- Sponsor would agree to include structural and document protections of CalPFA, including (a) Disclaimers of contractual liability of any kind with respect to the bonds and all the other agreements to which CalPFA is a party, (b) Disclaimer of responsibility for information contained in any disclosure document (other than the “Authority” and “Litigation” sections), (c) Adequate indemnifications or Indenture provisions for the funding of accounts with enough revenues from the project to cover any expenses the CalPFA may incur for any reason (budgeted and unbudgeted), and (d) Delegation as much as possible to the Bond Trustee, the Property Manager or the Financial Consultant of any additional responsibilities CalPFA might otherwise have as a result of its ownership of the project.
- CalPFA will engage Bond Counsel, and in such capacity, Bond Counsel would report to the Board any material adverse deviations prior to authorization of bonds and documents by the Board.
- CalPFA will engage Issuer Counsel to ensure the finance terms are consistent with typical CalPFA guidelines and real estate and general counsel to ensure the asset ownership provisions are consistent with the CalPFA guidelines.
- In the event a disclosure document is prepared, any opinion rendered by disclosure or underwriters counsel would also be addressed to CalPFA.
- In event of private placement or limited offering, an investor letter would be required in connection with the original sale in form satisfying #1 and #2 above.
- CalPFA would select an Insurance Consultant, and the insurance required with respect to the project would meet or exceed the recommendations of the Insurance Consultant.
- CalPFA would not select, but would review the qualifications and concur in the selection of, the Property Manager.
- CalPFA would engage a Financial Consultant to act as PFA’s fiduciary financial consultant on the transaction, and post-closing to oversee performance of the Property Manager, including formulation of budgets and approving disbursements, performing other tasks of the CalPFA as owner that are specified in accordance with #1 above, review post-issuance rebate and other tax and disclosure compliance, and report annually to the Board on the foregoing.
- CalPFA will, at its discretion, annually review the Insurance Consultant, Property Manager and Financial Consultant, and make any changes it deems appropriate, including replacement of any such party if it is in default or otherwise not performing satisfactorily, provided that CalPFA will not seek to change the Property Manager without concurrence of the Bond Trustee and any ground lessor, donee of the project or other holder of residential interests in the project, and subject to any conditions set out in the bond documents.
- CalPFA will require satisfactory evidence that each project is exempt from property tax if critical to the financial model of the transaction.
- The foregoing are in addition to the usual provisions and procedures the CalPFA applies to approving traditional conduit financings.
