CITY COUNCIL AGENDA ITEM NO.

CITY COUNCIL AGENDA ITEM NO. &

Meeting Date: November 25, 2014

Subject/Title: A resolution of the City Council of the City of Brentwood 1) authorizing execution of a Second Supplemental Installment Sale Agreement and a Bond Purchase Contract in connection with the issuance of Brentwood Infrastructure Financing Authority Water Revenue Refunding Bonds, Series 2014 and authorizing certain related actions in connection therewith, and 2) appointing RBC Capital Markets, LLC as underwriter, Orrick Herrington & Sutcliffe LLP as the bond and disclosure counsel and Del Rio Advisors, LLC as the municipal advisor to refinance the 2008 Water Revenue Bonds; with the proposed issuance anticipated to generate an estimated $9.3 million in savings over the life of the bonds.

Prepared by: Kerry Breen, Assistant Finance Director

Submitted by: Pamela Ehler, City Treasurer/Director of Finance and Information Systems

RECOMMENDATION

Approve a resolution 1) authorizing execution of a Second Supplemental Installment Sale Agreement and a Bond Purchase Contract in connection with the issuance of Brentwood Infrastructure Financing Authority Water Revenue Refunding Bonds, Series 2014 and authorizing certain related actions in connection therewith, and 2) appointing RBC Capital Markets LLC as underwriter, Orrick Herrington & Sutcliffe LLP as the bond and disclosure counsel, and Del Rio Advisors, LLC as the municipal advisor to refinance the 2008 Water Revenue Bonds; with the proposed issuance anticipated to generate an estimated $9.3 million in savings over the life of the bonds.

PREVIOUS ACTION

On November 26, 1996, the City Council approved Resolution No. 96-206 authorizing and approving the issuance of Water and Sewer Revenue Bonds 1996 Series A in an amount of $12,195,000 of which $9,701,123 was for water and $2,493,877 was for sewer.

On August 24, 2004, by Resolution No. 2004-206, the City Council authorized the City Manager to execute an agreement with the Contra Costa Water District (CCWD) pertaining to long-term treated water services as a part of the Surface Water Treatment Facility - Phase II, CIP Project No. 562-56290.

On September 11, 2007, the City Council approved Resolution No. 2007-209 approving and authorizing the City Manager to execute a second amendatory agreement with the CCWD pertaining to long-term treated water services as a part of the Surface Water Treatment Facility Project.

On September 9, 2008, the City Council approved Resolution No. 2008-236 authorizing the execution of a Master Installment Sale Agreement, a First Supplemental Installment Sale Agreement with the Brentwood Infrastructure Financing Authority (“the Authority”) and a Bond

the refunding of a portion of the Authority’s outstanding Water and Sewer Revenue Bonds, 1996 Series A and the financing and refinancing of the City’s 2008 Water Project.

BACKGROUND

In 1996, the Authority issued the Water and Sewer Revenue Bonds 1996 Series A in the amount of $12,195,000 to finance certain capital improvements to the Water System and Sewer System. In addition to water wells and connections to the existing water system, these improvements consisted of additional water and sewer pipelines, pumping stations, system control and data acquisition. The Water and Sewer Installment Sale Agreements allowed the proceeds of the Bonds to be expended on "any additions, betterments, extensions or improvements to the Systems designated by the City Council".

The costs of improvements to the Water System represented 79.55% or $9,701,122.50 of the proceeds. The projects funded were the Interim Water System, Zone #1 Water Line relocation, Lone Tree Water Line, SCADA and several improvements to the Well Systems.

Construction of The Surface Water Treatment Facility – Phase I & II, (CIP Project No. 562-56290), the Brentwood Water Treatment Plant (BWTP), began in December of 2004. Phase I consisted of preparing all necessary environmental documents to jointly expand and construct the BWTP adjacent to the Randall-Bold Water Treatment Plant, including the necessary pumping and distribution facilities; design and construction of the ultimate pumping facilities; and main trunk line to the City's distribution system and all related appurtenances. Phase I of the project was placed in service in 2006. Phase II consisted of the design and construction of the BWTP as part of a joint venture between the City and the CCWD to treat the City's surface water supply to potable drinking water standards to meet the ultimate water consumption demands of the City. Phase II began construction in 2006 and w a s operational in 2008. The BWTP currently has the capacity to treat up to 15 million gallons per day (mgd) and has been designed to be expandable to an ultimate capacity of 30 mgd to serve the City’s water demands through build-out.

Pursuant to the second amendatory agreement with the CCWD approved on September 11, 2007, the BWTP was initially financed through CCWD’s commercial paper program and cash contributions from the City. Per the agreement, the City had the option to issue bonds at any time during the construction phase or within twelve months of receiving treated water. The City determined that a lower cost structure was achieved through permanent financing for the facility through its own debt issuance.

On November 13, 2008, the Authority issued $53,200,000 in Water Revenue Bonds, with interest rates ranging from 4.5% to 5.75%, due July 1, 2038. The Authority pledged net revenues of the water system through 2038 to repay the Water Revenue Bonds.

Due to favorable market interest rates, it is possible to refinance the 2008 Water Revenue Bonds at lower interest rates. Based on today’s market rates, the refinancing of the bonds will generate an estimated $9.3 million in savings over the life of the bonds. The Series 2014 bonds received a rating by Standard & Poor’s of AA.

FISCAL IMPACT

This action would generate approximately $9.3 million in savings over the next 24 years. The savings generated would be available to fund future infrastructure needs and operations of the

Water enterprise.

Fees paid to the underwriter, bond and disclosure counsel and municipal advisor are contingent upon the successful completion of the issuance of the bonds and will be quantified at the time the financing package is brought before the City Council for consideration and approval of the bond issuance. Estimated fees have already been accounted for in the savings amount presented above.

ATTACHMENTS Resolution

Second Supplemental Trust Agreement

Second Supplemental Installment Sale Agreement Preliminary Official Statement (POS)

RESOLUTION NO. ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

BRENTWOOD 1) AUTHORIZING EXECUTION OF A SECOND

SUPPLEMENTAL INSTALLMENT SALE AGREEMENT AND A BOND

PURCHASE CONTRACT IN CONNECTION WITH THE ISSUANCE OF

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY WATER

REVENUE REFUNDING BONDS, SERIES 2014 AND AUTHORIZING

CERTAIN RELATED ACTIONS IN CONNECTION THEREWITH, AND 2)

APPOINTING RBC CAPTIAL MARKETS, LLC AS UNDERWRITER,

ORRICK, HERRINGTON & SUTCLIFFE LLP AS THE BOND AND

DISCLOSURE COUNSEL, AND DEL RIO ADVISORS, LLC AS THE

MUNICIPAL ADVISOR

WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the

Government Code of the State of California (the “Act”) and the Joint Exercise of Powers

Agreement, dated as of March 14, 1995, by and between the City of Brentwood (the “City”) and

the Redevelopment Agency of the City of Brentwood, creating the Brentwood Infrastructure

Financing Authority (the “Authority”), the Authority is authorized to issue bonds for the

purposes of, among other things, refunding bonds previously issued by the Authority under the

Act;

WHEREAS, the Authority previously issued its Water Revenue Bonds, Series 2008 (the

“2008 Bonds”), pursuant to the Act and a Master Trust Agreement, dated as of October 1, 2008

(the “Master Trust Agreement”), as supplemented by a First Supplemental Trust Agreement,

dated as of October 1, 2008, each between the Authority and U.S. Bank National Association, as

trustee (the “Trustee”) for the purpose of financing and refinancing certain improvements to the

water system of the City;

WHEREAS, the City has determined that it would be in the best interest of the City to

refund a portion of the 2008 Bonds (the “Refunded Bonds”) and the related installment payments

scheduled to be paid by the City;

WHEREAS, the Authority has determined to issue its Water Revenue Refunding Bonds,

Series 2014 (the “Bonds”), pursuant to the Master Trust Agreement, as supplemented by a

Second Supplemental Trust Agreement (the “Second Supplemental Trust Agreement”), between

the Authority and the Trustee to refund the Refunded Bonds;

WHEREAS, the City and the Authority have previously entered into a Master

Installment Sale Agreement, dated as of October 1, 2008 (the “Master Installment Sale

Agreement”);

WHEREAS, in order to accomplish the refunding of the Refunded Bonds, the City and

the Authority have determined to enter into a Second Supplemental Installment Sale Agreement

(the “Second Supplemental Installment Sale Agreement”), supplemental to the Master

Installment Sale Agreement, under which the City will make installment payments to the

Authority for the refunding of the Refunded Bonds;

WHEREAS, the Authority and the City have caused to be prepared a Preliminary

Official Statement describing said bonds (the “Preliminary Official Statement”);

WHEREAS, the City has been presented with a form of Bond Purchase Contract (the

“Bond Purchase Contract”), between the Authority, the City and RBC Capital Markets, LLC, as

underwriter (the “Underwriter”), pursuant to which the Underwriter offers to purchase the

Bonds;

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brentwood,

as follows:

Section 1.

The Second Supplemental Installment Sale Agreement, in substantially the

form on file with the City Clerk and presented to this meeting, is hereby approved. The Mayor,

the Vice Mayor, the City Manager and the Director of Finance and Information Systems or the

designee of any of them (each an “Authorized Officer”), each acting alone, are hereby authorized

and directed to execute and deliver, and the Clerk or the designee thereof is hereby authorized to

attest, the Second Supplemental Installment Sale Agreement in substantially said form with such

changes as the Authorized Officer executing the same approves in the interest of the City, after

consultation with the City Attorney, such approval to be conclusively evidenced by such

execution and delivery; provided, however, that the maximum aggregate principal amount of the

installment payments to be paid under the Second Supplemental Installment Sale Agreement

shall not exceed $50,000,000 and the term of the Second Supplemental Installment Sale

Agreement shall not extend beyond 2038.

Section 2.

The Preliminary Official Statement, in substantially the form on file with

the Clerk and presented to this meeting, is hereby approved. Any Authorized Officer is hereby

authorized and directed to deliver to the Underwriter a certificate deeming the Preliminary

Official Statement, in substantially said form, with such changes as the Authorized Officer

executing the same approves in the interest of the City, final within the meaning of Securities

Exchange Commission Rule 15c2-12. The Underwriter is hereby authorized to distribute the

Preliminary Official Statement in the form so deemed final. Any Authorized Officer is hereby

authorized and directed to execute and deliver a final Official Statement, in substantially the

form as such deemed final Preliminary Official Statement, as provided in the Bond Purchase

Contract.

Section 3.

The Bond Purchase Contract, in substantially the form on file with the

Clerk and presented to this meeting, is hereby approved. Any Authorized Officer is hereby

authorized and directed to execute and deliver the Bond Purchase Contract in substantially said

form, with such changes as the Authorized Officer executing the same approves in the interest of

the City, after consultation with the City Attorney, such approval to be conclusively evidenced

by such execution and delivery; provided, however, that the Bond Purchase Contract shall not

provide for a true interest cost with respect to the Bonds in excess of 4.00%, an underwriter’s

discount in excess of 1.00% of the total principal amount of the Bonds sold or a maximum

maturity of the Bonds beyond 2038.

any and all documents, certificates and opinions necessary to facilitate the issuance, sale and

delivery of the Bonds, including, but not limited to, a tax certificate, an escrow agreement, a

continuing disclosure undertaking and any other documents which they may deem necessary or

advisable in order to obtain bond insurance for the Bonds or any portion of the Bonds and to

carry out the purposes of this resolution.

Section 5.

The firm of Orrick, Herrington & Sutcliffe LLP is hereby appointed as

bond counsel and disclosure counsel in connection with the issuance of the Bonds.

Section 6.

The firm of Del Rio Advisors, LLC is hereby appointed municipal advisor

in connection with the issuance of the Bonds.

Section 7.

The firm of RBC Capital Markets, LLC is hereby appointed underwriter of

the Bonds.

Section 8.

This resolution shall take effect immediately upon its passage.

* * *

PASSED AND ADOPTED this 25th day of November, 2014, by the following vote:

AYES:

NOES:

ABSENT:

__________________________________________

Mayor

(SEAL)

ATTEST:

____________________________________

City Clerk of the City of Brentwood

CLERK’S CERTIFICATE

I, Margaret Wimberly, City Clerk of the City of Brentwood, do hereby certify as follows:

The foregoing resolution is a full, true and correct copy of a resolution duly adopted at a

regular meeting of the City Council of said City duly held at the regular meeting place thereof on

the 25th day of November, 2014, of which meeting all of the members of said City Council had

due notice and at which a majority thereof were present; and that at said meeting said resolution

was adopted by the following vote:

AYES:

NOES:

ABSENT:

An agenda of said meeting was posted at least 72 hours before said meeting at

City Hall, 150 City Park Way, Brentwood, California, a location freely accessible to members of

the public, and a brief description of said resolution appeared on said agenda.

I have carefully compared the foregoing with the original minutes of said meeting on file

and of record in my office, and the foregoing is a full, true and correct copy of the original

resolution adopted at said meeting and entered in said minutes.

Said resolution has not been amended, modified or rescinded since the date of its

adoption and the same is now in full force and effect.

Dated: _______________, 2014

__________________________________________

City Clerk of

OH&S

DRAFT

10/30/14

SECOND SUPPLEMENTAL

TRUST AGREEMENT

by and between the

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

Dated as of December 1, 2014

SECOND SUPPLEMENTAL

TRUST AGREEMENT

Table of Contents

Page

ARTICLE XII

THE SERIES 2014 BONDS

SECTION 12.01.

Definitions... 2

SECTION 12.02.

Authorization; Terms of the Series 2014 Bonds. ... 3

SECTION 12.03.

Redemption of Series 2014 Bonds ... 5

SECTION 12.04.

Selection of Series 2014 Bonds for Redemption ... 5

SECTION 12.05.

Notice of Redemption of Series 2014 Bonds ... 5

SECTION 12.06.

Partial Redemption of Series 2014 Bonds ... 5

SECTION 12.07.

Effect of Redemption of Series 2014 Bonds... 5

SECTION 12.08.

Form of Series 2014 Bonds... 6

SECTION 12.09.

Issuance of Series 2014 Bonds ... 6

SECTION 12.10.

Application of Proceeds of Series 2014 Bonds ... 6

SECTION 12.11.

Establishment and Application of Series 2014 Costs of Issuance

Account ... 6

SECTION 12.12.

Establishment and Application of Series 2014 Project Fund... 7

SECTION 12.13.

Use of Depository ... 7

SECTION 12.14.

[Reserved] ... 9

SECTION 12.15.

Establishment of the Series 2014 Reserve Fund ... 10

SECTION 12.16.

Terms of Series 2014 Bonds Subject to the Trust Agreement ... 10

SECTION 12.17.

Effective Date of Second Supplement ... 10

SECTION 12.18.

Execution in Counterparts... 10

Second Supplemental Trust Agreement

(Supplemental to the Trust Agreement

dated as of November 1, 2008)

Authorizing the Issuance of

$[PRINCIPAL AMOUNT] Aggregate Principal Amount of

Brentwood Infrastructure Financing Authority

Water Revenue Refunding Bonds,

Series 2014

This SECOND SUPPLEMENTAL TRUST AGREEMENT, dated as of December 1,

2014 (the “Second Supplement”), by and between the BRENTWOOD INFRASTRUCTURE

FINANCING AUTHORITY, a joint exercise of powers authority, duly organized and existing

pursuant to the laws of the State of California (the “Authority”), and U.S. BANK NATIONAL

ASSOCIATION, as trustee (the “Trustee”),

W I T N E S S E T H :

WHEREAS, the Authority is a joint exercise of powers authority duly organized and

operating pursuant to Article 1 of Chapter 5 of Division 7 of Title 1 of the Government Code of

the State of California;

WHEREAS, Bonds may be issued by the Authority pursuant to the provisions of the

Master Trust Agreement, dated as of November 1, 2008 (the “Master Trust Agreement”),

between the Authority and the Trustee and Article 4 of Chapter 5 of Division 7 of Title 1 of the

Government Code of the State of California, and the acts amendatory thereof and supplemental

thereto (the “Act”), for the purposes set forth in the Act, including the refunding of bonds

previously issued by the Authority;

WHEREAS, in accordance with the Master Trust Agreement, as supplemented by a First

Supplemental Trust Agreement, dated as of November 1, 2008, between the Authority and the

Trustee, the Authority previously issued its Water Revenue Bonds, Series 2008 (the “2008

Bonds”) in an original aggregate principal amount of $53,200,000 in part to provide funds to

finance and refinance certain improvements to the Water System (as defined in the Master Trust

Agreement); and

WHEREAS, the Authority has determined that it is desirable and necessary and in the

best interest of the Authority and the City to refund a portion of the outstanding 2008 Bonds in

the amount of $________ (the “Refunded Bonds”); and

WHEREAS, the Master Trust Agreement provides that the Authority may issue Bonds

from time to time as authorized by a supplemental trust agreement; and

WHEREAS, this Second Supplement is supplemental to the Master Trust Agreement;

and

WHEREAS, the Authority has determined that it is necessary and required that the

Authority enter into this Second Supplement in order to establish and declare, in conjunction

with the Master Trust Agreement, the terms and conditions upon which Brentwood Infrastructure

Financing Authority Water Revenue Refunding Bonds, Series 2014 (the “Series 2014 Bonds”)

shall be issued and secured and to secure the payment of the principal thereof and premium (if

any) and interest thereon; and

WHEREAS, the Authority has determined that all acts and proceedings required by law,

the Master Trust Agreement and this Second Supplement necessary to make the Series 2014

Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly

issued, the valid and binding obligations of the Authority payable in accordance with their terms,

and to constitute the Master Trust Agreement, as supplemented, a valid and binding agreement of

the parties hereto 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 Second Supplement has been in all

respects duly authorized;

NOW, THEREFORE, the parties hereto agree and covenant, as follow

ARTICLE XIII

THE 2014 BONDS

SECTION 13.01. Definitions. The terms defined in this Section shall, for all purposes of

this Second Supplement 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. Terms defined in the Master Trust Agreement, dated

November 1, 2008, between the Authority and the Trustee and not otherwise defined herein shall

have the meanings specified therein.

“Escrow Agreement” means the Escrow Agreement, dated as of December 1, 2014,

between the Authority and U.S. Bank National Association, as escrow agent, relating to the

Refunded Bonds.

“Refunded Bonds” has the meaning given to such term in the recitals to this Second

Supplement.

“Second Supplement” means this Second Supplemental Trust Agreement, dated as of

December 1, 2014, between the Authority and the Trustee.

“Series 2014 Bonds” means the Brentwood Infrastructure Financing Authority Water

Revenue Refunding Bonds, Series 2014, as described in Section 13.02(A) hereof.

“2008 Bonds” has the meaning given to such term in the recitals to this Second

Supplement.

SECTION 13.02. Authorization; Terms of the Series 2014 Bonds.

(A)

A second Series of Bonds to be issued under the Trust Agreement is hereby

created. Such Series shall be known as the “Brentwood Infrastructure Financing Authority

Water Revenue Refunding Bonds, Series 2014” (herein referred to as the “Series 2014 Bonds”).

The Series 2014 Bonds shall be issued in the aggregate principal amount of $[PRINCIPAL

AMOUNT] in accordance with the this Trust Agreement for the purposes of (i) refunding the

Refunded Bonds, and (ii) paying the costs of, or incidental to, the issuance and delivery of the

Series 2014 Bonds.

(B)

The Series 2014 Bonds shall be issued in fully registered form and shall be

initially registered in the name of “Cede & Co.”, as nominee of The Depository Trust Company.

The Series 2014 Bonds shall be evidenced by one Series 2014 Bond maturing on each of the

maturity dates as set forth in subsection 13.02(C) in a denomination corresponding to the total

principal amount of the Series 2014 Bonds of such maturity. Each Series 2014 Bond may be

assigned by the Trustee a distinctive number or letter and number, and a record of the same shall

be maintained by the Trustee. Registered ownership of the Series 2014 Bonds, or any portion

thereof, may not thereafter be transferred except as set forth in Section 13.12.

(C)

The Series 2014 Bonds shall be dated the date of delivery, shall be issued in

denominations of $5,000 or any integral multiple thereof, and shall bear interest from the date

thereof at the following rates per annum and shall mature on July 1 in the following years in the

following amounts:

Maturity Date

(July 1)

Principal

Amount

Interest

Rate

$

%

The Series 2014 Bonds maturing on July 1, 20__ through July 1, 20__ inclusive, are

designated Serial Bonds. The Series 2014 Bonds maturing on July 1, 20__ and July 1, 20__ are

designated as Term Bonds.

Interest on the Series 2014 Bonds shall be payable commencing on July 1, 2015 and

semiannually thereafter on January 1 and July 1 of each year in lawful money of the United

States of America by check mailed by first-class mail on each interest payment date to the

Holder thereof as of the close of business on the fifteenth (15th) day of the calendar month

immediately preceding such interest payment date; provided, that upon the written request of a

Holder of one million dollars ($1,000,000) or more in aggregate principal amount of Series 2014

Bonds received by the Trustee prior to the applicable Record Date (which such request shall

remain in effect until rescinded in writing by such Holder), interest shall be paid by wire transfer

in immediately available funds. Interest on the Series 2014 Bonds shall be computed on the

basis of a 360-day year of twelve 30-day months. The principal of and premium, if any, on the

Series 2014 Bonds are payable when due upon presentation thereof at the Corporate Trust Office

of the Trustee, in lawful money of the United States of America.

So long as the Series 2014 Bonds are maintained in book-entry form, payments of

principal, premium, if any, and interest shall be made by the Trustee to the Securities Depository

by wire transfer.

The Trustee shall provide to Holders of Series 2014 Bonds CUSIP number identification,

with appropriate dollar amounts for each CUSIP number, on all redemption payments and

SECTION 13.03. Redemption of Series 2014 Bonds.

(A)

Optional Redemption. The Series 2014 Bonds maturing on and after July 1, 20__

are subject to redemption prior to their respective stated maturities at the direction of the

Authority, from any source of available funds, as a whole or in part (in such maturities as are

designated by the Authority and by lot within a maturity) on any date on or after July 1, 20__, at

a redemption price equal to the principal amount of Series 2014 Bonds called for redemption,

together with accrued interest thereon to the date fixed for redemption, without premium.

(B)

Mandatory Sinking Fund Redemption. The Series 2014 Bonds maturing on

July 1, 20__ are also subject to redemption prior to their respective stated maturities, on any

July 1 on or after July 1, 20__, in part by lot, from mandatory sinking account payments at a

redemption price equal to the principal amount thereof to be redeemed, together with interest

accrued thereon to the date fixed for redemption, without premium, as set forth below (except

that if any of such Series 2014 Bonds shall have been optionally redeemed pursuant to Section

13.03(A), the amounts of the remaining mandatory sinking account payments for such Series

2014 Bonds shall be revised as directed in writing by the Authority).

Sinking Fund

Redemption Date

Principal

(July 1)

Amount

$

_________________

*Final Maturity

The Series 2014 Bonds maturing on July 1, 20__ are also subject to redemption prior to

their respective stated maturities, on any July 1 on or after July 1, 20__, in part by lot, from

mandatory sinking account payments at a redemption price equal to the principal amount thereof

to be redeemed, together with interest accrued thereon to the date fixed for redemption, without

premium, as set forth below (except that if any of such Series 2014 Bonds shall have been

optionally redeemed pursuant to Section 13.03(A), the amounts of the remaining mandatory

sinking account payments for such Series 2014 Bonds shall be revised as directed in writing by

the Authority).

Sinking Fund

Redemption Date

(July 1)

Principal

Amount

$

_________________

SECTION 13.04. Selection of Series 2014 Bonds for Redemption. Whenever provision

is made in this Second Supplement for the redemption of less than all of the Series 2014 Bonds

of any maturity (and interest rate), the Trustee shall select the Series 2014 Bonds to be redeemed,

from all Series 2014 Bonds of the respective maturity (and interest rate) not previously called for

redemption, in authorized denominations, by lot in any manner which the Trustee in its sole

discretion shall deem appropriate. The Trustee shall promptly notify the Authority and the City

in writing of the Series 2014 Bonds so selected for redemption.

SECTION 13.05. Notice of Redemption of Series 2014 Bonds. Notice of redemption of

any Series 2014 Bonds shall be mailed by the Trustee, not less than thirty (30) nor more than

sixty (60) days prior to the redemption date, (i) to the respective Holders of any Series 2014

Bonds designated for redemption at their addresses appearing on the bond registration books of

the Trustee by first-class mail, and (ii) to the Securities Depositories by facsimile and by

first-class mail. Notice of redemption shall be given in the form and in accordance with the

terms of the Trust Agreement.

SECTION 13.06. Partial Redemption of Series 2014 Bonds. Upon surrender of any

Series 2014 Bond redeemed in part only, the Authority shall execute and the Trustee shall

authenticate and deliver to the Holder thereof, at the expense of the Authority, a new Series 2014

Bond of authorized denominations, and of the same maturity and interest rate, equal in aggregate

principal amount to the unredeemed portion of the Series 2014 Bond surrendered.

SECTION 13.07. Effect of Redemption of Series 2014 Bonds. Notice of redemption

having been duly given as aforesaid, and moneys for payment of the Redemption Price of,

together with interest accrued to the redemption date on, the Series 2014 Bonds (or portions

thereof) so called for redemption being held by the Trustee, on the redemption date designated in

such notice, the Series 2014 Bonds (or portions thereof) so called for redemption shall become

due and payable at the redemption price specified in such notice, together with interest accrued

thereon to the date fixed for redemption, interest on the Series 2014 Bonds so called for

redemption shall cease to accrue, said Series 2014 Bonds (or portions thereof) shall cease to be

entitled to any benefit or security under this Trust Agreement, and the Holders of said Series

2014 Bonds shall have no rights in respect thereof except to receive payment of said Redemption

All Series 2014 Bonds redeemed pursuant to the provisions of this Article shall be

cancelled upon surrender thereof and destroyed.

SECTION 13.08. Form of Series 2014 Bonds. The Series 2014 Bonds and the certificate

of authentication and registration to be executed thereon shall be in substantially the form set

forth as Exhibit A hereto. The Series 2014 Bond designation letters and numbers, maturity dates,

principal amounts, and interest rates shall be inserted therein in conformity with Section 13.02.

SECTION 13.09. Issuance of Series 2014 Bonds. At any time after the execution and

delivery of this Second Supplement, the Authority may execute and the Trustee shall

authenticate and deliver the Series 2014 Bonds in the aggregate principal amount of

$[PRINCIPAL AMOUNT] upon the Order of the Authority.

SECTION 13.10. Application of Proceeds of Series 2014 Bonds. The proceeds of the

sale of the Series 2014 Bonds in the amount of $____________ (computed as $[PRINCIPAL

AMOUNT] aggregate principal amount of the Series 2014 Bonds, less $______ underwriter’s

discount, [plus/less] a [net] original issue [premium/discount] of $______) shall be received by

the Trustee on behalf of the Authority and held in trust and set aside as follows:

(i)

The Trustee shall transfer to U.S. Bank National Association, as escrow

agent under the Escrow Agreement, $__________ and;

(ii)

The Trustee shall deposit in the Series 2014 Costs of Issuance Account

$___________.

SECTION 13.11. Establishment and Application of Series 2014 Costs of Issuance

Account. The Trustee shall establish, maintain and hold in trust a separate account designated as

the “Series 2014 Costs of Issuance Account.” The moneys in the Series 2014 Costs of Issuance

Account shall be used and withdrawn by the Trustee to pay the costs of issuance of, or incidental

to, the issuance and delivery of the Series 2014 Bonds. Before any payment from the Series

2014 Costs of Issuance Account shall be made, the Authority shall file or cause to be filed with

the Trustee a requisition of the Authority signed by an authorized officer designated in writing

by the Authority and stating (i) the item number of such payment; (ii) the name of the person to

whom each such payment is due, which may be the Authority or the City in the case of

reimbursement for costs theretofore paid by the Authority or the City; (iii) the respective

amounts to be paid; (iv) the purpose by general classification for which each obligation to be

paid was incurred; and (v) that obligations in the stated amounts have been incurred by the

Authority or the City and are presently due and payable and that each item thereof is a proper

charge against the Series 2014 Costs of Issuance Account and has not been previously paid from

said account.

Upon receipt of each such requisition, the Trustee shall pay the amount set forth in such

requisition as directed by the terms thereof out of the Series 2014 Costs of Issuance Account.

The Trustee need not make any such payment if it has received notice of any lien, right to lien or

attachment upon, or claim affecting the right to receive payment of, any of the moneys to be so

paid, which has not been released or will not be released simultaneously with such payment. The

Trustee shall not incur any liability for any disbursement from the Series 2014 Costs of Issuance

Account made in reliance upon any requisition.

The Trustee shall maintain the Series 2014 Costs of Issuance Account for a period of 180

days following the date of delivery of the Series 2014 Bonds and then shall transfer any balance

therein to the Revenue Fund, pursuant to the priority established in Section 5.03 hereof.

SECTION 13.12. Use of Depository. Notwithstanding any provision of the Trust

Agreement or this Second Supplement to the contrary:

(A)

The Series 2014 Bonds shall be issued in fully registered form, in authorized

denominations and shall be initially registered in the name of “Cede & Co.”, as nominee of The

Depository Trust Company (the “Securities Depository”), and shall be evidenced by one Series

2014 Bond maturing on each of the maturity dates as set forth in subsection 13.02(C) in a

denomination corresponding to the total principal amount of the Series 2014 Bonds of such

maturity. Each Series 2014 Bond shall be assigned by the Trustee a distinctive number or letter

or letter and number, and a record of the same shall be maintained by the Trustee.

Registered ownership of the Series 2014 Bonds, or any portions thereof, may not

thereafter be transferred except:

(i)

To any successor of The Depository Trust Company or its nominee, or to

any substitute depository designated pursuant to clause (ii) of this subsection (A) (a

“Substitute Depository”); provided that any successor of The Depository Trust Company

or Substitute Depository shall be qualified under any applicable laws to provide the

services proposed to be provided by it;

(ii)

To any Substitute Depository not objected to by the Trustee, upon (1) the

resignation of The Depository Trust Company or its successor (or any Substitute

Depository or its successor) from its functions as depository, or (2) a determination by

the Authority that The Depository Trust Company or its successor (or any Substitute

Depository or its successor) is no longer able to carry out its functions as depository;

provided that any such Substitute Depository shall be qualified under any applicable laws

to provide the services proposed to be provided by it; or

(iii)

To any person as provided below, upon (1) the resignation of The

Depository Trust Company or its successor (or Substitute Depository or its successor)

from its functions as depository; provided that no Substitute Depository which is not

objected to by the Trustee can be obtained, or (2) a determination by the Authority that it

is in the best interests of the Authority to remove The Depository Trust Company or its

successor (or any Substitute Depository or its successor) from its function as depository.

(B)

In the case of any transfer pursuant to clause (i) or clause (ii) of

subsection 13.12(A), upon receipt of all Outstanding Series 2014 Bonds by the Trustee, together

with a Certificate of the Authority to the Trustee, a single new Series 2014 Bond for each

maturity shall be executed and delivered, registered in the name of such successor or such

Substitute Depository, or their nominees, as the case may be, all as specified in such Certificate

hereof, upon receipt of all Outstanding Series 2014 Bonds by the Trustee together with a

Certificate of the Authority to the Trustee, new Series 2014 Bonds shall be executed and

delivered in such denominations and registered in the names of such persons as are requested in

such a Certificate of the Authority, subject to the limitations of Section 13.02 hereof; provided

the Trustee shall not be required to deliver such new Series 2014 Bonds within a period less than

60 days from the date of receipt of such a Certificate of the Authority.

(C)

In the case of partial redemption, cancellation or an advance refunding of any

Series 2014 Bonds evidencing all or a portion of the principal maturing in a particular year, The

Depository Trust Company shall make an appropriate notation on the Series 2014 Bonds

indicating the date and amounts of such reduction in principal, in form acceptable to the Trustee.

(D)

The Authority and the Trustee shall be entitled to treat the person in whose name

any Series 2014 Bond is registered as the Holder thereof for all purposes of the Trust Agreement

and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or

the Authority; and the Authority and the Trustee shall have no responsibility for transmitting

payments to, communication with, notifying, or otherwise dealing with any beneficial owners of

the Series 2014 Bonds. Neither the Authority nor the Trustee will have any responsibility or

obligations, legal or otherwise, to the beneficial owners or to any other party including The

Depository Trust Company or its successor (or Substitute Depository or its successor), except to

the Holder of any Series 2014 Bond.

(E)

So long as all Outstanding Series 2014 Bonds are registered in the name of “Cede

& Co.” or its registered assign, the Authority and the Trustee shall cooperate with “Cede & Co.,”

as sole registered Holder, and its registered assigns in effecting payment of the principal of and

redemption premium, if any, and interest on the Series 2014 Bonds by arranging for payment in

such manner that funds for such payments are properly identified and are made immediately

available on the date they are due.

SECTION 13.13. Amendment of Trust Agreement. At such time as none of the 2008

Bonds remain Outstanding, the Trust Agreement shall be amended as set forth in this Section

13.13 and the initial Holders and subsequent Holders of the Series 2014 Bonds, by purchase and

acceptance thereof, shall be deemed to have consented to such amendments in accordance with

Section 8.01 of the Trust Agreement. Subject to the foregoing sentence, Section 5.03 of the

Trust Agreement is hereby amended to read in full as follows:

“SECTION 5.03. Establishment and Maintenance of

Accounts for Use of Money in the Revenue Fund. Subject to Section 6.03,

all money in the Revenue Fund shall be set aside by the Trustee in the

following respective special accounts within the Revenue Fund (each of

which is hereby created and each of which the Authority hereby covenants

and agrees to cause to be maintained) in the following order of priority:

(a)

Interest Account,

(b)

Principal Account; Sinking Accounts,

(d)

Fees and Expenses Fund.

All money in each of such accounts shall be held in trust by the Trustee

and shall be applied, used and withdrawn only for the purposes hereinafter

authorized in this section.

(a)

Interest Account. Not later than each Interest

Payment Date, the Trustee shall set aside from the Revenue Fund and

deposit in the Interest Account that amount of money which is equal to the

aggregate amount of interest becoming due and payable on the

Outstanding Current Interest Bonds on such Interest Payment Date

(excluding any interest for which there are moneys deposited in the

Interest Account from the proceeds of any Series of Bonds or other source

and reserved as capitalized interest to pay such interest). On January 1

and July 1 of each year any excess amounts in the Interest Account not

needed to pay interest on such date (and not held to pay interest on Bonds

having Interest Payment Dates other than January 1 and July 1) shall be

transferred to the Authority (but excluding, in each case, any moneys on

deposit in the Interest Account from the proceeds of any Series of Bonds

or other source and reserved as capitalized interest to pay interest on any

future Interest Payment Dates following such Interest Payment Dates).

All Swap Revenues received shall be deposited in the Interest Account.

(b)

Principal Account; Sinking Accounts. Not later

than each date that any Bond Obligation or Mandatory Sinking Account

Payment is scheduled to become due and payable, the Trustee shall

deposit in the Principal Account an amount equal to (i) the aggregate

amount of Bond Obligation becoming due and payable on such date, plus

(ii) the aggregate of the Mandatory Sinking Account Payments to be paid

on such date into the respective Sinking Accounts for the Term Bonds of

all Series. All of the aforesaid deposits made in connection with

Mandatory Sinking Account Payments shall be made without priority of

any payment into any one such Sinking Account over any other such

payment.

In the event that the Revenues shall not be sufficient to

make the required deposits so that moneys in the Principal Account on any

one date are equal to the amount of Bond Obligation to become due and

payable on the Outstanding Serial Bonds of all Series plus the Bond

Obligation amount of and redemption premium on the Outstanding Term

Bonds required to be redeemed or paid at maturity on such date, then such

moneys shall be applied on a Proportionate Basis and in such proportion

as said Serial Bonds and said Term Bonds shall bear to each other, after

first deducting for such purposes from said Term Bonds any of said Term

Bonds as shall have been redeemed or purchased during the preceding

12-month period. In the event that the Revenues shall not be sufficient to pay

one time into all such Sinking Accounts, then payments into all such

Sinking Accounts shall be made on a Proportionate Basis, in proportion

that the respective Mandatory Sinking Account Payments required to be

made into each Sinking Account during the then current 12-month period

bear to the aggregate of all of the Mandatory Sinking Account Payments

required to be made into all such Sinking Accounts during such 12-month

period.

On July 1 of each year or as soon as practicable thereafter

any excess amounts in the Principal Account not needed to pay principal

on such date (and not held to pay principal on Bonds having principal

payment dates other than July 1) shall be transferred to the Authority.

(c)

Reserve Fund. Upon the occurrence of any

deficiency in any Reserve Fund, the Trustee shall make such deposit to

such Reserve Fund as is required pursuant to Section 5.06, each such

deposit to be made as soon as possible in each month, until the balance

therein is at least equal to the applicable Reserve Requirement.

(d)

[Reserved]

(e)

Fees and Expenses Fund. The Trustee shall

establish, maintain and hold in trust a separate fund designated as the

“Fees and Expenses Fund.” At the direction of the Authority, after any

transfers described in (a), (b) and (c) above required to be made have been

made, the Trustee shall deposit as soon as practicable in each month in the

Fees and Expenses Fund amounts necessary for payment of fees, expenses

and similar charges (including fees, expenses and similar charges relating

to any Liquidity Facility or Credit Enhancement for the Bonds owing in

such month or following month by the Authority in connection with the

Bonds. The Authority shall inform the Trustee of such amounts, in

writing, on or prior to the first Business Day of each month.

Any Revenues remaining in the Revenue Fund after the

foregoing transfers described in (a), (b), (c), and (e) above, except as the

Authority shall otherwise direct in writing or as is otherwise provided in a

Supplemental Trust Agreement, shall be transferred to the Authority on

the same Business Day or as soon as practicable thereafter. The Authority

may use and apply the Revenues when received by it for any lawful

purpose of the Authority, including the redemption of Bonds upon the

terms and conditions set forth in the Supplemental Trust Agreement

relating to such Bonds and the purchase of Bonds as and when and at such

prices as it may determine.”

SECTION 13.14. Terms of Series 2014 Bonds Subject to the Trust Agreement. Except

as in this Second Supplement expressly provided, every term and condition contained in the

Trust Agreement shall apply to this Second Supplement and to the Series 2014 Bonds with the

same force and effect as if the same were herein set forth at length, with such omissions,

variations and modifications thereof as may be appropriate to make the same conform to this

Second Supplement.

This Second Supplement and all the terms and provisions herein contained shall form

part of the Trust Agreement as fully and with the same effect as if all such terms and provisions

had been set forth in the Trust Agreement. The Trust Agreement is hereby ratified and

confirmed and shall continue in full force and effect in accordance with the terms and provisions

thereof, as supplemented and amended hereby.

SECTION 13.15. Effective Date of Second Supplement. This Second Supplement shall

take effect upon its execution and delivery.

SECTION 13.16. Execution in Counterparts. This Second Supplement may be executed

in several counterparts, each of which shall be deemed an original, and all of which shall

constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Second Supplement by

their officers thereunto duly authorized as of the day and year first written above.

BRENTWOOD INFRASTRUCTURE

FINANCING AUTHORITY

By:

Treasurer/Controller

ATTEST:

By:

Secretary

U.S. BANK NATIONAL ASSOCIATION, as

Trustee

By:

EXHIBIT A

(FORM OF SERIES 2014 BOND)

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY

WATER REVENUE REFUNDING BOND

SERIES 2014

No. R-_____

$__________

NEITHER THE FULL FAITH AND CREDIT OF THE AUTHORITY NOR THE CITY OF

BRENTWOOD IS PLEDGED FOR THE PAYMENT OF THE INTEREST ON OR

PRINCIPAL OF THE BONDS AND NO TAX OR OTHER SOURCE OF FUNDS OTHER

THAN THE REVENUES HEREINAFTER REFERRED TO IS PLEDGED TO PAY THE

INTEREST ON OR PRINCIPAL OF THE BONDS. NEITHER THE PAYMENT OF THE

PRINCIPAL OF NOR INTEREST ON THE BONDS CONSTITUTES A DEBT, LIABILITY

OR OBLIGATION OF THE CITY OF BRENTWOOD.

Interest Rate

Maturity Date

Original

Issue Date

CUSIP

December __, 2014

REGISTERED OWNER:

CEDE & CO.

PRINCIPAL SUM:

____________________

The BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY, a joint

exercise of powers authority, duly organized and validly existing under and pursuant to the laws

of the State of California (the “Authority”), for value received hereby, promises to pay (but only

out of the Revenues hereinafter referred to) to the registered owner identified above or registered

assigns, on the maturity date specified above (subject to any right of prior redemption hereinafter

provided for) the principal sum specified above, together with interest on such principal sum

from the interest payment date next preceding the date of registration of this Bond (unless this

Bond is registered as of an interest payment date, in which event it shall bear interest from that

date, or unless this Bond is registered prior to July 1, 2015, in which event it shall bear interest

from the original issue date specified above) until the principal hereof shall have been paid at the

interest rate per annum specified above, payable on [January 1], 2015, and semiannually

thereafter on each January 1 and July 1. Interest due on or before the maturity or prior

redemption of this Bond shall be payable only by check mailed to the registered owner hereof.

The principal hereof is payable in lawful money of the United States of America at the corporate

trust office of U.S. Bank National Association in St. Paul, Minnesota.

amount of [PRINCIPAL AMOUNT IN WORDS] ($[PRINCIPAL AMOUNT]), all of like tenor

and date (except for such variations, if any, as may be required to designate varying numbers,

maturities and interest rates), and is issued under and pursuant to the provisions of the Joint

Exercise of Powers Act (being Chapter 5 of Division 7 of Title 1 of the California Government

Code, as amended) and all laws amendatory thereof or supplemental thereto (the “Act”) and

under and pursuant to the provisions of a Master Trust Agreement, dated as of November 1,

2008, between the Authority and U.S. Bank National Association as trustee (the “Trustee”), as

supplemented, including as supplemented by a Second Supplemental Trust Agreement, dated as

of December 1, 2014, (collectively, the “Trust Agreement”) (copies of which are on file at the

office of Trustee in San Francisco, California). Capitalized terms not otherwise defined herein

shall have the meanings ascribed thereto in the Trust Agreement.

The Bonds are issued to provide funds to refund a portion of the Brentwood

Infrastructure Financing Authority Water Revenue Bonds, Series 2008 and pay the costs of

issuance of, or incidental to, the issuance and delivery of the Bonds. The Bonds are limited

obligations of the Authority and are payable, as to interest thereon and principal thereof, solely

from certain proceeds of the Bonds held in certain funds and accounts pursuant to the Trust

Agreement and the revenues (the “Revenues”) derived from the 2014 Payments and other

payments made by the City, and all interest or other investment income, pursuant to the Master

Installment Sale Agreement, dated as of November 1, 2008, as supplemented, including as

supplemented by a Second Supplemental Installment Sale Agreement, dated as of December 1,

2014 (collectively the “Installment Sale Agreement”), by and between the Authority and the

City, and the Authority is not obligated to pay interest on and principal of the Bonds except from

the Revenues. All Bonds are equally and ratably secured in accordance with the terms and

conditions of the Trust Agreement by a pledge of and charge and lien upon the Revenues, and

the Revenues constitute a trust fund for the security and payment of the interest on and principal

of the Bonds as provided in the Trust Agreement. The general fund of the Authority is not liable,

and the full faith and credit of the Authority and the City are not pledged, for the payment of the

interest on or principal of the Bonds. No tax shall ever be levied or collected to pay the interest

on or principal of the Bonds. The Bonds are not secured by a legal or equitable pledge of or

charge or lien upon any property of the Authority or any of its income or receipts except the

Revenues, and neither the payment of the interest on nor principal of the Bonds is a debt, liability

or general obligation of the Authority. Additional bonds payable from the Revenues may be

issued which will rank equally as to security with the Bonds, but only subject to the conditions

and upon compliance with the procedures set forth in the Trust Agreement. Reference is hereby

made to the Act and to the Trust Agreement and any and all amendments thereof and

supplements thereto for a description of the terms on which the Bonds are issued, the provisions

with regard to the nature and extent of the Revenues, the rights of the registered owners of the

Bonds, security for payment of the Bonds, remedies upon default and limitations thereon, and

amendment of the Trust Agreement (with or without consent of the registered owners of the

Bonds); and all the terms of the Trust Agreement are hereby incorporated herein and constitute a

contract between the Authority and the registered owner of this Bond, to all the provisions of

which the registered owner of this Bond, by acceptance hereof, agrees and consents.

The Bonds are subject to redemption prior to their respective stated maturities as

set forth in the Trust Agreement.

Notice of redemption of this Bond shall be given by mail not less than thirty (30)

days nor more than sixty (60) days before the redemption date to the registered owner hereof,

subject to and in accordance with provisions of the Trust Agreement with respect thereto. If

notice of redemption has been duly given as aforesaid and money for the payment of the

above-described redemption price is held by the Trustee, then this Bond shall, on the redemption date

designated in such notice, become due and payable at the above-described redemption price; and

from and after the date so designated, interest on this Bond shall cease to accrue and the

registered owner of this Bond shall have no rights with respect hereto except to receive payment

of the redemption price hereof.

If an event of default, as defined in the Trust Agreement, shall occur, the principal

of all Bonds (and any additional bonds authorized by the Trust Agreement) may be declared due

and payable upon the conditions, in the manner and with the effect provided in the Trust

Agreement; except that the Trust Agreement provides that in certain events such declaration and

its consequences may be rescinded under the circumstances as provided therein.

This Bond is transferable only on a register to be kept for that purpose at the

above-mentioned office of the Trustee by the registered owner hereof in person or by his duly

authorized attorney upon payment of the charges provided in the Trust Agreement and upon

surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee

duly executed by the registered owner or his duly authorized attorney, and thereupon a new fully

registered Bond or Bonds in the same aggregate principal amount will be issued to the transferee

in exchange therefor. The Authority and the Trustee may deem and treat the registered owner

hereof as the absolute owner hereof for the purpose of receiving payment of the interest hereon

and principal hereof and for all other purposes, whether or not this Bond shall be overdue, and

neither the Authority nor the Trustee shall be affected by any notice or knowledge to the

contrary; and payment of the interest on and principal of this Bond shall be made only to such

registered owner, which payments shall be valid and effectual to satisfy and discharge liability

on this Bond to the extent of the sum or sums so paid.

This Bond shall not be entitled to any benefit, protection or security under the

Trust Agreement or become valid or obligatory for any purpose until the certificate of

authentication and registration hereon endorsed shall have been executed and dated by the

Trustee.

It is hereby certified that all acts, conditions and things required by law 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 manner as required by law

and that the amount of this Bond, together with all other indebtedness of the Authority, does not

exceed any limit prescribed by the Constitution or laws of the State of California and is not in

excess of the amount of Bonds permitted to be issued under the Trust Agreement.

IN WITNESS WHEREOF, the Brentwood Infrastructure Financing Authority has

caused this Bond to be executed in its name and on its behalf by the facsimile signature of the

Treasurer/Controller of the Authority and countersigned by the facsimile signature of the

Secretary of said Authority, and has caused this Bond to be dated as of the original issue date

specified above.

BRENTWOOD INFRASTRUCTURE

FINANCING AUTHORITY

By _____________________________________

Treasurer/Controller

Countersigned:

Secretary

[FORM OF CERTIFICATE OF AUTHENTICATION AND

REGISTRATION TO APPEAR ON SERIES 2014 BONDS]

This is one of the Bonds described in the within mentioned Trust Agreement

which has been authenticated and registered on

.

U.S. BANK NATIONAL ASSOCIATION, as

Trustee

By

Authorized Signatory

Unless this Bond is presented by an authorized representative of The Depository

Trust Company to the issuer or its agent for registration of transfer, exchange or payment, and

any Bond issued is registered in the name of Cede & Co. or such other name as requested by an

authorized representative of The Depository Trust Company and any payment is made to Cede &

Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE

BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &

Co., has an interest herein.

[FORM OF ASSIGNMENT TO

APPEAR ON SERIES 2014 BONDS]

For value received the undersigned hereby sells, assigns and transfers unto

_________________________________________ the within bond and all rights thereunder, and

hereby irrevocably constitutes and appoints _____________________________ attorney to

transfer the within bond on the books kept for registration thereof, with full power of substitution

in the premises.

_____________________________________

Dated: _____________

Note: The signature to this Assignment must correspond with the name as written on the face of

the Bond in every particular, without alteration or enlargement or any change whatever.

Signature Guaranteed: __________________________

OHS

DRAFT

10/30/14

______________________________________________________________________________

______________________________________________________________________________

SECOND SUPPLEMENTAL INSTALLMENT SALE AGREEMENT

by and between the

CITY OF BRENTWOOD

and the

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY

for the

CITY OF BRENTWOOD WATER PROJECT

Dated as of December 1, 2014

Relating to

$[PRINCIPAL AMOUNT]

BRENTWOOD INFRASTRUCTURE FINANCING AUTHORITY

WATER REVENUE REFUNDING BONDS,

SERIES 2014

______________________________________________________________________________

______________________________________________________________________________

TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS

Section 1.01. Definitions... 2

ARTICLE II

TERMS OF THE SECOND SUPPLEMENTAL INSTALLMENT SALE AGREEMENT

Section 2.01. Authority for the Second Supplemental Installment Sale

Agreement ... 4

Section 2.02. Purpose of the Second Supplemental Installment Sale Agreement ... 4

Section 2.03. Payment of 2014 Payments ... 5

Section 2.04. Prepayment of 2014 Payments... 5

Section 2.05. Compliance with Master Installment Sale Agreement ... 6

Section 2.06. Tax Covenants ... 6

Section 2.07. Continuing Disclosure ... 6

SECOND SUPPLEMENTAL INSTALLMENT SALE AGREEMENT

This Second Supplemental Installment Sale Agreement (this “Second

Supplemental Installment Sale Agreement”), dated as of December 1, 2014, by and between City

of Brentwood, a municipal corporation duly organized and existing under and by virtue of the

laws of the State of California (the “City”), and the Brentwood Infrastructure Financing

Authority, a joint exercise of powers authority duly organized and existing under and by virtue of

the laws of the State of California (the “Authority”);

W I T N E S S E T H:

WHEREAS, the City and the Authority have executed and entered into a Master

Installment Sale Agreement (the “Master Installment Sale Agreement”) as of November 1, 2008,

for the acquisition and construction from time to time of additions, betterments and

improvements to the Water System (as that term is defined in the Master Installment Sale

Agreement, and herein the “Water System”) of the City;

WHEREAS, the Authority previously agreed to assist the City by acquiring and

constructing those certain improvements for the water system of the City described in the First

Supplemental Installment Sale Agreement, dated as of November 1, 2008 (the “First

Supplemental Installment Sale Agreement”), between the City and the Authority, supplemental

to the Master Installment Sale Agreement (the “2008 Water Project”) and by selling the 2008

Water Project to the City as provided in the Master Installment Sale Agreement, as supplemented

by the First Supplemental Installment Sale Agreement and by refunding the unpaid installment

payments due by the City for the purchase of those certain improvements for the water system of

the City (the “1996 Water Project”) acquired under that certain 1996 Installment Sale Agreement

(the “1996 Installment Sale Agreement”) executed and entered into as of December 1, 1996, by

and between the City and the Authority, as provided in the First Supplemental Installment Sale

Agreement; and

WHEREAS, the Authority has agreed to assist the City in refinancing a portion of

the 2008 Water Project and a portion of the 1996 Water Project by refunding the aggregate

principal amount of $_______ of the installment payments scheduled to become due under the

First Supplemental Installment Sale Agreement (the “Refunded Payments”); and

WHEREAS, the City and the Authority have determined that the refunding of the

Refunded Payments is necessary and proper for the purposes of the City;

WHEREAS, the City has determined to make payments to the Authority for the

refunding of the Refunded Payments and the incidental costs and expenses related thereto as

provided in this Second Supplemental Installment Sale Agreement; and

WHEREAS, the City and the Authority have determined that all acts, conditions

and things required by law to exist, to have happened and to have been performed precedent to

and in connection with the execution and entering into of this Second Supplemental Installment

Sale Agreement do exist, have happened and have been performed in regular and due time, form