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HomeMy WebLinkAboutGrays Crossing Bond Agreement TRUCKEE DONNER PUBLIC UTILITY DISTRICT COMMUNITY FACILITIES DISTRICT NO. 04-1 (GRAY'S CROSSING) SPECIAL TAX BONDS BOND PURCHASE AGREEMENT 2004 Board of Directors Truckee Donner Public Utility District, as legislative body of Truckee Donner Public Utility District Community Facilities District No. 04-1 (Gray's Crossing) P.O. Box 309 Truckee, California 96160 Gentlemen: UBS Financial Services Inc. (the "Underwriter"), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement with Truckee Donner Public Utility District Community Facilities District No. 04-1 (Gray's Crossing) (the "Community Facilities District") which, upon acceptance, will be binding upon the Community Facilities District and the Underwriter. This offer is made subject to its acceptance by the Community Facilities District on the date hereof, and it is subject to withdrawal by the Underwriter upon notice delivered to the Community Facilities District at any time prior to the acceptance by the Community Facilities District. Capitalized terms that are used in this offer and not otherwise defined herein shall have the respective meanings ascribed to them in the Indenture (as hereinafter defined). I. Purchase Sale and Delive of the Bonds. (a) Subject to the terms and conditions, and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter agrees to purchase from the Community Facilities District, and the Community Facilities District agrees to sell to the Underwriter, all (but not less than all) of the Truckee Donner Public Utility District Community Facilities District No. 04-1 (Gray's Crossing) Special Tax Bonds (the "Bonds") in the aggregate principal amount specified in Exhibit A hereto. The Bonds shall be dated the Closing Date (as hereinafter defined), bear interest from said date (payable semiannually on March 1 and September 1 in each year, commencing March 1, 2005) at the rates per annum, and mature on the dates and in the amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be $ (representing the principal amount of the Bonds, less an Underwriter's discount of S (b) The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable and be subject to redemption as provided (2) in, a Trust Indenture (the "Indenture"), dated September 1, 2004, by and between the Community Facilities District and BNY Western Trust Company (the"Trustee"). onds (c) The Underwriter has previously distributed to potential 2004(wh(which Prelims of theinary the Preliminary official Statement for the Bonds, dated Official Statement, together with its cover page and all appendices thereto, is herein referred to as the ""Preliminary official Statement" and which, as amended with the prior approval of he Underwriter and executed by the Community Facilities District, will be referred to herein as the "Official Statement"), Such distribution of the Preliminary official Statement by the Underwriter subsequent to its receipt of a certificate from the Community Facilities District deeming the Preliminary Official Statement final for purposes of Rule 15e2-12 of the Securities and Exchange Commission ("Rule 15c2-12"). The Community Facilities District hereby ratifies the use by the Underwriter of the Preliminary Official Statement and authorizes the Underwriter to use and distribute the official Statement, the Indenture, the Community Facilities District d as of September I, 2004, by and between the Continuing Disclosure Agreement, date Community Facilities District and MuniFinancial, as Dissemination Agent (the "District Continuing Disclosure Agreement"), this Bond Purchase Agreement, any other documents or contracts to which the Community Facilities District is a party, and all information contained therein, and all other documents, certificates and statements furnished by the Community Facilies BondirPu hasestrictAgreementd in rconn conneto the Unerwiter in ction with17thetl the offer transactions ofcontemplated by this e Underwriter. (d) At 8:00 A.M., Los Angeles time, on 2004, or at such earlier time or date as shall be agreed upon by the Underwriter and the Community Facilities ity D striies Distri t time and date being herein referred to as the ""Closing Date"), the will deliver (i) to The Depository Trust Company in New York, New York, the Bonds in definitive form (all Bonds being in book-entry form registered in the name of Cede & Co. and having the CUSIP numbers assigned to them printed thereon), duly executed by the officers of the District as the officials of the Community Facilities District as provided in the Indenture, and (ii) to the Underwriter, at the San Francisco, California offices of Stradling Yocea Carlson & Rauth, a Professional Corporation (`Bond Counsel'), the documents herein mentioned; and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in same day funds (such delivery and payment being herein referred to as the "Closing"). (e) The Underwriter agrees to make a bona fide public offering of the Bonds at the initial offering prices set forth in the Official Statement, which prices may be changed from time to time by the Underwriter after such offering. 2, Re-resentations Warranties and Agreements of the Communit Facilities District. The Community Facilities District represents, warrants and covenants to and agrees with the Underwriter that: (a) The Truckee Donner Public Utility District (the "District") is duly organized and is validly existing under the Constitution and laws of the State as a public utility district, has full execute, deliver and perform its obligations under the legal right, power, and authority to dated as of July 22, 2004 (the"Acquisition Agreement") Acquisition and Disclosure Agreement, 2 (2) between Gray's Crossing, LLC, a Delaware limited liability company (the "Developer") and the District and to carry out all transactions contemplated by the Acquisition Agreement. (b) The District has duly adopted a resolution forming the Community Facilities District(the "Resolution of Formation") and an ordinance authorizing the levy of a special tax on the taxable property within the Community Facilities District (the "Special Tax Ordinance") and all other ordinances and resolutions referred to in the Resolution of Formation and the Special Tax Ordinance. The District has caused to be recorded in the real property records of the County of Nevada a Notice of Special Tax Lien (the "Notice of Special Tax Lien") (such ordinances and resolutions and Notice of Special Tax Lien being collectively referred to herein as the "Formation Documents"). Each of the Formation Documents remains in full force and effect as of the date hereof and has not been amended. (c) The Community Facilities District is duly organized and validly existing as a community facilities district under the Mello-Roos Community Facilities Act of 1982, as amended (the "Act") and the laws of the State of California and has, or at the Closing Date will have, as the case may be, full legal right, power and authority (i) to execute, deliver and perform its obligations under this Bond Purchase Agreement, the Indenture and the District Continuing Disclosure Agreement, and to carry out all transactions contemplated by each of such agreements, (ii) to issue, sell and deliver the Bonds to the Underwriter as provided herein, and (iii) to carry out, give effect to and consummate the transactions contemplated by the Formation Documents and the Official Statement and by the Indenture, this Bond Purchase Agreement, the District Continuing Disclosure Agreement and the Acquisition Agreement (collectively, the "Community Facility District Documents"); (d) The Community Facilities District has complied, and at the Closing Date will be in compliance, in all material respects, with the Act and the Community Facilities District Documents; and any immaterial compliance therewith by the Community Facilities District, if any, will not impair the ability of the Community Facilities District to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of the Bonds, the Community Facilities District will continue to comply with the Act and the covenants of the Community Facilities District contained in the Community Facilities District Documents; (e) The District has duly and validly: (i) taken or caused to be taken, all proceedings necessary under the Act and the Constitution and laws of the State of California in order to form the Community Facilities District, to authorize the levy of a special tax (the "Special Tax") on the taxable property within the Community Facilities District pursuant to the Rate and Method of Apportionment of Special Tax approved pursuant to the Resolution of Formation (the "Rate and Method of Apportionment"), to cause the Special Tax to be secured by a continuing lien on each parcel of Taxable Property (as defined in the Rate and Method of Apportionment) and to authorize the sale and issuance of the Bonds, (ii) authorized and approved the execution and delivery of the Community Facilities District Documents, (iii) authorized the preparation and delivery of the Preliminary Official Statement and the Official Statement, and (iv) authorized and approved the performance by the Community Facilities District of its obligations contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions contemplated by, each of said Community Facilities District 3 (2) Documents (including, without limitation, the collection of the Special Tax); and the Community Facilities District has been validly formed, the Special Tax has been approved and its levy authorized, and (assuming due authorization, execution and delivery by other parties thereto, where necessary) the Community Facilities District Documents and the Bonds will constitute the valid, legal and binding obligations of the Community Facilities District enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights in general and to the application of equitable principles; (f) The Community Facilities District is not in breach of or default under any applicable law or administrative rule or regulation of the United States or the State of California, or of any department, division, agency or instrumentality of either of them, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the performance by the Community Facilities District of its obligations under the Community Facilities District Documents or the Bonds; and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the United States or the State of California, or of any department, division, agency or instrumentality of either of them, or under any applicable court or administrative decree or order, or a material breach of or default under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound; (g) Except for compliance with the "blue sky" or other states securities law filings, as to which the Community Facilities District makes no representations, all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Community Facilities District of its obligations hereunder, or under the Community Facilities District Documents or the Bonds, have been obtained and are in frill force and effect; (h) The Special Tax has been duly and lawfully authorized and may be levied and collected under the laws of the State of California; and, when levied, the Special Tax will constitute a valid and legally binding continuing lien on the properties on which it is levied; (i) Until the date which is twenty-five (25) days after the "end of the underwriting period" (as hereinafter defined), if any event shall occur of which the Community Facilities District becomes aware, as a result of which it may be necessary to supplement the Official Statement in order to make the statements in the Official Statement, in light of the circumstances existing at such time, not misleading, the Community Facilities District shall forthwith notify the Underwriter of such event and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary so that the statements therein, as so supplemented, will not be misleading in light of the circumstances existing at such time; and the Community Facilities District shall promptly furnish to the Underwriter a reasonable number of copies of such supplement (as used herein, the term "end of the underwriting period" means the later of such time as (i) the Community Facilities District delivers the Bonds to the Underwriter, 4 (2) or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public; and, unless the Underwriter delivers written notice to the contrary to the Community Facilities District prior to the Closing specifying another date to be deemed the "end of the underwriting period," the "end of the underwriting period" shall be deemed to be the Closing Date); (j) The Indenture creates a valid pledge of the Net Special Taxes and the moneys in Special Tax Fund established pursuant to the Indenture, including the investments thereof, subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein; (k) Except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending or, to the knowledge of the Community Facilities District, threatened against the Community Facilities District (i) which would materially adversely affect the ability of the Community Facilities District to perform its obligations under the Community Facilities District Documents or the Bonds, or (ii) seeking to restrain or to enjoin: (A) the development of any of the land within the Community Facilities District, (B) the issuance, sale or delivery of the Bonds, (C) the application of the proceeds thereof in accordance with the Indenture or the Acquisition Agreement, or (D) the collection or application of the Special Tax, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Community Facilities District Documents, any tentative or final subdivision map or building permits applicable to property within the Community Facilities District, any other instruments relating to the development of any of the property within the Community Facilities District, or any action contemplated by any of said documents, or (in) in any way contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or the powers or authority of the Community Facilities District with respect to the Bonds, the Community Facilities District Documents, or any action of the Community Facilities District contemplated by any of said documents: nor is there any action pending or, to the knowledge of the Community Facilities District, threatened against the Community Facilities District which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from California personal income taxation; (1) The Community Facilities District will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order for the Underwriter to qualify the Bonds for offer and sale under the "Blue Sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, that the Community Facilities District shall not be required to register as a dealer or a broker of securities or to consent to service of process in connection with any blue sky filing; (m) Any certificate signed by any authorized official of the District or the Community Facilities District authorized to do so shall be deemed a representation and warranty to the Underwriter as to the statements made therein; 5 (2) (n) The Community Facilities District will apply the proceeds of the Bonds in accordance with the Indenture and the Acquisition Agreement and as described in the Official Statement; (o) The Official Statement (except the portion thereof entitled [`THE DEVELOPMENT AND PROPERTY OWNERSHIP,"] as to which no view need be expressed) is, as of the date thereof, and will be, as of the Closing Date, true, correct and complete in all material respects; and the Official Statement (except the portion thereof mentioned above, as to which no view is expressed),does not, as of the date thereof, and will not, as of the Closing Date, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (p) The Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the Community Facilities District as of its date, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(t) of Rule 15c2- 12. The Community Facilities District hereby covenants and agrees that, within seven (7) business days from the date hereof, or (upon reasonable written notice from the Underwriter) within sufficient time to accompany any confirmation requesting payment from any customers of the Underwriter, the Community Facilities District shall cause a final printed form of the Official Statement to be delivered to the Underwriter in a quantity mutually agreed upon by the Underwriter and the Community Facilities District so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2-12 and Rules G-12, G-15, G-32 and G-36 of the Municipal Securities Rulemaking Board. 3. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the Community Facilities District contained herein, as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the Community Facilities District and the statements of the officers and other officials of the Developer made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the Community Facilities District of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions: (a) At the Closing Date, the Community Facilities District Documents and the Developer Continuing Disclosure Agreement, dated as of September 1, 2004, between the Developer and MuniFinancial, as dissemination agent (the "Developer Continuing Disclosure Agreement") shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Bond Purchase Agreement, all such actions as, in the opinion of Bond Counsel, shall be necessary and appropriate; (b) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices set forth in the Official Statement shall not have been 6 (2) materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the Community Facilities District terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds) by reason of any of the following: (1) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, Wiling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon the interest that would be received by the holders of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; (2) legislation introduced in or enacted (or resolution passed)by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act WI as amended, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, including any or all underwriting arrangements, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws, rules or regulations as amended and then in effect; (3) the occurrence of any outbreak of hostilities or other national or international calamity or crisis, or the escalation of an existing national or international calamity or crisis, the effect of such outbreak, calamity or crises on the financial markets of the United States (it being acknowledged by the Underwriter that as of the date hereof no such event is occurring); (4) establishment of any new restrictions on securities materially affecting the free market for securities (including the imposition of any limitations on interest rates) or the charge to the net capital requirements of the Underwriter established by the New York Stock Exchange, the Securities and Exchange Commission, any other Federal or state agency or the Congress of the United States, or by Executive Order; (5) any amendment to the federal or California Constitution or action by any federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Community Facilities District, its property, income, securities (or interest thereon), the validity or enforceability of the Special Tax or the ability of 7 (2) the Community Facilities District to construct or acquire the improvements as contemplated by the Community Facilities District Documents or the Official Statement or the right of any owner of the property within the Community Facilities District to develop such property in the manner described in the Official Statement; or (6) any event occurring, or information becoming known, which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Official Statement, or results in the Official Statement containing any untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (c) On the Closing Date, the Underwriter shall have received counterpart originals or certified copies of the following documents, in each case satisfactory in form and substance to the Underwriter: (I) The Community Facilities District Documents, together with a certificate dated as of the Closing Date of the Secretary of the Board to the effect that each such document is a true, correct and complete copy of the one duly approved by the Board; (2) The Official Statement, duly executed by the Community Facilities District; (3) The opinion of Bond Counsel, dated the Closing Date and addressed to the Community Facilities District, in substantially the form attached to the Preliminary Official Statement as [APPENDIX G], and a reliance letter from such firm, dated the Closing Date and addressed to the Underwriter, to the effect that such approving opinion addressed to the Community Facilities District may be relied upon by the Underwriter to the same extent as if such opinion was addressed to them: (4) The supplemental opinion of Bond Counsel, dated the Closing Date and addressed to the Underwriter, to the effect that (i) this Bond Purchase Agreement, the Indenture and the Community Facilities District Continuing Disclosure Agreement have been duly authorized, executed and delivered by the Community Facilities District, and, assuming such agreements constitute valid and binding obligations of the other parties thereto, constitute the legally valid and binding agreements of the Community Facilities District enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditor's rights or remedies and is subject to general principles of equity and to the exercise ofjudicial discretion in appropriate cases; (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; and (iii) the statements contained in the Official Statement under the captions [`THE BONDS," "SOURCES OF PAYMENT FOR THE BONDS," "TAX MATTERS," and "CONTINUING DISCLOSURE," and in APPENDIX D and APPENDIX G,] insofar as such statements expressly summarize certain provisions of the Bonds, the Indenture, the other agreements and the opinion of such firm concerning the exclusion from gross income for federal (2) income tax purposes and exemption from State of California personal income taxes of interest on the Bonds, are accurate in all material respects; (5) The opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, dated the Closing Date and addressed to the Community Facilities District and to the Underwriter, to the effect that, without having undertaken to determine independently the accuracy or completeness of the statements contained in the Official Statement, but on the basis of their participation in conferences with representatives of the Community Facilities District, the Developer, the Appraiser and others, and their examination of certain documents, nothing has come to their attention which has led them to believe that the Official Statement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial statements or other financial, statistical or engineering data or forecasts, numbers, charts, estimates, projections, assumptions, or expressions of opinion, any information about valuation, appraisals, absorption, archeological or environmental matters, or any information about The Depository Trust Company or the book-entry-only system); (6) A certificate, dated the Closing Date and signed by an authorized representative of the Community Facilities District, ratifying the use and distribution by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offering and sale of the Bonds and certifying that (i) the representations and warranties of the Community Facilities District contained in Section 2 hereof are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date except that all references therein to the Preliminary Official Statement shall be deemed to be references to the Official Statement; (ii) to the best of his or her knowledge, no event has occurred since the date of the Official Statement affecting the matters contained therein which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make the statements and information contained in the Official Statement not misleading in any material respect, and the Bonds and the Community Facilities District Documents conform as to foam and tenor to the descriptions thereof contained in the Official Statement; and (iii) the Community Facilities District has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the Community Facilities District Documents and the Official Statement at or prior to the Closing Date; (7) An opinion, dated the Closing Date and addressed to the Underwriter, of Dennis W. De Cuir, A Law Corporation, Special Counsel for the District, dated the Closing Date and addressed to the Underwriter, to the effect that (i) the District was duly organized and is validly existing under the Constitution and laws of the State as a public utility district; (ii) the District has full legal right, power, and authority to execute and deliver, on behalf of the Community Facilities District, the Community Facilities District Documents, (iii) the Community Facilities District have been duly authorized, executed, and delivered by the District on behalf of the Community Facilities District and, assuming due authorization and execution by any other applicable parties thereto, the Community Facilities District Documents constitute the valid and binding obligations of the Community Facilities District, enforceable in accordance with their respective terms, subject to laws relating to bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally and the application of equitable principles 9 (2) if equitable remedies are sought; (iv) the District adopted the resolutions and ordinances forming the Community Facilities District, confirming the Special Tax, approving the Community Facilities District Documents and authorizing the sale and issuance of the Bonds at meetings of the Board which were called, held and conducted pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and such resolutions and ordinances are now in full force and effect and have not been amended, modified or rescinded; (v) to the best of such counsel's knowledge, after due inquiry, there are no actions, suits, proceedings, inquiries, or investigations, at law or in equity, before or by any court, governmental agency, public board, or body, pending or threatened against the District or the Community Facilities District, for which the District or the Community Facilities District has been served, to restrain or enjoin the formation of the Community Facilities District, the issuance of the Bonds, the collection or application of the Special Tax, or the payment of principal of and interest on the Bonds, or in any way contesting the validity of the Bonds or the other District Documents or this Bond Purchase Agreement; (vi) the execution and delivery of the Community Facilities District Documents and the approval of the Official Statement, and compliance with the provisions thereof and hereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute on the part of the District or the Community Facilities District a breach of or default under any agreement or other instrument to which either is a party or by which either is bound or any existing law, regulation, court order or consent decree to which either is subject, (vii) the Special Tax constituting the security for the Bonds has been duly and lawfully levied under and pursuant to the Act and constitutes valid and legally binding liens on the properties on which it has been levied; and (viii) to the best of such counsel's knowledge, without conducting an independent investigation, the information contained in the Official Statement relating to the District, the Community Facilities District, the Special Tax and the Bonds (except for the financial statements and other financial, statistical or engineering data or forecasts, numbers, charts, estimates, projections, assumptions, or expressions of opinion, any information about valuation, appraisals, absorption, archeological or environmental matters, the Appendices thereto, or any information about The Depository Trust Company or the book-entry-only system, as to which no view need be expressed) is correct in all material respects and does not contain any untrue or misleading statement of a material fact or omit a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (8) An opinion, dated the date of the Closing and addressed to the Underwriter, of Nossaman, Guthner, Knox & Elliott, LLP, counsel to the Underwriter, in such form as may be acceptable to the Underwriter and counsel to the Underwriter, including an opinion that the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended. (9) The Developer Continuing Disclosure Agreement, in substantially the form set forth in [.APPENDIX F] of the Official Statement; (10) A certificate of the Developer, dated the Closing Date, in substantially the form attached hereto as Exhibit B; (11) An opinion of Hefner, Start &Marms, counsel to the Developer, dated the date of the Closing and addressed to the Community Facilities District and the Underwriter, in 10 (2) form and substance acceptable to the Underwriter and Underwriter's Counsel in substantially the form set forth in Exhibit C hereto; (12) A certificate, dated the Closing Date, of MuniFinancial ("MuniFinancial") to the effect that (i) the Special Tax, if collected in the maximum amounts permitted pursuant to the Rate and Method of Apportionment, will generate in each Fiscal Year at least 110% of the debt service payable with respect to the Bonds in the calendar year that begins in such Fiscal Year, based on such assumptions and qualifications as shall be acceptable to the Community Facilities District and the Underwriter; (ii) all information supplied by MuniFinancial to the Appraiser, as hereinafter defined, is true and correct as of the date of the Official Statement and as of the Closing Date, based on such assumptions as may have been supplied to such firm by the Appraiser, (iii) the information contained in the Appraisal with respect to taxes and tax rates applicable, and projected to be applicable, to the property in the Community Facilities District is consistent with such information provided by MuniFinancial to the Appraiser; (iv) the statements concerning the Rate and Method of Apportionment and the statistical and financial data set forth in the tables and discussion in the Official Statement which were derived from information supplied by MuniFinancial for use in the Official Statement and in [APPENDIX A] thereto are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and no events or occurrences have been ascertained by MuniFinancial or have come to its attention that would substantially change such information set forth in the Official Statement; (v) MuniFinancial has the full power and authority to enter into and perform its duties under the District Continuing Disclosure Agreement and the Developer Continuing Disclosure Agreement (collectively, the "Continuing Disclosure Agreements"); and (vi) the Continuing Disclosure Agreements have been duly authorized, executed and delivered by MuniFinancial and constitute the valid and binding obligation of MuniFinancial in accordance with their respective terms. (13) A letter from Brown, Chudleigh, Schuler, Donaldson & Associates (the "Appraiser"), dated the Closing Date and addressed to the Community Facilities District and the Underwriter, to the effect that the Appraiser has prepared the appraisal report with respect to the property located within the Community Facilities District dated as of , 2004 (with an effective value date of 1, 2004) (the "Appraisal") and that: (a) the Appraisal was included in the Preliminary Official Statement and the Official Statement with its permission, (b)neither the Appraisal nor the information in the Official Statement referring to it contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, (c) in its opinion, the assumptions made in the Appraisal referred to in the Official Statement are reasonable, and (d) no events or occurrences have been ascertained by the Appraiser or have come to the Appraiser's attention that would materially change the opinion set forth in the Appraisal; (14) A certificate of the Trustee, dated the Closing Date, in form and substance reasonably acceptable to the Underwriter; 11 (2) (15) An opinion, dated the Closing Date and addressed to the Underwriter and the Community Facilities District, of counsel to the Trustee in form and substance acceptable to the Community Facilities District and the Underwriter; (16) Evidence satisfactory to the Underwriter that no ad valorem taxes, assessments, special taxes or Special Tax applicable to the property within Community Facilities District are delinquent; and (17) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the statements and information contained in the Preliminary Official Statement and the Official Statement, of the Community Facilities District's representations and warranties contained herein, and of the Developer's representations and warranties set forth in its certificates and the due performance or satisfaction by the Community Facilities District at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the Community Facilities District in connection with the transactions contemplated hereby and by the Official Statement. If the Community Facilities District shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Bond Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter nor the Community Facilities District shall be under any further obligation hereunder, except that the respective obligations of the Community Facilities District and the Underwriter set forth in Section 5 and Section 6 hereof shall continue in full force and effect. 4. Conditions of the Community Facilities District's Obligations. The Community Facilities District's obligations hereunder are subject to the Underwriter's performance of its obligations hereunder, and are also subject to the following conditions: (a) As of the Closing Date, no litigation shall be pending or, to the knowledge of the duly authorized officer of the Community Facilities District executing the certificate referred to in Section 3(c)(6) hereof, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds or the Community Facilities District Documents or the existence or powers of the Community Facilities District; and (b) As of the Closing Date, the Community Facilities District shall receive the opinions referred to in Section 3(c)(3) and(5)hereof. 5. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein: (a) The Underwriter shall be under no obligation to pay, and the Community Facilities District shall pay or cause to be paid (out of any legally available funds of the Community Facilities District) all expenses incident to the performance of the Community Facilities District's obligations hereunder, including, but not limited to, the cost of preparing and delivering the Bonds to DTC, the cost of preparation, printing, distributing and delivering of the 12 (2) Indenture, the Preliminary Official Statement, the Official Statement and all other agreements and documents contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter; and the fees and disbursements of the Trustee, Bond Counsel, Disclosure Counsel and any financial advisors, special tax consultants, appraisers, accountants, engineers or any other experts or consultants the Community Facilities District retained in connection with the Bonds; and (b) The Community Facilities District shall be under no obligation to pay, and the Underwriter shall pay, any fees of the California Debt and Investment Advisory Commission, the cost of preparation of any "blue sky" or legal investment memoranda and this Bond Purchase Agreement; expenses to qualify the Bonds for sale under any "blue sky" or other state securities laws; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses. 6. Notices. Any notice or other communication to be given to the Community Facilities District under this Bond Purchase Agreement may be given by delivering the same in writing to the Community Facilities District in care of Truckee Donner Public Utility District at the address shown on page one hereof, and any notice or other communication to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the same in writing to UBS Financial Services Inc., 777 South Figueroa Street, 50th Floor, Los Angeles, CA 90017, Attention: Dan Gangwish. 7. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the Community Facilities District and the Underwriter (including its successors or assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. 8. Survival of Representations, Warranties and Agreements The representations, warranties and agreements of the Community Facilities District set forth in or made pursuant to this Bond Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing and regardless of any investigations made by or on behalf of the Underwriter(or statements as to the results of such investigations) concerning such representations and statements of the Community Facilities District and regardless of delivery of and payment for the Bonds. 9. Effective Date This Bond Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the Community Facilities District and shall be valid and enforceable as of the time of such acceptance. 10. Partial U'nenforceability. Any provision of this Bond Purchase Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Purchase Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. 13 (2) IL No Prior Agreements. This Bond Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds for the Community Facilities District. 12. Governing Law. This Bond Purchase Agreement shall be governed by the laws of the State of California. 13. Counterparts, This Bond Purchase Agreement may be executed simultaneously in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. Very truly yours, UBS FINANCIAL SERVICES INC. By: Managing Director By: Title: ACCEPTED: TRUCKEE DONNER PUBLIC UTILITY DISTRICT COMMUNITY FACILITIES DISTRICT NO. 04-1 (GRAY'S CROSSING) By: General Manager, Truckee Donner Public Utility District 14 (2) EXHIBIT A MATURITY SCHEDULE Maturity Date (Smtember I Principal Amount Interest Rate Price A-1 EXHIBIT B TRUCKEE DONNER PUBLIC UTILITY DISTRICT COMMUNITY FACILITIES DISTRICT NO. 04-1 (CRAY'S CROSSING) SPECIAL TAX BONDS CERTIFICATE OF DEVELOPER In connection with the issuance and sale of the above-captioned bonds, and pursuant to the Bond Purchase Agreement, dated 2004, by and between Truckee Donner Public Utility District Community Facilities District No. 04-1 (Gray's Crossing) (the "Community Facilities District") and the Underwriter named therein (the "Bond Purchase Agreement"), the undersigned hereby certifies, represents, warrants and covenants, on behalf of Gray's Crossing, LLC (the "Developer") that: 1. The undersigned is, and at all pertinent times mentioned herein has been, the authorized representative of the Developer, and is authorized to make this certification on behalf of the Developer. 2. Capitalized terns that are not defined herein shall have the meanings ascribed to them in the Bond Purchase Agreement. 3. The Developer is a duly organized and validly existing a limited liability company in good standing under the laws of the State of Delaware, and is a wholly-owned subsidiary of a Delaware limited partnership, limited liability partnership. 4. The Developer has full power and authority to execute, deliver, and perform its obligations under the and the Acquisition and Disclosure Agreement, dated as of July 22, 2004 between the Developer and the Truckee Donner Public Utility District (the "District") (the "Acquisition Agreement"), the Developer Continuing Disclosure Agreement, dated as of September 1, 2004, between the Developer and MuniFinancial, as dissemination agent (the "Developer Continuing Disclosure Agreement") [and the Development Agreement, dated as of , 200 (the "Development Agreement"), between the Developer and the Town of Truckee] (collectively, the "Developer Documents"), the Developer Documents have been duly authorized, executed, and delivered by the Developer and, assuming due authorization, execution and delivery by the other parties thereto, as applicable, constitute legal, valid, and binding agreements of the Developer, enforceable in accordance with their respective terms, subject to laws relating to bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally and the application of equitable principles if equitable remedies are sought. 5. I have reviewed the contents of the Preliminary Official Statement and the contents of the Official Statement I have reviewed the contents of this Certificate and have conferred with our counsel for the purpose of discussing the meaning of its contents. B-1 6. All information concerning the Developer, the ownership of the Developer, and the Developer's property within the Community Facilities District submitted in writing by, or on behalf of, the Developer to the Underwriter, the Community Facilities District, Bond Counsel or Disclosure Counsel in connection with the preparation of the Preliminary Official Statement and the Official Statement, to the Appraiser in connection with preparation of the Appraisal, and to the Special Tax Consultant in connection with the Rate and Method of Apportionment was, to the best of my knowledge, true, complete, and correct at the time given. 7. The statements relating to the Developer, the ownership of the Developer and the Developer's property within the Community Facilities District contained in the Official Statement do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 8. No proceedings are pending or, to the best knowledge of the undersigned, after due inquiry, threatened in which the Developer may be adjudicated as bankrupt or discharged from any and all of its debts or obligations or granted an extension of time to pay its debts or a reorganization or readjustment of the debts. 9. No action, suit,proceeding, inquiry, or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending or, to the best knowledge of the Developer, threatened in any way seeking to restrain or to enjoin the development of the property within the Community Facilities District. 10. The Developer agrees to indemnify and hold harmless the Underwriter, the District, the Community Facilities District and each person, if any, who controls (as such term is defined in Section 15 of the Securities Act of 1933, as amended) the Underwriter (each, an "Indemnified Party") against any and all judgments, losses, claims, damages, liabilities and expenses (i) arising out of any statement or information in the Preliminary Official Statement or in the Official Statement, relating to the Developer, the ownership of the Developer and the Developer's property within the Community Facilities District and the development thereof as described in the Official Statement, that is or is alleged to be untrue or incorrect in any material respect or the omission or alleged omission therefrom of any statement or information that should be stated therein, or that is necessary, to make the statements therein not misleading in any material respect, and (ii) to the extent of the aggregate amount paid in settlement of any litigation commenced or threatened arising from a claim based upon any such untrue statement or omission if such settlement is effected with the written consent of the Developer. In case any claim shall be made or action brought against an Indemnified Party based upon the Official Statement for which indemnity may be sought against the Developer, as provided above, the Indemnified Party shall promptly notify the Developer in writing setting forth the particulars of such claim or action and the Developer shall assume the defense thereof, including the retaining of counsel reasonably acceptable to the Indemnified Party and the payment of all expenses. B-2 Notwithstanding the Developer's election to appoint counsel to represent the Indemnified Party in an action, the Indemnified Parry shall have the right to employ separate counsel (including local counsel), and the Developer shall bear the reasonable fees, costs and expenses of such separate counsel if(i) the use of counsel chosen by the Developer to represent the Indemnified Party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the Indemnified Party and the Developer and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are materially different from or additional to those available to the Developer; (iii) the Developer shall not have employed counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action; or (iv) the Developer shall authorize the Indemnified Party to employ separate counsel at the expense of the Developer. The Developer will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action , suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each Indemnified Party from all liability arising out of such claim, action, suit or proceeding. 11. Promptly after receipt by any Indemnified Party of notice of any complaint or the commencement of any action or proceeding in connection with any matter for which the Developer is obligated to indemnify an Indemnified Party as set forth in the preceding paragraph, the Indemnified Party shall notify the Developer in writing of such complaint or of the commencement of such action or proceeding and, if the Developer so elects or is requested by the Indemnified Party, the Developer shall assume the defense of such action or proceeding, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of the fees and disbursements of such counsel, in which event the Developer shall not be obligated to pay the reasonable fees and disbursements of separate counsel for the Indemnified Party in such action. In the event, however, that an Indemnified Party's legal counsel has determined that defenses may be available to an Indemnified Party that are different from or in addition to those available to the Developer or that there is or could reasonably be expected to be a conflict of interest by reason of the Developer and an Indemnified Party having common counsel in any action or proceeding, then the Indemnified Party may employ separate counsel to represent or defend it in any such action or proceeding in which such Indemnified Party may become involved or is named as defendant and the Developer shall pay the reasonable fees and disbursements of such separate counsel. 12. The Developer is fully qualified by all necessary permits, licenses, and certifications, to conduct its business as it is presently being conducted and, except as may be required under blue sky or other securities laws of any state, and B-3 except for such licenses, certificates, approvals, variances, and permits which may be necessary for the constriction of improvements within the Community Facilities District, there is no consent, approval, authorization, or other order of, or filing with, or certification by, any regulatory authority having jurisdiction over the Developer except as such have been obtained and are in full force and effect, for the consummation by the Developer of the actions contemplated to be consummated by the Developer under the Official Statement. 13. To the best knowledge of the undersigned, after due inquiry, the Developer is not in violation of any provision of, or in default under, its operating agreement or any material agreement, lease, or other contract, the violation of or default under which would materially and adversely affect the business, properties, assets, liabilities, or conditions (financial or other) of the Developer. 14. The Developer has never failed to comply with an obligation to file an annual disclosure report with the appropriate information repositories as required under Securities and Exchange Commission Rule 15e2-12. 15. Other than as described in the Official Statement, to the knowledge of the Developer, (i) no public debt secured by a special tax or assessment on the Developer's land in the Community Facilities District exists or is in the process of being authorized, and (ii) no assessment district or community facilities district exists or is in the process of being formed, in each case which would include any portion of the Developer's land within the Community Facilities District. 16. -None of the parcels of land within the Community Facilities District owned by the Developer is delinquent in the payment of any taxes or assessments 17. The execution and delivery by the Developer of the Developer Documents and the performance of its obligations thereunder do not and will not result in violation of any provision of, or in default under, the Developer's operating agreement or any material agreement, lease, or other contract to which the Developer is a party or by which it or its properties are bound. Dated: 2004 GRAY'S CROSSING, LLC By: EAST WEST RESORT DEVELOPMENT V, L.P., L.L.P, its Manager By:HE HOLDING CORP., its General Partner By: Blake L.Riva, Vice President B-4 EXHIBIT C FORM OF DEVELOPER COUNSEL OPINION We have acted as counsel to Gray's Crossing, LLC (the"Developer") in connection with (i) the proposed development known as Gray's Crossing (the "Development") to be located in the City of Truckee (the "City") as described in the Official Statement (as defined herein), and (ii) the issuance and sale of S Truckee Donner Public Utility District ("the District") Community Facilities District No. 04-1 Special Tax Bonds, (the "Bonds"). This opinion is rendered with reference to the Bond Purchase Agreement dated 2004 (the `Bond Purchase Agreement") between the District, acting for itself and on behalf of the Truckee Donner Public Utility District Community Facilities District No. 04-1 and UBS Financial Services Inc. Capitalized terms used herein without definition shall have the meanings set forth in the Bond Purchase Agreement. In rendering the opinions set forth herein, we have reviewed and examined such documents as we have determined to be appropriate, including the following documents: 1.0 The Bond Purchase Agreement; 2.0 The Official Statement for the offer and sale of the Bonds dated 2004 (the "Official Statement"); 3.0 The Acquisition and Disclosure Agreement dated as of July 22, 2004, between Developer, [the District; the Development Agreement, dated between Developer and the City,] and the Developer Continuing Disclosure Agreement, dated between Developer and the District (collectively, the"Developer Agreements"); 4.0 The Articles of Organization for Developer filed with the Secretary of State on (date), and certified as true and complete by the Secretary of State as of 2004; 5.0 The Operating Agreement of the Developer dated and certified by the Developer to be the Operating Agreement in effect on 2004; 6.0 The Resolution of the ;Managers of Developer authorizing the execution of all documents necessary to accomplish the sale of the Bonds, dated 2004; 7.0 The Certificate of Good Standing of Developer issued by the Secretary of State, dated as of 2003; and 9.0 The Property Owner's Certificate Regarding Official Statement (the "Developer's Certificate") dated as of 2004. With respect to factual matters underlying our opinions herein, we have made no independent investigation or inquiry and have relied solely upon the Developer's Certificate. We (2) advise you that the phrase "to our knowledge," as used herein, means that no facts have come to our attention, based upon an inquiry of attorneys in this firm who devote substantive legal attention to Developer, or as a result of our examination of the Developer's Certificate, that indicate to us anything contrary to the statement to which the phrase relates. Except as expressly set forth above; the phrase does not mean that we have conducted any investigation or inquiry or performed any other examination or review. We have no reason to believe that any factual matters or assumptions relied upon by us are not true, correct and complete. Our opinions herein are limited to the internal laws of the State of California and the federal laws of the United States of America. We express no opinion whatsoever with respect to the laws of any other jurisdiction and assume no responsibility for the applicability of such laws. In rendering our opinions herein, we have assumed the following, with your approval: (i) The genuineness and authenticity of all signatures on original documents submitted to us (other than any signatures on behalf of Developer); the authenticity and completeness of all documents submitted to us as originals; the conformity to originals of all documents submitted to us as copies; where any signature, other than any signature on behalf of Developer purports to have been made in a corporate, governmental, fiduciary or other capacity, the person who affixed such signature had the full power and authority to do so; (ii) The due authorization, execution and delivery of the applicable agreements by the parties thereto, other than the Developer, and the legality, validity, binding effect and enforceability against such parties of their respective obligations under such agreements; (iii) The truth, accuracy and completeness of all factual representations and warranties of all parties under the documents described in paragraphs A through H, above; and (iv) The constitutionality or validity of a relevant statute, rule, regulation or agency action is not in issue unless a reported decision in the State of California has specifically addressed but not resolved, or has established, its unconstitutionality or invalidity. Based upon the foregoing and in reliance thereon, and based on our examination of such questions of law as we have deemed appropriate under the circumstances, and subject to any further assumptions, comments, exceptions, qualifications and limitations set forth below, as of the date hereof,it is our opinion that: i. Developer is a limited liability corporation duly formed and validly existing in the State of and in good standing under the laws of the State of 2. The Developer Agreements have been duly authorized, executed and delivered by Developer, and constitute legal, valid and binding obligations of the Developer, enforceable against the Developer in accordance with its terms. 3. The execution and delivery by Developer of the Developer Agreements and the performance of its obligations thereunder will not conflict with or result in a violation of, or C-2 breach of or a default under, as applicable (a) to our knowledge, the Articles of Organization of Developer, (b) to our knowledge, any indenture, mortgage, deed of trust, lease, note, commitment, agreement or other instrument to which Developer is a party, or by which Developer or its property is bound or (c) to our knowledge, of any order, rule or regulation any court or other governmental body having jurisdiction over Developer, the conflict, violation or breach of which, in the case of clauses (b) or (c) would have a material adverse effect on Developer or the development, use, occupancy or operation of the Development or any material portion thereof. 4. To our knowledge, there are no actions, suits or proceedings pending or threatened against Developer in the Superior Court of the State of California, County of Sacramento, the California Court of Appeal, Third Appellate District, the United States District Court, Eastern District of California, the United States Bankruptcy Court, Eastern District of California, and the United States Ninth Circuit Court of Appeals, which, if determined adversely, would have a material adverse effect (a) on the ability of Developer to perform its obligations under the documents described in paragraphs A through H, above, or (b) on the development, construction, use, occupancy or operation of the Development or a material portion thereof. 5. Without having undertaken to independently determine the accuracy, completeness or fairness of the discussion contained in the Official Statement, nothing has come to our attention which would lead us to believe that such discussion contains any untrue statements of a material fact or omits to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. In addition, all of our opinions expressed hereinabove are specifically subject to and limited by the following: a) The effect of laws or court decisions relating to bankruptcy, insolvency, fraudulent conveyance, equitable subordination, reorganization, arrangement, moratorium or other laws or court decisions relating to or affecting creditors'rights generally. b) Limitations imposed by California or federal law or equitable principles upon the availability of the remedy of specific performance of any of the remedies, covenants or other provisions of any document or agreement and upon the availability of injunctive relief or other equitable remedies. In addition, we express no opinion as to the title of the property within the District or any entitlements, permits, approvals or other assets relating to the Development. This letter is intended solely for your use in relation to the Bond Purchase Agreement and may not be reproduced or filed publicly or relied upon for any other purpose by you or for any purpose whatsoever by any other party without the express written consent of the undersigned except that this Opinion may be copied and distributed as part of a closing book of the bond transaction documents, provided that such distribution shall not expand in any way the permitted uses of this letter. We assume no responsibility for the effect of any fact or circumstance C-3 occurring subsequent to the date of this letter, including without limitation, legislative or other changes in the law. Further, we assume no responsibility to advise you of any facts or circumstances of which we become aware after the date hereof, regardless of whether or not they may affect our opinions herein. This opinion is given as of the date hereof and we assume no obligation to update our opinions herein after the date hereof. Very truly yours, C-4