Oxnard City Council
June 30, 2022

2 WHEREAS, the Authority proposes to enter into an Indenture of Trust (the “Indenture”) by and between the Authority and Computershare Trust Company, N.A., as trustee (the “Trustee”), to provide for the issuance of the 2022 Authority Bonds; and WHEREAS, the Local Agency Financing Documents contain certain references to the Series 2012 Bonds and the 2012 Indenture, and the Local Agency Financing Documents shall be amended upon the issuance of the 2022 Authority Bonds to reference the 2022 Authority Bonds and Indenture; and
WHEREAS, in order to accommodate the pledge and assignment of the Acquired Obligation to the payment of the 2022 Authority Bonds, as set forth in the Indenture, there has been presented to the Board a form of First Amendment to Local Agency Financing Documents to be entered into among the Authority, the City, Certain Community Facilities Districts of the City of Oxnard, and Computershare Trust Company, N.A., as Fiscal Agent (the “Fiscal Agent”) which agreement amends provisions of the documents relating to the Series 2012 Bonds in the Local Agency Financing Documents; and
NOW, THEREFORE, the City Council of the City of Oxnard resolves as follows:

Section 1. Findings. This Council finds that the preceding recitals are true and correct.

Section 2. Approval of First Amendment to Local Agency Financing Documents; Execution of Certificates. The form of the First Amendment to Local Agency Financing Documents as presented to this City Council, together with any changes therein or additions thereto which are deemed advisable by the Mayor, the Mayor Pro Tem, the City Manager, or Chief Finance Officer, upon consultation with Best Best & Krieger LLP, Bond Counsel, are hereby authorized and directed for and in the name and on behalf of the City to execute the final form of the First Amendment to Local Agency Financing Documents, together with any certificates in connection with the delivery of the 2022 Authority Bonds.

Section 3. Official Actions. The Officers of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions, provide certificates of representations which they, or any of them, may deem necessary or advisable in the issuance, sale and delivery of the 2022 Authority Bonds.

Section 4. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption.
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Resolution No. _____

3 PASSED AND ADOPTED this 30th day of June, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

John C. Zaragoza, Mayor
ATTEST:
_________________________
Rose Chaparro, City Clerk
APPROVED AS TO FORM:
______________________________
Stephen Fischer, City Attorney
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Resolution No. _____

STATE OF CALIFORNIA )
COUNTY OF VENTURA ) ss.

CITY OF OXNARD )
I, Rose Chaparro, City Clerk of the City of Oxnard, do hereby certify the above and foregoing to be a true and correct copy of City of Oxnard City Council Resolution No. ______, adopted by the Oxnard City Council at the meeting held on June 30, 2022. The original is on file in the City Clerk’s office.

DATED: _______________, 2022.

Rose Chaparro
City Clerk
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BOARD OF DIRECTORS OF

THE CITY OF OXNARD FINANCING AUTHORITY
RESOLUTION NO. ______

RESOLUTION OF THE BOARD OF DIRECTORS OF CITY OF OXNARD FINANCING

AUTHORITY AUTHORIZING THE SALE, ISSUANCE, AND DELIVERY OF NOT MORE THAN $17,400,000 IN PRINCIPAL AMOUNT OF ITS 2022 LOCAL OBLIGATION

REVENUE REFUNDING BONDS (SPECIAL DISTRICT BOND) AND APPROVING

CERTAIN DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION

THEREWITH
WHEREAS, the City of Oxnard Financing Authority, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the "Authority"), has the authority, among other things, pursuant to the Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California) (the "Act"), to incur indebtedness for the purpose of financing and refinancing capital projects of the City; and WHEREAS, the Authority issued its $19,505,000 City of Oxnard Public Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series A Senior Lien Bonds (the “Series 2012A Bonds”), and its $9,060,000 City of Oxnard Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series B Subordinate Lien Bonds (the “Series 2012B Bonds”, and together with the Series 2012A Bonds, the “Series 2012 Bonds,” for the purpose of acquiring (i) the $11,835,000 City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 (the "AD Bonds"), (ii) the $8,750,000 Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds (the "CFD No. 1 Bonds"), and (iii) the $7,980,000 City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012 (the "CFD No. 2000-3 Bonds" and, together with the AD Bonds and the CFD No. 1 Bonds, the "Acquired Obligations") issued by the City, CFD No. 1, and CFD No. 2000-3, respectively, to refund certain Assessment District, CFD No. 1, and CFD No. 2000- 3 bond issues, the Authority has determined to issue its 2022 Local Obligation Revenue Refunding Bonds (Special District Bond) (the "Bonds"); and WHEREAS, the Board of Directors of the Authority (this "Board") has determined that the issuance of the Bonds pursuant to the Act does not require approval of the qualified electors of the City; and
WHEREAS, the Authority proposes to enter into an Indenture of Trust (the "Indenture") by and between the Authority and Computershare Trust Company, N.A., as trustee (the "Trustee"), to provide for the issuance of the Bonds; and WHEREAS, each series of Acquired Obligations was issued pursuant to a separate Fiscal Agent Agreement, each dated as of August 1, 2012 by and between the City and respective CFD and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, N.A. 190
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Finance Authority Resolution No. __

2 (the “Bank”), as fiscal agent (the “Fiscal Agent Agreements”) (collectively, the “Local Agency Financing Documents”); and
WHEREAS, the Local Agency Financing Documents contain certain references to the Series 2012 Bonds and the 2012 Indenture, and the Local Agency Financing Documents shall be amended upon the issuance of the Bonds to reference the Bonds and Indenture; and WHEREAS, in order to accommodate the pledge and assignment of the Acquired Obligation to the payment of the Bonds, as set forth in the Indenture, there has been presented to the Board a form of First Amendment to Local Agency Financing Documents to be entered into among the Authority, the City, Certain Community Facilities Districts of the City of Oxnard, and Computershare Trust Company, N.A., as Fiscal Agent (the “Fiscal Agent”) which agreement amends provisions of the documents relating to the Series 2012 Bonds in the Local Agency Financing Documents; and
WHEREAS, the Authority determined that the Bonds should be offered for private placement, have requested Piper Sandler & Co. to serve as placement agent (the “Placement Agent”) and have received a term sheet from CN Financing, Inc. (the “Purchaser”); and WHEREAS, there has been presented a Private Placement Agreement (the “Private Placement Agreement”) which sets forth the terms and conditions for the delivery of the financing; and
WHEREAS, the Authority has appointed NHA Advisors LLP, as municipal advisor (the "Municipal Advisor") to, among other things, advise the City and the Authority with respect to Bond interest rates, professional fees, and other financing matters relating to the issuance of the Bonds; and
WHEREAS, the Authority has appointed Best Best & Krieger LLP as bond counsel ("Bond Counsel") to prepare proceedings for the issuance, sale, and delivery of the Bonds in connection with the issuance of the Bonds; and
WHEREAS, the forms of the following documents are on file with the Secretary of this Board (the "Secretary") and have been submitted to this Board, and the Chief Financial Officer of the City, acting as the Controller of the Authority (the "Controller"), in consultation with the Placement Agent, the Municipal Advisor, and Bond Counsel, has examined and approved each document and has recommended that this Board direct the completion, where appropriate, and the execution and delivery of such documents and the consummation of such financing:
(a) the Indenture;
(b) the Private Placement Agreement;
(c) First Amendment to Local Agency Financing Documents ; and (d) Irrevocable Refunding Instructions for the Series 2012 Bonds.

WHEREAS, moneys will be set aside by the Authority to prepay the Series 2012 Bonds will be deposited under Irrevocable Refunding Instructions to be given by the Authority to Computershare Trust Company, N.A., as Trustee for the Series 2012 Bonds (the “2012 Trustee”); and
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Finance Authority Resolution No. __

3 WHEREAS, as the result of the passage of SB 450 that became effective on January 1, 2018, Section 5852.1 of the Government Code of the State of California (“Section 5852.1”) provides that the Authority obtain from an underwriter, municipal advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the Bonds, good faith estimates of: (a) the true interest cost of the Bonds, (b) the finance charge of the Bonds, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the Bonds received less the finance charge described above and any reserves or capitalized interest paid or funded with proceeds of the Bonds, and (d) the sum total of all payments on the Bonds calculated to the final date of maturity plus the fees and charges paid to third parties not paid with the proceeds of the Bonds; and
WHEREAS, in accordance with Section 5852.1, the Authority has obtained such good faith estimates from the Municipal Advisor, and such estimates are disclosed in Exhibit A to this Resolution (the “SB 450 Summary”); and
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY the Board of Directors of the City of Oxnard Financing Authority as follows:

Section 1. The foregoing recitals are, and each of them is, true and correct.

Section 2. The Authority's issuance of the Bonds pursuant to the Act to refund the Series 2012 Bonds will provide "significant public benefits" (as such term is defined in Government Code Section 6586) to the citizens of the City because it is expected that such use will provide demonstrable savings in effective interest rate costs, or more efficient delivery of local agency services to residential and commercial development.

Section 3. The Indenture is approved in substantially the form presented to this meeting.

The Chair, Vice-Chair, the Executive Director, Chief Financial Officer and Secretary of the Board of Directors (each an “Authorized Representative”) are each individually authorized and directed, for and in the name of the Authority, to execute and deliver the Indenture with such changes, insertions, and omissions as such Authorized Representative shall require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 4. The document named “Irrevocable Refunding Instructions” to be given by the Authority to the 2012 Trustee is hereby approved and any of the Authorized Representatives are each individually authorized to execute, acknowledge and deliver said instruction on behalf of the Authority in substantially the form hereby approved with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 5. The financing terms presented to the Authority are approved as follows:
maximum principal amount of financing is $17,400,000; maximum interest rate with respect to the financing is 3.25%, except in the event of default, or if interest payable on the Bonds is determined to be taxable, such rate may increase as agreed upon in the Indenture, and maximum final maturity for the financing is September 2, 2033.

Section 6. The Authority hereby approves the Private Placement Agreement in substantially the form on file with the Secretary, together with such additions thereto and 192
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Finance Authority Resolution No. __

4 changes therein as Bond Counsel shall deem necessary, desirable or appropriate, the execution of which by the Authorized Representatives shall be conclusive evidence of the approval of any such additions and changes.

Section 7. The Board approves the form of the First Amendment to Local Agency Financing Documents as presented to the Board at the meeting at which this resolution is adopted, together with any changes therein or additions thereto which are deemed advisable by any Authorized Representative, upon consultation with Bond Counsel, and any Authorized Representative are hereby authorized and directed for and in the name and on behalf of the Authority to execute the final form of the First Amendment to Local Agency Financing Documents.

Section 8. The Bonds, in an aggregate principal amount not to exceed $17,400,000, designated "City of Oxnard Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds)," are authorized to be issued, sold, and delivered by the Authority in accordance with the terms and provisions of the Indenture and the Private Placement Agreement. The proceeds from the sale of the Bonds shall be deposited as provided in the Indenture. The Authorized Representatives are each individually authorized and directed, for and in the name of the Authority, to execute (manually or by facsimile) and deliver the Bonds with such changes, insertions, and omissions as the officer executing the same shall require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 9. Computershare Trust Company, N.A., is appointed as Trustee under and pursuant to the Indenture, with the respective powers and duties of said office as set forth therein.

The Trustee is requested and directed to execute and deliver the Bonds to the Purchaser in accordance with written instructions to be executed on behalf of the Authority by an Authorized Representative.

Section 10. The Authorized Representatives and any other proper officer of the Authority are authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents necessary or proper for carrying out the transactions contemplated by the Indenture, the Private Placement Agreement, First Amendment to Local Agency Financing Documents, the Irrevocable Refunding Instructions, and this Resolution and to execute and deliver any and all certificates and representations, including signature certificates, no-litigation certificates, tax certificates, and certificates necessary and desirable to accomplish the transactions described in such documents or as set forth above.

Section 11. All actions previously taken by this Board and by the officers and staff of the Authority with respect to the matters addressed by this Resolution are approved, ratified, and confirmed.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.] 193
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Finance Authority Resolution No. __

5 Section 12. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption.

PASSED AND ADOPTED this 30th day of June, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

John C. Zaragoza, Chairman
ATTEST:
_________________________
Rose Chaparro, Secretary
APPROVED AS TO FORM:
______________________________
Stephen Fischer, Authority Counsel
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Finance Authority Resolution No. __

STATE OF CALIFORNIA )
COUNTY OF VENTURA ) ss.

CITY OF OXNARD )
I, Rose Chaparro, Secretary of the City of Oxnard Financing Authority, do hereby certify the attached to be a true and correct copy of City of Oxnard Financing Authority Resolution No. _______, adopted at the Oxnard City Council Meeting held on June 30, 2022. The original resolution is on file in the City Clerk’s Office at 300 W. Third Street, Oxnard, California 93030.

DATED this ___ day of __________, 2022.
__________________________________
Rose Chaparro
Secretary
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A-1

EXHIBIT A

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the Authority by the Municipal Advisor.

Principal Amount. The Municipal Advisor has informed the Authority that, based on the Authority’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $17,114,000, (the “Estimated Principal Amount”).

True Interest Cost of the Bonds. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, their good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 3.22%.

Finance Charge of the Bonds. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, their good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $225,000.

Amount of Proceeds to be Received. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, their good faith estimate of the amount of proceeds expected to be received by the Authority for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $16,696,546.

Total Payment Amount. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, their good faith estimate of the total payment amount, which means the sum total of all payments the Authority will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $19,965,145, which excludes any reserves or capitalized interest paid or funded with proceeds of the Bonds (which may offset such total payment amount).

The foregoing estimates constitute good faith estimates only as of June 1, 2022, and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual 196
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A-2
principal amount of Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the Authority’s financing plan, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of the Bonds sold will be determined by the Authority based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic, national, international and other factors beyond the control of the Authority, or the Municipal Advisor. 197
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IRREVOCABLE REFUNDING INSTRUCTIONS
These IRREVOCABLE REFUNDING INSTRUCTIONS (these “Instructions”), dated as of _____________, 2022, are given by the CITY OF OXNARD FINANCING AUTHORITY, a joint exercise of powers authority existing under the laws of the State of California (the “Authority”), to COMPUTERSHARE TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as successor in interest to WELLS FARGO BANK, NATIONAL ASSOCIATION, acting as trustee (the “Trustee”) for the hereinafter defined Series 2012 Bonds;
W l T N E S S E T H :

WHEREAS, the Authority issued its $19,505,000 City of Oxnard Public Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series A Senior Lien Bonds (the “Series 2012A Bonds”), and its $9,060,000 City of Oxnard Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series B Subordinate Lien Bonds (the “Series 2012B Bonds,” and together with the Series 2012A Bonds, the “Series 2012 Bonds”), pursuant to an Indenture of Trust, dated as of August 1, 2012, (the “Prior Indenture”) by and between the Authority and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, acting as trustee thereunder (the “Prior Trustee”); and
WHEREAS, the Authority has determined that it is in the best financial interests of the Authority to refund, at this time, the outstanding Series 2012 Bonds; and WHEREAS, in order to provide funds for such purpose, the Authority is issuing its City of Oxnard Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds) (the “Series 2022 Bonds”) and applying a portion of the proceeds thereof, together with certain other moneys, to defease and redeem a portion of the outstanding Series 2012 Bonds, as designated herein (the “Defeased Bonds”); and
WHEREAS, the Series 2022 Bonds are being issued pursuant to an Indenture of Trust, dated as of July 1, 2022, (the “2022 Indenture”) between the Authority and Computershare Trust Company, N.A., as trustee; and
WHEREAS, the Authority wishes to give these Instructions to the Prior Trustee for the purpose of providing the terms and conditions relating to the deposit and application of moneys to provide for the payment and redemption of a portion of the outstanding Series 2012 Bonds.

NOW, THEREFORE, the Authority hereby irrevocably instructs the Prior Trustee as follows:

Section 1. Establishment of the Series 2012 Bonds Refunding Fund. The Trustee shall establish and hold within the Principal Account established pursuant to Section 5.05 of the Prior Indenture, separate and apart from all other funds and accounts held by it, a special fund known as the “Series 2012 Bonds Refunding Fund” (the “Refunding Fund”) established in the Indenture.

All amounts on deposit in the Refunding Fund are hereby irrevocably pledged as a special trust 198
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fund for the payment of regularly scheduled principal and interest thereon and the redemption of the outstanding Series 2012 Bonds, as identified in Schedule 1 attached hereto, on ______________, 2022. Neither the Trustee nor any other person shall have a lien upon or right of set off against the amounts at any time on deposit in the Refunding Fund, and such amounts shall be applied only as provided herein.

Section 2. Deposit into the Series 2012 Bonds Refunding Fund; Investment of Amounts. Concurrently with delivery of the Series 2022B Bonds, the Authority shall cause to be deposited in the Refunding Fund the amount of $_____________ in immediately available funds which represents $______________ on hand in the funds and accounts relating to the Series 2012 Bonds, plus the amount of $_______________ of Series 2022 Bonds proceeds. The Authority hereby directs the Trustee to invest the proceeds in the investments set forth in Schedule 2 attached hereto and herein incorporated.

The Authority signifies that by making the deposit described herein, it is discharging the Series 2012 Bonds pursuant to Sections 10.03 of the Indenture.

Section 3. Proceedings for Redemption of Series 2012 Bonds. The Authority hereby irrevocably elects, and directs the Trustee, to redeem, on _________, 2022, from amounts on deposit in the Refunding Fund, the Series 2012 Bonds pursuant to the provisions of the Indenture.

The Trustee shall provide notice of such redemption in accordance with the Indenture in order to allow for the redemption of the Series 2012 Bonds on ______________, 2022, as shown in Schedule 3 hereto.

Section 4. Application of Funds to Redeem Series 2012 Bonds. The Trustee shall apply the amounts on deposit in the Refunding Fund to pay the regularly scheduled payments of principal and interest on the Series 2012 Bonds and to redeem the outstanding Series 2022 Bonds, as identified in Schedule 1 attached hereto, on _____________, 2022 at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest, all in accordance with the Indenture.

Section 5. Transfer of Remaining Funds. Any amounts on deposit in the Refunding Fund shall be used for the purpose of paying interest on and the principal of any outstanding bonds pursuant to the Indenture, as amended or supplemented. Any amounts on deposit in the Refunding Fund or any other funds and accounts related to the Series 2012 Bonds following redemption or defeasance of the Series 2012 Bonds shall be transferred to the Interest Account established under the 2022 Indenture to be used solely for the purpose of paying interest on the Series 2022B Bonds.

Section 6. Amendment. These Instructions shall be irrevocable by the Authority. These Instructions may be amended or supplemented by the Authority, but only if the Authority shall file with the Trustee (a) an opinion of nationally recognized bond counsel engaged by the Authority stating that such amendment or supplement will not, of itself, adversely affect the exclusion from gross income of interest on the Series 2012 Bonds under federal income tax law, and (b) a certification of an independent accountant or independent financial adviser engaged by the Authority stating that such amendment or supplement will not affect the sufficiency of funds invested and held hereunder to make the payments required by Section 4. 199
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Section 7. Application of Certain Terms of the Indenture. All of the terms of the Indenture relating to the payment of principal of and interest and repayment premium, if any, on the Series 2012 Bonds and the redemption thereof, and the protections, immunities and limitations from liability afforded the Trustee, are incorporated in these Instructions as if set forth in full herein.

Section 8. Counterparts. These Instructions may be signed in several counterparts, each of which will constitute an original, but all of which will constitute one and the same instrument. [Signature page follows]
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S-1
Section 9. Governing Law. These Instructions shall be construed in accordance with and governed by the laws of the State of California.

CITY OF OXNARD FINANCING

AUTHORITY
By:

Chief Financial Officer
ACCEPTED:

COMPUTERSHARE TRUST COMPANY, N.A.
as Trustee
By:

Authorized Officer
-Signature Page-
Irrevocable Refunding Instructions
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SCHEDULE 1

BONDS TO BE REDEEMED
Maturity Date
(September 2) Principal Amount
CUSIP
(Base CUSIP )
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SCHEDULE 2

ESCROW INVESTMENTS
Purchase Date
Type of
Security
Type of
SLGS
Maturity
Date
First
Interest
Payment
Date
Par
Amount Rate
Max
Rate Total Cost

ESCROW CASH FLOW
Date Principal Interest
Net Escrow
Receipts
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SCHEDULE 3

NOTICE OF OPTIONAL REDEMPTION
$19,505,000

ORIGINAL PRINCIPAL AMOUNT CITY OF

OXNARD PUBLIC FINANCING AUTHORITY
LOCAL OBLIGATION REVENUE BONDS (2012

SPECIAL DISTRICT BOND REFINANCINGS),

SERIES A SENIOR LIEN BONDS
AND
$9,060,000

ORIGINAL PRINCIPAL AMOUNT CITY OF

OXNARD FINANCING AUTHORITY LOCAL
OBLIGATION REVENUE BONDS (2012 SPECIAL

DISTRICT BOND REFINANCINGS), SERIES B

SUBORDINATE LIEN BONDS
______________, 2022
NOTICE IS HEREBY GIVEN pursuant to Section 4.01(d) of the Indenture of Trust, dated as of August 1, 2012 between the City of Oxnard Financing Authority (the “Authority”) and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association (the “Trustee”) that the below indicated Bonds (the “Bonds”) are, subject to the following paragraph, to be redeemed in full on _____________, 2022 (the “Redemption Date”) at a price equal to 100% of the principal amount represented thereby together with interest accrued to the Redemption Date.

CUSIP
Maturity
Date
Principal
Redeemed
Redemption
Price
All outstanding Bonds called for redemption are subject to full redemption on the Redemption Date and no holder of any Bond shall have the right to elect to retain such Bond. Interest represented by the Bonds will cease to accrue on and after the Redemption Date.

All Bonds must be surrendered to the Trustee for purchase not later than 3:30 p.m. Eastern Time on the Redemption Date. Payment of the Redemption Price on the Bonds redeemed will become due and payable on the Redemption Date upon presentation and surrender thereof in the following manner:

Delivery Instructions
Please call Bondholder Services at _____________ with any questions. 204
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Holders of the Bonds presenting their certificates in person for same day payment must surrender their certificate(s) by 1:00 P.M. CST on or after the Redemption Date and a check will be available for pick up after 2:00 P.M. CST. Checks not picked up by 4:30 P.M. will be mailed out to the Bond holder via first class mail. If payment of the Redemption Price is to be made to the registered owner of the Bond, you are not required to endorse the Bond to collect the Redemption Price.

REQUIREMENT INFORMATION
For a list of redemption requirements please visit our website at ______________________ and click on the “Bondholder Information” link.

IMPORTANT NOTICE
Under the Job and Growth Tax Relief Reconciliation Act of 2003 (the “Act”), 24% will be withheld if tax identification number is not properly certified.

Subject to the redemption of the Bonds on the Redemption Date, all interest on the Bonds will cease to accrue from and after the Redemption Date, and from and after the Redemption Date such Bonds shall no longer be entitled to any lien, benefit or security under the Indenture and the Owners thereof shall have no rights in respect of such redeemed Bonds except to receive payment of the Redemption Price.

The method of presentation and delivery of a Bond is at the option and risk of the holder of each Bond. If mail is used, insured registered mail, return receipt requested is suggested.

COMPUTERSHARE TRUST COMPANY, N.A.,
as Trustee
Date: ____________, 2022
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INDENTURE OF TRUST
by and between
COMPUTERSHARE TRUST COMPANY, N.A.,
as Trustee
and

CITY OF OXNARD FINANCING AUTHORITY
Dated as of July 1, 2022
Relating to:
$________
City of Oxnard Financing Authority
2022 Local Obligation Revenue Refunding Bonds
(Special District Bonds)
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1 INDENTURE OF TRUST
THIS INDENTURE OF TRUST dated as of July 1, 2022 (this “Indenture”), is by and between the City of Oxnard 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 Computershare Trust Company, N.A., a national banking association organized and existing under and by virtue of the laws of the United States and having a corporate trust office in Los Angeles, California, as trustee (the “Trustee”).

WITNESSETH:

WHEREAS, the Authority is a joint exercise of powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated October 9, 1991, by and among the City of Oxnard, California (the “City”), the Redevelopment Agency of the City of Oxnard, and the Housing Authority of the City of Oxnard, and under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), and the Authority is authorized pursuant to Article 4 of the Act (the “Bond Law”) to incur indebtedness for the purpose of financing and refinancing capital projects of the City; WHEREAS, the Authority issued its $19,505,000 City of Oxnard Public Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series A Senior Lien Bonds (the “Series 2012A Bonds”), and its $9,060,000 City of Oxnard Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series B Subordinate Lien Bonds (the “Series 2012B Bonds”, and together with the Series 2012A Bonds, the “Series 2012 Bonds”, for the purpose of acquiring the (i) the $11,835,000 City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 (the “AD Bonds”), (ii) the $8,750,000 Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds (the “CFD No. 1 Bonds”), and (iii) the $7,980,000 City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012 (the “CFD No. 2000-3 Bonds” and, together with the AD Bonds and the CFD No. 1 Bonds, the “Acquired Obligations”) issued to refund certain Assessment District, CFD No. 1, and CFD No. 2000-3 bond issues;
WHEREAS, the Authority has determined to issue its refunding bonds for the purposes of causing the early redemption of the Series 2012 Bonds and achieving debt service savings which will be secured the Acquired Obligations and designated as 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds), in the aggregate principal amount of $______ (the “Bonds”) all pursuant to and secured by this Indenture in the manner provided herein;
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the 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
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2 WHEREAS, all acts and proceedings required by law necessary to make the 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 this Indenture have been in all respects duly authorized.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby grant and agree as follows:

GRANTING CLAUSES
The Authority, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Bonds by the registered owners thereof, and for other good and valuable consideration, the receipt of which is hereby acknowledged, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds according to their tenor and effect and to secure the performance and observance by the Authority of all of the covenants expressed or implied herein and in the Bonds, does hereby grant, bargain, sell, convey, mortgage, assign, and pledge the following to Computershare Trust Company, N.A., as Trustee, and its successors in trust and assigns forever, for the securing of the performance of the obligations of the Authority hereinafter set forth:

GRANTING CLAUSE FIRST
All right, title, and interest of the Authority in and to the Revenues and the Acquired Obligations, including all extensions and renewals of its terms, if any, including, but without limiting the generality of the foregoing, the present and continuing right to make claim for, collect, receive, and receipt for any income, revenues, issues, profits, insurance proceeds, and other sums of money payable to or receivable by the Authority under the Acquired Obligations or any other document delivered pursuant to the terms of the Acquired Obligations, whether payable pursuant to the Acquired Obligations or otherwise, to bring actions and proceedings under the Acquired Obligations or for the enforcement thereof, and to do any and all things which the Authority is or may become entitled to do under the Acquired Obligations, including all proceeds of the foregoing and any investment income thereon;

GRANTING CLAUSE SECOND
All moneys, securities, investments, and funds from time to time held by the Trustee under this Indenture, including all Revenues, moneys, and securities held by the Trustee in all funds and accounts under this Indenture (except the Rebate Fund and the Expense Fund), and all other rights and property of every name and nature from time to time hereafter by delivery or by writing of any kind, tangible or intangible, assigned, pledged, or transferred as and for additional security hereunder to the Trustee by the Authority or the City, or by anyone in either’s behalf, or with its written consent, and to hold and apply the same, subject to the terms hereof, including all proceeds of the foregoing and all investment income thereon; 208
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3 TO HAVE AND TO HOLD all and singular the trust estate above granted (the “Trust Estate”), whether now owned or hereafter acquired, unto the Trustee and its respective successors in trust and assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security, and protection of all present and future registered owners of the Bonds executed and delivered under and secured by this Indenture without privilege, priority, or distinction as to the lien or otherwise of any of the Bonds over any of the other Bonds; PROVIDED, HOWEVER, that if the Authority, or its respective successors or assigns, shall well and truly pay, or cause to be paid, the principal of, premium, if any, and interest on the Bonds due or to become due thereon, on the dates and in the manner mentioned in the Bonds according to the true intent and meaning thereof, and shall cause the payments to be made as required under Article V hereof, and shall pay, or shall provide, as permitted hereby, for the payment thereof by depositing with the Trustee the entire amount due or to become due thereon, and shall well and truly keep, perform, and observe all the covenants and conditions pursuant to the terms of this Indenture to be kept, performed, and observed by them, and shall pay or cause to be paid to the Trustee all sums of money due or to become due in accordance with the terms and provisions hereof, then upon such final payment under this Indenture, the rights hereby granted shall cease, determine, and be void; otherwise this Indenture to be and remain in full force and effect;
NOW, THEREFORE, THIS INDENTURE FURTHER WITNESSETH, that in order to secure the payment of the principal of, premium, if any, and the interest on all 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 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 Bonds by the Owners thereof, and for other valuable considerations, the receipt whereof 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 Bonds, as follows:

ARTICLE I
DEFINITIONS; INTERPRETATION; EQUAL SECURITY
SECTION 1.01Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall, for all purposes of this Indenture and of any Supplemental Indenture and of any certificate, opinion, or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined.
“Acquired Obligations” means, collectively, the AD Bonds, the CFD No. 1 Bonds, and the CFD No. 2000-3 Bonds.
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4 “Act” means Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California. “AD Bonds” means the City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012, dated as of the date of their delivery to the Authority as the initial purchaser thereof and issued in the aggregate principal amount of $11,835,000 by the City under and pursuant to the Refunding Act.
“AD Bonds Fiscal Agent Agreement” means that certain Fiscal Agent Agreement, dated as of August 1, 2012, by and between the City and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, as fiscal agent, establishing the terms and conditions pertaining to the issuance and administration of the AD Bonds. “Administrative Costs” means the annual costs of administering the Bonds, including, without limitation, the annual fees and expenses pertaining to the servicing of the Bonds and the provision of continuing disclosure pertaining to the Bonds or the Authority as required by Rule 15c2-12 of the Securities and Exchange Commission and any applicable continuing disclosure agreement pertaining to the Bonds. Such fees and expenses shall include, but not be limited to, any or all of the following: the fees and expenses of the Trustee (including any fees and expenses of its counsel) and the expenses of the Authority in carrying out its duties hereunder, which expenses include, but are not limited to, calculating the rebate obligation, if any, for the Bonds, undertaking any annual audits of the Bonds, and undertaking any annual or event continuing disclosure requirement. In addition to the costs of consultants and attorneys incurred in undertaking such duties, the expenses of the Authority shall also include an allocable share of the salaries of staff of the Authority or the City directly related thereto and a proportionate amount of general administrative overhead related thereto, any rebate obligation due and owing the United States government, and all other costs and expenses of the Authority or the Trustee incurred in connection with the discharge of their respective duties hereunder and, in the case of the Authority, in any way related to the administration of the Authority. Administrative Costs also includes any Unfunded Special District Administrative Expenses. “AD Prepayment Account” means the Prepayment Account of the Redemption Fund established by the Fiscal Agent pursuant to the provisions of the AD Bonds Fiscal Agent Agreement.
“Agreement” means that certain Joint Exercise of Powers Agreement, dated as of October 9, 1991, by and among the City, the Redevelopment Agency of the City of Oxnard, and the Housing Authority of the City of Oxnard, as duly amended and supplemented from time to time.
“Assessment District” means City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange).
“Authority” means the City of Oxnard Financing Authority, a joint powers authority organized and existing under the Agreement and under and by virtue of the laws of the State of California.
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5 “Authorized Denomination” means the amount of $5,000 or any integral multiple thereof. “Authorized Representative” means: (a) with respect to the Authority, its Chairman, Vice Chairman, Controller, Assistant Controller, Executive Director, or Secretary, or any other Person designated as an Authorized Representative of the Authority by a Written Certificate of the Authority signed by its Chairman, Executive Director, or Controller and filed with the City and the Trustee; (b) with respect to the City, CFD No. 1, and CFD No. 2000-3, the City Manager, the Assistant City Manager, the Chief Financial Officer, the Financial Services Manager, or any other Person designated as an Authorized Representative of the City, CFD No. 1, or CFD No. 2000-3 by a Written Certificate signed on behalf of the City, CFD No. 1, or CFD No. 2000-3 by the City Manager, the Assistant City Manager, the Chief Financial Officer, or the Financial Services Manager and filed with the Authority and the Trustee; (c) with respect to the Trustee, the Senior Vice President, any Vice President, any Assistant Vice President, or any Trust Officer of the Trustee, and when used with reference to any act or document also means any other Person authorized to perform such act or sign any document by or pursuant to a resolution of the Board of Directors of the Trustee or the by-laws of the Trustee. “Available Amount” means an amount calculated by adding, as of the date of such calculation, (i) the amount on deposit in the Reserve Fund, and (ii) the amount on deposit in the Residual Account, less (a) the CFD No. 1 Residual Amount, (b) the CFD No. 2000-3 Residual Amount, and (c) any amounts determined by the Authority, in consultation with the City, to be needed to pay for debt service on the Bonds on September 2, 2032, or to be used for the payment of rebate or other expenses).
“Average Annual Debt Service” means the average annual debt service on the Bonds, based upon a Bond Year during the term of such Bonds.
“Bond Counsel” means Best Best & Krieger LLP or any law firm that is a firm of nationally recognized attorneys experienced in the issuance of obligations the interest on which is excluded from gross income for purposes of Section 103 of the Code, which firm is selected by the Authority in connection with the issuance of the Bonds. “Bond Law” means the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of the Act (commencing with Section 6584), as amended from time to time. “Bond Year” means, with respect to the Bonds or the Acquired Obligations, the period beginning on the Closing Date and ending on September 2, 2022, and each successive 12-month period thereafter until there are no longer any Bonds Outstanding. “Bonds” means, the $______________ original principal amount of City of Oxnard Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds). “Business Day” means a day that is not a Saturday, Sunday, or legal holiday on which banking institutions in the State of California, or in any state in which the Office of the Trustee is located, are closed, or a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed.
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6 “Cash Flow Certificate” means a certificate prepared by an Independent Special District Administrator which, as to a redemption of Bonds pursuant to Section 4.01 hereof, (i) directs the redemption of Bonds among maturities of the Bonds or of Bonds among maturities of the Bonds, as applicable, as necessary, after giving effect to such redemption, so as to maintain as close as practicable the level of Revenue coverage that existed for the Bonds as of the Date of Delivery, and (ii) certifies that after such redemption the Revenues scheduled to be received from the Acquired Obligations will be sufficient in time and amount (together with funds then held under this Indenture representing payments made pursuant to the Acquired Obligations and available to pay debt service on the Bonds, but excluding amounts, if any, on deposit in the Reserve Fund) to make all remaining scheduled payments of principal of and interest on the Outstanding Bonds. “CFD No. 1” means Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard.
“CFD No. 1 Bonds” means the Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds, dated as of the date of their delivery to the Authority as the initial purchaser thereof and issued in the aggregate principal amount of $8,750,000 by CFD No. 1 under and pursuant to the Mello-Roos Act. “CFD No. 1 Bonds Fiscal Agent Agreement” means that certain Fiscal Agent Agreement dated as of August 1, 2012, by and between CFD No. 1 and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, as fiscal agent, establishing the terms and conditions pertaining to the issuance and administration of the CFD No. 1 Bonds.
“CFD No. 1 Prepayment Account” means the Prepayment Account of the Bond Service Fund established by the Fiscal Agent pursuant to the provisions of the CFD No. 1 Bonds Fiscal Agent Agreement.
“CFD No. 1 Residual Amount” means the amount of [$714,798.57], which is the approximate aggregate amount on deposit in the Reserve Fund allocable to the CFD No. 1 Bonds.
“CFD No. 2000-3” means City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange).
“CFD No. 2000-3 Bonds” means the City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012, dated as of the date of their delivery to the Authority as the initial purchaser thereof and issued in the aggregate principal amount of $7,980,000 by CFD No. 2000-3 under and pursuant to the Mello-Roos Act.
“CFD No. 2000-3 Bonds Fiscal Agent Agreement” means that certain Fiscal Agent Agreement dated as of August 1, 2012, by and between CFD No. 2000-3 and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, as fiscal agent, establishing the terms and conditions pertaining to the issuance and administration of the CFD No. 2000-3 Bonds.
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7 “CFD No. 2000-3 Prepayment Account” means the Prepayment Account of the Bond Service Fund established by the Fiscal Agent pursuant to the provisions of the CFD No. 2000-3 Bonds Fiscal Agent Agreement.
“CFD No. 2000-3 Residual Amount” means the amount of [$651,891.15], which is the approximate aggregate amount on deposit in the Reserve Fund allocable to the CFD No. 2000-3 Bonds.
“City” means the City of Oxnard, California.
“Closing Date” means the date on which the Bonds are delivered to the Original Purchaser, being the Date of Delivery or, as to the Acquired Obligations, the date such Acquired Obligations are delivered to the Authority.
“Code” means the Internal Revenue Code of 1986, as amended, and any regulations, rulings, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it. “Costs of Issuance” means all expenses incurred in connection with the authorization, issuance, sale, and delivery of the Bonds, the acquisition of the Acquired Obligations, and the refunding of the improvement bonds and special tax bonds refunded through the sale and delivery of the Acquired Obligations, including, but not limited to, compensation, fees, and expenses of the City, CFD No. 1, CFD No. 2000-3, the Authority, the Trustee, and their respective counsel, compensation to any financial consultants, certified public accountants, market economists, or the Original Purchaser, other legal fees and expenses, filing and recording fees and costs, costs of preparation and reproduction of documents, and costs of printing. “Date of Delivery” means the date the Bonds are delivered to the Original Purchaser thereof.
“Depository” or “Securities Depositories” means The Depository Trust Company, 55 Water Street, 22nd Floor, New York, New York 10041-0099, Attn. Call Notification Department, Facsimile transmission: (212) 855-7232, or, in accordance with the then current guidelines of the Securities and Exchange Commission, such other depositories, or no such depositories, as the Authority may indicate in a certificate of the Authority to the Trustee. “Event of Bankruptcy” means, with respect to any Person, the filing of a petition in bankruptcy or the commencement of a proceeding under the United States Bankruptcy Code or any other applicable law concerning insolvency, reorganization or bankruptcy by or against such Person as debtor, other than any involuntary proceeding which has been finally dismissed without entry of an order for relief or similar order as to which all appeal periods have expired. “Event of Default” means any of the events specified in Section 7.01 herein. “Expense Fund” means the fund by that name established with the Trustee pursuant to Section 3.04.
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8 “Extraordinary Redemption Proceeds” means the proceeds of the extraordinary redemption, in whole or in part, of (a) the principal of, premium (if any) on, and interest on the AD Bonds with funds attributable to the prepayment of any reassessment lien securing such AD Bonds, (b) the principal of, premium (if any) on, and interest on the CFD No. 1 Bonds with funds attributable to the prepayment of any special tax lien securing such CFD No. 1 Bonds, or (c) the principal of, premium (if any) on, and interest on the CFD No. 2000-3 Bonds with funds attributable to the prepayment of any special tax lien securing such CFD No. 2000-3 Bonds. “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 State of California for the moneys proposed to be invested therein:
(a) direct general obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations the payment of principal of and interest on which are directly or indirectly unconditionally guaranteed by, the United States of America; and (b) direct obligations of any department, agency, or instrumentality of the United States of America the timely payment of principal of and interest on which are fully guaranteed by the United States of America.
“Fiscal Year” means the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other 12-month period hereafter selected and designated as the official fiscal year period of the Authority and certified to the Trustee in writing by an Authorized Representative of the Authority.
“Indenture” means this Indenture of Trust, dated as of July 1, 202 2, by and between the Authority and the Trustee, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture. “Independent Certified Public Accountant” means a nationally recognized certified public accountant or nationally recognized firm of certified public accountants appointed by the Authority, and who, or each of whom: (a) is judged by the Authority to have extensive experience with respect to the preparation of financial statements; (b) is in fact independent and not under the domination of the Authority, the City, CFD No. 1, or CFD No. 2000-3; (c) does not have any substantial interest, direct or indirect, with the Authority, the City, CFD No. 1, or CFD No. 2000-3; and (d) is not connected with the Authority, the City, CFD No. 1, or CFD No. 2000¬3 as an officer or employee thereof, but who may be regularly retained by either the Authority, the City, CFD No. 1, or CFD No. 2000-3 to make reports to such client. “Independent Special District Administrator” means a consultant or firm of consultants appointed by the Authority, and who, or each of whom: (a) is judged by the Authority to have experience (i) advising public agencies as a financial consultant or assessment engineer with respect to the issuance of bonds for assessment districts and community facilities districts or (ii) administering bonds issued for assessment districts and community facilities districts on behalf of the issuers of such bonds; (b) is in fact independent and not under the domination of the Authority; (c) does not have any substantial interest, direct or indirect, with the Authority, other 214
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9 than as Original Purchaser; and (d) is not connected with the Authority as an officer or employee of the Authority, but who may be regularly retained to make reports to the Authority. A consultant or firm engaged by the City to administer the AD Bonds, by CFD No. 1 to administer the CFD No. 1 Bonds, or by CFD No. 2000-3 to administer the CFD No. 2000-3 Bonds may be an Independent Special District Administrator.
“Information Services” means the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other services providing information with respect to called bonds as the Authority may designate in a Certificate of the Authority delivered to the Trustee.
“Interest Account” means the account of the Revenue Fund by that name established with the Trustee pursuant to Section 5.01(c).
“Interest Payment Date” means March 2 and September 2 in each year, commencing September 2, 2022, so long as any Bonds remain Outstanding. “Letter of Representation” means a letter substantially in the form attached hereto as Exhibit C delivered by the Original Purchaser and each subsequent Qualified Purchaser of the Bond to the District to the effect, among other things, that such purchaser (a) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the Bond, (b) is acquiring the Bond for its own account for deposit in its loan portfolio, and (c) has no present intention of selling, negotiating, transferring, or otherwise disposing of the Bond so purchased.
“Maximum Annual Debt Service” means, as of the date of any calculation, the largest Annual Debt Service for the Bonds, as the case may be, during the current or any future Bond Year.
“Mello-Roos Act” means the Mello-Roos Community Facilities Act of 1982, as amended, set forth in Chapter 2.5 of Division 2 of Title 5 of the Government Code of the State of California (commencing with Section 53311).
“Moody’s” means Moody’s Investors Service, Inc., and its successors and assigns. “Nominee” has the meaning given to such term in Section 2.09. “Office” means the designated corporate trust office or agency of the Trustee in Los Angeles, California, or such other offices as may be specified to the Authority by the Trustee in writing, and the designated corporate trust office of any successor trustee. “Original Purchaser” means City National Bank.
“Outstanding,” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 11.09) all Bonds theretofore or thereupon being authenticated and delivered by the Trustee under this Indenture except (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 10.02, 215
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10 including Bonds referred to under Section 11.10; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture.
“Owner” or “Bond Owner,” whenever used herein with respect to a Bond, means the Person in whose name the ownership of such Bond is registered on the Registration Books. “Participant” has the meaning given to such term in Section 2.09. “Permitted Investments” means any of the investments listed in Exhibit B attached hereto and incorporated herein by this reference, provided at the time of investment the investment is a legal investment under the laws of the State of California for the moneys proposed to be invested therein.
“Person” means an individual, corporation, firm, association, partnership, limited liability company, limited liability partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof “Prime Rate” has the meaning given to such term in Section 3.03(a)(4). “Principal Account” means the account of the Revenue Fund by that name established with the Trustee pursuant to Section 5.01(c).
“Prior Indenture” means the Indenture of Trust, dated as of August 1, 2012 (the “Prior Indenture”), by and between the Authority and the Prior Trustee. “Prior Trustee” means Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, acting as trustee thereunder. “Program Fund” means the fund by that name established with the Trustee pursuant to Section 3.05.
“Qualified Purchaser” means either (a) a “qualified institutional buyer,” within the meaning of Rule 144A of the Securities Act of 1933 (the “Securities Act”); or (b) an “accredited investor” within the meaning of Rule 501 of Regulation D of the rules governing the limited offer and sale of securities without registration under the Securities Act. “Rebatable Arbitrage” has the meaning given to such term in Section 6.08(b)(i). “Rebate Fund” means the account by that name established pursuant to Section 6.08(a). “Rebate Regulations” means the Proposed and Temporary Treasury Regulations issued under Section 148 of the Code.
“Record Date” means the fifteenth (15th) day (whether or not such day is a Business Day) of the calendar month preceding each Interest Payment Date. “Redemption Account” means the account of the Revenue Fund by that name established with the Trustee pursuant to Section 5.01(c).
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11 “Refunding Act” means the Refunding Act of 1984 for 1915 Improvement Act Bonds, being Division 11.5 (commencing with Section 9500) of the Streets and Highways Code of the State of California.
“Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.05. “Related Documents” means, collectively, this Indenture, the AD Bonds Fiscal Agent Agreement, the CFD No. 1 Bonds Fiscal Agent Agreement, the CFD No. 2000-3 Bonds Fiscal Agent Agreement, the AD Bonds, the CFD No. 1 Bonds, and the CFD No. 2000-3 Bonds. “Reserve Fund” means the fund by that name established with the Trustee pursuant to Section 3.03(a).
“Reserve Requirement” means, as of any date of calculation, an amount equal to the least of (i) Maximum Annual Debt Service for the Bonds, (ii) one hundred twenty-five percent (125%) of Average Annual Debt Service for the Bonds, or (iii) ten percent (10%) of the original principal amount of the Bonds; provided, however, that the Reserve Requirement as of any such date of calculation shall not exceed the Reserve Requirement calculated as of the Closing Date.

As of the Closing Date, the Reserve Requirement is $____________. “Residual Account” means the account of the Revenue Fund by that name established with the Trustee pursuant to Section 5.01(c).
“Revenue Fund” means the fund by that name established pursuant to Section 5.01. “Revenues” means (a) all amounts derived from or with respect to the Acquired Obligations, including, without limitation, the reassessments collected within the Assessment District, the special taxes collected within CFD No. 1, and the special taxes collected within CFD No. 2000-3, and (b) investment income with respect to any moneys held by the Trustee in the funds and accounts established hereunder, excepting therefrom the Rebate Fund. “S&P” means S&P Global, and its successors and assigns. “Special Record Date” means the date established by the Trustee pursuant to Section

2.02(b) as a record date for the payment of defaulted interest on the Bonds, if any. “State” means the State of California.
“Supplemental Indenture” means any indenture then in full force and effect which has been duly executed and delivered by the Authority and the Trustee amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Tax Certificate” means that certain certificate of the Authority by that name delivered on the Closing Date.
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12 “Trustee” means Computershare Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, or its successor, as Trustee hereunder as provided in Section 8.01.
“Unfunded Special District Administrative Expenses” means those annual costs of the administration of the AD Bonds, the CFD No. 1 Bonds, the CFD No. 2000-3 Bonds, the AD Bonds Fiscal Agent Agreement, the CFD No. 1 Bonds Fiscal Agent Agreement, and the CFD No. 2000-3 Bonds Fiscal Agent Agreement in excess of the proceeds of the annual assessments or special taxes for administrative costs and surcharges for collection costs and registration costs which may be collected for the Assessment District, CFD No. 1, or CFD No. 2000-3 on the tax roll by the City, CFD No. 1, or CFD No. 2000-3, as applicable. “Verification Report” has the meaning given to such term in Section 10.05(a). “Written Certificate,” “Written Order.” or “Written Request” of the Authority, the City, CFD No. 1, or CFD No. 2000-3 means, respectively, a written certificate, written order, or written request signed in the name of the Authority by any Authorized Representative thereof, in the name of the City by any Authorized Representative thereof, in the name of CFD No. 1 by any Authorized Representative thereof, or in the name of CFD No. 2000-3 by any Authorized Representative thereof. Any such certificate, order or request may, but need not, be combined in a single instrument with any other instrument, opinion, or representation, and the two or more so combined shall be read and construed as a single instrument. If and to the extent required by Section 1.02, each such certificate, order or request shall include the statements provided for in Section 1.02.
“Yield” shall have the meaning given to such term as set forth in the Tax Certificate for the Bonds.

SECTION 1.02Content of Certificates and Opinions. Every certificate or opinion provided for in this Indenture, except any certification of destruction pursuant to Section 11.05 hereof, with respect to compliance with any provision hereof shall include (a) a statement that the Person making or giving such certificate or opinion has read such provision and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the certificate or opinion is based; (c) a statement that, in the opinion of such Person, he has made or caused to be made such examination or investigation as is necessary to enable him to express an informed opinion with respect to the subject matter referred to in the instrument to which his signature is affixed; (d) a statement of the assumptions upon which such certificate or opinion is based, and that such assumptions are reasonable; and (e) a statement as to whether, in the opinion of such Person, such provision has been complied with.

Any such certificate or opinion made or given by an officer of the Authority, the City, CFD No. 1, or CFD No. 2000-3 may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an accountant, unless such officer knows, or in the exercise of reasonable care should have known, that the certificate, opinion, or representation with respect to the matters upon which such certificate or statement may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by counsel or an 218
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13 accountant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the Authority, the City, CFD No. 1, or CFD No. 2000-3, as the case may be) upon a certificate or opinion of or representation by an officer of the Authority, the City, CFD No. 1, or CFD No. 2000-3, unless such counsel or accountant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such Person’s certificate or opinion or representation may be based, as aforesaid, is erroneous. The same officer of the Authority, the City, CFD No. 1, or CFD No. 2000-3, or the same counsel or accountant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Indenture, but different officers, counsel or accountants may certify to different matters, respectively.

SECTION 1.03Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include the neuter, masculine, or feminine gender, as appropriate.
(b) Headings of Articles and Sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof, and shall not affect the meaning, construction, or effect hereof.
(c) All references herein to “Articles,” “Sections,” and other subdivisions are to the corresponding Articles, Sections, or subdivisions of this Indenture; the words “herein,” “hereof,” “hereby,” “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 1.04Indenture Constitutes Contract. In consideration of the purchase and acceptance of any and all of the Bonds issued hereunder by those who shall hold the same from time to time, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the Trustee, and the Owners of the Bonds. The pledge made in this Indenture and the provisions, covenants, and agreements herein set forth to be performed by or on behalf of the Authority shall be for the equal and proportionate benefit, protection, and security of all present and future Owners of the Bonds issued under and secured by this Indenture without privilege, priority, or distinction as to the lien or otherwise of any of the Bonds over any other Bonds.

ARTICLE II

THE BONDS
SECTION 2.01Authorization of Bonds. The Authority hereby authorizes the issuance of two (2) series of Bonds hereunder and under the Bond Law, which shall constitute special obligations of the Authority, for the purpose of providing moneys to finance the acquisition by the Authority of the Acquired Obligations. Such Bonds are hereby designated the 2022 City of Oxnard Financing Authority Local Obligation Revenue Refunding Bonds (Special District Bonds). The maximum aggregate principal amount of Bonds authorized to be issued and Outstanding under this Indenture shall equal $__________. This Indenture constitutes a 219
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14 continuing agreement with the Owners from time to time of the Bonds to secure the full payment of the principal of and interest on all such Bonds, subject to the covenants, provisions, and conditions herein contained.

SECTION 2.02Terms of the Bonds.
(a) The Bonds shall be issued in fully registered form without coupons in any Authorized Denomination. The Bonds shall be dated as of the Date of Delivery, shall mature (subject to prior redemption, as herein provided) in the principal amounts maturing or payable and bear interest as follows:

Maturity Date
(September 2)
Principal
Amount
Interest
Rate
2023
2024
2025
2026
2030
2033 (maturity)
(b) Interest on the Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Bond is authenticated ‘on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it shall bear interest from such Interest Payment Date, (ii) a Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the Date of Delivery, or (iii) interest on any Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has been paid in full, payable on each interest Payment Date. Interest with respect to the Bonds shall be calculated on the basis of 360 days per year, comprised of twelve 30-day months. Interest shall be paid on each Interest Payment Date to the Persons in whose names the ownership of the Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest on any Bond which is not punctually paid or duly provided for on any Interest Payment Date shall be payable to the Person in whose name the ownership of such Bond is registered on the Registration Books at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice of which shall be given to such Owner not less than ten (10) calendar days prior to such Special Record Date. Interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Bond Owners at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date; or by wire transfer made on such Interest Payment Date to any Owner of $1,000,000 or more in aggregate principal amount of Bonds who shall have requested such transfer pursuant to written notice filed with the Trustee on or before the preceding Record Date. (c) The principal of the Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof at the Office of the Trustee. Payment of principal on any Bond shall be made only upon presentation and surrender of such Bond at the Office of the Trustee.
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15 So long as the Bond is owned by the Original Purchaser (or any subsequent Owner), (i) the Trustee shall pay principal of and interest on the Bond when due by wire transfer in immediately available funds to the Original Purchaser (or any subsequent Owner) in accordance with such wire transfer instructions as shall be filed by the Original Purchaser (or any subsequent Owner) with the Trustee from time to time, provided that following a request from the Trustee and receipt by Owner of the principal which is payable at maturity, the Owner shall then surrender the Bond at the Principal Office of the Trustee, (ii) payments of principal on the Bond, pursuant to Sections 2.02(c) and 4.01 shall be made by wire transfer without the requirement for presentation and surrender of the Bond by the Original Purchaser (or any subsequent Owner), and (iii) the Trustee shall not be required to give notice to the Original Purchaser (or any subsequent Owner) of the mandatory sinking fund redemption of the Bond under Section

4.01(c).
(d) The Bonds shall be subject to redemption as provided in Article IV.

SECTION 2.03Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred to a Qualified Purchaser, in whole upon the books required to be kept pursuant to the provisions of Section 2.05 by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a duly written instrument of transfer and accompanied with a Letter of Representations, in the form set forth in Exhibit C hereto, and such Letter of Representations shall be conclusive evidence that such Letter of Representations has been duly executed and the Trustee may rely upon the representations set forth therein. The cost for any services rendered or any expenses incurred by the Trustee in connection with any such transfer shall be paid by the Authority. The Trustee shall collect from the Owner or any subsequent assignee requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer. Prior to any transfer of the Bond the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045, as amended. The Trustee shall conclusively rely on the information.

SECTION 2.04Exchange of Bonds. The Bonds may be exchanged at the Office of the Trustee for a Bond in a like aggregate principal amount of Bonds of Authorized Denominations and of the same maturity. The Authority may charge a reasonable sum for each new Bond issued upon any exchange (except in the case of any exchange of temporary Bonds for definitive Bonds and except in the case of the first exchange of any definitive Bond in the form in which it is originally issued) and the Trustee shall require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be obligated to make any exchange of Bonds during the period selected by the Trustee for the selection of Bonds for redemption, or with respect to any Bonds selected for redemption.

SECTION 2.05Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the 221
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16 Bonds (the “Registration Books”), which Registration Books shall be open to inspection during regular business hours and upon reasonable prior notice by the Authority, the City, CFD No. 1, and CFD No. 2000-3 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 such Registration Books, the ownership of the Bonds as hereinbefore provided.

SECTION 2.06Form and Execution of Bonds. The Bonds shall be in substantially the form set forth in Exhibit A hereto. The Bonds shall be executed in the name and on behalf of the Authority with the facsimile signature of its Chair (or any duly authorized deputy to the Chair) attested by the manual or facsimile signature of its Secretary. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of the officers who shall have signed or attested any of the Bonds shall cease to be such officer or officers of the Authority before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who signed and attested the same had continued to be such officers of the Authority, and also any Bonds may be signed and attested on behalf of the Authority by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds any such Person shall not have been such officer of the Authority.

Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the forms set forth in Exhibit A hereto, 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 or on behalf of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

SECTION 2.07Temporary Bonds. The Bonds may be issued in temporary form exchangeable for definitive Bonds when ready for delivery. Any temporary Bonds may be printed, lithographed, or typewritten, shall be of such Authorized Denominations as may be determined by the Authority, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds it will execute and deliver definitive Bonds as promptly thereafter as practicable, and thereupon the temporary Bonds may be surrendered, for cancellation, at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds in Authorized Denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder.

SECTION 2.08Bonds Mutilated, Lost, Destroyed, or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it. If any Bond shall be lost, destroyed, or stolen, evidence of such loss, destruction, or theft may be 222
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17 submitted to the Authority and the Trustee and, if such evidence be satisfactory to them and indemnity satisfactory to them shall be given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in replacement for the Bond so lost, destroyed, or stolen (or if any such Bond shall have matured, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed, or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed, or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds secured by this Indenture.

SECTION 2.09Book-Entry. The Bonds shall be initially issued in the form of a single, fully registered Bond for each maturity (which may be typewritten). Upon initial issuance, the ownership of such Bonds shall be registered in the name of the Nominee identified below as nominee of the Depository. Except as hereinafter provided, all of the Outstanding Bonds shall be registered in the name of the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to this Section (the “Nominee”). The initial Nominee shall be Cede & Co., as Nominee of the Depository.

With respect to the Bonds registered in the name of the Nominee, neither the Authority nor the Trustee shall have any responsibility or obligation to any broker-dealers, banks, and other financial institutions from time to time for which the Depository holds Bonds as securities depository (the “Participant”) or to any person on behalf of which such a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, neither the Authority nor the Trustee shall have any responsibility or obligation (unless the Authority is at such time the Depository) with respect to (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person, other than an Owner of a Bond as shown in the Registration Books, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event the Authority redeems the Bonds in part, or (iv) the payment to any Participant or any other person, other than an Owner of a Bond as shown in the Registration Books, of any amount with respect to principal of or interest on the Bonds. The Authority and the Trustee may treat and consider the person in whose name each Bond is registered as the holder and absolute Owner of such Bond for the purpose of payment of principal and interest with respect to such Bond for the purpose of giving notices of redemption if applicable, and other matters with respect to such Bond for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Authority shall pay all principal of and interest on the Bonds only to or upon the order of the respective Owner of a Bond, as shown in the Registration Books, or his respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Authority’s obligations with respect to payment of principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner of a Bond, as shown in the Registration Books, shall receive a Bond evidencing the obligation of the Authority to make payments of principal and interest pursuant to this Indenture. Upon delivery by the Depository to the Owners of the 223
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18 Bond, and the Authority of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such nominee of the Depository.

In the event (i) the Depository determines not to continue to act as securities depository for the Bonds or (ii) the Depository shall no longer so act and gives notice to the Authority of such determination, then the Authority will discontinue the book-entry system with the Depository. If the Authority determines to replace the Depository with another qualified securities depository, the Authority shall prepare or direct the preparation of a new, single, separate, fully registered Bond, per maturity, registered in the name of such successor or substitute qualified securities depository or its nominee. If the Authority fails to identify another qualified securities depository to replace the Depository, then the Bonds shall no longer be restricted to being registered in the register in the name of the Nominee, but shall be registered in whatever name or names owners of the Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of Sections 2.03 and 2.04 and the Authority shall prepare and deliver Bonds to the Owners thereof for such purpose.

In the event of a reduction in aggregate principal amount of Bonds Outstanding or an advance refunding of part of the Bonds outstanding, the Depository, in its discretion, (a) may request the Authority to prepare and issue a new Bond or (b) may make an appropriate notation on the Bond indicating the date and amounts of such reduction in principal, but in such event the Authority records maintained by the Trustee shall be conclusive as to what amounts are Outstanding on the Bond, except in the case of final maturity, in which case the Bond must be presented to the Trustee prior to payment.

Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments of principal and interest with respect to such Bond and all notice with respect to such Bonds shall be made and given respectively, as instructed by the Depository and acceptable to the Authority.

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS AND TRANSFERS FROM THE FISCAL AGENT; ACQUISITION OF ACQUIRED OBLIGATIONS
SECTION 3.01Issuance of the Bonds. At any time after the execution of this Indenture, the Authority may execute, and upon the Written Request of the Authority, the Trustee shall authenticate and deliver, Bonds in the aggregate principal amount of $_________.

SECTION 3.02Application of Proceeds of the Bonds and Transfers from the Fiscal Agent.

The proceeds in the amount of $_____________ received on the Date of Delivery from the sale of the Bonds shall be delivered in trust with the Trustee, and the Trustee shall immediately deposit the proceeds as follows:
(1) $________________ shall be transferred to the Prior Trustee for the early redemption of the Series 2012 Bonds;
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19 (2) $_________________, representing the Reserve Requirement, shall be deposited in the Reserve Fund;
(3) $____________ shall be deposited in the Residual Account of the Revenue Fund; and
(4) $____________ shall be deposited in the Expense Fund.

In addition, the Trustee shall deposit $_________ (representing a portion of the accrued interest on the CFD No. 1 Bonds) transferred to the Trustee pursuant to the CFD No. 1 Bonds Fiscal Agent Agreement and $______ (representing a portion of the accrued interest on the CFD No. 2000-3 Bonds) transferred to the Trustee pursuant to the CFD No. 2000-3 Bonds Fiscal Agent Agreement in the Interest Account of the Revenue Fund.

SECTION 3.03Reserve Fund. (a) Establishment of Reserve Fund. (1) The Trustee shall establish and maintain a separate reserve fund to be applied solely to the payment of debt service on the Bonds, designated as the “Reserve Fund.” The Trustee shall deposit the amount specified in Section 3.02(a) in the Reserve Fund. The Trustee shall administer the funds in the Reserve Fund as provided in this Section 3.03.
(2) If on any Interest Payment Date the amount in the Interest Account shall be less than the amount required for the interest payable with respect to the Bonds on such date, the Trustee shall withdraw from the Reserve Fund and deposit into the Interest Account the amount of such deficiency.
(3) If on any Interest Payment Date the amount in the Principal Account shall be less than the amount required for the principal payable with respect to the Bonds on such date, the Trustee shall withdraw from the Reserve Fund and deposit into the Principal Account the amount of such deficiency.
(4) If on September 3rd of any year the amount of cash on deposit in the Senior Reserve Fund exceeds the Reserve Requirement, the Trustee shall on such date transfer such excess from the cash then on deposit in the Reserve Fund to the Residual Account.
(5) Not later than three (3) days following the date that the Bonds are no longer Outstanding and all Administrative Costs have been paid in full, then the Trustee shall transfer all monies in the Reserve Fund to the Residual Account. (b) Calculation of Available Amount. At or around June 1, 2031, the Trustee shall calculate the Available Amount and transmit such calculation to the City, it being understood that the City will reduce the Fiscal Year 2031-2032 assessment levy in the Assessment District in an amount equal to the Available Amount. Amounts equal in the aggregate to the Available Amount shall be withdrawn proportionately from the Reserve Fund to pay, on September 2, 2032, a portion of the debt service on the Bonds.
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20 SECTION 3.04Expense Fund. The Trustee shall establish and maintain a separate fund to be known as the “Expense Fund.” The moneys deposited into the Expense Fund shall be utilized to pay the Costs of Issuance and Administrative Costs, as set forth in a Written Request of the Authority, the City, CFD No. 1, or CFD No. 2000-3 containing the respective amounts to be paid to the designated payees. The Trustee shall pay all such Costs of Issuance and Administrative Costs upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such requisition.

On September 3 of each year, the Trustee shall transfer any funds then held in the Expense Fund to the Residual Account.

SECTION 3.05Program Fund.

The Trustee shall establish and maintain a separate fund to be known as the “Program Fund.” The Trustee shall receive the Acquired Obligations from the Prior Trustee and hold all of the Acquired Obligations therein for the benefit of the Authority and the Owners..

SECTION 3.06Closing Documents. Prior to or concurrent with the acquisition of either of the Acquired Obligations with amounts on deposit in the Program Fund, there shall have been filed with the Authority and the Trustee as to such Acquired Obligation all of the following documents, in each case in form and substance satisfactory to the Authority. (a) Original fully executed copies of all agreements and other instruments pursuant to which such Acquired Obligation is authorized, sold, and issued or incurred, including, without limitation, the applicable fiscal agent agreement; (b) The fully executed Acquired Obligation or other instrument evidencing such Acquired Obligation registered in the name of the Authority pursuant to this Indenture;
(c) A separate Written Certificate of the City, CFD No. 1, and CFD No. 2000- 3, as applicable, stating that all of the documents referred to in (a) and (b) above have been duly executed by the City, CFD No. 1, and CFD No. 2000-3, as applicable, and that the Persons executing such documents on their behalf have been duly authorized to do so; (d) Certified copies of all resolutions of the governing body of the City (on behalf of itself and as the legislative body of CFD No. 1 or CFD No. 2000-3, as applicable) approving and authorizing the issuance of the Acquired Obligation and the documents referred to in (a) and (b) above;
(e) An opinion of Bond Counsel which: (a) states that the Acquired Obligation is a valid and binding obligation of the City, CFD No. 1, or CFD No. 2000-3, as applicable, enforceable in accordance with its terms, subject to customary bankruptcy, equitable remedy and other exceptions, and (b) contains such other opinions and addresses such other matters as are commonly provided by Bond Counsel for tax-exempt bonds similar to the type of the Acquired Obligation and as may reasonably be required by the Authority or the Original Purchaser; and
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21 (f) Such other opinions, documents, and other information as may be reasonably required by the Authority, Bond Counsel, or counsel to the Original Purchaser.

SECTION 3.07Validity of Bonds. The validity of the authorization and issuance of the Bonds is not dependent on and shall not be affected in any way by any proceedings taken by the Authority or the Trustee with respect to or in connection with the acquisition of the Acquired Obligations. The recital contained in the Bonds that the same are issued pursuant to the Constitution and laws of the State of California shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance.

ARTICLE IV

REDEMPTION OF BONDS
SECTION 4.01Redemption.
(a) Optional Redemption. The Bonds are not subject to optional redemption prior to their respective stated maturities.
(b) Extraordinary Redemption. The Bonds or any portion of a Bond in any Authorized Denomination shall be subject to extraordinary redemption prior to maturity, in whole on any date, or in part on any Interest Payment Date, pro rata among maturities as directed by the Authority in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate, from funds transferred to the Trustee by the Fiscal Agent from the AD Prepayment Account, the CFD No. 1 Prepayment Account, or the CFD No. 2000-3 Prepayment Account, as applicable, at the redemption price set forth below (expressed as a percentage of the principal amount of the Bonds to be redeemed), plus accrued interest to the date of redemption:

Redemption Dates Redemption Price
March 2, 2023, through March 2, 2024 103%
September 2, 2024, and March 2, 2025 102
September 2, 2025, and March 2, 2026 101
September 2, 2026 thereafter 100
(c) Mandatory Sinking Fund Redemption. The Bonds maturing on September 2, __________, are subject to mandatory redemption in part on September 2 in the following years in the following amounts at a redemption price equal to the principal amount thereof together with accrued interest to the date fixed for redemption, without premium:

Mandatory Redemption Date
(September 2) Principal Amount
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22 In the event of any optional or extraordinary redemption of Bonds pursuant to Subsection (b) above, the schedule of mandatory sinking fund installments in Subsection (c) above shall be reduced in equal percentages, as nearly as practicable, provided that the reductions shall be made in multiples of $5,000. The Authority shall provide the Trustee with the amended sinking fund payments schedule calculated as set forth above in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate.
(d) Purchase in Lieu of Redemption. In lieu of depositing cash with the Trustee as and for payment of the redemption price of any Bonds pursuant to this Section 4.01, and after complying with the Cash Flow Certificate requirements set forth in Section 4.02 below, amounts on deposit in the Principal Account, the Interest Account, and the Redemption Account may be used and withdrawn by the Trustee at any time prior to the selection of Bonds for such redemption having taken place with respect to such amounts, upon a Written Order of the Authority for the purchase of such Bonds at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as the Authority may, in its discretion, determine, but not in excess of the redemption price thereof plus accrued interest to the purchase date. All Bonds so purchased shall be delivered to the Trustee for cancellation.

SECTION 4.02Selection of Bonds for Redemption. Subject to Section 4.01, whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Trustee shall select the amounts and maturities of Bonds for redemption in accordance with the Written Order of the Authority to be provided to the Trustee not less than 45 days prior to the redemption date.

Each Written Order of the Authority provided in accordance with this Section 4.02 shall be accompanied by a Cash Flow Certificate.

Whenever less than all the outstanding Bonds of any one maturity are to be redeemed on any one date, the Trustee will select the particular Bonds to be redeemed randomly by lot and in selecting the Bonds for redemption the Trustee will treat each Bond of a denomination of more than five thousand dollars ($5,000) as representing that number of Bonds of five thousand dollars ($5,000) denomination which is obtained by dividing the principal amount of such Bond by five thousand dollars ($5,000), and the portion of any Bond of a denomination of more than five thousand dollars ($5,000) to be redeemed shall be redeemed in an Authorized Denomination.

The Trustee shall promptly notify the Authority in writing of the numbers of the Bonds so selected for redemption in whole or in part on such date.

SECTION 4.03Notice of Redemption.
(a) Contents of Notice. Notice of redemption shall be mailed by the Trustee promptly upon receipt of moneys to be applied to the redemption of Bonds, by first class mail, postage prepaid, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Registration Books, such notice to be mailed not more than sixty (60) nor less than thirty (30) calendar days prior to the redemption date. Each notice of redemption shall state the redemption date, the place or places of redemption, and the CUSIP numbers and the Bond 228
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23 numbers of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part only, the respective Authorized Denominations of the principal amount thereof to be redeemed. Each such notice shall also state that on said date there will become due and payable on each of said Bonds the principal amount relating thereto or of said specified portion of the principal thereof in the case of a Bond to be redeemed in part only, plus premium and accrued interest, if any, and through which date such interest will accrue, and that from and after such date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the Office of the Trustee. Neither the failure of any Bond Owner to receive any notice so mailed nor any defect therein shall affect the sufficiency of the proceedings for redemption of any Bonds or the cessation of accrual of interest thereon. A certificate of the Trustee that notice of redemption has been given as provided for in this Section 4.03(a) shall be conclusive as against all parties, and it shall not be open to any Owner to show that he or she failed to receive notice of such redemption.
(b) Notice to Others. In addition to the notice given pursuant to Subsection (a) of this Section, the notice of redemption described in Subsection (a) shall be given on the same day by either first class mail, postage prepaid, or facsimile transmission to the Securities Depositories and to at least one of the Information Services. Neither the failure to give the notice described in this Subsection nor any defect therein shall in any manner affect the redemption of the Bonds; provided further, that failure to provide such notice to the Securities Depositories or the Information Services shall not affect the validity of proceedings for the redemption of any Bonds.
(c) Given on Behalf of Authority. Notice of redemption of Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority.

SECTION 4.04Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of an Authorized Denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered.

SECTION 4.05Effect of Notice of Redemption. Notice having been given as aforesaid, and moneys for the redemption (including the interest to the applicable date of redemption), having been set aside in the Redemption Account or any of the accounts therein, the Bonds shall become due and payable on said date of redemption, and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the redemption price thereof, together with interest accrued and unpaid to said date of redemption and premium, if any.

If, on said date of redemption, moneys for the redemption of all the Bonds to be redeemed, together with interest to said date of redemption and premium, if any, shall be held by the Trustee so as to be available therefor on such date of redemption, and, if notice of redemption thereof shall have been given as aforesaid, then, from and after said date of redemption, interest represented by said Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed.
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24 When any Bonds (or portions thereof) have been duly called for redemption prior to maturity pursuant to the provisions of this Article IV or with respect to which irrevocable instructions to call such Bonds for redemption prior to maturity at the earliest redemption date have been given to the Trustee pursuant to the provisions of this Article IV and sufficient moneys shall be held irrevocably in trust for the payment of the redemption price of such Bonds (or portions thereof) as provided for in this Indenture, then such Bonds (or portions thereof) shall no longer be deemed Outstanding and shall be surrendered to the Trustee.

All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions of this Article IV shall be canceled upon surrender thereof and delivered to the Trustee.

ARTICLE V
REVENUES; FUNDS AND ACCOUNTS OF PRINCIPAL AND INTEREST
SECTION 5.01Pledge and Assignment; Revenue Fund.
(a) Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, the Acquired Obligations and all of the Revenues and any other amounts (including proceeds of the sale of the Bonds) held in any fund or account established pursuant to this Indenture (except the Rebate Fund and the Expense Fund) are hereby pledged by the Authority, to secure the payment of the principal of and interest on the Bonds in accordance with their terms and the provisions of this Indenture.

Said pledge shall constitute a first lien on and security interest in such assets, and shall attach, be perfected and be valid and binding from and after delivery of the Bonds by the Trustee, upon the physical delivery thereof.
(b) The Authority hereby transfers in trust and assigns to the Trustee, for the benefit of the Owners from time to time of the Bonds, all of the Revenues and all of the right, title, and interest of the Authority in the Acquired Obligations, when and as issued or incurred. 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 and shall forthwith be paid by the Authority to the Trustee for deposit to the Revenue Fund. The Trustee also shall be entitled to and may 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 City under and with respect to its Acquired Obligations.
(c) Upon receipt, all Revenues shall be promptly deposited by the Trustee thereof in a special fund designated as the “Revenue Fund” within which there shall be an Interest Account, Principal Account, Redemption Account, and a Residual Account, each of which the Trustee shall establish, maintain and hold in trust. All Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in this Indenture.

SECTION 5.02Allocation of Revenues. As Revenues (other than Extraordinary Redemption Proceeds, which shall be deposited in the Redemption Account pursuant to Section

5.05) are received in each calendar year commencing in 2022, the Trustee shall transfer from the 230
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25 Revenue Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain in trust separate and distinct from the other funds and accounts established hereunder) the following amounts on the following dates and 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 a 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:
(a) On March 2 and September 2 of each year, the Trustee shall deposit in the Interest Account an amount which, together with the amounts then on deposit therein, is required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest coming due and payable on such date on the Bonds.
(b) On September 2 of each year, the Trustee shall deposit in the Principal Account an amount which, together with the amounts then on deposit therein, is required to cause the aggregate amount on deposit in the Principal Account to equal the amount of principal coming due and payable, on such date on the Outstanding Bonds. (c) On March 2 and September 2 of each year, the Trustee shall deposit in the Reserve Fund an amount which, together with the amounts then on deposit therein, is required to cause the aggregate amount on deposit in the Reserve Fund to equal the Reserve Requirement. (d) On the next Business Day following each March 2 and September 2 deposit made pursuant to (a) through (c) above, the Trustee shall deposit in the Expense Fund such amount as may be requested in a Written Request of an Authorized Representative of the Authority for the payment of Administrative Costs.
(e) On the next Business Day following each March 2 and September 2 deposit made pursuant to (a) through (d) above, the Trustee shall deposit in the Rebate Fund all amounts which the Authority directs to be deposited therein pursuant to Section 6.08. (f) On the next Business Day following each March 2 and September 2 deposit made pursuant to (a) through (e) above, the Trustee shall deposit in the Residual Account of the Revenue Fund the amount then on deposit in the Revenue Fund.

SECTION 5.03Application of Interest Account.

Subject to the provisions of this Indenture, all amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as the same shall become due and payable or, at the Written Request of the Authority filed with the Trustee, to apply to the payment of accrued interest on any Bonds purchased by the Authority in lieu of redemption pursuant to Section 4.01(c). Any amounts on deposit in the Interest Account or any subaccount thereof on any Interest Payment Date and not required to pay interest then due and payable on the Bonds shall be retained in such Interest Account. 231
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26 SECTION 5.04Application of Principal Accounts.

Subject to the provisions of this Indenture, all amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal of the Bonds upon the stated maturity thereof.

SECTION 5.05Application of Redemption Account. All Extraordinary Redemption Proceeds shall be deposited into the Redemption Account. Subject to the provisions of this Indenture, all amounts deposited in the Redemption Account shall be used and withdrawn by the Trustee solely for the purpose of redeeming Bonds in the manner and upon the terms and conditions specified in Section 4.01(b), at the next succeeding date of redemption for which notice has been given and at the principal amount thereof. Additionally, any amounts for the redemption of Bonds pursuant to Section 4.01(a) may be deposited into the Redemption Account in a manner instructed by the Authority in writing to the Trustee. At any time prior to selection of Bonds for redemption, the Trustee may apply amounts on deposit in the Redemption Account to the purchase of Bonds pursuant to the provisions of Section 4.01(d).

SECTION 5.06Application of Residual Account.
(a) Amounts in the Residual Account in excess of $__________ (which amount is equal to approximately 10% of the average annual debt service on the Bonds as of the Closing Date) may, at any time and at the written direction of the Authority, be (i) transferred to the Expense Fund if the amount therein is insufficient to pay Costs of Issuance or Administrative Costs, (ii) transferred to the Rebate Fund, or (iii) transferred to the Redemption Account. (b) Three (3) Business Days prior to each Interest Payment Date, the Trustee shall transfer all monies deposited in the Residual Account to the Revenue Fund to be applied in accordance with Section 5.02.
(c) Promptly following the date that the Bonds are no longer Outstanding, all funds on deposit in the Residual Account, including transfers from the Reserve Fund pursuant to Section 3.03 shall be remitted (i) in the amount of the CFD No. 1 Residual Amount to the City for refund to the property owners within CFD No. 1 as determined by an Authorized Officer of the City, (ii) in the amount of the CFD No. 2000-3 Residual Amount to the City for refund to the property owners within CFD No. 2000-3 as determined by an Authorized Officer of the City, and (iii) in the amount of the balance of the Residual Account to the City for refund to the property owners within the Assessment District in the manner set forth in Section 8885 of the California Streets and Highways Code.
(d) Amounts in the Residual Account shall be invested in Permitted Investments the interest on which is excludable from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum’ tax of individuals and corporations under the Code) or in Permitted Investments at a Yield not in excess of the Yield on the Bonds, unless, in the opinion of Bond Counsel, investment at a higher Yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds then Outstanding. 232
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27 SECTION 5.07Investment of Moneys. Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to this Indenture shall be invested by the Trustee solely in Permitted Investments, as directed in writing by the Authority two (2) Business Days prior to the making of such investment. Permitted Investments may be purchased at such prices as the Authority shall determine. All Permitted Investments shall be acquired subject to any restrictive instructions given to the Trustee pursuant to Section 6.07 and such additional limitations or requirements consistent with the foregoing as may be established by the Written Request of the Authority. Moneys in all funds and accounts shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Indenture. Absent timely written direction from the Authority, the Trustee shall invest any funds held by it in Permitted Investments described in clause (15) of the definition thereof. Investment of cash on deposit in the Reserve Fund shall have an average weighted term to maturity not greater than five (5) years.

Unless otherwise provided in this Indenture, all interest, profits, and other income received from the investment of moneys in any fund or account established pursuant to this Indenture shall be deposited in the Revenue Fund, except that (a) earnings on the investment of amounts in the Residual Account of the Revenue Fund, the Reserve Fund (subject to Section

3.03(a) hereof) shall be deposited into the Residual Account of the Revenue Fund and (b) earnings on the investment of amounts in the Rebate Fund shall be retained therein.

Notwithstanding anything to the contrary contained in this paragraph, an amount of interest received with respect to any Permitted Investments equal to the amount of accrued interest, if any, paid as part of the purchase price of such Permitted Investment shall be credited to the fund from which such accrued interest was paid.

Permitted Investments acquired as an investment of moneys in any fund established under this Indenture shall be credited to such fund. For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued at the lesser of cost or par value plus, prior to the first payment of interest following purchase, the amount of accrued interest, if any, paid as a part of the purchase price.

The Trustee may act as principal or agent in the making or disposing of any investment.

Upon the Written Request of the Authority, the Trustee shall sell or present for redemption, any Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal, or disbursement from the fund to which such Permitted Investments is credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section 5.07.

The Authority acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity 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 will furnish the Authority periodic cash transactions statements which include details for all investment transactions made by the Trustee hereunder.
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28 ARTICLE VI

PARTICULAR COVENANTS
SECTION 6.01Punctual Payment. The Authority shall punctually pay or cause to be paid the principal, premium, if any, and interest to become due in respect of all the Bonds, in strict conformity with the terms of the 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 and received by the Authority or the Trustee.

SECTION 6.02Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchaser of such Bonds or by any other arrangement.

Nothing in this Section shall be deemed to limit the right of the Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of the Bonds.

SECTION 6.03Against 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 Bonds are Outstanding, except the pledge and assignment created by this Indenture or any Supplemental 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 6.04Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues, the Acquired Obligations, and other assets purported to be pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid, and binding special obligations of the Authority in accordance with their terms, and the Authority shall at all times, to the extent permitted by law, defend, preserve, and protect said pledge and assignment of Revenues and other assets and all the rights of the Bond Owners under this Indenture against all claims and demands of all Persons whomsoever.

SECTION 6.05Accounting 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 generally accepted accounting principles, in which complete and accurate entries shall be made of all transactions relating to the Bond proceeds, the Revenues, the Acquired Obligations, and all funds and accounts established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Authority, the City, CFD No. 1, and CFD No. 2000-3 during regular business hours and upon reasonable prior notice and under reasonable circumstances as agreed to by the Trustee.

SECTION 6.06Waiver of Laws. The Authority shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in 234
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29 this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law.

SECTION 6.07[RESERVED].

SECTION 6.08Rebate Fund.
(a) Establishment of Rebate Fund. With respect to the Bonds the Trustee shall establish a special fund designated as the “Rebate Fund” (the “Rebate Fund”) and shall comply with the requirements of Subsection (b) below. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, for payment to the United States Treasury. All amounts on deposit in the Rebate Fund shall be governed by this Section 6.08, and the Tax Certificate, unless the Authority obtains an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds will not be adversely affected for federal income tax purposes if such requirements are not satisfied.
(b) Rebate Fund. The following requirements shall be satisfied with respect to a Rebate Fund:
(i) Annual Computation. Within 55 calendar days of the end of each fifth Bond Year with respect to the Bonds and of the final maturity or redemption of the Bonds, the Authority shall calculate or cause to be calculated the amount of rebatable arbitrage in accordance with Section 148(f)(2) of the Code and Section 1.148-2 of the Rebate Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and (C) of the Code)) and for this purpose treating the last day of the applicable Bond Year as a computation date within the meaning of Section 1.148-8(b) of the Rebate Regulations (the “Rebatable Arbitrage”). The Authority shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.
(ii) Rebatable Amount Transfer. Within 55 calendar days of the end of each applicable Bond Year with respect to the Bonds, upon the Authority’s written direction, an amount shall be deposited to the Rebate Fund by the Trustee from any legally available funds, if and to the extent required, so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with (i) of this Subsection (b). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the applicable Rebate Fund exceeds the amount required to be on deposit therein, upon written instructions from the Authority, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Revenue Fund.
(iii) Payment to the Treasury. The Trustee shall, pursuant to the written direction of the Authority, pay to the United States Treasury, out of amounts in each Rebate Fund,
(X) Not later than sixty (60) calendar days after the end of (A) the fifth Bond Year with respect to the Bonds, and (B) each applicable fifth Bond Year 235
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30 thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and
(Y) Not later than sixty (60) calendar days after the payment of all the Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code.

In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the Authority shall calculate or cause to be calculated the amount of such deficiency and deposit with the Trustee for deposit in the Rebate Fund an amount received from any legally available source, equal to such deficiency in the particular Rebate Fund prior to the time such payment is due. Each payment required to be made pursuant to this Subsection (b) shall be made to the Internal Revenue Service on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, which shall be prepared by the Authority and provided to the Trustee or shall be made in such other manner as the Authority shall direct the Trustee, as provided under the Code.
(c) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the Bonds and the payments described in Subsection (b), may, upon the receipt of written directions from the Authority, be transferred by the Trustee to the Authority and utilized in any manner by the Authority.
(d) Survival of Defeasance. Notwithstanding anything in this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance of the Bonds.

SECTION 6.09Federal Tax Covenants. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest with respect to the Bonds will not be adversely affected for federal income tax purposes, the Authority covenants to 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:
(1) Private Activity. The Authority will not take or omit to take any action, and will not make any use of the proceeds of the Bonds or of any other monies or property which would cause the Bonds to be “private activity bonds” within the meaning of Section 141 of the Code;
(2) Arbitrage. The Authority will not make any use of the proceeds of the Bonds or of any other amounts or property, regardless of the source, and will not take or omit to take any action which would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code;
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31 (3) Federal Guarantee. The Authority will not make any use of the proceeds of the Bonds or take or omit to take any action that would cause the Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (4) Information Reporting. The Authority will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code; and
(5) Miscellaneous. The Authority will not take any action inconsistent with its expectations stated in the Tax Certificate executed on the Closing Date by the Authority in connection with the Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein.

SECTION 6.10Collection of Revenues Under Acquired Obligations. The Trustee shall collect all Revenues payable with respect to the Acquired Obligations promptly as such Revenues become due and payable, and shall enforce and cause to be enforced all rights of the Trustee under and with respect to the Acquired Obligations.

SECTION 6.11Disposition of Acquired Obligations. The Authority shall not sell or otherwise dispose of the Acquired Obligations, or any interest therein, unless either (a) there shall have occurred and be continuing an Event of Default hereunder or (b) upon the written direction of the Authority the proceeds derived by the Trustee from the sale or other disposition of the Acquired Obligations are sufficient to enable the Trustee to optionally redeem or discharge pursuant to Article X all Bonds then Outstanding.

SECTION 6.12Further Assurances. The Authority will make, execute, and deliver any and all such further indentures, 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 Bonds of the rights and benefits provided in this Indenture.

SECTION 6.13Annual Reporting Requirements to Original Purchaser. Unless otherwise posted by the Authority at no cost or expense to the Owners either on EMMA, or by some other readily publicly available means, the Authority shall provide to the Original Purchaser the information listed in Exhibit D. The Authority shall further provide to the Original Purchaser:
(a) within three (3) Business Days after the Authority obtains knowledge thereof, notice by telephone, promptly confirmed in writing, of any event that constitutes an Event of Default under this Indenture, together with a statement by an Authorized Officer of the Authority of the steps being taken by the Authority to cure such Event of Default; and (db within ten (10) days after receipt of request therefor by the Original Purchaser, such additional information as the Original Purchaser may reasonably request.
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32 ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
SECTION 7.01Events of Default. The following events shall be Events of Default:
(a) if default shall be made by the Authority in the due and punctual payment of the principal of any Bonds when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption or otherwise; (b) if default shall be made by the Authority in the due and punctual payment of any installment of interest on any Bonds when and as the same shall become due and payable; (c) if default shall be made by the Authority in the observance of any of the other covenants, agreements, or conditions on its part in this Indenture or in the Bonds contained, if such default shall have continued for a period of thirty (30) calendar 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 the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the affected series of Bonds at the time Outstanding; provided, however, if the failure stated in the notice can be corrected, but not within the applicable period, the Trustee and such Owners shall, subject to the provisions of Section 12.09, not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the Authority within the applicable period and diligently pursued until the default is corrected; and (d) the occurrence of an Event of Bankruptcy with respect to the Authority.

SECTION 7.02Remedies Upon Event of Default. If any Event of Default shall have occurred and be continuing, the Trustee or the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding may, upon notice in writing to the Authority, exercise any and all remedies available pursuant to law or granted with respect to such Event of Default.

SECTION 7.03Other Remedies of Bond Owners. Subject to the provisions of Section

7.07, any Bond Owner shall have the right, for the equal benefit and protection of all Bond Owners similarly situated:
(a) by mandamus, suit, action, or proceeding, to compel the Authority and its members, officers, agents, or employees to perform each and every term, provision, and covenant contained in this Indenture and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the Authority and the fulfillment of all duties imposed upon it by the Bond Law;
(b) by suit, action, or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the Bond Owners’ rights; or (c) upon the happening of any Event of Default, by suit, action, or proceeding in any court of competent jurisdiction, to require the Authority and its members and employees to account as if it and they were the trustees of an express trust. 238
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33 SECTION 7.04Application of Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Revenues and any other funds then held or thereafter received by the Authority shall be immediately upon receipt by the Authority be transferred by the Authority to the Trustee and shall be deposited by the Trustee in the Revenue Fund, and all amounts held in the Revenue Fund by the Trustee, and all Revenues and any other funds then held or thereafter received by the Authority or the Trustee under any of the provisions of this Indenture shall be applied by the Trustee as follows and in the following order:
(a) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the Bonds and payment of reasonable charges and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture; (b) To the payment of the principal of and interest then due with respect to the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) subject to the provisions of this Indenture, as follows:

First: To the payment to the Persons entitled thereto of all installments of interest then due on the Bonds in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Persons entitled thereto, without any discrimination or preference; and Second: To the payment to the Persons entitled thereto of the unpaid principal of any Bonds which shall have become due, whether at maturity or by call for redemption, with interest on the overdue principal at the rate borne by the respective Bonds on the date of maturity or redemption, and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on the Bonds on such date to the Persons entitled thereto, without any discrimination or preference.

Immediately upon the payment of any delinquent amounts that caused the occurrence of an Event of Default triggering the application of the provisions of this Section 7.04 to the Revenues and any other applicable funds so as to remedy such Event of Default, the provisions of Section 5.02 shall apply to the allocation of Revenues.

SECTION 7.05Trustee to Represent Bond Owners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to the Owners under the provisions of the Bonds, this Indenture, the Bond Law, and applicable provisions of any other law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Bond Owners, the Trustee in its discretion may, and upon the written request of the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the affected series of the Bonds then Outstanding, and upon being indemnified to its 239
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34 satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee and such Owners under the Bonds, this Indenture, the Bond Law, or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Revenues and other assets pledged under this Indenture, pending such proceedings. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action, or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of the Owners of such Bonds, subject to the provisions of this Indenture.

SECTION 7.06Bond Owners’ Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the affected series of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bond Owners not parties to such direction.

SECTION 7.07Limitation on Bond Owners’ Right to Sue. No Owner of any Bonds shall have the right to institute any suit, action, or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Agreement, the Bond Law, or any other applicable law with respect to such Bonds, unless (a) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default, (b) the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the affected series of the Bonds then Outstanding, shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action, or proceeding in its own name, and (c) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) calendar 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 Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to affect, disturb, or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under the Bonds, this Indenture, the Bond Law, or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had, and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture.
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35 SECTION 7.08Absolute Obligation of Authority. Nothing in Section 7.07 or in any other provision of this Indenture or in the Bonds contained shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Owners of the Bonds at their respective dates of maturity, or upon call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor and received by the Authority or the Trustee, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.

SECTION 7.09Termination of Proceeding. In case any proceedings taken by the Trustee or any one or more Bond Owners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Bond Owners, then in every such case the Authority, the Trustee, and the Bond Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers, and duties of the Authority, the Trustee, and the Bond Owners shall continue as though no such proceedings had been taken.

SECTION 7.10Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.

SECTION 7.11No Waiver of Default. No delay or omission of the Trustee or of any Owner of the Bonds to exercise any right or power arising upon the occurrence of 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 given by this indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient.

ARTICLE VIII

THE TRUSTEE
SECTION 8.01Duties and Liabilities of Trustee.
(a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of Default which has not been cured or waived, exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. (b) The Authority may remove the Trustee at any time unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed the Owners of not less than 241
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36 a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or if at any time the Trustee shall cease to be eligible in accordance with Subsection (e) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation, or liquidation, in each case by giving written notice of such removal to the Trustee and thereupon shall appoint a successor Trustee by an instrument in writing.
(c) The Trustee may at any time resign by giving written notice of such resignation by first-class mail, postage prepaid, to the Authority, and to the Bond Owners notice of such resignation at the respective addresses shown on the Registration Books. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing. The Trustee shall not be relieved of its duties until such successor Trustee has accepted appointment.
(d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within 45 calendar days following giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bond Owner (on behalf of himself and all other Bond Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Authority and to its predecessor Trustee a written acceptance thereof, 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 after payment by the Authority of all unpaid fees and expenses of the predecessor Trustee, such successor Trustee, without any further act, deed, or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties, and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title, and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign, and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Authority shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties, and obligations. Upon acceptance of appointment by a successor Trustee as provided in this Subsection, the Authority shall mail or cause the successor Trustee to mail, by first class mail postage prepaid, a notice of the succession of such Trustee to the trusts hereunder to each rating agency which then maintains a rating on the Bonds and to the Bond Owners at the addresses shown on the Registration Books. If the Authority fails to mail such notice within fifteen (15) calendar days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Authority. 242
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37 (e) Any Trustee appointed under the provisions of this Section 8.01 in succession to the Trustee shall be a trust company or bank having the powers of a trust company, having a combined capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state agency. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining agency above referred to, then for the purpose of this Subsection the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section. (f) No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. (g) The Trustee shall not be responsible for the sufficiency, timeliness, or enforceability of the Revenues or the reviewing of any report or certificate required to be provided hereunder.
(h) The Trustee shall not be accountable for the use or application by the Authority, the City, CFD No. 1, CFD No. 2000-3, or any other party of any funds which the Trustee has released under this Indenture.
(i) The Trustee may employ attorneys, agents, or receivers in the performance of any of its duties hereunder and shall not be answerable for the misconduct of any such attorney, agent, or receiver selected by it with reasonable care.

SECTION 8.02Merger or Consolidation. Any bank or trust company into which the Trustee may be merged or converted or with which it may be consolidated or any bank or trust company resulting from any merger, conversion, or consolidation to which it shall be a party or any bank or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such bank or trust company shall be eligible under Subsection (c) of Section 8.01 shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

SECTION 8.03Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of this Indenture or of the Bonds or shall incur any responsibility in respect thereof, other than as expressly stated herein in connection with the respective duties or obligations herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its Bond of authentication on the Bonds. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of any Bonds, or in respect of the security afforded by this Indenture and the Trustee shall incur no responsibility in respect thereof. The Trustee shall be under no responsibility or duty with respect to: (i) the issuance of the Bonds for value; (ii) the application of the proceeds thereof except to the extent that such proceeds are received by it in its 243
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38 capacity as Trustee; or (iii) the application of any moneys paid to the Authority or others in accordance with this Indenture except as the application of any moneys paid to it in its capacity as Trustee. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as 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 Bond Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding.
(b) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (d) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be deemed to have knowledge of any default or Event of Default hereunder unless and until it shall have actual knowledge thereof, or shall have received written notice thereof, at its Office. Except as otherwise provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of an Event of Default thereunder. The Trustee shall not be responsible for the validity or effectiveness of any collateral given to or held by it. (f) The Trustee assumes no responsibility or liability for any information, statement, or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. All indemnification and releases from liability granted herein to the Trustee shall extend to the directors, officers and employees of the Trustee.

SECTION 8.04Right to Rely on Documents. The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, bond, report, opinion, bonds, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may be Bond Counsel or other counsel of or to the Authority, 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; provided, however, the Trustee shall in no event delay any payment with respect to the Bonds in anticipation of any such opinion. 244
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39 The Trustee shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto is satisfactorily established, if disputed.

Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee 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 be deemed to be conclusively proved and established by a Written Certificate of the Authority, and such Bond shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this indenture in reliance upon such Bond, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.

SECTION 8.05Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject during business hours and upon reasonable prior notice to the inspection of the Authority, the City, and their agents and representatives duly authorized in writing.

SECTION 8.06Compensation and Indemnification. The Authority shall pay to the Trustee from time to time all reasonable compensation for all services rendered under this Indenture, and also all reasonable expenses, charges, legal and consulting fees, and other disbursements and those of their attorneys, agents, and employees, incurred in and about the performance of their powers and duties under this Indenture. The Authority shall reimburse the Trustee for advances of the Trustee’s funds hereunder with interest at the maximum rate allowed by law. Subject to Section 7.04 hereof, the Trustee shall not have any lien for the payment of such compensation on any funds or accounts established hereunder and not on any of the Revenues. The Authority further agrees to indemnify and save the Trustee harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder and under any related documents, including the enforcement of any remedies and the defense of any suit, and which are not due to its negligence or its willful misconduct. The duty of the Authority to compensate and indemnify the Trustee hereunder shall survive the termination and discharge of this Indenture and the resignation or removal of the Trustee. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.

ARTICLE IX

MODIFICATION OR AMENDMENT OF INDENTURE
SECTION 9.01Amendments Permitted.
(a) This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority and the Trustee may enter into with the written consent of the Owners of a majority in aggregate principal amount of all Bonds of the affected series then Outstanding, which shall have been filed with the Trustee. No such modification or amendment shall (i) extend the fixed maturity of any Bonds, or reduce the 245
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40 amount of principal thereof, or extend the time of payment, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or (iii) permit the creation of any lien on the Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture or deprive the Owners of the Bonds of the lien created by this Indenture on such Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary for the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof Promptly after the execution by the Authority and the Trustee of any Supplemental Indenture pursuant to this Subsection (a), the Trustee shall mail a notice (the form of which shall be furnished to the Trustee by the Authority), by first class mail postage prepaid, setting forth in general terms the substance of such Supplemental Indenture, to the Owners of the Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture.
(b) This Indenture and the rights and obligations of the Authority, the Trustee, and the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority and the Trustee may enter into without the consent of any Bond Owners for any one or more of the following purposes:
(1) to add to the covenants and agreements of the Authority contained in this Indenture other covenants and agreements thereafter to be observed, or to pledge or assign additional security for the Bonds (or any portion thereof); (2) to make such provisions for the purpose of curing any ambiguity, inconsistency, or omission, or of curing or correcting any defective provision contained in this Indenture, or as to any other provisions of this Indenture as the Authority may deem necessary or desirable, in any case which do not adversely affect the security for the Bonds granted hereunder;
(3) to modify, amend, or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions, and provisions as may be permitted by said act or similar federal statute; and (4) to modify, amend, or supplement this Indenture in such manner as to cause interest on the Bonds to be excludable from gross income for purposes of federal income taxation by the United States of America.

SECTION 9.02Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties, and obligations under this Indenture of the Authority, the Trustee, and all Owners of Bonds Outstanding shall thereafter be determined, exercised, and enforced hereunder subject in all respects to such modification and 246
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41 amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

SECTION 9.03Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Authority so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand on the Owner of any Bond or Bonds Outstanding at the time of such execution and presentation of his Bond or Bonds for that purpose at the Office of the Trustee a suitable notation shall be made on such Bond or Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand of the Owners of any Bond or Bonds then Outstanding shall be exchanged at the Office of the Trustee, without cost to any Bond Owner, for Bond or Bonds then Outstanding, upon surrender for cancellation of such Bond or Bonds, in equal aggregate principal amount of the same interest rate and maturity.

ARTICLE X

DEFEASANCE
SECTION 10.01Discharge of Indenture. The Bonds may be paid by the Authority in any of the following ways, provided that the Authority also pays or causes to be paid any other sums payable hereunder by the Authority:
(a) by paying or causing to be paid the principal of and redemption premium, if any, and interest on the Bonds, as and when the same become due and payable; (b) by depositing with the Trustee, in trust (pursuant to an escrow agreement), at or before maturity, money or securities in the necessary amount (as provided in Section

10.03) to pay or redeem all Bonds then Outstanding; or
(c) by delivering to the Trustee, for cancellation by it, all of the Bonds then Outstanding.

If the Authority shall also pay or cause to be paid all other sums payable hereunder by the Authority including without limitation any amounts due and owing the Trustee hereunder, then and in that case, at the election of the Authority (evidenced by a Written Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to discharge all such indebtedness and this Indenture), and notwithstanding that any Bonds shall not have been surrendered for payment, this Indenture and the pledge of Revenues and other assets made under this Indenture and all covenants, agreements, and other obligations of the Authority under this Indenture shall cease, terminate, become void, and be completely discharged and satisfied. In such event, upon the Written Request of the Authority, and upon receipt of a Written Certificate of Authorized Representatives of the Authority and an opinion of Bond Counsel acceptable to the Trustee, each to the effect that all conditions precedent herein provided for relating to the 247
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42 discharge and satisfaction of the obligations of the Authority have been satisfied, the Trustee shall cause an accounting for such period or periods as may be requested by the Authority to be prepared and filed with the Authority and shall execute and deliver to the Authority all such instruments as shall be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign, or deliver all moneys or securities or other property held by it pursuant to this Indenture, which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption, to the Authority.

SECTION 10.02Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem any Outstanding Bonds (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to maturity, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the Authority in respect of such Bonds shall cease, terminate, and be completely discharged, and the Owners thereof shall thereafter be entitled only to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 10.04.

The Authority may at any time surrender to the Trustee for cancellation by it any Bonds previously issued and delivered, which the Authority may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.

SECTION 10.03Deposit of Money or Securities with Trustee. Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any Bonds, the money or securities so to be deposited or held may include money or securities held by the Trustee in the funds and accounts established pursuant to this Indenture and shall be:
(a) Lawful money of the United States of America, in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount of such Bonds plus any premium and all unpaid interest thereon to the redemption date; or (b) Non-callable Federal Securities described in clause (a) of the definition thereof, the principal of, premium, if any, and interest on which when due as determined by the Independent Certified Public Accountant will provide money sufficient to pay the principal of and all unpaid interest to maturity, or to the redemption date, as the case may be, on the Bonds to be paid or redeemed, as such principal and interest become due, provided that in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice; provided, in each case, that the Trustee shall have been irrevocably instructed (by the terms of this 248
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43 Indenture or by Written Request of the Authority) to apply such funds to the payment of such principal and interest with respect to such Bonds.

SECTION 10.04Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal of, or interest on, any Bonds and remaining unclaimed for two (2) years after the principal of all of the Bonds has become due and payable (whether at maturity or upon call for redemption or otherwise as provided in this Indenture), if such moneys were so held at such date, or one (1) year after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall be repaid to the Authority free from the trusts created by this Indenture and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee shall (at the written request and cost of the Authority) first mail, by first- class mail, postage prepaid, to the Owners of Bonds which have not yet been paid, at the respective addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof.

ARTICLE XI

MISCELLANEOUS
SECTION 11.01Liability of Authority Limited to Revenues. Notwithstanding anything in this Indenture or in the Bonds contained, neither the Authority nor any member thereof shall be required to advance any moneys derived from any source other than the Revenues and other assets pledged under this Indenture for the payment of the principal of or interest on the Bonds.

Nevertheless, the Authority may, but shall not be required to, advance for any of the purposes hereof any funds of the Authority which may be made available to it for such purposes.

SECTION 11.02Successor Is Deemed Included in All References to Predecessor.

Whenever in this Indenture either the Authority or the Trustee 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 Indenture contained by or on behalf of the Authority or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

SECTION 11.03Limitation of Rights to Parties and Bond Owners. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any Person other than the Authority, the Trustee, the City, CFD No. 1, CFD No. 2000-3, and the Owners of the Bonds, any legal or equitable right, remedy, or claim under or in respect of this Indenture or any covenant, condition, or provision therein or herein contained; and all such covenants, conditions, and provisions are and shall be held to be for the sole and exclusive benefit of the Authority, the Trustee, the City, CFD No. 1, CFD No. 2000-3, and the Owners of the Bonds.

SECTION 11.04Waiver 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 249
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44 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 11.05Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee may, in lieu of such cancellation and delivery, destroy such Bonds as may be allowed by law, and in accordance with its retention policy then in effect.

SECTION 11.06Severability of Invalid Provisions. If any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal, or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality, or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

The Authority hereby declares that it would have entered into this Indenture and each and every other Section, paragraph, sentence, clause, or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses, or phrases of this Indenture may be held illegal, invalid, or unenforceable.

SECTION 11.07Notices. All notices or communications herein required or permitted to be given to the Authority or the Trustee shall be in writing and shall be deemed to have been sufficiently given or served for all purposes by being delivered or sent by telecopy or by being deposited, postage prepaid, in a post office letter box, addressed as follows:

If to Authority: City of Oxnard Financing Authority
300 West Third Street
Oxnard, CA 93030
Attn: Controller
250
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45 If to the Trustee: Computershare Trust Company, N.A.

CTSO Mail Operations
Attention: __________________
MAC: N9300-070
600 South 4th Street, 7th Floor
Minneapolis, MN 55415
with a copy to:

Computershare Trust Company, N.A.
333 S. Grand Avenue, Floor 5
Los Angeles, CA 90071-1504
Attention: Corporate Trust Services
If to the City, CFD No. 1, or CFD No.
2000-3
City of Oxnard
300 West Third Street
Oxnard, CA 93030
Attention: Chief Financial Officer
So long as the Original Purchaser is the
Owner of any Outstanding Bond, to the
Original Purchaser:

City National Bank
555 S. Flower Street, 21st Floor
Los Angeles, California 90071
Attention: Scott Johnson
SECTION 11.08Evidence of Rights of Bond Owners. Any request, consent, or other instrument required or permitted by this Indenture to be signed and executed by Bond Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bond Owners in Person or by an 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, or of the holding by any Person of Bonds transferable by delivery, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and the Authority if made in the manner provided in this Section.

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 Bond 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 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 shall be proved by the Registration Books.

Any request, consent, or other instrument or writing of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every 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 accordance therewith or reliance thereon.
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46 SECTION 11.09Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent, or waiver under this Indenture, Bonds which are known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any other obligor on the Bonds, or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall certify to the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request, the Authority shall specify to the Trustee those Bonds disqualified pursuant to this Section 11.09.

SECTION 11.10Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest or principal due on any date with respect to particular Bonds shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.04 but without any liability for interest thereon.

SECTION 11.11Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with industry standards to the extent practicable, and with due regard for the requirements of Section 6.05 and for the protection of the security of the Bonds and the rights of every Owner thereof
SECTION 11.12Payment on Non-Business Days. In the event any payment is required to be made hereunder on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day with the same effect as if made on such previous non-Business Day.

SECTION 11.13Waiver of Personal Liability. No member, officer, agent, or employee of the Authority shall be individually or personally liable for the payment of the principal of or premium or interest on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein contained shall relieve any such member, officer, agent, or employee from the performance of any official duty provided by law or by this Indenture.

SECTION 11.14Execution 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 such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. 252
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47 SECTION 11.15Governing Laws. This Indenture shall be governed by and construed in accordance with the laws of the State of California.
(Signature page follows)
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IN WITNESS WHEREOF, the City of Oxnard Financing Authority has caused this Indenture to be signed in its name by its Chairman and attested by its Secretary and Computershare Trust Company, N.A., in its acceptance of the trusts and duties created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.

CITY OF OXNARD FINANCING

AUTHORITY
By:

John C. Zaragoza, Chairman
ATTEST:

By:

Rose Chaparro, Secretary

COMPUTERSHARE TRUST COMPANY,
N.A., as Trustee
By:

Authorized Officer
-Signature Page-
Indenture of Trust
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EXHIBIT A

FORM OF BOND

TRANSFER OF THIS BOND IS SUBJECT TO THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN. A TRANSFER OF THIS BOND IS LIMITED

TO CERTAIN PARTIES THAT QUALIFY UNDER THE REQUIREMENTS OF THE

INDENTURE, WHICH INCLUDE THE REQUIREMENT THAT THE TRANSFEREE HAS

SUCH KNOWLEDGE AND EXPERIENCE IN BUSINESS AND FINANCIAL MATTERS,

INCLUDING THE PURCHASE AND OWNERSHIP OF MUNICIPAL OBLIGATIONS OF A

NATURE SIMILAR TO THE BONDS, TO BE ABLE TO EVALUATE THE RISKS AND MERITS OF THE INVESTMENT IN THIS BOND. THIS BOND HAS NOT BEEN

REGISTERED WITH ANY FEDERAL OR STATE SECURITIES AGENCY OR

COMMISSION, AND IS INTENDED TO BE A PRIVATELY PLACED LOAN BETWEEN AN ISSUER AND THE REGISTERED OWNER.

No. R-___ **$__________**

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

CITY OF OXNARD FINANCING AUTHORITY
2022 LOCAL OBLIGATION REVENUE REFUNDING BONDS
(SPECIAL DISTRICT BOND)

INTEREST RATE MATURITY DATE DATED DATE CUSIP
____% September 2, 20__
REGISTERED OWNER:

PRINCIPAL AMOUNT: _______________________________ DOLLARS The City of Oxnard Financing Authority (the “Authority”), a joint powers authority created pursuant to the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Law”), for value received, hereby promises to pay (but only out of the Revenues and other assets pledged therefor as hereinafter mentioned) to the Registered Owner stated above or 255
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registered assigns, on the Maturity Date stated above (subject to any right of prior redemption hereinafter mentioned), the Principal Amount stated above, in lawful money of the United States of America and to pay interest thereon in like lawful money from the Interest Payment Date (as defined herein) next preceding the date of authentication of this Bond (as defined herein) (unless this Bond is authenticated after a Record Date (as defined herein) and on or prior to the next succeeding Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or before the first Record Date, in which event it shall bear interest from the Dated Date stated above, or unless this Bond is authenticated on or before the first Record Date, in which event it shall bear interest from the Dated Date stated above, or unless interest is in default on this Bond on such date, in which case it shall bear interest from the last date interest was paid in full or from its Dated Date if no interest has been paid) until payment of such principal sum shall be discharged as provided in the Indenture (as defined herein) at the Interest Rate per annum stated above, payable semiannually on each March 2 and September 2 (each, an “Interest Payment Date”), commencing September 2, 2022. The principal (or redemption price) hereof is payable at the corporate trust office of Computershare Trust Company, N.A. (together with any successor trustee under the Indenture, the “Trustee”), in Los Angeles, California (or such other office designated by the Trustee, herein called the “Office of the Trustee”). Interest hereon is payable (except as otherwise provided in the Indenture with respect to defaulted interest) by check mailed on each Interest Payment Date to the Registered Owner as of the fifteenth (15th) day of the month preceding each Interest Payment Date (the “Record Date”) at the address shown on the registration books maintained by the Trustee, or by wire transfer made on such Interest Payment Date to any Owner of $1,000,000 or more in aggregate principal amount of Bonds (as defined in the Indenture) who shall have requested such transfer pursuant to written notice filed with the Trustee on or before the preceding Record Date.

Interest shall be computed on the basis of a 360-day year composed of twelve 30-day months.

This Bond is one of a duly authorized issue of bonds of the Authority designated as the “City of Oxnard Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds) (the “Bonds”), in the aggregate principal amount of $_________________, all issued pursuant to the provisions of the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of the Law (commencing with Section 6584) (the “Bond Law”), and pursuant to an Indenture of Trust, dated as of July 1, 2022 (the “Indenture”), by and between the Authority and the Trustee, issued for the purpose of acquiring the Acquired Obligations. The term “Acquired Obligations” is defined in the Indenture as, collectively, (i) the $11,835,000 original principal amount City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 (the “AD Bonds”), (ii) the $8,750,000 original principal amount Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds (the “CFD No. 1 Bonds”), and (iii) the $7,980,000 original principal amount City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012. Reference is hereby made to the Indenture (a copy of which is on file at the Office of the Trustee) and all indentures supplemental thereto and to the Bond Law for a description of the rights thereunder of the Owners of the Bonds, of the nature and extent of the security for the Bonds, of the rights, duties, and immunities of the Trustee, and of the rights and obligations of the Authority thereunder. The capitalized terms used herein shall have the meanings ascribed to such terms in the Indenture unless otherwise specified herein. The 256
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Registered Owner of this Bond, by acceptance hereof, assents and agrees to all the provisions of the Indenture.

The Bonds and the interest thereon are limited, special obligations of the Authority and are payable solely from Revenues, derived primarily from payments made with respect to the Acquired Obligations acquired with the proceeds of the Bonds. The Bonds are secured by a first pledge and assignment of the Revenues and of certain amounts held in the funds and accounts established pursuant to the Indenture; subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture. The Bonds are not a lien or charge upon the funds or property of the Authority, except to the extent of the aforesaid pledge and assignment. The Bonds are not a debt of the City or the State of California and the City and said State are not liable for the payment thereof The Authority has no taxing power.

The Bonds are not subject to optional redemption prior to their respective stated maturities. The Bonds or any portion of a Bond in any Authorized Denomination shall be subject to extraordinary redemption prior to maturity, in whole on any date, or in part on any Interest Payment Date, pro rata among maturities as directed by the Authority in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate, from funds transferred to the Trustee by the Fiscal Agent from the AD Prepayment Account, the CFD No. 1 Prepayment Account, or the CFD No. 2000-3 Prepayment Account, as applicable, at the redemption price set forth below (expressed as a percentage of the principal amount of the Bonds to be redeemed), plus accrued interest to the date of redemption:

Redemption Dates Redemption Price
March 2, 2023through March 2, 2024 103%
September 2, 2024, and March 2, 2025 102
September 2, 2025, and March 2, 2026 101
September 2, 2026, thereafter 100
The Bonds are subject to mandatory redemption in part on September 2, commencing September 2, 2023, in the amounts and on the dates set forth in the Indenture at a redemption price equal to the principal amount thereof together with accrued interest to the date fixed for redemption, without premium.

In the event of any optional or extraordinary redemption of Bonds, the schedule of mandatory sinking fund installments shall be reduced in equal percentages, as nearly as practicable, provided that the reductions shall be made in multiples of $5,000. The Authority shall provide the Trustee with the amended sinking fund payments schedule calculated as set forth above in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate.

Notice of redemption shall be mailed by first-class mail, postage prepaid, no earlier than sixty (60) nor less than thirty (30) calendar days prior to the redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Bond registration books held by the Trustee. Each notice of redemption shall state the redemption date, the place or places of redemption, the fact that such redemption is subject to cancellation, the 257
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CUSIP numbers and the bond numbers of the Bonds to be redeemed, and, in the case of Bonds to be redeemed in part only, the respective multiples of $5,000 of the principal amount thereof to be redeemed. Each such notice shall also state that on said redemption date there will become due and payable on each of said Bonds the principal amount relating thereto or, in the case of a Bond to be redeemed in part only, of said specified portion of the principal thereof, plus accrued interest, if any, and that from and after such redemption date, interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the Office of the Trustee.

Neither the failure of any Bond Owner to receive any notice so mailed nor any defect therein shall affect the sufficiency of the proceedings for redemption of any Bond or the cessation of accrual of interest thereon.

If an Event of Default shall occur, the principal of all Bonds may be declared due and payable and become subject to redemption upon the conditions, in the manner, and with the effect provided in the Indenture.

The Bonds are issuable as fully-registered Bonds in the denomination of $5,000 each or any integral multiple thereof. Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, Bonds may be exchanged, at the Office of the Trustee, for a like aggregate principal amount of Bonds of the same interest rate and of other Authorized Denominations.

This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Office of the Trustee, but only in the manner, subject to the limitations, and upon payment of the charges, if any, provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer, a new Bond or Bonds, of Authorized Denomination or Authorized Denominations, for the same aggregate principal amount, will be issued to the transferee in exchange herefor. 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 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 (1) extend the fixed maturity of this Bond, or reduce the amount of principal hereof, or reduce the rate of interest hereon, or extend the time of payment of interest hereon, or reduce any premium payable upon the redemption hereof, without the consent of the Owner thereof, or (2) reduce the percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged as security for the Bonds prior to or on a parity with the lien created by the Indenture, or deprive the Owners of the Bonds of the lien created by the Indenture on such Revenues and other assets (except as expressly provided in the Indenture), without the consent of the Owners of all Bonds then outstanding, all as more fully set forth in the Indenture.

It is hereby certified and recited by the Authority that any and all conditions, things, and acts required to exist, to have happened, and to have been performed precedent to and in the issuance of this Bond do exist, have happened, and have been performed in due time, form, and 258
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manner as required by the Bond Law, and by the Constitution and laws of the State of California, and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Bond Law, or by the Constitution and laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.

This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the Certificate of Authentication hereon endorsed shall have been manually signed by the Trustee.

IN WITNESS WHEREOF, the Authority has caused this Bond to be executed in its name and on its behalf by the signature of the Chairman of the Authority and attested by the signature of the Secretary of the Authority, all as of the Dated Date.

CITY OF OXNARD FINANCING

AUTHORITY
By:

John C. Zaragoza
Chairman
ATTEST:

By:

Rose Chaparro
Secretary
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CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described in the within-mentioned Indenture, which has been authenticated on the date set forth below.

Dated: _____________, 2022 COMPUTERSHARE TRUST COMPANY, N.A.

By:

Authorized Signatory
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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 Bond and do(es) hereby irrevocably constitute and appoint ______________________ _________________________________________ attorney, to transfer the same on the books of the Trustee, with full power of substitution in the premises.

Dated: _______________________
Signature Guaranteed:

Note: Signature guarantee shall be made by a
guarantor institution participating in the
Securities Transfer Agents Medallion
Program or in such other guarantee
program acceptable to the Trustee.

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.
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EXHIBIT B

PERMITTED INVESTMENTS
(1) Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America (“U.S. Government Securities”).
(2) Direct obligations (see footnote 1 below) of the following federal agencies which are fully guaranteed by the full faith and credit of the United States of America:
(a) Export-Import Bank of the United States - Direct obligations and fully guaranteed certificates of beneficial interest
(b) Federal Housing Administration - debentures
(c) General Services Administration - participation certificates (d) Government National Mortgage Association (“GNMAs”) - guaranteed mortgage-backed securities and guaranteed participation certificates (e) Small Business Administration - .guaranteed participation certificates and guaranteed pool certificates
(f) U.S. Department of Housing & Urban Development - local authority bonds
(g) U.S. Maritime Administration - guaranteed Title XI financings (h) Washington Metropolitan Area Transit Authority - guaranteed transit bonds
(3) Direct obligations 1 of the following federal agencies which are not fully guaranteed by the faith and credit of the United States of America:
(a) Federal National Mortgage Association (“FNMAs”) - senior debt obligations rated Aaa by Moody’s and AAA by S&P
The following are explicitly excluded from the securities enumerated in clauses (a) and (b):
1 The following are explicitly excluded from the securities enumerated in clauses (a) and (b):
(a) All derivative obligations, including without limitation inverse floaters, residuals, interest-only, principal- only and range notes;
(b) Obligations that have a possibility of returning a zero or negative yield if held to maturity; (c) Obligations that do not have a fixed par value or those whose terms do not promise a fixed dollar amount at maturity or call date; and
(d) Collateralized Mortgage-Backed Obligations (“CMOs”). 262
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(a) All derivative obligations, including without limitation inverse floaters, residuals, interest-only, principal-only and range notes; (b) Obligations that have a possibility of returning a zero or negative yield if held to maturity;
(c) Obligations that do not have a fixed par value or those whose terms do not promise a fixed dollar amount at maturity or call date; and (d) Collateralized Mortgage-Backed Obligations (“CMOs”). (a) Federal Home Loan Mortgage Corporation (“FHLMCs”) - participation certificates and senior debt obligations rated Aaa by Moody’s and AAA by S&P (b) Federal Home Loan Banks - consolidated debt obligations (c) Student Loan Marketing Association - debt obligations (d) Resolution Funding Corporation - debt obligations
(4) Direct, general obligations of any state of the United States of America or any subdivision or agency thereof whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, A2 or better by Moody’s and A or better by S&P, or any obligation fully and unconditionally guaranteed by any state, subdivision, or agency whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, A2 or better by Moody’s and A or better by S&P.
(5) Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, P-1 by Moody’s and A-1 or better by S&P. (6) Certificates of deposit, savings accounts, deposit accounts, or money market deposits in amounts that are continuously and fully insured by the Federal Deposit Insurance Corporation (“FDIC”), including the Bank Insurance Fund and the Savings Association Insurance Fund.
(7) Certificates of deposit, deposit accounts, federal funds, or bankers’ acceptances (in each case having maturities of not more than 365 days following the date of purchase) of any domestic commercial bank or United States branch office of a foreign bank, provided that such bank’s short-term certificates of deposit are rated P-1 by Moody’s and A-1 or better by S&P (not considering holding company ratings).
(8) Investments in money-market funds rated AAAm or AAAm-G by S&P. Such money market funds may include funds for which the Trustee or its affiliates or subsidiaries provide investment advisory or other management services. (9) State-sponsored investment pools rated AA- or better by S&P. (10) Repurchase agreements that meet the following criteria:
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(a) A master repurchase agreement or specific written repurchase agreement, substantially similar in form and substance to the Public Securities Association or Bond Market Association master repurchase agreement, governs the transaction. (b) Acceptable providers shall consist of (i) registered broker/dealers subject to Securities Investors’ Protection Corporation (“SIPC”) jurisdiction or commercial banks insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured, and unguaranteed rating of A3/P-1 or better by Moody’s and A-/A-1 or better by S&P, or (ii) domestic structured investment companies rated, or domestic structured investment companies with a guarantor rated, Aaa by Moody’s and AAA by S&P. (c) The repurchase agreement shall require termination thereof if the counterparty’s ratings are suspended, withdrawn, or fall below A3 or P-1 from Moody’s, or A- or A-1 from S&P. Within ten (10) days, the counterparty shall repay the principal amount plus any accrued and unpaid interest on the investments. (d) The repurchase agreement shall limit acceptable securities to U.S.

Government Securities and to the obligations of GNMA, FNMA or FHLMC described in clauses 2(d), 3(a) and 3(b) above. The fair market value of the securities in relation to the amount of the repurchase obligation, including principal and accrued interest, is equal to a collateral level of at least 104% for U.S. Government Securities and 105% for GNMAs, FNMAs, or FHLMCs. The repurchase agreement shall require (i) the Trustee or an independent third party acting solely as agent for the Trustee (the “Agent”) to value the collateral securities no less frequently than weekly, (ii) the delivery of additional securities if the fair market value of the securities is below the required level on any valuation date, and (iii) liquidation of the repurchase securities if any deficiency in the required percentage is not restored within two (2) Business Days of such valuation. (e) The repurchase securities shall be delivered free and clear of any lien to the Trustee or the Agent, and such Agent is (i) a Federal Reserve Bank or (ii) a bank which is a member of the FDIC and which has combined capital, surplus, and undivided profits or, if appropriate, a net worth, of not less than $50 million, and the Trustee shall have received written confirmation from such third party that such third party holds such securities, free and clear of any lien, as agent for the Trustee. (f) A perfected first security interest in the repurchase securities shall be created for the benefit of the Trustee, and the Authority and the Trustee shall receive an opinion of counsel as to the perfection of the security interest in such repurchase securities and any proceeds thereof
(g) The repurchase agreement shall have a term of one year or less, or shall be due on demand.
(h) The repurchase agreement shall establish the following as events of default, the occurrence of any of which shall require the immediate liquidation of the repurchase securities:
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i. insolvency of the broker/dealer or commercial bank serving as the counterparty under the repurchase agreement;
ii. failure by the counterparty to remedy any deficiency in the required collateral level or to satisfy the margin maintenance call under clause 10(d) above; or
iii. failure by the counterparty to repurchase the repurchase securities on the specified date for repurchase.
(11) Investment agreements (also referred to as guaranteed investment contracts) that meet the following criteria:
(a) A master agreement or specific written investment agreement governs the transaction.
(b) Acceptable providers of uncollateralized investment agreements shall consist of (i) domestic FDIC-insured commercial banks, or U.S. branches of foreign banks, rated at least Aa2 by Moody’s and AA by S&P; (ii) domestic insurance companies rated Aaa by Moody’s and AAA by S&P; and (iii) domestic structured investment companies rated, or domestic structured investment companies with a guarantor rated, Aaa by Moody’s and AAA by S&P.
(c) Acceptable providers of collateralized investment agreements shall consist of (i) registered broker/dealers subject to SIPC jurisdiction, if such broker/dealer has an uninsured, unsecured, and unguaranteed rating of Al or better by Moody’s and A+ or better by S&P; (ii) domestic FDIC-insured commercial banks, or U.S. branches of foreign banks, rated at least Al by Moody’s and A+ by S&P; (iii) domestic insurance companies rated at least Al by Moody’s and A+ by S&P; and (iv) domestic structured investment companies rated, or domestic structured investment companies with a guarantor rated, Aaa by Moody’s and AAA by S&P. Required collateral levels shall be as set forth in clause 11(f) below.
(d) The investment agreement shall provide that, if the provider’s ratings fall below Aa3 by Moody’s or AA- by. S&P, the provider shall within ten (10) days either (i) repay the principal amount plus any accrued and interest on the investment; or (ii) deliver Permitted Collateral as provided below.
(e) The investment agreement must provide for termination thereof if the provider’s ratings are suspended, withdrawn, or fall below A3 from Moody’s or A- from S&P. Within ten (10) days, the provider shall repay the principal amount plus any accrued interest on the agreement, without penalty.
(f) The investment agreement shall provide for the delivery of collateral described in clause i or ii below (“Permitted Collateral”) which shall be maintained at the following collateralization levels at each valuation date:
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i. U.S. Government Securities at 104% of principal plus accrued interest; or
ii. Obligations of GNMA, FNMA, or FHLMC (described in clauses 2(d), 3(a), and 3(b) above) at 105% of principal and accrued interest. (g) The investment agreement shall require the Trustee or the Agent to determine the market value of the Permitted Collateral not less than weekly and notify the investment agreement provider on the valuation day of any deficiency. Permitted Collateral may be released by the Trustee to the provider only to the extent that there are excess amounts over the required levels. Market value, with respect to collateral, may be determined by any of the following methods:
i. the last quoted “bid” price as shown in Bloomberg, Interactive Data Systems, Inc., The Wall Street Journal, or Reuters; ii. valuation as performed by a nationally recognized pricing service, whereby the valuation method is based on a composite average of various bid prices; or
iii. the lower of two (2) bid prices by nationally recognized dealers.

Such dealers or their parent holding companies shall be rated investment grade and shall be market makers in the securities being valued. (h) Securities held as Permitted Collateral shall be free and clear of all liens and claims of third parties, held in a separate custodial account, and registered in the name of the Trustee or the Agent.
(i) The provider shall grant the Trustee or the Agent a perfected first security interest in any collateral delivered under an investment agreement. For investment agreements collateralized initially and in connection with the delivery of Permitted Collateral under clause 1 1 (f) above, the Trustee shall receive an opinion of counsel as to the perfection of the security interest in the collateral.

The investment agreement shall provide that moneys invested under the agreement must be payable and putable at par to the Trustee without condition, breakage fee, or other penalty, upon not more than two (2) Business Days’ notice, or immediately on demand for any reason for which the funds invested may be withdrawn from the applicable fund or account established under the authorizing document, as well as the following:
i. In the event of a deficiency in the debt service account; ii. Upon acceleration after an event of default;
iii. Upon refunding of the Bonds in whole or in part;
iv. Reduction of the Reserve Requirement for the Bonds; or 266
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v. If a determination is later made by a nationally recognized bond counsel that investments must be yield-restricted.

Notwithstanding the foregoing, the agreement may provide for a breakage fee or other penalty that is payable in arrears and not as a condition of a draw by the Trustee if the Authority’s obligation to pay such fee or penalty is subordinate to its obligation to pay debt service on the Bonds and to make deposits to the Reserve Fund. (j) The investment agreement shall establish the following as events of default, the occurrence of any of which shall require the immediate liquidation of the investment securities, unless:
i. Failure of the provider or the guarantor (if any) to make a payment when due or to deliver Permitted Collateral of the character, at the times, or in the amounts described above;
ii. Insolvency of the provider or the guarantor (if any) under the investment agreement;
iii. Failure by the provider to remedy any deficiency with respect to required Permitted Collateral;
iv. Failure by the provider to make a payment or observe any covenant under the agreement;
v. The guaranty (if any) is terminated, repudiated, or challenged; or vi. Any representation of warranty furnished to the Trustee or the Authority in connection with the agreement is false or misleading. (1) The investment agreement must incorporate the following general criteria:
i. “Cure periods” for payment default shall not exceed
two (2) Business Days;
ii. The agreement shall provide that the provider shall remain liable for any deficiency after application of the proceeds of the sale of any collateral, including costs and expenses incurred by the Trustee;
iii. If the investment agreement is for the Reserve
Fund, reinvestments of funds shall be required to bear interest at a rate at least equal to the original contract rate;
iv. The provider shall be required to immediately
notify the Trustee of any event of default or any suspension, withdrawal, or downgrade of the provider’s ratings; and 267
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v. The agreement shall be unconditional and shall
expressly disclaim any right of set-off or counterclaim. (12) Forward delivery agreements in which the securities delivered mature on or before each interest payment date (for debt service or debt service reserve funds) or draw down date (construction funds) that meet the following criteria:
(a) A specific written investment agreement governs the transaction. (b) Acceptable providers shall be limited to (i) any registered broker/dealer subject to the SIPC jurisdiction, if such broker/dealer or bank has an uninsured, unsecured, and unguaranteed obligation rated A3/P-1 or better by Moody’s and A-/A-1 or better by S&P; (ii) any commercial bank insured by the FDIC, if such bank has an uninsured, unsecured, and unguaranteed obligation rated A3/P-1 or, better by Moody’s and A-/A-1 or better by S&P; and (iii) domestic structured investment companies rated, or domestic structured investment companies with a guarantor rated, Aaa by Moody’s and AAA by S&P.
(c) The forward delivery agreement shall provide for termination or assignment (to a qualified provider hereunder) of the agreement if the provider’s ratings are suspended, withdrawn, or fall below A3 or P-1 from Moody’s or A- or A-1 from S&P. Within ten (10) days, the provider shall fulfill any obligations it may have with respect to shortfalls in market value. There shall be no breakage fee payable to the provider in such event.
(d) Permitted securities shall include the investments listed in clauses 1, 2, and 3 above.
(e) The forward delivery agreement shall include the following provisions:
i. The permitted securities must mature at least one (1) Business Day before a debt service payment date or scheduled draw. The maturity amount of the permitted securities must equal or exceed the amount required to be in the applicable fund on the applicable valuation date.
ii. The agreement shall include market standard termination provisions, including the right to terminate for the provider’s failure to deliver qualifying securities or otherwise to perform under the agreement. There shall be no breakage fee or penalty payable to the provider in such event. iii. Any breakage fees shall be payable only on Interest Payment Dates and shall be subordinated to the payment of debt service fund and Reserve Fund replenishments.
iv. The provider must submit at closing a bankruptcy opinion to the effect that upon any bankruptcy, insolvency, or receivership of the provider, the securities will not be considered to be a part of the provider’s estate. 268
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(13) Forward delivery agreements in which the securities delivered mature after the funds may be required but provide for the right of the issuer or the Trustee to put the securities back to the provider under a put, guaranty, or other hedging arrangement. (14) Pre-refunded Municipal Obligations defined as follows: Any bonds or other obligations of the State of California or of any agency, instrumentality, or local governmental unit of the State of California which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice and which are rated, based on an irrevocable escrow account or fund, in the highest rating category of S&P and Moody’s.
(15) Shares in any money market mutual fund registered under the Investment Company Act of 1940 whose investment portfolio consists solely of direct obligations of the United States Government, provided that any such fund has been rated in the highest category by a nationally recognized rating agency and, provided further, that such mutual funds may include funds for which the Trustee or its affiliates or subsidiaries provide investment advisory or other management services.
(16) The Local Agency Investment Fund (“LAIF”).
(17) Maturity of investments shall be governed by the following:
(a) Investments of monies (other than reserve funds) shall be in securities and obligations maturing not later than the dates on which such monies will be needed to make payments.
(b) Investments shall be considered as maturing on the first date on which they are redeemable without penalty at the option of the holder or the date on which the Trustee may require their repurchase pursuant to repurchase agreements.
(c) Investments of monies in reserve funds not payable upon demand shall be restricted to maturities of five (5) years or less. 269
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C-1

EXHIBIT C

FORM OF LETTER OF REPRESENTATIONS
City of Oxnard Financing Authority
300 West Third Street
Oxnard, CA 93030
Attention: Chief Financial Officer
Re: $_________City of Oxnard Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds
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The undersigned, a duly authorized representative of City National Bank a ________________, and its successors, assigns and transferees (the “Purchaser”), hereby certifies to the City of Oxnard Financing Authority (the “Authority”) as follows:
(i) The Purchaser has purchased on the date hereof the above-referenced bond (the “Bond”), issued in the aggregate principal amount of $_________ pursuant to the Indenture of Trust, dated as of July 1, 202 (the “Indenture”), by and between the Authority and Computershare Trust Company, N.A., as Trustee, and acknowledged and agreed to by the Purchaser, as the original purchaser of the Bond.
(ii) The Bond is currently being acquired by the Purchaser for its own account (or that of its consolidated taxpayer group) and not with a present intent for any resale or distribution thereof, in whole or in part, to others; provided, however, that the Purchaser shall not be precluded from transferring or assigning its interest in the Bond in accordance with the terms and conditions set forth in the Indenture. The Purchaser is not participating, directly or indirectly, in a distribution of the Bond and will not take, or cause to be taken, any action that would cause the Purchaser or Piper Sandler & Co., Inc. (the “Placement Agent”) to be deemed an “underwriter” of such Bond as defined in Section 2(11) of the Securities Act of 1933, as amended (the “Securities Act”). The Purchaser understands that the Authority and the Placement Agent have no obligation to register the Bond for resale under the Securities Act. The Purchaser further understands that the Bond is being sold in a transaction that is exempt from the registration requirements of the Securities Act.

The Purchaser acknowledges that the Authority will not be entering into a continuing disclosure agreement pursuant to Section 15c2-12 of the Securities Exchange Act of 1934, as amended. (iii) The Purchaser has received and carefully read all information and other items of disclosure relating to the Authority and the City of Oxnard (the “City) with respect to the Acquired Obligations, as defined in the Indenture, and the Bond that the Purchaser has deemed necessary and that has been provided or published by the Authority, including without limitation various financial information, reports, and other publicly available information that a reasonable investor would attach significance to in making its determination to purchase the Bond and, in connection therewith, has had access to all other materials, books, records, documents, and information relating to the Authority, the Acquired Obligations and the Bond (collectively, the “Disclosure Items”).
(iv) The Purchaser has had an opportunity to ask questions of, and receive satisfactory answers from, duly designated representatives of the Authority and the City concerning the terms and conditions pursuant to which the offer to purchase the Bond is being made, and any request for such information has been fully complied with to the extent the Authority possesses such information or can acquire it without unreasonable effort or expense. (v) The Purchaser has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks relating to such Bond and has evaluated: (a) the information (including the information set forth in the Disclosure Items) furnished to it by the Authority and/or the City and the Placement Agent; (b) its or such representative’s personal knowledge of the business and affairs of the Authority and/or the City; (c) the records, files, and plans of the Authority and/or the City, to all of which it or such representative has had full access; (d) such additional information as it or such representative may have requested and have 271
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received from the Authority and/or the City; and (e) the independent inquiries and investigations undertaken by it or such representative.
(vi) The Purchaser certifies that it is (a) a “qualified institutional buyer” as that term is defined in Rule 144A in the Securities Act, or (b) an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) the Securities Act.
(vii) The Purchaser has made an independent investigation and evaluation of the financial condition and prospects of, and the risks associated with, the Bond, the Authority and the City, or has caused such investigation and evaluation to be made by persons it deems competent to do so, and it has not relied upon the Authority or the Placement Agent in making its decision to purchase the Bond other than the Disclosure Items.
(viii) No person employed or authorized in writing by the Authority, the City or the Placement Agent has given any information or made any representation not contained in any Disclosure Items referred to above. The Purchaser understands and agrees that any such information or representation not contained in the Disclosure Items must not, and will not, be relied upon and that nothing contained therein should be deemed as legal or tax advice to the Purchaser.
(ix) Other than the dates and amounts of principal and interest to be paid under the Bond, neither of the Authority, nor the City, nor the Placement Agent has made any direct or indirect representation or warranty of any kind to the Purchaser with respect to the economic return which may accrue to the Purchaser. The Purchaser has consulted with its own counsel and other advisors with respect to its purchase of the Bond.
(x) The signatory of this letter is a duly authorized officer of the Purchaser with the authority to sign this letter on behalf of the Purchaser, and this letter has been duly authorized, executed, and delivered by the Purchaser.

Dated: July __, 2022

CITY NATIONAL BANK
By: ____________________________
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TABLE OF CONTENTS
Page
-i-

ARTICLE I
DEFINITIONS; INTERPRETATION; EQUAL SECURITY
SECTION 1.01 Definitions .................................................................................................. 3 SECTION 1.02 Content of Certificates and Opinions ....................................................... 12 SECTION 1.03 Interpretation............................................................................................. 13 SECTION 1.04 Indenture Constitutes Contract ................................................................. 13

ARTICLE II

THE BONDS
SECTION 2.01 Authorization of Bonds............................................................................. 13 SECTION 2.02 Terms of the Bonds................................................................................... 13 SECTION 2.03 Transfer of Bonds ..................................................................................... 15 SECTION 2.04 Exchange of Bonds ................................................................................... 15 SECTION 2.05 Registration Books.................................................................................... 15 SECTION 2.06 Form and Execution of Bonds .................................................................. 15 SECTION 2.07 Temporary Bonds ..................................................................................... 16 SECTION 2.08 Bonds Mutilated, Lost, Destroyed, or Stolen ........................................... 16 SECTION 2.09 Book-Entry ............................................................................................... 17

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS AND TRANSFERS FROM THE FISCAL AGENT; ACQUISITION OF ACQUIRED OBLIGATIONS
SECTION 3.01 Issuance of the Bonds ............................................................................... 18 SECTION 3.02 Application of Proceeds of the Bonds and Transfers from the Fiscal Agent..............................................................................................18 SECTION 3.03 Reserve Fund ............................................................................................ 19 SECTION 3.04 Expense Fund............................................................................................ 19 SECTION 3.05 Program Fund. .......................................................................................... 19 SECTION 3.06 Closing Documents................................................................................... 20 SECTION 3.07 Validity of Bonds...................................................................................... 20

ARTICLE IV

REDEMPTION OF BONDS
SECTION 4.01 Redemption............................................................................................... 21 SECTION 4.02 Selection of Bonds for Redemption.......................................................... 22 SECTION 4.03 Notice of Redemption............................................................................... 22 SECTION 4.04 Partial Redemption of Bonds.................................................................... 23 SECTION 4.05 Effect of Notice of Redemption................................................................ 23

ARTICLE V
REVENUES; FUNDS AND ACCOUNTS OF PRINCIPAL AND INTEREST
SECTION 5.01 Pledge and Assignment; Revenue Fund. .................................................. 24 SECTION 5.02 Allocation of Revenues............................................................................. 24 SECTION 5.03 Application of Interest Account................................................................ 25 273
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TABLE OF CONTENTS
(continued)
Page
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SECTION 5.04 Application of Principal Accounts............................................................ 25 SECTION 5.05 Application of Redemption Account ........................................................ 25 SECTION 5.06 Application of Residual Account.............................................................. 26 SECTION 5.07 Investment of Moneys .............................................................................. 26

ARTICLE VI

PARTICULAR COVENANTS
SECTION 6.01 Punctual Payment ..................................................................................... 27 SECTION 6.02 Extension of Payment of Bonds ............................................................... 27 SECTION 6.03 Against Encumbrances ............................................................................. 27 SECTION 6.04 Power to Issue Bonds and Make Pledge and Assignment........................ 28 SECTION 6.05 Accounting Records and Financial Statements ........................................ 28 SECTION 6.06 Waiver of Laws......................................................................................... 28 SECTION 6.07 [RESERVED]........................................................................................... 28 SECTION 6.08 Rebate Fund.............................................................................................. 28 SECTION 6.09 Federal Tax Covenants ............................................................................. 30 SECTION 6.10 Collection of Revenues Under Acquired Obligations .............................. 30 SECTION 6.11 Disposition of Acquired Obligations........................................................ 30 SECTION 6.12 Further Assurances ................................................................................... 31 SECTION 6.13 Annual Reporting Requirements to Original Purchaser ........................... 31

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
SECTION 7.01 Events of Default ...................................................................................... 31 SECTION 7.02 Remedies Upon Event of Default ............................................................. 32 SECTION 7.03 Other Remedies of Bond Owners ............................................................. 32 SECTION 7.04 Application of Revenues and Other Funds After Default ........................ 32 SECTION 7.05 Trustee to Represent Bond Owners .......................................................... 33 SECTION 7.06 Bond Owners’ Direction of Proceedings.................................................. 33 SECTION 7.07 Limitation on Bond Owners’ Right to Sue............................................... 34 SECTION 7.08 Absolute Obligation of Authority............................................................. 34 SECTION 7.09 Termination of Proceeding ....................................................................... 34 SECTION 7.10 Remedies Not Exclusive........................................................................... 34 SECTION 7.11 No Waiver of Default ............................................................................... 35

ARTICLE VIII

THE TRUSTEE
SECTION 8.01 Duties and Liabilities of Trustee............................................................... 35 SECTION 8.02 Merger or Consolidation........................................................................... 37 SECTION 8.03 Liability of Trustee. .................................................................................. 37 SECTION 8.04 Right to Rely on Documents..................................................................... 38 SECTION 8.05 Preservation and Inspection of Documents .............................................. 38 SECTION 8.06 Compensation and Indemnification.......................................................... 38 274
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TABLE OF CONTENTS
(continued)
Page
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ARTICLE IX

MODIFICATION OR AMENDMENT OF INDENTURE
SECTION 9.01 Amendments Permitted. ........................................................................... 39 SECTION 9.02 Effect of Supplemental Indenture............................................................. 40 SECTION 9.03 Endorsement of Bonds; Preparation of New Bonds ................................. 40

ARTICLE X

DEFEASANCE
SECTION 10.01 Discharge of Indenture ............................................................................. 40 SECTION 10.02 Discharge of Liability on Bonds............................................................... 41 SECTION 10.03 Deposit of Money or Securities with Trustee ........................................... 41 SECTION 10.04 Payment of Bonds After Discharge of Indenture ..................................... 42

ARTICLE XI

MISCELLANEOUS
SECTION 11.01 Liability of Authority Limited to Revenues ............................................. 42 SECTION 11.02 Successor Is Deemed Included in All References to Predecessor............ 42 SECTION 11.03 Limitation of Rights to Parties and Bond Owners.................................... 43 SECTION 11.04 Waiver of Notice; Requirement of Mailed Notice ................................... 43 SECTION 11.05 Destruction of Bonds ................................................................................ 43 SECTION 11.06 Severability of Invalid Provisions ............................................................ 43 SECTION 11.07 Notices ...................................................................................................... 43 SECTION 11.08 Evidence of Rights of Bond Owners ........................................................ 44 SECTION 11.09 Disqualified Bonds ................................................................................... 45 SECTION 11.10 Money Held for Particular Bonds............................................................. 45 SECTION 11.11 Funds and Accounts.................................................................................. 45 SECTION 11.12 Payment on Non-Business Days............................................................... 45 SECTION 11.13 Waiver of Personal Liability..................................................................... 45 SECTION 11.14 Execution in Several Counterparts ........................................................... 45 SECTION 11.15 Governing Laws........................................................................................ 45 EXHIBIT A – FORM OF SERIES A BOND............................................................................A-1 EXHIBIT B – PERMITTED INVESTMENTS .........................................................................B-1 EXHIBIT C - FORM OF LETTER OF REPRESENTATIONS ...............................................C-1 275
60302.00021\35018021.2

FIRST AMENDMENT TO

LOCAL AGENCY FINANCING DOCUMENTS
by and among

CITY OF OXNARD FINANCING AUTHORITY
and

CITY OF OXNARD
and

CERTAIN COMMUNITY FACILITIES DISTRICTS OF THE

CITY OF OXNARD
and
COMPUTERSHARE TRUST COMPANY, N.A., as Fiscal Agent
Dated as of July 1, 2022
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1 This FIRST AMENDMENT TO LOCAL AGENCY FINANCING DOCUMENTS (“First Amendment”) is made and entered into as of this 1st day of July, 2022, by and among the CITY OF OXNARD FINANCING AUTHORITY (“Authority”), a joint powers authority organized and existing under the laws of the State of California (“State”); the CITY OF OXNARD (“City”), a general law city organized and existing pursuant to the laws of the State on behalf of CITY OF OXNARD ASSESSMENT DISTRICT NO. 2001-1 (RICE AVENUE/HIGHWAY 101 INTERCHANGE) (the “AD”), COMMUNITY FACILITIES DISTRICT NO. 1 (WESTPORT AT MANDALAY BAY) OF THE CITY OF OXNARD (“CFD No. 1”), and CITY OF OXNARD COMMUNITY FACILITIES DISTRICT NO. 2000-3 (OXNARD BOULEVARD/HIGHWAY 101 INTERCHANGE) (“CFD No. 2000-3” and, together with the AD and the CFD No. 1, the “Special Districts”) each of CFD No. 1 and CFD No. 200-3 are organized and existing pursuant to the Mello-Roos Community Facilities Act of 1982 as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State (“Mello-Roos Act”); and COMPUTERSHARE TRUST COMPANY, N.A. (“Bank”), a national banking association organized and existing under the laws of the United States of America. The Authority, the City, the Special Districts and the Bank may hereinafter be referred to individually as a “Party” or collectively as the “Parties.”

RECITALS
A. 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 Government Code of the State of California (“Bond Law”), and is authorized pursuant to Article 4 of the Act to (i) purchase, with the proceeds of its bonds, bonds issued by a local agency and to hold such bonds and (ii) issue bonds to pay the cost of any public capital improvement.

B. The Authority issued its $19,505,000 City of Oxnard Public Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series A Senior Lien Bonds (the “Series 2012A Bonds”), and its $9,060,000 City of Oxnard Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series B Subordinate Lien Bonds (the “Series 2012B Bonds”, and together with the Series 2012A Bonds, the “Series 2012 Bonds”), for the purpose of acquiring the (i) the $11,835,000 City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 (the “AD Bonds”), (ii) the $8,750,000 Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds (the “CFD No. 1 Bonds”), and (iii) the $7,980,000 City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012 (the “CFD No. 2000-3 Bonds” and, together with the AD Bonds and the CFD No. 1 Bonds, the “Acquired Obligations”) issued to refund certain Assessment District, CFD No. 1, and CFD No. 2000-3 bond issues. Each series of Acquired Obligations was issued pursuant to a separate Fiscal Agent Agreement, each dated as of August 1, 2012, by and between the City and the Bank with respect to the AD Bonds, and between the respective CFD and the Bank, as fiscal agent (the “Fiscal Agent Agreements”), as such Acquired Obligations and Fiscal Agent Agreements (collectively, the “Local Agency Financing Documents”) are further identified in Exhibits A and B, respectively, attached hereto and incorporated herein,
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2 C. For the purpose of redeeming and defeasing the outstanding 2012 Authority Bonds, the Authority has determined to issue the City of Oxnard Public Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds)in the aggregate initial principal amount of $_______________ (“2022 Authority Bonds”) pursuant to an Indenture of Trust, dated as of July 1, 2022, by and between the Authority and the Bank, as trustee (“2022 Authority Indenture”).

D. Pursuant to the 2022 Authority Indenture, the 2022 Authority Bonds will be secured by the same pledge of funds derived from the Acquired Obligations and Fiscal Agent Agreements, which Acquired Obligations will remain outstanding and in the ownership and possession of the Authority, held through the Bank, as trustee, and will not be re-issued or refunded.

E. The Local Agency Financing Documents contain certain references to the 2012 Authority Bonds and the 2012 Authority Indenture, and the Local Agency Financing Documents shall be amended upon the issuance of the 2022 Authority Bonds to reference the 2022 Authority Bonds and 2022 Authority Indenture, as provided herein.

F. In order to accommodate the pledge and assignment of the Acquired Obligations to the payment of the 2022 Authority Bonds as set forth in the 2022 Authority Indenture, the Parties wish to enter into this First Amendment and have duly authorized such First Amendment.

G. The Parties hereto agree that the Acquired Obligations have previously been delivered to the Authority or the Bank, as trustee of the 2012 Authority Bonds, as appropriate, and that such Acquired Obligations shall remain in such capacity upon issuance of the 2022 Authority Bonds and do not require a notation.

AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants, and conditions herein contained, the Parties hereto agree as follows:

Section 1. Incorporation of Recitals and Definitions. All of the foregoing Recitals are true and correct and are incorporated in this First Amendment by reference.

Section 2. Definitions. For purposes of this First Amendment, the terms hereinafter set forth have the following meanings:
“Acquired Obligations” means, collectively, (i) the $11,835,000 City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 (the “AD Bonds”), (ii) the $8,750,000 Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds (the “CFD No. 1 Bonds”), and (iii) the $7,980,000 City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax 278
60302.00021\35018021.2
3 Refunding Bonds, Series 2012 (the “CFD No. 2000-3 Bonds”). “2012 Authority Bonds” means collectively, $19,505,000 City of Oxnard Public Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series A Senior Lien Bonds (the “Series 2012A Bonds”), $9,060,000 City of Oxnard Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series B Subordinate Lien Bonds (the “Series 2012B Bonds”).
“2012 Authority Indenture” means that certain Indenture of Trust, by and between the Authority and the Bank, as trustee, dated as of August 1, 2012. “2022 Authority Bonds” means the City of Oxnard Public Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds), issued pursuant to the Bond law in the aggregate principal amount of $________________. “2022 Authority Indenture” means that certain Indenture of Trust, by and between the Authority and the Bank, as trustee, dated as of July 1, 2022. “Authority” means the City of Oxnard Financing Authority, a joint exercise of powers agency.
“Authority Bonds Reserve Fund” means the Reserve Fund established for the 2022 Authority Bonds under the 2022 Authority Indenture.
“Authority Bonds Reserve Funds Proportionate Share” means, if the District is a Delinquent District (as defined in subsection (1) of Section 4.03 of the Authority Indenture), an amount determined by dividing the deficiency in the amounts that were paid by the Fiscal Agent for such Delinquent District to the Authority Trustee in payment of Debt Service on the Bonds in any Bond Year (as a result of a deficiency in the collection of Special Tax Revenues) by the amount withdrawn from the Reserve Fund to pay Debt Service on the 2022 Authority Bonds in that same Bond Year.
“Authority Indenture” means the 2022 Authority Indenture. “Bank” means Computershare Trust Company, N.A.
“Bond Law” means the Marks Roos Local Bond Pooling Act of 1985, constituting Article 4 of the Act (commencing with Section 6584), as it may hereafter be amended from time to time. “
“Fiscal Agent Agreements” means, collectively,
(i) that certain Fiscal Agent Agreement relating to City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 dated as of August 1, 2012, by and between City and the Bank, as fiscal agent; (ii) that certain Fiscal Agent Agreement relating to the $8,750,000 Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax 279
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4 Refunding Bonds, dated as of August 1, 2012, by and between Community Facilities District No. 1 and the Bank, as fiscal agent;
(iii) that certain Fiscal Agent Agreement relating to the $7,980,000 City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012, dated as of August 1, 2012, by and between Community Facilities District No. 2003-1 and the Bank, as fiscal agent; “Local Agency Financing Documents” means, collectively the Fiscal Agent Agreements and all other documents and agreements executed in connection with the issuance and sale of the Acquired Obligations necessary to secure the repayment thereof or ownership thereof by the Authority, as further identified in Exhibit B attached hereto and incorporated herein. “Special Districts” means, City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) (the “AD”), Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard (“CFD No. 1”), and City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) (“CFD No. 2000-3”).

Section 3. Amendments to Local Agency Financing Documents. (a) Upon the issuance of the 2022 Authority Bonds and the defeasance of the outstanding 2012 Authority Bonds, all Local Agency Financing Documents currently in effect that refer to the 2012 Authority Bonds and/or the 2012 Authority Indenture (however such terms are designated therein), shall at that time be deemed amended to instead refer to the 2022Authority Bonds and/or 2022 Authority Indenture, as applicable.
(b) Upon the issuance of the 2022 Authority Bonds and defeasance of the outstanding 2012 Authority Bonds, all Fiscal Agent Agreements shall at that time be deemed amended to include the provisions set forth in subparagraphs (i) through (v) below. Terms used in such subparagraphs and not defined herein have the meaning(s) set forth in the applicable CFD Fiscal Agent Agreement.
(c) References in this Section 3(c) to the Fiscal Agent Agreements shall conform to the definition set forth in Section 2 hereof.
(d) Notwithstanding any provision in the Fiscal Agent Agreements to the contrary, the Acquired Obligations shall not be subject to option redemption prior to their stated respective dates of maturity.
(e) Notwithstanding any provision in the Fiscal Agent Agreements to the contrary, the Acquired Obligations are each subject to extraordinary redemption prior to maturity, in whole on any date, or in part on any Interest Payment Date, pro rata among maturities as directed by the City in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate, from funds on hand with the Fiscal Agent in the respective AD Prepayment Account, the CFD No. 1 Prepayment Account, or the CFD No. 2000-3 Prepayment Account, as applicable, at the redemption price set forth below (expressed as a percentage of the principal amount of the respective Acquired Obligations to be redeemed), plus accrued interest to the date of redemption:
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5 Redemption Dates Redemption Price
March 2, 2023, through March 2, 2024 103%
September 2, 2024, and March 2, 2025 102
September 2, 2025, and March 2, 2026 101
September 2, 2026 thereafter 100
Section 4. Non-Objection to Authority Pledge of Acquired Obligations. The City and the Special Districts each expressly acknowledge the pledge of the Acquired Obligations to the payment of the 2022 Authority Bonds pursuant to the terms of the 2022 Authority Indenture, effective upon the issuance of the 2022 Authority Bonds and the defeasance of the outstanding 2012 Authority Bonds, and hereby confirm their consent and non-objection to such pledge by the Authority.

Section 5. Confirmation of Special Tax Pledge. Each applicable CFD expressly acknowledges and confirms that the Acquired Obligations of each applicable CFD are secured by a first pledge of the Special Tax Revenues of the corresponding CFD as further set forth in Section,

2.11, Section 4.01 and Article IV of the Fiscal Agent Agreements.

Section 6. Due Authority. Each individual signing this First Amendment warrants and represents that he or she has been duly authorized by appropriate action of the Party he or she represents to enter into this First Amendment on behalf of such Party.

Section 7. Other Actions Authorized. Each of the Parties hereto are hereby authorized to take all other and future actions necessary or desirable to carry out the provisions hereof.

Section 8. Binding Effect. This First Amendment shall inure to the benefit of and shall be binding upon the Parties hereto and their respective successors and assigns.

Section 9. Interpretation. If any terms of this First Amendment are in conflict with the terms of any of the Local Agency Financing Documents, the terms of this First Amendment shall supersede any conflicting provisions in the Local Agency Financing Documents. Otherwise, except as amended by this First Amendment, the provisions of the Local Agency Financing Documents shall remain in full force and effect.

Section 10. Applicable Law. This First Amendment shall be governed by and construed in accordance with the laws of the State applicable to contracts made and performed in such State.

Section 11. Counterpart Signatures. This First Amendment 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.
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S-1
IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment as of the date first above written.

CITY OF OXNARD FINANCING AUTHORITY
By: _____________________________
Name:

Title:

CITY OF OXNARD for and on behalf of
COMMUNITY FACILITIES DISTRICT NO. 1

OF THE CITY OF OXNARD ,
COMMUNITY FACILITIES DISTRICT NO.
2003-1 OF THE CITY OF OXNARD ,
and
CITY OF OXNARD, for ASSESSMENT
DISTRICT 2001-1
By: _______________________________________
Name:

Title:
-Signature Page-
First Amendment to Local Agency Financing Documents
282
60302.00021\35018021.2
S-2
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Fiscal Agent
By: _____________________________
Name:

Title:
283
60302.00021\35018021.2
A-1

EXHIBIT A

THE CFD'S AND LOCAL AGENCY OBLIGATIONS
AD/CFD No. AD/CFD Name Bond Caption
2001-1
City of Oxnard Assessment
District No. 2001-1 (Rice
Avenue/Highway 101
Interchange)
City of Oxnard Assessment District No.
2001-1 (Rice Avenue/Highway 101
Interchange) Limited Obligation
Improvement Refunding Bonds, Series
2012, original issued in the aggregate
principal amount of $11,835,000
CFD No. 1
Community Facilities
District No. 1 (Westport at
Mandalay Bay) of the City
of Oxnard
Community Facilities District No. 1
(Westport at Mandalay Bay) of the City of
Oxnard 2012 Special Tax Refunding Bonds,
originally issued in the aggregate principal
amount of $8,750,000
CFD No. 2000-3
City of Oxnard Community
Facilities District No. 2000-
3 (Oxnard
Boulevard/Highway 101
Interchange)
City of Oxnard Community Facilities
District No. 2000-3 (Oxnard
Boulevard/Highway 101 Interchange)
Special Tax Refunding Bonds, Series 2012,
originally issued in the aggregate principal
amount of $7,980,000
284
60302.00021\35018021.2
B-1

EXHIBIT B

LOCAL AGENCY FINANCING DOCUMENTS
“Local Agency Financing Documents” includes, but is not limited to, the following documents relating to the Local Agency Obligations:

A. “AD Bonds Fiscal Agent Agreement” means that certain Fiscal Agent Agreement, dated as of August 1, 2012, by and between the City and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, as fiscal agent, establishing the terms and conditions pertaining to the issuance and administration of the AD Bonds.

B. “CFD No. 1 Bonds Fiscal Agent Agreement” means that certain Fiscal Agent Agreement dated as of August 1, 2012, by and between CFD No. 1 and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, as fiscal agent, establishing the terms and conditions pertaining to the issuance and administration of the CFD No. 1 Bonds.

C. “CFD No. 2000-3 Bonds Fiscal Agent Agreement” means that certain Fiscal Agent Agreement dated as of August 1, 2012, by and between CFD No. 2000-3 and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, as fiscal agent, establishing the terms and conditions pertaining to the issuance and administration of the CFD No. 2000-3 Bonds.
285
City of Oxnard
2022 Local Obligation Revenue Refunding Bonds
(Refunding Series 2012A and B Bonds)

PRESENTATION TO CITY COUNCIL
JUNE 30, 2022
286
Recommendations
 That:
 City Council of the City of Oxnard approving a first amendment to local agency financing documents and the execution of certain certificates relating to the issuance by the City of Oxnard Financing Authority of refunding revenue bonds for the purpose of refunding its outstanding Series 2012 Bonds.
 Board of Directors of the City of Oxnard financing authority authorizing the sale, issuance, and delivery of not more than $17,400,000 in principal amount of Local Obligation Revenue Refunding Bonds (Special District Bond) and approving certain documents and authorizing certain actions in connection therewith. 2 287
Background on 2012 A&B Bonds
 Original Issued principal: $28,565,000
 Combined Outstanding Par: $18,765,000
 Bonds issued to purchase underlying
bonds related to Assessment District 2001-
1 (Rice Avenue/Highway 101), CFD No. 1
(Westport at Mandalay Bay), and CFD No.
2000-3 (Oxnard Boulevard/Highway 101
Interchange)
 Debt service payments on the 2012 Bonds
come from assessments and special taxes in
those areas
 Series A are “senior” with “A-” credit rating
and Series B as “subordinate” without a
credit rating
 Combined annual debt service escalation
~1% per year through 2032; step down in
2033
9/2/20229/2/20239/2/20249/2/20259/2/20269/2/20279/2/20289/2/20299/2/20309/2/20319/2/20329/2/2033 0 500,000
1,000,000
1,500,000
2,000,000
2,500,000
2012A and 2012B Bonds
Outstanding Debt Service
3 288
Refunding Opportunity
 Despite moves up in interest rates, there
is an opportunity for the City to refund
outstanding debt and reduce annual
taxes in the Assessment
District/Community Facilities Districts
 Bonds are expected to be sold directly to
City National Bank (the “Bank”) through
a private placement
 The Bank has provided a locked interest
rate of 3.22% (vs 4.87% avg interest rate
on 2012 A&B Bonds)
 Taxpayers could see approximately
$350,000 average annual debt service
savings on the 2022 Bonds from 2023
through 2031
 Represents a 16% reduction in each year’s
debt service from 2023 through 2031
 $1.3 million cumulative savings in today’s
terms, net of all cost of issuing the bonds
4 9/2/20239/2/20249/2/20259/2/20269/2/20279/2/20289/2/20299/2/20309/2/20319/2/20329/2/2033 0 500,000
1,000,000
1,500,000
2,000,000
2,500,000
2022 Refunding LORBs
Estimated Net Debt Service and Savings
2022 Bonds Estimated Debt Service
2012A and B Bonds Debt Service
Approx. $350K
Annual Savings
289
City’s Financing Team
• Issuer for the 2022 Bonds
• City’s municipal financial advisor
City of Oxnard Financing
Authority
• Bond Counsel
NHA Advisors
• Placement agent
Best Best & Kreiger
• Special Tax Consultant
Piper Sandler
• Bond trustee
NBS
• Purchaser of the 2022 Bonds
Computershare Trust
Company
City National Bank
5 290
Summary of Legal Documents
Authorizing Resolutions
•Authorize legal documents and authorize
City staff to execute documents
•Identifies not-to-exceed amounts related
to the 2022 Bonds
Indenture of Trust
•Formalizes the relationship between City
of Oxnard Financing Authority and
Computershare Trust Company
•Terms of 2022 Bonds, including payment
schedule, prepayment provisions
Placement Agent Agreement
•Defines Piper Sandler’s role in placing the
2022 Bonds with the bank and identifies
amount to be paid to Piper Sandler
•Fees paid contingent on successful close
Irrevocable Refunding
Instructions
•Detailed instructions to Computershare
regarding process of refunding 2012A
and 2012B Bonds (establishment of
required funds, application of monies,
logistical items)
First Amendment to Local Agency
Financing Documents
•Amends the original 2012 documents to
instead refer to the 2022 Bond and
documents and Authority pledges
repayment
6 291
Anticipated Timing
May 10, 2022:

Finance and
Governance
Committee
Mid-May:

Receive
Proposals from
banks; Select
Winning Bank
Mid-May – Mid-
June: Work with
selected bank to
lock interest
rate and finalize
items of the
2022 Bonds
June 30, 2022:

City Council
considers 2022
Bonds
Mid-July 2022:

Close 2022
Refunding
Bonds, funds
transferred into
escrow
September 2,
2022:

Refund 2012A
and 2012B
Bonds
7 292
Recommendations
 That:
 City Council of the City of Oxnard approving a first amendment to local agency financing documents and the execution of certain certificates relating to the issuance by the City of Oxnard Financing Authority of refunding revenue bonds for the purpose of refunding its outstanding Series 2012 Bonds.
 Board of Directors of the City of Oxnard financing authority authorizing the sale, issuance, and delivery of not more than $17,400,000 in principal amount of Local Obligation Revenue Refunding Bonds (Special District Bond) and approving certain documents and authorizing certain actions in connection therewith. 8 293
Questions?
9 294

FINANCE AND GOVERNANCE COMMITTEE

AGENDA REPORT

REPORTS
AGENDA ITEM NO. J.2

DATE: June 30, 2022

TO: Finance & Governance Committee

FROM: Betsy George, Chief Financial Officer, (805) 200-5400, [email protected]

SUBJECT: 2021 Single Audit Report and Update on the Corrective Action Plan (CAP). (10/5/5)

RECOMMENDATION

That the City Council receive the 2021 Single Audit Report from the audit firm Eadie + Payne, and an update on the Corrective Action Plan (CAP) from staff.
(Finance and Governance Committee approved 3-0.)
Eadie + Payne presentation on the Single Audit Report will be live per consultant's request. Please click the following link to view the required Measure M pre-recorded staff's presentation video for the update on the Corrective Action Plan (CAP): https://youtu.be/rT89ZG6_CAY

BACKGROUND

The City’s annual audit for FY 2014-15 produced 111 single-audit findings. These findings primarily concerned the City's policies and procedures (or lack thereof) for accounting and financial management. During the FY 2015-16 audit, there were an additional five audit findings. For FY 2016-17, an additional 19 audit findings occurred, of which nine were repeat findings from the two prior audits. For FY 2017-18, an additional 37 audit findings occurred, of which 13 were repeat findings from the prior three audits. For FY 2018-19, there were an additional 11 findings, of which three were repeat findings from the prior four audits totaling 183 findings through FY 2018-19. For FY 2019-20, there was one additional audit finding, for Information Technology General Controls, which was communicated to City Council via a separate confidential written report due to its sensitive nature.

For FY 2020-21, there is one new finding for accounting and financial management, and only two earlier audit findings remain unresolved. There are no material weaknesses.

In order to correct the various accounting and financial management audit findings, the City was required to produce a Corrective Action Plan (CAP). This plan, updated annually, addresses all unresolved findings and the steps and timeline to correct them.

After the 2015 and 2016 single audits were released simultaneously by Eadie + Payne in the spring of 2017, staff in the Finance Department and other departments began to address the first 111 audit findings. During the remainder of 2017 and throughout 2018, they made significant progress in executing the CAP and addressing the findings. More than 30 material weaknesses were resolved. 295
In the meantime, however, new audit findings continued to pile up -- 67 more, as recapped above. Therefore, at the beginning of 2019 staff created a detailed audit scorecard, and began presenting it to the Finance & Governance Committee, and to City Council, every six months.

In October 2020, staff provided an update of the audit scorecard to the Finance & Governance Committee (and, later, to City Council) indicating that the total number of unresolved, unique (non-repeat) findings, at that time, was 16.

In the last update from staff in December 2021, the total of unresolved unique findings was 5.

As shown on the new audit scorecard (slide 5 of the accompanying PowerPoint presentation), of the 186 total audit findings (of which 159 were unique, non-repeat), only three remain outstanding. Slide 7 lists them. Two remain from prior year's audits and one new finding from the most recent 2020-21 audit, which was performed in March and April 2022.

STRATEGIC PRIORITIES

This agenda item supports the Organizational Effectiveness strategy. The purpose of the Organizational Effectiveness strategy is to reinforce, stabilize, improve, and strengthen the organizational foundation of the City in order to build a modern, high-functioning City government that effectively and efficiently supports the operating departments in providing high-quality services and programs for our residents and businesses.

FINANCIAL IMPACT

There is no financial impact.

Prepared by: Eadie+Payne, Jennifer Hiraoka, Senior Manager Internal Controls/Acting Controller

ATTACHMENTS

1. FY 20-21 Issued Single Audit Report

2. 6.30.22 CC E+P Presentation on the 2021 Single Audit Report

3. 6.30.22 CC Staff Presentation for the Update on Corrective Action Plan 296
297

CITY OF OXNARD

CONTENTS
JUNE 30, 2021
PAGE
Independent
Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ................. 1 Independent Auditor's Report on Compliance for Each Major Program; Report on Internal Control over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ................................ 3 Schedule of Expenditures of Federal Awards and Schedule of Findings and Questioned Costs Schedule of Expenditures of Federal Awards ........................... 7 Notes to the Schedule of Expenditures of Federal Awards .................... 1 0 Schedule of Findings and Questioned Costs ........................... 1 1 Schedule of Prior Audit Findings .................................. 1 6 298
299
expect quality .

Eadie Payne, LLP
3880 Lemon St., Ste. 300
Riverside, CA 92501
P.O. Box 1529
Riverside, CA 92502-1529
Office: 951-241-7800
www.eadiepaynellp.com
-1-

INDEPENDENT AUDITOR'S REPORT ON

INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON

AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable City Council
City of Oxnard
Oxnard, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Oxnard, California (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 30, 2021.

Our report includes a reference to other auditors who audited the financial statements of Oxnard Housing Authority, as described in our report on the City's basic financial statements. This report does not include the results of the other auditors' testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors.

Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control.

Accordingly, we do not express an opinion on the effectiveness of the City's internal control.
300

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A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in inte rnal control over financial reporting that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Riverside, California
December 30, 2021
301
expect quality .

Eadie Payne, LLP
3880 Lemon St., Ste. 300
Riverside, CA 92501
P.O. Box 1529
Riverside, CA 92502-1529
Office: 951-241-7800
www.eadiepaynellp.com
-3-

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM; REPORT ON INTERNAL CONTROL OVER
COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES

OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE
The Honorable City Council
City of Oxnard
Oxnard, California
Report on Compliance for Each Major Federal Program
We have audited City of Oxnard's (City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major Federal programs for the year ended June 30, 2021. The City's major Federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

The City's basic financial statements include the operations of the Oxnard Housing Authority, which expended $26,990,557 in Federal awards during the year ended June 30, 2021. Our audit, described below, did not include the operations of the Oxnard Housing Authority, because it engaged other auditors to perform an audit in accordance with the Uniform Guidance.

Management's Responsibility
Management is responsible for compliance with Federal statutes, regulations, and the terms and conditions of its Federal awards applicable to its Federal programs.
302

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Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the City's major Federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major Federal program. However, our audit does not provide a legal determination of the City's compliance.

Opinion on Each Major Federal Program
In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2021.

Other Matters
The results of our auditing procedures disclosed instances of noncompliance which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as items 2021-001 through 2021-002. Our opinion on each major federal program is not modified with respect to these matters.

The City’s response to the noncompliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

Report on Internal Control over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major Federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major Federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a 303

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Federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a Federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to iden tify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies, and therefore material weaknesses or significant deficiencies may exist that have not been identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we did identify certain deficiencies in internal control over compliance, described in the accompanying schedule of findings and questioned costs as items 2021-001 through 2021-002 that we consider to be significant deficiencies.

The City’s response to the internal control over compliance findings identified in our audit is described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated December 30, 2021, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of Federal awar ds is presented for the purposes of additional analysis as required by the Uniform Guidance, and is not a required part of the basic financial statements.

Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of Federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Riverside, California
April 15, 2022
304
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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
305
-7-

CITY OF OXNARD

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2021
Federal
Assistance Program Total Total Amount
Federal Grantor/Pass-through Listing Identification Program Provided to Grantor/Program Title Number Number Expenditures Subrecipients U.S. Department of Housing and Urban Development
CDBG - Entitlement Grants Cluster
Direct Program
Community Development Block Grants/Entitlement Grants 14.218 B-20-MC-06-0534 1,022,702$ 59,771$ B-19-MC-06-0534 647,804 -
B-18-MC-06-0534 273,418 -
B-17-MC-06-0534 297,637 670
B-16-MC-06-0534 204,801 3,751
COVID-19 Community Development Block Grants CARES Act 14.218 B-20-MW-06-0534 744,459 127,770 3,190,821 191,962
Total CDBG - Entitlement Grants Cluster 3,190,821 191,962 Direct Program
Emergency Solutions Grants Program 14.231 E-20-MC-06-0534 87,947 80,000 E-19-MC-06-0534 120,593 114,063
COVID-19 Emergency Solutions Grants - CARES Act 14.231 E-20-MW-06-0534 1,255,967 1,234,249 1,464,507 1,428,312
Direct Program
HOME Investment Partnership Program 14.239 M-19-MC-06-0526 156,667 - M-17-MC-06-0526 100,397 -
257,064 -
Total U.S. Department of Housing and Urban Development 4,912,392 1,620,274 U.S. Department of Homeland Security
Passed through the County of Ventura
Homeland Security Grant Program 97.067 2019-0035 15,902 - 2018-0054 2,285 -
2018-0054 2,574 -
2018-0054 31,294 -
52,055 -
Passed through the County of Ventura
Emergency Management Performance Grant 97.042 2019-0003 5,520 - 5,520 -
Passed through the California Office of Emergency Services

97.039 HMGP #4407-431-079R 20,385 -
HMGP#4344-460-120R 1,451 -
21,836 -
Direct Program
Assistance to Firefighters Grant FY19 97.044 EMW-2019-FG-09826 178,006 71,461 EMW-2019-FG-09714 12,002 -
EMW-2018-FO-03109 284,157 -
474,165 71,461
Passed through the California Office of Emergency Services

97.036 FEMA 4482-DR-CA-COVID-19
Pandemic
43,864 -
43,864 -
Total U.S. Department of Homeland Security 597,440 71,461 COVID-19 Disaster Grants - Public Assistance (Presidentially Declared Disasters)
Hazard Mitigation Grant - Emergency Backup Generator at Oxnard Shores See accompanying notes to Schedule of Expendi
tures of Federal Aw ards and Independent Auditor's Report on Compliance for Each Ma jor Program; Report on Internal Control over Compliance; and Report on the Schedule of Expenditures of Federal Awards required by the Uniform Guidance.
306

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CITY OF OXNARD
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued)
FOR THE YEAR ENDED JUNE 30, 2021

Federal
Assistance Program Total Total Amount
Federal Grantor/Pass-through Listing Identification Program Provided to Grantor/Program Title Number Number Expenditures Subrecipients U.S. Department of Justice
Direct Program
Equitable Sharing Program 16.922 CA0560400-NCIC 86,817 - 86,817 -
Direct Program
Edward Byrne Justice Assistance Grant (JAG) 16.738 2020-DJ-BX-0781 3,316 - 2017-DJ-BX-0957 5,101 -
2018-DJ-BX-0852 13,171 11,206
21,588 11,206
Passed through the County of Ventura Sheriff Department FY19 Edward Byrne Justice Assistance Grant (JAG) 16.738 BSCC 655-19 6,974 - 6,974 -
28,562 11,206
Direct Program
COVID-19 FY2020 Coronavirus Emergency Supplemental Funding 16.034 2020-VD-BX-0321 59,161 - 59,161 -
Total U.S. Department of Justice 174,540 11,206 U.S. Department of Transportation
Highway Planning and Construction Cluster
Passed through the State of California Department
of Transportation
Rice Ave. & 5th Street Grade Separation 20.205 STPL-5129(084) - - Bicycle Facilities in Northeast Specific Plan 20.205 CML-5129 (086) 41 - C Street Bicycle Facilities 20.205 CML-5129 (087) 1,476 - Westside of Rose Ave. Between Auto Ctr. & E. Collins 20.205 CML-5129 (079) 2,385 - Northside Vta Blvd. Between Balboa & Rose Avenue 20.205 CML-5129 (078) 8,369 - Channel Island Blvd over Mandalay Bay - Bridge 20.205 BHLS-5129(069) - - Channel Island Blvd over Edison Canal - Bridge 20.205 BHLS-5129(070) - - Cross Walk Beacon Phase II 20.205 CML-5129(091) - - Traffic Signal Various Locations 20.205 HSIPL 5129 (093) 62,666 - Vineyard Av Resurf PW 16-12 20.205 FERSTPL-5129(092) - - Oxnard Blvd Bike Lane 2017 20.205 ATPCML-5129(090) 30,533 - City Wide Signal Mod 20.205 HSIPL 5129 (095) 70,343 - 175,813 -
Total Highway Planning and Construction Cluster 175,813 - Passed through the California Department of Transportation, Division of Rail and Mass Transportation (DRMT)
Railroad Development Rice Ave & 5th Street Grade Separation 20.314 69A36518500220STECA/ 75A0501
1,914 -
1,914 -
Highway Safety Cluster
Passed through the State of California Office of
Traffic Safety
OTS Pedestrain & Bicycle Safety Program-2020 20.600 PS21024 10,910 - OTS Traffic Enforcement - 2021 20.600 PT21094 79,216 - OTS Traffic Enforcement - 2020 20.600 PT20098 42,405 - Total Highway Safety Cluster 132,531 -
Passed through the State of California Office of
Traffic Safety
OTS Traffic Enforcement - 2021 20.608 PT21094 146,797 - FY2020 Minimum Penalties for Repeat Offender for Driving While Intoxicated 20.608 PT20098 115,230 - 262,027 -
Passed through the State of California Office of
Traffic Safety
OTS Child Passenger Safty - 2020 20.616 OP21013 6,405
OTS Traffic Enforcement - 2021 20.616 PT21094 35,349 - 41,754 -
Total U.S. Department of Transportation 614,039 -

See accompanying notes to Schedule of Expenditures of Federal Aw ards and Independent Auditor's Report on Compliance for Each Ma jor Program; Report on Internal Control over Compliance; and Report on the Schedule of Expenditures of Federal Awards required by the Uniform Guidance.
307
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CITY OF OXNARD
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued)
FOR THE YEAR ENDED JUNE 30, 2021
Federal
Assistance Program Total Total Amount
Federal Grantor/Pass-through Listing Identification Program Provided to Grantor/Program Title Number Number Expenditures Subrecipients Corporation for National and Community Service
Direct Program
Retired and Senior Volunteer Program FY19-20 94.002 19SRPCA007 21,391 Retired and Senior Volunteer Program FY20-21 94.002 19SRPCA007 65,089 - Total Corporation for National and Community Service 86,480 - U.S. Department of Health and Human Services
Aging Cluster
Passed through the County of Ventura Area Agency on Aging Special Programs for the Aging, Senior Nutrition Services 93.045 3500FY20-05 172,884 - Total Aging Cluster 172,884 -
Total U.S. Department of Health and Human Services 172,884 - Total Direct Program 5,640,603 1,702,941
Total Pass Through 917,172 -
TOTAL EXPENDITURES OF FEDERAL AWARDS 6,557,775$ 1,702,941 $ See accompanying notes to Schedule of Expenditures of Federal Aw ards and Independent Auditor's Report on Compliance for Each Ma jor Program; Report on Internal Control over Compliance; and Report on the Schedule of Expenditures of Federal Awards required by the Uniform Guidance.
308
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CITY OF OXNARD

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2021

1. BASIS OF PRESENTATION
The accompanying schedule of expenditures of Federal awards (Schedule) includes the Federal award activity of City of Oxnard (City) under programs of the Federal government for the year ended June 30, 2021. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the City. It does not include the Federal award activity of Oxnard Housing Authority, a blended component unit of the City, which expended $26,990,557 in Federal awards.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting.

Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

3. INDIRECT COST RATE
The City has not elected to use the 10% de minimis indirect cost rate.

4. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
Amounts reported in the Schedule agree, in all material respects, with amounts reported in the basic financial statements of the City of Oxnard. The following presents a reconciliation of Federal expenditures to those reported in the financial statements:

AMOUNT
Total expenditures per the schedule of expenditures of
federal awards 6,557,775 $
Add: Expenditures of nonfederal awards 221,081,383

TOTAL GOVERNMENTAL FUNDS EXPENDITURES
PER THE FINANCIAL STATEMENTS 227,639,158$

5. FEDERALLY-FUNDED LOANS
The City administers loans, primarily forgivable loans, made from funds provided by the following
Federal programs for the year ended June 30, 2021:

LOANS

FEDERAL PROGRAMS OUTSTANDING
Community Development Block Grants
(CFDA #14.218) 3,807,569 $
HOME Investment Partnership Program
(CFDA #14.239) 10,770,657
309

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CITY OF OXNARD

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021

SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP:

Internal control over financial reporting:
• Material weaknesses identified? Yes x No
• Significant deficiencies identified? Yes x None reported Noncompliance material to financial statements noted: Yes x No Federal Awards
Internal control over major programs:

Material weaknesses identified? Yes x No
Significant deficiences identified? x Yes None reported Type of auditor's report issued on compliance
for major programs:

Any audit findings disclosed that are required to be
reported in accordance with 2 CFR 200.516(a)? x Yes No Identification of major programs:

CFDA No. Name of Federal Program or Cluster

14.218 CDBG-Entitlement Grants Cluster

14.231 Emergency Solutions Grants Program
Dollar threshold used to distinguish between
type A and type B programs: $750,000
Auditee qualified as low-risk auditee? x Y e s N o
Unmodified
Unmodified
310
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CITY OF OXNARD

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
INDEX

CURRENT YEAR

MAJOR FEDERAL AWARD PROGRAMS
Indirect Cost Allocation 2021-001
2021-002

FINANCIAL STATEMENTS

PRIOR YEAR

MAJOR FEDERAL AWARD PROGRAMS
Indirect Cost 2017-005

FINANCIAL STATEMENTS
Information Technology General Controls 2020-001
Lease Agreements 2018-015
Pension Plans 2018-016
Information Technology General Controls 2018-018 to 2018-037 Information Technology General Controls 2017-016
Notes Receivable 2015-068
CDBG HUD Findings
None
311
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CITY OF OXNARD

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021

FINDINGS AND
QUESTIONED COSTS – MAJOR PROGRAMS
2021-001 – Indirect Cost Allocation (SD)
CFDA Title and Number: 14.218 - Community Block Grants
Name of Federal Agency: Department of Housing and Urban Development Internal Control over Compliance: Allowable Cost
Criteria: 2 CFR Part 200.414 requires that governmental entities support indirect costs with a cost allocation plan or an indirect cost proposal prepared in accordance with the Uniform Guidance. 2 CFR Part 200 Appendices III-VII contain
the requirements for the development and submission of indirect cost rate proposals and cost allocation plans. A non-Federal entity that has never received a negotiated indirect cost rate, may elec
t to charge a de minimis rate of 10% of modified total direct costs.

Condition: The City does not have
a cost allocation plan or an indirect cost proposal prepared in accordance with the Uniform Guidance. The City has not ele cted to use the 10% de minimis rate either.

The City charged $22,573 of liability insurance costs to Fund 285 based on a City cost allocation plan.

Cause: The City has n
ot completed the indirect cost stud y that will comply with requirements of the Uniform Guidance for indirect cost.

Effect or Potential Effect:

Indirect costs charged to the CDBG program may not eligible for reimbursement.

Questioned Cost: None, since the am
ount charged was less than 10% of the total cost.

Repeat of a Prior-Year Finding: 2017-005
Recommendation: The City should complete the central service cost allocation plan (as indicated in the Corrective Action for prior year finding 2017-005). It should include the cost allocation plan for indirect c
osts, including liability insurance, as required by Uniform Guidance.

City’s Response 202
1: The City continues making progress on developing the central service cost allocation plan that will include a cost allocation method for indirect costs, such as liability insurance, in accordance with OMB’s Uniform Guidance.

Planned Implementation Date: The central service cost allocation plan will be completed by September 2022 and will be implemented with the FY 23-24 budget.

Responsible Person: Jim Costello, Financial Analyst III; Beth Vo, Assistant CFO
(SD – Significant Deficiency)
312
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)

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2021-002 – CDBG HUD Findings (SD)
CFDA Title and Number: 14.218 - Community Block Grants
Name of Federal Agency: Depart
ment of Housing and Urban Development
Internal Control over Compliance: Allowable Cost
Criteria: Recipients of CDBG grants are required to be in compliance with all requirements imposed by the U.S. Department of Housing and Urban Development at all times.

Condition: The City received fifteen findings and two conc erns from the U.S. Department of Housing and Urban Development as part of the Fiscal Year 2021 Remote Monitoring Report for the Community Development Block Grant (CDBG) Program. HUD conduc ted the remote monitoring in order to assess the City’s performance and compliance with applicable requirements. This report covered grants B-18- MC-06-0534 and B-19-MC-06-0534 for $2,502,719 and $2,516,091, respectively.

A finding is a deficiency in progra m performance bas ed on a violation of a statutory or regulatory requirement. A concern is a deficiency in program performance that is not based on a statutory or regulatory requirement but is brought to the City’s attention.

The following summarizes the findings:
1) Fair Housing Eligibility – The City did not provide sufficient docum entation to support a subrecipient’s eligibility and national objective.
2) Fire Station Equipment and Vehicles – Fire station generators is an ineligible use of CDBG funds. 3) Citywide Homebuyer Loan Program – The City provided all participants a standard loan of $30,000 instead of limiting the amount of the loan to 50% of the required down payment as specified in CDBG regulations.
4) Conflict of Interest – The City provided a homeowner loan to a City employee and t here was no evidence that the City determined whether a conflict of interest existed. 5) Time and Activity Sheets – The City did not provide documentation associating staff costs charged to specific CDBG program with eligible housing activities carried out. 6) Lead-Based Paint – The City’s rehabilitation program relies solely on a form signed by the City inspector indicating that the home was built after 1978 to determine when a property requires lead-based paint inspection, assessment and correction. 7) Procurement Written Policies and Procedures – The City’s purchasing policy manu al did not address if cost plus a percentage of cost and percentage of construction cost methods of contracting were prohibited.
8) Procurement History – The City’s documentation was not sufficient to detail the procurement history to identify the rationale for the method of procurement, the selection of contract type, contract selection or reject, or the basis for the cost or price of the contract. 9) Procurement Procedures for Housing Services Programs and Fire Department – The City did not have policies to guarantee that environmental consultants are procured for based on qualifications. There was no evidence provided for the procurement of select fire department equipment and vehicles.
(SD – Significant Deficiency)
313
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
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10) Financial Standards -- HUD was unable to determine the account codes assigned to specific CDBG activities, CFDA title and grant number within the City’s accounting records. Without these, HUD was unable to identify the source and application of the CDBG award. 11) Source Documentation – Source documentation did not support all expenditure costs of select vouchers reviewed.
12) Record Retention and Access Policy – The City’s record retention and access policy did not comply with 2 CFR Part 200 requirements.
13) Protected Personally Identifiable (PII) Information – The City did not provide written documentation to support an internal control self-assessment nor measures to safeguard PII information.
14) Audit Costs – HUD was unable to determine if measures are in place to ensure HUD awards are charged no more than a reasonably proportionate share of the audit costs. 15) Equipment Records – The City’s equipment records do not comply with all requirements of 2 CFR Part 200.

Cause: The deficiencies were attributed by HUD to various causes including:
 Not having updated policies and procedures for the CDBG programs  The procurement policies and procedures needing to be revised to comply with 2 CFR Part 200  Not having the appropriate accounting codes to keep track of CDBG costs by activity/program/grant number
 Not keeping complete documentation to support costs charged to CDBG.

Effect or Potential Effect: Various
Questioned Cost: None for current year. For prior years: $470,000 for Finding #2; $5,137.16 for Finding #11
Context: The U.S. Department of Housing and Urban Development conducted a routine monitoring assessment over a selection of CDBG grants administered by the City during program years 2018 and 2019, and determined that the City had fifteen findings which would require corrective actions, and two concerns for which they provided recommended actions.

Repeat of a Prior-Year Finding: No.

Recommendation: We recommend that the City continue to follow up with the U.S. Department of Housing and Urban Development in order to sufficiently meet the required corrective action plan.

City’s Response 2021: The City continues to follow up with the U.S. Department of Housing and Urban Development (HUD) in order to sufficiently complete its Corrective Action Plan detailed in the City’s response to Fiscal Year 2021 Remote Auditing letter to HUD dated February 8, 2022.

Planned Implementation Date: Corrective Action completion dates vary by finding, with all Corrective Actions to be completed by May 9, 2022.

Responsible Person: Andrea Palmer, Grants Manager
314
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CITY OF OXNARD

SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2021

FINDINGS AND
QUESTIONED COSTS – MAJOR FEDERAL PROGRAMS
2017-005 - Indirect Cost (SD)
CFDA Title and Number: 14.218 - Community Block Grants
Name of Federal Agency: Department of Housing and Urban Development Internal Control over Compliance: Allowable Cost
Criteria: 2 CFR Part 200.414 requires that governmental entities support indirect costs with a cost allocation plan or an indirect cost proposal prepared in accordance with the Uniform Guidance. 2 CFR Part 200 Appendices
III-VII contain the requirements for the development and submission of indirect cost rate proposals and cost allocation plans. A non-Federal entity that has never received a negotiated indirect cost
rate, may elect to charge a de minimis rate of 10% of modified total direct costs.

Condition: The
City does not have a cost allocation plan or an indirect cost proposal prepared in accordance with the Uniform Guidance. The City has not elected to use the 10% de minimis rate either. The City charged in fiscal year 2016-2017 $76,912 of indirect costs to Fund 285 based on a City cost allocation plan.

Cause: The Finance Department was not aware of the requirements of the Uniform Guidance for indirec t
cost, and allocated cost to CDBG and posted the
entry without consulting the grants administrator.

Effect or Potential Effect: Any indirect costs charged to the CDBG program are not eligible for reimbursement.

Questioned Cost: None
Context: The Housing Department discovered the error and did not claim reimbursement for the amount.

The amount was not included in the
Schedule of Expenditures of Federal Awards.

Repeat of a Prior-Year Finding: 2015-060
Recommendation: The City should complete the central service cost allocation plan (as indicated in the Corrective Action for
prior year finding 2017-005). It should include the cost allocation plan for indirect costs, including liability insurance, as required by Uniform Guidance.

City’s Response 2021:

The City continues making progress on developing the central service cost allocation plan that will include a cost allocation method for indirect costs, such as liability insurance, in accordance with OMB’s Uniform Guidance.

Planned Implementation Date:

The central service cost allocation plan
will be completed by
September 2022 and will be implemented with the FY 23-24 budget.

Responsible Person:

Jim Costello, Financial Analyst III; Beth Vo, Assistant CFO (SD – Significant Deficiency)
315
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SCHEDULE OF PRIOR AUDIT FINDINGS (Continued)

FINDINGS AND QUE

STIONED COSTS - FINANCIAL STATEMENTS
2020-001 – Information Technology (IT) General Controls (SD) Criteria: IT general controls (ITGC) are basic controls applied to IT systems. The objectives of ITGC are to ensure the integrit
y of data and processes that the IT systems support. ITGC have a pervasive effect on the City’s system of internal control over financial reporting.

Condition: We evaluated the design and implementation of ITGCs and noted 12 findings. We communicated such findings to the IT Department. Because those findings reveal vulnerabilities to, or otherwise increase the potential for an attack on, the information technology systems of the City, the details of the findings will not be published in this document. They will, however, be communicated to the City Council via a separate confidential written r
eport.

Repeat of a Prior-Year Finding: 5 out of 12 were repeat findings Recommendation: Our recommendations will be communicated to th e City Coun cil via a se parate confidential written report.

City’s Response: The City’s corrective action plan will be communicated to the City Council via a separate confidential written report. The auditors will follow up on th e City’s implementation of its
corrective action plan in the next audit.

EP's Comment 2021: In progress
2018-015 – Lease Agreements (SD)
Criteria: The City routinely enters into lease agreements. Lease agreements should be identified and evaluated by the Finance Departme
nt to determine proper accounting and ensure that they are properly reported in the City’s financial reports.

Finding: The City has not implemented a process to identify and evaluate all lease agreements. In March 2018, the City entered into two capital lease agreements in the amount of $5 million each, however the transaction was only recorded in September 2018 during audit fieldwork. In addition, one of the agreements was misclassified under the Wastewater Fund; instead of Environmental Resource Fund.

Cause: The
Finance Department does not have a process to identify and evaluate all lease agreements.

Effect or Potential Effect: Misstatement of assets and liabilities.

Repeat of a Prior-Year Finding: 2015-074
(SD – Significant Deficiency)
316
SCHEDULE OF PRIOR AUDIT FINDINGS (Continued)

-18-
Recommendation: Assign a member of the Finance Department who has sufficient knowledge and skills to identify and evaluate all lease agreements to ensure that they are properly reported in the financial statements and related disclosures. Communication should be made with those entering into agreements. The process should be documented in writing.

EP’s Comment 2021: Complete.
2018-016 - Pension Plans (SD)
Criteria: The City has four separate pension plans covering certain groups of employees.

The calculation of the City’s net pension liability, deferred inflows and outflows of resources and pension expense is based to a large extent on the cen
sus data provided by the City to the actuaries. The City should review the census data and correct any errors on an annual basis.

Condition: Census data used by CalPERS and PARS to calculate t he net pension liability was not reviewed. Discrepancies in demographic and compensation data were noted in current year as well as in prior years.

Cause: The City does not have a process in pla
ce to review the CalPERS and PARS census data.

Effect or Potential Effect: Potential misstatement of the net pensio n liability, d eferred inflows and outflows of resources related to pension, and pension expense.

Repeat of a Prior-Year Finding: 2015-092
Recommendation: Review the census data used by actuaries in calcula ting the net pension liability and ensure that discrepancies are investigated and resolved appropriately.

EP’s Comment 2021: Complete.
2018-018 – 2018-037 –Information Technology (IT) General Controls (SD) Criteria: IT general controls (ITGC) are basic controls applied to IT systems. The objectives of ITGC are to ensure the integrity of data and processes that the IT systems support. ITGC have a pervasive effect on the City’s system of internal control over financial reporting.

Condition: We evaluated the design and imp l ementation of ITGCs and noted 20 findings. We communicated such findings to the IT department. Because those findings reveal vulnerabilities to, or otherwise increase the potential for an attack on, information technology systems of the City, the details of the findings will not be published in this document. They will however be communicated to the City Council via a separate confidential written report.

Repeat of a Prior-Year Finding: No
Recommendation: Our recommen dations will be communicated to th e City Council via a separate
confidential written report.
(SD – Significant Deficiency)
317
SCHEDULE OF PRIOR AUDIT FINDINGS (Continued)

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City's Response 2021: The City's corrective action plan will be communicated to the City Council via a separate confidential written report. The auditors will follow-up on the City’s implementation of its corrective action plan in the next audit.

EP’s Comment 2021: In progress.
2017-016 - Information Technology General Controls (SD) Criteria: The City should establish and implement comprehensive data security controls to protect sensitive data, mitigate risks to confidentiality, and ensure the integrity and availability of data in the City's information systems.

Condition: We found deficiencies in data security controls. We communicated such findings to the IT department. Because those findings reveal vulnerabilities to, or otherwise increase the potential for an attack on, information technology systems of the City, the details of the findings will not be published in this document. They will however be communicated to the City Council via a separate confidential written report.

Recommendation: Our recommendations will be communicated to the City Council via a separate confidential written report.

City's Response 2021: The City's corrective action plan will be communicated to the City Council via a separate confidential written report. The auditors will follow-up on the City's implementation of its corrective action plan in the next audit.

EP’s Comment 2021: In progress.
2015-068 - Notes Receivable (SD)
Finding: There are no procedures
in place to collect payments from developers based on residual revenues.

Recommendation: Policies and procedures must be developed and implemented to collect payments from developers based on residual revenues.

EP’s Comment 2021: Complete.
(SD – Significant Deficiency)
318
Single Audit Report for
Fiscal Year Ended June 30, 2021
City Council Meeting
June 30, 2022
319
1 Introduction
2 Schedule of Expenditures of Federal
Awards (SEFA)
3 Internal Control Findings
AGENDA
City Council Meeting, June 30, 2022
320
City Council Meeting, June 30, 2022
Introduction
•Single Audit Report
• Internal Control Report Required by Government Auditing Standards
• Report on Compliance for Each Major Program
• Report on Internal Control on Internal Control over Compliance • Report on the Schedule of Expenditures of Federal Awards 1 321
City Council Meeting, June 30, 2022
Schedule of Expenditures of Federal Awards (SEFA)
• Total Expenditures $6.56M
• Major Programs 2
• Total Programs 18
2 322
City Council Meeting, June 30, 2022
• Findings Categories
• Material weakness (MW) – none
• Significant deficiency (SD) -- 3
• New finding – 1
• Prior year findings -- 2
Internal Control Findings 3
323
THANK
YOU!
Eden C. Casareno
[email protected]
909.809.7662
324
1 2021 SINGLE AUDIT REPORT

AND UPDATE ON THE CORRECTIVE

ACTION PLAN
Presentation to City Council
Betsy George, Chief Financial Officer
Jennifer Hiraoka, Senior Manager Internal Controls
June 30, 2022
RECOMMENDATION 2
That the City Council receive the 2021 Single Audit Report from the audit firm Eadie + Payne, and update on the
Corrective Action Plan (CAP) from staff.
325
2 AGENDA 3
• Status of Corrective Action Plan
• Continued progress
CAP STATUS DEFINITIONS 4
Complete – Auditors have tested and determined that corrective action for the finding has been effectively implemented To Be Tested – Policies and Procedures (P&P) approved (if applicable), training completed and corrective action ready for auditors to test during the next single audit
P&P Draft – P&P drafted but not yet approved by CFO and/or training not yet provided.

In Progress – Staff has taken steps towards implementation, but not yet drafted P&P or completed training
Not Started – Staff has not initiated mitigations, implemented resolutions or provided training
Passed/No Longer Required – Staff disagrees with the finding and/or auditors have determined corrective action is no longer required 326
3 FY 2021 SINGLE AUDIT RESULTED IN ONE ADDITIONAL FINDING, 2 PREVIOUS FINDINGS REMAIN UNRESOLVED – NO MATERIAL WEAKNESSES
5 FINDINGS STATUS (2015-2021)
(as of April '22)

MATERIAL

WEAKNESS

SIGNIFICANT

DEFICIENCY
Non-
Compliance
Best
Practice TOTAL
TOTAL Findings 72 78 17 19 186
Repeat Findings (7) (12) (4) (4) (27)
TOTAL Unique Findings 65 66 13 15 159
COMPLETE 63 60 7 12 142
Passed / No Longer Required 2 3 6 3 14
TO BE TESTED 0 0 0 0 0
P&P DRAFT 0 0 0 0 0
IN PROGRESS 0 3 0 0 3
NOT STARTED 0 0 0 0 0
TOTAL Unresolved Findings 0 3 0 0 3
CORRECTIVE ACTION PLAN STATUS THROUGH OCTOBER 2021
6 TOTAL Findings 72 76 17 19 184
Repeat Findings (7) (11) (4) (4) (26)
TOTAL Unique Findings 65 65 13 15 158
COMPLETE 63 57 7 12 139
Passed / No Longer Required 2 3 6 3 14
TO BE TESTED 0 3 0 0 3
P&P DRAFT 0 0 0 0 0
IN PROGRESS 0 2 0 0 2
NOT STARTED 0 0 0 0 0
TOTAL Unresolved Unique
Findings 0 5 0 0 5
TOTALFINDINGS STATUS (2015-2020)
(as of October '21)

MATERIAL

WEAKNESS

SIGNIFICANT

DEFICIENCY
Non-
Compliance
Best
Practice
327
4 REMAINING AUDIT FINDINGS
The three (3) outstanding remaining findings:
 CDBG HUD Findings [Housing Department]
 Update to Indirect Cost Allocation Plan [Finance Department]  Information Technology (IT) General Controls [IT Department] 7 HISTORY OF PROGRESS 8
*Includes all unique findings excluding “Complete” or “Passed/No Longer Required” status 35 39
5 8
87 23
22 4
8 57
21 20
1 11
53 1
10 1
4 16
0 5
0 0
5 0
5 0
0 5
0 3
0 0
3 MATERIAL WEAKNESS

SIGNIFICANT DEFICIENCY
Non-Compliance
Best Practice
TOTAL
COUNT OF UNRESOLVED* FINDINGS 2015-2021
CAP STATUS - As of Mar'19
CAP STATUS - As of Oct'19
CAP STATUS - As of Mar'20
CAP STATUS - As of Oct'20
CAP STATUS - As of Mar'21
CAP STATUS - As of Oct'21
CAP STATUS - As of Apr 22
328
5 • New Controller started April 18, 2022
• All nine Internal Control Integrated Framework (ICIF) Policies adopted as of December 2021
• On-going Training
o Staff
o Finance and Governance Committee serving as audit committee • ERP implementation project on-going
o Numerous financial and process controls to be enhanced in conjunction with Munis implementation (go-live October 2022) PROGRESS CONTINUES 9
RECOMMENDATION 10
That the City Council receive the 2021 Single Audit Report from the audit firm Eadie + Payne, and update on the
Corrective Action Plan (CAP) from staff.
329