustee and the Bond Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken. -39- ARTICLE IX MISCELLANEOUS Section 9.1 Limited Liability of Authority. Notwithstanding anything in this Indenture contained, the Authority shall not be required to advance any moneys derived from any source of income other than the Revenues for the payment of the principal of or interest on the Authority Bonds, or any premiums upon the redemption thereof, or for the performance of any covenants herein contained (except to the extent any such covenants are expressly payable hereunder) from the Revenues. The Authority may in its sole and absolute discretion, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose and may be used by the Authority for such purpose without incurring indebtedness. The Authority Bonds shall be revenue bonds, payable exclusively from the Revenues and other funds as in this Indenture provided. The general fund of the Authority is not liable, and the credit of the Authority is not pledged, for the payment of the interest and premium (if any) on or principal of the Authority Bonds. The Owners of the Authority Bonds shall never have the right to compel the forfeiture of any property of the Authority. The principal of and interest on the Authority Bonds and any premiums upon the redemption of any thereof, shall not be a legal or equitable pledge, charge, lien or encumbrance upon any property of the Authority or upon any of its income, receipts or revenues except the Revenues and other funds pledged to the payment thereof as in this Indenture provided. Section 9.2 Benefits of Indenture Limited to Parties. Nothing in this Indenture, expressed or implied, is intended to give to any person other than the Authority, the Trustee and the Owners of the Authority Bonds, any right, remedy or claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the Trustee and the Owners of the Authority Bonds. Section 9.3 Discharge of Indenture. If the Authority shall pay and discharge any or all of the Outstanding Authority Bonds in any one or more of the following ways: (a) by well and truly paying or causing to be paid the principal of and interest and premium (if any) on such Authority Bonds, as and when the same become due and payable; (b) by irrevocably depositing with the Trustee, in trust, at or before maturity, money which, together with the available amounts then on deposit in the funds and accounts established with the Trustee pursuant to this Indenture and available for such purpose, is fully sufficient to pay such Authority Bonds, including all principal, interest and redemption premiums; or (c) by irrevocably depositing with the Trustee or any other fiduciary, in trust, the securities set forth in the final paragraph of this Section in such amount as Bond Counsel or an Independent Accountant shall determine will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established with the Trustee pursuant to this Indenture and available for such purpose, be fully sufficient to pay and discharge the indebtedness on such Authority Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Authority Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been mailed pursuant to Section 2.2(c) hereof or provision satisfactory to -40- the Trustee shall have been made for the mailing of such notice, then, at the Request of the Authority, and notwithstanding that any of such Authority Bonds shall not have been surrendered for payment, the pledge of the Revenues and other funds provided for in this Indenture with respect to such Authority Bonds, and all other pecuniary obligations of the Authority under this Indenture with respect to such Authority Bonds, shall cease and terminate, except only the obligation of the Authority to comply with the covenants contained in Sections 5.6 and 6.12 hereof, to pay or cause to be paid to the Owners of such Authority Bonds not so surrendered and paid all sums due thereon from amounts set aside for such purpose as aforesaid, and to pay all expenses and costs of the Trustee. Any funds thereafter held by the Trustee, which are not required for said purposes, shall be paid over to the Authority. Section 9.4 Successor is Deemed Included in All References to Predecessor. Whenever in this Indenture or any Supplemental Indenture either the Authority is named or referred to, such reference shall be deemed to include the successor to the powers, duties and functions, with respect to the management, administration and control of the affairs of the Authority, that are presently vested in the Authority, and all the covenants, agreements and provisions contained in this Indenture by or on behalf of the Authority shall bind and inure to the benefit of its successors whether so expressed or not. Section 9.5 Waiver of Notice; Requirement of Mailed Notice. Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Whenever in this Indenture any notice shall be required to be given by mail, such requirement shall be satisfied by the deposit of such notice in the United States mail, postage prepaid, by first class mail. Section 9.6 Execution of Documents by Bond Owners. Any request, consent or other instrument required by this Indenture to be signed and executed by Bond Owners may be in any number of concurrent writings of substantially similar tenor and may be signed or executed by such Bond Owners in person or by agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and of the Authority if made in the manner provided in this Section 9.6. The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the person signing such request, consent or other instrument or writing acknowledged to him the execution thereof. The ownership of Authority Bonds shall be conclusively proved by the Bond Register. Any request, consent or vote of the Owner of any Authority Bond shall bind every future Owner of the same Authority Bond and the Owner of any Authority Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in pursuance of such request, consent or vote. In lieu of obtaining any demand, request, direction, consent or waiver in writing, the Trustee may call and hold a meeting of the Bond Owners upon such notice and in accordance with such rules and obligation as the Trustee considers fair and reasonable for the purpose of obtaining any such action. Section 9.7 Disqualified Authority Bonds. In determining whether the Owners of the requisite aggregate principal amount of Authority Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Authority Bonds which are owned or held by -41- or for the account of the Authority or the Town (but excluding Authority Bonds held in any employees' or retirement fund) shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, provided, however, that for the purpose of determining whether the Trustee shall be protected in relying on any such demand, request, direction, consent or waiver, only Authority Bonds which the Trustee knows to be so owned or held shall be disregarded. Upon request, the Authority shall specify to the Trustee those Authority Bonds disqualified pursuant to this Section 9.7. Section 9.8 Waiver of Personal Liability. No Boardmember, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the interest on or principal of the Authority Bonds; but nothing herein contained shall relieve any such officer, agent or employee from the performance of arty official duty provided by law. Section 9.9 Partial Invalidity. If any one or more of the covenants or agreements, or portions thereof, provided in this Indenture on the part of the Authority (or of the Trustee) to be performed should be contrary to law, then such covenant or covenants, such agreement or agreements, or such portions thereof, shall be null and void and shall be deemed separable from the remaining covenants and agreements or portions thereof and shall in no way affect the validity of this Indenture or of the Authority Bonds; but the Bond Owners shall retain all rights and benefits accorded to them under the Bond Law or any other applicable provisions of law. The Authority hereby declares that it would have entered into this Indenture and each and every other section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Authority Bonds pursuant hereto irrespective of the fact that any or more sections, paragraphs, subdivisions, sentences, clauses or phrases of this Indenture or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid. Section 9.10 Destruction of Canceled Authority Bonds. Whenever in this Indenture provision is made for the surrender to the Authority or the Trustee of any Authority Bonds which have been paid or canceled pursuant to the provisions of this Indenture, the Trustee shall destroy such Authority Bonds in accordance with the retention policy of the Trustee then in effect. Section 9.11 Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Authority or the Trustee may be established and maintained in the accounting records of the Authority or the Trustee, as the case may be, either as a fund or an account, and may, for the purpose of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account. All such records with respect to all such funds and accounts held by the Authority shall at all times be maintained in accordance with generally accepted accounting principles and all such records with respect to all such funds and accounts held by the Trustee shall be at all times maintained in accordance with industry practices; in each case with due regard for the protection of the security of the Authority Bonds and the rights of every Owner thereof. Section 9.12 Notices. Any notice, request, complaint, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, postage prepaid, or sent by telegram, addressed as follows: -42- If to the Authority: If to the Town: If to the Trustee: Tiburon Public Financing Authority 1505 Tiburon Boulevard Tiburon, CA 94920 Attention: Treasurer Town of Tiburon, California 1505 Tiburon Boulevard Tiburon, CA 94920 Attention: Director of Administrative Services U.S. Bank National Association 1 California Street, 10th Floor San Francisco, CA 94111 Attention: Corporate Trust Department The Authority, the Town and the Trustee may designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Section 9.13 Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of interest, principal or premium on any of the Authority Bonds which remain unclaimed for two (2) years after the date when such interest, principal or premium has become due and payable, either at its stated due date, maturity date or by call for earlier redemption, if such moneys were held by the Trustee at such date, or for two (2) years after the date of deposit of such moneys if deposited with the Trustee after said date when such Authority Bonds become due and payable, shall be repaid by the Trustee to the Authority, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bond Owners shall look only to the Authority for the payment of such Authority Bonds; provided, however, that before being required to make such payment to the Authority, the Trustee may, at the expense of Authority, cause to be mailed to the Owners of all such Authority Bonds, at their respective addresses appearing on the Bond Register, a notice that said moneys remain unclaimed and that, after a date in said notice, which date shall not be less than thirty (30) days after the date of mailing such notice, the balance of such moneys then unclaimed will be returned to the Authority. Section 9.14 Payment Due on Other than a Business Day. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in the Indenture, is not a Business Day, such payment, with no interest accruing for the period after such nominal date, may be made or act performed or right exercised on the next succeeding Business Day with the same force and effect as if done on the nominal date provided in this Indenture. Section 9.15. Governing Laws. This Indenture shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in California. Section 9.16. Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original and all of which shall constitute but one and the same instrument. -43- IN WITNESS WHEREOF, the TIBURON PUBLIC FINANCING AUTHORITY has caused this Indenture to be signed by its Executive Director, and U.S. BANK NATIONAL ASSOCIATION, in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by its officer identified below, all as of the day and year first above written. 20034.01:114109 S-1 TIBURON PUBLIC FINANCING AUTHORITY By Greg Chanis, Executive Director U.S. BANK NATIONAL ASSOCIATION, as Trustee By Authorized Officer EXHIBIT A FORM OF BOND TIBURON PUBLIC FINANCING AUTHORITY 2016 REVENUE BOND (CONSOLIDATED REASSESSMENT DISTRICT) INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP: September 2, August 25, 2016 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The TIBURON PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the United States of America (the "Authority"), for value received, hereby promises to pay (but only out of the Revenues and other funds hereinafter referred to) to the Registered Owner identified above or registered assigns (the "Registered Owner"), on the Maturity Date identified above (subject to any right of prior redemption hereinafter mentioned), the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Authority Bond (unless this Authority Bond is authenticated on or before an Interest Payment Date and after the fifteenth calendar day of the month preceding the month in which such Interest Payment Date occurs, in which event it shall bear interest from such Interest Payment Date, or unless this Authority Bond is authenticated on or prior to February 15, 2017, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Authority Bond, interest is in default on this Authority Bond, this Authority Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or made available for payment), payable semiannually on March 2 and September 2 in each year, commencing March 2, 2017 (each, an "Interest Payment Date"), until the Maturity Date stated above or date of redemption of this Authority Bond. The Principal Amount hereof is payable upon presentation and surrender hereof at the Trust Office (as defined in the Indenture) of U.S. Bank National Association (the "Trustee"). Interest hereon is payable by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the registration books of the Trustee as of the fifteenth calendar day of the month preceding the month in which such Interest Payment Date occurs; provided, however, that payment of interest may be made by wire transfer to an account in the continental United States of America to any registered owner of Authority Bonds in the aggregate principal amount of $1,000,000 or more upon written instructions of any such registered owner filed with the Trustee for that purpose as of the close of business on the fifteenth calendar day of the month preceding the month in which such Interest Payment Date occurs. Exhibit A Page 1 This Authority Bond is a limited obligation of the Authority, payable solely from the Revenues and funds pledged under the Indenture (as defined herein). This Authority Bond is not a debt of the Town of Tiburon, California or the State of California or any of its political subdivisions (except the Authority and only to the extent set forth in the Indenture), and none of said Town, said State or any of its political subdivisions is liable hereon. The Authority has no taxing power. This Authority Bond is one of a duly authorized series of bonds of the Authority designated the "Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District)" (the "Authority Bonds"), limited in principal amount to million hundred thousand dollars ($ ), secured by an Indenture of Trust dated as of August 1, 2016 (the "Indenture"), by and between the Authority and the Trustee. Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of the rights thereunder of the owners of the Authority Bonds, of the nature and extent of the Revenues (as that term is defined in the Indenture), of the rights, duties and immunities of the Trustee and of the rights and obligations of the Authority thereunder; and all of the terms of the Indenture are hereby incorporated herein and constitute a contract between the Authority and the Registered Owner hereof, and to all of the provisions of which Indenture the Registered Owner hereof, by acceptance hereof, assents and agrees. The Authority Bonds are authorized to be issued pursuant to the provisions of the Marks - Roos Local Bond Pooling Act of 1985, as amended, constituting Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act"). The Authority Bonds are limited obligations of the Authority and, as and to the extent set forth in the Indenture, are payable solely from and secured by a first lien on and pledge of the Revenues and certain other funds held by the Trustee as provided in the Indenture. The Revenues and such other funds constitute a trust fund for the security and payment of the principal of and interest on the Authority Bonds, except to the extent otherwise provided in the Indenture. The full faith and credit of the Authority is not pledged to the payment of the principal of or interest or redemption premiums (if any) on the Authority Bonds. The Authority Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the Authority or any of its income or receipts, except the Revenues and such other funds as provided in the Indenture. The Authority Bonds have been issued to provide funds to purchase certain reassessment bonds of the Town (the "Reassessment Bonds"), to fund a reserve fund and to pay costs of issuance of the Authority Bonds and the Reassessment Bonds. The Town will use the proceeds that it receives from the sale of the Reassessment Bonds to the Authority to refund certain outstanding bonds of the Town. The obligations of the Town to make payments of principal and interest on the Reassessment Bonds are limited obligations secured only as set forth therein. The Authority Bonds maturing on or after September 2, , are subject to optional redemption prior to maturity on any Interest Payment Date on or after September 2, , as a whole, or in part from maturities as are selected by the Authority in accordance with the Indenture, and by lot within a maturity, from any source of funds made available to the Authority, at the option of the Authority, on any date at the following respective redemption prices (expressed as percentages of the principal amount of the Authority Bonds to be redeemed), plus accrued interest thereon to the date of redemption: Redemption Date Redemption Price and , % and 2, and thereafter Exhibit A Page 2 The Authority Bonds are also subject to special redemption on any Interest Payment Date on or after March 2, 2017, from proceeds of early redemption of the Reassessment Bonds from prepayments of Reassessments (as such term is defined in the Indenture), in whole or in part, among maturities as selected by the Authority in accordance with the Indenture, at the principal amount thereof, plus accrued interest to the date of redemption thereof, without premium. The Authority Bonds maturing on September 2, , are subject to mandatory sinking payment redemption in part on September 2, , and on each September 2 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking payments as follows: Redemption Date Mandatory (September 2) Sinking Payments The Trustee on behalf and at the expense of the Authority shall mail by first class mail, postage prepaid, notice of any redemption to the respective owners of any Authority Bonds designated for redemption, at their respective addresses appearing on the registration books maintained by the Trustee and to the Securities Depositories and to the Information Services (as such terms are defined in the Indenture), at least thirty (30) but not more than sixty (60) days prior to the redemption date; provided, however, that neither failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Authority Bonds or the cessation of the accrual of interest thereon. Notices of redemption may be conditioned upon receipt by the Trustee of sufficient moneys to redeem the Bonds on the anticipated redemption date, and if the Trustee does not receive sufficient funds by the scheduled redemption date the redemption shall not occur and the Bonds for which notice of redemption was given shall remain outstanding for all purposes of the Indenture. If this Authority Bond is called for redemption and payment is duly provided therefor as specified in the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption. The Authority Bonds are issuable as fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, fully registered Authority Bonds may be exchanged at the Trust Office of the Trustee for a like aggregate principal amount and maturity of fully registered Authority Bonds of other authorized denominations. This Authority Bond is transferable by the Registered Owner hereof, in person or by its attorney duly authorized in writing, at the Trust Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Authority Bond. Upon such transfer a new fully registered Authority Bond or Authority Bonds, of authorized denomination or denominations, for the same aggregate principal amount will be issued to the transferee in exchange herefor. The Trustee shall not be required to register the transfer or exchange of any Authority Bond (i) during 15 days prior to selection of Authority Bonds for redemption, or (ii) selected for redemption. Exhibit A Page 3 The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. The Indenture and the rights and obligations of the Authority and of the owners of the Authority Bonds and of the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Authority Bond or otherwise alter or impair the obligation of the Authority to pay the principal, interest or redemption premiums at the time and place and at the rate and in the currency provided therein of any Authority Bond without the express written consent of the owner of such Authority Bond, (b) reduce the percentage of Authority Bonds required for the written consent to any such amendment or modification, or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee, all as more fully set forth in the Indenture. It is hereby certified by the Authority that all things, conditions and acts required to exist, to have happened and to have been performed precedent to and in the issuance of this Authority Bond do exist, have happened and have been performed in due time, form and manner as required by the Constitution and statutes of the State of California and by the Act, and that the amount of this Authority Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Constitution or statutes of the State of California or by the Act. Unless this Authority Bond is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any Authority Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. This Authority Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the Trustee's Certificate of Authentication hereon shall have been signed by the Trustee. Exhibit A Page 4 IN WITNESS WHEREOF, the Authority has caused this Authority Bond to be executed in its name and on its behalf by the facsimile signatures of its Chair and Secretary and its seal to be reproduced hereon all as of the Dated Date identified above. [S E A L] ATTEST: TIBURON PUBLIC FINANCING AUTHORITY By Chair Secretary TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Authority Bonds described in the within -mentioned Indenture. Date: U.S. BANK NATIONAL ASSOCIATION, as Trustee By: Authorized Signatory Exhibit A Page 5 ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number) the within -mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises. Dated: Signature: Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. Signature Guaranteed: Note: Signature(s) must be guaranteed by an eligible guarantor. Exhibit A Page 6 Quint & Thimmig LLP 7/12/16 BOND PURCHASE AGREEMENT TIBURON PUBLIC FINANCING AUTHORITY 2016 REFUNDING REVENUE BONDS (CONSOLIDATED REASSESSMENT DISTRICT) August 2016 Tiburon Public Financing Authority 1505 Tiburon Blvd Tiburon, California 94920 Ladies and Gentlemen: The undersigned (the "Underwriter") offers to enter into this Bond Purchase Agreement (the "Purchase Agreement") with the Tiburon Public Financing Authority (the "Authority") which will be binding upon the Authority and the Underwriter upon the acceptance hereof by the Authority. This offer is made subject to its acceptance by the Authority by execution of this Purchase Agreement and its delivery to the Underwriter on or before 5:00 p.m., California time, on the date hereof. All capitalized terms used and not otherwise defined herein have the respective meanings given to such terms in the Indenture of Trust (the "Indenture"), dated as of August 1, 2016, by and between the Authority and U.S. Bank National Association, as trustee (the "Trustee"). Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the Authority for offering to the public, and the Authority hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District) (the `Bonds"). The purchase price for the Bonds shall be $ (being the $ aggregate initial principal amount of the Bonds, plus a net original issue premium of $ , and less an underwriter's discount of $ ). The Authority acknowledges and agrees that: (a) the primary role of the Underwriter is to purchase securities for resale to investors in an arms -length commercial transaction between the Authority and the Underwriter and that the Underwriter has financial and other interests that differ from those of the Authority, (b) the Underwriter is not acting as a municipal advisor, financial advisor or fiduciary to the Authority or any other person or entity and has not assumed any advisory or fiduciary responsibility to the Authority with respect to the transaction contemplated hereby and the discussions, undertakings and proceedings leading thereto (irrespective of whether the Underwriter have provided other services or is currently providing other services to the Authority on other matters), (c) the only obligations the Underwriter has to the Authority with respect to the transaction contemplated hereby expressly are set forth in this Purchase Agreement, except as otherwise provided by applicable rules and regulations of the Securities and Exchange Commission or the rules of the Municipal Securities Rulemaking Board (the "MSRB"), and (d) the Authority has consulted its own legal, accounting, tax, financial and other advisors, as applicable, to the extent it has deemed appropriate in connection with the transaction contemplated herein. The Authority acknowledges that it has previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the MSRB. 20034.O1:J14149 Section 2. Description of the Bonds. The Bonds shall be issued pursuant to the Indenture, Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Bond Law"), and a resolution of the Board of Directors of the Authority adopted on July 20, 2016 (the "Bond Resolution"). The Bonds shall be as described in the Indenture and the official statement dated the date hereof relating to the Bonds (which, together with all exhibits and appendices included therein or attached thereto and such amendments or supplements thereto which shall be approved by the Underwriter, is hereinafter called the "Official Statement"). The proceeds of the Bonds shall be applied by the Authority to finance the purchase of the $ Town of Tiburon Limited Obligation Refunding Bonds 2016 Consolidated Reassessment District (the "Reassessment Bonds"), being issued by the Town of Tiburon, California (the "Town") pursuant to a Fiscal Agent Agreement, dated as of August 1, 2016 (the "Fiscal Agent Agreement"), by and between the Town and U.S. Bank National Association, as fiscal agent, to refund the Prior Bonds (as defined in the Fiscal Agent Agreement). The Reassessment Bonds will be purchased by the Authority in accordance with a Bond Purchase Contract dated the date hereof (the "Reassessment Bonds Bond Purchase Contract"), by and between the Authority and the Town. The Bonds are payable from (a) "Revenues" received by the Trustee under the Indenture, which are generally defined in the Indenture as all payments on the Reassessment Bonds, as well as (b) amounts in the Reserve Fund held by the Trustee under the Indenture. Section 3. Terms of the Bonds; Public Offering. The Bonds will mature on the dates and in the principal amounts, and will bear interest at the rates, as set forth in Exhibit A hereto. The Underwriter agrees to make a bona fide public offering of all the Bonds initially at the public offering prices (or yields) set forth on the inside cover of the Official Statement. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriter 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. Section 4. Delivery of Official Statement. The Authority has delivered or caused to be delivered to the Underwriter prior to the execution of this Purchase Agreement, copies of a preliminary official statement relating to the Bonds (the "Preliminary Official Statement"). The Preliminary Official Statement is the official statement deemed final by the Authority for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule") and approved for distribution by resolution of the Authority. The Authority shall have executed and delivered to the Underwriter a certification to such effect in the form attached hereto as Appendix B. Within seven (7) business days from the date hereof, the Authority shall deliver to the Underwriter a final Official Statement, executed on behalf of the Authority by an authorized representative of the Authority and dated the date hereof, which shall include information permitted to be omitted by paragraph (b)(1) of the Rule and with such other amendments or supplements as shall have been approved by the Authority and the Underwriter. The Authority will undertake, pursuant to the Indenture, the Rule and a continuing disclosure agreement, dated as of August 1, 2016 (the "Continuing Disclosure Agreement"), between the Authority and NBS Government Finance Group, as dissemination agent, to provide certain annual financial information and notices of the occurrence of certain events, if material. A copy of the Continuing Disclosure Agreement is included as Appendix C to the Preliminary Official Statement and will also be included as Appendix C to the final Official Statement. -2- Section 5. The Closing. At 8:00 a.m., California time, on August 25, 2016, or at such other time or on such earlier or later business day as shall have been mutually agreed upon by the Authority, the Town and the Underwriter, the Authority will deliver (a) the Bonds in definitive form to the Underwriter at The Depository Trust Company in New York, New York, or such other location as may be specified by the Underwriter, with CUSIP identification numbers printed thereon, in fully registered form and registered in the name of Cede & Co., and (b) the closing documents hereinafter mentioned at the offices of Quint & Thiinmig LLP, Larkspur, California ("Bond Counsel"), or another place to be mutually agreed upon by the Authority, the Town and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by federal funds wire payable to the order of the Trustee on behalf of the Authority. This payment and delivery, together with the delivery of the aforementioned documents, is herein called the "Closing." The Bonds will initially be delivered in the form of one Bond for each maturity thereof. Section 6. Representations. Warranties and Covenants. The Authority represents and warrants to, and covenants with, the Underwriter as follows: (a) Due Organization. Existence and Authority. The Authority is a joint powers authority duly organized and existing under the laws of the State, with full right, power and authority to execute, deliver and perform its obligations under this Purchase Agreement, the Indenture, the Reassessment Bonds Bond Purchase Contract and the Continuing Disclosure Agreement (together, the "Authority Documents") and to carry out and consummate the transactions on its part contemplated by the Authority Documents 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 on its part contained in, the Authority Documents and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered by the Authority and the other parties thereto, the Authority Documents will constitute the 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 affecting creditors' rights generally. The Authority has complied, and will at the Closing be in compliance in all respects, with its obligations under the Authority Documents. (c) Official Statement Accurate and Complete. The Preliminary Official Statement was as of its date, and the final Official Statement is, and at all times subsequent to the date of the final Official Statement up to and including the Closing will be, true and correct in all material respects, and the Preliminary Official Statement and the final 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) Underwriter's Consent to Amendments and Supplements to Official Statement. The Authority will advise the Underwriter 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 Underwriter, which consent will not be unreasonably withheld. The Authority will advise the Underwriter promptly of the -3- institution of any proceedings known to it by any governmental authority prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (e) No Breach or Default. As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Authority is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State, or any applicable judgment or decree or any indenture, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Authority is a party or is otherwise subject, which breach or default adversely affects the ability of the Authority to perform its obligations under the Authority Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute such a default under any such instrument; and, as of such times, except as disclosed in the Official Statement, the authorization, execution and delivery by the Authority of the Authority Documents and compliance by the Authority with the provisions of each of such agreements or instruments do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State, or any applicable judgment, decree, license, permit, indenture, 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. (f) No Litigation. As of the time of acceptance hereof and as of the Closing, except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government authority, public board or body, pending with respect to which the Authority has been served with process or known by the Authority to be threatened (i) in any way questioning the corporate 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 issuance or delivery of any of the Bonds, or the payment or collection of the Revenues pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or the Authority Documents or the consummation of the transactions contemplated thereby, or contesting the exclusion of the interest on the Bonds from the gross incomes of the owners of the Bonds for purposes of federal income taxation, or contesting the powers of the Authority and its authority to pledge the revenues securing the Bonds; (iii) which may result in any material adverse change relating to the Authority; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the final Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the final 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 known basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence. (g) Certificates of the Authority. Any certificate signed by an official of the Authority authorized to execute such certificate and delivered to the Underwriter in connection with the transactions contemplated by the Authority Documents shall be -4- deemed a representation and warranty by the Authority to the Underwriter as to the truth of the statements therein contained. (h) Security for Bonds. The Indenture creates a valid pledge of, and first lien upon, Revenues deposited thereunder and the moneys in certain funds and accounts established under the Indenture, subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein. (i) Blue Sky. The Authority will cooperate with the Underwriter (at the cost of the Underwriter), in qualifying the Bonds for offer and sale under the securities or Blue Sky laws of such jurisdictions of the United States as the Underwriter may reasonably request; provided, however, that the Authority shall not be required to consent to suit or to service of process, or to qualify to do business, in any jurisdiction. (j) Continuing Disclosure. The Authority has never failed to comply with any obligation to provide continuing disclosure pursuant to the Rule. Section 7. Closing Conditions. The Underwriter has entered into this Purchase Agreement in reliance upon the representations, warranties and covenants herein and the performance by the Authority of its obligations hereunder, both as of the date hereof and as of the date of the Closing. The Underwriter's obligations under this Purchase Agreement to purchase and pay for the Bonds shall be subject to the following additional conditions: (a) Bring -Down Representation. The representations, warranties and covenants of the Authority contained herein shall be true and correct at the 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 shall be in full force and effect, and shall not have been amended, modified or supplemented except with the consent of the Underwriter, such consent not to be unreasonably withheld, and (ii) there shall be in full force and effect such resolutions as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated by this Purchase Agreement, the Official Statement and the Authority Documents. (c) Issuance and Purchase of Reassessment Bonds. Concurrent with the issuance of the Bonds and the purchase thereof by the Underwriter in accordance with this Purchase Agreement, the Town shall have issued the Reassessment Bonds and delivered the Reassessment Bonds to the Trustee under and in accordance with the Reassessment Bonds Bond Purchase Contract, and all conditions set forth in the Reassessment Bonds Bond Purchase Contract to the issuance and delivery of the Reassessment Bonds shall have been satisfied. (d) Closing Documents. At or prior to the Closing, the Underwriter shall receive each of the documents identified in Section 8. Section 8. Closing Documents. In addition to the other conditions to the Underwriter's obligations under this Purchase Agreement to purchase and pay for the Bonds, at or before the Closing the Underwriter shall receive each of the following documents, provided that the actual payment for the Bonds by the Underwriter and the acceptance of delivery thereof shall be conclusive evidence that the requirements of this Section 8 shall have been satisfied or waived by the Underwriter. -5- (a) Bond Opinion. An approving opinion of Bond Counsel, dated the date of the Closing and substantially in the form included as Appendix D to the Official Statement, together with a letter from Bond Counsel, dated the date of the Closing and addressed to the Underwriter, to the effect that the foregoing opinion addressed to the Authority may be relied upon by the Underwriter to the same extent as if such opinion was addressed to the Underwriter. (b) Supplemental Opinion. A supplemental opinion of Bond Counsel addressed to the Underwriter, in form and substance acceptable to the Underwriter and dated the date of the Closing, substantially to the following effect: (i) This Purchase Agreement, the Reassessment Bonds Purchase Contract and the Continuing Disclosure Agreement have been duly authorized, executed and delivered by the Authority and, assuming the due authorization and execution by the other respective parties thereto, constitute the valid, legal and binding agreements of the Authority, enforceable 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 affecting creditors' rights generally. (ii) The statements contained in the Official Statement under the headings "THE AUTHORITY BONDS," "SECURITY FOR THE AUTHORITY BONDS," "SECURITY FOR THE REASSESSMENT BONDS" and "CERTAIN LEGAL MATTERS" and in Appendix A and Appendix D to the Official Statement, are accurate, insofar as such statements purport to summarize certain provisions of the Bonds, the Reassessment Bonds, the Indenture, or Bond Counsel's opinion with respect to federal tax law. (iii) The Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended. (c) Defeasance Opinion. A defeasance opinion of Bond Counsel, dated the Closing Date and addressed to the Authority, the Underwriter and the Town, relating to the legal defeasance of the Prior Bonds. (d) Letter of Disclosure Counsel. A letter of Quint & Thimmig LLP, in its capacity as disclosure counsel to the Authority ("Disclosure Counsel"), addressed to the Authority and the Underwriter, to the effect that without passing upon or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement and making no representation that they have independently verified the accuracy, completeness or fairness of any such statements, based upon the information made available to them in the course of their participation in the preparation of the Official Statement, nothing has come to such counsel's attention which would lead them to believe that the Official Statement, as of its date or as of the Closing Date, including the cover page (in each case except for financial statements, the information set forth in the Appendices to the Official Statement, any CUSIP numbers, financial, statistical, economic, engineering or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, or any information about book -entry, tax -exemption, or The Depository Trust Company included or referred to therein, which disclosure counsel expressly excludes from the scope of such letter and as to which disclosure counsel need express no opinion or view) -6- contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (e) Authority Counsel Opinion. An opinion of Burke, Williams & Sorenson, LLP, in their capacity as legal counsel to the Authority, dated the date of the Closing and addressed to the Underwriter, substantially to the following effect: (i) The Authority is a joint powers authority duly organized and validly existing under the laws of the United States of America. (ii) The Bond Resolution has been duly adopted, is in full force and effect and has not been modified, amended or rescinded. (iii) Without conducting an independent investigation, except as otherwise disclosed in the Official Statement and to the best knowledge of such counsel after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending with respect to which the Authority has been served with process or known to be threatened against the Authority, challenging the creation, organization or existence of the Authority, or the validity of the Authority Documents or seeking to restrain or enjoin the repayment of the Bonds or in any way contesting or affecting the validity of the Authority Documents or contesting the authority of the Authority to enter into or perform its obligations under any of the Authority Documents, or under which a determination adverse to the Authority would have a material adverse effect upon the financial condition or the revenues of the Authority, or which, in any manner, questions the right of the Authority to pledge the Revenues to the payment of the Bonds. (f) Trustee Counsel Opinion. The opinion of counsel to the Trustee, dated the date of the Closing, addressed to the Authority and the Underwriter, to the effect that: (i) The Trustee is a national banking association, duly organized and validly existing under the laws of the United States of America, having full power to enter into, accept and administer the trust created under the Indenture. (ii) The Indenture has been duly authorized, executed and delivered by the Trustee and constitutes the legal, valid and binding obligations of the Trustee enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles, if equitable remedies are sought. (g) Authority Certificate. A certificate of the Authority, dated the date of the Closing, signed on behalf of the Authority by the Executive Director or other duly authorized officer of the Authority to the effect that: (i) 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 Agreement required to be complied with by the Authority at or prior to the date of the Closing. -7- (ii) No event affecting the Authority has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (iii) Except as otherwise disclosed in the Official Statement and to the best knowledge of such signing officer without conducting an independent investigation, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending with respect to which the Authority has been served with process or known to be threatened against the Authority, challenging the creation, organization or existence of the Authority, or the validity of the Authority Documents or seeking to restrain or enjoin the repayment of the Bonds or in any way contesting or affecting the validity of the Authority Documents or contesting the authority of the Authority to enter into or perforin its obligations under any of the Authority Documents, or under which a determination adverse to the Authority would have a material adverse effect upon the financial condition or the revenues of the Authority, or which, in any manner, questions the right of the Authority to pledge the Revenues to the payment of the Bonds. (h) Trustee's Certificate. A certificate of the Trustee, dated the date of Closing, in form and substance acceptable to counsel for the Underwriter, to the following effect: (i) The Trustee is duly organized and existing as a national banking association in good standing under the laws of the United States of America, having the full power and authority to enter into and perform its duties under the Indenture. (ii) The Trustee is duly authorized to enter into the Indenture. (iii) To its best knowledge after due inquiry, there is no action, suit, proceeding or investigation, at law or in equity, before or by any court or governmental district, public board or body pending against the Trustee or threatened against the Trustee which in the reasonable judgment of the Trustee would affect the existence of the Trustee or in any way contesting or affecting the validity or enforceability of the Indenture or contesting the powers of the Trustee or its authority to enter into and perform its obligation under the Indenture. (i) Original Executed Documents. An original executed copy of each of the Authority Documents and the Official Statement. (j) Reassessment Documents. A copy of each of the documents listed in Section 12(e) of the Reassessment Bonds Bond Purchase Contract. (k) Bond Resolution. A certified copy of the Bond Resolution. (1) Arbitrage Certificate. A non -arbitrage certificate executed by the Authority and the Town in form and substance satisfactory to Bond Counsel. (m) Certificate of Reassessment Engineer. A certificate, dated the Closing Date, of NBS Government Finance Group (the "Reassessment Engineer") addressed to Authority -8- and the Underwriter to the effect that (i) the Reassessment Report of the Reassessment Engineer with respect to the Reassessment District complies with the requirements of California Streets and Highways Code Section 9523 and, in the opinion of the Reassessment Engineer, the Reassessments, as set forth in the Reassessment Report, comply with Streets and Highways Code Section 9525(a) and (ii) the statements and information contained in the Official Statement under the headings "SECURITY FOR THE REASSESSMENT BONDS" and "THE REASSESSMENT DISTRICT," and in the tables under such headings, insofar as such statements and information were provided by the Reassessment Engineer or otherwise purport to summarize certain provisions of the Reassessment Report, do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading and no events or occurrences have come to the attention of the Reassessment Engineer that would substantially change such information set forth in the Official Statement. (n) Letter of Verification Agent. A letter addressed to the Authority, the Town, the Underwriter, and Bond Counsel, dated the Closing Date, from Grant Thornton LLP, verifying the accuracy of the mathematical computations concerning the adequacy of moneys to be deposited with the Escrow Bank (as defined in the Fiscal Agent Agreement) to legally defease the Prior Bonds. (o) Additional Documents. Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter or Bond Counsel may reasonably request to evidence compliance by the Authority with legal requirements, the truth and accuracy, as of the time of Closing, of the representations of the Authority herein contained, and the due performance or satisfaction by the Authority at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Authority under this Purchase Agreement. If the Authority shall be unable to satisfy the conditions contained in this Purchase Agreement, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the Authority shall be under further obligation hereunder, except as further set forth in Section 10. Section 9. Termination Events. The Underwriter shall have the right to terminate this Purchase Agreement, without liability therefor, by written notification to the Authority if at any time between the date hereof and prior to the Closing: (a) 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 (b) the marketability of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation in or by the Congress of the United States or by the State, or the amendment of legislation pending as of the date of this Purchase Agreement 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 -9- 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, or the interest on bonds or notes or obligations of the general character of the Bonds; or (c) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or authority 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 Underwriter, materially adversely affects the market price of the Bonds; or (d) 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 district having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that 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 Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or (e) 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 Underwriter's ability to trade the Bonds; or (f) a general banking moratorium shall have been established by federal or State authorities; or (g) 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, or there has occurred any escalation of existing hostilities, calamity or crisis, financial or otherwise, the effect of which on the financial markets of the United States being such as, in the reasonable opinion of the Underwriter, would affect materially and adversely the ability of the Underwriter to market the Bonds; or (h) the commencement of any action, suit or proceeding described in Section 6(f) with respect to the Authority which, in the judgment of the Underwriter, materially adversely affects the market price of the Bonds; or (i) there shall be in force a general suspension of trading on the New York Stock Exchange. -10- Section 10. Expenses. The Underwriter shall be under no obligation to pay and the Authority shall pay or cause to be paid the expenses incident to the performance of the obligations of the Authority 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 and the cost of preparing, printing, issuing and delivering the definitive Bonds, (b) the fees and disbursements of any attorney, Reassessment Engineer, accountant, verification agent or other experts or consultants retained by the Authority or the Town; (c) the fees and disbursements of Bond Counsel and Disclosure Counsel; and (d) the cost of and preparation and printing the Preliminary Official Statement and any supplements and amendments thereto and the cost of printing the Official Statement, including the requisite number of copies thereof for distribution by the Underwriter. The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds, and all other expenses incurred by it in connection with its public offering and distribution of the Bonds. Section 11. Notices. Any notice or other communication to be given to the Authority under this Purchase Agreement may be given by delivering the same in writing to such entity at the address set forth above. Any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to: Wulff, Hansen Sc Co, 351 California Street, Suite 1000, San Francisco, CA 94104, Attention: Mark Pressman. Section 12. Entire Agreement. This Purchase Agreement, when accepted by the Authority, shall constitute the entire agreement between the Authority and the Underwriter with respect to the subject matter hereof and is made solely for the benefit of the Authority and the Underwriter (induding the successors or assigns of any Underwriter). No other person shall acquire or have any right hereunder by virtue hereof, except as provided herein. All the Authority's representations, warranties and agreements in this Purchase Agreement shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriter. Section 13. Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. Section 14. 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. Section 15. Governing Law. The validity, interpretation and performance of this Purchase Agreement shall be governed by the laws of the State applicable to contracts made and performed in the State. -11- Section 16. No Assignment. The rights and obligations created by this Purchase Agreement shall not be subject to assignment by the Underwriter or the Authority without the prior written consent of the other party hereto. Accepted as of the date first stated above: TIBURON PUBLIC FINANCING AUTHORITY By: Greg Chanis, Executive Director Time of Execution: 20034.O1:J14149 -12- WULFF, HANSEN & CO., as Underwriter By: Mark Pressman, Principal APPENDIX A MATURITY SCHEDULE FOR THE BONDS Principal Payment Date Principal Interest (September 2) Amount Rate Price Yield A-1 APPENDIX B CERTIFICATE REGARDING PRELIMINARY OFFICIAL STATEMENT $ * Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District) The undersigned hereby states and certifies: (i) that the undersigned is the duly appointed, qualified and acting Executive Director of the Tiburon Public Financing Authority, a joint powers authority duly organized and existing under the laws of the State of California (the "Authority"), and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same on behalf of the Authority; (ii) that there has been delivered to Wulff, Hansen & Co., as underwriter (the "Underwriter") of the captioned bonds, a Preliminary Official Statement, dated July _, 2016 (including the cover page and all appendices thereto, the "Preliminary Official Statement"), which the Authority deems nearly 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; and (iii) that the Authority has approved the use and distribution of the Preliminary Official Statement by the Underwriter. Dated: July _, 2016 • Preliminary, subject to change. B-1 TIBURON PUBLIC FINANCING AUTHORITY By: Greg Chanis, Executive Director it-(:6i/k O PRELIMINARY OFFICIAL STATEMENT DATED JULY 2016 NEW ISSUE NOT RATED o 2 'a co In the opinion of Quint & Thimmig LLP, Larkspur, California, Bond Counsel, subject, however, to certain qualifications described herein, under existing law, the interest on the Authority Bonds is excludable from gross income of the owners thereof o_L for federal income tax purposes, and is not included as an item of tax preference in computing the alternative minimum tax for 00, i individuals and corporations under the Internal Revenue Code of 1986, as amended, but is taken into account in computing an ami c adjustment used in determining the federal alternative minimum tax for certain corporations. In the further opinion of Bond .o , Counsel, such interest is exempt from personal income taxation imposed by the State of California. See "TAX MATTERS" herein. >,-0 o $10,360,000* o TIBURON PUBLIC FINANCING AUTHORITY o 0 2016 REFUNDING REVENUE BONDS 0 (CONSOLIDATED REASSESSMENT DISTRICT) al c E o `o - Dated: Date of Delivery Due: September 2, as shown on inside cover C U T) N The above -captioned bonds (the "Authority Bonds") are being issued by the Tiburon Public Financing Authority (the ca (ts "Authority") pursuant to an Indenture of Trust, dated as of August 1, 2016 (the "Indenture"), between the Authority and U.S. a o Bank National Association, as trustee (the "Trustee"). The Authority Bonds are being issued to provide funds to the Authority to c ▪ N fund a reserve fund for the Authority Bonds, pay costs of issuance of the Authority Bonds, and to enable the Authority to ,, o purchase the Town of Tiburon Limited Obligation Refunding Bonds, 2016 Consolidated Reassessment District (the "Reassessment E E Bonds"), the proceeds of which will, in turn, be used to refund seven series of assessment bonds previously issued by the Town of 0 o Tiburon, California (the "Town") relating to six different assessment districts formed by the Town. See "THE FINANCING c PLAN." 5 m N3 The Authority Bonds will be issued in denominations of $5,000 or any integral multiple thereof. Interest on the Authority N'N Bonds is payable semiannually on each March 2 and September 2, commencing March 2, 2017. The Authority Bonds will be Lo initially issued only in book -entry form and registered to Cede & Co. as nominee of The Depository Trust Company, New York, 1 . New York ("DTC"), which will act as securities depository of the Authority Bonds. Principal and interest (and premium, if any) EE t i on the Authority Bonds is payable by the Trustee to DTC, which remits such payments to its Participants for subsequent E distribution to the registered owners of the Authority Bonds as shown on the Trustee's books as of the fifteenth day of the month - �n preceding the month in which such interest payment date occurs. See "THE AUTHORITY BONDS—General Provisions" herein. N Em The Authority Bonds will mature on September 2 in the years and in the principal amounts shown on the Maturity Schedule o• set forth on the inside cover page of this Official Statement. The Authority Bonds are subject to redemption prior to maturity as c Q described herein. o�� n c m The Authority Bonds are limited obligations of the Authority payable solely from Revenues (as defined in the Indenture), E E consistingprimarilyof scheduled payments of principal of and interest on the Reassessment Bonds received bythe Authority, of P Ym P P h' - o n`. which payments are secured by liens of unpaid reassessments on properties within the Town's 2016 Consolidated Reassessment co -o District. Scheduled payments of principal of and interest on the Reassessment Bonds are calculated to be sufficient to permit the m L o Authority to timely pay the scheduled principal of and interest on the Authority Bonds. mm3 m Lv, m THE AUTHORITY BONDS ARE NOT A DEBT OF THE TOWN, THE STATE OF CALIFORNIA OR ANY POLITICAL 2 a) N SUBDIVISION THEREOF OTHER THAN THE AUTHORITY, AND SHALL BE PAY ABLE SOLELY FROM THE REVENUES AND c c a FUNDS PLEDGED TO THE PAYMENT THEREOF UNDER THE INDENTURE. NEITHER THE FAITH AND THE CREDIT NOR THE No TAXING POWER OF THE TOWN, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE . E m PAYMENT OF THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, AND INTEREST ON THE AUTHORITY BONDS_ THE v v :� ISSUANCE OF THE AUTHORITY BONDS SHALL NOT DIRECTLY, INDIRECTLY OR CONTINGENTLY OBLIGATE THE TOWN, THE c 'o N STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY OR PLEDGE ANY FORM OF TAXATION c 0 - WHATSOEVER THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT. THE AUTHORITY HAS NO TAXING o •- d POWER. POTENTIAL INVESTORS ARE ADVISED TO READ CAREFULLY THE SECTION IN THIS OFFICIAL STATEMENT o c r ENTITLED "SPECIAL RISK FACTORS." D o m N THE REASSESSMENT BONDS ARE NOT GENERAL OBLIGATIONS OF THE TOWN, BUT ARE LIMITED OBLIGATIONS, ' 2 L @ PAYABLE SOLELY FROM REASSESSMENTS AND THE FUNDS PLEDGED UNDER THE FISCAL AGENT AGREEMENT PURSUANT ':.g. O • c 3V TO WHICH THE REASSESSMENT BONDS ARE BEING ISSUED. NEITHER THE FAITH AND CREDIT OF THE TOWN NOR THE o• c STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE REASSESSMENT tE c c BONDS. f6 • 2 " MATURITY SCHEDULE o>I m _c (see inside cover) 2-o >s m •N 2 The Authority Bonds are offered when, as and if issued and accepted by the Underwriter, subject to the approval as to their ( m ,c legality by Quint & Thimmig LLP, Larkspur, California, Bond Counsel. Certain legal matters will be passed upon for the Town c0 E (a and the Authority by Burke, Williams & Sorenson, LLP, San Rafael, California, in its capacity as general counsel to the Authority E m92 r. and as Town Attorneys, and for the Authority by Quint Sr Thimmig LLP in its capacity as Disclosure Counsel to the Authority. It O in c0i is expected that the Authority Bonds will be available for delivery through DTC in New York, New York on or about August 25, cco 2016. ;E o w WULFF, HANSEN & CO. 2 t Z Dated: August _, 2016 n. o N 0 N E To N ` Preliminary, subject to change. $10,360,000* TIBURON PUBLIC FINANCING AUTHORITY 2016 REFUNDING REVENUE BONDS (CONSOLIDATED REASSESSMENT DISTRICT) MATURITY SCHEDULE* $ Serial Bonds Maturity Date Principal (September 2) Amount Interest Rate Yield Price CUSIPt $ % Term Bonds due September 2, 2040; Yield _%; Price ; CUSIP I- CUSIP is a registered trademark of the American Banker's Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S&P Capital IQ. * Preliminary, subject to change. No dealer, broker, salesperson or other person has been authorized by the Underwriter, the Authority or the Town to give any information or to make any representations with respect to the Authority Bonds other than those contained in this Official Statement and if given or made, such other information or representation must not be relied upon as having been authorized by the Authority, the Town or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy nor shall there by any sale of the Authority Bonds by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is submitted in connection with the sale of the Authority Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not to be construed to be a contract with the purchasers of the Authority Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. The information set forth herein has been furnished by the Authority, the Town and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Authority, the Town or the Underwriter. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority or the Town since the date hereof. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. All references to and summaries of the Indenture or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents. The Underwriter may overallot or take other steps that stabilize or maintain the market price of the Authority Bonds at a level above that which might otherwise prevail in the open market. If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the Authority Bonds to certain dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the inside cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter. The issuance and sale of the Authority Bonds have not been registered under the Securities Act of 1933 (the "Securities Act"), as amended, or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act and Section 3(a)(12) of the Exchange Act. Certain statements included or incorporated in this Official Statement constitute forward-looking statements. Such statements are generally identifiable by the terminology used such as plan, expect, estimate, budget, or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. The City does not plan to issue any updates or revisions to those forward-looking statements if or when its expectations or events, conditions or circumstances on which such statements are based occur. The Town maintains an Internet website, but the information on the website is not incorporated in this Official Statement. -i- TIBURON PUBLIC FINANCING AUTHORITY BOARD OF DIRECTORS and TOWN OF TIBURON TOWN COUNCIL Erin Tollini Chair/Mayor Jim Fraser Vice Chair/Vice Mayor Frank Doyle Board Member/Council Member Alice Fredericks Board Member/Council Member Emmett O'Donnell Board Member/Council Member AUTHORITY OFFICERS and TOWN ADMINISTRATION Greg Chanis Heidi Bigall Executive Director/Town Manager Treasurer/Town Director of Administrative Services Patrick Barnes Diane Crane-Iacopi Town Engineer and Director of Public Works Board Secretary/Town Clerk PROFESSIONAL SERVICES AUTHORITY GENERAL COUNSEL/TOWN ATTORNEYS Burke, Williams & Sorensen, LLP San Rafael, California BOND COUNSEL and DISCLOSURE COUNSEL Quint & Thimmig LLP Larkspur, California TRUSTEE and FISCAL AGENT U.S. Bank National Association San Francisco, California REASSESSMENT ENGINEER NBS Government Finance Group Temecula, California ESCROW BANK The Bank of New York Mellon Trust Company, N.A. Los Angeles, California VERIFICATION AGENT Grant Thornton, LLP Minneapolis, Minnesota TABLE OF CONTENTS INTRODUCTION 1 The Authority 1 The Town 1 The Reassessment District 1 Purpose of the Authority Bonds 2 Sources of Payment for the Authority Bonds 3 Authority for Issuance 4 Security for the Repayment of the Authority Bonds and the Reassessment Bonds 4 Description of the Authority Bonds 5 Tax Matters 5 Professionals Involved in the Offering 5 Continuing Disclosure 6 Other Information 6 THE FINANCING PLAN 6 Establishment of Reassessment District 6 Refunding of Prior Bonds 6 Estimated Sources and Uses of Funds 7 DEBT SERVICE SCHEDULES 8 Interest Rate Differential Between the Authority Bonds and the Reassessment Bonds 8 Debt Service on the Authority Bonds and the Reassessment Bonds 8 THE AUTHORITY BONDS 9 General Provisions 9 Redemption 10 SECURITY FOR THE AUTHORITY BONDS 12 Revenues 12 Reserve Fund 13 Non -Asset Bonds 14 Investment of Bond Proceeds 14 SECURITY FOR THE REASSESSMENT BONDS 14 Reassessments 14 Legal Authority 15 Covenant to Commence Foreclosure Proceedings 15 Sales of Tax -Defaulted Property Generally 16 Tax Loss Reserve Fund - "Teeter Plan" 17 Prior Assessment Delinquencies 17 Priority of Lien 18 THE REASSESSMENT DISTRICT 18 Method of Spreading Reassessment 19 APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F Annual Administrative Assessment 19 Surplus Funds Credits 19 Land Uses and Top Property Owners 20 Estimated Reassessment Levies 21 VALUATION OF PROPERTY WITHIN THE REASSESSMENT DISTRICT 22 Assessed Valuation 22 Value to Lien Ratios 22 ESTIMATED DIRECT AND OVERLAPPING INDEBTEDNESS 23 SPECIAL RISK FACTORS 24 Limited Obligations 24 Failure to Pay Reassessment Installments 25 Direct and Overlapping Indebtedness 25 Land Values 26 Priority of Reassessment Lien 26 Bankruptcy and Foreclosure Delays 26 Geologic, Topographic, Climatic and Other Conditions 27 Hazardous Substances 27 Absence of a Secondary Market for the Authority Bonds 28 Disclosure to Future Purchasers of Property 28 No Acceleration Provision 28 Redemption of Bonds Prior to Maturity from Principal Prepayments 28 No Liability of the Authority to the Owners 28 Loss of Tax Exemption 29 Limited Town Obligation to Pay Debt Service 29 Limitations on Remedies 29 Secondary Market 29 TAX MATTERS 29 CERTAIN LEGAL MATTERS 32 VERIFICATION OF MATHEMATICAL ACCURACY 32 ABSENCE OF LITIGATION 33 CONTINUING DISCLOSURE 33 UNDERWRITING 33 MISCELLANEOUS 34 SUMMARY OF PRINCIPAL LEGAL DOCUMENTS INFORMATION REGARDING THE TOWN OF TIBURON AND THE COUNTY OF MARIN FORM OF CONTINUING DISCLOSURE AGREEMENT FORM OF BOND COUNSEL OPINION DTC AND THE BOOK -ENTRY -ONLY SYSTEM REASSESSMENT DIAGRAM GENERAL LOCATION MAP TIBURON • CALIFORNIA Oman LarRapur Cone wdnm ?multi. Cry Pacific Ocean 411 VaIoy „aichmona A+w44o Ae�a144 n1 lottl bl.wl , rt_i�G.'r �p l F:.'• .__.i San Francisco El fd' rrtte Eme yvill¢ 'Albany `Berkeley ama are,oeer my City' ihof v -iv- OFFICIAL STATEMENT $10,360,000* TIBURON PUBLIC FINANCING AUTHORITY 2016 REFUNDING REVENUE BONDS (CONSOLIDATED REASSESSMENT DISTRICT) The purpose of this Official Statement is to provide certain information concerning the sale and issuance of the $10,360,000* Tiburon Public Financing Authority, 2016 Refunding Revenue Bonds (Consolidated Reassessment District) (the "Authority Bonds"). INTRODUCTION This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described herein. A full review should be made of the entire Official Statement. The sale and delivery of the Authority Bonds to potential investors is made only by means of the entire Official Statement. Capitalized terms used and not defined herein have the meanings given to them in the Indenture or the Fiscal Agent Agreement, as applicable (each as hereinafter defined). Also, see "APPENDIX A—Summary of Principal Legal Documents." The Authority The Tiburon Public Financing Authority (the "Authority") was established pursuant to a Joint Exercise of Powers Agreement, dated June 1, 2016 (the "Joint Powers Agreement"), by and between the Town of Tiburon, California (the "Town") and the Tiburon Parking Authority (the "Parking Authority"), and under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title I of the Government Code of the State of California (the "Act"). The Authority is authorized pursuant to Article 4 of the Act to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations to provide financing or refinancing for public capital improvements of local agencies within the State of California. The Town Located in southern Marin County approximately seven miles north of the Golden Gate Bridge, the Town is located on the Tiburon Peninsula, which runs in a northwest -southeast direction. It is a ridge extending into San Francisco Bay. To the west, it is bordered by U.S. 101, to the south by Richardson Bay, and to the east and north by San Francisco Bay. Given its central position in the San Francisco Bay Area and its hilly terrain, this area offers spectacular views of the San Francisco Bay area. The Town, which is virtually built -out with mostly single family residential housing, is one of the most desirable residential areas in the region, due to the close proximity to downtown San Francisco. See APPENDIX B—Information Regarding the Town of Tiburon and the County of Marin. The Reassessment District The Town's 2016 Consolidated Reassessment District (the "Reassessment District") was established by the Town pursuant to proceedings taken under the Refunding Act of 1984 for 1915 Preliminary, subject to change. -1- Improvement Act Bonds, constituting Division 10 of the California Streets and Highways Code (the "Refunding Act") and Resolution No. adopted by the Town Council on July 20, 2016 (the "Resolution of Intention"). The Reassessment District includes 460 separate reassessed parcels located in six former assessment districts (collectively, the "Prior Districts"), which were formed by the Town under the provisions of the Municipal Improvement Act of 1913, constituting Division 12 of the California Streets and Highways Code. The Prior Districts include: (i) the Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District formed pursuant to Resolution No. 15-2003 adopted by the Town Council on May 21, 2003, which included 203 Marin County Assessor's parcels as of the formation of the Reassessment District; (ii) the Town of Tiburon, Lyford Cove Utility Undergrounding Supplemental Assessment District formed pursuant to Resolution No. 03-2006 adopted by the Town Council on January 4, 2006, which included 205 Marin County Assessor's parcels as of the formation of the Reassessment District (195 of which are also in the Prior District referenced in (i) above); (iii) the Town of Tiburon, Stewart Drive Undergrounding Assessment District formed pursuant to Resolution No. 14-2001 adopted by the Town Council on March 21, 2001, which included 83 Marin County Assessor's parcels as of the formation of the Reassessment District; (iv) the Town of Tiburon, Main Street Assessment District formed pursuant to Resolution No. 3326 adopted by the Town Council on April 7, 1999, which included 15 Marin County Assessor's parcels as of the formation of the Reassessment District; (v) the Town of Tiburon, Del Mar Valley Utility Undergrounding Assessment District formed pursuant to Resolution No. 19-2003 adopted by the Town Council on June 4, 2003, which included 145 Marin County Assessor's parcels as of the formation of the Reassessment District; and (vi) the Town of Tiburon, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District formed pursuant to Resolution No. 30-2010 adopted by the Town Council on June 2, 2010, which included 135 Marin County Assessor's parcels as of the formation of the Reassessment District (131 of which are also in the Prior District referenced in (v) above). See pages 2-7 of the Reassessment Diagram for the Reassessment District in Appendix F for the boundaries of the Reassessment District, including the locations within the Town of the six Prior Districts. Purpose of the Authority Bonds The proceeds of the Authority Bonds will be used to (i) acquire the Town of Tiburon Limited Obligation Refunding Bonds, 2016 Consolidated Reassessment District (the "Reassessment Bonds"), (ii) fund a reserve fund to be held by the Trustee under the Indenture, and (iii) pay the costs of issuance of the Authority Bonds. The Reassessment Bonds are being issued to refund seven series of outstanding Town assessment bonds (collectively, the "Prior Bonds") issued for the respective Prior Districts, including: -2- (i) the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District issued on March 15, 2005 in the initial principal amount of $3,800,000, of which $2,945,000 was outstanding as of the date of issuance of the Reassessment Bonds; (ii) the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Series 2005-2 issued on October 11, 2005 in the initial principal amount of $173,415, of which $173,415 was outstanding as of the date of issuance of the Reassessment Bonds; (iii) the Town of Tiburon Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Supplemental Assessment District issued on May 10, 2006 in the initial principal amount of $2,002,561, of which $1,992,561 was outstanding as of the date of issuance of the Reassessment Bonds; (iv) the Town of Tiburon Limited Obligation Improvement Bonds, Stewart Drive Undergrounding Assessment District issued on July 30, 2001 in the initial principal amount of $1,465,500, of which $920,000 was outstanding as of the date of issuance of the Reassessment Bonds; (v) the Town of Tiburon Limited Obligation Improvement Bonds, Main Street Assessment District issued on December 21, 1999 in the initial principal amount of $408,513, of which $153,000 was outstanding as of the date of issuance of the Reassessment Bonds; (vi) the Town of Tiburon Limited Obligation Improvement Bonds, Del Mar Valley Utility Undergrounding Assessment District issued on August 24, 2005 in the initial principal amount of $4,184,700, of which $2,505,000 was outstanding as of the date of issuance of the Reassessment Bonds; and (vii) the Town of Tiburon Subordinate Lien Limited Obligation Improvement Bonds, Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District issued on September 9, 2010 in the initial principal amount of $1,962,000, of which $1,885,000 was outstanding as of the date of issuance of the Reassessment Bonds. All of the outstanding Prior Bonds will be legally defeased on the date of issuance of the Authority Bonds, and will be redeemed on September 2, 2016. See "THE FINANCING PLAN— Refunding of Prior Bonds." Sources of Payment for the Authority Bonds The Authority Bonds are being issued by the Authority pursuant to an Indenture of Trust, dated as of August 1, 2016 (the "Indenture"), between the Authority and U.S. Bank National Association, as trustee (the "Trustee"). The Authority Bonds are secured by a lien on and security interest in all of the Revenues and amounts in the Revenue Fund (including the Interest Account and the Principal Account therein) and the Reserve Fund established under the Indenture. "Revenues" include (a) all payments on the Reassessment Bonds received by the Trustee; (b) any proceeds of the Authority Bonds originally deposited with the Trustee and all moneys deposited and held from time to time by the Trustee in the funds and accounts established under the Indenture with respect to the Bonds (other than the Rebate Fund, the Surplus Fund and the Purchase Fund); and (c) investment income with respect to any moneys held by the Trustee in the funds and accounts -3- established under the Indenture with respect to the Authority Bonds (other than investment income on moneys held in the Rebate Fund and the Reserve Fund). Pursuant to the provisions of the Indenture, the Authority will transfer in trust and assign to the Trustee, for the benefit of the Owners of the Authority Bonds, all of the Revenues and all of the right, title and interest, if any, of the Authority in the Reassessment Bonds. See "SECURITY FOR THE AUTHORITY BONDS—Revenues." Ownership of the Authority Bonds is subject to a significant degree of risk. In addition, the Authority Bonds are not rated by any national rating agency. Accordingly, there may be a limited secondary market for the Authority Bonds. Potential investors in the Authority Bonds are advised to read carefully the section of this Official Statement entitled "SPECIAL RISK FACTORS." The Authority Bonds are not a debt of the Town, the State of California or any political subdivision thereof other than the Authority, and then only to the limited extent described herein, and are payable solely from the funds provided therefor in the Indenture. Neither the faith and the credit nor the taxing power of the Town, the State of California or any political subdivision thereof is pledged to the payment of the principal of, redemption premium, if any, or interest on the Authority Bonds. The issuance of the Authority Bonds does not directly, indirectly or contingently obligate the Town, the State of California or any political subdivision thereof to levy or pledge any form of taxation whatsoever therefor or to make any appropriation for their payment. The Authority has no taxing power. Authority for Issuance The Authority Bonds. The Authority Bonds are being issued pursuant to Article 4 of the Marks -Roos Local Bond Pooling Act of 1985, as amended (the "Bond Law"), and pursuant to the Indenture. Issuance of the Authority Bonds was approved by the Authority pursuant to Resolution No. adopted by the Board of Directors of the Authority on July 20, 2016. The Reassessment Bonds. The Reassessment Bonds are being issued pursuant to the Refunding Act, and pursuant to a Fiscal Agent Agreement, dated as of August 1, 2016 ("Fiscal Agent Agreement"), by and between the Town and U.S. Bank National Association, as fiscal agent (the "Fiscal Agent"). Issuance of the Reassessment Bonds was approved by the Town Council pursuant to Resolution No. adopted by the Town Council on July 20, 2016. Security for the Repayment of the Authority Bonds and the Reassessment Bonds The Authority Bonds. The Authority Bonds are equally secured by a pledge, charge and lien upon the Revenues without priority for any Authority Bond over any other Authority Bond; and the payment of the interest on and principal of the Authority Bonds and any premiums upon the redemption of any Authority Bonds are secured by an exclusive pledge, charge and lien upon the Revenues. So long as any of the Authority Bonds are Outstanding, the Revenues shall not be used for any purpose except as is expressly permitted by the Indenture. The Authority Bonds are further secured by a pledge of and lien on amounts in the Revenue Fund and the Reserve Fund, subject to the provisions of the Indenture. See "SECURITY FOR THE AUTHORITY BONDS" herein. The Reassessment Bonds. The Reassessment Bonds are limited obligation refunding improvement bonds issued by the Town with respect to the Reassessment District. The Reassessment Bonds are payable from and secured by a pledge of certain unpaid reassessments (the "Reassessments") levied by the Town on parcels (the "Assessment Parcels") in the Reassessment District. The unpaid Reassessments together with the interest thereon constitute a -4- trust fund for the redemption and payment of the principal of and the interest on the Reassessment Bonds. See "SECURITY FOR THE REASSESSMENT BONDS" herein. Description of the Authority Bonds Payments. Interest on the Authority Bonds is payable semiannually on each March 2 and September 2, commencing March 2, 2017. Denominations; Book -Entry -Only System. The Authority Bonds will be issued in denominations of $5,000 each or integral multiples thereof. The Authority Bonds will be issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to actual purchasers of the Authority Bonds (the "Beneficial Owners") in the denominations described above, under the book -entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants, as described in this Official Statement. Beneficial Owners will not be entitled to receive physical delivery of the Authority Bonds. See "THE AUTHORITY BONDS— General Provisions" and APPENDIX E — DTC and the Book -Entry -Only System. Redemption. The Authority Bonds are subject to optional redemption and mandatory redemption prior to maturity as described herein. See "THE AUTHORITY BONDS— Redemption" herein. Tax Matters In the opinion of Quint & Thimmig LLP, Bond Counsel, under existing law and assuming compliance with certain covenants, the interest on the Authority Bonds is excludable from gross income of the owners thereof for federal income tax purposes, and is not included as an item of tax preference in computing the alternative minimum tax for individuals and corporations under the Internal Revenue Code of 1986, as amended, but is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. The interest on the Authority Bonds, in the further opinion of Bond Counsel, is exempt from personal income taxation imposed by the State of California. Bond Counsel expresses no opinion regarding any other tax consequences caused by the ownership or disposition of, or the accrual or receipt of interest on, the Authority Bonds. See "TAX MATTERS" herein. Professionals Involved in the Offering The proceedings in connection with the issuance of the Authority Bonds and the Reassessment Bonds are subject to the approval as to their legality of Quint & Thimmig LLP, Larkspur, California, Bond Counsel. Quint & Thimmig LLP is also acting as Disclosure Counsel to the Authority with respect to the Authority Bonds. U.S. Bank National Association, San Francisco, California will act as Trustee for the Authority Bonds and as Fiscal Agent for the Reassessment Bonds. The Bank of New York Mellon Trust Company, N.A., Los Angeles, California, will act as escrow bank with respect to the Prior Bonds. NBS Government Finance Group, Temecula, California, is providing certain information relating to the Reassessment District and is acting as Reassessment Engineer. Grant Thornton LLP, Minneapolis, Minnesota, is acting as verification agent. Burke, Williams & Sorenson, LLP, San Rafael, California, is the general counsel to the Authority and Town Attorneys for the Town. Payment of compensation to Quint & Thimmig LLP and U.S. Bank National Association is contingent upon the sale and delivery of the Authority Bonds. -5- Continuing Disclosure The Authority has covenanted for the benefit of holders and beneficial owners of the Authority Bonds to provide certain financial information and operating data relating to the Authority and the Town by not later than March 31 following the end of each respective fiscal year, commencing on March 31, 2017, with the report for the 2015-2016 Fiscal Year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events, if material. See "CONTINUING DISCLOSURE" herein. The Annual Report and any notices of material events will be filed by the Authority with the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the Annual Report or the notices of material events is set forth in APPENDIX C— Form of Continuing Disclosure Agreement. These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c2 -12(b)(5) (the "Rule"). Other Information This Official Statement speaks only as of its date, and the information contained herein is subject to change without notice. Copies of documents referred to herein are available from the Authority upon written request to Authority addressed as follows: Tiburon Public Financing Authority c /o Town of Tiburon, 1505 Tiburon Boulevard, Tiburon, California 94920, Attention: Director of Administrative Services. The Authority may impose a charge for copying, mailing and handling expenses related to any request for documents. THE FINANCING PLAN Establishment of Reassessment District The Town has established the Reassessment District under the provisions of the Refunding Act and the Resolution of Intention. Pursuant to the Refunding Act, the Reassessments will supplant the unpaid assessments previously levied by the Town on parcels in the Prior Districts, except for any delinquent assessments which will remain liens on parcels in the applicable Prior Districts. Under the Refunding Act, the lien of the Reassessments on the parcels on which they are levied will be given superiority and priority as of the date that the original assessments levied in the respective Prior Districts became liens on the properties so assessed, and will have priority over any private mortgage or other nongovernmental liens on the properties subject to the Reassessments. The lien of any delinquent assessments not supplanted by the Reassessments and the lien of the Reassessments on the related parcels are equal in priority. See "SECURITY FOR THE REASSESSMENT BONDS." Refunding of Prior Bonds The net proceeds of the Authority Bonds will be used to acquire the Reassessment Bonds. Concurrent with the execution and delivery of the Authority Bonds and the purchase by the Authority from the Town of the Reassessment Bonds, the Town will enter into an escrow agreement (the "Escrow Agreement") with The Bank of New York Mellon Trust Company, N.A., as escrow bank (the "Escrow Bank") with respect to the Prior Bonds pursuant to which the proceeds derived from the sale of the Reassessment Bonds, along with amounts held in the reserve funds and the redemption funds for the Prior Bonds, will be deposited in an escrow fund (the "Escrow Fund"). Amounts deposited in the Escrow Fund will be held by the Escrow Bank in cash, and such deposit will be verified by Grant Thornton LLP (the "Verification Agent") to be sufficient to pay the principal of and interest and premiums on the Prior Bonds upon their redemption on September 2, 2016. As a result of the deposit and application of funds -6- as provided for in the Escrow Agreement, assuming the accuracy of the computations verified by the Verification Agent, the obligation to make payments of the principal of and interest on the Prior Bonds will be legally defeased on the date of issuance of the Authority Bonds and the Reassessment Bonds. Moneys held by the Escrow Bank in the Escrow Fund are pledged to the payment of the Prior Bonds, and will not be available for the payment of the Authority Bonds or the Reassessment Bonds. Estimated Sources and Uses of Funds The Authority Bonds. The anticipated sources and uses of funds relating to the Authority Bonds are as follows: Sources of Funds: Par Amount of Authority Bonds Plus: Original Issue Premium Less: Underwriter's Discount Total Sources Uses of Funds: Purchase Fund (purchase of Reassessment Bonds)(1) Reserve Fund(2) Costs of Issuance Fund(3) Total Uses $ $ $ $ (1) To be used to acquire the Reassessment Bonds on the date of issuance of the Authority Bonds. See "PLAN OF FINANCING—Refunding of Prior Bonds. (2) Equal to the Initial Reserve Fund Deposit. See APPENDIX A—Summary of Principal Legal Documents for additional information relating to the amount required to be held in the Reserve Fund, both on the date of issuance of the Authority Bonds and thereafter. See also "SECURITY FOR THE AUTHORITY BONDS—Reserve Fund" herein. (3) Includes Trustee, Fiscal Agent and Escrow Bank fees and expenses, Bond Counsel and Disclosure Counsel fees and expenses, printing costs, and other costs related to the issuance of the Authority Bonds and the Reassessment Bonds. The Reassessment Bonds. The anticipated sources and uses of funds relating to the Reassessment Bonds are as follows: Sources of Funds: Par Amount of Reassessment Bonds $ Less Purchaser's Discount Plus Prior Reserve Funds Plus Prior Redemption Funds Total Sources $ Uses of Funds: Deposit to Escrow Fund(�) $ Total Uses $ (1) To be used to redeem the Prior Bonds on September 2, 2016. See "PLAN OF FINANCING—Refunding of Prior Bonds. -7- DEBT SERVICE SCHEDULES Interest Rate Differential Between the Authority Bonds and the Reassessment Bonds Debt service on the Authority Bonds is generally less than the amount of scheduled debt service coming due and payable on the Reassessment Bonds in each Bond Year. The amount of debt service paid on the Reassessment Bonds which is in excess of the amount required to pay debt service on the Authority Bonds will be received by the Trustee as Revenues. The Indenture provides that Revenues, after setting aside amounts in the Interest Account, the Principal Account and the Reserve Fund in accordance with the Indenture, will be deposited in the Surplus Fund. The Authority anticipates that amounts in the Surplus Fund will be available (i) to make up any shortfalls in revenues from the Reassessment Bonds needed to pay scheduled debt service on the Authority Bonds, (ii) to pay certain administrative costs of the Authority and the Town related to the Authority Bonds and the Reassessment Bonds, (iii) for transfer to the Town to be deposited into the Redemption Fund for the Reassessment Bonds and applied to reduce debt service payments on Reassessment Bonds or credited against the Reassessments pursuant to the Formation Act, or (iv) for accumulation in and expenditure from the Surplus Fund for any lawful purpose of the Authority; all as directed from time to time by the Authority to the Trustee in writing. Debt Service on the Authority Bonds and the Reassessment Bonds The following table sets forth the amount of scheduled debt service on the Reassessment Bonds in each Bond Year and the amount of scheduled debt service on the Authority Bonds in each Bond Year. Debt service on the Reassessment Bonds and the Authority Bonds is shown without regard to any possible optional redemption or mandatory redemption by reason of prepayments of Reassessments of the Reassessment Bonds or the Authority Bonds. -8- Schedule Debt Service on the Reassessment Bonds and the Authority Bonds Year Reassessment Bonds Authority Bonds Ending Available Sept 2 Principal Interest Total Principal Interest Total Revenues(1) Cumulative 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Totals(2): (1) Any shortfall in scheduled debt service on the Reassessment Bonds needed to pay the scheduled debt service on the Authority Bonds is anticipated to be funded from prior surplus amounts held in the Surplus Fund. See "APPENDIX A—Summary of Principal Legal Documents — The Surplus Fund." (2) Some figures may not total due to rounding. THE AUTHORITY BONDS General Provisions The Authority Bonds will be issued in the denomination of $5,000 or any integral multiple thereof, will be dated their delivery date, and will bear interest at the rates per annum set forth on the cover page hereof. Principal of the Authority Bonds is payable annually on September 2 of each year commencing September 2, 2017, subject to the redemption provisions set forth in the Indenture. Interest on the Authority Bonds will be payable semiannually on each March 2 and September 2, commencing March 2, 2017 (each, an "Interest Payment Date"). The Authority Bonds will be issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to actual purchasers of the Authority Bonds (the "Beneficial Owners") in the denominations described above, under the book -entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants. Beneficial Owners will not be entitled to receive physical delivery of the Authority Bonds. In the event that the book - entry -only system is no longer used with respect to the Authority Bonds, the Authority Bonds will be registered and transferred in accordance with the Indenture. See APPENDIX E—DTC and the Book -Entry -Only System. Interest on the Authority Bonds will be payable on each Interest Payment Date to the person whose name appears on the Bond Register as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date. Interest will be paid by check of the -9- Trustee mailed by first-class mail, postage prepaid, to the Owner at the address of such Owner as it appears on the Bond Register, or by wire transfer upon instructions of any Owner of $1,000,000 or more in aggregate principal amount of Authority Bonds. "Record Date" is defined in the Indenture to mean, with respect to any Interest Payment Date, the fifteenth calendar day of the month preceding the month in which such Interest Payment Date occurs, whether or not such day is a Business Day. Principal of and premium (if any) on any Bond will be paid upon presentation and surrender of the Bond, at maturity or the prior redemption, at the corporate trust office of the Trustee in San Francisco, California (the "Trust Office"). The principal of and interest and premium (if any) on the Authority Bonds is be payable in lawful money of the United States of America. So long as the Authority Bonds are registered in the name of Cede & Co., as nominee of DTC, payments of the principal, premium, if any, and interest on the Authority Bonds will be made directly to DTC, or its nominee, Cede & Co. Disbursements of such payments to DTC's Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's Participants and Indirect Participants. See APPENDD< E—DTC and the Book -Entry -Only System. Each Authority Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it will bear interest from such Interest Payment Date; or (b) it is authenticated on or before February 15, 2017, in which event it will bear interest from the date of issuance of the Authority Bonds; provided, however, that if, as of the date of authentication of any Authority Bond, interest thereon is in default, such Authority Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon, or from the date of issuance of the Authority Bonds if no interest has been paid or made available for payment. For a more complete description of the provisions of the Indenture with respect to the Authority Bonds, see APPENDIX A—Summary of Principal Legal Documents. Redemption Optional Redemption. The Authority Bonds maturing on or after September 2, , may be redeemed at the option of the Authority, from any source of available funds, on any Interest Payment Date on or after September 2, , as a whole, or in part such that the principal and interest on the Authority Bonds to remain Outstanding due on any Interest Payment Date following such redemption are not in excess of the remaining principal and interest payable on or before such Interest Payment Date on the Reassessment Bonds to remain outstanding following the payment of any Reassessment Bonds being redeemed, if any redemption of Reassessment Bonds is being accomplished in conjunction with such optional redemption, and otherwise from such maturities as are selected by the Authority, and by lot within a maturity, at the following redemption prices (expressed as a percentage of the principal amount of the Authority Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Dates September 2, and March 2, September 2, and March 2, September 2, and thereafter -10- Redemption Price % Prior to consenting to any refunding of any Reassessment Bonds, the Authority must deliver to the Trustee a certificate of an Independent Financial Consultant verifying that, following such refunding of the Reassessment Bonds and redemption of Authority Bonds, the principal and interest generated from the remaining Reassessment Bonds is adequate to make the timely payment of principal and interest due on the Authority Bonds that will remain Outstanding following such optional redemption. Mandatory Redemption from Prepayments of Reassessments. The Bonds are subject to mandatory redemption, in whole or in part, on any Interest Payment Date from amounts received by the Trustee representing a redemption of the Reassessment Bonds resulting from the prepayment of Reassessments by property owners, in whole, or in part among maturities as selected by the Authority, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest to the date of redemption, without premium. Mandatory Sinking Payment Redemption. The Authority Bonds maturing on September 2, , are subject to mandatory sinking payment redemption in part on September 2, , and on each September 2 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking payments as follows: Redemption Date Mandatory (September 2) Sinking Payments The amounts in the foregoing table shall be reduced, as a result of any prior partial redemption of the Authority Bonds maturing on September 2, , pursuant to the optional or mandatory redemption from prepayments of Reassessments described above, as specified by the Authority to the Trustee, such that the remaining scheduled payments of principal and interest on the Reassessment Bonds will be sufficient on a timely basis to pay debt service on the Authority Bonds. The Trustee shall be entitled to rely upon a Certificate of the Authority as proof of such sufficiency. Notice of Redemption. When redemption is authorized or required pursuant to the Indenture, the Trustee shall on behalf of and at the expense of the Authority give official notice the redemption of the Authority Bonds by mailing a copy thereof by first class mail, or by such other means as is acceptable to the recipient thereof, at least 30 days and not more than 60 days prior to the date fixed for redemption to the Owners of the Authority Bonds to be redeemed at the addresses shown on the registration books kept by the Trustee, and to the Town, the securities depositories and information services specified in the Indenture. Such official notice shall specify: (i) the redemption date, (ii) the redemption price and place of redemption, (iii) the CUSIP numbers, the Bond numbers (in the event of a partial redemption) and the maturity or maturities (in the event of redemption of all Authority Bonds of such maturity or maturities in whole) and (iv) that interest on such Authority Bonds shall cease to accrue from and after such redemption date. Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the sufficiency of the proceedings for the redemption of the Authority Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption. -11- Selection of Authority Bonds for Redemption. Authority Bonds shall be selected for redemption among maturities by the Authority on such basis that the remaining scheduled payments of principal and interest on the Reassessment Bonds will be sufficient on a timely basis to pay the remaining scheduled debt service on the Authority Bonds, as shall be demonstrated in a report of an Independent Financial Consultant filed with the Trustee. Whenever less than all of the Authority Bonds of the same maturity are to be redeemed, the Trustee will select the Authority Bonds to be redeemed from all Authority Bonds of such maturity not previously called for redemption, by lot in any manner which the Trustee in its sole discretion deems appropriate and fair. For purposes of such selection, all Authority Bonds shall be deemed to be comprised of separate $5,000 authorized denominations, and such separate authorized denominations shall be treated as separate Authority Bonds which may be separately redeemed. Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of and interest (and premium, if any) on the Authority Bonds so called for redemption shall have been duly provided, such Authority Bonds so called shall cease to be entitled to any benefit under the Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice. Purchase of Authority Bonds. In lieu of redemption of Authority Bonds as provided in the Indenture, amounts held by the Trustee for such redemption shall, at the written request of the Authority received by the Trustee prior to the selection of Authority Bonds for redemption, be applied by the Trustee to the purchase of Authority Bonds at public or private sale as and when and at such prices (including brokerage, accrued interest and other charges) as the Authority may in its discretion direct, but not to exceed the redemption price which would be payable if such Authority Bonds were redeemed. The aggregate principal amount of Authority Bonds of the same maturity purchased in lieu of redemption shall not exceed the aggregate principal amount of Authority Bonds of such maturity which would otherwise be subject to such redemption. Any Authority Bonds so purchased in lieu of redemption shall be treated as if such Authority Bonds were redeemed, for all purposes of the Indenture. SECURITY FOR THE AUTHORITY BONDS Revenues The Authority Bonds are secured by a first lien on and pledge of the Revenues. In addition, the Authority has assigned to the Trustee, pursuant to the Indenture, for the benefit of Bondowners, all of the Revenues and all of the Authority's right, title and interest in the Reassessment Bonds, subject to the terms of the Indenture. Payment of the principal of, premium, if any, and interest on the Authority Bonds is expected to be made from the Revenues. "Revenues" consist of: (a) all payments on the Reassessment Bonds received by the Trustee; (b) any proceeds of the Authority Bonds originally deposited with the Trustee and all moneys deposited and held from time to time by the Trustee in the funds and accounts established under the Indenture with respect to the Authority Bonds (other than the Rebate Fund, the Surplus Fund and the Purchase Fund); and (c) investment income with respect to any moneys held by the Trustee in the funds and accounts established under the Indenture with respect to the Authority Bonds -12- (other than investment income on moneys held in the Rebate Fund and the Reserve Fund). All Reassessment Bond debt service payments received by the Trustee will be promptly deposited by the Trustee into a Revenue Fund held by the Trustee pursuant to the Indenture. Any Revenues which represent the payment of delinquent principal of or interest on the Reassessment Bonds will immediately be deposited to the Reserve Fund to the extent necessary to replenish the amount in such account to the amount required under the Indenture, with any amount in excess of that needed to replenish the Reserve Fund to the amount of the Initial Reserve Fund Deposit to be transferred to the Surplus Fund. On each Interest Payment Date and date for redemption of the Authority Bonds, the Trustee will apply moneys in the Revenue Fund to pay interest on the Authority Bonds, pay principal on the Authority Bonds, and to make deposits to the Reserve Fund to increase the balance in the Reserve Fund to the amount of the then Reserve Requirement (if necessary), in that order of priority. Any moneys remaining in the Revenue Fund on September 3 of each year will be deposited into the Surplus Fund and will no longer be considered Revenues or be pledged to repay the Authority Bonds. See APPENDIX A—Summary of Principal Legal Documents herein. THE AUTHORITY BONDS ARE NOT A DEBT OF THE TOWN OR THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS (EXCEPT THE AUTHORITY), AND NONE OF THE TOWN, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS (EXCEPT THE AUTHORITY) IS LIABLE THEREFOR, NOR IN ANY EVENT WILL THE AUTHORITY BONDS BE PAYABLE OUT OF ANY FUNDS OTHER THAN THOSE OF THE AUTHORITY SPECIFICALLY PLEDGED THEREFOR UNDER THE INDENTURE. THE AUTHORITY BONDS DO NOT CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR RESTRICTION. THE AUTHORITY HAS NO TAXING POWER. Reserve Fund Pursuant to the Indenture, the Trustee will establish and maintain the Reserve Fund under the Indenture. An amount equal to the Initial Reserve Fund Deposit of $ will be funded with proceeds of the Authority Bonds and will be deposited to the Reserve Fund on the date of issuance of the Authority Bonds. See "THE FINANCING PLAN—Estimated Sources and Uses of Funds." Investment earnings on amounts in the Reserve Fund, other than the first $ of such earnings which will be transferred to the Surplus Fund, will remain on deposit in the Reserve Fund until the amount in the Reserve Fund equals the Maximum Reserve Amount. The "Reserve Requirement" is defined in the Indenture as an amount equal the Initial Reserve Fund Deposit plus any investment earnings on amounts in the Reserve Fund, other than the first $ of such earnings which will be transferred to the Surplus Fund, not to exceed, in any event, the Maximum Reserve Amount. The Maximum Reserve Amount means, as of any date of calculation, an amount equal to the least of (i) 10% of the initial principal amount of the Authority Bonds, (ii) Maximum Annual Debt Service on the Outstanding Authority Bonds, or (iii) 125% of average Annual Debt Service on the Outstanding Authority Bonds. If the amounts in the Interest Account or the Principal Account of the Revenue Fund are insufficient to pay the principal of or interest on the Authority Bonds when due, the Trustee will withdraw from the Reserve Fund for deposit in the Interest Account and the Principal Account, as applicable, moneys necessary for such purposes. -13- Under the Indenture, any interest earned on the investment of moneys on deposit in the Reserve Fund, other than the first $ of such earnings which will be transferred to the Surplus Fund, (i) shall be retained in the Reserve Fund until the amount on deposit therein equals the Maximum Reserve Amount, and (ii) which would cause the amount therein to exceed the Maximum Reserve Amount shall be transferred to the Surplus Fund on each September 3. On the date on which there are no longer any Authority Bonds Outstanding under the Indenture, all amounts in the Reserve Fund will be transferred to the Surplus Fund. Non -Asset Bonds While scheduled debt service (principal and interest payments) on the Reassessment Bonds generally exceeds scheduled debt service on the Authority Bonds, the initial principal amount of the Reassessment Bonds is less than the initial principal amount of the Authority Bonds. See "DEBT SERVICE SCHEDULES." The initial aggregate principal amount of the Authority Bonds will be $ . The principal amount of the Reassessment Bonds, at the time of issuance, will be $ . The difference between the principal amount of the Authority Bonds and the principal amount of the Reassessment Bonds, less any amount then on deposit in the Reserve Fund, is a potential shortfall (the "Non -asset Shortfall") in moneys available to pay the Authority Bonds should all of the Reassessment Bonds be redeemed from property owners' prepayments of Reassessments. See "THE AUTHORITY BONDS— Redemption – Mandatory Redemption from Prepayments of Reassessments." After taking into account amounts in the Reserve Fund and other moneys, the initial Non -asset Shortfall position will be approximately $ . If all Reassessments were prepaid on September 2, 2017, this would be the Non -asset Shortfall. The Non -asset Shortfall is projected to decrease to zero by September 2, , assuming no draws on the Reserve Fund prior to such date and the Reassessment Bonds are timely paid in accordance with their terms, and no prepayments of Reassessments occur. The likelihood of property owner Reassessment prepayments cannot be predicted with certainty. Investment of Bond Proceeds Money held by the Trustee in any fund or account established under the Indenture will be invested by the Trustee in Permitted Investments (see the definition of Permitted Investments in APPENDIX A—Summary of Principal Legal Documents). For further details regarding the investment of Authority Bond proceeds and other moneys in the funds and accounts established under the Indenture, see APPENDIX A—Summary of Principal Legal Documents. All interest or gain derived from the investment of amounts in any of the funds or accounts established under the Indenture will be deposited in the fund or account from which such investment was made; provided, however, that interest or gain derived from the investment of amounts in the Reserve Fund that is in excess of the first $ of such earnings (which $ will be transferred to the Surplus Fund) shall, to the extent the balance thereof exceeds, on September 3 of each year, the Maximum Reserve Amount, the excess amount will be withdrawn by the Trustee on such September 3 and deposited to the Surplus Fund. SECURITY FOR THE REASSESSMENT BONDS Reassessments The Reassessment Bonds are being issued pursuant to the Refunding Act and the Fiscal Agent Agreement upon and secured by a first pledge of all of the Reassessments and all moneys deposited in the Redemption Fund. The Reassessments and all moneys deposited into the Redemption Fund (except as otherwise provided in the Fiscal Agent Agreement) are dedicated -14- to the payment of the principal of, and interest and any premium on, the Reassessment Bonds as provided in the Fiscal Agent Agreement and in the Refunding Act until all of the Reassessment Bonds has been paid in full. Although the unpaid Reassessments constitute fixed liens on the Assessment Parcels, they do not constitute personal indebtedness of the owners of the Assessment Parcels. Furthermore, there can be no assurance as to the ability of the owners to pay the unpaid Reassessments. See "SPECIAL RISK FACTORS." The unpaid Reassessments levied on the Assessment Parcels will be collected in annual installments, together with interest on the declining balances, on the tax roll of the County on which ad valorem property taxes on real property are collected. The annual Reassessment installments, together with interest thereon are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do ad valorem property taxes, and the Assessment Parcels are subject to the same provisions for sale and redemption as are properties for nonpayment of ad valorem property taxes, subject to the foreclosure covenant in the Fiscal Agent Agreement described below. These annual Reassessment installments will be deposited into the Redemption Fund established under the Fiscal Agent Agreement, and will be used to pay the principal of and interest on the Reassessment Bonds as they become due. The Reassessment Bonds are not secured by the general taxing power of the Town, the County, the State of California or any political subdivision thereof, and neither the faith and credit nor the taxing power of the Town, the County, the State of California or any political subdivision thereof is pledged to the payment of the Reassessment Bonds. The Reassessment Bonds are limited obligation bonds, and the Town is not contingently liable to pay any of the Reassessment Bonds from its own funds. Legal Authority The Reassessment Bonds are issued pursuant to particular provisions of the Refunding Act which permit their authorization, issuance and sale without public hearing if three conditions are satisfied. The three conditions are summarized as follows: (a) Each estimated annual installment of principal and interest on the Reassessments is less than the corresponding annual installment of principal and interest on the portion of the assessment being superseded and supplanted by the same percentage for all Assessment Parcels. (b) The number of years to maturity of the Reassessment Bonds is not more than the number of years to the last maturity of the Prior Bonds. (c) The principal amount of the Reassessment on each Assessment Parcel is Jess than the unpaid principal amount of the portion of the original assessment being superseded and supplanted by the same percentage for each Assessment Parcel. The Town Council, as part of the refunding proceedings, has made a finding that the three conditions are satisfied as to the Reassessment Bonds. Covenant to Commence Foreclosure Proceedings The Municipal Improvement Act of 1913, Division 12 of the Streets and Highways Code (the "Assessment Law") provides that in the event any Reassessment or installment thereof or -15- any interest thereon is not paid when due, the Town may order the institution of a court action to foreclose the lien of the unpaid Reassessment. In such an action, the real property subject to the unpaid Reassessment may be sold at judicial foreclosure sale. This foreclosure sale procedure is not mandatory. However, in the Fiscal Agent Agreement the Town has covenanted that it will order, and cause to be commenced, and thereafter diligently prosecute to judgment (unless such delinquency is theretofore brought current), an action in the superior court to foreclose the lien of any Reassessment or installment thereof not paid when due as described below. On or about February 15 and June 15 of each Fiscal Year, the Finance Director of the Town is obligated to compare the amount of Reassessments due and payable to the amount of Reassessment Payments theretofore received by the Town, and: (a) If the Finance Director determines that any single parcel subject to a Reassessment is delinquent in the payment of three or more installments of the Reassessments, then the Finance Director shall send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner within 45 days of such determination, and (if the delinquency remains uncured) foreclosure proceedings shall be commenced by the Town within 90 days of such determination; and (b) If the Finance Director determines that the total amount of delinquent Reassessments for the prior Fiscal Year for the entire Reassessment District (including the total of delinquencies under subsection (a) above), exceeds 4% of the total Reassessment levied for the prior Fiscal Year, the Finance Director shall notify or cause to be notified property owners who are then delinquent in the payment of Reassessments and demand immediate payment of the delinquency within 45 days of such determination, and the Town shall commence foreclosure proceedings within 90 days of such determination against each parcel of land in the Reassessment District with a Reassessments delinquency. Notwithstanding the foregoing, the Town may elect to defer foreclosure proceedings with respect to any delinquent parcel if the Town has received funds equal to the delinquent Reassessments from any source, and those funds are available to contribute toward the payment of the principal of (including sinking fund payments) and interest on the Reassessment Bonds when due (including without limitation funds received under the Teeter Plan and funds from the sale of the receivables associated with delinquent Reassessments). In the event court foreclosure proceedings are necessary, there may be a delay in payments due with respect to the Reassessment Bonds, and a corresponding delay in the payment of Revenues and the debt service on the Authority Bonds, pending prosecution of the foreclosure proceedings and receipt by the Town of the proceeds of the foreclosure sale. Foreclosure actions can take several years and it is also possible that no bid for the purchase of the applicable property would be received at the foreclosure sale. See also the section herein entitled "SPECIAL RISK FACTORS." Sales of Tax -Defaulted Property Generally Property securing delinquent Reassessment installments which is not sold pursuant to the judicial foreclosure proceedings described above may be sold, subject to redemption by the property owner, in the same manner and to the same extent as real property sold for nonpayment of ad valorem County property taxes. On or before June 30 of the year in which such delinquency occurs, the property becomes tax -defaulted. This initiates a five-year period -16- during which the property owner may redeem the property. At the end of the five-year period, the property becomes subject to sale by the County Treasurer and Tax Collector. Except in certain circumstances, as provided in the Assessment Law, the purchaser at any such sale takes such property subject to all unpaid Reassessments, interest and penalties, costs, fees and other charges which are not satisfied by application of the sales proceeds and subject to all public improvement assessments which may have priority. Tax Loss Reserve Fund - "Teeter Plan" Some California counties and the other political subdivisions within their boundaries operate under the provisions of Sections 4701 through 4717, inclusive, of the California Revenue and Taxation Code, commonly referred to as the "Teeter Plan," with respect to property tax collection and disbursement procedures. These sections provide an alternative method of apportioning secured taxes whereby agencies levying taxes or assessments through county tax billings may receive from the county 100% of their taxes or assessments at the time they are levied. The county treasury's cash position (from taxes) is insured by a special tax loss reserve fund accumulated from delinquent penalties. The Reassessments are expected to be collected under the County's Teeter Plan. Thus, so long as the County maintains its policy of collecting taxes and assessments pursuant to above- described procedures and the Town meets the Teeter Plan requirements, the Town will receive 100% of the annual Reassessments levied on parcels in the Reassessment District without regard to actual collections. There is no assurance, however, that the County Board of Supervisors will maintain its policy of apportioning the Reassessments pursuant to the aforementioned procedures. The Board of Supervisors of the County may discontinue the procedures under the Teeter Plan altogether, or with respect to any tax or assessment levying agency in the County if the rate of secured tax and assessment delinquency in that agency in any year exceeds 3% of the total of all taxes and assessments levied on the County secured rolls for that agency. Prior Assessment Delinquencies The following table sets forth the amount of the assessments levied on properties in the Prior Districts for the last six fiscal years, and the delinquencies in payment of the assessments so levied. -17- Table 1 Town of Tiburon 2016 Consolidated Reassessment District Delinquency Summary as of June 23, 2016 Percentage of Amount Parcels Levied Total Parcels Remaining Total Amount Total Amount Which is Fiscal Year Levied Delinquent Levied Delinquent Delinquent 2010/11(1) 247 0 $483,924.74 $0.00 0.00% 2011 /12(2) 266 0 498,655.74 0.00 0.00 2012 /13 460 1 786,933.44 801.61 0.10 2013/14 460 2 854,133.12 4,009.24 0.47 2014/15(3) 311 2 528,730.08 3,835.48 0.73 2015/16(3) 311 7 524,121.88 9,443.63 1.80 Totals $3,676,499.00 $18,089.96 0.49% (1) 214 parcels within Lyford Cove/Lyford Cove Supplemental were not levied because they received assessment levy credits from surplus improvement funds. See "THE REASSESSMENT DISTRICT—Surplus Funds Credits." (2) 195 parcels within Lyford Cove/Lyford Cove Supplemental were not levied because they received assessment levy credits from surplus improvement funds. See "THE REASSESSMENT DISTRICT—Surplus Funds Credits." (3) 149 parcels within Del Mar Valley/Del Mar Valley Supplemental were not levied because they received assessment levy credits from surplus improvement funds. Surplus funds are expected to be exhausted in FY 2017/18. See "THE REASSESSMENT DISTRICT—Surplus Funds Credits." Source: Marin County as compiled by NBS Government Finance Group. No assurance can be given regarding possible future delinquencies in payment of Reassessments levied on properties in the Reassessment District. Priority of Lien Each Reassessment and each installment thereof, and any interest and penalties thereon, constitutes a lien against the parcel of land on which it was imposed until the same is paid. The lien is subordinate to all fixed special assessment liens imposed upon the same property prior to the date that the assessments supplanted by the reassessments became a lien on the property assessed, but has priority over all private liens and over all fixed special assessment liens which may thereafter be created against the property. The lien is co -equal to and independent of the lien for ad valorem property taxes and any community facilities (Mello -Roos) district special taxes, including ad valorem property taxes and community facilities district special taxes levied or imposed subsequent to the date the assessments supplanted by the reassessment liens securing the Reassessment Bonds were imposed on land in the District. THE REASSESSMENT DISTRICT The Reassessment District includes 460 distinct County Assessor's parcels consolidated from the six Prior Districts. See "INTRODUCTION—The Reassessment District." The Prior Districts, and hence the Reassessment District, are all located within the Town. See APPENDIX F—Reassessment Diagram for the locations of the Prior Districts, and thereby of the parcels included in the Reassessment District. All of the Prior Districts, except for the former Main Street Assessment District, were formed to finance costs of the undergrounding of overhead power and utility lines. The former Main Street Assessment District was formed to finance the improvement of Main Street in the Town to comply with Americans With Disabilities Act requirements. All of the undergrounding and street work financed by the Prior Districts has been completed. The -18- properties in the Reassessment District, other than those in the former Main Street Assessment District, consist primarily of parcels improved with single family residences. The parcels in the former Main Street Assessment District include parcels improved with various commercial structures. Method of Spreading Reassessment Each Reassessment has been computed as a proration of the existing individual assessments to the total existing assessments. Delinquent assessment installments securing the payment of the Prior Bonds were not included in the Reassessments, and represent liens on the applicable parcels that are on a parity with the Reassessment liens. Annual Administrative Assessment The Town Council intends, pursuant to subparagraph (f) of Section 10204 of the California Streets and Highways Code, to provide for an annual assessment upon each of the parcels of land in the Reassessment District to pay various costs and expenses incurred from time to time by the Town and not otherwise reimbursed to the Town which result from the administration and collection of Reassessment installments or from the administration or registration of the Reassessment Bonds and the various funds and accounts pertaining thereto. This annual administrative assessment levy is anticipated to be approximately $ per parcel, and the proceeds of such levy are not pledged to the payment of the Reassessment Bonds. In addition, the County Auditor is expected to add an additional assessment of $16.00 per parcel per year for collection of Reassessments. These levys will be collected as part of the annual Reassessment levy to pay debt service on the Reassessment Bonds. Surplus Funds Credits Upon completion of the improvements to be financed by the prior Lyford Cove Utility Undergrounding Assessment District and the prior Lyford Cove Utility Undergrounding Supplemental Assessment District (together, the "Prior Lyford Districts"), and completion of the improvements to be financed by the prior Del Mar Valley Utility Undergrounding Assessment District and the prior Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (together, the "Prior Del Mar Districts"), it was determined that there were surplus funds in the improvement funds established for the Prior Lyford Districts and the Prior Del Mar Districts. The Town, after discussions with property owners in the Prior Lyford Districts and the Prior Del Mar Districts, determined to use the surplus funds as credits to the assessments levied to pay the Prior Bonds issued for the Prior Lyford Districts and the Prior Del Mar Districts, respectively, as is permitted by Section 10427.1 of the California Streets and Highways Code. The surplus funds attributable to the Prior Lyford Districts have been fully expended as credits against the assessments levied in such Prior Districts. However, there are still $ in funds available to credit Reassessments to be levied on properties in the Reassessment District that were located in the Prior Del Mar Districts (the "Del Mar Parcels"). The Fiscal Agent Agreement provides for the Finance Director to establish a Credit Account, and to use the funds described in the preceding sentence as credits against Reassessments to be levied in the next Fiscal Year or two on the Del Mar Parcels. -19- Land Uses and Top Property Owners The following table sets forth the distribution of land uses in the Reassessment District, the total direct and overlapping tax and assessment debt with respect to those land uses, and their respective 2015-16 County assessed value. Table 2 Town of Tiburon 2016 Consolidated Reassessment District Ownership/Land Use Distribution Land Use Category Single Family Residential Multi -Family Residential Commercial Vacant Single Family Residential Vacant Multi -Family Residential Totals Number of Parcels 376 65 13 3 3 Total Direct and Overlapping Tax and Assessment Debt $15,011,881.46 2,890,206.68 511,591.26 93,707.99 80,482.15 460 _ $18,587,869.54 Source: NBS Government Finance Group. % of Total 80.76% 15.55 2.75 0.50 0.43 % Total 2015/16 Assessed Assessed Value Value $456,857,151.00 80,657,841.00 27,469,578.00 1,876,256.00 636,383.00 80.50% 14.21 4.84 0.33 0.11 100.00% $567,497,209.00 100.00% It should be noted that the Reassessments supplanted the assessments that were authorized to be levied in the Prior Districts. The period in which those assessments were authorized to be levied varied among the Prior Districts; and, hence, the term of the Reassessments also vary by reference to the Prior Districts in which the respective Assessment Parcels are located. The final year of the Reassessment Levy for Assessment Parcels in the Prior Districts are as follows: (i) the former Main Street Assessment District, September 2, 2020, (ii) the former Stewart Drive Undergrounding Assessment District, September 2, 2028, (iii) the former Lyford Cove Utility Undergrounding Assessment District, September 2, 2035, (iv) the former Del Mar Valley Utility Undergrounding Assessment District, September 2, 2035, (v) the former Lyford Cove Utility Undergrounding Supplemental Assessment District, September 2, 2039, and (vi) the former Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District, September 2, 2040. The following table sets forth the owners of parcels in the Reassessment District with the largest Reassessment liens and direct and overlapping tax and assessment debt on their properties in the Reassessment District, and the County assessed values of their parcels. -20- Property Owner ZELINSKY PROPERTIES LLC ACV ARGO TIBURON LP LIZZ,A TIBERIO P 27 MAIN STREET LLC LEVINSON FRANK H TR LYNCH EDWARD L HAGEL JOHN TRUST WELSH GARY T REVOC TRUST MUSSEY JOHN MTR LATOUR PIERRE-OLIVIER All Others Totals Table 3 Town of Tiburon 2016 Consolidated Reassessment District 2015-16 Top Property Owners(1) Land Use Commercial Commercial Multi -Family Residential Commercial Multi -Family Residential Single Family & Multi -Family Residential Multi -Family Residential Single Family Residential Single Family & Vacant Single Family Residential Single Family Residential Various Total Direct and Overlapping Number Tax and 2015 /16 of Assessment % of Assessed Value - Parcels Debt Total Value to -Lien 4 $148,260.54 0.80% $8,084,617 54.53 :1 3 136,007.29 0.73 7,213,253 53.04:1 3 117,453k1 0.63 1,543, 093 13.14 :1 1 116,622.01 0.63 7,781,800 66.73 :1 1 94,294.33 0.51 4,818,549 51.10 :1 2 88,591.06 0.48 2,591,400 29.25 :1 1 87,672.11 0.47 4,333,916 49.43 :1 1 80,444.65 0.43 3,261,896 40.55 :1 2 78,944.17 0.42 1,869,396 23.68:1 1 78,141.09 0.42 4,327,775 5538 :1 441 17,561,438.68 94.48 521,671,514 29.71 :1 460 $18,587,869.54 100.00% $567,497,209 30.53 :1 (1) Top property owners are ranked based on total direct and overlapping tax and assessment debt. Source: NBS Government Finance Group. Estimated Reassessment Levies The following table sets for the highest and lowest Reassessment lien on the respective parcels by reference to the Prior District in which the parcels were located, and the annual highest and lowest expected annual Reassessments on the parcels. Table 4 Town of Tiburon 2016 Consolidated Reassessment District Prior Districts Range of Reassessments and Estimated Reassessment Levies Prior District Main Street Stewart Drive Lyford Cove Def Mar Valley(3) Lyford Cove Supplemental Def Mar Valley Supplemental(3) Number Highest Lowest of Reassessment Reassessment Parcels(1) Lien Lien 15 $26,445.62 $1,059.01 83 11,315.09 7,912.08 203 27,658.88 3,918.36 145 19,875.67 5,385.34 205 18,513.28 2,622.72 135 13,922.30 4,640.74 Highest Estimated Reassessment Levy for FY 2016/17(2) $7,913.28 1,310.51 2,302.87 1,607.61 814.84 732.96 Lowest Estimated Reassessment Levy for FY 2016/17(2) $316.89 916.37 326.24 435.58 115.44 244.32 (1) 195 parcels are in both Lyford Cove and Lyford Cove Supplemental; 131 parcels are in both Del Mar Valley and Del Mar Valley Supplemental. (2) Includes principal and interest, plus seven percent (7%) of principal and interest for administration. (3) Estimated reassessment levy for FY 2016/17 does not reflect levy credits from surplus improvement funds. Source: NBS Government Finance Group. -21- VALUATION OF PROPERTY WITHIN THE REASSESSMENT DISTRICT Assessed Valuation The Reassessment District includes 460 separate County Assessor's parcels subject to Reassessment liens the aggregate assessed value of which, as reflected on the 2015 /16 County property tax roll, is $567,497,209. The County Assessor assesses all real property within the County at 100% of "full cash value." Article XIIIA of the California Constitution defines such "full cash value" as the value as of March 1, 1975, plus adjustments not to exceed 2% per year to reflect inflation, and requires reassessment of "full cash value" upon change of ownership or new construction. Accordingly, the gross assessed valuation presented may not necessarily be representative of the actual market value of the property in the Reassessment District. Assessed values determined by the County Assessor are often more or less than actual market values, and often may not reflect the amount that would be bid for a property at a foreclosure sale. Also, assessed values of parcels in the Reassessment District vary widely among the parcels. The Town has no control over the amount of additional indebtedness that may be issued in the future by other public entities, the payment of which, through the levy of a tax or special tax could be on a parity with the assessments levied against the Assessment Parcels. While certain mortgage liens may encumber the Assessment Parcels, the value has not been reduced by the amount of these liens for purposes of the valuation, and calculation of the value to lien ratios specified below. All private liens are subordinate to the lien of the unpaid Reassessments. Value to Lien Ratios The value to assessment lien ratios shown below are derived by dividing the total assessed value by the total direct and overlapping indebtedness, including the Reassessments. For example, a 3:1 lien ratio means that the assessed value is three times greater than the total direct and overlapping indebtedness, including the Reassessments. The following table summarizes the value to lien ratios for the 406 Assessment Parcels. Value to Lien Category Greater than 20:1 15:1 to 19.9:1 10:1 to 14.9:1 5:1 to 9.9:1 3:1 to 4.9:1 Less than 3:1 Totals Table 5 Town of Tiburon 2016 Consolidated Reassessment District Value -to -Lien Categories Number of Parcels 325 24 39 60 12 Total Direct and Overlapping Tax and Assessment Debt 2015/16 Assessed of Total Value $14,473,814.40 77.87% $524,850,167.00 732,235.32 3.94 12,707,019.00 1,122,322.22 6.04 14,294,989.00 1,855,918.25 9.98 13,786,507.00 403,579.36 2.17 1,858,527.00 0.00 - 460 $18,587,869.54 Source: NBS Government Finance Group. 100.00% $567,497,209.00 -22- % Total Average Assessed Value -to - Value Lien 92.49% 36.26:1 2.24 17.35:1 2.52 12.74:1 2.43 7.43:1 0.33 4.61:1 0.00 n/ a 100.00% 30.53:1 The following tables set forth the distribution of the estimated value -to -lien ratios of the parcels within the Reassessment District by reference to the respective Prior District in which the parcels were located. Table 6 Town of Tiburon 2016 Consolidated Reassessment District Prior Districts Assessed Value -to -Lien Ratios Prior District Main Street Stewart Drive Lyford Cove Del Mar Valley Lyford Cove Supplemental Del Mar Valley Supplemental Totals % of Total Number Reassess of Reassessment ment Parcels() Lien Lien Overall 2015-16 Total Value -to- Year of Assessed Value(1) Lien(2) Maturity 15 $89,662.02 0.91% $ 29,643,613.00 330.62:1 83 714,878.01 7.23 90,789,685.00 127.00:1 203 2,951,374.63 29.84 268,907,936.00 91.11:1 145 2,337,864.49 23.64 166,380,332.00 71.17:1 205 1,950,837.44 19.73 268,077,516.00 137.42:1 135 1,844,704.70 18.65 160,684,774.00 87.11:1 460 $9,889,321.29 100.00% $567,497,209.00 57.38:1 2020 2028 2035 2040 2039 2040 (1) 195 parcels, accounting for $260,492,900 in total assessed value, are in both Lyford Cove and Lyford Cove Supplemental; 131 parcels, accounting for $156,493,747 in total assessed value, are in both Del Mar Valley and Del Mar Valley Supplemental. Therefore, the totals for Number of Parcels and 2015-16 Total Assessed Value do not add up to the sum of such values shown for each of the Prior Districts. (2) Does not include total direct and overlapping tax and assessment debt. Source: NBS Government Finance Group. ESTIMATED DIRECT AND OVERLAPPING INDEBTEDNESS The following table illustrates the estimated direct and overlapping bonded debt of the property within the Reassessment District as of , 2016. The table include only such information as has been reported to California Municipal Statistics, Inc. by the issuers of the debt described therein and by others. The table is included for general informational purposes only. Neither the Authority nor the Town makes any representation as to its completeness or accuracy. The first column in the table names the public agencies which have outstanding debt as of the date of , 2016 and whose territories overlap. The second column shows assessed valuation as a percentage of the total assessed value of each overlapping agency identified in column 1. This percentage, multiplied by the total outstanding debt of each overlapping agency (which is not shown in the table) produces the amount shown in column 3, which is the apportionment of each overlapping agency's outstanding debt on property. -23- Table 7 Town of Tiburon 2016 Consolidated Reassessment District Direct and Overlapping Indebtedness 2015-16 Local Secured Assessed Valuation: $567,497,209 (Land and Improvements) DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/ 1 /16 Marin Community College District 0.852% $1,864,309 Tamalpais Union High School District 1.441 1,793,229 Reed Union School District 7.368 2,330,109 Marin Healthcare District 1.027 1,745,138 Belvedere -Tiburon Library Community Facilities District No. 95-1 9.993 93,435 Marin Emergency Radio Authority Parcel Tax Revenue Bonds 0.442 145,844 Marin County Open Space Community Facilities District Nos. 1993-1 and 1997-1 14.472 726,484 Town of Tiburon 2016 Consolidated Reassessment District(1) 100.00 9,889,321 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $18,587,870 OVERLAPPING GENERAL FUND DEBT: Marin County General Fund Obligations 0.850% $782,857 Marin County Pension Obligation Bonds 0.850 847,361 Marin County Transit District Authority General Fund Obligations 0.850 1,118 Marin Municipal Water District General Fund Obligations 1.087 1,164 Marin Community College District General Fund Obligations 0.852 21,423 Town of Tiburon General Fund Obligations 11.150 22,989 Tiburon Fire Protection District General Fund Obligations 13.004 15,794 TOTAL GROSS OVERLAPPING GENERAL FUND DEBT $1,692,706 COMBINED TOTAL DEBT $20,280,576(2) (1) Debt expected to be issued on August 25, 2016. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non -bonded capital lease obligations. Ratios to 2015-16 Assessed Valuation: Direct Debt ($9,889,321) 1.74% Total Direct and Overlapping Tax and Assessment Debt 3.28% Gross Combined Total Debt 3.57% Source: NBS Government Finance Group, as reported by California Municipal Statistics, Inc. SPECIAL RISK FACTORS The following information should be considered by prospective investors in evaluating the credit quality of the Authority Bonds, which are not rated or insured. However, it does not purport to be an exhaustive listing of the risks and other considerations that may be relevant to an investment in the Authority Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of any such risks. Limited Obligations Payment of the principal of, redemption premium, if any, and interest on the Authority Bonds is secured primarily by amounts received as payment of the scheduled debt service on the Reassessment Bonds. The Town's legal obligations with respect to any delinquent Reassessment installments that secure the Reassessment Bonds are limited to instituting judicial foreclosure proceedings in certain circumstances. The Reassessment Bonds can not be accelerated in the event of any default in payment of the Reassessment Bonds. The -24- Reassessment Bonds are limited obligation improvement bonds of the Town under the Refunding Law. Failure to Pay Reassessment Installments Under the provisions of the Act, Reassessment installments, from which Revenues are derived to make the debt service payments on the Authority Bonds, will be billed to the owners of the property on their regular property tax bills. Such Reassessment installments are due and payable at the same time and bear the same penalties and interest for non-payment as regular property tax installments. Reassessment installment payments cannot be made separately from property tax payments. In order to pay debt service on the Reassessment Bonds, it is necessary that unpaid installments of Reassessments are paid in a timely manner. Should the installments not be paid on time and thus insufficient Revenues generated, the Indenture has established a Reserve Fund for the Authority Bonds. The Reserve Fund will initially be funded from the proceeds of the Authority Bonds to help cover any shortfall in the payment of Revenues related to the Reassessment Bonds. See "SECURITY FOR THE AUTHORITY BONDS—Reserve Fund." In all respects, the Reassessment Bonds will be governed by the provisions of the Refunding Law and the Town is not obligated to advance funds from the Town's general funds to cover any deficiency which may occur in the Redemption Fund for the Reassessment Bonds. The Town has no direct or contingent liability to transfer the amount of any delinquency out of any other available monies of the Town. The Reassessments are secured by liens on the private properties within the Reassessment District. In the event of a delinquent payment of a Reassessment installment, the Town has covenanted under certain circumstances to institute foreclosure proceedings to sell the parcel in order to obtain funds to pay the debt service on the Reassessment Bonds. No assurance can be given that, should a parcel with delinquent Reassessment payments be foreclosed upon and sold for the amount of the delinquency, any bid will be received for such property or, if a bid is received that such bid will be sufficient to pay all delinquent Reassessments. See "SECURITY FOR THE REASSESSMENT BONDS— Covenant to Commence Foreclosure Proceedings." Unpaid Reassessments do not constitute a personal indebtedness of the current or subsequent owners of the parcels included in the Reassessment District. There is no assurance that any current or subsequent owner of a parcel of land included in the Reassessment District will be able to pay the Reassessment installments or that it will pay such installments even though financially able to do so. Failure by current or subsequent owners of the parcels to pay installments of Reassessments when due, delay in foreclosure proceedings, or the inability of the Town to sell parcels which have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of Reassessments levied against such parcels may result in the inability of the Town to make full or punctual payments of debt service on the Reassessment Bonds and owners of the Authority Bonds would therefore be adversely affected. Direct and Overlapping Indebtedness The ability of an owner of land within the Reassessment District to pay the Reassessment installments could be affected by the existence of other taxes and assessments imposed upon taxable parcels. In addition, public agencies whose boundaries overlap those of the Reassessment District, without the consent of the Town, could and in certain cases without the consent of the owners of the land within the Reassessment District, impose additional taxes or assessment liens on the property within the Reassessment District in order to finance public improvements or services to be located or provided inside of or outside of such area. The lien -25- created on the property within the Reassessment District through the levy of such additional taxes or assessments may be on parity with the lien of the Reassessments. See "ESTIMATED DIRECT AND OVERLAPPING INDEBTEDNESS" and "SECURITY FOR THE REASSESSMENT BONDS—Priority of Lien." The imposition of additional liens may reduce the ability or willingness of the landowners to pay the reassessment installments, and additional liens on a parity with the reassessments increases the possibility that foreclosure proceeds will not be adequate to pay delinquent reassessment installments or the principal of and interest on the Reassessment Bonds when due. Land Values The value of the land within the Reassessment District is a critical factor in determining the investment quality of the Authority Bonds. If a property owner is delinquent in the payment of a Reassessment installment, the Town's only remedy is to commence foreclosure proceedings in an attempt to obtain funds to pay the Reassessment. Reductions in land values due to a downturn in the economy, physical events such as earthquakes or floods, or stricter land use regulations or other events could adversely impact the security underlying the Reassessment. Furthermore, existing assessed values may not accurately estimate existing fair market values, or values realizable on foreclosure. Prospective purchasers of the Authority Bonds should not assume that the land within the Reassessment District could be sold for the valuation amount described herein at a foreclosure sale. See "VALUATION OF PROPERTY WITHIN THE DISTRICT" and "SECURITY FOR THE REASSESSMENT BONDS" herein. Priority of Reassessment Lien The Reassessments and each installment thereof, and any interest and penalties thereon, constitute a lien against the parcels in the Reassessment District on which they are imposed until paid in full. the priority of the lien is established by law as the date of the initial assessment that is being supplanted by the Reassessment lien. The Reassessment lien is subordinate to all fixed special assessment liens previously imposed upon the same property, but has priority over all private liens and over all fixed special assessment liens, which may thereafter be created against such property. The reassessment lien is equal to and independent of the lien for general and special taxes including those imposed under the Mello -Roos Community Facilities Act of 1982, as amended. See also the section "SECURITY FOR THE REASSESSMENT BONDS—Priority of Lien" for a description of certain senior liens on the parcels in the Reassessment District. Accordingly, special tax liens on the property within the Reassessment District could greatly increase, without any corresponding increase in the value of the property within the Reassessment District and thereby severely reduce the value to lien ratio that exists at the time the Authority Bonds are issued between the value of the property and the debt secured by the taxes and assessments thereon. The imposition of such additional indebtedness could also reduce the willingness and ability of the property owners within the Reassessment District to pay the Reassessments when due. See also the section "SECURITY FOR THE REASSESSMENT BONDS—Priority of Lien." Bankruptcy and Foreclosure Delays The payment of Reassessment installments and the ability of the Town to foreclose upon the lien of delinquent unpaid reassessment installments may be limited by bankruptcy, insolvency, or other laws generally affecting creditors' rights or by the laws of the State relating -26- to judicial foreclosure. In addition, the prosecution of a foreclosure action could be delayed due to crowded local court calendars or legal delaying tactics. The various legal opinions to be delivered concurrently with the delivery of the Authority Bonds (including Bond Counsel's approving legal opinion) will be qualified, as to the enforceability of the various legal instruments, by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. Although bankruptcy proceedings would not cause the lien of the Reassessments to become extinguished, bankruptcy of a property owner or anyone else who claims an interest in the property could result in a delay in prosecuting superior court foreclosure proceedings and could result in the possibility of delinquent Reassessment installments not being paid in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Reassessment Bonds, and thereby on the Authority Bonds. The ability of the Town to collect interest and penalties specified by State law and to foreclose the lien of a delinquent unpaid Reassessment installment may be limited in certain respects with regard to properties in which the Federal Deposit Insurance Corporation (the "FDIC") or the Resolution Trust Company (the "RTC") has or obtains an interest. While neither the FDIC nor the RTC has any known interest in the land within the Reassessment District at present, this could change in the future if various lending institutions make loans secured by an interest in parcels of land within the Reassessment District. Geologic, Topographic, Climatic and Other Conditions The market value of the parcels within the Reassessment District can be adversely affected by a variety of factors, particularly with respect to infrastructure and other public and private improvements of the parcels and the continued habitability and enjoyment of such public and private improvements. Such additional factors include, without limitation, geologic conditions (such as earthquakes), topographic conditions (such as earth movements and floods) and climatic conditions (such as droughts and fire hazard). Hazardous Substances While government taxes, assessments and charges are a common claim against the value of a parcel, other less common claims may also be relevant. One of the most serious, in terms of the potential reduction in the value of a parcel, is a claim with regard to a hazardous substance. In general, the owners of a parcel may be required by law to remedy conditions relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as "CERCLA" or the "Superfund Act," is the most well known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar in effect. Under many of these laws, the owner is obligated to remedy a hazardous substance condition of a parcel whether or not the owner had anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the parcels within the Reassessment District be affected by a hazardous substance, would be to reduce the marketability and value of the property by the costs of remedying the condition. Further, it is possible that such hazardous substance liabilities may arise in the future with respect to any of the parcels within the Reassessment District resulting from the existence of a substance presently classified as hazardous but which has not been released. It is also possible that liability may arise in the future resulting from the existence on a parcel, of a substance not presently classified as hazardous but which may in the future be so classified. -27- Additionally, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling such substance. All of these possibilities could significantly affect the value of a parcel. Absence of a Secondary Market for the Authority Bonds No application has been made for a credit rating for the Authority Bonds, and it is not known whether a credit rating, could be secured either now or in the future for the Authority Bonds. Payment of the Authority Bonds is not insured by any bond insurer. There can be no assurance that there will ever be a secondary market for purchase or sale of the Authority Bonds. Disclosure to Future Purchasers of Property As a part of the proceedings for the issuance of the Reassessment Bonds, the Reassessment District has recorded a notice of the reassessment lien in the Office of the County Recorder. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Reassessment obligation in the purchase of a parcel of land subject to the Reassessment or the lending of money thereon. Failure to disclose the existence of the Reassessments may affect the willingness and ability of future owners of property within the Reassessment District to pay the Reassessments when due. No Acceleration Provision Neither the Reassessment Bonds nor the Authority Bonds contain a provision allowing for the acceleration of the Reassessment Bonds or the Authority Bonds in the event of payment default or other default under the terms of the Fiscal Agent Agreement or the Indenture. Redemption of Bonds Prior to Maturity from Principal Prepayments The Authority Bonds are subject to mandatory redemption prior to maturity from amounts received by the Trustee representing a redemption of the Reassessment Bonds pursuant to the Fiscal Agent Agreement and the Indenture. The redemption of a portion of the Reassessment Bonds will result from the prepayment of the Reassessment lien with respect to any property within the Reassessment District. See the section "SECURITY FOR THE AUTHORITY BONDS—Non-Asset Bonds" for a discussion of a possible shortfall in amounts available to pay the Authority Bonds, should all or substantially all for the Reassessments be prepaid. No Liability of the Authority to the Owners Except as expressly provided in the Indenture, the Authority will have no obligation or liability to the Owners of the Authority Bonds with respect to the payment when due of the debt service on the Reassessment Bonds by the Town, or with respect to the observance or performance by the Town of other agreements, conditions, covenants and terms required to be observed or performed by the Town under the Fiscal Agent Agreement, or with respect to the performance by the Trustee of any obligation required to be performed by it under the Indenture. -28- Loss of Tax Exemption As discussed in this Official Statement under the following section "TAX MATTERS" interest on the Authority Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the Authority Bonds were issued as a result of future acts or omissions of the Authority or the Town in violation of their respective covenants under the Indenture and the Fiscal Agent Agreement, respectively. Should such an event of taxability occur, the Authority Bonds are not subject to a special redemption and will remain outstanding until maturity or until redeemed under one of the other redemption provisions contained in the Indenture. Limited Town Obligation to Pay Debt Service THE TOWN'S OBLIGATION TO ADVANCE FUNDS TO PAY DEBT SERVICE ON THE REASSESSMENT BONDS IN THE EVENT REASSESSMENT INSTALLMENT COLLECTIONS ARE INSUFFICIENT, WILL NOT EXCEED THE AMOUNT ON DEPOSIT FROM TIME TO TIME IN THE REDEMPTION FUND CREATED UNDER THE FISCAL AGENT AGREEMENT. AMOUNTS IN A RESERVE FUND UNDER THE INDENTURE MAY BE USED TO PAY DEBT SERVICE ON THE AUTHORITY BONDS IN THE EVENT OF A FAILURE TO PAY DEBT SERVICE IN FULL ON THE REASSESSMENT BONDS DUE TO DELINQUENCIES IN REASSESSMENT INSTALLMENTS OR OTHERWISE, AND IF SO ADVANCED WILL REDUCE THE AMOUNT IN THE RESERVE FUND BY THE AMOUNT OF THE FUNDS ADVANCED. Limitations on Remedies Remedies available to the owners of the Authority Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Authority Bonds or to preserve the tax-exempt status of the interest on the Authority Bonds. Bond Counsel has limited its opinion as to the enforceability of the Authority Bonds and of the Indenture to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium, or other similar laws affecting generally the enforcement of creditors' rights, by equitable principles and by the exercise of judicial discretion. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the owners of the Authority Bonds. Secondary Market There can be no guarantee that there will be a secondary market for the Authority Bonds, or, if a secondary market exists, that such Authority Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase prices of the Authority Bonds. TAX MATTERS Federal tax law contains a number of requirements and restrictions which apply to the Authority Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond proceeds and the facilities -29- financed with proceeds of the Prior Bonds, and certain other matters. The Authority has covenanted in the Indenture to comply with all requirements that must be satisfied in order for the interest on the Authority Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Authority Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the Authority Bonds. Subject to the Authority's compliance with the above -referenced covenants, under present law, in the opinion of Quint & Thimmig LLP, Bond Counsel, interest on the Authority Bonds (i) is excludable from the gross income of the owners thereof for federal income tax purposes, and (ii) is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but interest on the Authority Bonds is taken into account, however, in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In rendering its opinion, Bond Counsel will rely upon certifications of the Authority and the Town. Bond Counsel's opinion represents its legal judgment based upon its review of the law and the facts that it deems relevant to render such opinion and is not a guarantee of a result. The Internal Revenue Code of 1986, as amended (the "Code"), includes provisions for an alternative minimum tax ("AMT") for corporations in addition to the corporate regular tax in certain cases. The AMT, if any, depends upon the corporation's alternative minimum taxable income ("AMTI"), which is the corporation's taxable income with certain adjustments. One of the adjustment items used in computing the AMTI of a corporation (with certain exceptions) is an amount equal to 75% of the excess of such corporation's "adjusted current earnings" over an amount equal to its AMTI (before such adjustment item and the alternative tax net operating loss deduction). "Adjusted current earnings" would include certain tax-exempt interest, including interest on the Authority Bonds. Ownership of the Authority Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax exempt obligations. Prospective purchasers of the Authority Bonds should consult their tax advisors as to applicability of any such collateral consequences. The issue price (the "Issue Price") for each maturity of the Authority Bonds is the price at which a substantial amount of such maturity of the Authority Bonds is first sold to the public. The Issue Price of a maturity of the Authority Bonds may be different from the price set forth, or the price corresponding to the yield set forth, on the inside cover page of this Official Statement. If the Issue Price of a maturity of the Authority Bonds is less than the principal amount payable at maturity, the difference between the Issue Price of each such maturity, if any, of the Authority Bonds (the "OID Authority Bonds") and the principal amount payable at maturity is original issue discount. For an investor who purchases an OID Authority Bond in the initial public offering at the Issue Price for such maturity and who holds such OID Authority Bond to its stated maturity, subject to the condition that the Authority comply with the covenants discussed above, (a) the full amount of original issue discount with respect to such OID Authority Bond constitutes interest which is excludable from the gross income of the owner thereof for federal -30- income tax purposes; (b) such owner will not realize taxable capital gain or market discount upon payment of such OID Authority Bond at its stated maturity; (c) such original issue discount is not included as an item of tax preference m computing the alternative minimum tax for individuals and corporations under the Code, but is taken into account in computing an adjustment used in determining the alternative minimum tax for certain corporations under the Code, as described above; and (d) the accretion of original issue discount in each year may result in an alternative minimum tax liability for corporations or certain other collateral federal income tax consequences in each year even though a corresponding cash payment may not be received until a later year. Owners of OID Authority Bonds should consult their own tax advisors with respect to the state and local tax consequences of original issue discount on such OID Authority Bonds. Owners of Authority Bonds who dispose of Authority Bonds prior to the stated maturity (whether by sale, redemption or otherwise), purchase Authority Bonds in the initial public offering, but at a price different from the Issue Price or purchase Authority Bonds subsequent to the initial public offering should consult their own tax advisors. If a Authority Bond is purchased at any time for a price that is less than the Authority Bond's stated redemption price at maturity or, in the case of an OID Authority Bond, its Issue Price plus accreted original issue discount reduced by payments of interest included in the computation of original issue discount and previously paid (the "Revised Issue Price"), the purchaser will be treated as having purchased a Authority Bond with market discount subject to the market discount rules of the Code (unless a statutory de minimis rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a Authority Bond is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the purchaser's election, as it accrues. Such treatment would apply to any purchaser who purchases an OID Authority Bond for a price that is less than its Revised Issue Price even if the purchase price exceeds par. The applicability of the market discount rules may adversely affect the liquidity or secondary market price of such Authority Bond. Purchasers should consult their own tax advisors regarding the potential implications of market discount with respect to the Authority Bonds. An investor may purchase a Authority Bond at a price in excess of its stated principal amount. Such excess is characterized for federal income tax purposes as "bond premium" and must be amortized by an investor on a constant yield basis over the remaining term of the Authority Bond in a manner that takes into account potential call dates and call prices. An investor cannot deduct amortized bond premium relating to a tax-exempt bond. The amortized bond premium is treated as a reduction in the tax-exempt interest received. As bond premium is amortized, it reduces the investor's basis in the Authority Bond. Investors who purchase a Authority Bond at a premium should consult their own tax advisors regarding the amortization of bond premium and its effect on the Authority Bond's basis for purposes of computing gain or loss in connection with the sale, exchange, redemption or early retirement of the Authority Bond. There are or may be pending in the Congress of the United States legislative proposals, including some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters referred to above or affect the market value of the Authority Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to bonds issued prior to enactment. Prospective purchasers of the Authority Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal tax legislation. -31- The Internal Revenue Service (the "Service") has an ongoing program of auditing tax- exempt obligations to determine whether, in the view of the Service, interest on such tax- exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Authority Bonds. If an audit is commenced, under current procedures the Service may treat the Authority as a taxpayer and the holders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Authority Bonds until the audit is concluded, regardless of the ultimate outcome. Payments of interest on, and proceeds of the sale, redemption or maturity of, tax exempt obligations, including the Authority Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any Authority Bond owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Authority Bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. In the further opinion of Bond Counsel, interest on the Authority Bonds is exempt from California personal income taxes. Ownership of the Authority Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Authority Bonds. Prospective purchasers of the Authority Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. The complete text of the final opinion that Bond Counsel expects to deliver upon issuance of the Authority Bonds is set forth in Appendix D. CERTAIN LEGAL MATTERS The validity of the Authority Bonds and certain other legal matters are subject to the approving opinion of Quint & Thimmig LLP, Larkspur, California, Bond Counsel. A complete copy of the proposed form of Bond Counsel's opinion is set forth in APPENDIX D, which will be available at the time of delivery of the Authority Bonds. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. Bond Counsel's engagement is limited to a review of the legal procedures required for the authorization of the Authority Bonds and the exclusion of interest on the Authority Bonds for purposes of Federal and State income taxation. See "TAX MATTERS." Payment of the fees and expenses of Bond Counsel is contingent on the issuance and delivery of the Authority Bonds. VERIFICATION OF MATHEMATICAL ACCURACY The Verification Agent, upon delivery of the Authority Bonds, will deliver a report on the mathematical accuracy of certain computations contained in schedules provided to it on behalf of the Town, relating to the sufficiency of the anticipated amount of proceeds of the Reassessment Bonds available to pay, when due, the redemption price of the Prior Bonds, and the "yield" on the amount of proceeds held and invested prior to redemption of the Prior Bonds considered by Bond Counsel in connection with the opinion rendered by such firm that the Authority Bonds are not "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended. -32- ABSENCE OF LITIGATION There is no action, suit or proceeding pending with respect to which service of process has been made to the Town or the Authority, or otherwise known by the Town or the Authority to be threatened, restraining or enjoining the execution or delivery of the Authority Bonds, the Reassessment Bonds or the Indenture or the Fiscal Agent Agreement or in any way contesting or affecting the validity of the foregoing or any proceeding of the Town or the Authority taken (including the levy of the Reassessments) with respect to any of the foregoing. NO RATING The Authority has not made, and does not intend to make, any application to any rating agency for the assignment of a rating to the Authority Bonds. CONTINUING DISCLOSURE The Authority has covenanted in a Continuing Disclosure Agreement for the benefit of the owners and Beneficial Owners of the Authority Bonds to provide Annual Reports that include certain annual financial information and operating data, and to provide notices of the occurrence of certain enumerated events. The Authority has retained NBS Government Finance Group to act as the Dissemination Agent under the Continuing Disclosure Agreement. The Authority or the Dissemination Agent, on behalf of the Authority, will file the Annual Reports and notices as required by the Continuing Disclosure Agreement with the Municipal Securities Rulemaking Board. See APPENDIX C—Form of Continuing Disclosure Agreement for the complete text of the Authority's Continuing Disclosure Agreement. The covenants of the Authority in the Continuing Disclosure Agreement have been made in order to assist the Underwriter in complying with Rule 15c2 -12(b)(5) (the "Rule") promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. A failure by the Authority to comply with the provisions of the Continuing Disclosure Agreement is not an event of default under the Indenture (although the owners and beneficial owners of the Authority Bonds do have certain limited remedies at law and in equity), and is not a default by the Town under the Fiscal Agent Agreement. However, a failure to comply with the provisions of the Continuing Disclosure Agreement must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Authority Bonds. Therefore, a failure by the Authority to comply with the provisions of the Continuing Disclosure Agreement may adversely affect the marketability of the Authority Bonds on the secondary market. Before the date of this Official Statement, the Authority requested that conduct an examination (the "Examination") of the filings during the five year period ending 2016 by the Town required under its continuing disclosure undertakings with respect to the Rule in connection with various bond issues, including those related to the Prior Bonds. The Examination found that UNDERWRITING The Authority Bonds are being purchased through negotiation by Wulff, Hansen & Co., Incorporated (the "Underwriter"). The Underwriter agreed to purchase the Authority Bonds at a price of $ (which is equal to the par amount of the Authority Bonds, plus a net original issue premium of $ less an underwriter's discount of $ ). The initial public offering prices set forth on the inside cover page of this Official Statement may be changed by the Underwriter. The Underwriter may offer and sell the Authority Bonds to certain -33- dealers and others at prices lower than the public offering prices set forth on the inside cover page hereof. MISCELLANEOUS References are made herein to certain documents and reports which are brief summaries thereof and which do not purport to be complete or definitive. Reference is made to complete copies of the documents and reports for the full and complete statements of the provisions thereof. This Official Statement is submitted only in connection with the sale of the Authority Bonds by the Authority. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. While the information contained in this Official Statement pertaining to the Town and the Reassessment District has been provided by the Town, such information contained herein should not be construed as representing all possible conditions affecting the Authority, the Town, the Reassessment Bonds, or the Authority Bonds. The execution and delivery of this Official Statement has been duly authorized by the Authority. TIBURON PUBLIC FINANCING AUTHORITY By: Executive Director -34- APPENDIX A SUMMARY OF PRINCIPAL LEGAL DOCUMENTS A-1 APPENDIX B INFORMATION REGARDING THE TOWN OF TIBURON AND THE COUNTY OF MARIN The following information concerning the Town of Tiburon and the County of Marin is included only for the purpose of supplying general information regarding the community. The Authority Bonds are not a debt of the Town, the County of Marin, the State or any of its political subdivisions other than the Authority (and then only to the limited extent set forth in the Indenture), and none of the Town, the County of Marin, the State nor any of its political subdivisions (other than the Authority) is liable therefor. Introduction The Reassessment District is located in the Town of Tiburon (the "Town"), an incorporated city in Marin County, California ("Marin County"). It is located on the Tiburon Peninsula, which reaches south into the San Francisco Bay. The smaller city of Belvedere (formerly a separate island) occupies the south-west part of the peninsula and is contiguous with the Town. The Town is bordered by the cities of Corte Madera to the north and Mill Valley to the west, but is otherwise mostly surrounded by the San Francisco Bay. Besides Belvedere and the Town, much of the Tiburon Peninsula is unincorporated, including portions of the north side and the communities of Strawberry and Paradise Cay. The Town's name derives from the Spanish word tiburon, which means "shark." The name was first given to the peninsula on which the Town is situated, and probably inspired by the prevalence of locally native leopard sharks in the surrounding waters. The Town was formerly the southern terminus of the Northwestern Pacific Railroad, which transported freight for transfer to barges for shipping to cities around San Francisco Bay. It is now a commuter and tourist town, linked by fast ferry services to San Francisco and with a concentration of restaurants and clothes shops. It is the nearest mainland point to Angel Island and a regular ferry service connects to the island. The County, located in the San Francisco -Oakland metro area, is one of 58 counties in California. One of the nine Bay Area counties, the County is linked to San Francisco by the Golden Gate Bridge and to the East Bay by the Richmond -San Rafael Bridge. The is bordered on the north and northeast by Sonoma County and on the west by the Pacific Ocean. According to the U.S. Census Bureau, the County has a total area of 828 square miles (2,140 km'), of which 520 square miles (1,300 km) is land and 308 square miles (800 km=) (37.2%) is water. The County is the fourth -smallest county in California by land area. Most of the County's population resides its the eastern side, with a string of communities running along San Francisco Bay, from Sausalito to Tiburon to Corte Madera to San Rafael. The interior of the County contains large areas of agricultural and open space. West Marin, through which State Route 1 runs alongside the California coast, contains many small unincorporated communities whose economies depend on agriculture and tourism. West Marin has beaches which are popular destinations for surfers and tourists year-round. Notable features of the County include the Sausalito shoreline, Richardson Bay, the Tiburon Peninsula, Ring Mountain, and Triangle Marsh at Corte Madera. B-1 Population The table below summarizes population of the Town, the County and the State of California for the last five years. Town of Tiburon, Marin County and California POPULATION Year Tiburon Marin County State of California 2012 9,158 255,812 37,881,357 2013 9,293 257,228 38,239,207 2014 9,416 260,294 38,657,459 2015 9,484 261,798 38,907,642 2016 9,503 262,274 39,255,883 Source: California Department of Finance, E-4 Population Estimate for Cities, Counties, and the State, 2011-2016, with 2010 Census Benchmark. Employment The following table summarizes the historical numbers of workers by industry in the County for the last five years: San Rafael MD (Marin County) LABOR FORCE AND INDUSTRY EMPLOYMENT (Annual Averages by Industry) 2011 2012 2013 2014 2015.. Total, All Industries 103,100 106,200 110,000 111,300 113,300 Total Farm 400 400 400 400 300 Mining and Logging 100 100 - - - Construction 4,900 5,200 5,700 6,100 6,500 Manufacturing 2,200 2,400 2,900 3,500 4,000 Wholesale Trade 2,400 2,600 2,700 2,800 3,000 Retail Trade 13,400 13,600 13,900 14,300 14,300 Transportation, Warehousing & Utilities 1,100 1,100 1,200 1,300 1,200 Information 2,600 2,800 2,800 2,600 2,600 Financial Activities 7,000 7,200 7,300 6,800 6,400 Professional & Business Services 17,800 18,600 18,700 18,200 18,700 Educational & Health Services 17,800 18,500 19,400 19,700 20,200 Leisure & Hospitality 12,700 13,200 14,400 15,100 15,400 Other Services 4,800 5,000 5,200 5,200 5,300 Government 16,000 15,500 15,400 15,400 15,700 Source: California Employment Development Department, based on March 2015 benchmark. Note: Does not include proprietors, self-employed, unpaid volunteers or family workers, domestic workers in households, and persons involved in labor/management trade disputes. Employment reported by place of work. Items may not add to totals due to independent rounding. (1) Last available full year data. B-2 The following tables summarize historical employment and unemployment for the County, the State of California and the United States for the last five years: Marin County, California and United States CIVILIAN LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT (Annual Averages) Year Area 2011 Marin County California United States 2012 Marin County California United States 2013 Marin County California United States 2014 Marin County California United States 2015 Marin County California United States Labor Force 134,600 18,419,500 153,617,000 137,100 18,554,800 154,975,000 138,700 18,671,600 155,389,000 139,600 18,811,400 155,922,000 141,100 18,981,800 157,130,000 Employment 124,800 16,260,100 139,869,000 128,500 16,630,100 142,469,000 131,500 17,002,900 143,929,000 133,700 17,397,100 146,305,000 136,100 17,798,600 148,834,000 Unemployment Unemployment Rate - 9,800 7.3% 2,159,400 11.7 13,747,000 8.9 8,600 1,924,700 12,506,000 7,200 1,668,700 11,460,000 5,900 1,414,300 9,617,000 5,000 1,183,200 146,411,000 6.3 10.4 8.1 5.2 8.9 7.4 4.3 7.5 6.2 3.5 6.2 5.3 Source: California Employment Development Department, Monthly Labor Force Data for Counties, Annual Average 2010-2015, and US Department of Labor. (1) The unemployment rate is computed from unrounded data, therefore, it may differ from rates computed from rounded figures available in this table. (2) Latest available full -year data. B-3 Major Employers The table below sets forth the ten principal employers of the County in 2015. Marin County MAJOR EMPLOYERS Employer Name County of Marin San Quentin State Prison Kaiser Permanente Medical Center Marin General Hospital BioMarin Pharmeceutical Novato Unified School District Autodesk, Inc. Fireman's Fund Insurance Co. San Rafael City Schools Dominican University Total Top 10 Number of Employees 2,125 1,705 1,575 1,378 850 834 763 721 610 422 10,983 Source: Marin County CAFR for the Fiscal Year Ended June 30, 2015. % of Total County Employment 1.55% 1.25 1.15 1.01 .62 .61 .56 .53 .45 .31 8.02 Construction Activity The following tables reflect the five-year history of building permit valuation for the Town and the County: Town of Tiburon BUILDING PERMITS AND VALUATION (Dollars in Thousands) 2011 2012 2013 2014 2015 Permit Valuation: New Single-family 1,500 2,316 6,912 9,143 1,855 New Multi -family Res. Alterations/ Additions 19,989 10,350 11,194 20,711 16,484 Total Residential 21,489 12,666 18,107 29,584 18,339 Total Nonresidential 2,825 1,772 25,107 3,074 3,390 Total All Building 24,315 14,439 43,214 32,929 21,730 New Dwelling Units: Single Family Multiple Family Total 1 3 6 8 3 1 3 6 8 3 Source: Construction Industry Research Board: "Building Permit Summary." Note: Totals may not add due to independent rounding. B-4 Marin County BUILDING PERMITS AND VALUATION (Dollars in Thousands) 2011 2012 2013 2014 2015 Permit Valuation: New Single-family 35,394 36,152 59,423 71,460 75,834 New Multi -family 7,621 4,927 33,397 14,069 2,426 Res. Alterations/Additions 160,275 132,762 152,065 203,375 203,754 Total Residential 203,292 173,842 244,885 288,904 282,015 Total Nonresidential 82,031 118,071 378,771 186,281 550,397 Total All Building 285,323 291,914 623,657 475,186 832,412 New Dwelling Units: Single Family 55 67 90 112 121 Multiple Family 61 50 212 76 20 Total 116 117 302 188 141 Source: Construction industry Research Board: "Building Permit Summary." Note: Totals may not add due to independent rounding. Commercial Activity Taxable sales in the County for the last five available years are shown below. Beginning in 2009, reports summarize taxable sales and permits using the NAICS codes. As a result of the coding change industry -level data since 2009 is not comparable to that of prior years. Marin County TAXABLE SALES (Dollars in Thousands) 2009 2010 2011 2012 2013 Retail and Food Services Motor Vehicles and Parts Dealers 434,910 485,061 523,483 610,028 660,321 Furniture and Home Furnishings Stores 106,960 109,379 117,090 118,307 121,233 Electronics and Appliance Stores 129,928 123,308 123,608 120,099 124,988 Bldg Mtrl. and Garden Equip. and Supplies 246,690 237,664 254,092 272,110 313,687 Food and Beverage Stores 246,161 259,294 266,823 277,873 287,593 Health and Personal Care Stores 109,301 114,342 121,051 122,472 127,239 Gasoline Stations 258,624 301,124 371,618 400,211 394,982 Clothing and Clothing Accessories Stores 243,655 263,834 280,098 305,000 324,851 Sporting Goods, Hobby, Book and Music 128,490 131,892 138,838 137,827 143,664 Stores General Merchandise Stores 261,529 265,063 273,199 281,325 292,739 Miscellaneous Store Retailers 157,795 175,970 182,054 184,154 209,267 Nonstore Retailers 26,001 25,596 26,884 41,692 85,735 Food Services and Drinking Places 418,831 422,951 455,433 486,787 518,808 Total Retail and Food Services 2,768,875 2,915,477 3,134,270 3,357,884 3,605,108 All Other Outlets 891,160 918,692 915,599 975,716 1,059,812 Totals All Outlets=. 3,660,036 3,834,169 4,049,869 4,333,600 4,664,920 Source: California Board of Equalization, Taxable Sales in California (Sales & Use Tax). (1) Last available full year data. (2) Totals may not add up due to independent rounding. B-5 Median Household Income The following table summarizes the total effective buying income and median household effective buying income for the Town, the County, the State of California and the nation for the last five years. Town of Tiburon, Marin County, California and United States MEDIAN HOUSEHOLD EFFECTIVE BUYING INCOME Year Area 2011 Tiburon Marin County California United States 2012 Tiburon Marin County California United States 2013 Tiburon Marin County California United States 2014 Tiburon Marin County California United States 2015 Tiburon Marin County California United States Source: Nielsen, Inc. Total Effective Buying Income (000's Omitted) $609,745 $10,592,305 $814,578,457 $6,438,704,663 $710,480 $11,615,363 $864,088,827 $6,737,867,730 $538,670 $10,035,970 $858,676,636 $6,982,757,379 $583,215 $11,636,360 $901,189,699 $7,357,153,421 $667,830 $12,751,873 $981,231,666 $7,757,960,399 B-6 Median Effective Buying Income $94,150 $68,667 $47,062 $41,253 $96,250 $69,129 $47,307 $41,358 $81,908 $61,675 $48,340 $43,715 $94,822 $74,420 $50,072 $45,448 $115,633 $80,192 $53,589 $46,738 APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT THIS CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement"), dated as of August 1, 2016, is by and between NBS GOVERNMENT FINANCE GROUP, as dissemination agent (the "Dissemination Agent"), and the TIBURON PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the State of California (the "Authority"). RECITALS: WHEREAS, the Authority has issued its Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District) (the `Bonds") in the initial principal amount of $ ; and WHEREAS, the Bonds have been issued pursuant to an Indenture of Trust, dated as of August 1, 2016 (the "Indenture"), by and between U.S. Bank National Association, as trustee (the "Trustee'), and the Authority; and WHEREAS, this Disclosure Agreement is being executed and delivered by the Authority and the Dissemination Agent for the benefit of the owners and beneficial owners of the Bonds and in order to assist the underwriter of the Bonds in complying with Securities and Exchange Commission Rule 15c2 -12(b)(5). AGREEMENT: NOW, THEREFORE, for and in consideration of the premises and mutual covenants herein contained, and for other consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: Section 1. Definitions. In addition to the definitions of capitalized terms set forth in Section 1.1 of the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section or in the Recitals above, the following capitalized terms have the following meanings when used in this Disclosure Agreement: "Annual Report" means any Annual Report provided by the Authority pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Beneficial Owner" shall mean any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bond (including persons holding any Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bond for federal income tax purposes. "Disclosure Representative" means the Town's Director of Administrative Services, or such person's designee, or such other officer or employee of the Town or the Authority as the Authority shall designate as the Disclosure Representative hereunder in writing to the Dissemination Agent from time to time. "Dissemination Agent" means NBS Government Finance Group, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent C-1 designated in writing by the Authority and which has filed with the Authority a written acceptance of such designation. "EMMA" or "Electronic Municipal Market Access" means the centralized on-line repository for documents to be filed with the MSRB, such as official statements and disclosure information relating to municipal bonds, notes and other securities as issued by state and local governments. "Listed Events" means any of the events listed in Section 5(a) or 5(b) of this Disclosure Agreement. "MSRB" means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information which may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. "Official Statement" means the Official Statement, dated July J 2016, relating to the Bonds. "Participating Underwriter" means Wulff, Hansen & Co., the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" means Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "Town" means the Town of Tiburon, California. Section 2. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Authority and the Dissemination Agent for the benefit of the owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule. Section 3. Provision of Annual Reports. (a) Delivery of Annual Report. The Authority shall, or shall cause the Dissemination Agent to, not later than the March 31 occurring after the end of each fiscal year of the Authority, commencing with the report for the 2015-16 fiscal year, which is due not later than March 31, 2017, file with EMMA, in a readable PDF or other electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a single document or as separate documents comprising a package and may cross-reference other information as provided in Section 4 of this Disclosure Agreement; provided that any audited financial statements of the Authority may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. (b) Change of Fiscal Year. If the Authority's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c), and subsequent Annual Report filings shall be made no later than six months after the end of such new fiscal year end. (c) Delivery of Annual Report to Dissemination Agent. Not later than fifteen (15) Business Days prior to the date specified in subsection (a) (or, if applicable, subsection (b) of this Section C-2 3 for providing the Annual Report to EMMA), the Authority shall provide the Annual Report to the Dissemination Agent (if other than the Authority). If by such date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall notify the Authority. (d) Report of Non -Compliance. If the Authority is the Dissemination Agent and is unable to file an Annual Report by the date required in subsection (a) (or, if applicable, subsection (b)) of this Section 3, the Authority shall send a notice to EMMA substantially in the form attached hereto as Exhibit A. If the Authority is not the Dissemination Agent and is unable to provide an Annual Report to the Dissemination Agent by the date required in subsection (c) of this Section 3, the Dissemination Agent shall send a notice to EMMA in substantially the form attached hereto as Exhibit A in a timely manner. (e) Annual Compliance Certification. The Dissemination Agent shall, if the Dissemination Agent is other than the Authority, file a report with the Authority certifying that the Annual Report has been filed with EMMA pursuant to Section 3 of this Disclosure Agreement, stating the date it was so provided and filed. Section 4. Content of Annual Reports. It is acknowledged that the Closing Date for the Bonds occurred after the end of the 2015-2016 fiscal year of the Authority. In light of the foregoing, submission of the Official Statement shall satisfy the Authority's obligation to file an Annual Report for fiscal year 2015-2016. The Annual Report for each fiscal year commencing with the Annual Report for the 2016-2017 fiscal year, shall contain or incorporate by reference the following: (a) Financial Statements. Audited financial statements of the Authority (which may be in the form of consolidated financial statements of the Town) for the most recently completed fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) Other Annual Information. The Annual Report for each fiscal year commencing with fiscal year 2016-2017 shall also include the following information: (i) The principal amount of Bonds Outstanding as of the September 2 next preceding the date of the Annual Report. (ii) The balance in the Reserve Fund, and a statement of the Reserve Requirement, as of the September 2 next preceding the date of the Annual Report. (iii) The principal amount of the outstanding of the Reassessment Bonds. (iv) The balance in the Redemption Fund created pursuant to the Fiscal Agent Agreement relating to the Reassessment Bonds. (v) The total assessed value of all parcels within the Reassessment District with unpaid Reassessments, as shown on the assessment roll of the County Assessor last equalized prior to the September 2 next preceding the date of the C-3 Annual Report, and a statement of assessed value -to -lien ratios therefor, either by individual parcel or by categories, in a table similar to Table in the Official Statement. (vi) The Reassessment aggregate delinquency rate for all parcels within the Reassessment District with unpaid Reassessments, the aggregate number of parcels within the Reassessment District which are delinquent in payment of Reassessments, and the percentage of the most recent annual Reassessment levy that is delinquent, all as of the September 2 next preceding the date of the Annual Report. (vii) The status of foreclosure proceedings for any parcels within the Reassessment District with delinquent Reassessments, and a summary or the results of any foreclosure sales or other collection efforts with respect to delinquent Reassessments, as of the September 2 next preceding the date of the Annual Report. (viii) A copy of any information given by the Authority to the California Debt and Investment Advisory Commission pursuant to Section 5.10(b) or (c) of the Indenture. (c) Cross References. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Authority or related public entities, which are available to the public on EMMA. The Authority shall clearly identify each such other document so included by reference. If the document included by reference is a final official statement, it must be available from EMMA. (d) Further Information. In addition to any of the information expressly required to be provided under paragraph (b) of this Section 4, the Authority shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading. Section 5. Reporting of Listed Events. (a) Reportable Events. The Authority shall, or shall cause the Dissemination Agent (if not the Authority) to, give notice of the occurrence of any of the following events with respect to the Bonds: (1) Principal and interest payment delinquencies. (2) Unscheduled draws on debt service reserves reflecting financial difficulties. (3) Unscheduled draws on credit enhancements reflecting financial difficulties. (4) Substitution of credit or liquidity providers, or their failure to perform. (5) Defeasances. (6) Rating changes. C-4 (7) Tender offers. (8) Bankruptcy, insolvency, receivership or similar event of the obligated person. (9) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. Note: For the purposes of the event identified in subparagraph (8), the event is considered to occur when any of the following occur: the appointment of a receiver, trustee or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (b) Material Reportable Events. The Authority shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: (1) Non-payment related defaults. (2) Modifications to rights of security holders. (3) Bond calls. (4) The release, substitution, or sale of property securing repayment of the securities. (5) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms. (6) Appointment of a successor or additional trustee, or the change of name of a trustee. (c) Time to Disclose. The Authority shall, or shall cause the Dissemination Agent (if not the Authority) to, file a notice of such occurrence with EMMA, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of any Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(5) and (b)(3) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to owners of affected Bonds under the Indenture. C-5 Section 6. Identifying Information for Filings with EMMA. All documents provided to EMMA under this Disclosure Agreement shall be accompanied by identifying information as prescribed by the MSRB. Section 7. Termination of Reporting Obligation. The Authority's obligations under this Disclosure Agreement shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Authority shall give notice of such termination in the same manner as for a Listed Event under Section 5(c). Section 8. Dissemination Agent. (a) Appointment of Dissemination Agent. The Authority may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement and may discharge any such agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be NBS Government Finance Group. If the Dissemination Agent is not the Authority, the Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Authority pursuant to this Disclosure Agreement. It is understood and agreed that any information that the Dissemination Agent may be instructed to file with EMMA shall be prepared and provided to it by the Authority. The Dissemination Agent has undertaken no responsibility with respect to the content of any reports, notices or disclosures provided to it under this Disdosure Agreement and has no liability to any person, including any Bond owner, with respect to any such reports, notices or disclosures. The fact that the Dissemination Agent or any affiliate thereof may have any fiduciary or banking relationship with the Authority or the Town shall not be construed to mean that the Dissemination Agent has actual knowledge of any event or condition, except as may be provided by written notice from the Authority. (b) Compensation of Dissemination Agent. The Dissemination Agent shall be paid compensation by the Authority for its services provided hereunder as agreed to between the Dissemination Agent and the Authority from time to time and all expenses, legal fees and expenses and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder, with payment to be made from any lawful funds of the Authority. The Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the Authority, the owners of the Bonds, the Beneficial Owners, or any other party. The Dissemination Agent may rely, and shall be protected in acting or refraining from acting, upon any written direction from the Authority or a written opinion of nationally recognized bond counsel. The Dissemination Agent may at any time resign by giving written notice of such resignation to the Authority. The Dissemination Agent shall not be liable hereunder except for its negligence or willful misconduct. (c) Responsibilities of Dissemination Agent. In addition of the filing obligations of the Dissemination Agent set forth in Sections 3(e) and 5, the Dissemination Agent shall be obligated, and hereby agrees, to provide a request to the Authority to compile the information required for its Annual Report at least 30 days prior to the date such information is to be provided to the Dissemination Agent pursuant to subsection (c) of Section 3. The failure to provide or receive any such request shall not affect the obligations of the Authority under Section 3. Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Authority may amend this Disclosure Agreement (and the Dissemination Agent C-6 shall agree to any amendment so requested by the Authority that does not impose any greater duties or risk of liability on the Dissemination Agent), and any provision of this Disclosure Agreement may be waived, provided that all of the following conditions are satisfied: (a) Change in Circumstances. If the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a) or (b), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or the type of business conducted. (b) Compliance as of Issue Date. The undertaking, as amended or taking into account such waiver, would, in the opinion of a nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances. (c) Consent of Holders; Non -impairment Opinion. The amendment or waiver either (i) is approved by the Bond owners in the same mariner as provided in the Indenture for amendments to the Indenture with the consent of Bond owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Bond owners or the Beneficial Owners. If this Disclosure Agreement is amended or any provision of this Disclosure Agreement is waived, the Authority shall describe such amendment or waiver in the next following Annual Report and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Authority. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same mariner as for a Listed Event under Section 5(c), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Authority from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Authority chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Authority shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or future notice of occurrence of a Listed Event. Section 11. Default. In the event of a failure of the Authority to comply with any provision of this Disclosure Agreement, any Bond owner, any Beneficial Owner, the Trustee or the Participating Underwriter may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Authority to comply with its obligations under this Disclosure Agreement. The sole remedy under this Disclosure Agreement in the event of any failure of the Authority to comply with this Disclosure Agreement shall be an action to compel performance. C-7 Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Authority, the Trustee, the Dissemination Agent, the Participating Underwriter and the owners and the Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 13. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. C-8 IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as of the date first above written. TIBURON PUBLIC FINANCING AUTHORITY By: Greg Chanis, Executive Director NBS GOVERNMENT FINANCE GROUP, as Dissemination Agent By: Its: C-9 EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Obligor: Tiburon Public Financing Authority Name of Bond Issue: $ Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District) Date of Issuance: August _, 2016 NOTICE IS HEREBY GIVEN that the Obligor has not provided an Annual Report with respect to the above-named Bonds as required by Section 5.10 of the Indenture of Trust, dated as of August 1, 2016, between the Obligor and U.S. Bank National Association, as trustee. The Obligor anticipates that the Annual Report will be filed by Date: By: NBS Government Finance Group, as Dissemination Agent C-10 APPENDIX D FORM OF BOND COUNSEL OPINION August _, 2016 Tiburon Public Financing Authority 1505 Tiburon Boulevard Tiburon, California 94920 OPINION: $ Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District) Members of the Board of Directors: We have acted as bond counsel to the Tiburon Public Financing Authority (the "Authority") in connection with the issuance by the Authority of its $ Tiburon Public Financing Authority 2016 Refunding Revenue Bonds (Consolidated Reassessment District) (the "Authority Bonds"), issued pursuant to the provisions of the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) of Chapter 5, Division 7, Title 1 of the California Government Code (the "Bond Law"), a resolution adopted by the Board of Directors of the Authority on July 20, 2016, and an Indenture of Trust, dated as of August 1, 2016 (the "Indenture"), by and between the Authority and U.S. Bank National Association, as trustee. The Authority Bonds will be payable from Revenues, as such term is defined in the Indenture, consisting primarily of payments of debt service on a series of reassessment bonds (the "Reassessment Bonds") issued by the Town of Tiburon, California (the "Town") pursuant to a Fiscal Agent Agreement, dated as of August 1, 2016 (the "Fiscal Agent Agreement"), by and between the Town and U.S. Bank National Association, as fiscal agent. In connection with this opinion, we have examined the Bond Law, the Indenture, the Fiscal Agent Agreement and such certified proceedings and other papers as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the Authority contained in the Indenture, of the Town contained in the Fiscal Agent Agreement, and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based upon our examination we are of the opinion, under existing law, that: 1. The Authority is a joint exercise of powers authority duly organized and existing under the laws of the United States of America, with the power to enter into the Indenture, to perform the agreements on its part contained therein and to issue the Authority Bonds. 2. The Indenture has been duly entered into by the Authority and constitutes a valid and binding obligation of the Authority enforceable upon the Authority. 3. Pursuant to the Bond Law, the Indenture creates a valid lien on the funds pledged by the Indenture for the security of the Authority Bonds. D-1 4. The Authority Bonds have been duly authorized, executed and delivered by the Authority and are valid and binding limited obligations of the Authority, payable solely from the sources provided therefor in the Indenture. 5. Subject to the Authority's compliance with certain covenants, interest on the Authority Bonds (a) is excludable from gross income of the owners thereof for federal income tax purposes, and (b) is not included as an item of tax preference in computing the alternative minimum tax for individuals and corporations under the Internal Revenue Code of 1986, as amended, but is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. Failure by the Authority to comply with certain of such covenants could cause interest on the Authority Bonds to be includable in gross income for federal income tax purposes retroactively to the date of issuance of the Authority Bonds. [It is also our opinion that the Bonds are "qualified tax-exempt obligations" under section 265(b)(3) of the Code.] 6. The interest on the Authority Bonds is exempt from personal income taxation imposed by the State of California. Ownership of the Authority Bonds may result in other tax consequences to certain taxpayers, and we express no opinion regarding any such collateral consequences arising with respect to the Authority Bonds. The rights of the owners of the Authority Bonds and the enforceability of the Authority Bonds, the Indenture, the Reassessment Bonds and the Fiscal Agent Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and also may be subject to the exercise of judicial discretion in accordance with general principles of equity. In rendering this opinion, we have relied upon certifications of the Authority, the Town and others with respect to certain material facts. Our opinion represents our legal judgment based upon such review of the law and facts that we deem relevant to render our opinion and is not a guarantee of a result. This opinion is given as of the date hereof and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Respectfully submitted, D-2 APPENDIX E DTC AND THE BOOK -ENTRY -ONLY SYSTEM The following description of the Depository Trust Company ("DTC"), the procedures and record keeping with respect to beneficial ownership interests in the Authority Bonds, payment of principal, interest and other payments on the Authority Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Authority Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same zvith DTC or the DTC Participants, as the case may be. Neither the Authority as issuer of the Authority Bonds (the "Issuer"), nor the trustee, fiscal agent or paying agent appointed with respect to the Authority Bonds (the "Agent") take any responsibility for the information contained in this Appendix. No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Authority Bonds, (b) certificates representing ownership interest in or other confirmation or ozvnership interest in the Authority Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Authority Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC. 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Authority Bonds (the "Securities"). The Securities will be issued as fully - registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue. 2. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed E-1 Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book -entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). E-2 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 10. Issuer may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 11. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. E-3 APPENDIX F REASSESSMENT DIAGRAM O Z Q W ceg u) < GW w id W ul a WW ai Q u CG v9z 0 U (0 0 N A a°c�0 mIE Dov 0 LL 0 z=o 00‹ ~ V N C RNA t Ogg Ig%141 Iyl e�tv flo X sgAll18/ iq 0 12 S F-1 F-2 F-3 F-4 F-5 F-6 F-7 q QQ m mnmm � e o nN e W o�N n e W Nh m. -N qQQ , ,++,, eq�' ,I gq 4.8 88138•, o, 888 og000go`c h8`•""01,,nnnnnnnngnnnnngnngoo14gm W `W"8"W"8282oa00008o'�`d82 88000080023`d' ob8 0040 :�$ o 0 o i' o o a 8 0 0 o a o C: qq ��6emm maOGlnG m 2EmmEmlEmm8mmmmmmm 0Emmm mem n33a?Y1m�Wa mpL a 3132323.332-(1y1{11Y1yl��y�gygy gnai�g SE11AFgm3mgr 3 R R R g R R R N N N N N N N N N N N N N N V N N N N E N N E N N A R N N N N N M ER a lOo y N0 N No No oN Oo Yo oY$o !o1 •n'•l 4 , oT? 4o 4O T e uqo 4 „ mo 4 We 0 m N E 0m "RRRRsRRNRRRRRRNRRRgRRRRRRpRRR0 ONap'O RO eO 0 aoSo o AtFFopooOois�OtOGOoOoo8O7Ol��o0 t oo0oo aCl 0 0 0 O l ��yy pp yy r� y °m� S 2 8$ g 8 m 'mo m' mm o m` mmm to ia' m m 7o F'a m 0 8 3 8 id 3 8 8 3 7h aaCCaoCo aooCo`mgr`�dr$ggFmgmm€Fgggm���m�o`om99`em�5�gmg F.. m e m m 10 aa` W IG R m `R a 1`t N G ��{{ t0 pp U _m YNI I[nl N h o N N N m m IhG m W m O IWJ IW7 + I� A A A n ti m A 0 m' O m m b m 0 m m OI a W W Gni m Gmi GWi m �N R E 0 L z uf N �p pp W r r A r m 4 m m• o$ W 01 0 0 2 O 7 N e n m W N N N O .7 R N N N N N N N N O O O O O O C9 co 5 a' 0 .i 01 Id as d Ih In 0 01 Ih IA d d E0 m m m m m m m m m m m m m m m m m m m m m m m m W m m m m m m m m n m m m m m m m m m m W m m W m m QN zzzd a:ddddmdfidddddd,d¢d ddd dddddddddddd d,dddd ¢ dddd dd BW Zzo i tt§twill”d`2'g3d"dtto"doggno"dmo'§`1§4§"aY�Viltog'agg$ "doGdmo'd"o"o F- V) m7 LL IL ILI Fu.pm 2 Ce z z 9 p p m p p yq M1 Y y m O y ym m m ui FW- ,-o1- E SANGnl YyfRbE yNNy EERR IG NbpN yb IG HENiSAt1nGy� IGEq� Gmg]FNlfpm] RERFA mm NYf InmGmYAmi CO Q y m ,3 V3 �iiiI13 13 3 31213 N8Mgd1y11 a 1 A �U 131b� R I� 11311 m lid 1111 a a O O o 2 O O 18 0 0 0- N m e N m A m O+ R N N N N N N N N N R 2 tai8 2 2 2 lA'1 8 2 a 2 a 4< O 2 a 2 Q 8 W J 0 ix 0 & z O 0 w r N N g O O �� � N N N N f'1 p1 A� T1 4 4 0. � h m A m W N m O N N N N l�'j tW'•I CA! n M T V� 2 Y Y T Y Y T Y � 1� A z �S $ 'e 'c 'e e e o a v e a v c v c v v v v o e v o v ° v o a v v a e n n `m m m n n n 4 d d d d d d d d d t d d d d d d d d d d d d d d t d d5kd d d d d d �i § o d d WN cd A 6 "2 2282222 22 20.02222 88228 2 22. 222.2 on ccogco 28000 Reassessment ID O E O v m O W N n y W m A m W 0 IV N R G� N N� O � N n V i m tt�� Wl� 11�� yOy y yN Iy� y y y e e 8i G2ioQi•Yi GmiuS'REG0iln i Hlnnlnv'�nm`GNi GNi mw mE m�o.nm m W m EG�i Yi in G2 2 2 2 2 2 8 8 8 8 22 2 n n n w ne m m m 2 em m m m m m 8 `m 2 2 2 2 2 2 2 2? m g 2 n g q 2 N 0 0 0 2 8 0 0 2, �� N N 2 q a v l 8 P M 2 8 8 - N n C m m n m R+, N' " 2 02 00 8 Wo dd mdddddddod�i��ioii Fiq Nicg l2A 2A22 iA0Ai3AO*221'12 f ait QOuo d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d o d d d d d d d d 2282822222822822.820282.020.222222822822282220.0.. A m m YI N YI IG n m m s s Q m N s nW 0 m m A A I� A Q r n A r r O O e<< O O O Y V V S p 4 V u1.4. e e e e e e a e e e e e e v e e e a e e e e e 3333/3330=3sA3is 3311 33333 3333 M t1333333i3 �Nmemmnm W �; m.-12?RNFihNnnA Rs;s gns,r;nss va`awave+$ F-8 1- 0 1- H a Ez Om Q W W W EW Mc mw W W mN z O U m r 0 N �rom212N888:2 o. .�emmmmG�n eq♦ adddd ���888 _' OW N O O O O O O O OOdO0000 0 O O O O O O O O OOO O(Oy O OOry- O o OeNO 0OD O O O OW Ny „ 'O 0 0 0 0 0 0 0000000000 q`�4YQ NO O: HO n An nT YN 7 4n 3 G O O F S?- N 4 4 4 $ 4 4 0 0 — N e N m m 7 n cow*mNNNNNmNNNNmmNqNN0mm g§ W zzz add dddddddddddn QQ 80d882828888828b26a8o8222222208o2'82228gg8S nth 16-6 � I Fab LL O LL zz� 9 � � c 0 g .. H w A m G .- M n m m W m A W N ro n A N r) a N m h p N O 7 N N a m A W 4- g q N h N (ty� ((yyV (ryy ((�� (ryyv (o'y �qy 4 mR tOp O N N N N t'1 O O � O � � f� � $ N Cr {O� CQj (f�� f♦? �Q} Oj O O O O (4y O O � �dy a fV N N N N 1V N N N N N N N N N Ne Y Y N N N N N N N fV fV N< Y Y Y Y V*< 4 i W O m u' o o O e' o 'a c e e e a e a a a a a a 46ddddd46d6dvt'uSAAu5.n,hAA66A “ A t � `�� �� d `a o 0 0 0 `a o o 2 o °d G `E o S E o 0 0 2 o 2 0 0 0. 8753655386i6O o B O o S o 0 0 U c Reassessment ID Reassessment ID 44 "4. A„A � yn3ynn� 41 2 Ao Wit: 2M1 nA r E"k' �{ FEUR F2F.R �^ W w W W i g W W W W$ Po W mrd' m A w a 3 i i a iin vmi m w `n °oi gmg o A m n m gm r7 r7 3 1 7 �eWYi S000R F�4iRoOinr�riA�nnn§ME9E `r 5FL9 :SM`mRRii RRii Ri.gi�.gi m n � � a 12. O,hh O O S Q O O OA- N,CA�",'�y i,ty y Ny . Ni ,y�y u s �1 O, ra§ O O R $ R p O 7": 7": O W N N N O 77a m m rhif.:1AA er%i ori Atdn,A0 AA�3elrSi AAAN:3aaee eeeeevaaaaee d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d saaooa282222oa000assassoaosaao8888BEEEassasssaoaso m N 3 E S O O O$ O O S ' ^ m A m m O n N N e N N N m m t f 1'l Fr; F A m m m N A A A A A A A A A A A M1 A A A 1� A n ti A N N n A M1 M1 M1 oWWWWWaW WmWWWpWW �p 1W/�WWWWWWW�WIWWWWmW_pt(LypVppeyWp�mEmIRE pq�oIm�y�g�gr313m11 N N N E N N C N A m m 0 m N N N N N N N N NNN N N m m N m AN N N m Q m N A N N N N N N N N N N N N N ffffCCVVVVII F-9