LSU Municipal Bond 2008

NEW ISSUE ~ BooI-Entry OnIy Rating:
S&P: AAA/A-1+
(See 'RATING" herein}
!n lhc ojnon of Orrck, Hcrrnqlon & Svlc|ffc LLP, Eond Covnsc| lo lhc Avlhorl, bascd vjon an ana|ss of caslnq |avs, rcqv|alons,
rv|nqs and covrl dccsons, and assvunq, auonq olhcr uallcrs, lhc accvrac of ccrlan rcjrcscnlalons and couj|ancc vlh ccrlan
coicnanls, nlcrcsl on lhc Eonds s cac|vdcd frou qross ncouc for fcdcra| ncouc laa jvrjoscs vndcr Scclon 10J of lhc !nlcrna| Ecicnvc
fcdcra| ndidva| or corjoralc a|lcrnalic unuvu laacs, a|lhovqh Eond Covnsc| obscrics lhal svch nlcrcsl s nc|vdcd n ad]vslcd cvrrcnl
carnnqs vhcn ca|cv|alnq corjoralc a|lcrnalic unuvu laaab|c ncouc. Eond Covnsc| s a|so of lhc ojnon lhal nlcrcsl on lhc Eonds
s cacujl frou jrcscnl Slalc of Ca|forna jcrsona| ncouc laacs. Eond Covnsc| cajrcsscs no ojnon rcqardnq an olhcr laa conscqvcnccs
rc|alcd lo lhc ovncrshj or dsjoslon of, or lhc accrva| or rcccjl of nlcrcsl on, lhc Eonds. Scc TAX MATTEES.
$24,405,000
CALIFORNIA MUNICIPAL FINANCE AUTHORITY
VARIABLE RATE REVENUE BONDS
(LA SIERRA UNIVERSITY}
SERIES 200S
$12,000,000
Seriea 200SA
$12,405,000
Seriea 200SB
Dated: Date of Delivery Price: 100 Due: August 1, as shown on inside cover page
Thia cover page containa certain inIormation Ior generaI reIerence onIy. It ia not intended to be a aummary oI thia iaaue.

CapitaIized terma uaed in thia cover page ahaII have the meaninga given auch terma herein.
The California Municipal Finance Authority is issuing its \ariable Rate Revenue Bonds (La Sierra University), Series z00SA (the Series
z00SA Bonds"), and its \ariable Rate Revenue Bonds (La Sierra University), Series z00SB (the Series z00SB Bonds" and collectively with the
Series z00SA Bonds, the Bonds"). The Bonds are issuable as fully-registered bonds registered in the name of a nominee of The Depository Trust
Company, which will act as securities depository for the Bonds. Purchases and tenders of the Bonds may be made in book-entry form only,
National Association, as Trustee. Disbursement of payments to DTC Participants is the responsibility of DTC and disbursement of payments to
The Authority will loan the proceeds of the Bonds to La Sierra University (the Corporation") pursuant to a Loan Agreement to provide
furnishing, and/or equipping of certain educational facilities on the campus of La Sierra University, and (ii) pay costs incurred in connection with
the issuance of the Bonds, all as more fully described herein See ESTIMATED SOURCES AND USES OF PROCEEDS."
The Bonds are being issued as two series (each, a Series") of variable rate bonds. The Bonds will initially bear interest at a Weekly Interest
Rate and will be available in denominations of $100,000 and any multiple of $b,000 in excess thereof. The Bonds of any Series are subject to
conversion to a Term Interest Rate as more fully described herein and are subject to mandatory tender for purchase upon any such conversion.
Brokerage
rst Business
Day of each calendar month, commencing September 1, z00S.
With respect to Weekly Interest Rate Periods, payment of the principal, Purchase Price of, and interest on the Bonds initially will be supported
by an irrevocable, direct-pay letter of credit (the Letter of Credit") issued by Wells Fargo Bank, National Association (the Bank") pursuant to
and subject to the terms of a Reimbursement Agreement. The Letter of Credit will be in effect from the date of issuance of the Bonds through the
occurrence of the earliest of the termination events described herein.
THE BONDS ARE SUBJECT TO OPTIONAL REDEMPTION AND OPTIONAL AND MANDATORY TENDER FOR PURCHASE AS
DESCRIBED HEREIN.
The Authority is obligated to pay the principal, premium, if any, and interest on the Bonds solely from the Revenues, which include amounts
received from the Corporation under the Loan Agreement and amounts received under Credit Facilities for the Bonds, and the other funds
pledged therefor under the Indenture. The Corporation's payment obligations under the Loan Agreement are general, unsecured obligations of
the Corporation.
NONE OF THE AUTHORITY, ANY AUTHORITY MEMBER OR ANY PERSON EXECUTING THE BONDS IS LIABLE PERSONALLY
ON THE BONDS OR SUBJECT TO ANY PERSONAL LIABILITY OR ACCOUNTABILITY BY REASON OF THEIR ISSUANCE. THE
BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM AND SECURED BY THE PLEDGE OF
CERTAIN REVENUES UNDER THE INDENTURE. NEITHER THE AUTHORITY, ITS MEMBERS, THE STATE OF CALIFORNIA,
NOR ANY OF ITS POLITICAL SUBDIVISIONS SHALL BE DIRECTLY, INDIRECTLY, CONTINGENTLY, OR MORALLY OBLIGATED
TO USE ANY OTHER MONEYS OR ASSETS TO PAY ALL OR ANY PORTION OF THE DEBT SERVICE DUE ON THE BONDS, TO
LEVY OR TO PLEDGE ANY FORM OF TAXATION WHATEVER THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR
PAYMENT. THE BONDS ARE NOT A PLEDGE OF THE FAITH AND CREDIT OF THE AUTHORITY, ITS MEMBERS, THE STATE OF
CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS, NOR DO THEY CONSTITUTE INDEBTEDNESS WITHIN THE MEANING
OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION. THE AUTHORITY HAS NO TAXING POWER.
The Bonds are offered when, as and if issued by the Authority and accepted by the Underwriter subject to the approval of legality by Orrick,
Herrington & Sutcliffe LLP, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed upon for the Corporation
by DLA Piper, San Diego, California, Corporation Counsel, for the Bank by Chapman and Cutler LLP, San Francisco, California, Bank Counsel and
for the Authority by Squire, Sanders & Dempsey, LLP, Authority Counsel. It is expected that the Bonds will be available for delivery through the
DTC book-entry system on or about August 14, z00S.
WeIIa Fargo InatitutionaI Securitiea, LLC
Dated: August 7, z00S
MATURI TY SCHEDULE
Series Principal Amount CUSI P
*
Maturity Date

Seri es 2008A Bonds $12,000,000 13048TDT7 August 1, 2028
Seri es 2008B Bonds $12,405,000 13048TDS9 August 1, 2020

*
Copyright 2008, American Bankers Association. CUSIP data is provided by Standard & Poors CUSIP Service
Bureau, a di vi si on of The McGraw-Hi l l Compani es, I nc. CUSI P numbers are provi ded f or conveni ence of reference
onl y. The Corporati on assumes no responsi bi l i ty f or the accuracy of such numbers.
Thi s Of f i ci al Statement does not consti tute an of f er to sel l the Bonds i n any j uri sdi cti on i n whi ch
or to any person to whom i t i s unl awf ul to make such an of f er. No deal er, sal esperson or other person has
been authori zed by the Cal i f orni a Muni ci pal Fi nance Authority (the Authority), La Sierra University
(the Corporation) or Wells Fargo I nsti tuti onal Securi ti es, LLC (the Underwriter) to give any
i nf ormati on or to make any representati ons, other than those contai ned herei n, i n connecti on wi th the
of f eri ng of the Bonds and, i f gi ven or made, such i nf ormati on or representati ons must not be rel i ed upon.
The i nf ormati on set f orth herei n under the capti on THE BANK has been obtained from Wells
Fargo Bank, Nati onal Associ ati on (the Bank). The information set forth herein under the captions
THE AUTHORITY and ABSENCE OF MATERIAL LITIGATION The Authority has been
obtai ned f rom the Authori ty. Al l other i nf ormati on set f orth herei n has been obtai ned f rom the
Corporati on, and other sources whi ch are bel i eved to be current and rel i abl e. The accuracy or
compl eteness of any i nf ormati on other than that contained under the captions THE AUTHORITY and
ABSENCE OF MATERIAL LITIGATION The Authority is not guaranteed by, and is not to be
construed as a representati on by, the Authori ty.
The Underwri ter has provi ded the f ol l owi ng sentence f or i ncl usi on i n thi s Of f i ci al Statement.
The Underwri ter has revi ewed the i nf ormati on i n thi s Of f i ci al Statement i n accordance wi th, and as part
of , i ts responsi bi l i ti es to i nvestors under the f ederal securi ti es l aws as appl i ed to the f acts and
ci rcumstances of thi s transacti on, but the Underwri ter does not guarantee the accuracy or compl eteness of
such i nf ormati on.
Esti mates and opi ni ons i ncl uded i n thi s Of f i ci al Statement shoul d not be i nterpreted as statements
of f act. Summari es of documents do not purport to be compl ete statements of thei r provi si ons. The
i nf ormati on and expressi ons of opi ni on herei n are subj ect to change wi thout noti ce, and nei ther the
del i very of thi s Of f i ci al Statement nor any sal e made hereunder shal l , under any ci rcumstances, create any
i mpl i cati on that there has been no change i n the af f ai rs of the Authori ty, the Corporati on, or the Bank
si nce the date hereof .
______________________________
I N CONNECTI ON WI TH THI S OFFERI NG, THE UNDERWRI TER MAY
OVERALLOT OR EFFECT TRANSACTI ONS THAT STABI LI ZE OR MAI NTAI N THE
MARKET PRI CE OF THE BONDS AT LEVELS ABOVE THOSE WHI CH MI GHT
OTHERWI SE PREVAI L I N THE OPEN MARKET. SUCH STABI LI ZI NG, I F COMMENCED,
MAY BE DI SCONTI NUED AT ANY TI ME.
______________________________
CAUTI ONARY STATEMENTS REGARDI NG
FORWARD-LOOKI NG STATEMENTS I N THI S OFFI CI AL STATEMENT
Certai n statements i ncl uded or i ncorporated by ref erence i n thi s Of f i ci al Statement consti tute
forward-looking statements. Such statements are general l y i denti f i abl e by the termi nol ogy used such as
plan, expect, estimate, budget, intend, projection, or other similar words. Such forward-
l ooki ng statements i ncl ude, but are not l i mi ted to, certai n statements contai ned i n the i nf ormati on i n
APPENDIX A INFORMATION REGARDING LA SIERRA UNIVERSITY.
THE ACHI EVEMENT OF CERTAI N RESULTS OR OTHER EXPECTATI ONS CONTAI NED
I N SUCH FORWARD-LOOKI NG STATEMENTS I NVOLVES KNOWN AND UNKNOWN RI SKS,
UNCERTAI NTI ES AND OTHER FACTORS WHI CH MAY CAUSE ACTUAL RESULTS,
PERFORMANCE OR ACHI EVEMENTS DESCRI BED TO BE MATERI ALLY DI FFERENT FROM
ANY FUTURE RESULTS, PERFORMANCE OR ACHI EVEMENTS EXPRESSED OR I MPLI ED BY
SUCH FORWARD-LOOKI NG STATEMENTS. THE CORPORATI ON DOES NOT PLAN TO I SSUE
ANY UPDATES OR REVI SI ONS TO THOSE FORWARD-LOOKI NG STATEMENTS I F OR WHEN
I TS EXPECTATI ONS, OR EVENTS, CONDI TI ONS OR CI RCUMSTANCES ON WHI CH SUCH
STATEMENTS ARE BASED OCCUR.
TABLE OF CONTENTS

Page

-i -

I NTRODUCTI ON ....................................................................................................................................... 1
General ........................................................................................................................................... 1
The Corporati on .............................................................................................................................. 1
The Bonds ....................................................................................................................................... 2
Book-Entry System ......................................................................................................................... 2
Securi ty and Sources of Payment f or the Bonds ............................................................................. 2
Certai n I nf ormati on Rel ated to thi s Of f i ci al Statement .................................................................. 3
Bondholders Risks ......................................................................................................................... 3
PLAN OF FI NANCE ................................................................................................................................... 3
ESTI MATED SOURCES AND USES OF PROCEEDS ............................................................................ 4
DEBT SERVI CE REQUI REMENTS .......................................................................................................... 5
THE BONDS ............................................................................................................................................... 5
General ........................................................................................................................................... 5
Book-Entry System ......................................................................................................................... 6
Determi nati on of I nterest Rates on the Bonds ................................................................................ 6
Weekl y I nterest Rate Peri od f or Bonds........................................................................................... 6
Term I nterest Rate Peri od f or Bonds .............................................................................................. 7
Conversi on of I nterest Rate Peri od ................................................................................................. 8
Speci al Consi derati ons Rel ati ng to the Bonds .............................................................................. 10
TENDER OF BONDS FOR PURCHASE ................................................................................................. 11
Opti onal Tender ............................................................................................................................ 11
Mandatory Tender ......................................................................................................................... 12
Mandatory Purchase i n Li eu of Redempti on ................................................................................ 13
Ef f ect of Purchase of Bonds ......................................................................................................... 13
Purchase of Tendered Bonds ........................................................................................................ 14
I nadequate Funds f or Tenders ....................................................................................................... 14
Remarketi ng .................................................................................................................................. 14
REDEMPTI ON OF BONDS ..................................................................................................................... 15
Opti onal Redempti on .................................................................................................................... 15
Noti ce of Redempti on ................................................................................................................... 16
Ef f ect of Redempti on .................................................................................................................... 16
Sel ecti on of Bonds to be Redeemed ............................................................................................. 16
TABLE OF CONTENTS
(conti nued)
Page

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SECURI TY AND SOURCES OF PAYMENT FOR THE BONDS ......................................................... 17
General ......................................................................................................................................... 17
Credi t Faci l i ty ............................................................................................................................... 17
Al ternate Credi t Faci l i ty ............................................................................................................... 18
Revenues and Repayment I nstal l ments......................................................................................... 19
THE BANK ............................................................................................................................................... 19
Wel l s Fargo Bank, Nati onal Associ ati on ...................................................................................... 19
THE LETTER OF CREDI T AND THE REI MBURSEMENT AGREEMENT ....................................... 20
Letter of Credi t .............................................................................................................................. 20
Rei mbursement Agreement .......................................................................................................... 21
THE AUTHORI TY ................................................................................................................................... 24
BONDHOLDERS RISKS ........................................................................................................................ 24
General ......................................................................................................................................... 24
The Bank ....................................................................................................................................... 25
Enf orceabi l i ty of the Letter of Credi t ............................................................................................ 25
Tax-Exempt Status and Other Tax Matters ................................................................................... 25
Fi rst Amendment I ssues ................................................................................................................ 27
Sei smi c Ri sks ................................................................................................................................ 28
I nvestments ................................................................................................................................... 28
Ri sks Rel ated to Outstandi ng Vari abl e Rate Obl i gati ons ............................................................. 28
Enf orceabi l i ty of Remedi es ........................................................................................................... 28
ABSENCE OF MATERI AL LI TI GATI ON .............................................................................................. 29
The Authori ty ................................................................................................................................ 29
The Corporati on ............................................................................................................................ 29
I NDEPENDENT AUDI TOR ..................................................................................................................... 29
RATI NGS .................................................................................................................................................. 29
UNDERWRI TI NG .................................................................................................................................... 29
APPROVAL OF LEGALI TY .................................................................................................................... 30
TAX MATTERS ........................................................................................................................................ 30
CONTI NUI NG DI SCLOSURE ................................................................................................................. 32
MI SCELLANEOUS .................................................................................................................................. 32

TABLE OF CONTENTS
(conti nued)
Page

-i i i -

APPENDI X A I NFORMATI ON REGARDI NG LA SI ERRA UNI VERSI TY ............................... A-1
APPENDI X B AUDI TED FI NANCI AL STATEMENTS OF LA SI ERRA UNI VERSI TY .......... B-1
APPENDI X C BOOK-ENTRY SYSTEM ....................................................................................... C-1
APPENDI X D SUMMARY OF CERTAI N PROVI SI ONS OF THE PRI NCI PAL LEGAL
DOCUMENTS ......................................................................................................... D-1
APPENDI X E FORM OF OPI NI ON OF BOND COUNSEL ......................................................... E-1
APPENDI X F FORM OF LETTER OF CREDI T ........................................................................... F-1

[THIS PAGE INTENTIONALLY LEFT BLANK]
OFFI CI AL STATEMENT
$24,405,000
CALI FORNI A MUNI CI PAL FI NANCE AUTHORI TY
VARI ABLE RATE REVENUE BONDS
(LA SI ERRA UNI VERSI TY)
SERI ES 2008
$12,000,000
Series 2008A Bonds
$12,405,000
Series 2008B Bonds

I NTRODUCTI ON
Thi s I ntr oducti on contai ns onl y a br i ef summar y of cer tai n of the ter ms of the Bonds bei ng
offer ed and a ful l r evi ew shoul d be made of the enti r e Offi ci al Statement, i ncl udi ng the cover page, the
i nsi de cover pages and the Appendi ces i n or der to make an i nfor med i nvestment deci si on. Al l statements
contai ned i n thi s I ntr oducti on ar e qual i fi ed i n thei r enti r ety by r efer ence to the enti r e Offi ci al Statement.
Refer ences to, and summar i es of, pr ovi si ons of the l aws of the State of California (the State) or any
documents r efer r ed to her ei n do not pur por t to be compl ete and such r efer ences ar e qual i fi ed i n thei r
enti r ety by the compl ete pr ovi si ons ther eof.
General
Thi s Of f i ci al Statement, i ncl udi ng the cover page, the i nsi de cover pages and Appendi ces hereto
(this Official Statement), provides certain informati on i n connecti on wi th the of f eri ng of $24,405,000
aggregate pri nci pal amount of the Cal i f orni a Muni ci pal Fi nance Authori ty Vari abl e Rate Revenue Bonds
(La Sierra University), Series 2008A (the Series 2008A Bonds) and the California Municipal Finance
Authori ty Vari abl e Rate Revenue Bonds (La Si erra University), Series 2008B (the Series 2008B Bonds
and collectively with the Series 2008A Bonds, the Bonds).
The Bonds wi l l be i ssued pursuant to and secured by an I ndenture of Trust, dated as of August 1,
2008 (the Indenture), between the California Municipal Finance Authority (the Authority) and U.S.
Bank National Association, as trustee (the Trustee). The Authori ty wi l l l end the proceeds of the Bonds
to La Sierra University (the Corporation) pursuant to a Loan Agreement, dated as of August 1, 2008
(the Loan Agreement), between the Authority and the Corporation. See PLAN OF FINANCE and
ESTIMATED SOURCES AND USES OF PROCEEDS.
Al l capi tal i zed terms used i n thi s Of f i ci al Statement and not otherwi se def i ned herei n have the
same meanings as in the Indenture. See APPENDIX D SUMMARY OF CERTAIN PROVISIONS
OF THE PRINCIPAL LEGAL DOCUMENTS DEFINITIONS for definitions of certain words and
terms used but not otherwi se def i ned herei n.
The Corporation
The Corporati on i s a nonprof i t rel i gi ous corporati on and i s exempt f rom f ederal i ncome taxati on
as an organi zati on descri bed i n Secti on 501(c)(3) of the I nternal Revenue Code of 1986, as amended. The
Corporati on owns and operates La Si erra Uni versi ty, a pri vate, Adventi st l i beral arts col l ege l ocated i n
Ri versi de, Cal i f orni a.
2
For more information about the Corporation, see APPENDIX A INFORMATION
REGARDING LA SIERRA UNIVERSITY and APPENDIX B AUDITED FINANCIAL
STATEMENTS OF LA SIERRA UNIVERSITY.
The Bonds
The Bonds will be issued as two series (each, a Series) of variable rate bonds, all initially
beari ng i nterest at a Weekl y I nterest Rate. Whi l e the Bonds of any Seri es are i n a Weekl y I nterest Rate
Peri od, i nterest on such Bonds i s payabl e on the f i rst Busi ness Day of each cal endar month, commenci ng
September 1, 2008. The Bonds wi l l be dated thei r date of i ssuance and wi l l mature on the dates set f orth
on the i nsi de cover page. The Bonds wi l l i ni ti al l y be i ssued i n authori zed denomi nati ons of $100,000 and
any mul ti pl e of $5,000 i n excess thereof. See THE BONDS.
Pursuant to the I ndenture, the Bonds of any Seri es shal l bear i nterest at ei ther a Weekl y I nterest
Rate or a Term I nterest Rate as speci f i ed f rom ti me to ti me by the Corporati on. The maxi mum rate of
i nterest any of the Bonds (other than Credi t Provi der Bonds) may bear is 12% per annum. See THE
BONDS Determination of Interest Rates on the Bonds, Weekly Interest Rate Period for Bonds and
Term Interest Rate Period for Bonds.
The I nterest Rate Peri od f or the Bonds of any Seri es may be converted f rom ti me to ti me as
provided in the Indenture. See THE BONDS Conversion of Interest Rate Period.
The Bonds are subj ect to redempti on and opti onal and mandatory tender f or purchase pri or to
thei r respecti ve maturi ty dates as descri bed herein. See REDEMPTION OF BONDS and TENDER
OF BONDS FOR PURCHASE.
Book-Entry System
When del i vered, the Bonds wi l l be regi stered i n the name of Cede & Co., a nomi nee of The
Depository Trust Company (DTC) which will act as securi ti es deposi tory f or the Bonds. Purchases of
the Bonds and tenders of the Bonds may be made i n book-entry f orm onl y, through brokers and deal ers
who are, or who act through, DTC Parti ci pants. Benef i ci al Owners of the Bonds wi l l not recei ve physi cal
del i very of certi f i cated securi ti es. Payments of the pri nci pal and Purchase Pri ce of , premi um, i f any, and
i nterest on the Bonds wi l l be payabl e by the Trustee to DTC, whi ch wi l l i n turn remi t such payments to
the DTC Parti ci pants, whi ch wi l l i n turn remi t such payments to the Benef i ci al Owners of the Bonds. I n
addi ti on, so l ong as Cede & Co. i s the regi stered owner of the Bonds, the ri ght of any Benef i ci al Owner to
exerci se i ts ri ght to tender i ts i nterest i n any Bond f or purchase and recei ve payment theref or wi l l be
based onl y upon and subj ect to the procedures and l i mi tati ons of the DTC book-entry system. See
APPENDIX C BOOK-ENTRY SYSTEM.
Security and Sources of Payment for the Bonds
Payment of the pri nci pal , Purchase Pri ce of , and i nterest on the Bonds i ni ti al l y wi l l be supported
by an irrevocable, direct-pay letter of credit (the Letter of Credit) issued by Wells Fargo Bank, National
Association (the Bank) made pursuant to and subj ect to the terms of a Rei mbursement Agreement,
dated as of August 1, 2008 (the Reimbursement Agreement), between the Corporation and the Bank.
The Rei mbursement Agreement consti tutes a Credi t Agreement pursuant to the I ndenture and the Letter
of Credi t consti tutes a Credi t Faci l i ty pursuant to the I ndenture.
The Authori ty i s obl i gated to pay the pri nci pal , premi um, i f any, and i nterest on the Bonds sol el y
f rom the Revenues whi ch i ncl ude amounts recei ved f rom the Corporati on under the Loan Agreement and
3
amounts recei ved under Credi t Faci l i ti es f or the Bonds, and the other f unds avai l abl e heref or under the
I ndenture. Pursuant to the I ndenture, the Authori ty has pl edged to the Trustee f or the benef i t of the
Bondhol ders al l of the Revenues.
The Corporations payment obligations under the Loan Agreement are general , unsecured
obl i gati ons of the Corporati on. Under the Loan Agreement, the Corporati on i s uncondi ti onal l y obl i gated
to pay the Repayment I nstal l ments to be made thereunder, whi ch are due i n amounts and at the ti mes
necessary to pay the pri nci pal (whether at maturi ty or upon redempti on or accel erati on) of , premi um, i f
any, and i nterest to the respecti ve maturi ty dates or redempti on of the Bonds, when due.
The Purchase Price of Bonds tendered or deemed tendered for purchase is payable only
from the proceeds of the remarketing of such Bonds and from amounts made available under the
Credit Facility for such Bonds. The Corporation has no obligation under the Loan Agreement to
make any payments with respect to the Purchase Price of Bonds tendered or deemed tendered for
purchase.
There wi l l be no reserve f und wi th respect to the Bonds.
Certain I nformation Related to this Official Statement
The descri pti ons herei n of the I ndenture, the Loan Agreement, the Letter of Credi t, the
Rei mbursement Agreement and other agreements rel ati ng to the Bonds are qual i f i ed i n thei r enti rety by
ref erence to such documents, and the descri pti on herei n of the Bonds i s qual i f i ed i n i ts enti rety by the
f orm thereof and the provi si ons of the I ndenture. See APPENDIX D SUMMARY OF CERTAIN
PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS f or a bri ef summary of certai n provi si ons
of the I ndenture and the Loan Agreement.
The i nf ormati on and expressi ons of opi ni on herei n speak onl y as of thei r date and are subj ect to
change wi thout noti ce. Nei ther del i very of thi s Of f i ci al Statement nor any sal e made hereunder nor any
f uture use of thi s Of f i ci al Statement shal l , under any ci rcumstances, create any i mpl i cati on that there has
been no change i n the af f ai rs of the Authori ty, the Corporati on or the Bank.
Bondholders Risks
There are ri sks associ ated wi th the purchase of the Bonds. See BONDHOLDERS RISKS
herei n f or a di scussi on of certai n of these ri sks.
PLAN OF FI NANCE
The proceeds of the Bonds wi l l be used to (i ) f i nance and ref i nance the acqui si ti on, constructi on,
i nstal l ati on, i mprovement, renovati on, remodel i ng, f urni shi ng, and/or equi ppi ng of certai n educati onal
f aci l i ti es on the campus of La Si erra Uni versi ty, and (i i ) pay costs i ncurred i n connecti on wi th the
i ssuance of the Bonds.
4
ESTI MATED SOURCES AND USES OF PROCEEDS
The f ol l owi ng tabl e sets f orth the esti mated sources and esti mated uses of the proceeds of the
Bonds.
Estimated Sources of Proceeds
Par Amount of the Bonds $ 24,405,000.00

Estimated Uses of Proceeds
Deposi t to Constructi on Fund $ 8,000,000.00
Payof f of Exi sti ng Loan 15,828,454.84
Bank Fees and Expenses 214,412.11
Deposi t to Costs of I ssuance Fund
1
362,133.05
Total $ 24,405,000.00

1
Includes underwriters discount, initial annual fee paid to Remarketi ng Agent, l egal and f i nanci ng f ees, rati ng
agency f ees, pri nti ng costs and other mi scel l aneous expenses.

5
DEBT SERVI CE REQUI REMENTS
The f ol l owi ng tabl e sets f orth, f or each of the years endi ng August 1, the amounts requi red to be
made avai l abl e f or the payment of total debt servi ce on the Bonds.
Year Endi ng
August 1,
Pri nci pal I nterest
(1)
Total

2009 $ 905,000 $ 764,082 $ 1,669,082
2010 905,000 763,750 1,668,750
2011 935,000 734,337 1,669,337
2012 965,000 704,756 1,669,756
2013 1,000,000 671,817 1,671,817
2014 1,030,000 640,088 1,670,088
2015 1,065,000 606,613 1,671,613
2016 1,100,000 572,655 1,672,655
2017 1,140,000 535,636 1,675,636
2018 1,180,000 499,200 1,679,200
2019 1,220,000 460,850 1,680,850
2020 1,260,000 421,682 1,681,682
2021 1,300,000 379,815 1,679,815
2022 1,340,000 338,000 1,678,000
2023 1,385,000 294,450 1,679,450
2024 1,435,000 249,723 1,684,723
2025 1,485,000 202,568 1,687,568
2026 1,535,000 154,537 1,689,537
2027 1,585,000 104,650 1,689,650
2028 1,635,000 53,198 1,688,198
Totals: $ 24,405,000 $ 9,152,407 $ 33,557,407
_____________________
(1)
Assumes al l of the Bonds bear i nterest at 3.25% per annum.

See Note 14 to APPENDIX B AUDITED FINANCIAL STATEMENTS OF LA SIERRA UNIVERSITY for a
descri pti on of exi sti ng i ndebtedness of the Corporati on.

Source: Wel l s Fargo I nsti tuti onal Securi ti es, LLC.

THE BONDS
General
The Bonds wi l l be i ssued i n the aggregate pri nci pal amounts set f orth on the cover page of thi s
Of f i ci al Statement. The Bonds wi l l be dated thei r date of i ssuance and wi l l mature on the dates set f orth
on the i nsi de cover page of thi s Of f i ci al Statement.
Pursuant to the I ndenture, the Bonds of any Seri es shal l bear i nterest at a Weekl y I nterest Rate or
a Term I nterest Rate, as such rates shal l be determi ned by the Remarketi ng Agent. The maxi mum rate of
i nterest any of the Bonds (other than Credi t Provi der Bonds) may bear i s 12% per annum. Al l the Bonds
wi l l i ni ti al l y bear i nterest at the Weekl y I nterest Rate, determi ned as descri bed herei n. The Bonds wi l l
i ni ti al l y be i ssued i n authori zed denomi nati ons of $100,000 or any mul ti pl e of $5,000 i n excess thereof .
6
Book-Entry System
The Bonds wi l l be regi stered i n the name of Cede & Co., the nominee of DTC, and held in DTCs
book-entry system. So l ong as the Bonds are hel d i n the book-entry system, DTC or i ts nomi nee wi l l be
the regi stered owner of the Bonds f or al l purposes of the I ndenture and the Bonds. So l ong as the Bonds
are hel d i n book-entry f orm through DTC, al l payments wi th respect to pri nci pal , Purchase Pri ce,
premi um, i f any, and i nterest on each Bond wi l l be made pursuant to DTCs rules and procedures. See
APPENDIX C BOOK-ENTRY SYSTEM.
The Authori ty, the Corporati on, the Trustee and the Remarketi ng Agent wi l l have no
responsi bi l i ty or obl i gati on to DTC, any DTC Parti ci pants, or the Benef i ci al Owners wi th respect to (a)
the accuracy of any records mai ntai ned by DTC or any DTC Parti ci pant, (b) the payment by DTC or by
any DTC Parti ci pant of any amount due to any Parti ci pant or Benef i ci al Owner, respecti vel y, i n respect of
the pri nci pal , Purchase Pri ce of , redempti on or i nterest on any Bond, or (c) the del i very of any noti ce by
DTC or any DTC Parti ci pant.
Determination of I nterest Rates on the Bonds
The i nterest rate on the Bonds shal l be determi ned by the Remarketi ng Agent i n the manner
speci f i ed i n the I ndenture. Wel l s Fargo Brokerage Servi ces, LLC has been appoi nted under the I ndenture
and a Remarketi ng Agreement wi th the Corporati on to serve as Remarketi ng Agent f or the Bonds. The
Remarketi ng Agent may resi gn or be removed and a successor Remarketi ng Agent may be appoi nted, al l
i n accordance wi th the terms of the I ndenture and the Remarketi ng Agreement.
The Weekl y I nterest Rate and the Term I nterest Rate shal l be determi ned as provi ded i n the
I ndenture; provi ded, that no Bond (other than a Credi t Provi der Bond) shal l bear i nterest at a rate
exceedi ng the Maxi mum I nterest Rate. Each Bond shal l bear i nterest f rom and i ncl udi ng the date of
i ssuance to but excl udi ng the date of payment i n f ul l thereof (whether at maturi ty, upon redempti on or
accel erati on or otherwi se). I nterest shal l be computed upon the basi s of a 365-day or 366-day year, as
appl i cabl e, f or the number of days actual l y el apsed f or any Bonds beari ng i nterest i n a Weekl y I nterest
Rate Peri od or Term I nterest Rate Peri od of l ess than one year. For Bonds beari ng i nterest i n a Term
I nterest Rate Peri od of one year or l onger, i nterest shal l be computed upon the basi s of a 360-day year,
consi sti ng of twel ve 30-day months.
The determi nati on of the i nterest rate on the Bonds by the Remarketi ng Agent shal l be concl usi ve
and bi ndi ng upon the Bondhol ders, the Authori ty, the Bank and the Trustee.
Payment of the pri nci pal , Purchase Pri ce of , and i nterest on the Bonds i n a Weekl y I nterest Rate
Peri od i ni ti al l y wi l l be supported by the Letter of Credi t. The Corporati on may provi de one or more
Al ternate Credi t Faci l i ti es f or the Letter of Credi t, and may el i mi nate the support of any Seri es of Bonds
by a Credi t Faci l i ty, upon the terms and condi ti ons provi ded i n the I ndenture and the Loan Agreement,
whi ch terms requi re the mandatory tender of such Bonds for purchase. See THE LETTER OF CREDIT
AND THE REIMBURSEMENT AGREEMENT and SECURITY AND SOURCES OF PAYMENT
FOR THE BONDS Alternate Credit Facility.
Weekly I nterest Rate Period for Bonds
Upon i ni ti al i ssuance, the Bonds wi l l be i n a Weekl y I nterest Rate Peri od and wi l l bear i nterest at
Weekl y I nterest Rates payabl e on each I nterest Payment Date f or the Bonds, commenci ng September 1,
2008. Duri ng each Weekl y I nterest Rate Peri od f or a Seri es of Bonds, the Remarketi ng Agent wi l l set a
Weekl y I nterest Rate f or such Seri es of Bonds by 5:00 p.m. (New York Ci ty ti me) on the Wednesday
7
i mmedi atel y precedi ng each Cal endar Week (or by 12:00 noon (New York Ci ty ti me) on the next
preceedi ng Busi ness Day i f such Wednesday i s not a Busi ness Day); provi ded that the i ni ti al Weekl y
I nterest Rate f or each Seri es of Bonds shal l be determi ned by the Remarketi ng Agent on or pri or to the
I ssue Date and provi ded f urther that i f a Seri es of Bonds i s to be Converted to a Weekl y I nterest Rate
Peri od f rom a Term I nterest Rate Peri od, the Weekl y I nterest Rate f or the i ni ti al Cal endar Week of such
Weekl y I nterest Rate Peri od shal l be determi ned not l ater than the Busi ness Day next precedi ng the
ef f ecti ve date of such Weekl y I nterest Rate Peri od. Each Weekl y I nterest Rate shal l be the rate
determi ned by the Remarketi ng Agent (on the basi s of exami nati on of obl i gati ons comparabl e to the
appl i cabl e Seri es of Bonds known by the Remarketi ng Agent to have been pri ced or traded under then
prevai l i ng market condi ti ons) to be the mi ni mum i nterest rate whi ch, i f borne by such Seri es of Bonds,
woul d enabl e the Remarketi ng Agent to sel l Bonds of such Seri es on such day at a pri ce equal to the
pri nci pal amount thereof pl us accrued i nterest.
I f f or any reason the Weekl y I nterest Rate f or a Seri es of Bonds f or a Cal endar Week i s not so
determi ned, the Weekl y I nterest Rate f or such Seri es of Bonds f or such Cal endar Week shal l be equal to
110% of the SI FMA Swap I ndex.
The i nterest on each Bond beari ng i nterest at the Weekl y I nterest Rate wi l l be payabl e on the f i rst
Busi ness Day of each cal endar month to the regi stered Bondhol der whose name appears on the
regi strati on books mai ntai ned by the Trustee as of the cl ose of busi ness on the Record Date, whi ch shal l
be the Busi ness Day i mmedi atel y precedi ng the I nterest Payment Date duri ng any Weekl y I nterest Rate
Peri od; except that i f there i s a def aul t i n any payment of i nterest and suf f i ci ent f unds thereaf ter become
avai l abl e to pay such i nterest, such payment shal l be made to the regi stered Bondhol der whose name
appears on the regi strati on books as of a speci al record date to be establ i shed by the Trustee.
Term I nterest Rate Period for Bonds
The durati on of each Term I nterest Rate Peri od wi l l be determi ned by the Corporati on and wi l l be
a peri od of approxi matel y one month, approxi matel y three months, approxi matel y si x months,
approxi matel y ni ne months, approxi matel y one year or any mul ti pl e of approxi matel y si x months above
one year i n each case endi ng on a day precedi ng a Busi ness Day; provi ded, however, that notwi thstandi ng
the f oregoi ng any Term I nterest Rate Peri od f or a Seri es of Bonds whi ch ends on the day i mmedi atel y
precedi ng the respecti ve maturi ty date of such Seri es of Bonds may i ncl ude a peri od of ti me f rom the
I nterest Payment Date f or such Seri es of Bonds i mmedi atel y precedi ng the maturi ty date of such Seri es of
Bonds to the day i mmedi atel y precedi ng such maturi ty date even i f the ti me remai ni ng to such day i s not
one of the peri ods speci f i ed above; and provi ded f urther that notwi thstandi ng the f oregoi ng any Term
I nterest Rate Peri od may end on the day i mmedi atel y precedi ng the maturi ty date of such Seri es of Bonds
whether or not such maturi ty date i s a Busi ness Day.
Duri ng each Term I nterest Rate Peri od f or a Seri es of Bonds, the Remarketi ng Agent wi l l set a
Term I nterest Rate f or such Seri es of Bonds by 4:00 p.m. (New York Ci ty ti me) on the Busi ness Day
precedi ng the f i rst day of such Term I nterest Rate Peri od. Each Term I nterest Rate shal l be the rate
determi ned by the Remarketi ng Agent (i n part, on the basi s of exami nati on of obl i gati ons comparabl e to
such Seri es of Bonds known to the Remarketi ng Agent to have been pri ced or traded under then
prevai l i ng market condi ti ons) to be the mi ni mum i nterest rate whi ch, i f borne by such Seri es of Bonds,
woul d enabl e the Remarketi ng Agent to sel l such Seri es of Bonds on such Busi ness Day at a pri ce equal
to the pri nci pal amount thereof ; provi ded, however, that i f f or any reason the Term I nterest Rate i s not so
determi ned f or any Term I nterest Rate Peri od, the I nterest Rate Peri od on such Seri es of Bonds shal l
automati cal l y Convert to a Weekl y I nterest Rate Peri od.
8
The i nterest on each Bond beari ng i nterest at a Term I nterest Rate f or a Term I nterest Rate Peri od
of l ess than one year wi l l be payabl e the day i mmedi atel y succeedi ng the l ast day of such Term I nterest
Rate Peri od. The i nterest on each Bond beari ng i nterest at a Term I nterest Rate f or a Term I nterest Rate
Peri od of one year or l onger wi l l be payabl e each Semi -Annual I nterest Payment Date duri ng such Term
I nterest Rate Peri od and the day i mmedi atel y succeedi ng the l ast day of such Term I nterest Rate Peri od.
Payment of such i nterest wi l l be to the regi stered Bondhol der whose name appears on the regi strati on
books mai ntai ned by the Trustee as of the cl ose of busi ness on the Record Date, whi ch shal l be the
Busi ness Day i mmedi atel y precedi ng the I nterest Payment Date duri ng any Term I nterest Rate Peri od of
l ess than one year or the f i f teenth day of the month (whether or not a Busi ness Day) pri or to an I nterest
Payment Date wi th respect to any Term I nterest Rate Peri od of one year or l onger.
Conversion of I nterest Rate Period
Conversion to Term I nterest Rate Period. The Corporati on, by wri tten di recti on to the Trustee
and the Remarketi ng Agent, and wi th the wri tten consent of the appl i cabl e Credi t Provi der and
accompani ed by an Approvi ng Opi ni on, may el ect to Convert the I nterest Rate Peri od f or a Seri es of
Bonds f rom a Weekl y I nterest Rate Peri od to a Term I nterest Rate Peri od or f rom one Term I nterest Rate
Peri od to another Term I nterest Rate Peri od, and shal l determi ne the durati on of any such new Term
Interest Rate Period. The Corporations written directi on to Convert a Seri es of Bonds to a Term I nterest
Rate Peri od (a) shal l speci f y the Seri es of Bonds to be Converted; (b) shal l speci f y the Conversi on Date to
such Term I nterest Rate Peri od whi ch shal l be (1) the I nterest Payment Date whi ch i s not l ess than 30
days f ol l owi ng the recei pt by the Trustee of such di recti on i f such Seri es of Bonds i s to be Converted
f rom a Weekl y I nterest Rate Peri od to a Term I nterest Rate Peri od; or (2) the I nterest Payment Date next
succeedi ng the l ast day of the then-current Term I nterest Rate Peri od whi ch i s not l ess than 30 days
f ol l owi ng the date of recei pt by the Trustee of such di recti on i f such Seri es of Bonds i s to be Converted
f rom one Term I nterest Rate Peri od to another; or (3) any date on whi ch the Bonds of such Seri es may be
opti onal l y redeemed pursuant to the I ndenture not l ess than 30 days f ol l owi ng the date of recei pt by the
Trustee of such di recti on; and (c) shal l speci f y the l ast day thereof . The Corporati on shal l not Convert the
I nterest Rate Peri od on a Seri es of Bonds to a Term I nterest Rate Peri od unl ess (a) the Credi t Faci l i ty then
i n ef f ect wi th respect to such Seri es of Bonds has been modi f i ed, i f necessary, to provi de i nterest
coverage suf f i ci ent to provi de f or al l i nterest to accrue on such Seri es of Bonds as of each I nterest
Payment Date duri ng and i mmedi atel y succeedi ng such Term I nterest Rate Peri od pl us ten (10) addi ti onal
days at the Term I nterest Rate f or such Term I nterest Rate Peri od; provi ded, however, that no Credi t
Faci l i ty shal l be requi red i n connecti on wi th the Conversi on of such Seri es of Bonds to a Term I nterest
Rate Peri od whi ch ends on the day i mmedi atel y precedi ng the maturi ty date of such Seri es of Bonds i f the
conditions to the termination of the Corporations obligati on to mai ntai n a Credi t Faci l i ty set f orth i n the
Loan Agreement have been sati sf i ed; and (b) wi th respect to a Term I nterest Rate Peri od of l onger than
ni ne months, the Trustee and the Authori ty have recei ved pri or to the ef f ecti ve date of such Term I nterest
Rate Peri od of a conti nui ng di scl osure agreement i mposi ng obl i gati ons upon the Corporati on or any other
responsi bl e party to compl y wi th the requi rements of S.E.C. Rul e 15c2-12, as i t may f rom ti me to ti me be
amended or suppl emented, wi th respect to such Seri es of Bonds as provi ded i n the Loan Agreement. See
REDEMPTION OF BONDSOptional Redemption and SECURITY AND SOURCES OF
PAYMENT OF THE BONDSAlternate Credit Facility.
The Bonds of a Seri es are subj ect to automati c Conversi on to an I nterest Rate Peri od of the same
durati on as the i mmedi atel y precedi ng I nterest Rate Peri od f or Bonds of such Seri es upon the f ai l ure of
the condi ti ons contai ned i n the I ndenture to a Conversi on of such Bonds to a Term I nterest Rate Peri od
f rom a Term I nterest Rate Peri od to a Weekl y I nterest Rate Peri od or f rom a Term I nterest Rate Peri od to
another Term I nterest Rate Peri od. Except f or automati c Conversi ons pursuant to the I ndenture, the
Trustee shal l gi ve noti ce by f i rst cl ass mai l of each Term I nterest Rate Peri od to the appl i cabl e
Bondhol ders not l ess than 30 days pri or to the ef f ecti ve date of such Term I nterest Rate Peri od. Such
9
noti ce shal l state (1) that the i nterest rate on the appl i cabl e Seri es of Bonds wi l l be Converted to or
conti nue to be a Term I nterest Rate Peri od, (2) the Conversi on Date to, and f i nal date of , such Term
I nterest Rate Peri od, (3) the day by whi ch the Term I nterest Rate f or such Term I nterest Rate Peri od shal l
be determi ned, (4) the manner by whi ch such Term I nterest Rate may be obtai ned, (5) the I nterest
Payment Dates duri ng such Term I nterest Rate Peri od, (6) that the Bonds of such Seri es shal l be
purchased on such ef f ecti ve date pursuant to the mandatory tender f or purchase provi si ons of the
I ndenture, (7) the procedures f or such purchase, (8) the redempti on provi si ons that wi l l pertai n to the
Bonds of such Seri es duri ng such Term I nterest Rate Peri od, (9) the rati ngs whi ch are expected to be
assi gned to the Bonds upon such Conversi on to a Term I nterest Rate Peri od and (10) whether a Credi t
Faci l i ty wi l l be i n ef f ect wi th respect to such Seri es of Bonds upon such Conversi on to a Term I nterest
Rate Peri od.
Conversion to Weekly I nterest Rate Period. The Corporati on, by wri tten di recti on to the Trustee
and the Remarketi ng Agent, and wi th the wri tten consent of the Credi t Provi der and accompani ed by an
Approvi ng Opi ni on, may el ect to Convert the I nterest Rate Peri od f or a Seri es of Bonds f rom a Term
I nterest Rate Peri od to a Weekl y I nterest Rate Peri od. The Corporations written direction to Convert a
Seri es of Bonds to a Weekl y I nterest Rate Peri od shal l speci f y the Seri es of Bonds to be Converted and
the Conversi on Date to a Weekl y I nterest Rate Peri od, whi ch shal l be (a) the I nterest Payment Date next
succeedi ng the l ast day of the then current Term I nterest Rate Peri od not l ess than 30 days f ol l owi ng the
date of recei pt by the Trustee of such di recti on, or (b) any date on whi ch such Seri es of Bonds may be
opti onal l y redeemed pursuant to the I ndenture not l ess than 30 days f ol l owi ng the date of recei pt by the
Trustee of such direction. See REDEMPTION OF BONDSOptional Redemption.
Bonds of a Seri es are subj ect to automati c Conversi on to a Weekl y I nterest Rate Peri od upon the
f ai l ure of the Remarketi ng Agent to establ i sh a Term I nterest Rate f or a Term I nterest Rate Peri od or upon
the f ai l ure of the condi ti ons contai ned i n the I ndenture to a Conversi on of such Seri es of Bonds f rom a
Weekl y I nterest Rate Peri od to a Term I nterest Rate Peri od. Except f or automati c Conversi ons pursuant
to the I ndenture, the Trustee shal l gi ve noti ce by f i rst cl ass mai l of a Conversi on of a Seri es of Bonds to a
Weekl y I nterest Rate Peri od to the appl i cabl e Bondhol ders not l ess than 30 days pri or to the Conversi on
Date to such Weekl y I nterest Rate Peri od. Such noti ce shal l state (1) that the I nterest Rate Peri od on such
Seri es of Bonds wi l l be Converted to a Weekl y I nterest Rate Peri od, (2) the Conversi on Date to such
Weekl y I nterest Rate Peri od, (3) the day by whi ch the i ni ti al Weekl y I nterest Rate f or such Weekl y
I nterest Rate Peri od shal l be determi ned and the manner by whi ch such Weekl y I nterest Rate may be
obtai ned, (4) the I nterest Payment Dates wi th respect to such Weekl y I nterest Rate Peri od, (5) that the
Bonds of such Seri es wi l l be purchased on such Conversi on Date pursuant to the mandatory tender f or
purchase provi si ons of the I ndenture, (6) the procedures f or such purchase, (7) that, subsequent to such
ef f ecti ve date, the appl i cabl e Bondhol ders wi l l have the ri ght to demand purchase of the Bonds of such
Series upon not less than seven days notice, (8) the procedures f or a demand f or such purchase, (9) the
redempti on provi si ons that wi l l pertai n to the Bonds of such Seri es duri ng such Weekl y I nterest Rate
Peri od, and (10) the rati ngs whi ch are expected to be assi gned to such Seri es of Bonds upon such
Conversi on to a Weekl y I nterest Rate Peri od.
F ailure of Conditions of Conversion. I f the condi ti ons contai ned i n the I ndenture rel ati ng to the
Conversi on of a Seri es of Bonds to a new I nterest Rate Peri od are not sati sf i ed af ter noti ce of such
Conversi on has been gi ven to the appl i cabl e Bondhol ders, then the I nterest Rate Peri od f or such Seri es of
Bonds that shal l commence on the date of the mandatory purchase of such Bonds on such Conversi on
Date speci f i ed i n such noti ce shal l automati cal l y be an I nterest Rate Peri od of the same durati on as the
i mmedi atel y precedi ng I nterest Rate Peri od f or such Seri es of Bonds and the Remarketi ng Agent shal l
determi ne the i nterest rate to appl y to such Bonds duri ng such I nterest Rate Peri od on the Conversi on
Date speci f i ed i n such noti ce to Bondhol ders.
10
The Trustee i s not requi red to gi ve noti ce f or an automati c Conversi on (1) to a Weekl y I nterest
Rate Peri od i n the event that a Term I nterest Rate i s not determi ned by the Remarketi ng Agent f or any
Term I nterest Rate Peri od, or (2) to an I nterest Rate Peri od of the same durati on as the i mmedi atel y
precedi ng Term I nterest Rate Peri od i n the event that the condi ti ons of the I ndenture to the Conversi on of
the Bonds to another I nterest Rate Peri od are not sati sf i ed.
Special Considerations Relating to the Bonds
The Remarketing Agent is Paid By the Borrower. The Remarketi ng Agent's responsi bi l i ti es
i ncl ude determi ni ng the i nterest rate f rom ti me to ti me and remarketi ng Bonds that are opti onal l y or
mandatori l y tendered by the owners thereof (subj ect, i n each case, to the terms of the I ndenture and the
Remarketi ng Agreement), al l as f urther descri bed i n thi s Of f i ci al Statement. The Remarketi ng Agent i s
appoi nted by the Borrower and i s pai d by the Borrower f or i ts servi ces. As a resul t, the i nterests of the
Remarketi ng Agent may di f f er f rom those of exi sti ng Hol ders and potenti al purchasers of Bonds.
The Remarketing Agent Routinely Purchases Bonds for its Own Account. The Remarketi ng
Agent acts as remarketi ng agent f or a vari ety of vari abl e rate demand obl i gati ons and, i n i ts sol e
di screti on, routi nel y purchases such obl i gati ons f or i ts own account. The Remarketi ng Agent i s
permi tted, but not obl i gated, to purchase tendered Bonds f or i ts own account and, i n i ts sol e di screti on,
may routi nel y acqui re such tendered Bonds i n order to achi eve a successf ul remarketi ng of Bonds (i .e.,
because there otherwi se are not enough buyers to purchase such Bonds) or f or other reasons. However,
the Remarketi ng Agent i s not obl i gated to purchase Bonds, and may cease doi ng so at any ti me wi thout
noti ce. The Remarketi ng Agent may al so make a market i n Bonds by routi nel y purchasi ng and sel l i ng
Bonds other than i n connecti on wi th an opti onal or mandatory tender and remarketi ng. Such purchases
and sal es may be at or bel ow par. However, the Remarketi ng Agent i s not requi red to make a market i n
Bonds. The Remarketi ng Agent may al so sel l any Bonds i t has purchased to one or more af f i l i ated
i nvestment vehi cl es f or col l ecti ve ownershi p or enter i nto deri vati ve arrangements wi th af f i l i ates or others
i n order to reduce i ts exposure to Bonds. The purchase of Bonds by the Remarketi ng Agent may create
the appearance that there i s greater thi rd party demand f or Bonds i n the market than i s actual l y the case.
The practi ces descri bed above al so may resul t i n f ewer Bonds bei ng tendered i n a remarketi ng.
Bonds May be Offered at Different Prices on Any Date I ncluding an I nterest Rate
Determination Date. Pursuant to the I ndenture and the Remarketi ng Agreement, the Remarketi ng Agent
i s requi red to determi ne the appl i cabl e rate of i nterest that, i n i ts j udgment, i s the l owest rate that woul d
permi t the sal e of a Seri es of Bonds beari ng i nterest at the appl i cabl e i nterest rate at par pl us accrued
i nterest, i f any, on and as of the appl i cabl e i nterest rate determi nati on date. The i nterest rate wi l l ref l ect,
among other f actors, the l evel of market demand f or a Seri es of Bonds (i ncl udi ng whether the
Remarketi ng Agent i s wi l l i ng to purchase such Bonds f or i ts own account). There may or may not be
Bonds tendered and remarketed on an i nterest rate determi nati on date, the Remarketi ng Agent may or
may not be abl e to remarket any Bonds tendered f or purchase on such date at par and the Remarketi ng
Agent may sel l Bonds at varyi ng pri ces to di f f erent i nvestors on such date or any other date. The
Remarketi ng Agent i s not obl i gated to advi se purchasers i n a remarketi ng i f i t does not have thi rd party
buyers f or al l of such Bonds at the remarketi ng pri ce. I n the event a Remarketi ng Agent owns any Bonds
f or i ts own account, i t may, i n i ts sol e di screti on i n a secondary market transacti on outsi de the tender
process, of f er such Bonds on any date, i ncl udi ng the i nterest rate determi nati on date, at a di scount to par
to some i nvestors.
The Ability to Sell Bonds Other Than Through the Tender Process May Be Limited. The
Remarketi ng Agent may buy and sel l Bonds other than through the tender process. However, i t i s not
obl i gated to do so and may cease doi ng so at any ti me wi thout noti ce and may requi re Hol ders that wi sh
to tender thei r Bonds to do so through the Tender Agent wi th appropri ate noti ce. Thus, i nvestors who
11
purchase the Bonds, whether i n a remarketi ng or otherwi se, shoul d not assume that they wi l l be abl e to
sel l thei r Bonds other than by tenderi ng such Bonds i n accordance wi th the tender process.
The Remarketing Agent May Resign, Without a Successor Being Named. The Remarketi ng
Agent may resign, upon 30 days prior written noti ce, wi thout a successor havi ng been named.
TENDER OF BONDS FOR PURCHASE
Optional Tender
Duri ng any Weekl y I nterest Rate Peri od f or a Seri es of Bonds, any Bond of such Seri es (or
porti ons thereof i n amounts such that the amount purchased and the amount not purchased are i n
Authori zed Denomi nati ons) shal l be subj ect to purchase on any Busi ness Day f rom the sources speci f i ed
i n the I ndenture upon del i very by the Hol der of such Bond to the Trustee at i ts Pri nci pal Of f i ce of an
i rrevocabl e noti ce by tel ephone or El ectroni c Noti ce (promptl y conf i rmed i n wri ti ng) or wri tten noti ce by
5:00 p.m. (New York Ci ty ti me) on any Busi ness Day at l east seven (7) days pri or to the Purchase Date,
whi ch states the pri nci pal amount of such Bond to be tendered f or purchase and the Purchase Date, at a
Purchase Pri ce equal to 100% of the pri nci pal amount of such Bonds (or the porti ons thereof ) tendered f or
purchase, pl us accrued and unpai d i nterest thereon to but not i ncl udi ng the Purchase Date; provi ded,
however, i f the Purchase Date occurs af ter the Record Date appl i cabl e to the payment of such accrued
i nterest, then the Purchase Pri ce shal l not i ncl ude accrued and unpai d i nterest, whi ch shal l be pai d to the
Hol der of record on the appl i cabl e Record Date. The Purchase Pri ce wi l l be payabl e i n i mmedi atel y
avai l abl e f unds.
Effect of Tender. Any noti ce del i vered to the Trustee i n accordance wi th the above paragraph
shal l be i rrevocabl e wi th respect to the purchase of such Bond (or porti on thereof ) f or whi ch such noti ce
was del i vered and shal l be bi ndi ng upon any subsequent Bondhol der or Benef i ci al Owner of the Bond to
whi ch i t rel ates, i ncl udi ng any Bond i ssued i n exchange theref or or upon the regi strati on of transf er
thereof , and as of the date of such noti ce, the Hol der or Benef i ci al Owner of the Bonds speci f i ed therei n
shal l not have any ri ght to opti onal l y tender f or purchase such Bond (or porti on thereof ) pri or to the date
of purchase speci f i ed i n such noti ce.
I F A BONDHOLDER FAI LS TO DELI VER ANY BOND TO THE TRUSTEE ON OR
BEFORE THE PURCHASE DATE, SUCH BOND SHALL BE DEEMED TO HAVE BEEN
PROPERLY TENDERED TO THE TRUSTEE AND, TO THE EXTENT THAT THERE SHALL
BE ON DEPOSI T WI TH THE TRUSTEE ON SUCH PURCHASE DATE AN AMOUNT
SUFFI CI ENT TO PAY THE PURCHASE PRI CE THEREOF, SUCH BOND SHALL CEASE TO
CONSTI TUTE OR REPRESENT A RI GHT TO PAYMENT OF PRI NCI PAL THEREOF OR
I NTEREST THEREON OF THE FORMER HOLDER AND SHALL CONSTI TUTE AND
REPRESENT ONLY THE FORMER HOLDERS RI GHT TO PAYMENT OF THE PURCHASE
PRI CE PAYABLE ON SUCH DATE. THE FOREGOI NG SHALL NOT LI MI T THE
ENTI TLEMENT OF ANY BONDHOLDER ON ANY RECORD DATE TO RECEI PT OF
I NTEREST, I F ANY, DUE ON ANY SUCH PURCHASE DATE.
SEE APPENDIX C BOOK-ENTRY SYSTEM FOR THE TENDER PROVISIONS
APPLI CABLE WHI LE THE BONDS ARE I N THE BOOK-ENTRY-ONLY SYSTEM. THE
AUTHORI TY, THE CORPORATI ON AND THE TRUSTEE SHALL NOT BE RESPONSI BLE
I N THE EVENT DTC DOES NOT TENDER OR DELI VER BONDS FOR TENDER I N
ACCORDANCE WI TH DI RECTI ONS DTC RECEI VES FROM A DTC PARTI CI PANT.
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Mandatory Tender
The Bonds of a Seri es shal l be subj ect to mandatory tender f or purchase upon the occurrence of
any of the events l i sted bel ow f rom the sources l i sted i n the I ndenture at a Purchase Pri ce equal to 100%
of the pri nci pal amount of any Bond tendered or deemed tendered to the Trustee f or purchase, pl us
accrued and unpai d i nterest thereon to but not i ncl udi ng the date of purchase; provi ded, however, i f the
date of such purchase occurs af ter the Record Date appl i cabl e to the payment of such accrued i nterest,
then the Purchase Pri ce shal l not i ncl ude accrued and unpai d i nterest, whi ch shal l be pai d to the Hol der of
record on the appl i cabl e Record Date:
(i ) duri ng any Weekl y I nterest Rate Peri od f or such Seri es of Bonds, on any Busi ness Day
(not earl i er than the 10th day f ol l owi ng the 2nd Busi ness Day af ter recei pt by the Trustee of such
desi gnati on) desi gnated by the Corporati on wi th the consent of the appl i cabl e Credi t Provi der;
(i i ) on the ef f ecti ve date of any new I nterest Rate Peri od f or such Seri es of Bonds;
(i i i ) on the ef f ecti ve date of an Al ternate Credi t Faci l i ty wi th respect to such Seri es of Bonds;
(i v) i n the event that the Credi t Faci l i ty then i n ef f ect wi th respect to such Seri es of Bonds i s
not renewed, or an Al ternate Credi t Faci l i ty wi th respect to such Seri es of Bonds i s not del i vered to the
Trustee, on the f i rst Busi ness Day whi ch i s at l east f i ve (5) cal endar days precedi ng the expi rati on date of
the Credi t Faci l i ty then i n ef f ect wi th respect to such Seri es of Bonds; or
(v) on a Busi ness Day whi ch i s no more than seven (7) cal endar days f ol l owi ng recei pt by
the Trustee of a noti ce f rom the Credi t Provi der provi di ng the Credi t Faci l i ty then i n ef f ect wi th respect to
such Seri es of Bonds that an event of def aul t or termi nati on has occurred and i s conti nui ng under the
appl i cabl e Credi t Agreement or that the Credi t Provi der wi l l not rei nstate the i nterest porti on of the
appl i cabl e Credi t Faci l i ty and requesti ng the Trustee to cause the mandatory tender of the Bonds of such
Seri es f or purchase.
Wi th respect to Bonds subj ect to mandatory tender f or purchase pursuant to cl ause (i ) above, the
Trustee shal l gi ve Noti ce by Mai l to the Hol ders of such Bonds not l ater than two (2) Busi ness Days
f ol l owi ng recei pt of the noti ce f rom the Corporati on descri bed i n cl ause (i ) above, whi ch noti ce shal l state
that such Bonds are subj ect to mandatory tender f or purchase on the date determi ned i n accordance wi th
cl ause (i ), whi ch date shal l be speci f i ed i n such noti ce. Wi th respect to Bonds subj ect to mandatory
tender f or purchase pursuant to cl ause (i i ) above, the Trustee shal l gi ve Noti ce by Mai l to the Hol ders of
such Bonds, not l ater than the thi rti eth (30th) day pri or to the date on whi ch such Bonds are subj ect to
mandatory tender pursuant to cl ause (i i ) i n the f orm of notice described under the caption Conversion of
Interest Rate Period with respect to either a Weekly I nterest Rate or Term I nterest Rate, as appl i cabl e.
Wi th respect to Bonds subj ect to mandatory tender f or purchase pursuant to cl ause (i i i ) above, the Trustee
shal l gi ve Noti ce by Mai l of the provi si on of any commi tment to i ssue an Al ternate Credi t Faci l i ty wi th
respect to such Bonds to the Hol ders of such Bonds, not l ater than the f i f teenth (15th) day pri or to the date
on whi ch such Bonds are subj ect to mandatory tender pursuant to cl ause (i i i ), whi ch noti ce shal l (a) state
the expected ef f ecti ve date of such Al ternate Credi t Faci l i ty and (b) state that such Bonds shal l be subj ect
to mandatory tender f or purchase on the date speci f i ed i n such noti ce. Wi th respect to Bonds subj ect to
mandatory tender f or purchase pursuant to cl ause (i v) above, the Trustee shal l gi ve Noti ce by Mai l to the
Hol ders of such Bonds, not l ater than the f i f teenth (15th) day pri or to the date on whi ch such Bonds are
subj ect to mandatory tender pursuant to cl ause (i v), whi ch noti ce shal l state that the Credi t Faci l i ty then i n
ef f ect wi th respect to such Bonds has not been renewed and an Al ternate Credi t Faci l i ty has not been
del i vered to the Trustee and that such Bonds are subj ect to mandatory tender f or purchase, on the date
determi ned i n accordance wi th cl ause (i v), whi ch date shal l be speci f i ed i n such noti ce. Wi th respect to
13
Bonds subj ect to mandatory tender f or purchase pursuant to cl ause (v) above, the Trustee shal l gi ve
Noti ce by Mai l to the Hol ders of such Bonds, not l ater than two (2) Busi ness Days f ol l owi ng recei pt of
the noti ce f rom a Credi t Provi der descri bed i n cl ause (v), whi ch noti ce by the Trustee shal l (a) state that
the Trustee has recei ved a noti ce f rom such Credi t Provi der that an event of def aul t or termi nati on has
occurred and i s conti nui ng under the appl i cabl e Credi t Agreement and requesti ng the Trustee to cause the
mandatory tender of such Bonds, and (b) state that such Bonds are subj ect to mandatory tender f or
purchase on the date determi ned i n accordance wi th such cl ause (v), whi ch date shal l be speci f i ed i n such
noti ce.
Upon the gi vi ng of noti ce to Bondhol ders of the mandatory tender of Bonds f or purchase
pursuant to the I ndenture, such Bonds wi l l be subj ect to mandatory tender f or purchase notwi thstandi ng
that the events descri bed i n such noti ce have not occurred on the Purchase Date speci f i ed i n such noti ce,
i ncl udi ng the f ai l ure to change the I nterest Rate Peri od on such Bonds to the I nterest Rate Peri od
speci f i ed i n such noti ce, the f ai l ure of an Al ternate Credi t Faci l i ty to go i nto ef f ect, the renewal of the
exi sti ng Credi t Faci l i ty f or such Bonds, or the curi ng of any event of def aul t or termi nati on under the
appl i cabl e Credi t Agreement.
I F A BONDHOLDER FAI LS TO DELI VER ANY BOND TO THE TRUSTEE ON OR
BEFORE ANY PURCHASE DATE SPECI FI ED ABOVE, SUCH BOND SHALL BE DEEMED
TO HAVE BEEN PROPERLY TENDERED TO THE TRUSTEE AND, TO THE EXTENT THAT
THERE SHALL BE ON DEPOSI T WI TH THE TRUSTEE ON SUCH PURCHASE DATE AN
AMOUNT SUFFI CI ENT TO PAY THE PURCHASE PRI CE THEREOF, SUCH BOND SHALL
CEASE TO CONSTI TUTE OR REPRESENT A RI GHT TO PAYMENT OF PRI NCI PAL
THEREOF OR I NTEREST THEREON OF THE FORMER HOLDER AND SHALL
CONSTITUTE AND REPRESENT ONLY THE FORMER HOLDERS RIGHT TO PAYMENT
OF THE PURCHASE PRI CE PAYABLE ON SUCH DATE. THE FOREGOI NG SHALL NOT
LI MI T THE ENTI TLEMENT OF ANY BONDHOLDER ON ANY RECORD DATE TO
RECEI PT OF I NTEREST, I F ANY, DUE ON ANY SUCH PURCHASE DATE.
Mandatory Purchase in Lieu of Redemption
Each Bondhol der or Benef i ci al Owner, by purchase and acceptance of any Bond, i rrevocabl y
grants to the Corporati on the opti on to purchase such Bond at any ti me such Bond i s subj ect to opti onal
redempti on at a purchase pri ce equal to the then appl i cabl e redempti on pri ce of such Bond. The
Corporati on shal l al so del i ver a Favorabl e Opi ni on of Bond Counsel and shal l di rect the Trustee to
provi de noti ce of mandatory purchase, such noti ce to be provi ded, as and to the extent appl i cabl e, i n the
same manner as f or noti ce of redempti on and to sel ect Bonds subj ect to mandatory purchase i n the same
manner as Bonds cal l ed f or redempti on. On the date f i xed f or purchase of any Bond i n l i eu of redempti on
as descri bed i n the I ndenture, the Corporati on shal l pay the purchase pri ce of such Bond to the Trustee i n
Avai l abl e Amounts, and the Trustee shal l pay the same to the Hol ders of the Bonds bei ng purchased
agai nst del i very thereof . No purchase of any Bond i n l i eu of redempti on as descri bed i n the I ndenture
shal l operate to exti ngui sh the i ndebtedness of the Corporati on evi denced by such Bond. No Bondhol der
or Benef i ci al Owner may el ect to retai n a Bond subj ect to mandatory purchase i n l i eu of redempti on. The
Corporati on may exerci se i ts opti on to purchase bonds, i n whol e or i n part; i n accordance wi th the
I ndenture.
Effect of Purchase of Bonds
No purchase of Bonds pursuant to the I ndenture shal l be deemed to be a payment or redempti on
of such Bonds or any porti on thereof and such purchase wi l l not operate to exti ngui sh or di scharge the
i ndebtedness evi denced by such Bonds, unl ess such Bonds are submi tted to the Trustee f or cancel l ati on.
14
Purchase of Tendered Bonds
On each Purchase Date that any Bonds are tendered f or purchase (or deemed tendered f or
purchase) i n accordance wi th the I ndenture, the Trustee wi l l purchase (but sol el y f rom f unds recei ved by
the Trustee i n accordance wi th the terms of the I ndenture) such Bonds (or porti ons thereof i n Authori zed
Denomi nati ons) at the appl i cabl e Purchase Pri ce. Funds f or the payment of the Purchase Pri ce of such
Bonds (or porti ons thereof i n Authori zed Denomi nati ons) shal l be pai d by the Trustee sol el y f rom the
f ol l owi ng sources and i n the f ol l owi ng order of pri ori ty:
(i ) Proceeds of the remarketi ng of such Bonds (or porti ons thereof i n Authori zed
Denomi nati ons); and
(i i ) Money drawn or recei ved under the Credi t Faci l i ty f or such Bonds.
So l ong as the Bonds are hel d i n the DTC book-entry system, payment of the Purchase Pri ce of
any Bond purchased (or deemed purchased) pursuant to the I ndenture shal l be made to DTC or i ts
nominee. See APPENDIX C BOOK-ENTRY SYSTEM.
I nadequate Funds for Tenders
THE CORPORATI ON HAS NO OBLI GATI ON UNDER THE LOAN AGREEMENT TO
MAKE ANY PAYMENTS WI TH RESPECT TO THE PURCHASE PRI CE OF THE BONDS
TENDERED OR DEEMED TENDERED FOR PURCHASE.
I f suf f i ci ent f unds are not avai l abl e f or the purchase of al l Bonds tendered or deemed tendered
and requi red to be purchased on any Purchase Date, the f ai l ure to pay the Purchase Pri ce of al l tendered
Bonds when due and payabl e shal l consti tute an Event of Def aul t pursuant to the I ndenture and al l
tendered Bonds shal l be returned to thei r respecti ve Hol ders and shal l bear i nterest at the Maxi mum
I nterest Rate f rom the date of such f ai l ed purchase unti l al l such Bonds are purchased as requi red i n
accordance wi th the I ndenture. Thereaf ter, the Tender Agent shal l conti nue to take al l such acti on
avai l abl e to i t to obtai n remarketi ng proceeds f rom the Remarketi ng Agent and suf f i ci ent other f unds
f rom the Credi t Faci l i ty Provi der.
Remarketing
Wel l s Fargo Brokerage Servi ces, LLC wi l l serve as Remarketi ng Agent f or the Bonds pursuant to
the terms of the I ndenture and a Remarketi ng Agreement wi th the Corporati on. The Remarketi ng Agent
may resi gn, or the Corporati on or the Authori ty may remove the Remarketi ng Agent, i n accordance wi th
the terms of the I ndenture and the Remarketi ng Agreement.
Upon recei pt of noti ce that any Bonds wi l l be or are requi red to be tendered f or purchase i n
accordance wi th the I ndenture, the Remarketi ng Agent i s requi red under the I ndenture and the
Remarketi ng Agreement to use i ts best ef f orts to remarket such Bonds at a pri ce equal to the Purchase
Pri ce on the appl i cabl e Purchase Date i n accordance wi th the opti onal or mandatory tender provi si ons of
the I ndenture, as appl i cabl e. The Remarketi ng Agent wi l l transf er to the Trustee the proceeds of the
remarketi ng of such Bonds.
15
REDEMPTI ON OF BONDS
Optional Redemption
The Bonds of a Seri es shal l be subj ect to redempti on pri or to thei r respecti ve maturi ty dates, i n
whol e, or i n part by l ot i n Authori zed Denomi nati ons, f rom Avai l abl e Amounts, as f ol l ows:
(A) Duri ng any Weekl y I nterest Rate Peri od f or such Seri es of Bonds, on any Busi ness Day
at a redempti on pri ce equal to 100% of the pri nci pal amount thereof pl us accrued i nterest to the
redempti on date.
(B) Duri ng any Term I nterest Rate Peri od f or such Seri es of Bonds, on any Busi ness Day,
duri ng the peri ods speci f i ed bel ow, at the redempti on pri ces (expressed as percentages of pri nci pal
amount of the Bonds of such Seri es (or porti ons thereof ) to be redeemed) herei naf ter i ndi cated pl us
accrued i nterest to the redempti on date:
Lesser of Length of Term
I nterest Rate Peri od or
Length of Ti me to Maturi ty

Redempti on Dates and Pri ces

Greater than 10 years At any ti me on or af ter the 5th anni versary of the ef f ecti ve date
commenci ng such Term I nterest Rate Peri od at 102% decl i ni ng
% annual l y to 100%

Greater than 6 and l ess than or equal
to 10 years
At any ti me on or af ter the 3rd anni versary of the ef f ecti ve date
commenci ng such Term I nterest Rate Peri od at 101 % decl i ni ng

to 6 years
At any ti me on or af ter the 2nd anni versary of the ef f ecti ve date
commenci ng such Term I nterest Rate Peri od at 101% decl i ni ng

to 4 years
At any ti me on or af ter the 2nd anni versary of the ef f ecti ve date

to 3 years
At any ti me on or af ter the 1st anni versary of the ef f ecti ve date

to 2 years
At any ti me on or af ter the 1st anni versary of the ef f ecti ve date
commenci ng such Term I nterest Rate Peri od at 100%

Less than or equal to 1 year On the I nterest Payment Date whi ch i s si x months af ter the
ef f ecti ve date of such Term I nterest Rate Peri od at 100%

Notwi thstandi ng the opti onal redempti on schedul e set f orth above, on or pri or to the ef f ecti ve
date of a Term I nterest Rate Peri od endi ng on the day i mmedi atel y precedi ng the maturi ty date of a Seri es
of Bonds, the Remarketi ng Agent can provi de an al ternate opti onal redempti on schedul e f or such Seri es
of Bonds i f i t obtai ns an Approvi ng Opi ni on.
16
Notice of Redemption
The Trustee wi l l gi ve noti ce of any redempti on of Bonds, by f i rst-cl ass mai l , postage prepai d, to
the Hol ders of al l Bonds to be redeemed, at the addresses appeari ng on the Bond Regi ster, and other
enti ti es speci f i ed i n the I ndenture, not l ess than thi rty (30) days nor more than si xty (60) days (except i n
the case of redempti on of Bonds beari ng i nterest at a Weekl y Rate, i n whi ch case not l ess than ten (10)
days) pri or to the redempti on date. Each noti ce of redempti on of Bonds wi l l i denti f y the Bonds to be
redeemed and wi l l state the date of such noti ce, the I ssue Date, the redempti on date, the redempti on pri ce,
the pl ace of redempti on, the Seri es and the pri nci pal amount, and, i f l ess than al l of the Bonds of such
Seri es are to be redeemed, the di sti ncti ve certi f i cate numbers of the Bonds of such Seri es to be redeemed
and, i n the case of Bonds of such Seri es to be redeemed i n part onl y, the respecti ve porti ons of the
pri nci pal amount thereof to be redeemed. So l ong as DTC or i ts nomi nee i s the sol e regi stered owner of
the Bonds under the book-entry system, redempti on noti ces are to be sent to Cede & Co. Noti ces of
redempti on are al so to be sent to certai n i nf ormati on servi ces that di ssemi nate redempti on noti ces and to
certai n nati onal l y recogni zed muni ci pal securi ti es i nf ormati on reposi tori es.
Wi th respect to any noti ce of redempti on as descri bed above, unl ess upon the gi vi ng of such
noti ce the Bonds to be redeemed are deemed to have been pai d i n accordance wi th the I ndenture, such
noti ce must state that such redempti on i s condi ti onal upon the recei pt by the Trustee on or pri or to the
date f i xed f or such redempti on of Avai l abl e Amounts suf f i ci ent to pay the pri nci pal of , and premi um, i f
any, and i nterest on, the Bonds to be redeemed, and that i f such Avai l abl e Amounts are not recei ved, such
noti ce wi l l be of no f orce and ef f ect, the Bonds to be redeemed shal l not be subj ect to redempti on on such
date and the Bonds to be redeemed wi l l not be requi red to be redeemed on such date. I f such redempti on
i s not ef f ectuated, the Trustee wi l l , wi thi n a reasonabl e ti me thereaf ter, gi ve noti ce that such Avai l abl e
Amounts were not so recei ved.
The Corporati on may resci nd noti ce of redempti on upon wri tten noti ce to the Trustee no l ater
than 5 Busi ness Days pri or to the date f i xed f or redempti on. The Trustee shal l gi ve noti ce of such
resci ssi on as soon thereaf ter as practi cabl e i n the same manner to the same Persons as noti ce of such
redempti on was gi ven.
Effect of Redemption
Noti ce of redempti on havi ng been dul y gi ven and Avai l abl e Amounts f or payment of the
redempti on pri ce bei ng hel d by the Trustee, the Bonds so cal l ed f or redempti on wi l l , on the redempti on
date desi gnated i n such noti ce, become due and payabl e at the redempti on pri ce speci f i ed i n such noti ce,
i nterest on the Bonds to be redeemed wi l l cease to accrue, sai d Bonds shal l cease to be enti tl ed to any
l i en, benef i t or securi ty under the I ndenture, and the Hol ders thereof wi l l have no ri ghts except to recei ve
payment, but onl y f rom the f unds provi ded i n connecti on wi th such redempti on, of the redempti on pri ce
of and i nterest, i f any, accrued on such Bonds to the redempti on date.
Selection of Bonds to be Redeemed
I f l ess than al l the Bonds of a Seri es are cal l ed f or redempti on, the Trustee wi l l sel ect the Bonds
of such Seri es or any porti on thereof to be redeemed f i rst f rom the Credi t Provi der Bonds of such Seri es,
i f any, or such porti on thereof not previ ousl y cal l ed f or redempti on, by l ot i n such manner as i t may
determi ne, unti l al l Credi t Provi der Bonds of such Seri es, i f any, shal l have been redeemed, and then f rom
the other Bonds of such Seri es or such gi ven porti on thereof not previ ousl y cal l ed f or redempti on, by l ot.
For the purpose of any such sel ecti on the Trustee shal l assi gn a separate number f or each mi ni mum
Authori zed Denomi nati on of each Bond of such Seri es of a denomi nati on of more than such mi ni mum;
provi ded that f ol l owi ng any such sel ecti on, the porti on of such Bond to remai n Outstandi ng shal l be i n an
17
Authori zed Denomi nati on. Notwi thstandi ng the f oregoi ng, i f l ess than al l of the Bonds of a Seri es are to
be redeemed at any ti me whi l e the Bonds are Book-Entry Bonds, sel ecti on of the Bonds of such Seri es to
be redeemed af ter Credi t Provi der Bonds of such Seri es have been redeemed shal l be made i n accordance
wi th customary practi ces of DTC or the appl i cabl e successor deposi tory, as the case may be.
SECURI TY AND SOURCES OF PAYMENT FOR THE BONDS
General
The pri nci pal , premi um, i f any, and i nterest on the Bonds are payabl e sol el y f rom the Revenues
recei ved f rom the Corporati on pursuant to the Loan Agreement and under Credi t Faci l i ti es f or the Bonds
and the other amounts pl edged theref or under the I ndenture. The Purchase Pri ce of the Bonds tendered or
deemed tendered f or purchase pursuant to the I ndenture wi l l be payabl e onl y f rom the proceeds of the
remarketi ng of such Bonds and draws on the Credi t Faci l i ty f or such Bonds. The i ni ti al Credi t Faci l i ty
f or the Bonds i s the Letter of Credi t i ssued by the Bank and supports the pri nci pal and Purchase Pri ce of ,
and i nterest on the Bonds i n a Weekl y I nterest Rate Peri od, but not any premi um on the Bonds. See
THE BANK.
The Purchase Price of Bonds tendered or deemed tendered for purchase is payable only
from the proceeds of the remarketing of such Bonds and from amounts made available under the
Credit Facility for such Bonds. The Corporation has no obligation under the Loan Agreement to
make any payments with respect to the Purchase Price of Bonds tendered or deemed tendered for
purchase.
NONE OF THE AUTHORI TY, ANY AUTHORI TY MEMBER OR ANY PERSON
EXECUTI NG THE BONDS I S LI ABLE PERSONALLY ON THE BONDS OR SUBJECT TO
ANY PERSONAL LI ABI LI TY OR ACCOUNTABI LI TY BY REASON OF THEI R I SSUANCE.
THE BONDS ARE LI MI TED OBLI GATI ONS OF THE AUTHORI TY, PAYABLE SOLELY
FROM AND SECURED BY THE PLEDGE OF CERTAI N REVENUES UNDER THE
I NDENTURE. NEI THER THE AUTHORI TY, I TS MEMBERS, THE STATE OF CALI FORNI A,
NOR ANY OF I TS POLI TI CAL SUBDI VI SI ONS SHALL BE DI RECTLY, I NDI RECTLY,
CONTI NGENTLY, OR MORALLY OBLI GATED TO USE ANY OTHER MONEYS OR ASSETS
TO PAY ALL OR ANY PORTI ON OF THE DEBT SERVI CE DUE ON THE BONDS, TO LEVY
OR TO PLEDGE ANY FORM OF TAXATI ON WHATEVER THEREFOR OR TO MAKE ANY
APPROPRI ATI ON FOR THEI R PAYMENT. THE BONDS ARE NOT A PLEDGE OF THE
FAI TH AND CREDI T OF THE AUTHORI TY, I TS MEMBERS, THE STATE OF CALI FORNI A
OR ANY OF I TS POLI TI CAL SUBDI VI SI ONS, NOR DO THEY CONSTI TUTE
I NDEBTEDNESS WI THI N THE MEANI NG OF ANY CONSTI TUTI ONAL OR STATUTORY
DEBT LI MI TATI ON. THE AUTHORI TY HAS NO TAXI NG POWER.
Credit Facility
Pursuant to the Loan Agreement, except as descri bed i n the next paragraph, the Corporati on has
agreed to mai ntai n one or more Credi t Faci l i ti es, ei ther by mai ntai ni ng the Letter of Credi t or provi di ng
one or more Al ternate Credi t Faci l i ti es to provi de a source of payment of the pri nci pal , Purchase Pri ce of ,
and i nterest on, the Bonds. For i nf ormati on concerning the initial Credit Facility, see THE LETTER OF
CREDIT AND THE REIMBURSEMENT AGREEMENT The Letter of Credit.
The Corporations obligations to maintain a Credi t Faci l i ty f or any Seri es of the Bonds wi l l
termi nate i n the event that: (i ) a Term I nterest Rate Peri od endi ng on the day i mmedi atel y precedi ng the
maturi ty date of such Bonds i s establ i shed and i n ef f ect pursuant to the I ndenture; and (i i ) the Corporati on
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provi des the Trustee wi th ei ther (1) wri tten evi dence f rom the Rati ng Agency that ef f ecti ve upon the
commencement of such Term I nterest Rate Peri od wi th no Credi t Faci l i ty securi ng such Bonds, such
Bonds wi l l have a l ong-term rati ng of A or better, or if such Bonds wi l l have onl y a short-term rati ng,
such rati ng wi l l be i n the hi ghest short-term rati ng category (without regard to + or - signs); or (2)
wri tten consent of the Authori ty.
Alternate Credit Facility
The Corporati on may at any ti me provi de an Al ternate Credi t Faci l i ty wi th respect to a Seri es of
Bonds provi ded that each such Al ternate Credi t Faci l i ty meets the f ol l owi ng condi ti ons:
(i ) the Al ternate Credi t Faci l i ty must be a Credi t Faci l i ty entered i nto by, or i ssued by, a
commerci al bank or other f i nanci al i nsti tuti on;
(i i ) the Al ternate Credi t Faci l i ty must be i n an amount suf f i ci ent to pay the greater of (i ) the
pri nci pal and the maxi mum amount of i nterest payabl e on the Outstandi ng Bonds of such Seri es on any
I nterest Payment Date f or such Bonds duri ng the current I nterest Rate Peri od f or such Bonds and (i i ) the
maxi mum Purchase Pri ce of such Bonds whi ch wi l l be appl i cabl e duri ng the then current I nterest Rate
Peri od f or such Bonds;
(i i i ) the Al ternate Credi t Faci l i ty must take ef f ect on or bef ore the date whi ch i s the f i rst
Busi ness Day whi ch i s not l ess than f i ve (5) cal endar days bef ore the date of termi nati on of the Credi t
Faci l i ty then securi ng such Bonds and the term of the Al ternate Credi t Faci l i ty must be at l east 364 days
(or, i f shorter, the peri od to the maturi ty of such Bonds); and
(i v) i f the Al ternate Credi t Faci l i ty i s not an i rrevocabl e, di rect pay l etter of credi t upon the
issuance of which such Bonds will be rated A or better by a rati ng agency, then the Al ternate Credi t
Faci l i ty must be approved by the Authori ty.
Notwi thstandi ng the above, the Corporati on wi l l not provi de any Al ternate Credi t Faci l i ty wi th
respect to such Bonds i f such Bonds are not then requi red to be tendered f or purchase pursuant to the
I ndenture as a resul t of the provi si on of such Al ternate Credi t Faci l i ty f or the then-current Credi t Faci l i ty.
On or pri or to the date of del i very to the Trustee of an Al ternate Credi t Faci l i ty meeti ng the above
requi rements, the Corporati on must f urni sh to the Trustee (i ) an opi ni on of Bond Counsel wi th respect to
the del i very of such Al ternate Credi t Faci l i ty, and (i i ) an opi ni on or opi ni ons of counsel to the Credi t
Provi der of such Al ternate Credi t Faci l i ty, to the ef f ect that such Al ternate Credi t Faci l i ty has been dul y
authori zed, executed and del i vered by such Credi t Provi der and, subj ect to standard excepti ons and
qual i f i cati ons, consti tutes the val i d, l egal and bi ndi ng obl i gati on of such Credi t Provi der enf orceabl e
agai nst such Credi t Provi der i n accordance wi th i ts terms.
Pursuant to the I ndenture, i f there shal l have been del i vered to the Authori ty and the Trustee (i ) an
Al ternate Credi t Faci l i ty meeti ng the requi rements of the Loan Agreement and (i i ) the opi ni ons and
documents requi red by the Loan Agreement, then the Trustee shal l accept such Al ternate Credi t Faci l i ty
and, i f so di rected by the Corporati on, upon the ef f ecti veness of such Al ternate Credi t Faci l i ty and the
payment of the Purchase Pri ce of al l Bonds tendered f or purchase pursuant to the I ndenture i n connecti on
wi th such Al ternate Credi t Faci l i ty promptl y surrender the Credi t Faci l i ty theretof ore i n ef f ect wi th
respect to such Bonds f or cancel l ati on. I n the event that the Corporati on el ects to provi de an Al ternate
Credi t Faci l i ty f or a Seri es of Bonds, such Bonds shal l be subj ect to mandatory tender as provi ded i n the
Indenture. See TENDER OF BONDS FOR PURCHASEMandatory Tender.
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Revenues and Repayment I nstallments
The Authori ty i s obl i gated to pay the pri nci pal of , premi um, i f any and i nterest on the Bonds
sol el y f rom the Revenues recei ved f rom the Corporati on under the Loan Agreement and under the Credi t
Faci l i ty f or the Bonds and the other amounts pl edged theref or under the I ndenture. Pursuant to the
I ndenture, the Authori ty has pl edged to the Trustee f or the benef i t of the Bondhol ders al l of the Revenues.
Revenues mean all payments received by the Authori ty or the Trustee pursuant or wi th respect to the
Loan Agreement (except any such payments made or wi th respect to certai n provi si ons of the Loan
Agreement) or a Credi t Faci l i ty, i ncl udi ng, wi thout l i mi ti ng the general i ty of the f oregoi ng, Repayment
I nstal l ments (i ncl udi ng both ti mel y and del i nquent payments), prepayments and al l i ncome deri ved f rom
the i nvestment of any moneys i n any f und or account establ i shed pursuant to the I ndenture, but not
i ncl udi ng amounts, i ncl udi ng i nvestment i ncome, recei ved f or or on deposi t i n the Rebate Fund and the
Bond Purchase Fund. Revenues does not include certai n payments to the Authori ty or the Trustee
speci f i ed i n the Loan Agreement or any amounts on deposi t i n the Rebate Fund. There wi l l be no reserve
f und wi th respect to the Bonds.
SEE APPENDIX D SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL
LEGAL DOCUMENTS for a summary of certain provisions of the I ndenture and the Loan Agreement.
THE BANK
The i nf ormati on under thi s headi ng has been provi ded sol el y by the Bank and i s bel i eved to be
rel i abl e. Thi s i nf ormati on has not been veri f i ed i ndependentl y by the Corporati on, the Authori ty or the
Underwri ter. None of the Corporati on, the Authori ty or the Underwri ter make any representati on
whatsoever as to the accuracy, adequacy or compl eteness of such i nf ormati on.
Wells Fargo Bank, National Association
The Bank i s a nati onal banki ng associ ati on organi zed under the l aws of the Uni ted States of
Ameri ca wi th i ts mai n of f i ce at 101 North Phi l l i ps Avenue, Si oux Fal l s, South Dakota 57104, and
engages i n retai l , commerci al and corporate banki ng, real estate l endi ng and trust and i nvestment servi ces.
The Bank i s an i ndi rect, whol l y owned subsi di ary of Wel l s Fargo & Company, a di versi f i ed f i nanci al
servi ces company, a f i nanci al hol di ng company and a bank hol di ng company regi stered under the Bank
Hol di ng Company Act of 1856, as amended, wi th i ts pri nci pal executi ve of f i ces l ocated i n San Franci sco,
Cal i f orni a.
As of March 31, 2008, the Bank had total consol i dated assets of approxi matel y $486.8 bi l l i on,
total domesti c and f orei gn deposi ts of approxi matel y $355.0 bi l l i on and total equi ty capi tal of
approxi matel y $43.3 bi l l i on.
Each quarter, the Bank f i l es wi th the FDI C f i nancial reports entitled Consolidated Reports of
Condi ti on and I ncome f or I nsured Commerci al Banks with Domestic and Foreign Offices, commonly
referred to as the Call Reports. The Banks Call Reports are prepared i n accordance wi th regul atory
accounti ng pri nci pl es, whi ch may di f f er f rom general l y accepted accounti ng pri nci pl es. The publ i cl y
avai l abl e porti ons of the Cal l Reports f or the peri od endi ng March 31, 2008, and f or Cal l Reports f i l ed by
the Bank wi th the FDI C af ter the date of thi s Of f eri ng Memorandum may be obtai ned f rom the FDI C,
Di scl osure Group, Room F518, 550 17th Street, N.W., Washi ngton, D.C. 20429 at prescri bed rates, or
f rom the FDI C on i ts I nternet si te at http://www.f di c.gov, or by writing to Corporate Secretarys Office,
Wel l s Fargo Center, Si xth and Marquette, MAC N9305-173, Mi nneapol i s, MN 55479.
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The Letter of Credit will be solely an obligation of the Bank and will not be an obligation of,
or otherwise guaranteed by, Wells Fargo & Company, and no assets of Wells Fargo & Company or
any affiliate of the Bank or Wells Fargo & Company will be pledged to the payment thereof.
Payment of the Letter of Credit will not be insured by the FDI C.
The i nf ormati on contai ned i n thi s secti on, i ncl udi ng f i nanci al i nf ormati on, rel ates to and has been
obtai ned f rom the Bank, and i s f urni shed sol el y to provi de l i mi ted i ntroductory i nf ormati on regardi ng the
Bank and does not purport to be comprehensi ve. Any f i nanci al i nf ormati on provi ded i n thi s secti on i s
qual i f i ed i n i ts enti rety by the detai l ed i nf ormati on appeari ng i n the Cal l Reports ref erenced above. The
del i very hereof shal l not create any i mpl i cati on that there has been no change i n the af f ai rs of the Bank
si nce the date hereof .
THE LETTER OF CREDI T AND THE REI MBURSEMENT AGREEMENT
The fol l owi ng i s a summar y of cer tai n of the pr ovi si ons of the Letter of Cr edi t and the
Rei mbur sement Agr eement. Thi s summar y does not pur por t to be defi ni ti ve or compr ehensi ve. Refer ence
i s made to the actual document for the ful l ter ms ther eof.
Letter of Credit
On the date of i ssuance of the Bonds, the Bank wi l l i ssue i n f avor of the Trustee the Letter of
Credit in an original stated amount equal to the aggregate principal amount of the Bonds plus 50 days
i nterest thereon cal cul ated at a rate equal to 12%, computed on the basi s of a 365-day year (as f rom ti me
to ti me reduced and rei nstated as provi ded i n the Letter of Credi t). The Letter of Credi t (subj ect to any
reducti ons and rei nstatements as provi ded therei n) may be drawn upon wi th respect to the payment of the
unpai d pri nci pal amount of , or porti on of the purchase pri ce correspondi ng to the pri nci pal of , the Bonds
(or any Seri es thereof ) and wi th respect to the payment of accrued but unpai d i nterest on, or porti on of the
purchase pri ce representi ng accrued i nterest on, the Bonds (or any Seri es thereof ). The Letter of Credi t
does not cover the payment of any redempti on or purchase premi um.
The Letter of Credi t shal l automati cal l y termi nate upon the earl i est of (i ) the honori ng by the
Bank of the f i nal drawi ng avai l abl e to be made thereunder; (ii) the Banks receipt of the Letter of Credit
and a wri tten certi f i cate of the Trustee and the Corporati on that no Bonds are Outstandi ng wi thi n the
meaning of the Indenture; (iii) the Banks receipt of the Letter of Credi t and a wri tten certi f i cate of the
Trustee and the Corporati on that an Al ternate Credi t Faci l i ty has been accepted by the Trustee and i s i n
ef f ect; or (i v) August 1, 2010.
The Letter of Credi t wi l l be an i rrevocabl e obl i gati on of the Bank to pay to the Trustee, upon
presentati on of the certi f i cates requi red by the terms thereof up to (i ) an amount equal to the aggregate
outstandi ng pri nci pal amount of the Bonds (or any Seri es thereof ) to pay the pri nci pal of the Bonds (or
any Seri es thereof ) when due and payabl e (whether at maturi ty or upon accel erati on of maturi ty or af ter
noti ce of redempti on or prepayment or otherwi se) or the porti on of the purchase pri ce of the Bonds (or
any Seri es thereof ) representi ng such pri nci pal , and (ii) an amount equal to 50 days interest on the Bonds
(or any Seri es thereof ) cal cul ated at a rate equal to 12%, computed on the basi s of a 365-day year.
The Banks obligation under the Letter of Credi t and the total amount of the Letter of Credi t shal l
be reduced by an amount equal to each demand honored thereunder, ef f ecti ve as of the date of
presentati on of such demand, subj ect to rei nstatement on the terms set f orth i n the Letter of Credi t. Each
demand honored by the Bank under the Letter of Credit will be paid with the Banks own funds.
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The Letter of Credi t to be i ssued by the Bank wi l l be substanti al l y i n the f orm attached hereto as
APPENDI X F.
Reimbursement Agreement
The Bank and Corporati on have entered i nto a Rei mbursement Agreement, dated as of August 1,
2008 (the Reimbursement Agreement), which, among other thi ngs, sets f orth the terms and condi ti ons
whereby Corporati on i s requi red to repay the Bank any amounts drawn by the Trustee under the Letter of
Credi t and grants to the Bank certai n l i ens and securi ty i nterests i n real property and other col l ateral of
Corporation. Except for Corporation and Reimbursement Agreement, capitalized terms used in this
Secti on and not otherwi se def i ned shal l have the meani ngs gi ven to such terms i n the Rei mbursement
Agreement.
The Rei mbursement Agreement and the other documents, agreements and i nstruments, i ncl udi ng
wi thout l i mi tati on, the Deed of Trust, secure Corporations obligations to the Bank and do not secure the
Bonds or the obl i gati ons of Corporati on to the Trustee or the Hol ders of the Bonds, nor do they i nur e to
the benef i t of the Trustee or the Hol ders of the Bonds.
The Bank wi l l i ssue the Letter of Credi t pursuant to the terms and provi si ons of the
Rei mbursement Agreement. Further, the Rei mbursement Agreement requi res Corporati on to take al l
necessary acti on to cause the redempti on of porti ons of the Bonds on certai n dates speci f i ed i n the
Rei mbursement Agreement i n the pri nci pal amounts set f orth therei n.
Corporations redemption obligations described in the Reimbursement Agreement are
solely for the benefit of the Bank and may be waived or modified by the Bank in its sole and
absolute discretion in accordance with the terms of the Reimbursement Agreement.
The Rei mbursement Agreement contai ns vari ous af f i rmati ve and negati ve covenants and events
of def aul t, i ncl udi ng, among other thi ngs, covenants regardi ng the f ol l owi ng: pensi on pl an regul atory
matters; f urther assurances; i nspecti on of property, books and records; noti ces; compl i ance wi th Rel ated
Documents; tax covenants; l i ti gati on; f i nanci al statements; f i nanci al condi ti on; mai ntenance of property
and i nsurance; merger, consol i dati on and transf er of assets; taxes and other obl i gati ons; di stri buti ons;
mai ntenance of f aci l i ti es; accredi tati on and af f i l i ati ons; other i ndebtedness; guaranti es; l oans, advances
and i nvestments; pl edge of assets; and ground l eases. I n addi ti on, pursuant to the Rei mbursement
Agreement, Corporati on wi l l , among other thi ngs, (i ) preserve, renew and keep i n f ul l f orce and ef f ect al l
ri ghts, pri vi l eges, contracts and l eases necessary or usef ul f or the normal conduct of i ts busi nesses, (i i )
compl y wi th al l appl i cabl e l aws, (i i i ) conduct i ts busi ness i n an orderl y manner wi thout vol untary
i nterrupti on and (i v) remai n qual i f i ed to do busi ness i n each j uri sdi cti on where such qual i f i cati on i s
requi red.
Events of Default. The f ol l owi ng i s a summary of certai n acti ons or events, the occurrence of
any of whi ch, among others, consti tutes an Event of Def aul t under the Rei mbursement Agreement:
(a) Corporati on shal l f ai l to pay when due any amount owi ng under the Rei mbursement
Agreement or any Rel ated Document or to deposi t wi th Bank any amount speci f i ed i n the Rei mbursement
Agreement when due to be deposi ted; or
(b) Any representati on or warranty made by Corporati on i n the Rei mbursement Agreement
or i n any Rel ated Document or i n any certi f i cate, f i nanci al or other statement f urni shed by Corporati on
pursuant to the Rei mbursement Agreement shal l prove to have been untrue or i ncompl ete i n any materi al
respect when made; or
22
(c) Corporati on shal l f ai l to mai ntai n i ts Accredi tati on or Af f i l i ati on; or
(d) Corporati on shal l f ai l to perf orm or observe any materi al term, covenant or agreement on
i ts part to be perf ormed or observed hereunder or under any Rel ated Document (other than as speci f i ed i n
paragraphs (a), (b) or (c) above), and wi th respect to any such def aul t whi ch by i ts nature can be cured,
such def aul t shal l conti nue f or a peri od of twenty (20) days f rom i ts occurrence; or
(e) (i ) Any i mpai rment of the ri ghts of Bank i n the Real Property Col l ateral , i ncl udi ng,
wi thout l i mi tati on, any attachment or l i ke l evy on the Real Property Col l ateral ; or (i i ) Bank, i n good f ai th,
reasonabl y bel i eves any or al l of the Real Property Col l ateral to be i n danger of mi suse, di ssi pati on,
commi ngl i ng, l oss, thef t, damage or destructi on, or otherwi se i n j eopardy or unsati sf actory i n character or
val ue; or
(f ) Any materi al provi si on of the Rei mbursement Agreement or any Rel ated Document shal l
at any ti me f or any reason cease to be i n f ul l f orce and ef f ect or val i d and bi ndi ng on Corporati on, or shal l
be decl ared to be nul l and voi d, or the val i di ty or enf orceabi l i ty thereof shal l be contested by Corporati on
or Corporati on shal l deny that i t has any f urther l i abi l i ty or obl i gati on under the Rei mbursement
Agreement or any Rel ated Document, and such event shal l have or be l i kel y to have a materi al adverse
ef f ect on the condi ti on of Corporati on or i ts abi l i ty to perf orm i ts obl i gati ons under the Rei mbursement
Agreement and the Rel ated Documents; or
(g) Corporati on shal l : (i ) appl y f or or consent to the appoi ntment of a recei ver, trustee,
custodi an, l i qui dator or the l i ke of i tsel f or any of i ts property; or (i i ) admi t i n wri ti ng i ts i nabi l i ty to pay
i ts debts general l y as they become due; or (i i i ) make a general assi gnment f or the benef i t of credi tors, (i v)
be adj udi cated bankrupt or i nsol vent; or (v) commence a vol untary case under the Bankruptcy Code or
f i l e a vol untary peti ti on or answer seeki ng reorgani zati on, an arrangement wi th credi tors or an order f or
rel i ef or seeki ng to take advantage of any i nsol vency l aw or f i l e an answer admi tti ng the materi al
al l egati ons of a peti ti on f i l ed agai nst i t i n any bankruptcy, reorgani zati on or i nsol vency proceedi ng; or (vi )
take any organi zati onal acti on f or the purpose of ef f ecti ng any of the f oregoi ng; or
(h) I f wi thout the appl i cati on, approval or consent of Corporati on, an i nvol untary case or
other proceedi ng shal l be i nsti tuted i n any court of competent j uri sdi cti on, under the Bankruptcy Code or
any l aw rel ati ng to bankruptcy, i nsol vency, reorgani zati on, or rel i ef of debtors seeki ng i n respect of such
Corporati on, an order f or rel i ef or an adj udi cati on i n bankruptcy, reorgani zati on, di ssol uti on, wi ndi ng-up,
l i qui dati on, a composi ti on or arrangement wi th credi tors, a readj ustment of debts, the appoi ntment of a
trustee, recei ver, l i qui dator or custodi an or the l i ke of such Corporati on, or of al l or any substanti al part of
the assets of such Corporati on, or other l i ke rel i ef i n respect thereof under any bankruptcy or i nsol vency
l aw; or
(i ) (i ) any def i ned event of def aul t occurs under any Rel ated Document; or (i i ) Corporati on
(A) f ai l s to make any payment when due (whether by schedul ed maturi ty, accel erati on or otherwi se) i n
respect of any i ndebtedness wi th an aggregate outstandi ng pri nci pal amount greater than $500,000,
whether di rect or conti ngent (other than i ndebtedness under the Rei mbursement Agreement) or (B) f ai l s
to observe or perf orm any other agreement or condi ti on rel ati ng to any such i ndebtedness or contai ned i n
any i nstrument or agreement evi denci ng, securi ng or rel ati ng thereto, or any other event occurs, the ef f ect
of whi ch def aul t or other event i s to cause, or to permi t any hol der of such i ndebtedness (or a trustee or
agent on behal f of such hol der or benef i ci ary) to cause such i ndebtedness to be demanded or to become
due or to be repurchased or redeemed pri or to i ts stated maturi ty; or
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(j ) There shal l exi st or occur any event or condi ti on whi ch Bank i n good f ai th bel i eves
i mpai rs, or i s substanti al l y l i kel y to i mpai r, the prospect of payment or perf ormance by Corporati on of i ts
obl i gati ons under the Rei mbursement Agreement or any of the Rel ated Documents; or
(k) (i ) The recordi ng of any cl ai m of l i en agai nst the Real Property Col l ateral other than
Permi tted Real Property Li ens, or the servi ce on Bank of any bonded stop noti ce rel ati ng to the Proj ect
and the conti nuance of such cl ai m of l i en twenty (20) days af ter noti ce of same to Corporati on wi thout
di scharge, sati sf acti on or provi si on f or payment bei ng made by Corporati on i n a reasonabl e manner
sati sf actory to Bank; or (i i ) the condemnati on, sei zure or appropri ati on of , or occurrence of an uni nsured
casual ty wi th respect to any materi al porti on of the Real Property Col l ateral or any other assets of the
Corporati on; or (i i i ) the sequestrati on or attachment of , or any l evy or executi on upon any porti on of the
Real Property Col l ateral ; or
(l ) The sal e, transf er, hypothecati on, assi gnment or encumbrance, whether vol untary,
i nvol untary or by operati on of l aw, other than as expressl y al l owed by the Rei mbursement Agreement,
without Banks prior written consent, of all or any part of or i nterest i n the Real Property Col l ateral or a
materi al part of the assets of Corporati on; or
(m) The f ai l ure of the Deed of Trust as modi f i ed i n wri ti ng f rom ti me to ti me, to be val i d f i rst
pri ori ty l i en, subj ect to Permi tted Real Property Li ens, upon any porti on of the Real Property Col l ateral .
Upon the occurrence of an Event of Def aul t under the Rei mbursement Agreement, the Bank may
decl are al l amounts payabl e by Corporati on under the Rei mbursement Agreement to be i mmedi atel y due
and payabl e, wi thout presentment, demand, protest or other noti ce or f ormal i ty of any ki nd; provi ded that
upon the occurrence of an Event of Def aul t descri bed i n (g) or (h) above, such accel erati on shal l
automati cal l y occur.
I n ei ther case, the Bank may al so: (a) requi re that Corporati on i mmedi atel y prepay to the Bank i n
i mmedi atel y avai l abl e f unds an amount equal to the undrawn bal ance of the Letter of Credi t (such amount
to be hel d by the Bank as col l ateral securi ty f or the Rei mbursement Obl i gati ons); provi ded, however, that
upon the occurrence of an Event of Def aul t descri bed i n (g) or (h) above, such prepayment obl i gati ons
shal l automati cal l y become i mmedi atel y due and payabl e; (b) gi ve noti ce of the occurrence of an Event of
Def aul t to the Trustee and di rect the Trustee to cause a mandatory tender f or purchase of the Bonds i n
accordance wi th the requi rements of the I ndenture; (c) gi ve noti ce of the occurrence of an Event of
Def aul t to the Trustee and di rect the Trustee to accel erate the Bonds or take such acti ons as the Bank may
di rect, under the I ndenture or otherwi se; (d) pursue any ri ghts or remedi es that the Bank may have under
the Rei mbursement Agreement or any of the Rel ated Documents; (e) pursue any other ri ghts or remedi es
avai l abl e to the Bank at l aw or i n equi ty; and (f ) exerci se al l or any combi nati on of the remedi es provi ded
f or i n thi s paragraph. Noti ce to the Trustee by the Bank of any Event of Def aul t under the
Rei mbursement Agreement consti tutes an Event of Def aul t under the I ndenture whi ch, at the request of
the Bank, wi l l resul t i n accel erati on of the maturi ty of the Bonds.
Corporation and the Bank may amend the Reimbursement Agreement at any time without
the consent of the Trustee, the Holders of the Bonds or any other person and any such amendment
could amend the conditions under which Corporation would be in default thereunder and thereby
increase the ability of the Bank to give notices which could result in, among other things, an Event
of Default under the I ndenture.
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THE AUTHORI TY
Under Ti tl e 1, Di vi si on 7, Chapter 5 of the Cal i f ornia Government Code (the JPA Act), certain
Cal i f orni a ci ti es, counti es and speci al di stri cts have entered i nto a j oi nt exerci se of powers agreement (the
JPA Agreement) forming the Authority for the purpose of exerci si ng to powers common to the
members and to exerci se the addi ti onal powers granted to the Authori ty by the JPA Act and any other
appl i cabl e provi si ons of Cal i f orni a l aw. Under the JPA Agreement, the Authori ty may i ssue bonds, notes
or any other evi dence of i ndebtedness, f or any purpose or acti vi ty permi tted under the JPA Act or any
other appl i cabl e l aw.
The Authori ty may sel l and del i ver obl i gati ons other than the Bonds. These obl i gati ons wi l l be
secured by i nstruments separate and apart f rom the Bonds, I ndenture and Agreement and the hol ders of
such other obl i gati ons of the Authori ty wi l l have no cl ai m on the securi ty f or the Bonds. Li kewi se, the
Hol der of the Bonds wi l l have no cl ai m on the securi ty f or such other obl i gati ons that may be i ssued by
the Authori ty.
Nei ther the Authori ty nor i ts i ndependent contractors has f urni shed, revi ewed, i nvesti gated or
veri f i ed the i nf ormati on contai ned i n thi s Of f i ci al Statement other than the i nf ormati on contai ned i n thi s
section and the section entitled ABSENCE OF MATERIAL LITIGATION The Authority. The
Authori ty does not and wi l l not i n the f uture moni tor the f i nanci al condi ti on of the Corporati on or
otherwi se moni tor payment of the Bonds or compl i ance wi th the documents rel ati ng thereto.
BONDHOLDERS RISKS
The purchase and ownershi p of the Bonds i nvol ves i nvestment ri sks that are di scussed throughout
thi s Of f i ci al Statement. Each prospecti ve purchaser of the Bonds (or a benef i ci al ownershi p i nterest
therei n) shoul d eval uate al l of the i nf ormati on presented i n thi s Of f i ci al Statement. Thi s secti on on
Bondholders Risks focuses primarily on the general ri sks associ ated wi th the Bonds; whereas
APPENDI X A descri bes the Corporati on speci f i cal l y. These provi si ons shoul d be read together. Some
of the ri sks that coul d af f ect the Bonds and the f uture f i nanci al condi ti on of the Corporati on are descri bed
bel ow. Thi s descri pti on of vari ous ri sks i s not, and i s not i ntended to be, exhausti ve.
General
Except as noted under SECURITY AND SOURCES OF PAYMENT FOR THE BONDS, the
Bonds are payabl e sol el y f rom and secured by the Authoritys pledge of Revenues. No representation or
assurance can be made that revenues wi l l be real i zed by the Corporati on i n amounts suf f i ci ent to make the
payments under the Loan Agreements and, thus, to pay pri nci pal of , redempti on premi um and i nterest on
the Bonds.
Future economi c and other condi ti ons, i ncl udi ng, wi thout l i mi tati on, the l oss by the Corporati on
of i ts accredi tati on, destructi on or l oss of a substantial portion of the Corporations facilities, litigation,
competi ti on, reducti on of the amounts recei ved by the Corporati on through f undrai si ng ef f orts or research
grants, change i n f ederal rei mbursement programs, reducti on i n val ue of endowment f unds, the
occurrence of nati onal or i nternati onal cal ami ti es, changes i n the percei ved val ue of the Corporati on and
the ability of the Corporations faculty and administrati on, may adversel y af f ect the revenues of the
Corporati on. There can be no assurance that the Corporations revenues will not decrease.
25
The Bank
There can be no assurance that the credi t rati ngs of the Bank wi l l conti nue at i ts current l evel . A
decl i ne i n the credi t rati ng of the Bank or the i ssuer of an Al ternate Letter of Credi t coul d resul t i n a
decl i ne i n any rati ng that may be assi gned to the Bonds f rom ti me to ti me. Such a decl i ne coul d i n turn
af f ect the market pri ce and the marketabi l i ty of the Bonds. For i nf ormati on concerni ng the Bank, see
THE BANK.
Enforceability of the Letter of Credit
Secti on 105 of the Bankruptcy Code empowers a bankruptcy court to i ssue such orders as are
necessary or appropri ate to carry out the provi si ons of the Bankruptcy Code. Court deci si ons di scussi ng
the enf orceabi l i ty of l etters of credi t i ndi cate that i t i s possi bl e that a bankruptcy court acti ng pursuant to
Secti on 105 or other equi tabl e powers under the Bankruptcy Code coul d enj oi n a drawi ng by the Trustee
under the Letter of Credi t or the payment by the Trustee to the Bondhol ders of amounts drawn under the
Letter of Credi t under vari ous ci rcumstances, i ncl udi ng the bankruptcy or i nsol vency of , or a si mi l ar
event wi th respect to, the Corporati on or any af f i l i ate of the Corporati on.
The Letter of Credi t al so wi l l not, and are not i ntended to, protect Bondhol ders f rom events
af f ecti ng the Bank or i ts credi tworthi ness, i ncl udi ng, wi thout l i mi tati on, the bankruptcy or i nsol vency of
the Bank.
Tax-Exempt Status and Other Tax Matters
Maintenance of the Tax-Exempt Status of the Corporation. The tax-exempt status of the Bonds
presentl y depends upon mai ntenance by the Corporati on of i ts status as an organi zati on descri bed i n
secti on 501(c)(3) of the Code. The mai ntenance of such status i s conti ngent on compl i ance wi th general
rul es promul gated i n the Code and rel ated regul ati ons regardi ng the organi zati on and operati on of tax-
exempt enti ti es, i ncl udi ng thei r operati on f or chari tabl e and other permi ssi bl e purposes and thei r
avoi dance of transacti ons that may cause thei r earni ngs or assets to i nure to the benef i t of pri vate
i ndi vi dual s. As these general pri nci pl es were devel oped pri mari l y f or publ i c chari ti es that do not conduct
l arge-scal e techni cal operati ons and busi ness acti vi ti es, they of ten do not adequatel y address the myri ad
of operati ons and transacti ons entered i nto by a modern educati on organi zati on.
The Internal Revenue Service (IRS) has periodi cal l y conducted audi t and other enf orcement
acti vi ty regardi ng tax-exempt organi zati ons. Such audi ts are conducted by teams of revenue agents, of ten
take years to compl ete and requi re the expendi ture of si gni f i cant staf f ti me by both the I RS and taxpayers.
These audi ts exami ne a wi de range of possi bl e i ssues, i ncl udi ng tax-exempt bond f i nanci ng, acti vi ti es of
partnershi ps and j oi nt ventures, reti rement pl ans and empl oyee benef i ts, empl oyment taxes, pol i ti cal
contri buti ons and other matters.
I f the I RS were to f i nd that the Corporati on has parti ci pated i n acti vi ti es i n vi ol ati on of certai n
regul ati ons or rul i ngs, the tax-exempt status of the Corporati on coul d be i n j eopardy. Al though the I RS
has not f requentl y revoked the 501(c)(3) tax-exempt status of nonprof i t corporati ons, i t coul d do so i n the
f uture. Loss of tax-exempt status by the Corporati on potenti al l y coul d resul t i n l oss of tax exempti on of
the Bonds and of other tax-exempt debt of the Corporati on and def aul ts i n covenants regardi ng the Bonds
and other rel ated tax-exempt debt and obl i gati ons l i kel y woul d be tri ggered. Loss of tax-exempt status
al so coul d resul t i n substanti al tax l i abi l i ti es on i ncome of the Corporati on. For these reasons, l oss of tax-
exempt status of the Corporati on coul d have a materi al adverse ef f ect on the f i nanci al condi ti on of the
Corporati on.
26
I n some cases, the I RS has i mposed substanti al monetary penal ti es on tax-exempt organi zati ons
i n l i eu of revoki ng thei r tax-exempt status. I n those cases, the I RS and exempt organi zati ons entered i nto
settl ement agreements requi ri ng the to make substanti al payments to the I RS. Gi ven the si ze of the
Corporati on, the wi de range of compl ex transacti ons entered i nto by the Corporati on, and potenti al
exempti on ri sks, the Corporati on coul d be at ri sk f or i ncurri ng monetary and other l i abi l i ti es i mposed by
the I RS.
I n l i eu of revocati on of exempt status, the I RS may i mpose penal ty exci se taxes on certai n
excess benefit transactions involving 501(c)(3) organizations and disqualified persons. An excess
benef i t transacti on i s one i n whi ch a di squal i f i ed person or enti ty recei ves more than f ai r market val ue
f rom the exempt organi zati on or pays the exempt organi zati on l ess than f ai r market val ue f or property or
servi ces, or shares the net revenues of the tax-exempt enti ty. A di squal i f i ed person i s a person (or an
enti ty) who i s i n a posi ti on to exerci se substanti al i nf l uence over the af f ai rs of the exempt organi zati on
duri ng the f i ve years precedi ng an excess benef i t transacti on. The statute i mposes exci se taxes on the
disqualified person and any organization manager who knowingly participates in an excess benefit
transacti on. These rul es do not penal i ze the exempt organi zati on i tsel f , so there woul d be no di rect
i mpact on the Corporati on or the tax status of the Bonds i f an excess benef i t transacti on were subj ect to
I RS enf orcement, pursuant to these intermediate sanctions rules.
State and Local Tax Exemption. I t i s l i kel y that the l oss by the Corporati on of f ederal tax
exempti on woul d al so tri gger a chal l enge to i ts state tax-exempti on. Dependi ng on the ci rcumstances,
such event coul d be materi al and adverse.
I t i s not possi bl e to predi ct the scope or ef f ect of f uture l egi sl ati ve or regul atory acti ons wi th
respect to taxati on of nonprof i t corporati ons. There can be no assurance that f uture changes i n the l aws
and regul ati ons of state or l ocal governments wi l l not materi al l y adversel y af f ect the f i nanci al condi ti on
of the Corporati on by requi ri ng payment of i ncome, l ocal property or other taxes.
Unrelated Business I ncome. The I RS and state and l ocal taxi ng authori ti es have been
undertaki ng audi ts and revi ews of the operati ons of tax-exempt hospi tal s wi th respect to thei r exempt
acti vi ti es whi ch generate unrel ated busi ness taxabl e i ncome (UBTI). The Corporation participates in
acti vi ti es whi ch generate UBTI . Management bel i eves i t has properl y accounted f or and reported UBTI ;
neverthel ess, an i nvesti gati on or audi t coul d l ead to a chal l enge whi ch coul d resul t i n taxes, i nterest and
penal ti es wi th respect to unreported UBTI and i n some cases coul d ul ti matel y af f ect the tax-exempt status
of the Corporati on as wel l as the excl usi on f rom gross i ncome f or f ederal i ncome tax purposes of the
i nterest payabl e on the Bonds and other tax-exempt debt of the Corporati on.
Maintenance of Tax-Exempt Status of I nterest on the Bonds. The Code i mposes a number of
requi rements that must be sati sf i ed f or i nterest on state and l ocal obl i gati ons, such as the Bonds, to be
excl udabl e f rom gross i ncome f or f ederal i ncome tax purposes. These requi rements i ncl ude l i mi tati ons
on the use of bond proceeds, l i mi tati ons on the i nvestment earni ngs of bond proceeds pri or to expendi ture,
a requi rement that certai n i nvestment earni ngs on bond proceeds be pai d peri odi cal l y to the Uni ted States
Treasury, and a requi rement that the Authori ty f i l es an i nf ormati on report wi th the I RS. The Corporati on
has covenanted i n the Loan Agreement that i t wi l l compl y wi th such requi rements. Future f ai l ure by the
Corporati on to compl y wi th the requi rements stated i n the Code and rel ated regul ati ons, rul i ngs and
pol i ci es may resul t i n the treatment of i nterest on the Bonds as taxabl e, retroacti vel y to the date of
i ssuance. The Authori ty has covenanted i n the I ndenture that i t wi l l not take any acti on or ref rai n f rom
taki ng any acti on that woul d cause i nterest on the Bonds to be i ncl uded i n gross i ncome f or f ederal
i ncome tax purposes.
27
I RS of f i ci al s have recentl y i ndi cated that more resources wi l l be i nvested i n audi ts of tax-exempt
bonds i n the chari tabl e organi zati on sector, wi th speci f i c revi ews of pri vate use. Record retenti on, whi ch
the I RS has parti cul arl y emphasi zed, i s l i kel y to be an obj ect of scruti ny. The I RS recentl y sent several
hundred post-i ssuance compl i ance questi onnai res to nonprof i t corporati ons that have previ ousl y borrowed
on a tax-exempt basi s. The questi ons pertai n to post-issuance compliance relating to the Corporations (i)
record retenti on, (i i ) qual i f i ed use of bond-f i nanced property, (i i i ) arbi trage yi el d restri cti on and rebate
requi rements, (i v) debt management pol i ci es and (v) vol untary compl i ance and educati on. I RS
representati ves i ndi cate that af ter anal yzi ng responses f rom the f i rst wave of responses, thousands more
wi l l be sent.
Al though the Corporati on bel i eves that i ts expendi ture and i nvestment of bond proceeds, use of
property f i nanced and ref i nanced wi th tax-exempt debt and record retenti on practi ces have compl i ed wi th
al l appl i cabl e l aws and regul ati ons, there can be no assurance that the i ssuance of surveys wi l l not l ead to
an I RS exami nati on that coul d adversel y af f ect the market val ue of the Bonds or of other outstandi ng tax-
exempt i ndebtedness of the Corporati on. The Bonds or other tax-exempt obl i gati ons i ssued f or the
benef i t of the Corporati on may be, f rom ti me to ti me, subj ect to exami nati ons by the I RS. The
Corporati on bel i eves that the Bonds and other tax-exempt obl i gati ons i ssued f or i ts benef i t properl y
compl y wi th the tax l aws. I n addi ti on, Bond Counsel wi l l render an opi ni on wi th respect to the tax-
exempt status of the Bonds, as descri bed under the caption TAX MATTERS. No ruling with respect to
the tax-exempt status of the Bonds has been or wi l l be sought f rom the I RS, however, and opi ni ons of
counsel are not bi ndi ng on the I RS or the courts.
First Amendment I ssues
The Corporati on operates a rel i gi ous ori ented educati onal i nsti tuti on and proceeds of the Bonds
wi l l be used to f i nance and ref i nance the educati onal rel ated f aci l i ti es operated by the Corporati on. The
Corporati on has covenanted that no porti on of the proceeds of the Bonds shal l be used to f i nance and
ref i nance any f aci l i ty, pl ace or bui l di ng used or to be used f or sectari an i nstructi on or study or as a pl ace
f or devoti onal acti vi ti es or rel i gi ous worshi p or i n connecti on wi th any part of the programs of any school
or department of di vi ni ty f or the durati on of the usef ul l i f e of the proj ect f i nanced wi th the proceeds of the
Bonds.
The Establishment Clause of the First Amendment to the Uni ted States Consti tuti on has been
i nterpreted by some courts to restri ct publ i c f i nanci al assi stance to certai n sectari an i nsti tuti ons general l y
referred to as pervasively sectarian institutions. The Cal i f orni a Consti tuti on al so contai ns certai n
provi si ons that no governmental enti ty can use publ i c f unds to ai d any church, sectari an soci ety or f or any
sectari an purpose. The Uni ted State Supreme Court has not di rectl y addressed the questi on of whether
the Establishment Clause restricts the lending to pervasively sectarian institutions of the proceeds of a
tax-exempt of taxabl e bond i ssue i nvol vi ng no expendi ture of publ i c f unds. However, the Cal i f orni a
Supreme Court has recentl y addressed the questi on of whether the Cal i f orni a Consti tuti on prohi bi ts the
f i nanci ng by an agency of the State of Cal i f orni a on behal f of a sectari an i nsti tuti on or the f i nanci ng of a
proj ects or a sectari an i nsti tuti on i nvol vi ng no expendi ture of publ i c f unds. The acti on enti tl ed Cal i f orni a
Statewi de Communi ti es Devel opment Authori ty v. Al l Persons I nterested i n the Val i di ty of a Purchase
Agreement, 40 Cal . 4th 788 (2007) sets f orth certai n cri teri a under whi ch bonds may be i ssued to benef i t a
sectari an i nsti tuti on, such as the Corporati on, wi thout vi ol ati on of the Cal i f orni a Consti tuti on.
I f a court were to f i nd the i ssuance of the Bonds and the use of the proceeds to f i nance or
ref i nance the Proj ect descri bed i n thi s Of f i ci al Statement unconsti tuti onal under the f ederal and/or
Cal i f orni a Consti tuti on, and i f such an adverse deci si on were to become f i nal , the Bonds coul d be
decl ared unenf orceabl e and/or voi d. Such an adverse deci si on coul d become f i nal i f the Corporati on does
not appeal the adverse deci si on or i f the Corporati on were unsuccessf ul upon appeal because the adverse
28
deci si on i s uphel d by the Uni ted States or Cal i f orni a Supreme Court or because the Uni ted States or
Cal i f orni a Supreme Court decl i ned to revi ew the adverse rul i ng or such revi ew i s not sought. I n the event
of a f i nal adverse deci si on, any i nterest pai d on the Bonds coul d become i ncl udabl e i n gross i ncome f or
f ederal and state tax purposes.
The Authori ty i s not obl i gated to appeal an adverse rul i ng wi th respect to Bonds or any
determi nati on that the i nterest pai d on the Bonds i s i ncl udabl e i n gross i ncome f or f ederal or state tax
purposes.
Seismic Risks
The Corporati on i s l ocated i n a sei smi cal l y acti ve regi on of Southern Cal i f orni a. The occurrence
of severe sei smi c acti vi ty coul d resul t i n substanti al damage to one or more of the Corporations facilities,
whi ch coul d adversel y af f ect the abi l i ty of the Corporati on to operate and/or to make the payments due on
the Bonds. No sei smi c revi ew of the bui l di ngs i ncluded in the Corporations real property has been
undertaken, and the Corporati on carri es no earthquake insurance. See APPENDIX A
INFORMATION REGARDING LA SIERRA UNIVERSITY Insurance. If seismic activity caused
significant damage to the Corporations real property, the abi l i ty of the Corporati on to conti nue i ts
operati ons coul d be adversel y af f ected and the securi ty f or the Bonds coul d be i mpai red. Nei ther the
Corporati on nor the Authori ty i s abl e to predi ct whether or to what extent these ef f ects coul d occur.
I nvestments
The Corporati on has si gni f i cant hol di ngs i n a broad range of i nvestments, i ncl udi ng real estate,
mortgage-rel ated and venture capi tal al ternati ve i nvestments. Market f l uctuati ons may af f ect the val ue of
those i nvestments and those f l uctuati ons may be and hi stori cal l y have been at ti mes materi al . For a
discussion of the Corporations investments, see APPENDIX A INFORMATION REGARDING LA
SIERRA UNIVERSITY Managements Discussion of Financial Operations Investment Policy and
Performance.
Risks Related to Outstanding Variable Rate Obligations
I nterest rates on the Bonds coul d ri se. The i nterest rates are adj usted on a weekl y basi s whi l e the
Bonds are beari ng i nterest at Weekl y I nterest Rate. Al though the Bonds may be converted to bear i nterest
at a Term I nterest Rate, thi s protecti on agai nst ri si ng i nterest rates i s l i mi ted because the Corporati on
woul d conti nue to pay i nterest at the vari abl e rate unti l permi tted to convert the i nterest rates pursuant to
the I ndenture.
Enforceability of Remedies
The remedi es avai l abl e to the Trustee or the Bondhol ders upon an Event of Def aul t under the
I ndenture or Loan Agreement are i n many respects dependent upon j udi ci al acti ons whi ch are of ten
subj ect to di screti on and del ay, and such remedi es may not be readi l y avai l abl e or may be l i mi ted. I n
parti cul ar, under the Uni ted States Bankruptcy Code, a bankruptcy case may be f i l ed by the Authori ty, by
or agai nst the Corporati on or by or agai nst any of thei r af f i l i ates. I n general , the f i l i ng of any such
peti ti on operates as a stay agai nst enf orcement of the terms of the agreements to whi ch the bankrupt enti ty
i s a party. The vari ous l egal opi ni ons to be del i vered concurrentl y wi th the Bonds (i ncl udi ng Bond
Counsels approving opinion) will be qualified, as to the enf orceabi l i ty of the vari ous l egal i nstruments,
by l i mi tati ons i mposed by bankruptcy, reorgani zati on, i nsol vency or other si mi l ar l aws af f ecti ng the
ri ghts of credi tors general l y and by general pri nci pl es of equi ty appl i ed i n the exerci se of j udi ci al
di screti on.
29
ABSENCE OF MATERI AL LI TI GATI ON
The Authority
To the knowl edge of the Authori ty, there i s no acti on, sui t, proceedi ng, i nqui ry or i nvesti gati on, at
l aw or i n equi ty, bef ore or by any court, governmental agency, publ i c board or body, pendi ng agai nst the
Authori ty seeki ng to restrai n or enj oi n the sal e or i ssuance of the Bonds, or i n any way contesti ng or
af f ecti ng any proceedi ngs of the Authori ty taken concerni ng the sal e thereof , the pl edge or appl i cati on of
any moneys or securi ty provi ded f or the payment of the Bonds, the val i di ty or enf orceabi l i ty of the
documents executed by the Authori ty i n connecti on wi th the Bonds, the compl eteness or accuracy of the
Of f i ci al Statement or the exi stence or powers of the Authori ty rel ati ng to the sal e of the Bonds.
The Corporation
To the knowl edge of the Corporati on, there i s no acti on, sui t, proceedi ng, i nqui ry or i nvesti gati on,
at l aw or i n equi ty, bef ore or by any court, governmental agency, publ i c board or body, pendi ng agai nst
the Corporati on seeki ng to restrai n or enj oi n the sal e or i ssuance of the Bonds, or i n any way contesti ng or
af f ecti ng any proceedi ngs of the Corporati on taken concerni ng the sal e thereof , the pl edge or appl i cati on
of any moneys or securi ty provi ded f or the payment of the Bonds, the val i di ty or enf orceabi l i ty of the
documents executed by the Corporati on i n connecti on wi th the Bonds, the compl eteness or accuracy of
the Of f i ci al Statement or the exi stence or powers of the Corporati on rel ati ng to the sal e of the Bonds.
There i s no l i ti gati on of any nature now pendi ng agai nst the Corporati on or, to the knowl edge of
the Corporations officers, threatened, which, if successf ul , woul d materi al l y adversel y af f ect the
operati ons or f i nanci al condi ti on of the Corporati on.
I NDEPENDENT AUDI TOR
The f i nanci al statements of the Corporati on f or the years ended June 30, 2007 and 2006, i ncl uded
i n Appendi x B to thi s Of f i ci al Statement, have been audi ted by Ahern Adcock Devl i n LLP,
i ndependent audi tors as stated i n thei r report appeari ng therei n.
RATI NGS
Standard & Poors Ratings Services, a division of The McGraw-Hill companies, Inc. (S&P) has
assigned the Bonds a long-term rating of AAA and a short-term rating of A-1+ with the
understandi ng that upon del i very of the Bonds, the Letter of Credi t wi l l be executed and del i vered to the
Trustee by the Bank. Any expl anati on of the si gni f i cance of such rati ngs may onl y be obtai ned f rom
S& P.
There i s no assurance that the rati ngs menti oned above wi l l remai n i n ef f ect f or any gi ven peri od
of ti me or that a rati ng mi ght not be l owered or wi thdrawn enti rel y, i f i n the j udgment of S& P,
ci rcumstances so warrant. The Authori ty, the Corporati on, and the Underwri ter have not undertaken any
responsi bi l i ty to bri ng to the attenti on of the Bondhol ders any proposed change i n or wi thdrawal of a
rati ng or to oppose any such proposed revi si on or wi thdrawal . Any such downward change i n or
wi thdrawal of a rati ng may have an adverse ef f ect on the market pri ce or marketabi l i ty of the Bonds.
UNDERWRI TI NG
The Authori ty and the Corporati on have entered i nto a purchase contract wi th Wel l s Fargo
I nsti tuti onal Securi ti es, LLC, as Underwri ter, pursuant to whi ch the Underwri ter has agreed, subj ect to
30
certai n condi ti ons, to purchase the Bonds f rom the Authori ty at a purchase pri ce of $24,268,332 (whi ch
represents the par amount of the Bonds, l ess the Underwriters discount of $136,668). The Underwriter is
obl i gated under the purchase contract to purchase al l of the Bonds i f any are purchased. The Bonds may
be of f ered and sol d by the Underwri ter to certai n deal ers and others at yi el ds l ower than the publ i c
of f eri ng pri ce i ndi cated on the cover hereof , and such publ i c of f eri ng pri ce may be changed, f rom ti me to
ti me, by the Underwri ter.
APPROVAL OF LEGALI TY
Certai n l egal matters i nci dent to the i ssuance of the Bonds are subj ect to the approvi ng opi ni on of
Orri ck, Herri ngton & Sutcl i f f e LLP, Bond Counsel to the Authori ty. A compl ete copy of the proposed
f orm of Bond Counsel opi ni on i s contai ned i n APPENDI X E hereto. Bond Counsel undertakes no
responsi bi l i ty f or the accuracy, compl eteness or f ai rness of thi s Of f i ci al Statement. Certai n other l egal
matters wi l l be passed upon f or the Corporati on by i ts counsel , DLA Pi per, San Di ego, Cal i f orni a; f or the
Bank by i ts counsel , Chapman and Cutl er LLP, San Franci sco, Cal i f orni a; and f or the Authori ty by i ts
counsel , Squi re, Sanders & Dempsey, L.L.P., Los Angel es, Cal i f orni a.
TAX MATTERS
In the opinion of Orrick, Herrington & Sutcliffe LLP (Bond Counsel), Bond Counsel to the
Authori ty, based upon an anal ysi s of exi sti ng l aws, regul ati ons, rul i ngs, and court deci si ons, and
assumi ng, among other matters, the accuracy of certai n representati ons and compl i ance wi th certai n
covenants, i nterest on the Bonds i s excl uded f rom gross i ncome f or f ederal i ncome tax purposes under
Secti on 103 of the I nternal Revenue Code of 1986 (the Code). Bond Counsel is of the further opinion
that i nterest on the Bonds i s not a speci f i c pref erence i tem f or purposes of the f ederal i ndi vi dual or
corporate al ternati ve mi ni mum taxes, al though Bond Counsel observes that such i nterest i s i ncl uded i n
adj usted current earni ngs when cal cul ati ng corporate al ternati ve mi ni mum taxabl e i ncome. Bond Counsel
i s al so of the opi ni on that i nterest on the Bonds i s exempt f rom present State of Cal i f orni a personal
i ncome taxes. A compl ete copy of the proposed f orm of opi ni on of Bond Counsel i s i ncl uded herei n as
APPENDI X E.
Bonds purchased, whether at ori gi nal i ssuance or otherwi se, f or an amount hi gher than thei r
pri nci pal amount payabl e at maturi ty (or, i n some cases, at their earlier call date) (Premium Bonds) will
be treated as havi ng amorti zabl e bond premi um. No deducti on i s al l owabl e f or the amorti zabl e bond
premi um i n the case of bonds, l i ke the Premi um Bonds, the i nterest on whi ch i s excl uded f rom gross
i ncome f or f ederal i ncome tax purposes. However, the amount of tax-exempt i nterest recei ved, and a
Beneficial Owners basis in a Premium Bond, wi l l be reduced by the amount of amorti zabl e bond
premi um properl y al l ocabl e to such Benef i ci al Owner. Benef i ci al Owners of Premi um Bonds shoul d
consul t thei r own tax advi sors wi th respect to the proper treatment of amorti zabl e bond premi um i n thei r
parti cul ar ci rcumstances.
The Code i mposes vari ous restri cti ons, condi ti ons and requi rements rel ati ng to the excl usi on f rom
gross i ncome f or f ederal i ncome tax purposes of i nterest on obl i gati ons such as the Bonds. The Authori ty
and the Corporati on have made certai n representati ons and covenanted to compl y wi th certai n restri cti ons,
condi ti ons and requi rements desi gned to ensure that i nterest on the Bonds wi l l not be i ncl uded i n f ederal
gross i ncome. I naccuracy of these representati ons or f ai l ure to compl y wi th these covenants may resul t i n
i nterest on the Bonds bei ng i ncl uded i n gross i ncome f or f ederal i ncome tax purposes, possi bl y f rom the
date of ori gi nal i ssuance of the Bonds. The opi ni on of Bond Counsel assumes the accuracy of these
representati ons and compl i ance wi th these covenants. Bond Counsel has not undertaken to determi ne (or
to i nf orm any person) whether any acti ons taken (or not taken) or events occurri ng (or not occurri ng), or
any other matters coming to Bond Counsels attenti on af ter the date of i ssuance of the Bonds may
31
adversel y af f ect the val ue of , or the tax status of i nterest on, the Bonds. Accordi ngl y, the opi ni on of Bond
Counsel i s not i ntended to, and may not, be rel i ed upon i n connecti on wi th any such acti ons, events or
matters.
I n addi ti on, Bond Counsel has rel i ed, among other thi ngs, on the opi ni on of DLA Pi per, San
Di ego, Cal i f orni a, Counsel to the Corporati on, regardi ng the current qual i f i cati on of the Corporati on as an
organi zati on descri bed i n Secti on 501(c)(3) of the I nternal Revenue Code of 1986 (the Code) and the
use of the f aci l i ti es f i nanced wi th the proceeds of the Bonds i n acti vi ti es that are not consi dered unrel ated
trade or busi ness acti vi ti es of the Corporati on wi thi n the meani ng of Secti on 513 of the Code. We note
that such opi ni on i s subj ect to a number of qual i f i cati ons and l i mi tati ons. Fai l ure of the Corporati on to be
organi zed and operated i n accordance wi th the I nternal Revenue Services requirements for the
mai ntenance of i ts status as an organi zati on descri bed i n Secti on 501(c)(3) of the Code, or use of the
f aci l i ti es f i nanced or ref i nanced wi th the proceeds of the Bonds i n acti vi ti es that are consi dered unrel ated
trade or busi ness acti vi ti es of the Corporati on wi thi n the meani ng of Secti on 513 of the Code, may resul t
i n i nterest payabl e wi th respect to the Bonds bei ng i ncl uded i n f ederal gross i ncome, possi bl y f rom the
date of i ssuance of the Bonds.
Al though Bond Counsel i s of the opi ni on that i nterest on the Bonds i s excl uded f rom gross
i ncome f or f ederal i ncome tax purposes and i nterest on the Bonds i s exempt f rom State of Cal i f orni a
personal i ncome taxes, the ownershi p or di sposi ti on of , or the accrual or recei pt of i nterest on, the Bonds
may otherwise affect a Beneficial Owners federal, state or l ocal tax l i abi l i ty. The nature and extent of
these other tax consequences depends upon the parti cul ar tax status of the Benef i ci al Owner or the
Beneficial Owners other items of income or deducti on. Bond Counsel expresses no opi ni on regardi ng
any such other tax consequences.
Future l egi sl ati ve proposal s, i f enacted i nto l aw, cl ari f i cati on of the Code or court deci si ons, may
cause i nterest on the Bonds to be subj ect, di rectl y or i ndi rectl y, to f ederal i ncome taxati on or to be subj ect
to or exempted f rom state i ncome taxati on, or otherwi se prevent Benef i ci al Owners f rom real i zi ng the f ul l
current benef i t of the tax status of such i nterest. The i ntroducti on or enactment of any such f uture
l egi sl ati ve proposal s or cl ari f i cati on of the Code or court deci si ons may al so af f ect the market pri ce f or, or
marketabi l i ty of , the Bonds. Prospecti ve purchasers of the Bonds shoul d consul t thei r own tax advi sors
regardi ng any pendi ng or proposed f ederal or state tax l egi sl ati on, regul ati ons or l i ti gati on, as to whi ch
Bond Counsel expresses no opi ni on.
The opi ni on of Bond Counsel i s based on current l egal authori ty, covers certai n matters not
di rectl y addressed by such authori ti es, and represents Bond Counsels judgment as to the proper treatment
of the Bonds f or f ederal i ncome tax purposes. I t i s not bi ndi ng on the I RS or the courts. Furthermore,
Bond Counsel cannot gi ve and has not gi ven any opi ni on or assurance about the f uture acti vi ti es of the
Authori ty or the Corporati on, or about the ef f ect of f uture changes i n the Code, the appl i cabl e regul ati ons,
the i nterpretati on thereof or the enf orcement thereof by the I RS. The Authori ty and the Corporati on have
covenanted, however, to compl y wi th the requi rements of the Code.
Bond Counsels engagement with respect to the Bonds ends wi th the i ssuance of the Bonds, and,
unl ess separatel y engaged, Bond Counsel i s not obl i gated to def end the Authori ty, the Corporati on or the
Benef i ci al Owners regardi ng the tax-exempt status of the Bonds i n the event of an audi t exami nati on by
the I RS. Under current procedures, parti es other than the Authori ty, the Corporati on and thei r appoi nted
counsel , i ncl udi ng the Benef i ci al Owners, woul d have l i ttl e, i f any, ri ght to parti ci pate i n the audi t
exami nati on process. Moreover, because achi evi ng j udi ci al revi ew i n connecti on wi th an audi t
exami nati on of tax exempt bonds i s di f f i cul t, obtai ni ng an i ndependent revi ew of I RS posi ti ons wi th
whi ch the Authori ty or the Corporati on l egi ti matel y di sagrees, may not be practi cabl e. Any acti on of the
I RS, i ncl udi ng but not l i mi ted to sel ecti on of the Bonds f or audi t, or the course or resul t of such audi t, or
32
an audi t of bonds presenti ng si mi l ar tax i ssues may af f ect the market pri ce f or, or the marketabi l i ty of , the
Bonds, and may cause the Authori ty, the Corporati on or the Benef i ci al Owners to i ncur si gni f i cant
expense.
CONTI NUI NG DI SCLOSURE
The Authori ty has determi ned that no f i nanci al or operati ng data concerni ng the Authori ty i s
materi al to an eval uati on of the of f eri ng of the Bonds or to any deci si on to purchase, hol d or sel l Bonds
and the Authori ty wi l l not provi de any such i nf ormati on. The Corporati on has undertaken al l
responsi bi l i ti es f or any conti nui ng di scl osure to Bondhol ders as descri bed bel ow, and the Authori ty shal l
have no l i abi l i ty to the Hol ders of the Bonds or any other person wi th respect to Rul e 15c2-12
promulgated by the Securities and Exchange Commission (the Rule).
The Corporati on has not undertaken any i ni ti al conti nui ng di scl osure obl i gati ons wi th respect to
the Bonds. Under the Loan Agreement, the Corporati on has agreed to compl y wi th the conti nui ng
di scl osure requi rements of the Rul e f or the Bonds whenever a Term I nterest Rate Peri od of l onger than
ni ne months i s i n ef f ect or i f otherwi se requi red by the Rul e.
MI SCELLANEOUS
Al l quotati ons f rom and summari es and expl anati ons of the I ndenture, the Loan Agreement, the
Letter of Credi t and the Rei mbursement Agreement and of other documents and of statutes contai ned
herei n do not purport to be compl ete, and ref erence i s made to sai d documents and statutes f or f ul l and
compl ete statements of thei r provi si ons. A copy of the I ndenture, the Loan Agreement, the Letter of
Credi t and the Rei mbursement Agreement may be obtai ned upon request di rected to the Underwri ter or
the Corporati on.
Any statements i n thi s Of f i ci al Statement i nvol vi ng matters of opi ni on are i ntended as such and
not as representati ons of f act. Thi s Of f i ci al Statement i s not to be construed as a contract or agreement
between the Authori ty or the Corporati on and Hol ders of any of the Bonds.
33
The Authori ty has approved the use and di stri buti on of thi s Of f i ci al Statement The executi on and
del i very of thi s Of f i ci al Statement by the Corporati on has been dul y authori zed by the Corporati on.
LA SI ERRA UNI VERSI TY

By: /s/ Randal Wi sbey
Presi dent

By: /s/ Davi d Geri gui s
Vi ce Presi dent


APPENDI X A

I NFORMATI ON CONCERNI NG LA SI ERRA UNI VERSI TY

I nf ormati on i n thi s APPENDI X A has been provi ded by La Si erra Uni versi ty
A-i
I NTRODUCTI ON ................................................................................................................................... A-1
General ....................................................................................................................................... A-1
La Si erra Uni versi ty Today ......................................................................................................... A-1
Membershi p ................................................................................................................................ A-1
Board of Trustees ........................................................................................................................ A-2
Management ................................................................................................................................ A-4
Facul ty ....................................................................................................................................... A-5
Academi c Programs .................................................................................................................... A-5
Accredi tati on ............................................................................................................................... A-7
FI NANCI AL CONDI TI ON OF LA SI ERRA UNI VERSI TY ................................................................ A-8
Statement of Operati ons .............................................................................................................. A-8
Fund Rai si ng ............................................................................................................................. A-13
Endowment ............................................................................................................................... A-13
Ground Leases .......................................................................................................................... A-14
Pl ant Properti es ......................................................................................................................... A-14
Commi tments and Conti ngenci es ............................................................................................. A-15
Ri sk Management ..................................................................................................................... A-16
Li ti gati on ................................................................................................................................... A-16
A-1
I NFORMATI ON CONCERNI NG LA SI ERRA UNI VERSI TY
I NTRODUCTI ON
General
La Sierra University (La Sierra) is a Seventh-day Adventi st coeducati onal i nsti tuti on that began
as La Si erra Academy i n 1922 on acreage that had been part of an 1846 Mexi can l and grant known as
Rancho La Si erra. I t i s now part of the Ci ty of Ri versi de. La Si erra Academy become La Si erra Col l ege
i n 1939.
I n 1967, La Si erra Col l ege was merged wi th Loma Li nda Uni versi ty as i ts Col l ege of Arts and
Sci ences. The School of Educati on was organi zed i n 1968, f ol l owed i n 1986 by the School of Busi ness
and the Eveni ng Adul t Degree Program, and i n 1987 by the School of Rel i gi on.
The Loma Li nda and La Si erra campuses of Loma Li nda Uni versi ty were reorgani zed i nto
separate i nsti tuti ons i n 1990, and f our school s (the Col l ege of Arts and Sci ences, the School of Educati on,
the School of Busi ness and Management, and the School of Rel i gi on) and the Eveni ng Adul t Degree
Program became La Si erra Uni versi ty.
La Sierra University Today
La Si erra i s a Chri sti an coeducati onal i nsti tuti on l ocated i n i nl and Southern Cal i f orni a and i s part
of the Seventh-day Adventi st system of hi gher educati on. La Si erra enrol l s approxi matel y 2,000 students
i n i ts Col l ege of Arts and Sci ences and three prof essi onal school s.
La Si erra of f ers graduate and undergraduate curri cul a i n appl i ed and l i beral arts and sci ences,
busi ness and management, rel i gi on, and programs f or prof essi onal educati on i n f ul f i l l ment of
requi rements f or teachi ng credenti al s.
La Si erra Li brary, Museums, Observatory, Arboretum, Brandstater Gal l ery, MI COL computi ng
l aboratory, Learni ng Support and Testi ng Center, Hancock and Stahl Centers, and other campus resources
f aci l i tate i ntel l ectual pursui ts. Physi cal f i tness i s encouraged on campus by such acti vi ti es as i ntramural
and varsi ty sports, physi cal educati on courses, and by three swi mmi ng pool s, a f i tness center, track,
tenni s, basketbal l , and vol l eybal l courts.
La Sierras campus is located at 4500 Ri verwal k Parkway, Ri versi de, Cal i f orni a, and i s si tuated
on 300 acres owned by La Si erra.
Membership
La Si erra i s a membershi p corporati on under the Cal i f orni a non-prof i t corporati ons code. The
members, i denti f i ed i n the Byl aws of La Si erra as the Constituent Membership, have the power to elect
the Board of Trustees and exerci se the other powers of members of a non-prof i t corporati on under the
Cal i f orni a Corporati ons Code.
The Byl aws of La Si erra provi de that the Consti tuent Membershi p shal l al l be members of the
Seventh-day Adventi st Church (except f or up to ten percent (10%) of the membershi p of the Board of
Trustees) and consi st of the f ol l owi ng:
A-2
(a) The members of the Executi ve Commi ttee of the Paci f i c Uni on Conf erence of Seventh-
day Adventi sts;
(b) Two (2) representati ves f rom the Ari zona Conf erence and three (3) representati ves each,
f rom the Southeastern Cal i f orni a and Southern Cal i f orni a conf erences;
(c) Members of the Board of Trustees of La Si erra;
(d) The vi ce presi dents and/or provost, chi ef f i nanci al of f i cer, chi ef student l i f e of f i cer, chi ef
devel opment of f i cer, and chi ef enrol l ment servi ces of f i cer of the Uni versi ty and the deans of the Col l ege
and School s of La Si erra;
(e) The chai r pl us f our addi ti onal representati ves el ected by the Academi c Senate, and the
chai r pl us two addi ti onal representati ves el ected by the Staf f Counci l ;
(f ) Two el ected representati ves of the Student Associ ati on;
(g) The presi dent of the al umni organi zati on of La Si erra, the presi dent-el ect, and the al umni
coordi nators f or each academi c enti ty of La Si erra.
Addi ti onal consti tuent members may be seated by a two-thi rds (2/3) vote of the consti tuent
members as def i ned above.
The Consti tuent Membershi p consti tutes a nomi nati ng commi ttee f rom among i ts membershi p to
name i ndi vi dual s to be consi dered f or posi ti ons on the Board of Trustees of La Si erra. Thi s nomi nati ng
commi ttee i ncl udes i n i ts consi derati on the names of persons suggested by the Membershi p Commi ttee of
the Board of Trustees of La Si erra.
Board of Trustees
The acti vi ti es, busi ness, and af f ai rs of La Si erra i s managed and al l corporate powers are
exerci sed by, or under the di recti on of , the Board of Trustees. The Board of Trustees has a voti ng
membershi p of twenty-three (23), at l east ni nety percent (90%) of whom are requi red by the Byl aws to be
members of the Seventh-day Adventi st Church.
The Byl aws def i ne the appoi ntment, f uncti on and responsi bi l i ti es of the Board of Trustees. The
Board shal l have a membershi p of twenty-three members. Of the twenty-three, ei ght are appoi nted due to
posi ti ons wi thi n the Paci f i c Uni on Conf erence of Seventh-day Adventi sts, the presi dent of La Si erra i s an
appoi nted trustee, and f ourteen (14) other persons are el ected by the Consti tuent Membershi p to no more
than two consecuti ve si x-year terms unl ess the Consti tuent Membershi p approves an excepti on upon
speci al request by the Board of Trustees. At l east ni ne (9) of the trustees shal l not be empl oyed by any
enti ty of the Seventh-day Adventi st Church.
The Board normal l y meets three ti mes a year and has f our standi ng commi ttees i ncl udi ng the
Academi c Programs and Personnel Commi ttee; Fi nance, Budget and Audi t Commi ttee; Devel opment and
Membershi p Commi ttee; and Student Af f ai rs Commi ttee.
A-3
As of Jul y 1, 2008, the members of the Board of Trustees and thei r pri mary af f i l i ati ons are as
f ol l ows:
Ri cardo Graham, D.Mi n., Chai r
Pr esi dent
Paci fi c Uni on Confer ence of Seventh-day
Adventi sts (SDA)
Westl ake Vi l l age, Cal i for ni a
Judy St. John, C.P.A., Vi ce Chai r
Steel e & St. John, LLP
Thousand Oaks, Cal i for ni a
Randal R. Wi sbey, D.Mi n., Secretary
Pr esi dent, La Si er r a Uni ver si ty
Ri ver si de, Cal i for ni a
Tony Anobi l e, M.A.
Pr esi dent
Ar i zona Confer ence of SDA
Scottsdal e, Ar i zona
Theodore Benson
Tr easur er
Paci fi c Uni on Confer ence of SDA
Kel l y Bock, Ph.D.
Di r ector of Educati on
Paci fi c Uni on Conf erence of SDA
Westl ake Vi l l age, Cal i f orni a
Al varo Bol i var, M.D.
Pr i vate Sur gi cal Pr acti ce
Chi ef of Sur gi cal Ser vi ces
Communi ty Hospi tal of
San Ber nar di no, Cal i for ni a
Larry L. Cavi ness, M.Di v.
Pr esi dent
Souther n CA Confer ence of SDA
Gl endal e, Cal i for ni a
Henry Coi l , J.D.
Reti r ed Busi nessman, Communi ty
Leader
Consul tant to the Pr esi dent/CEO
Ti l den-Coi l Constr uctor s, I nc.
Leonard Darnel l , B.S.
Busi nessman
Redl ands, Cal i for ni a
Lowel l Hanks, M.H.A.
Executi ve Di r ector
Medi ci ne Educati on & Resear ch
Foundati on
San Di ego, Cal i for ni a
Karen Hansberger, M.D.
Pr i vate Medi cal Pr acti ce
Loma Li nda, Cal i for ni a
Donal d Kanen, B.A.
Owner
Rocky Mountai n Heal thcar e
Management, I nc.
Al amosa, Col or ado
Carl a Li dner Baum, D.D.S., M.S.
Denti st and Communi ty Vol unteer
Shel i a Marshal l -McLean, M.F.C.T.
Pr i vate Mar r i age, Fami l y, and Chi l d
Ther apy Pr acti ce
Cor ona, Cal i for ni a
Geral d McI ntosh, M.P.A.
Entr epr eneur , Busi ness Consul tant
Houston, Texas
Bradf ord Newton, D.Mi n.
Secr etar y
Dougl as Ni es, Ph.D.
Pr i vate Psychol ogy Pr acti ce
Gl endal e, Cal i for ni a
Geral d Peni ck, M.A
Pr esi dent
Southeaster n CA Confer ence of SDA
Kathryn Prof f i tt, R.D.H.
Busi nesswoman and for mer Uni ted
States Ambassador to Mal ta
Fountai n Hi l l s, Ar i zona
Marta Kal bermatter Tooma, D.D.S.
Phi l anthr opi st and Denti st
Laguna Beach, Cal i for ni a
Arnol d Truj i l l o, M.A.
Vi ce Pr esi dent
Ronal d Zane, D.D.S.
Reti r ed Denti st

A-4
Management
The f ol l owi ng tabl e sets f orth the names of the si x pri nci pal executi ve of f i cers of La Si erra, al ong
wi th thei r posi ti ons and tenure i n of f i ce. A bri ef statement of the duti es and background of each of the
of f i cers appears f ol l owi ng the tabl e.
Name

Position
Position
Since

Randal R. Wi sbey, D.Mi n. Presi dent and Chi ef Executi ve Of f i cer 2007
Warren C. Trenchard, Ph.D. Provost 2004
Davi d A. Geri gui s, MBA Vi ce Presi dent f or Fi nanci al Admi ni strati on 2001
Jef f ry M. Kaatz, DMA Vi ce Presi dent f or Advancement 2001
Yami l eth Bazan, MA Vi ce Presi dent f or Student Li f e 2007
Davi d R. Lof thouse, BS Vi ce Presi dent f or Enrol l ment 2007

Randal R. Wisbey, Presi dent and Chi ef Executi ve Of f i cer of La Si erra and a member of i ts Board
of Trustees, i s responsi bl e f or the overal l operati ons of La Si erra. Whi l e La Si erra traces i ts hi story as an
educati onal i nsti tuti on back to 1922, Dr. Wi sbey became i ts thi rd presi dent i n i ts 18-year hi story si nce i t
became an i ndependent i nsti tuti on once agai n i n 1990. He succeeds Lawrence T. Geraty, who served as
Presi dent f rom 1993 to 2007, and Fri tz Guy, who served f rom 1990 to 1993. Dr. Wi sbey recei ved hi s
doctorate i n 1990 f rom Wesl ey Theol ogi cal Semi nary i n Washi ngton, DC. Pri or to j oi ni ng La Si erra, Dr.
Wi sbey served as presi dent of Col umbi a Uni on Col l ege, Takoma Park, MD, f or 7 years and Canadi an
Uni versi ty Col l ege i n Western Canada f or two years.
Warren C. Trenchard, Provost of La Si erra, serves as the chi ef academi c of f i cer and the chi ef
operati ng of f i cer. I n thi s rol e, Dr. Trenchard carri es broad responsi bi l i ty f or the academi c programs and
ensures the fulfillment of La Sierras academic mission and pl ans. Dr. Trenchard serves as a member of
the Academi c Programs and Personnel Commi ttee of the Board of Trustees. Dr. Trenchard, who recei ved
the Doctor of Phi l osophy degree f rom La Si erra of Chi cago i n 1981, was appoi nted Provost i n Jul y 2004.
He had previ ousl y served La Si erra as Seni or Assi stant to the Presi dent and Prof essor i n the School of
Rel i gi on. Pri or to comi ng to La Si erra, Dr. Trenchard served as Vi ce Presi dent f or Academi c
Admi ni strati on at Canadi an Uni versi ty Col l ege i n Al berta, Canada.
David A. Geriguis, Vi ce Presi dent f or Fi nanci al Admi ni strati on of La Si erra, i s responsi bl e f or
the management of f i nanci al and operati onal f uncti ons of La Si erra, i ncl udi ng accounti ng, i nvestment
management, purchasi ng f uncti ons, human resources, f aci l i ti es management, student f i nanci al servi ces,
and busi ness operati ons. He serves as a member of the Fi nance, Budget and Audi t Commi ttee of the
Board of Trustees. Mr. Geri gui s recei ved hi s MBA degree f rom Cal i f orni a State Uni versi ty i n 1996. Mr.
Geri gui s came to La Si erra i n 1993 af ter spendi ng hi s earl i er career i n the f or-prof i t worl d cul mi nated by
worki ng as the U.S. CFO of a mul ti nati onal corporati on.
Jeffry M. Kaatz, Vi ce Presi dent f or Advancement of La Si erra, is responsible for La Sierras
f undrai si ng ef f orts, al umni rel ati ons, i nternal and external publ i cati ons, and medi a rel ati ons. Dr. Kaatz
serves as a member of the Devel opment Commi ttee of the Board of Trustees. He hol ds a bachel or degree
f rom Loma Li nda Uni versi ty and a masters and doctorate degree f rom La Si erra of Southern Cal i f orni a.
He j oi ned La Si erra i n 1988 as an Assi stant Prof essor and Chai r f or the Department of Musi c.
Yamileth Bazan, Vi ce Presi dent f or Student Li f e of La Si erra, i s responsi bl e i n hel pi ng students
succeed academi cal l y as she makes sure the servi ces provi ded to La Si erra students stay rel evant to a
changi ng student popul ati on. Ms. Bazan oversees al l student servi ces and acti vi ti es, recreati onal sports,
A-5
resi denti al l i f e, uni versi ty mi ni stry, and campus securi ty. Ms. Bazan i s a member of the Student Af f ai rs
Commi ttee of the Board of Trustees. She recei ved a Masters of Arts degree f rom La Sierras School of
Educati on i n 2001. Pri or to j oi ni ng La Si erra, Ms. Bazan was Associ ate Youth Di rector f or the
Southeastern Cal i f orni a Conf erence of Seventh-day Adventi sts.
David R. Lofthouse, Vi ce Presi dent f or Enrol l ment of La Si erra, i s responsi bl e f or worki ng wi th a
team of counsel ors to recrui t and admi t el i gi bl e students to La Si erra. Mr. Lof thouse recei ved a Bachel or
of Sci ence degree wi th emphasi s i n Communi cati ons f rom Andrews Uni versi ty, Berri en Spri ngs,
Mi chi gan. Mr. Lof thouse i s a member of the Student Af f ai rs Commi ttee of the Board of Trustees. Pri or to
j oi ni ng La Si erra, he was the Dean f or Enrol l ment Management at Ketteri ng Col l ege of Medi cal Arts i n
Ketteri ng, Ohi o.
Faculty
The f ol l owi ng tabl e ref l ects the number of f ul l -ti me prof essors, associ ate prof essors, and assi stant
prof essors and i nstructors f or the past f i ve academi c years as of the Fal l Quarter f or such academi c year.
FACULTY SUMMARY
Fall
Quarter

Professors
Associate
Professors
Assistant
Professors

I nstructors

Total

2003 39 29 22 2 92
2004 40 27 28 2 97
2005 37 27 31 1 96
2006 35 29 32 4 100
2007 38 28 33 0 99

The f ul l -ti me f acul ty as of the Fal l Quarter of 2007 was compri sed of 38 prof essors, 28 associ ate
prof essors, and 33 assi stant prof essors. 82 percent of the f ul l ti me f acul ty has obtai ned the Ph.D. or other
termi nal degrees appropri ate to thei r di sci pl i nes. I n addi ti on to i ts f acul ty members, La Si erra al so
empl oyees approxi matel y 209 f ul l -ti me and 25 part-ti me staf f members.
Academic Programs
As a communi ty of l earni ng that i s al so a communi ty of f ai th, La Si erra f ul f i l l s i ts mi ssi on by
engagi ng i n three ki nds of acti vi ty: i t educates undergraduate and graduate students; i t promotes research
i n the areas i n whi ch i t of f ers i nstructi on; and i t contri butes to the good of the l arger soci ety.
La Si erra educates i ts students through a broad curri cul um of secul ar subj ects i n the l i beral arts
and sci ences and i n sel ected prof essi onal areas. I t promotes research through encouragi ng and f aci l i tati ng
ori gi nal i nvesti gati on, cri ti cal ref l ecti on, and schol arl y publ i cati on. I t serves i ts vari ous communi ti es
through adul t educati on, resource centers, cul tural events, non-techni cal publ i cati ons, and prof essi onal
consul tati on. Among these vari ed acti vi ti es, La Si erra mai ntai ns as a vi tal concern the educati on of i ts
undergraduate students.
Thus La Si erra does the thi ngs most other uni versi ti es do: al l i nf ormati on and course work used
to teach secul ar subj ects are neutral wi th respect to rel i gi on. But La Si erra does these thi ngs as the f rui ti on
of i ts Adventi st heri tage and commi tment, even as i t wel comes students f rom al l rel i gi ous and cul tural
backgrounds. La Sierras religious ori entati on provi des a perspecti ve f or i ts educati onal programs and
proj ects, a moti vati on f or i ts i ntel l ectual vi tal i ty and ri gor, a f ramework f or i ts moral val ues and l i f estyl e,
A-6
and a basi s f or i ts soci al consci ousness and publ i c servi ce. Convi nced that God i s the author of al l truth,
La Si erra mai ntai ns an atmosphere of f reedom and openness f or i ntel l ectual expl orati on and expressi on.
As La Si erra does i ts work of teachi ng, research, and servi ce, i t stri ves to exempl i f y i ts i deal s of
educati onal comprehensi veness, communi ty i nteracti on, and i ntel l ectual excel l ence.
La Si erra i s compri sed of a col l ege and three school s: the Col l ege of Arts and Sci ences, the
School of Busi ness, the School of Educati on, and the School of Rel i gi on, whi ch of f er undergraduate,
graduate and/or prof essi onal programs of study.
College of Arts and Sciences. The College of Arts and Sciences (the College) offers 13
Bachel or of Arts degrees, 12 Bachel or of Sci ence degrees, a Bachel or of Musi c degree, a Bachel or of
Soci al Work degree, and a Bachel or of Fi ne Arts degree.
The Col l ege has as i ts f undamental purpose to provi de an envi ronment f or l earni ng and personal
growth that chal l enges and enabl es students to devel op thei r i ntel l ects and thei r i ntel l ectual ski l l s, to
exami ne thei r val ues, and to mature i n character and i n Chri sti an commi tment. The l i beral arts study i n
whi ch a person may carry on an i ndi vi dual search f or truth and val ue i s j oi ned i n some di sci pl i nes to
prof essi onal study.
The Col l ege i s a center f or the expressi on of the val ues of the l i beral arts wi thi n La Si erra. The
Col l ege i denti f i es i ts mi ssi on as an educati onal i nsti tuti on consi stent wi th the l arger mi ssi on of the
Seventh-day Adventi st Church, and i n thi s mi ssi on i t i s not onl y servi ng the church but i s al so one of the
ways that the church serves. From i ts graduates i s drawn a creati ve cadre of church workers; i ts f acul ty
consti tute a resource of tal ent and i nf ormati on to church and soci ety; and i ts students and f acul ty f orm a
communi ty f or the expressi on and devel opment of Chri sti an val ues that ul ti matel y ai d i n human heal i ng.
Commi tment to excel l ence i n schol arshi p must al ways be expressed i n terms of i ndi vi dual goal s
and abi l i ti es. The Col l ege commi tment i s to provi de, as f ar as possi bl e, opportuni ti es f or persons of vari ed
backgrounds and abi l i ti es to devel op to thei r maxi mum potenti al . For al l students, broadl y based general
studi es are bal anced by depth i n a chosen maj or. Col l ege graduates expect to be abl e to enter prof essi ons
adequatel y prepared by the cri teri a of the l i censi ng board or accredi ti ng associ ati on of thei r di sci pl i ne or
to be prepared to enter the graduate or prof essi onal school of thei r choi ce. Wi thi n the scope of i ts
of f eri ngs the Col l ege desi gns curri cul a to meet these needs wi th di sti ncti on.
School of Business. The School of Business (the SB) recognizes the importance of business
educati on i n cul ti vati ng the devel opment of students as whole persons. It educates studentsits own
majors and othersfor active citizenship, assisting i n thei r moral devel opment, f aci l i tati ng thei r
awareness of cul ture, and hel pi ng them to i ntegrate thei r work and the rest of thei r l i ves. I t chal l enges
them to understand work as a potenti al vocati on, a uni que responsi bi l i ty they can recei ve as a gi f t f rom
God and an opportuni ty f or servi ce.
Servi ce i s central to the SB curri cul um. By di rectl y assi sti ng peopl e i n need, engagi ng i n soci al
entrepreneurshi p or communi ty educati on, and organi zi ng or conducti ng pol i cy anal ysi s, students come to
understand the si gni f i cance of thei r studi es and devel op greater empathy.
The SBs curricula emphasize workplace spirituality, soci al entrepreneurshi p, and ethi cs. The
f ocused study of these themes as part of the busi ness curri cul um f osters i ntel l ectual devel opment and
expands students moral and spiritual horizons. Servi ce-l earni ng acti vi ti es si mul taneousl y express i ts
commitments to excellence in the Schools areas of di sti ncti ve competence and provi de students wi th the
chance to devel op appropri ate habi ts and ski l l s.
A-7
School of Education. The School of Educations mission is to prepare individuals for exemplary
servi ce i n the vari ous f i el ds of educati on to the end that thei r students may real i ze thei r f ul l est potenti al i n
servi ce to God and humani ty. I ts goal s are:
to assist pre-service and in-service educational personnel i n bui l di ng a sound phi l osophy of
educati on that ref l ects Chri sti an val ues and ethi cal pri nci pl es.
to enable the student to implement basic princi pl es of educati on whi ch ref l ect sound theori es
and practi ces.
to motivate investigative curiosity and a desi re to parti ci pate i n the advancement of
knowl edge.
to help develop skills in educational research.
Curri cul a are of f ered f or the degrees: Master of Arts i n Teachi ng, Master of Arts, Master of Arts
i n Speci al Educati on, Speci al i st i n Educati on, and Doctor of Education. Post baccalaureate (or fifth-
year) credential programs and a certificate program are also available. The credential programs are
structured to f ul f i l l requi rements f or teachi ng and servi ce credenti al s prescri bed by the North Ameri can
Di vi si on of Seventh-day Adventi sts Department of Educati on and/or the Cal i f orni a Commi ssi on on
Teacher Credenti al i ng.
School of Religion. The School of Rel i gi on provi des general rel i gi ous studi es f or al l students i n
every school of La Si erra. Based upon the central Chri sti an bel i ef i n one God, Creator of the worl d and
Redeemer of manki nd, these studi es expl ore the Bi bl e as the i nspi red Word of God, provi de i nstructi on i n
Chri sti an f ai th, exami ne the hi story and mi ssi on of the church, and of f er gui dance f or the Chri sti an l i f e.
But beyond the general educati on needs of La Si erra, the School of Rel i gi on al so meets academi c
and prof essi onal needs of speci al i sts by provi di ng (a) the maj or i n rel i gi ous studi es, (b) the pre-semi nary
program, and (c) three graduate programs: the Master of Arts i n Rel i gi ous Studi es, the Master of Pastoral
Studi es, and the Master of Di vi ni ty.
Accreditation
La Si erra i s accredi ted by the Accredi ti ng Commi ssi on f or Seni or Col l eges and Uni versi ti es of
the Western Associ ati on of School s and Col l eges (WASC).
La Si erra i s al so accredi ted by the Adventi st Accredi ti ng Associ ati on (AAA), the accredi ti ng
associ ati on of Seventh-day Adventi st school s, col l eges, and uni versi ti es.
La Si erra i s a member of the Counci l f or Hi gher Educati on Accredi tati on, the Associ ati on of
Ameri can Col l eges and Uni versi ti es, the Nati onal Associ ati on of I ndependent Col l eges and Uni versi ti es,
and the Associ ati on of I ndependent Cal i f orni a Col l eges and Uni versi ti es. Approval of programs i s
mai ntai ned wi th the Cal i f orni a Commi ssi on on Teacher Credenti al i ng. The undergraduate program i n
Soci al Work i s f ul l y accredi ted by the Counci l on Soci al Work Educati on, and the Nati onal Associ ati on
of School s of Musi c accredi ts the musi c degrees.
Curri cul a are of f ered l eadi ng to the f ol l owi ng degrees: Bachel or of Arts, Bachel or of Fi ne Arts,
Bachel or of Musi c, Bachel or of Sci ence, Bachel or of Soci al Work, Master of Arts, Master of Busi ness
Admi ni strati on, Master of Di vi ni ty, Master of Pastoral Studi es, Speci al i st i n Educati on, and Doctor of
Educati on.
A-8
FI NANCI AL CONDI TI ON OF LA SI ERRA UNI VERSI TY
The f i nanci al statements of La Si erra are presented i n Appendi x B, and compri se audi ted
statements of the f i scal years ended June 30, 2007 and 2006. La Si erra mai ntai ns i ts accounts i n
accordance wi th general l y accepted accounti ng pri nci pl es as appl i cabl e to educati onal i nsti tuti ons. See
Appendix B Audited Financial Statements of La Sierra University.
Statement of Operations
The f ol l owi ng tabl e provi des a statement of unrestri cted acti vi ti es and changes i n unrestri cted net
assets of La Si erra f or each of the f i scal years ended June 30, 2005, 2006 and 2007 and f or the el even
months ended May 31, 2007 and 2008. Management has deri ved the f i nanci al data f or La Si erra f or the
f i scal years ended June 30, 2005, 2006 and 2007 from its audited financial statements. La Sierras
audi ted f i nanci al statements f or the two f i scal years ended June 30, 2007 have been audi ted by i ts
auditors, as stated in the independent auditors report i ncl uded therei n, and are i ncl uded i n Appendi x B.
The f i nanci al statements i ncl uded i n Appendi x B, i ncl udi ng the notes thereto, are an i ntegral part hereof
and shoul d be read i n thei r enti rety. The f i nanci al i nf ormati on f or the el even months ended May 31, 2007
and 2008 has been deri ved by La Si erra management f rom unaudi ted i nteri m f i nanci al statements whi ch
i ncl ude al l adj ustments whi ch La Si erra management consi ders necessary to present such i nf ormati on i n
conf ormi ty wi th general l y accepted accounti ng pri nci pl es and on a basi s consi stent wi th the audi ted
f i nanci al statements. The resul ts of operati ons f or the el even months ended May 31, 2008 are not
necessari l y i ndi cati ve of the operati ng resul ts to be expected f or the enti re f i scal year endi ng June 30,
2008.
The audi ted f i nanci al statements i ncl uded as Appendi x B al so contai n i nf ormati on rel ated to
temporarily restricted assets and permanently restricted assets. Since these assets are restricted to a
purpose i nconsi stent wi th thei r use f or the payment of debt servi ce on the Bonds, i nvestors shoul d not
expect that any of these assets wi l l be avai l abl e f or debt servi ce.
[ Remai nder of page i ntenti onal l y l ef t bl ank]
A-9
STATEMENT OF UNRESTRI CTED ACTI VI TI ES AND CHANGES I N
UNRESTRI CTED NET ASSETS
(I n Thousands of Dollars)
Fiscal Year
Ended June 30,
Eleven Months
Ended May 31,
2005 2006 2007 2007 2008

REVENUES AND OTHER SUPPORT:
Net Tui ti on and Fees $21,242 $22,803 $23,761 $22,448,936 $23,265,598
Grants and Contracts 3,962 5,216 4,164 3,281,679 2,786,723
Contri buti ons 106,908 791,281
I nvestment I ncome 1,177 1,611 5,074 (57,014) (796,166)
Auxi l i ary & I ndependent Operati ons
Revenue 6,425 7,223 7,663 7,082,362 7,797,643
Other 1,510 2,026 1,630 1,334,853 2,184,809
Total Revenues 34,316 38,879 42,292 34,197,724 36,029,888

Net Assets Rel eased From
Restri cti ons

1,508

2,970

2,392

--

--
Total Revenues and Other Support 35,824 41,849 44,684 34,197,724 36,029,888

EXPENSES:
Program Expenses:
I nstructi onal and Research 11,996 13,305 16,702 13,315,755 13,797,320
Student Servi ce 3,743 3,801 4,278 3,788,511 3,928,221
Academi c Support 3,325 3,745 4,150 5,150,341 5,733,639
I nsti tuti onal Support & Devel opment 8,347 8,784 7,747 6,724,152 6,846,063
Auxi l i ary & I ndependent Operati ons 5,925 7,852 6,106 4,809,833 5,559,159
Total Expenses 33,336 37,487 38,983 33,788,593 35,864,402

OTHER:
Nonrecurri ng-gai n on sal e of assets 12,173 6,865 10,236 10,356,391 --

UNRESTRICTED NET ASSETS
Begi nni ng of Year 29,638 44,299 55,527 55,526,639 71,463,693

UNRESTRICTED NET ASSETS
End of Year $44,299 $55,527 $71,464 $66,292,161 $71,629,179

[ Remai nder of page i ntenti onal l y l ef t bl ank]
A-10
Tuition and F ees. The l argest component of the Revenues i s tui ti on and f ees, whi ch are a
function of tuition rates and enrollments. La Sierras tui ti on revenues have grown over the past f i ve years
due to i ncreases i n both components.
Tuition Rates. La Si erra has rai sed i ts tui ti on rates i n each of the past f i ve years and bel i eves that
i ts rates remai n very competi ti ve compared to those of other pri vate i nsti tuti ons wi th whi ch La Si erra
competes f or students. The f ol l owi ng tabl e sets f orth the tui ti on charged to f ul l -ti me students f or the past
f our years and the current academi c year:
TUI TI ON RATES

Academic
Year
Undergraduate
Full Time
Tuition and Fees

2003-2004 $16,746
2004-2005 $17,790
2005-2006 $19,083
2006-2007 $20,634
2007-2008 $21,876

Student Enrollment. La Sierras enrollment has grown from 1,518 to 1,686 full time equivalent
(FTE) students over the l ast f i ve academi c years. La Si erra has conti nued to mai ntai n the academi c
qual i ty of each i ncomi ng cl ass, as ref l ected by average hi gh school grade poi nt average and SAT scores.
La Si erra bel i eves that i ts l ocati on i n one of the l argest popul ati on centers i n the country, pl ans i n
recrui tment and marketi ng, and i ts management and f i scal i nvestment i n student retenti on i ni ti ati ves, wi l l
enabl e i t to real i ze i ts goal of steady enrol l ment growth up to 2,500 students i n the next f our to f i ve years.
The following table sets forth La Sierras full time equi val ent f al l quarter enrol l ment f or the past
f our years and the current academi c year together wi th the number of degrees conf erred i n each such year
compl eted.
ENROLLMENTS AND DEGREES
Enrollments Degrees Awarded
Academic Year Under-Graduate Graduate Total Bachelor Graduate Total
2002-2003 1321 197 1518 207 105 312
2003-2004 1462 243 1705 193 114 307
2004-2005 1495 219 1714 197 185 382
2005-2006 1535 207 1742 201 133 334
2006-2007 1468 218 1686 215 121 336

Full time equivalent enrollment is computed by di vi di ng the total enrol l ed uni ts f or part-ti me
students by 12 and addi ng the resul t to the number of f ul l -ti me students.
A-11
La Si erra attracts students f rom a wi de vari ety of hi gh school s and other hi gher educati on
i nsti tuti ons. Approxi matel y 75 percent of La Si erras students are from California, 15 percent are from
other states and 13 percent are f rom outsi de the Uni ted States. Approxi matel y 77 percent of the students
are under the age of 25, whi l e 22 percent are age 25-54, and one percent of the student popul ati on i s age
55 and over. The f ol l owi ng tabl es set f orth appl i cati ons, admi ssi ons and new enrol l ments f or the
undergraduate and graduate programs f or the l ast f i ve academi c years as of the Fal l Quarter f or such
academi c year.
APPLI CATI ON POOLS
Undergraduate
Offered Selectivity
Fall Quarter Applications Admission Ratio Enrollment

2003 1644 857 52.1% 628
2004 1748 975 55.8% 574
2005 1714 1004 58.6% 582
2006 1609 891 55.4% 556
2007 1674 879 52.5% 530

Graduate
Offered Selectivity
Fall Quarter Applications Admission Ratio Enrollment

2003 227 115 50.7% 106
2004 256 137 53.5% 73
2005 247 138 55.9% 104
2006 248 137 55.2% 88
2007 273 136 49.8% 95

Scholarships. The following table shows La Sierras total grants f or al l students, graduate and
undergraduate, f or the past f i ve academi c years.
FI NANCI AL AI D PROGRAMS
(I n Thousands)
Grants
California State Federal La Sierra
Academic Year Programs Assistance Expenditures
2002-2003 $2,650 $2,319 $5,513
2003-2004 $3,158 $2,589 $6,023
2004-2005 $3,274 $2,416 $6,345
2005-2006 $3,283 $2,273 $6,835
2006-2007 $2,593 $2,532 $7,826

A-12
A significant number of La Sierras students depend on sources of student f i nanci al ai d other than
La Si erra to pay tui ti on f ees and expenses. The maj ori ty of such ai d comes f rom state and f ederal
governmental sources. The conti nued avai l abi l i ty of those f unds i s conti ngent upon conti nued l egi sl ati ve
support.
Grants, Contributions and Pledges. La Si erra i s i n the mi dst of a f i ve-year capi tal campai gn. I t
has achi eved about 50% of i ts $35 mi l l i on target. However, the l evel and f l ow of gi f ts i s subj ect to
f l uctuati on. A successf ul f undrai si ng ef f ort i s an i mportant strategic objective of La Sierra. See Fund
Raising below. However, since these amounts will consi st predomi nantl y of restri cted assets, they wi l l
not be avai l abl e f or the payment of debt servi ce on the Bonds.
Auxiliary & I ndependent Operations Revenue. Auxi l i ary & I ndependent Operati ons revenues
are generated pri nci pal l y f rom room and board f ees. La Si erra attempts to operate i ts auxi l i ary enterpri ses
and i ndependent operati ons on a better than break-even basi s, af ter i ncl udi ng charges f or i nterest,
depreci ati on and f aci l i ti es mai ntenance.
The f ol l owi ng tabl e sets f orth the combi ned room and board charges f or the maj ori ty of
undergraduate uni versi ty resi dents f or the past f our years and the current academi c year. Approxi matel y
653 students l i ve on campus wi th the resi dence hal l s at 75% of capaci ty.
ROOM AND BOARD FEES
Academic
Year
Per Academic
Year

2002-2003 $4,302
2003-2004 $4,680
2004-2005 $4,902
2005-2006 $5,244
2006-2007 $5,874

Expenses. The most si gni f i cant categori es of expense are i nstructi on, academi c support, student
servi ces, i nsti tuti onal support, and auxi l i ary enterpri ses. I nstructi on expenses i ncl ude pri nci pal l y f acul ty
and academi c staf f sal ari es and benef i ts and other expenses rel ated to the operati ons of the maj or
academi c di vi si ons. Academi c support expenses i ncl ude Deans offices, library resources, advising and
ori entati on and other general academi c expenses. Student servi ces expenses i ncl ude regi strati on,
admi ssi ons, f i nanci al ai d admi ni strati on, psychol ogi cal and heal th counsel i ng and career gui dance.
I nsti tuti onal support i ncl udes expenses rel ated to executi ve management and such operati ons as
i nf ormati on technol ogy, f und rai si ng, uni versi ty publ i cati ons, al umni acti vi ti es, l egal and audi t f uncti ons,
empl oyee benef i ts, and other si mi l ar expenses, whi ch benef i t La Si erra as a whol e. Auxi l i ary enterpri se
expenses i ncl ude the costs of provi di ng room and board to students.
Liabilities. La Sierras liabilities at June 30, 2006 and 2007 are shown on the Statement of
Fi nanci al Posi ti on i ncl uded i n La Si erras financial statements set f orth i n Appendi x B and the Notes
thereto. Such l i abi l i ti es amounted to $33,445,222, i ncl udi ng a mortgage on the Thai ne B. Pri ce Sci ence
Compl ex of $17,456,177, whi ch wi l l be ref unded wi th proceeds of the Bonds. The remai nder of the
l i abi l i ti es consi sted of accounts payabl e and accrued l i abi l i ti es, def erred revenue and f ederal student l oan
f unds. La Si erra al so has two unsecured l i nes of credi t total i ng $5,500,000, of whi ch l ess than $1,700,000
was outstandi ng as of June 30, 2007 and $470,000 as of March 30, 2008.
A-13
On October 28, 2004, La Si erra entered i nto an i nterest rate swap agreement wi th a swap
counterparty. The ef f ecti ve date of the swap was February 2, 2006 and the termi nati on date i s February 2,
2021. The i ni ti al noti onal amount was $12,000,000; and at June 30, 2007 and 2006, the noti onal amount
was $10,938,829 and $11,733,332, respecti vel y. On August 25, 2006, La Si erra and the same swap
counterparty entered i nto a second swap agreement wi th a noti onal amount of $4,000,000. The ef f ecti ve
date of the agreement was September 4, 2007 and the termi nati on date i s September 4, 2012. La Si erra
expects to termi nate both swap agreements on or bef ore the i ssuance of the Bonds and expects to pay
f rom i ts own equi ty a termi nati on f ee to the swap counterparty of between $400,000 and $600,000.
Fund Raising
I n November 2005, La Si erra entered i nto a comprehensi ve f undrai si ng capi tal campai gn wi th a
goal of rai si ng $35 mi l l i on that wi l l provi de f aci l i ti es constructi on and renovati on f undi ng. I n addi ti on,
La Si erra seeks to rai se f unds f or schol arshi p endowments, f acul ty chai rs, and academi c programs.
Endowment
La Sierras endowment consists of assets that are permanentl y restri cted by the donor, wi th the
pri nci pal of the gi f t kept i n perpetui ty and the i ncome avai l abl e to support acti vi ti es as desi gnated by the
donor, and assets that have been desi gnated by the Board as quasi endowment assets. La Sierras quasi-
endowment has i ncreased over the l ast f our years as a resul t of sal e of surpl us l and and ground l eases,
gi f ts and i nvestment perf ormance. Market values for La Sierras endowment as of June 30 for the past
five fiscal years are shown below. La Sierras investment income and gains distributed from its
endowment f und are determi ned annual l y accordi ng to an endowment spendi ng pol i cy approved by the
I nvestment Commi ttee and the Board of Trustees. Any i nvestment i ncome, i ncl udi ng real i zed gai ns, i n
excess of the spendi ng pol i cy i s rei nvested i n the endowment.
A si gni f i cant uncertai nty f aci ng La Si erra i s the i mpact of the f i nanci al markets upon the
investments in La Sierras endowment. While La Sierra has a di versi f i ed i nvestment strategy desi gned f or
l ong-term appreci ati on, there wi l l undoubtedl y be peri odi c negati ve i mpacts upon the market val ue of
such i nvestments due to vol ati l i ty i n the f i nanci al markets.
TOTAL ENDOWMENT
MARKET VALUE
2004 $25,579
2005 $30,264
2006 $40,899
2007 $53,551
La Sierras endowment investments are overseen by the Investment Committee and advised by
Cambri dge & Associ ates, an I nvestment Consul ti ng f i rm, and are i nvested pri nci pal l y i n a prof essi onal l y
managed pool of securi ti es. The total return on La Si erras pooled investments as of June 30 for the past
f our f i scal years i s shown bel ow.
ENDOWMENT POOL RETURNS
2004 7.19%
2005 5.94%
2006 6.68%
2007 15.08%
A-14
Ground Leases
I n May, 2003, La Si erra entered i nto a ground l ease of 588 apartment homes wi th Fai rf i el d Col l ett
L.P. I n 2006, Fai rf i el d Col l ett, L.P. sol d the i mprovements to Sequoi a Equi ti es, I nc. who then assumed
the l ease. The tenant i s l easi ng real property f rom La Si erra. The l ease requi res quarterl y rent payments
over the 99 year l ease term.
Future mi ni mum rental s to be recei ved are:
2007-08 $ 1,009,596
2008-09 1,009,596
2009-10 1,009,596
2010-11 1,009,596
2011-12 1,009,596
Thereaf ter 90,863,640
$95,911,620

On March 15, 2007, La Si erra entered i nto a ground l ease wi th Ri verwal k Commons LP. The
Tenant i s l easi ng real property of approxi matel y 26 acres f or the purpose of constructi ng resi denti al and
commerci al bui l di ngs and other rel ated i mprovements. Tenant wi l l pay $478,561 f or the f i rst year and
ei ther $957,122 or $1,435,683 f or the second year, based on bui l di ng permi t acqui si ti on, $1,435,683 per
year f or the thi rd through tenth years, and $1,579,251.30 per year f rom year el even through ni nety-ni ne.
I n addi ti on to the above payment schedul e, tenant wi l l begi n payi ng the greater of 3.0 percent of the gross
i ncome f or the previ ous cal endar year or the percent i ncrease of the Consumer Pri ce I ndex mul ti pl i ed by
the gross i ncome f or the previ ous cal endar year commenci ng Apri l 15, 2010.
Ri verwal k Commons LP has approached management of La Si erra and di scl osed f undi ng
di f f i cul ti es i n connecti on wi th i ts constructi on l oan. These f undi ng di f f i cul ti es have resul ted i n a
cessati on of constructi on si nce February 2008. Ri verwal k Commons LP has requested a 4-month rent-
def erral under the appl i cabl e ground l ease, to permi t i t to obtai n repl acement constructi on and/or take-out
f undi ng.
On August 4, 2008, the Fi nance Commi ttee of the Board of Trustees agreed to grant a 4-month
def erral of the rent to Ri verwal k Commons LP. The def erred payments pl us i nterest woul d be due on the
earl i er of (a) the f i rst draw f rom any new f i nanci ng, (b) a sal e or subl ease of the proj ect, or (c) March 31,
2009.
Plant Properties
I n 2006, La Si erra compl eted a comprehensi ve physi cal Master Pl an that was unani mousl y
approved by the Ci ty Counci l of the Ci ty of Ri versi de. La Sierras strategic plan is reflected in the Master
Pl an as i t rel ates to f aci l i ti es and addresses ci ti ng of new bui l di ngs, campus l and use di stri cts, auto
ci rcul ati on and parki ng, pedestri an and bi cycl e parki ng, open space network, communi ty ori ented
f aci l i ti es f or the vi sual and perf ormi ng arts, treatments of hi stori c structures, parki ng l ots and parki ng
structures on the campus, and desi gns f or compati bl e campus edges wi th adj acent nei ghborhoods. The
f i rst phase expects growth up to 2,500 students, the second, up to 5,000 students.
Over the l ast f ew years, La Si erra expanded i ts campus by i ncorporati ng approxi matel y 50 acres
of surpl us l and i nto a ceremoni al entrance, i ncl udi ng water f eatures and a def i ni ng scul pture. Athl eti c
f i el ds were constructed on both si des of the entrance. The Thai ne B. Pri ce Sci ence Compl ex, housi ng the
Bi ol ogy and Mathemati cs and Computer Sci ence departments, was compl eted i n 2006. Thi s bui l di ng
A-15
enhanced and expanded La Sierras educational facilities. In 2007 a maj or renovati on of the di ni ng
commons, thereby enhanci ng and upgradi ng the use of student l i f e f aci l i ti es, was undertaken. Proceeds
f rom the Bond i ssuance wi l l , i n addi ti on to rei mbursement of the exi sti ng l oan, f und constructi on of a
peri meter f ence around campus, mechani cal , pl umbi ng, el ectri cal , I T, and other i nf rastructure
i mprovements.
The f ol l owi ng tabl e sets f orth the Pl ant Properti es of La Si erra at the end of each of the l ast f our
f i scal years ended on June 30.
PLANT PROPERTI ES
2004 2005 2006 2007
Land $1,899 $1,983 $2,256 $2,196
Land I mprovements 4,765 9,975 10,691 11,050
Bui l di ngs 26,585 27,405 28,702 52,921
Constructi on i n progress 4,417 11,519 22,367 5,037
Equi pment 13,983 15,093 17,249 18,951
Subtotal 51,649 65,975 81,265 90,155
Less Accumul ated depreci ati on (30,216) (31,956) (34,100) (37,015)
Total $21,433 $34,019 $47,165 $53,140
Commitments and Contingencies
Leases. La Si erra l eases several copi ers and equi pment under l eases wi th monthl y payments
total i ng approxi matel y $2,484. Total expenses f or operati ng l eases were approxi matel y $29,808 and
$217,848 f or the years ended June 30, 2007 and 2006, respecti vel y.
Student Loans. La Si erra parti ci pates i n a f ederal l y f unded student l oan program whi ch requi res
that La Si erra compl y wi th certai n requi rements over l oan di sbursement, reporti ng, and col l ecti on.
Uni ted States government l oans ref undabl e, wi th a bal ance of $6,553,964 and $6,510,828 at
June 30, 2007 and 2006, respecti vel y, are ref l ected as a l i abi l i ty on the statement of f i nanci al posi ti on. No
al l owance f or uncol l ecti bl e l oan pri nci pal has been provi ded f or the outstandi ng bal ances, si nce La Si erra
may, subj ect to certai n restri cti ons and compl i ance wi th l oan program admi ni strati on requi rements, assi gn
the l oans to the U.S. Department of Educati on (DOE) f or col l ecti on.
Lease of Property. La Si erra entered i nto an agreement with a developer and a property owners
associ ati on on May 6, 2003 to l ease a water wel l . Water wi l l be extracted f or i rri gati on and mai ntenance
of devel oper and associ ati on property and to suppl y water to La Si erra. The term of the l ease i s f or 30
years f or $98,000 per year and i s subj ect to CPI i ncreases begi nni ng on January 1, 2008. As part of the
agreement, La Si erra wi l l use water to mai ntai n 11 acres f or a f ee of $32,000 per year. The l ease can be
extended i n ten-year i ncrements.
F inancial Aid Programs. Federal l y f unded f i nanci al ai d programs are subj ect to speci al audi t.
Such audi ts coul d resul t i n cl ai ms agai nst the resources of La Si erra. No provi si on has been made f or any
l i abi l i ti es that may ari se f rom such audi ts si nce the amounts, i f any, cannot be determi ned at thi s date.
A-16
Risk Management
La Si erra empl oys a Di rector of Ri sk Management, Saf ety, and ADA, charged wi th i denti f yi ng
exposure to l oss i n the categori es of property, l i abi l i ty, net i ncome and personnel , saf ety, and ADA
compl i ance. La Si erra systemati cal l y i denti f i es maj or ri sks, devel ops ri sk control and l oss preventi on
programs, moni tors compl i ance wi th state and Federal OSHA gui del i nes, and convenes saf ety
commi ttees. Addi ti onal l y, i t oversees and devel ops i nsti tuti onal processes f or ensuri ng that capi tal
proj ects are i n compl i ance wi th the requi rements of the Ameri can wi th Di sabi l i ti es Act.
La Si erra mai ntai ns a f ul l program of i nsurance, al though these coverages may change f rom ti me
to ti me. La Si erra i s part of the Adventi st Ri sk Management of Seventh-day Adventists. La Sierras
current i nsurance coverage, both group and i ndi vi dual , i ncl udes property, f i ne arts, boi l er and machi nery,
general l i abi l i ty, automobi l e l i abi l i ty, medi a l i abi l i ty, crime, educators legal liability, fiduciary, limited
prof essi onal l i abi l i ty, speci f i c medi cal prof essi onal l i abi l i ty, heal thcare medi cal prof essi onal l i abi l i ty,
sports camp acci dent and general liability, cyber coverage, special events liability, workers
compensati on, and student organi zati on l i abi l i ty coverage.
La Si erra i s sel f -i nsured f or empl oyee and student heal th care coverage, auto physi cal damage,
unemployment benefits, and worker compensati on benef i ts. Addi ti onal l y, La Si erra mai ntai ns an excess
medi cal i nsurance pol i cy to cover any i ndi vi dual employees medical claims exceeding $60,000 and an
excess workers compensation policy which covers l osses exceedi ng $250,000 per cl ai m. Property,
automobi l e and general l i abi l i ty coverage i s provi ded through La Si erras participation in a self-insured
trust, subj ect to vari ous deducti bl e l i mi ts. For automobi l e l i abi l i ty cl ai ms exceedi ng $25,000, and f or
property and general l i abi l i ty cl ai ms exceedi ng $50,000, coverage i s provi ded through addi ti onal carri ers.
Litigation
Vari ous cl ai ms and l i ti gati on i nvol vi ng La Si erra are currentl y outstandi ng. However,
management of La Si erra bel i eves, based on consul tati on wi th l egal counsel , that the ul ti mate resol uti on
of these matters wi l l not have a materi al ef f ect on La Sierras financial position. There is no material
l i ti gati on of any nature now pendi ng agai nst La Si erra or, to the knowl edge of i ts of f i cers, threatened
whi ch seeks to restrai n or enj oi n the i ssuance or the sal e of the Bonds or whi ch i n any way contests or
af f ects the val i di ty of the Bonds or any proceedi ngs of La Si erra taken wi th respect to the i ssuance or sal e
thereof , of the pl edge or appl i cati on of any moneys or securi ty provi ded f or the payment of the Bonds, the
use of the Bond proceeds or the exi stence or powers of La Si erra rel ati ng to the i ssuance of the Bonds.
APPENDI X B

AUDI TED FI NANCI AL STATEMENTS OF LA SI ERRA UNI VERSI TY

C-1
APPENDI X C

BOOK-ENTRY SYSTEM
THE INFORMATION HEREIN CONCERNING DTC AND DTCS BOOK-ENTRY SYSTEM
HAS BEEN OBTAI NED FROM SOURCES THAT THE AUTHORI TY, THE CORPORATI ON, THE
TRUSTEE AND THE UNDERWRI TER BELI EVE TO BE RELI ABLE, BUT THE AUTHORI TY, THE
CORPORATI ON, THE TRUSTEE AND THE UNDERWRI TER TAKE NO RESPONSI BI LI TY FOR
THE ACCURACY THEREOF. BENEFI CI AL OWNERS SHOULD CONFI RM THE FOLLOWI NG
I NFORMATI ON WI TH DTC OR THE DTC PARTI CI PANTS (AS DEFI NED HEREI N).
The Depository Trust Company (DTC), New York, New York, wi l l act as securi ti es deposi tory
f or the Bonds. The Bonds wi l l be i ssued as f ul l y-regi stered securi ti es regi stered i n the name of Cede &
Co. (DTCs partnership nominee) or such other name as may be requested by an authori zed representati ve
of DTC. One f ul l y-regi stered Bond certi f i cate wi l l be i ssued f or each Seri es of the Bonds i n the aggregate
pri nci pal amount of such Seri es, and wi l l be deposi ted wi th DTC.
DTC, the worlds largest depository, is a limi ted-purpose trust company organi zed under the New
York Banking Law, a banking organization withi n the meani ng of the New York Banki ng Law, a
member of the Federal Reserve System, a clearing corporation within the meaning of the New York
Uniform Commercial Code, and a clearing agency registered pursuant to the provi si ons of Secti on 17A
of the Securi ti es Exchange Act of 1934. DTC hol ds and provi des asset servi ci ng f or over 3.5 mi l l i on
i ssues of U.S. and non-U.S. equi ty i ssues, corporate and muni ci pal debt i ssues, and money market
i nstruments (f rom over 100 countri es) that DTCs participants (Direct Participants) deposit with DTC.
DTC al so f aci l i tates the post-trade settl ement among Di rect Parti ci pants of sal es and other securi ti es
transacti ons i n deposi ted securi ti es, through el ectroni c computeri zed book-entry transf ers and pl edges
between Direct Participants accounts. This eliminates the need f or physi cal movement of securi ti es
certi f i cates. Di rect Parti ci pants i ncl ude both U.S. and non-U.S. securi ti es brokers and deal ers, banks, trust
compani es, cl eari ng corporati ons, and certai n other organi zati ons. DTC i s a whol l y-owned subsi di ary of
The Depository Trust & Clearing Corporation (DTCC). DTCC, is the holding company for DTC
Nati onal Securi ti es Cl eari ng Corporati on, and Fi xed I ncome Cl eari ng Corporati on al l of whi ch are
regi stered cl eari ng agenci es. DTCC i s owned by the users of i ts regul ated subsi di ari es. Access to the
DTC system i s al so avai l abl e to others such as both U.S. and non-U.S. securi ti es brokers and deal ers,
banks, trust compani es, and cl eari ng corporati ons that cl ear through or mai ntai n a custodi al rel ati onshi p
wi th a Di rect Parti ci pant, ei ther di rectl y or i ndi rectly (Indirect Participants). DTC has Standard &
Poors highest rating: AAA. The DTC Rules applicable to i ts Parti ci pants are on f i l e wi th the Securi ti es
and Exchange Commi ssi on. More i nf ormati on about DTC can be f ound at www.dtcc.com and
www.dtc.org.
Purchases of Bonds under the DTC system must be made by or through Di rect Parti ci pants,
which will receive a credit for the Bonds on DTCs records. The ownershi p i nterest of each actual
purchaser of each Bond (Beneficial Owner) is in turn to be recorded on the Di rect and I ndi rect
Participants records. Beneficial Owners will not recei ve wri tten conf i rmati on f rom DTC of thei r
purchase. Benef i ci al Owners are, however, expected to recei ve wri tten conf i rmati ons provi di ng detai l s of
the transacti on, as wel l as peri odi c statements of thei r hol di ngs, f rom the Di rect or I ndi rect Parti ci pant
through whi ch the Benef i ci al Owner entered i nto the transacti on. Transf ers of ownershi p i nterests i n the
Bonds are to be accompl i shed by entri es made on the books of Di rect and I ndi rect Parti ci pants acti ng on
behal f of Benef i ci al Owners. Benef i ci al Owners wi l l not recei ve certi f i cates representi ng thei r ownershi p
i nterests i n Bonds, except i n the event that use of the book-entry system f or the Bonds i s di sconti nued.
C-2
To f aci l i tate subsequent transf ers, al l Bonds deposi ted by Di rect Parti ci pants wi th DTC are
registered in the name of DTCs partnership nomi nee, Cede & Co., or such other name as may be
requested by an authori zed representati ve of DTC. The deposi t of Bonds wi th DTC and thei r regi strati on
i n the name of Cede & Co. or such other DTC nomi nee do not ef f ect any change i n benef i ci al ownershi p.
DTC has no knowl edge of the actual Benef i ci al Owners of the Bonds; DTCs records reflect only the
i denti ty of the Di rect Parti ci pants to whose accounts such Bonds are credi ted, whi ch may or may not be
the Benef i ci al Owners. The Di rect and I ndi rect Parti ci pants wi l l remai n responsi bl e f or keepi ng account
of thei r hol di ngs on behal f of thei r customers.
Conveyance of noti ces and other communi cati ons by DTC to Di rect Parti ci pants, by Di rect
Parti ci pants to I ndi rect Parti ci pants, and by Di rect Parti ci pants and I ndi rect Parti ci pants to Benef i ci al
Owners wi l l be governed by arrangements among them, subj ect to any statutory or regul atory
requi rements as may be i n ef f ect f rom ti me to ti me. Benef i ci al Owners of Bonds may wi sh to take certai n
steps to augment the transmi ssi on to them of noti ces of si gni f i cant events wi th respect to the Bonds, such
as redempti ons, tenders, def aul ts, and proposed amendments to the Bond documents. For exampl e,
Benef i ci al Owners of Bonds may wi sh to ascertai n that the nomi nee hol di ng the Bonds f or thei r benef i t
has agreed to obtai n and transmi t noti ces to Benef i ci al Owners. I n the al ternati ve, Benef i ci al Owners may
wi sh to provi de thei r names and addresses to the regi strar and request that copi es of noti ces be provi ded
di rectl y to them.
Redempti on noti ces shal l be sent to DTC. I f l ess than al l of the Bonds wi thi n an i ssue are bei ng
redeemed, DTCs practice is to determine by lot the amount of the i nterest of each Di rect Parti ci pant i n
such i ssue to be redeemed.
Nei ther DTC nor Cede & Co. (nor any other DTC nomi nee) wi l l consent or vote wi th respect to
Bonds unl ess authori zed by a Di rect Parti ci pant i n accordance with DTCs Procedures. Under its usual
procedures, DTC mai l s an Omni bus Proxy to the Authori ty as soon as possi bl e af ter the record date. The
Omnibus Proxy assigns Cede & Co.s consenting or voting ri ghts to those Di rect Parti ci pants to whose
accounts Bonds are credi ted on the record date (i denti f i ed i n a l i sti ng attached to the Omni bus Proxy).
Pri nci pal , Purchase Pri ce, premi um, i f any, and i nterest payments on the Bonds wi l l be made to
Cede & Co., or such other nomi nee as may be requested by an authorized representative of DTC. DTCs
practice is to credit Direct Participants accounts upon DTCs receipt of funds and corresponding detail
i nf ormati on f rom the Authori ty or the Trustee, on payabl e date i n accordance wi th thei r respecti ve
holdings shown on DTCs records. Payments by Partici pants to Benef i ci al Owners wi l l be governed by
standi ng i nstructi ons and customary practi ces, as i s the case wi th securi ti es hel d f or the accounts of
customers in bearer form or registered in street name, and will be the responsi bi l i ty of such Parti ci pant
and not of DTC nor i ts nomi nee, the Trustee, or the Authori ty, subj ect to any statutory or regul atory
requi rements as may be i n ef f ect f rom ti me to ti me. Payment of pri nci pal , Purchase Pri ce, premi um, i f
any, and i nterest payments to Cede & Co. (or such other nomi nee as may be requested by an authori zed
representati ve of DTC) i s the responsi bi l i ty of the Authori ty or the Trustee, di sbursement of such
payments to Di rect Parti ci pants wi l l be the responsi bi l i ty of DTC, and di sbursement of such payments to
the Benef i ci al Owners wi l l be the responsi bi l i ty of Di rect and I ndi rect Parti ci pants.
A Benef i ci al Owner shal l gi ve noti ce to el ect to have i ts Bonds purchased or tendered, through i ts
Parti ci pant, to the Trustee, and shal l ef f ect del i very of such Bonds by causi ng the Di rect Parti ci pant to
transfer the Participants interest in the Bonds, on DTCs records, to the Trustee. The requirement for
physi cal del i very of Bonds i n connecti on wi th an opti onal tender or a mandatory purchase wi l l be deemed
sati sf i ed when the ownershi p ri ghts i n the Bonds are transferred by Direct Participants on DTCs records
and f ol l owed by a book-entry credi t of tendered Securities to the Trustees DTC account.
C-3
DTC may di sconti nue provi di ng i ts servi ces as securi ti es deposi tory wi th respect to the Bonds at
any ti me by gi vi ng reasonabl e noti ce to the Authori ty or the Trustee. Under such ci rcumstances, i n the
event that a successor securi ti es deposi tory i s not obtai ned, Bond certi f i cates are requi red to be pri nted
and del i vered.
The Authori ty may deci de to di sconti nue use of the system of book-entry transf ers through DTC
(or a successor securi ti es deposi tory). I n that event, Bond certi f i cates wi l l be pri nted and del i vered.
The i nf ormati on i n thi s secti on concerni ng DTC and DTCs book-entry system has been obtained
f rom sources that the Authori ty, the Corporati on, the Bank, the Underwri ter and the Trustee bel i eve to be
rel i abl e, but the Authori ty, the Corporati on, the Bank, the Underwri ter and the Trustee take no
responsi bi l i ty f or the accuracy thereof .
APPENDI X D

SUMMARY OF CERTAI N PROVI SI ONS OF THE PRI NCI PAL LEGAL DOCUMENTS

D-1
APPENDIX D
SUMMARY OF CERTAIN PROVISIONS OF THE
PRINCIPAL LEGAL DOCUMENTS
The following is a summary of certain provisions of the Inaenture of Trust (the 'Inaenture`) ana the Loan
Agreement (the 'Agreement`) which are not aescribea elsewhere in the Official Statement. This summary aoes not
purport to be comprehensive, ana reference shoula be maae to the Inaenture ana the Agreement for a full ana
complete statement of their provisions.
DEFINITIONS
Unless the context otherwise requires, the Iollowing terms shall have the meanings speciIied below:
'Accountant`s CertiIicate means a certiIicate signed by an independent certiIied public accountant oI
recognized national or regional standing, or a Iirm oI independent certiIied public accountants oI recognized
national or regional standing, selected by the Corporation.
'Act means the Joint Exercise oI Powers Act, comprising Articles 1, 2, 3 and 4 oI Chapter 5 oI Division 7
oI Title 1 (commencing with Section 6500) oI the Government Code oI the State.
'Act oI Bankruptcy means any oI the Iollowing with respect to any person: (a) the commencement by
such person oI a voluntary case under the Iederal bankruptcy laws, as now in eIIect or hereaIter amended, or any
other applicable Iederal or state bankruptcy, insolvency or similar laws; (b) Iailure by such person to timely
controvert the Iiling oI a petition with a court having jurisdiction over such person to commence an involuntary case
against such person under the Iederal bankruptcy laws, as now in eIIect or hereaIter amended, or any other
applicable Iederal or state bankruptcy, insolvency or similar laws; (c) such person shall admit in writing its inability
to pay its debts generally as they become due; (d) a receiver, trustee, custodian or liquidator oI such person or such
person`s assets shall be appointed in any proceeding brought against the person or such person`s assets; (e)
assignment oI assets by such person Ior the beneIit oI its creditors; or (I) the entry by such person into an agreement
oI composition with its creditors.
'Additional Payments means the payments to be made by the Corporation to the Authority or the Trustee
pursuant to certain provisions oI the Agreement.
'Agreement means the Loan Agreement, dated as oI August 1, 2008, between the Authority and the
Corporation and relating to the loan oI the proceeds oI the Bonds, as originally executed or as it may Irom time to
time be supplemented or amended.
'Alternate Credit Facility means any letter oI credit, guarantee, insurance policy or other credit support
arrangement, or any combination thereoI, provided by the Corporation with respect to the Bonds or any Series oI the
Bonds pursuant to the Agreement and the Indenture.
'Amendment means any amendment or modiIication oI the Agreement.
'Approving Opinion means an Opinion oI Bond Counsel to the eIIect that an action being taken (a) is
authorized by the applicable provisions oI the Indenture, and (b) will not, in and oI itselI, result in the inclusion oI
interest on the Bonds in gross income Ior Iederal income tax purposes.
'Authority means the CaliIornia Municipal Finance Authority or its successors and assigns, a joint
exercise oI powers authority Iormed by the Joint Powers Agreement pursuant to the provisions oI the Act.
'Authority Representative or 'Authorized OIIicer means, with respect to the Authority, any member oI
the Board, or any other person designated as an Authority Representative by a certiIicate signed by a member oI the
Board and Iiled with the Trustee.
D-2
'Authorized Corporation Representative or 'Authorized Representative means, with respect to the
Corporation, any person who at the time and Irom time to time may be designated, by written certiIicate Iurnished to
the Authority, the Credit Provider (iI any) and the Trustee, as a person authorized to act on behalI oI the
Corporation. Such certiIicate shall contain the specimen signature oI such person, shall be signed on behalI oI the
Corporation by any oIIicer oI the Corporation and may designate an alternate or alternates.
'Authorized Denomination means (a) with respect to Bonds during any Weekly Interest Rate Period or
Term Interest Rate Period oI less than one year, $100,000 or any multiple oI $5,000 in excess thereoI; and (b) with
respect to Bonds during any Term Interest Rate Period oI one year or more, $5,000 or any integral multiple in excess
thereoI.
'Available Amounts means (a) with respect to a Series oI Outstanding Bonds secured by a Credit Facility,
(i) Iunds received by the Trustee pursuant to such Credit Facility; (ii) moneys which have been continuously on
deposit with the Trustee (A) held in any separate and segregated Iund, account or subaccount established under the
Indenture in which no other moneys which are not Available Amounts are held, and (B) which have so been on
deposit with the Trustee Ior at least 123 consecutive days Irom their receipt by the Trustee and not commingled with
any moneys so held Ior less than said period and during and prior to which period, and as oI the date oI the
application thereoI to the payment oI Bonds oI such Series, no Act oI Bankruptcy oI the Corporation or the
Authority has occurred; (iii) proceeds Irom the issuance and sale or remarketing oI bonds, notes or other evidences
oI indebtedness oI the Authority received by the Trustee directly and contemporaneously with the issuance and sale
or remarketing oI such bonds, notes or other evidences oI indebtedness; (iv) any other moneys; or (v) proceeds oI
the investment oI Iunds qualiIying as Available Amounts under the Ioregoing clauses; provided, however, that with
respect to clause (iii) and (iv) there must be delivered to the Trustee at the time oI such issuance and sale or
remarketing oI bonds, notes or other evidences oI indebtedness oI the Authority or the deposit oI such moneys with
the Trustee, as applicable, an opinion oI counsel (which may assume that no Holder oI Bonds oI such Series is an
'insider within the meaning oI the Bankruptcy Code) Irom a Iirm experienced in bankruptcy matters to the eIIect
that the use oI such moneys to pay amounts due on Bonds oI such Series would not be recoverable Irom applicable
Bondholders pursuant to Section 550 oI the Bankruptcy Code as avoidable preIerential payments under Section 547
oI the Bankruptcy Code in the event oI the occurrence oI an Act oI Bankruptcy oI the Corporation or the Authority,
and (b) with respect to a Series oI Outstanding Bonds not secured by a Credit Facility, any moneys deposited with
the Trustee.
'Bankruptcy Code means Title 11 oI the United States Code, as amended.
'Bond Counsel means any attorney at law or Iirm oI attorneys, oI nationally recognized standing in
matters pertaining to the validity oI, and exclusion Irom gross income Ior Iederal tax purposes oI interest on, bonds
issued by states and political subdivisions and duly admitted to practice law beIore the highest court oI any state oI
the United States and acceptable to the Authority.
'Bond Fund means the Bond Fund established pursuant to the Indenture.
'Bond Purchase Fund means the Bond Purchase Fund established pursuant to the Indenture.
'Bond Register means the books Ior the registration oI ownership oI the Bonds, and the transIer oI
ownership oI the Bonds, maintained by the Trustee pursuant to the Indenture
'Bonds means, collectively the Series 2008A Bonds and Series 2008B Bonds authorized and issued
pursuant to the Indenture and any bonds issued in exchange or replacement thereoI in accordance with the Indenture.
'Book-Entry Bonds means any Bonds which are then held in book-entry Iorm by a Securities Depository
as provided in the Indenture.
'Business Day means any day other than (i) a Saturday or a Sunday or (ii) a day on which commercial
banks in the city oI San Francisco, CaliIornia, or the city or cities in which the principal corporate trust oIIice oI
D-3
Trustee, the Remarketing Agent or the oIIice oI the applicable Credit Provider at which demands Ior payment under
a Credit Facility then in eIIect are to be presented are authorized or required by law to close.
'Calendar Week means the period oI seven (7) days Irom and including Thursday oI any week to and
including Wednesday oI the next Iollowing week; provided, however, that the initial Calendar Week with respect to
each Weekly Interest Rate Period shall commence on the Iirst day oI such Weekly Interest Rate Period and shall end
on the next succeeding Wednesday; and provided Iurther that the Iinal Calendar Week with respect to each Weekly
Interest Rate Period shall commence on the Thursday immediately preceding the last day oI such Weekly Interest
Rate Period and shall end on the last day oI such Weekly Interest Rate Period.
'CertiIicate oI the Authority means a certiIicate signed by an Authorized Authority Representative. II and
to the extent required by certain provisions oI the Indenture, each CertiIicate oI the Authority shall include the
statements provided Ior therein.
'CertiIicate oI the Corporation means a certiIicate signed by an Authorized Corporation Representative. II
and to the extent required by certain provisions oI the Indenture, each CertiIicate oI the Corporation shall include the
statements provided Ior therein.
'Code means the Internal Revenue Code oI 1986, as amended.
'Completion Date means the date oI completion oI the last portion oI the Project as that date shall be
certiIied as provided in the Agreement.
'Construction Fund means the Construction Fund established pursuant to the Indenture.
'Conversion or 'Convert means the adjustment oI the rate borne by a Series oI the Bonds Irom a Weekly
Interest Rate to a Term Interest Rate, Irom a Term Interest Rate to a Weekly Interest Rate or Irom a Term Interest
Rate Ior one Term Interest Rate Period to a Term Interest Rate Ior another Term Interest Rate Period.
'Conversion Date means the date on which the Interest Rate Period Ior a Series oI the Bonds is changed,
or the date oI a change oI the Interest Rate Period Ior a Series oI the Bonds speciIied in a notice given pursuant to
the Indenture.
'Conversion Notice means the notice required by the Indenture oI the Conversion oI a Series oI the
Bonds.
'Corporation means (i) La Sierra University, a CaliIornia nonproIit public beneIit corporation, and its
successors and assigns, and (ii) any surviving, resulting or transIeree corporation as provided in the Agreement.
'Costs means, with respect to the Project, the sum oI the items, or any such item, oI the cost oI the
acquisition, construction, installation, improvement, renovation, remodeling, Iurnishing and equipping oI the Project
authorized to be paid with Bond proceeds pursuant to the Agreement, including the reimbursement to the
Corporation oI amounts expended Ior such costs to the extent permitted by the Tax CertiIicate, but shall not include
any Costs oI Issuance.
'Costs oI Issuance means all items oI expense directly or indirectly payable by or reimbursable to the
Authority or the Corporation and related to the authorization, issuance, sale and delivery oI the Bonds, including but
not limited to costs oI preparation and reproduction oI documents, printing expenses, Iiling and recording Iees,
initial Iees and charges oI the Trustee, legal Iees and charges, Iees and disbursements oI consultants and
proIessionals, rating agency Iees, Iees and charges Ior preparation, execution and saIekeeping oI the Bonds and any
other cost, charge or Iee in connection with the original issuance oI the Bonds which constitutes a 'cost oI issuance
within the meaning oI Section 147(g) oI the Code.
'Costs oI Issuance Fund means the Costs oI Issuance Fund established pursuant to the Indenture.
D-4
'Credit Agreement means, with respect to any Credit Facility, the agreement or agreements between the
Corporation and the applicable Credit Provider, as originally executed or as it or they may Irom time to time be
replaced, supplemented or amended in accordance with the provisions thereoI, providing Ior the issuance oI the
Credit Facility and the reimbursement oI the Credit Provider Ior payments thereunder, together with any related
pledge agreement, security agreement or other security document.
'Credit Facility means, as oI any time, the Initial Credit Facility or any Alternate Credit Facility, as
applicable, then securing the Bonds or any Series oI the Bonds.
'Credit Facility Account means the Credit Facility Account established in the Bond Fund pursuant to the
Indenture.
'Credit Facility Purchase Account means the Credit Facility Purchase Account established in the Bond
Purchase Fund pursuant to the Indenture.
'Credit Provider Bond means any Bond acquired with moneys in the Credit Facility Purchase Account
pursuant to the Indenture until such Bond is remarketed and the applicable Credit Facility has been Iully reinstated
as provided in the Indenture or shall not be considered a Credit Provider Bond in accordance with the applicable
Credit Agreement.
'Credit Provider means, with respect to a Credit Facility, the bank or other Iinancial institution issuing the
Credit Facility or otherwise obligated under the Credit Facility to provide amounts to pay the principal and/or
Purchase Price oI, and/or interest on, or any Series oI the Bonds.
'Electronic Notice means notice through telecopy, telegraph, telex, Iacsimile transmission, internet, e-mail
or other electronic means oI communication.
'Event oI DeIault as used with respect to the Indenture has the meaning speciIied in the Indenture, and as
used with respect to the Agreement has the meaning speciIied therein.
'Facilities means all oI the real and personal property constituting La Sierra University, primarily located
at 4700 Pierce Street, Riverside, CaliIornia, 92515 as the same may be improved and expanded Irom time to time.
'Fitch means Fitch Ratings, its successors and their assigns, and, iI such entity shall be dissolved or
liquidated or shall no longer perIorm the Iunctions oI a securities rating agency, 'Fitch shall be deemed to reIer to
any other nationally recognized securities rating agency (other than S&P or Moody`s) designated by the Authority,
with the approval oI the Corporation, by notice to each Credit Provider, the Trustee and the Remarketing Agent.
'Government Obligations means bonds, notes, certiIicates oI indebtedness, treasury bills or other
securities constituting direct obligations oI, or obligations the Iull and timely payment oI which is guaranteed by, the
United States oI America, or securities evidencing ownership interests in such obligations or in speciIied portions
thereoI (which may consist oI speciIic portions oI the principal oI or interest on such obligations).
'Holder or 'Bondholder means the registered owner oI any Bond.
'Indenture means the Indenture oI Trust, as originally executed or as it may Irom time to time be
supplemented, modiIied or amended by any Supplemental Indenture entered into pursuant to the provisions oI the
Indenture.
'Initial Credit Facility means the irrevocable direct pay letter oI credit issued by the Initial Credit Provider
with respect to the Bonds.
'Initial Credit Provider means Wells Fargo Bank, National Association, as the issuer oI the Initial Credit
Facility.
D-5
'Interest Payment Date means (i) with respect to each Credit Provider Bond, each date Ior the payment oI
interest thereon set Iorth in the applicable Credit Agreement; (ii) with respect to each Bond bearing interest at a
Weekly Interest Rate, the Iirst Business Day, commencing September 1, 2008; (iii) with respect to each Bond
bearing interest at a Term Interest Rate Ior a Term Interest Rate Period oI less than one year, the day immediately
succeeding the last day oI such Term Interest Rate Period; and (iv) with respect to any Term Interest Rate Period oI
one year or longer, each Semi-Annual Interest Payment Date during such Term Interest Rate Period and the day
immediately succeeding the last day oI such Term Interest Rate Period.
'Interest Period means, with respect to a Series oI Bonds, the period Irom and including any Interest
Payment Date Ior such Series oI Bonds to and including the day immediately preceding the next Iollowing Interest
Payment Date Ior such Series oI Bonds, except that the Iirst Interest Period shall be the period Irom and including
the date oI the Iirst authentication and delivery oI the Bonds to and including the day immediately preceding the Iirst
Interest Payment Date relating to the Bonds.
'Interest Rate Period means either a Weekly Interest Rate Period or a Term Interest Rate Period.
'Investment Securities means any oI the Iollowing iI and to the extent that the Iollowing are at the time
legal investments under the laws oI the State oI CaliIornia Ior moneys held under the Indenture and then proposed to
be invested therein and shall be the sole investments in which amounts on deposit in any Iund or account created
under the Indenture shall be invested:
(a) Cash deposits (insured at all times by the Federal Deposit Insurance Corporation or
otherwise collateralized with obligations described in paragraphs (b), (c) or (d)).
(b) Direct obligations (including obligations issued or held in book entry Iorm on the books
oI the Department oI Treasury) oI the United States oI America.
(c) Obligations oI any Iederal agency or Iederally sponsored entity which obligations are
guaranteed by the Iull Iaith and credit oI the United States oI America, including but not limited to the Iollowing:
(i) Export-Import Bank,
(ii) Rural Economic Community Development Administration (Iormerly the
Farmers Home Administration),
(iii) Federal Financing Bank,
(iv) General Services Administration,
(v) U.S. Maritime Administration,
(vi) U.S. Department oI Housing and Urban Development,
(vii) Small Business Administration,
(viii) Government National Mortgage Association,
(ix) Federal Housing Administration,
(x) Farm Credit System Financial Assistance Corporation, and
(xi) The guaranteed interest on obligations issued by the Resolution Trust
Corporation.
D-6
(d) Direct obligations oI any oI any Iederal agency or Iederally sponsored entity which are
not Iully guaranteed by the Iull Iaith and credit oI the United States oI America, including but not limited to the
Iollowing:
(i) Federal National Mortgage Association,
(ii) Federal Home Loan Mortgage Corporation,
(iii) Federal Home Loan Bank System,
(iv) The principal component oI obligations issued by the Resolution Trust
Corporation, and
(v) Student Loan Marketing Corporation.
(e) Commercial paper which is rated at the time oI purchase in the highest short-term rating
category (without regard to qualiIier, "A-1" by S&P, "P-1" by Moody's and "F-1" by Fitch) oI at least one nationally
recognized rating agency and which matures not more than 18 months aIter the date oI purchase.
(I) U.S. dollar denominated deposit accounts, Iederal Iunds and bankers` acceptances with
domestic commercial banks (including the Trustee and its aIIiliates) which either (i) have a rating on their short-term
certiIicates oI deposit on the date oI purchase in one oI the three highest short-term rating categories (without regard
to qualiIier) oI at least two nationally recognized rating agencies, (ii) are insured at all times by the Federal Deposit
Insurance Corporation, or (iii) are collateralized with direct obligations oI the United States oI America at 102
valued daily. All such certiIicates must mature no more than 18 months aIter the date oI purchase.
(g) Investments in (i) money market Iunds subject to SEC Rule 2a-7 and rated in the highest
short-term rating category Ior money market Iunds (without regard to qualiIier) oI at least one nationally recognized
rating agency, including Iunds Ior which the Trustee and its aIIiliates provide investment advisory or other
management services, and (ii) public sector investment pools operated pursuant to SEC Rule 2a-7 in which the
deposit shall not exceed 5 oI the aggregate pool balance at any time and such pool is rated in one oI the three
highest short-term rating categories (without regard to qualiIier, 'A-1 by S&P, 'P-1 by Moody`s and 'F-1 by
Fitch) oI at least two nationally recognized rating agencies.
(h) Pre-reIunded municipal obligations deIined as Iollows: Any bonds or other obligations oI
any state oI the United States oI America or oI any agency, instrumentality or local governmental unit oI any such
state which are not callable at the option oI the obligor prior to maturity or as to which irrevocable instructions have
been given by the obligor to call on the date speciIied in the notice; and,
(i) which are rated, based on an irrevocable escrow account or Iund (the 'escrow),
in the highest long-term rating category (without regard to qualiIier) oI at least two nationally recognized rating
agencies; or
(ii) (A) which are Iully secured as to principal and interest and redemption
premium, iI any, by an escrow consisting oI cash or securities as described in paragraphs (b) or (c) above, which
escrow may be applied only to the payment oI such principal oI and interest and redemption premium, iI any, on
such bonds or other obligations on the maturity date or dates thereoI or the redemption date or dates speciIied
pursuant to such irrevocable instructions, as appropriate, and
(B) which escrow is suIIicient, as veriIied by an Accountant`s CertiIicate,
to pay principal oI and interest and redemption premium, iI any, on the bonds or other obligations described in this
paragraph on the maturity date or dates thereoI or the redemption date or dates speciIied pursuant to such
irrevocable instructions, as appropriate.
D-7
(i) General obligations oI states with a short-term rating in one oI the three highest rating
categories (without regard to qualiIiers) and a long-term rating in one oI the three highest rating categories (without
regard to qualiIiers) oI at least two nationally recognized rating agencies. In the event such obligations are variable
rate obligations, the interest rate on such obligations must be reset not less Irequently than annually.
(j) Repurchase agreements with any commercial bank, which has a long-term, unsecured
rating oI 'A or better by S&P and A2 or better by Moody`s, provided that (i) the term oI such repurchase
agreement is not greater than thirty years, (ii) the Trustee or third party acting solely as agent Ior the Trustee has
possession oI the collateral, (iii) the collateral is valued weekly and the market value oI the collateral is maintained
at an amount equal to at least 102 Ior those securities deIined in paragraphs (b) and (c) above and 104 Ior those
securities deIined in paragraph (d) above oI the amount oI cash transIerred by the Trustee to the commercial bank
under the repurchase agreement plus interest, (iv) Iailure to maintain the requisite collateral levels will permit the
Trustee to liquidate the collateral immediately, (v) the repurchase securities are Iree and clear oI any third-party lien
or claim; and (vi) in the case oI PSA Master Repurchase Agreements, there shall have been delivered to the Trustee,
the Authority and the Corporation an Opinion oI Counsel to the eIIect that such repurchase agreement meets all
guidelines under State law Ior legal investment oI the Iunds to be invested.
(k) Investment agreements, including guaranteed investment contracts ('GICs), Iorward
purchase agreements and reserve Iund put agreements.
(l) Any other investments approved in writing by the Credit Provider.
'Issue Date means, with respect to the Bonds, the date on which the Bonds are Iirst delivered to the
purchasers thereoI.
'Mandatory Tender Bonds has the meaning speciIied in the Indenture.
'Maximum Interest Rate means (a) with respect to a Series oI Bonds Ior which a Credit Facility is in
eIIect, the rate oI interest speciIied in such Credit Facility which is used to determine the amount available under
such Credit Facility Ior payment oI interest due and payable to Holders oI such Bonds, but in no event greater than
12 per annum, and (b) with respect to a Series oI Bonds Ior which no Credit Facility is in eIIect, 12 per annum;
provided, however, 'Maximum Interest Rate with respect to Credit Provider Bonds means the maximum rate oI
interest allowed by law, iI any.
'Moody`s means Moody`s Investors Service, Inc., a corporation organized and existing under the laws oI
the State oI Delaware, its successors and assigns and, iI such entity shall be dissolved or liquidated or shall no longer
perIorm the Iunctions oI a securities rating agency, 'Moody`s shall be deemed to reIer to any other nationally
recognized securities rating agency (other than S&P or Fitch) designated by the Authority, with the approval oI the
Corporation, by notice to each Credit Provider, the Trustee and the Remarketing Agent.
'Notice by Mail or 'notice oI any action or condition 'by Mail shall mean a written notice meeting the
requirements oI the Indenture mailed by Iirst class mail, postage prepaid.
'Opinion oI Bond Counsel means an Opinion oI Counsel which is a Bond Counsel.
'Opinion oI Counsel means a written opinion oI counsel (who may be counsel Ior the Corporation)
acceptable to the Authority and the Corporation.
'Outstanding, when used as oI any particular time with reIerence to the Bonds or a Series oI Bonds
(subject to certain provisions oI the Indenture under the caption 'Evidence oI Action by Bondholders), means all
Bonds or all Bonds oI such Series, as applicable, theretoIore authenticated and delivered by the Trustee under the
Indenture except:
(a) Bonds or Bonds oI such Series theretoIore cancelled by the Trustee or surrendered to the
Trustee Ior cancellation;
D-8
(b) Bonds or Bonds oI such Series in lieu oI or in substitution Ior which other Bonds or
Bonds oI such Series shall have been authenticated and delivered by the Trustee pursuant to the terms oI the
Indenture;
(c) Bonds or Bonds oI such Series with respect to which the liability oI the Authority has
been discharged to the extent provided in, and pursuant to the requirements oI, the Indenture; and
(d) Bonds or Bonds oI such Series deemed purchased pursuant to the Indenture.
'Person means an individual, corporation, Iirm, association, limited liability company, corporation,
partnership, trust, or other legal entity or group oI entities, including a governmental entity or any agency or political
subdivision thereoI.
'Principal OIIice (i) oI the Trustee means the principal corporate trust oIIice oI the Trustee designated in
writing to the Authority, each Credit Provider and the Corporation, which initially shall be located at the address set
Iorth in the Indenture; (ii) oI the Remarketing Agent means its oIIice designated in writing to the Authority, the
Trustee, each Credit Provider and the Corporation; (iii) oI the Initial Credit Provider means its oIIice designated in
writing to the Authority, the Trustee and the Corporation; and (iv) oI any subsequent Credit Provider means its
oIIice located at such address as such Credit Provider shall designate in writing to the Authority, the Trustee and the
Corporation.
'Project means the additions to and improvements oI those portions oI the Facilities Iunded with proceeds
oI the Bonds, and the equipment and Iurnishings, generally described in the Agreement.
'Purchase Date means any date on which any Bond is required to be purchased pursuant to the Indenture.
'Purchase Price means an amount equal to 100 oI the principal amount oI any Bond (or the portion
thereoI) tendered or deemed tendered to the Trustee Ior purchase pursuant to the optional or mandatory tender Ior
purchase provisions oI the Indenture, plus accrued and unpaid interest thereon to but not including the date oI
purchase; provided, however, iI the Purchase Date occurs aIter the Record Date applicable to the interest accrued on
such Bond Irom the last occurring Interest Payment Date, then the Purchase Price shall not include accrued and
unpaid interest, which shall be paid to the Holder oI record on the applicable Record Date.
'QualiIied Newspaper means The Wall Street Journal or The Bond Buyer or any other newspaper or
journal containing Iinancial news, printed in the English language and customarily published on each Business Day,
oI general circulation in New York, New York, and selected by the Corporation and designated to the Trustee.
'Rating Agency means S&P to the extent it is then providing or maintaining a rating on the Bonds at the
request oI the Corporation, or in the event that S&P no longer maintains such a rating on the Bonds, Moody`s, Fitch,
or, iI approved by the Authority, any other nationally recognized rating agency, in each case then providing or
maintaining a rating on the Bonds at the request oI the Corporation.
'Rebate Fund means the Rebate Fund established and held by the Trustee in accordance with the
Indenture
'Rebate Requirement has the meaning assigned to such term in the Tax CertiIicate.
'Record Date means (i) with respect to each Interest Payment Date described in clause (i) oI the deIinition
oI 'Interest Payment Date, such Interest Payment Date; (ii) with respect to each Interest Payment Date described in
clause (ii) or clause (iii) oI the deIinition oI 'Interest Payment Date, the Business Day immediately preceding the
applicable Interest Payment Date; and (iii) with respect to each Interest Payment Date described in clause (iv) oI the
deIinition oI 'Interest Payment Date, whether or not a Business Day, the IiIteenth day oI the month prior to the
applicable Interest Payment Date.
D-9
'Remarketing Agent means the initial Remarketing Agent Ior the Bonds designated in the Indenture and
any successor thereto appointed pursuant thereto.
'Remarketing Agreement means any agreement or agreements meeting the requirements oI the Indenture.
'Repayment Installment means any amount that the Corporation is required to pay to the Trustee pursuant
to the Agreement.
'Responsible OIIicer oI the Trustee means and includes the chairman oI the board oI directors, the
president, every vice president, every assistant vice president, every trust oIIicer, and every oIIicer and assistant
oIIicer oI the Trustee other than those speciIically above mentioned, to whom any corporate trust matter is reIerred
because oI his or her knowledge oI, and Iamiliarity with, a particular subject.
'Revenues means all payments received by the Authority or the Trustee pursuant or with respect to the
Agreement (but not including certain payments to the Authority, the Trustee or other parties pursuant to the
Agreement) or a Credit Facility, including, without limiting the generality oI the Ioregoing, Repayment Installments
(including both timely and delinquent payments), prepayments, proceeds oI the sale oI the Bonds and all income
derived Irom the investment oI any moneys in any Iund or account established pursuant to the Indenture, but not
including amounts, including investment income, received Ior or on deposit in the Rebate Fund.
'Rule 15c2-12 means Rule 15c2-12 adopted by the Securities and Exchange Commission under the
Securities Exchange Act oI 1934, as it may Irom time to time be amended and supplemented.
'S&P means Standard & Poor`s Ratings Services, its successors and their assigns, and, iI such entity shall
be dissolved or liquidated or shall no longer perIorm the Iunctions oI a securities rating agency, 'S&P shall be
deemed to reIer to any other nationally recognized securities rating agency (other than Fitch or Moody`s) designated
by the Authority, with the approval oI the Corporation, by notice to each Credit Provider, the Trustee and the
Remarketing Agent.
'Semi-Annual Interest Payment Date means February 1 and August 1.
'Series means Bonds issued at the same time or sharing some other common term or characteristic and
designated in the Indenture as being oI a separate series oI Bonds. The Series 2008A Bonds and the Series 2008B
Bonds shall be separate Series under the Indenture.
'Series 2008A Bonds means the CaliIornia Municipal Finance Authority Variable Rate Revenue Bonds
(La Sierra University) Series 2008A authorized and issued pursuant to the Indenture and any bonds issued in
exchange or replacement thereoI in accordance with the Indenture.
'Series 2008B Bonds means the CaliIornia Municipal Finance Authority Variable Rate Revenue Bonds
(La Sierra University) Series 2008B authorized and issued pursuant to the Indenture and any bonds issued in
exchange or replacement thereoI in accordance with the Indenture.
'SIFMA Swap Index means, on any date, a rate determined on the basis oI the seven-day high grade
market index oI tax-exempt variable rate demand obligations, as produced by Municipal Market Data and published
or made available by the Securities Industry & Financial Markets Association (Iormerly the Bond Market
Association) ('SIFMA) or any Person acting in cooperation with or under the sponsorship oI SIFMA and eIIective
Irom such date.
'State means the State oI CaliIornia.
'Supplemental Indenture or 'indenture supplemental hereto means any indenture hereaIter duly
authorized and entered into between the Authority and the Trustee in accordance with the provisions oI the
Indenture.
D-10
'Surplus Account means an account so designated established pursuant to the Indenture.
'Tax Agreement means the Tax CertiIicate and Agreement relating to the Tax-Exempt Bonds, dated as oI
the Issue Date Ior the Bonds, by and between the Authority and the Corporation, as the same may be amended Irom
time to time.
'Term Interest Rate means a non-variable interest rate on a Series oI the Bonds established Ior a Term
Interest Rate Period in accordance with the Indenture.
'Term Interest Rate Period means each period determined by the Corporation pursuant to the Indenture
during which a Series oI the Bonds bears interest at a Term Interest Rate; provided that each such period shall be Ior
a term oI approximately one month, approximately three months, approximately six months, approximately nine
months, approximately one year or any multiple oI approximately six months above one year in each case ending on
a day preceding a Business Day; provided, however, that notwithstanding the Ioregoing any Term Interest Rate
Period which ends on the day immediately preceding the maturity date oI such Series oI the Bonds may include a
period oI time Irom the Interest Payment Date immediately preceding the maturity date oI such Series oI the Bonds
to the day immediately preceding the maturity date oI such Series oI the Bonds even iI the time remaining to such
day is not one oI the periods speciIied above; and provided Iurther that notwithstanding the Ioregoing any Term
Interest Rate Period may end on the day immediately preceding the maturity date oI such Series oI the Bonds
whether or not such maturity date is a Business Day.
'Trustee means U.S. Bank National Association, a national banking association organized under the laws
oI the United States oI America, and its successors and assigns or any successor trustee appointed pursuant to the
Indenture.
'Weekly Interest Rate means an interest rate on a Series oI the Bonds established Ior a Calendar Week
pursuant to the Indenture.
'Weekly Interest Rate Period means each period during which a Series oI the Bonds bears interest at
Weekly Interest Rates.
'Written Order oI the Authority and 'Written Request oI the Authority mean, respectively, a written
order or request signed by or on behalI oI the Authority by an Authorized Authority Representative.
'Weekly Put Bonds shall have the meaning given such term in the Indenture.
INDENTURE OF TRUST
Construction Fund. The Trustee shall establish the La Sierra University Construction Fund to pay costs
oI the Project.
Costs of Issuance Fund. The Trustee shall establish the Costs oI Issuance Fund (the 'Costs oI Issuance
Fund). The moneys in the Costs oI Issuance Fund shall be held by the Trustee in trust and applied to the payment oI
Costs oI Issuance, upon a requisition Iiled with the Trustee, signed by an Authorized Corporation Representative.
All payments Irom the Costs oI Issuance Fund shall be reIlected in the Trustee`s regular accounting statements. Any
amounts remaining in the Costs oI Issuance Fund six months Iollowing the Issue Date oI the Bonds shall be
transIerred to the Construction Fund and applied as provided in the Indenture.
Bond Purchase Fund. There shall be created and established with the Trustee a trust Iund designated the
'CaliIornia Municipal Finance Authority Variable Rate Revenue Bonds (La Sierra University) Series 2008 Bond
Purchase Fund (the 'Bond Purchase Fund). There shall also be created and established separate accounts in the
Bond Purchase Fund designated the 'Remarketing Account and the 'Credit Facility Purchase Account.
(a) Remarketing Account. All moneys received by the Trustee on behalI oI purchasers oI
Bonds pursuant to the provisions oI the Indenture relating to the remarketing oI Bonds shall be (i) deposited in the
D-11
Remarketing Account within the Bond Purchase Fund, (ii) held in trust in accordance with the provisions thereoI
and (iii) paid out in accordance with the Indenture.
(b) Credit Facility Purchase Account. All moneys received by the Trustee as payments under
any Credit Facility Ior the purchase oI Bonds shall be (i) deposited in the Credit Facility Purchase Account within
the Bond Purchase Fund, (ii) held in trust in accordance with the provisions thereoI and (iii) paid out in accordance
with the Indenture.
The Iunds held by the Trustee in the Bond Purchase Fund shall not be considered Revenues and shall not
constitute part oI the trust estate that is subject to the lien oI the Indenture. The moneys in the Bond Purchase Fund
shall be used solely to pay the Purchase Price oI Bonds oI the applicable Series oI Bonds Ior which such moneys
were received as provided in the Indenture (or to reimburse the applicable Credit Provider, iI any, Ior payments
made under a Credit Facility Ior such purpose) and may not be used Ior any other purpose.
Remarketing of Tendered Bonds.
(a) Weekly Put Bonds.
(i) Not later than 10:30 a.m. (New York City time) on each Business Day
succeeding a day on which the Trustee receives a notice Irom a Holder oI Bonds oI a Series to be tendered pursuant
to the Indenture (the 'Weekly Put Bonds), the Trustee shall give notice by telephone to the Remarketing Agent,
speciIying the Series designation and principal amount oI Bonds Ior which it has received such notice, the names oI
the Holder or Holders thereoI and the Purchase Date. The Remarketing Agent shall thereupon oIIer Ior sale and use
its best eIIorts to Iind purchasers Ior such Weekly Put Bonds, other than Credit Provider Bonds, which shall be
remarketed at par pursuant to the Indenture.
(ii) Not later than 11:00 a.m. (New York City time) on the Business Day
immediately preceding the Purchase Date described in (i) above, the Trustee shall give notice by telephone to the
Remarketing Agent oI the accrued amount oI the interest payable as oI such Purchase Date, and conIirming the
aggregate principal amount oI, the Weekly Put Bonds.
(iii) Not later than 11:30 a.m. (New York City time) on each Purchase Date Ior a
Series oI Weekly Put Bonds, the Remarketing Agent shall give Electronic Notice (promptly conIirmed in writing) to
the Corporation and the Trustee oI the amount oI remarketing proceeds that the Remarketing Agent has received Ior
each Series oI Weekly Put Bonds and the principal amount oI each Series oI Weekly Put Bonds which have not been
remarketed in accordance with the Remarketing Agreement.
(iv) II the Remarketing Agent`s notice pursuant to subparagraph (iii) above indicates
that the Remarketing Agent has on hand less remarketing proceeds than are needed to purchase all the Weekly Put
Bonds oI a Series to be purchased on any Purchase Date, the Trustee shall demand payment under the Credit Facility
then in eIIect with respect to such Series oI Weekly Put Bonds by 11:45 a.m. (New York City time) on such
Purchase Date so as to provide by 3:00 p.m. (New York City time) on such Purchase Date an amount suIIicient,
together with the remarketing proceeds to be available Ior such purchase, calculated solely on the basis oI the notice
given by the Remarketing Agent pursuant to subparagraph (iii) above, to pay the Purchase Price oI the Weekly Put
Bonds oI such Series. The Trustee shall immediately aIter such demand Ior payment give notice by telephone to the
Corporation oI the amount, iI any, oI such demand.
(b) Mandatory Tender Bonds.
(i) Not later than 9:30 a.m. (New York City time) on each Purchase Date occurring
pursuant the Indenture, the Trustee shall give notice by telephone to the Remarketing Agent speciIying the principal
amount oI all Outstanding Bonds oI a Series which are subject to mandatory tender on such Purchase Date (the
'Mandatory Tender Bonds) and the names oI the registered owner or owners thereoI. The Remarketing Agent shall
thereupon oIIer Ior sale and use its best eIIorts to Iind purchasers Ior such Mandatory Tender Bonds, other than
Credit Provider Bonds, which shall be remarketed at par pursuant to the Indenture.
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(ii) Not later than 10:00 a.m. (New York City time) on each Purchase Date
described in (i) above, the Trustee shall give notice by telephone to the Remarketing Agent oI the accrued amount oI
the interest payable as oI the Purchase Date speciIied in such notice Irom the Trustee on, and conIirming the
aggregate principal amount oI, the Mandatory Tender Bonds.
(iii) Not later than 11:30 a.m. (New York City time) on each Purchase Date with
respect to a Series oI Mandatory Tender Bonds, the Remarketing Agent shall give Electronic Notice (promptly
conIirmed in writing) to the Corporation and the Trustee oI the amount oI remarketing proceeds that the
Remarketing Agent has received Ior each Series oI Mandatory Tender Bonds and the principal amount oI each
Series oI Mandatory Tender Bonds which have not been remarketed in accordance with the Remarketing
Agreement.
(iv) II the Remarketing Agent`s notice pursuant to subparagraph (iii) above indicates that
such Remarketing Agent has on hand less remarketing proceeds than are needed to purchase all the Mandatory
Tender Bonds oI a Series to be purchased on such Purchase Date, the Trustee shall demand payment under the
Credit Facility then in eIIect with respect to such Series oI Mandatory Tender Bonds by 11:45 a.m. (New York City
time) on such Purchase Date so as to provide by 3:00 p.m. (New York City time) on such Purchase Date an amount
suIIicient, together with the remarketing proceeds to be available Ior such purchase, calculated solely on the basis oI
the notice given by the Remarketing Agent pursuant to subparagraph (iii) above, to pay the Purchase Price oI the
Mandatory Tender Bonds oI such Series. The Trustee shall immediately aIter such demand Ior payment give notice
to the Corporation oI the amount, iI any, oI such demand.
(c) Limitation. II a Credit Facility is in eIIect with respect to a Series oI Bonds, the
Remarketing Agent shall not remarket any tendered Bonds oI such Series to the Authority, the Corporation or any
aIIiliate oI the Corporation.
Disbursements from the Bond Purchase Fund.
(a) Application oI Moneys. (i) Moneys in the Bond Purchase Fund with respect to a Series
oI Bonds (other than the proceeds oI any remarketing oI Credit Provider Bonds which shall be paid to the applicable
Credit Provider on the remarketing date) shall be applied at or beIore 4:00 p.m. (New York City time) to the
purchase oI Bonds oI such Series as provided in the Indenture by the Trustee, on each Purchase Date, as Iollows:
First -- Moneys constituting Iunds in the Remarketing Account with respect to such Series oI
Bonds shall be used by the Trustee on any Purchase Date Ior such Series oI Bonds to purchase tendered
Bonds oI such Series at the Purchase Price.
Second -- In the event such moneys in the Remarketing Account with respect to such Series oI
Bonds on any Purchase Date Ior such Series oI Bonds are insuIIicient to purchase all tendered Bonds oI
such Series, moneys in the Credit Facility Purchase Account with respect to such Series oI Bonds on such
Purchase Date shall be used by the Trustee at that time to purchase such remaining tendered Bonds oI such
Series at the Purchase Price thereoI.
(ii) Notwithstanding anything to the contrary in this section, iI the Bonds are Book-Entry Bonds,
payment oI the Purchase Price Ior tendered Bonds shall be made in accordance with the rules and procedures oI
DTC, including the timing requirements oI DTC.
(b) Limitation. Notwithstanding anything contained to the contrary in the Indenture, while
any Credit Facility is in eIIect Ior a Series oI Bonds the Trustee shall not use proceeds obtained by remarketing any
Bonds oI such Series to the Corporation, any aIIiliate oI the Corporation or the Authority to pay any portion oI the
Purchase Price oI the tendered Bonds oI such Series, and no such proceeds shall be deposited in the Remarketing
Account.
Pledge of Revenues and Credit Facility. Subject only to the provisions oI the Indenture permitting the
application thereoI Ior the purposes and on the terms and conditions set Iorth in the Indenture, all oI the Revenues
D-13
and all amounts (but excluding any Additional Payments paid by the Corporation pursuant to the Agreement) held in
any Iund or account established pursuant to the Indenture other than the Rebate Fund and the Bond Purchase Fund
are irrevocably pledged to the punctual payment oI the principal oI, premium, iI any, and interest on the Bonds, and
thereaIter to the extent provided in the applicable Credit Agreement, to the payment oI obligations due to the Credit
Provider under the Credit Agreement. Subject only to the provisions oI the Indenture permitting the application
thereoI Ior the purposes and on the terms and conditions set Iorth therein, all amounts in the Bond Purchase Fund
with respect to a Series oI Bonds are irrevocably pledged to the punctual payment oI the Purchase Price oI the
Bonds oI such Series tendered or deemed tendered Ior purchase pursuant to the Indenture and thereaIter, to the
extent provided in the applicable Credit Agreement, to the payment oI obligations due to the Credit Provider under
such Credit Agreement. Said pledge shall constitute a Iirst and exclusive lien on the Revenues and the amounts in
such Iunds and accounts Ior the payment oI the Bonds, and payment to the Credit Provider in accordance with the
terms oI the Indenture and oI the Credit Agreement to the extent oI their interests therein.
The Authority transIers in trust, grants a security interest in, assigns and sets over to the Trustee, Ior the
beneIit oI the Holders Irom time to time oI the Bonds and the applicable Credit Provider to the extent oI their
interest therein, all oI the Revenues and the other amounts pledged in (a) above and all right, title and interest and
privileges it has in and under the Agreement, except (i) the Authority`s rights to receive any notices under the
Indenture or the Agreement, (ii) the Authority`s right to receive and enIorce its rights with respect to payments oI
Iees, expenses and indemniIication and certain other purposes under the Agreement and (iii) the Authority`s rights to
give approvals or consents pursuant to the Agreement, including, without limitation, the right to collect and receive
directly all oI the Revenues and the right to hold and enIorce any security thereIor; and any Revenues collected or
received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the
agent oI the Trustee, and shall Iorthwith be paid by the Authority to the Trustee. The assignment under the Indenture
is to the Trustee solely in its capacity as Trustee under the Indenture and subject to the provisions oI the Indenture,
and in taking or reIraining Irom taking any action under the Agreement pursuant to such assignment, the Trustee
shall be entitled to the protections and limitations Irom liability aIIorded it as Trustee under the Indenture. The
Trustee also shall be entitled to take all steps, actions and proceedings reasonably necessary in its judgment (1) to
enIorce the terms, covenants and conditions oI, and preserve and protect the priority oI its interest in and under, the
Agreement, any Credit Facility and any other security agreement with respect to the Project or the Bonds, and (2) to
assure compliance with all covenants, agreements and conditions on the part oI the Authority contained in the
Indenture with respect to the Revenues.
Each Credit Facility provided with respect to a Series oI Bonds is (to the extent the Authority has any
interest therein) irrevocably pledged to the punctual payment oI the principal and Purchase Price oI, and interest on,
such Bonds, and proceeds oI any drawing on such Credit Facility shall not be used Ior any other purpose. Said
pledge shall constitute a Iirst and exclusive lien in Iavor oI the Trustee Ior the beneIit oI the Holders oI such Bonds
oI the Authority`s interest, iI any, in each Credit Facility and any payments thereunder Ior the payment oI the
principal and Purchase Price oI, and interest on, such Bonds in accordance with the terms thereoI. Each Credit
Facility, iI any, and any payments thereunder shall be held in trust Ior the beneIit oI the Holders Irom time to time oI
such Bonds, but shall nevertheless be disbursed, allocated and applied solely Ior the uses and purposes set Iorth in
the Indenture.
The Corporation may at its sole discretion Irom time to time deliver to the Trustee or the Authority such
additional or other security to secure the payment oI the principal oI and interest and premium, iI any, on, and
Purchase Price oI, the Bonds and any such additional or other security delivered by the Corporation shall be pledged
to such payment, provided that the delivery oI such additional or other security does not result in the inclusion oI
interest on any Bonds in gross income Ior Iederal income tax purposes.
The Bonds do not constitute a debt or liability oI the State or oI any political subdivision thereoI, other than
the Authority, but shall be payable solely Irom the Iunds provided thereIor. The Authority is not obligated to pay
the principal oI the Bonds, or the redemption premium or interest thereon, except Irom the Iunds provided under the
Indenture and the Agreement and neither the Iaith and credit nor the taxing power oI the State or oI any political
subdivision thereoI, including the Authority, is pledged to the payment oI the principal oI or the redemption
premium or interest on the Bonds. The issuance oI the Bonds does not directly or indirectly or contingently obligate
the State or any political subdivision thereoI to levy or to pledge any Iorm oI taxation or to make any appropriation
Ior their payment. The Authority has no taxing power.
D-14
Notwithstanding anything contained in the Indenture, the Authority is not required to advance any moneys
derived Irom any source oI income oI any governmental body or political subdivision oI the State or the Authority
other than the Revenues and Additional Payments, Ior any oI the purposes in the Indenture, whether Ior the payment
oI the principal oI or interest on the Bonds or Ior any other purpose oI the Indenture. The Bonds are not general
obligations oI the Authority, and are payable Irom and secured only by the Revenues and the other assets pledged
Ior such payment under the Indenture.
Bond Fund. Upon the receipt thereoI, the Trustee shall deposit all Revenues in the 'CaliIornia Municipal
Finance Authority Variable Rate Revenue Bonds (La Sierra University) Series 2008 Bond Fund (the 'Bond Fund)
which the Trustee shall establish and maintain and hold in trust, and which shall be disbursed and applied only as
authorized in the Indenture. Except as provided under this caption and pursuant to the provisions oI the Indenture
relating to Credit Facilities and the payment oI Bonds aIter Discharge, moneys in the Bond Fund shall be used solely
Ior the payment oI the principal oI and premium, iI any, and interest on all the Bonds as the same shall become due,
pari passu, whether at maturity or upon redemption or acceleration.
The Trustee shall deposit in the Bond Fund Irom time to time, upon receipt thereoI, all Repayment
Installments received by the Trustee Irom the Corporation, subject to the provisions oI the Indenture relating to the
investment oI moneys, any income received Irom the investment oI moneys on deposit in the Bond Fund and any
other Revenues; provided, however, that any prepayment oI Repayment Installments received under the Agreement
Irom or Ior the account oI the Corporation shall be deposited in a special account in the Bond Fund established by
the Trustee Ior the purposes oI receipt and application oI such prepayment, or in such other Iund or account held by
the Trustee Ior such purpose in accordance with the provisions oI the Indenture relating to deIeasance.
In making payments oI principal oI, premium, iI any, and interest on the Bonds, the Trustee shall use any
Revenues received by the Trustee.
Investment of Moneys. Subject to certain provisions oI the Indenture relating to arbitrage covenants and
the Rebate Fund, any moneys in any oI the Iunds and accounts to be established by the Trustee pursuant to the
Indenture (other than the Bond Purchase Fund and the Credit Facility Account) shall be invested upon the written
direction oI the Corporation signed by an Authorized Corporation Representative (such direction to speciIy the
particular investment to be made), by the Trustee, iI and to the extent then permitted by law, in Investment
Securities. In the absence oI such written direction, the Trustee is directed to invest available moneys in Investment
Securities described in paragraph (g) oI the deIinition thereoI. Moneys in any Iund or account (other than the Bond
Purchase Fund and the Credit Facility Account) shall be invested in Investment Securities with respect to which
payments oI principal thereoI and interest thereon are scheduled to be paid or are otherwise payable (including
Investment Securities payable at the option oI the Holder) not later than the date on which such moneys will be
required by the Trustee. For investment purposes only, the Trustee may commingle the Iunds and accounts
established under the Indenture (other than the Bond Purchase Fund, the Credit Facility Account, the Rebate Fund
and any Iund or account established pursuant to the deIeasance provisions oI the Indenture) but shall account Ior
each separately.
Notwithstanding the Ioregoing provisions, (i) any moneys held in the Bond Purchase Fund and any moneys
constituting payments under any Credit Facility shall be held uninvested unless such moneys are invested in
accordance with the Indenture to eIIect the deIeasance oI Bonds and (ii) any moneys constituting Available
Amounts shall be invested in Investment Securities that are rated 'Aaa by S&P and that mature on or beIore the
date on which such moneys are to be applied to the payment oI the Bonds.
Any interest, proIit or loss on any investments oI moneys in any Iund or account under the Indenture shall
be credited or charged to the respective Iunds Irom which such investments are made. The Trustee may sell or
present Ior redemption any obligations so purchased whenever it shall be necessary in order to provide moneys to
meet any payment, and the Trustee shall not be liable or responsible Ior any loss, Iee, tax or other charge resulting
Irom any investment, reinvestment or liquidation under the Indenture. Unless otherwise directed by the Corporation,
the Trustee may make any investment permitted under the Indenture through or with its own commercial banking or
investment departments.
D-15
The Authority (and the Corporation by its execution oI the Agreement) acknowledges that to the extent
regulations oI the Comptroller oI the Currency or other applicable regulatory entity grant the Authority or the
Corporation the right to receive brokerage conIirmations oI security transactions as they occur, the Authority and the
Corporation speciIically waive receipt oI such conIirmations to the extent permitted by law. The Trustee will Iurnish
the Authority and the Corporation periodic cash transaction statements which include detail Ior all investment
transactions made by the Trustee under the Indenture. The Trustee or any oI its aIIiliates may act as sponsor, advisor
or manager in connection with any investments made by the Trustee under the Indenture.
Repayment to Corporation or Credit Provider. When there are no longer any Bonds Outstanding under
the Indenture, and all Iees, charges and expenses oI the Trustee, the applicable Credit Provider, and the Remarketing
Agent have been paid or provided Ior, payment oI the Iull amount owing the United States Government, as
determined under the Agreement, the Indenture and the Tax CertiIicate, all expenses oI the Authority relating to the
Project and the Indenture have been paid or provided Ior, and all other amounts payable under the Indenture and
under the Agreement have been paid, and the Indenture has been discharged and satisIied in accordance with the
Indenture, the Trustee shall pay to the Corporation any amounts remaining in any Iund established and held under
the Indenture; provided, however, that no payment shall be made to the Corporation and such amounts shall be paid
to the applicable Credit Provider iI and to the extent the Corporation has any obligations to a Credit Provider which
are then due and payable, as certiIied by such Credit Provider to the Trustee.
Credit Facilities.
(a) The Trustee shall hold and maintain each Credit Facility Ior the beneIit oI the Holders
Irom time to time oI the Bonds until such Credit Facility expires in accordance with its terms. The Trustee shall
enIorce all terms, covenants and conditions oI each Credit Facility, including drawing on a Credit Facility as
required to provide Ior all payments oI debt service or purchase price oI Bonds, and the provisions relating to the
payment oI draws on, and reinstatement oI amounts that may be drawn under, such Credit Facility, and will not
consent to, agree to or permit any amendment or modiIication oI a Credit Facility that would materially adversely
aIIect the rights or security oI the Holders Irom time to time oI the Bonds. II at any time during the term oI an
applicable Credit Facility any successor Trustee shall be appointed and qualiIied under the Indenture, the resigning
or removed Trustee shall request that the Bank transIer the Credit Facility to the successor Trustee. II the resigning
or removed Trustee Iails to make this request, the successor Trustee shall do so beIore accepting appointment.
When a Credit Facility expires in accordance with its terms or is replaced by an Alternate Credit Facility or the lien
oI the Indenture has been released as provided in the Indenture, the Trustee shall immediately surrender the Credit
Facility to the Credit Provider thereoI.
(b) The Trustee acknowledges the right oI the Corporation at any time to provide an
Alternate Credit Facility with respect to the Bonds or any Series oI the Bonds and, upon satisIaction oI the
conditions speciIied in the Agreement, to discontinue providing a Credit Facility with respect to the Bonds or any
Series oI the Bonds. II there shall have been delivered to the Authority and the Trustee (i) an Alternate Credit
Facility meeting the requirements oI the Agreement and (ii) the opinions and documents required by the Agreement,
then the Trustee shall accept such Alternate Credit Facility and, iI so directed by the Corporation, upon the
eIIectiveness oI such Alternate Credit Facility and the payment oI the Purchase Price oI all Bonds tendered Ior
purchase pursuant to the Indenture in connection with such Alternate Credit Facility (either Irom the proceeds oI the
remarketing oI such Bonds or Irom amounts made available under the Credit Facility being replaced by such
Alternate Credit Facility) promptly surrender the Credit Facility theretoIore in eIIect with respect to such Bonds in
accordance with the respective terms thereoI Ior cancellation; provided the Trustee shall not surrender any Credit
Facility until all draws or requests to purchase Bonds made under such Credit Facility have been honored. In the
event that the Corporation elects to provide an Alternate Credit Facility, the Bonds secured by the Credit Facility
being replaced shall be subject to mandatory tender as provided in the Indenture. II at any time all Bonds oI a Series
shall cease to be Outstanding under the Indenture or the conditions speciIied in the Agreement permitting the
Corporation to discontinue providing a Credit Facility with respect to the Bonds oI a Series shall be satisIied, or a
Credit Facility shall be terminated pursuant to its terms, the Trustee shall promptly surrender such Credit Facility in
accordance with its terms Ior cancellation. The Trustee shall comply with the procedures set Iorth in each Credit
Facility relating to the termination thereoI.
D-16
(c) In the event that a Credit Facility is in eIIect with respect to a Series oI Bonds, the
Trustee shall make a demand Ior payment under such Credit Facility subject to and in accordance with its terms, in
order to receive payment thereunder not later than the time payment is due on the Bonds oI such Series on the
Iollowing dates in the Iollowing amounts:
(i) On each Interest Payment Date, in an amount which will be suIIicient to pay all
interest due and payable on the Outstanding Bonds oI such Series on such Interest Payment Date;
(ii) On any date Iixed Ior payment (whether by acceleration, maturity or otherwise),
deIeasance or redemption oI the Bonds oI such Series in an amount which, together with amounts demanded Ior
payment pursuant to paragraph (i) above, will be suIIicient to pay the principal amount due on such Bonds,
including accrued interest and premium, iI any (iI a demand Ior payment is permitted Ior premium under the terms
oI such Credit Facility); and
(iii) On each Purchase Date, in an amount suIIicient to pay the Purchase Price oI any
Bonds oI such Series tendered or deemed tendered pursuant to the Indenture and which have not been remarketed in
accordance with the Indenture, or Ior which suIIicient remarketing proceeds have not been received as provided
therein.
(d) Each such demand Ior payment shall be made not later than the time required by the
Credit Facility in order to receive payment thereunder not later than the time payment is required to be made to the
Holders oI such Bonds pursuant to the Indenture. The Trustee shall give notice oI each such demand Ior payment to
the Corporation at the time oI each such demand. The proceeds oI each such demand shall be deposited in the
Credit Facility Account in the Bond Fund or the Credit Facility Purchase Account in the Bond Purchase Fund, as
appropriate, and used in the order oI priority established by the Indenture. At the time oI making any demand under
a Credit Facility pursuant to the Indenture, the Trustee shall deposit the proceeds oI such demand directly in the
Credit Facility Account in the Bond Fund. At the time oI making any demand under a Credit Facility pursuant to
the Indenture, the Trustee shall deposit the proceeds oI such demand directly in the Credit Facility Purchase Account
in the Bond Purchase Fund. The Trustee shall comply with all provisions oI each Credit Facility in order to realize
upon any demand Ior payment thereunder, and will not demand payment under any Credit Facility oI any amounts
Ior payment oI: (i) Credit Provider Bonds; or (ii) Bonds held by the Authority or the Corporation or actually known
by the Trustee to be held by any aIIiliate oI the Corporation or any nominee oI the Authority unless such Credit
Facility speciIically permits such demand.
(e) Whenever requested in writing by the Corporation, the Trustee shall submit to each
Credit Provider a reduction certiIicate or other appropriate documentation necessary under the applicable Credit
Facility to reduce the principal amount oI Bonds and related interest to which such Credit Facility relates to reIlect
any purchase or redemption and the cancellation oI such Bonds.
Payment of Principal and Interest. The Authority shall punctually pay, but only out oI Revenues, the
other amounts pledged thereIor under the Indenture, the proceeds oI the remarketing oI the Bonds and the proceeds
oI any demand under a Credit Facility, in each case as provided in the Indenture, the principal and Purchase Price oI
and the interest (and premium, iI any) on every Bond issued under the Indenture at the times and places and in the
manner provided therein and in the Bonds according to the true intent and meaning thereoI. All such payments shall
be made by the Trustee as provided in the Indenture. When and as paid in Iull, all Bonds, iI any, shall be delivered
to the Trustee and shall Iorthwith be cancelled by the Trustee, who shall deliver a certiIicate evidencing such
cancellation to the Authority and the Corporation. The Trustee may retain or destroy such cancelled Bonds.
Extension or Funding of Claims for Interest. In order to prevent any accumulation oI claims Ior interest
aIter maturity, the Authority shall not, directly or indirectly, extend or assent to the extension oI the time Ior the
payment oI any claim Ior interest on any oI the Bonds, and shall not, directly or indirectly, be a party to or approve
any such arrangement by purchasing or Iunding such claims or in any other manner. In case any such claim Ior
interest shall be extended or Iunded, whether or not with the consent oI the Authority, such claim Ior interest so
extended or Iunded shall not be entitled, in case oI deIault under the Indenture, to the beneIits oI the Indenture,
except subject to the prior payment in Iull oI the principal oI all oI the Bonds then Outstanding and oI all claims Ior
interest which shall not have been so extended or Iunded.
D-17
Preservation of Revenues. The Authority shall not waive any provision oI the Agreement or take any
action to interIere with or impair the pledge and assignment under the Indenture oI Revenues and the assignment to
the Trustee oI rights under the Agreement, or the Trustee`s enIorcement oI any rights thereunder, without the prior
written consent oI the Trustee and the Credit Provider. The Trustee may give such written consent, and may itselI
take any such action, or consent to any Amendment, only in accordance with the provisions oI the Indenture.
Other Liens. So long as any Bonds are Outstanding, the Authority shall not create or suIIer to be created
any pledge, lien or charge oI any type whatsoever upon all or any part oI the Revenues, the other amounts pledged
under the Indenture, the proceeds oI the remarketing oI the Bonds and the proceeds oI demands under a Credit
Facility, other than the lien oI the Indenture.
Arbitrage Covenants; Rebate Fund.
(a) The Authority covenants with all persons who hold or at any time held Bonds that the
Authority will not directly or indirectly use the proceeds oI any oI the Bonds or any other Iunds oI the Authority or
permit the use oI the proceeds oI any oI the Bonds or any other Iunds oI the Authority or take or omit to take any
other action which will cause any oI the Bonds to be 'arbitrage bonds or to be otherwise subject to Iederal income
taxation by reason oI Sections 103 and 141 through 150 oI the Code and any applicable regulations promulgated
thereunder. To that end the Authority covenants to comply with all covenants set Iorth in the Tax CertiIicate, which
is incorporated in the Indenture by reIerence as though Iully set Iorth therein.
(b) The Trustee shall establish and maintain a Iund separate Irom any other Iund established
and maintained under the Indenture designated the 'CaliIornia Municipal Finance Authority Variable Rate Revenue
Bonds (La Sierra University), Series 2008 Rebate Fund (the 'Rebate Fund). Within the Rebate Fund, the Trustee
shall maintain such accounts as shall be directed by the Corporation as necessary in order Ior the Authority and the
Corporation to comply with the terms and requirements oI the Tax CertiIicate. Subject to the transIer provisions
provided in paragraph (c) below, all money at any time deposited in the Rebate Fund shall be held by the Trustee in
trust, to the extent required to satisIy the Rebate Requirement (as deIined in the Tax CertiIicate), Ior payment to the
United States Government, and neither the Corporation, the Authority nor the Bondholders shall have any rights in
or claim to such moneys. All amounts deposited into or on deposit in the Rebate Fund shall be governed by the
Indenture, the Agreement and by the Tax CertiIicate. The Trustee shall conclusively be deemed to have complied
with such provisions iI it Iollows the directions oI the Corporation, including supplying all necessary inIormation
requested by the Corporation and the Authority in the manner set Iorth in the Tax CertiIicate, and shall not be
required to take any actions thereunder in the absence oI written directions Irom the Corporation.
(c) Upon receipt oI the Corporation`s written instructions, the Trustee shall remit part or all
oI the balances in the Rebate Fund to the United States Government, as so directed. In addition, iI the Corporation so
directs, the Trustee will deposit moneys into or transIer moneys out oI the Rebate Fund Irom or into such accounts
or Iunds as directed by the Corporation`s written directions. Any Iunds remaining in the Rebate Fund aIter
redemption and payment oI all oI the Bonds and payment and satisIaction oI any Rebate Requirement shall be
withdrawn and remitted to the Corporation upon its written request.
(d) Notwithstanding any provision oI the Indenture, including in particular the provisions oI
the Indenture relating to deIeasance, the obligation oI the Corporation to pay the Rebate Requirement to the United
States Government and to comply with all other requirements oI the Indenture, the Agreement and the Tax
CertiIicate shall survive the deIeasance or payment in Iull oI the Bonds.
(e) Notwithstanding any provisions oI the Indenture or the Agreement, iI the Corporation
shall provide to the Authority and the Trustee an Opinion oI Bond Counsel that any speciIied action required under
the Indenture or the Agreement is no longer required or that some Iurther or diIIerent action is required to maintain
the status oI interest on the Bonds as excluded Irom gross income Ior Iederal income tax purposes, the Corporation,
the Trustee and the Authority may conclusively rely on such opinion in complying with the arbitrage and rebate
requirements and the covenants under the Indenture shall be deemed to be modiIied to that extent.
D-18
Events of Default; Acceleration- Waiver of Default.
(a) Each oI the Iollowing events shall constitute an 'Event oI DeIault under the Indenture:
(i) Failure to make payment oI any installment oI interest upon any Bond when
such payment shall have become due and payable;
(ii) Failure to make due and punctual payment oI the principal oI or premium, iI
any, on any Bond when such payment shall have become due and payable, whether at the stated maturity thereoI, or
upon proceedings Ior redemption thereoI or upon the maturity thereoI by declaration;
(iii) Failure to pay the Purchase Price oI any Bond tendered or subject to mandatory
tender pursuant to the Indenture;
(iv) The occurrence oI an 'Event oI DeIault under the Agreement, as speciIied in
the Indenture;
(v) DeIault by the Authority in the perIormance or observance oI any other oI the
covenants, agreements or conditions on its part contained in the Indenture or in the Bonds, and the continuance oI
such deIault Ior a period oI thirty (30) days aIter written notice thereoI, speciIying such deIault and requiring the
same to be remedied, shall have been given to the Authority and the Corporation by the Trustee, or to the Authority,
the Corporation and the Trustee by the Holders oI not less than twenty-Iive percent (25) in aggregate principal
amount oI the Bonds at the time Outstanding; or
(vi) The Trustee receives notice Irom a Credit Provider that an event oI deIault under
a Credit Agreement has occurred and is continuing and requiring that the principal oI and interest on the Bonds
subject to such Credit Facility be declared immediately due and payable.
(b) No deIault speciIied in (a)(v) above shall constitute an Event oI DeIault unless the
Authority and the Corporation shall have Iailed to correct such deIault within the applicable 30-day period;
provided, however, that iI the deIault shall be such that it can be corrected, but cannot be corrected within such
period, it shall not constitute an Event oI DeIault iI corrective action is instituted by the Authority or, the
Corporation within the applicable period and diligently pursued until the deIault is corrected. With regard to any
alleged deIault concerning which notice is given to the Corporation under these provisions, the Authority grants the
Corporation Iull authority Ior the account oI the Authority to perIorm any covenant or obligation the non-
perIormance oI which is alleged in said notice to constitute a deIault in the name and stead oI the Authority with Iull
power to do any and all things and acts to the same extent that the Authority could do and perIorm any such things
and acts and with power oI substitution. Notwithstanding such grant, the Corporation shall not have any obligation
to cure any deIault oI the Authority.
(c) Upon (i) the occurrence oI an Event oI DeIault under (a)(vi) above the Trustee shall
immediately declare the principal amount oI all Bonds then Outstanding subject to the Credit Facility Ior which the
Trustee has received notice under (a)(vi) above and the interest accrued thereon immediately due and payable, and
such principal and interest shall thereupon become and be immediately due and payable or (ii) the occurrence and
continuation oI any Event oI DeIault speciIied above, the Trustee may, and shall, upon the written request oI the
Holders oI not less than twenty-Iive percent (25) in aggregate principal amount oI Bonds then Outstanding and, iI
a Credit Facility is in eIIect, the consent oI the Credit Provider, by notice in writing delivered to the Corporation and
the Credit Provider, with copies oI such notice being sent to the Authority, declare the principal oI all Bonds then
Outstanding and the interest accrued thereon immediately due and payable, and such principal and interest shall
thereupon become and be immediately due and payable. Interest on the Bonds so declared immediately due and
payable shall cease to accrue Irom and aIter the date oI declaration oI any such acceleration. For so long as a Credit
Facility is in eIIect with respect to a Series oI Bonds and so long as the applicable Credit Provider has not Iailed to
pay any properly presented draw on such Credit Facility, said Credit Provider shall be solely entitled to direct the
acceleration oI the Series oI Bonds subject to such Credit Facility, and the Trustee shall have no discretion with
respect thereto. Notwithstanding the Ioregoing, the Trustee shall not be required to take any action upon the
D-19
occurrence and continuation oI an Event oI DeIault under (a)(iv) or (a)(v) above until a Responsible OIIicer oI the
Trustee has actual knowledge oI such Event oI DeIault. AIter any declaration oI acceleration under the Indenture the
Trustee shall immediately declare all indebtedness payable under the Agreement with respect to such Bonds to be
immediately due and payable in accordance with the Agreement and may exercise and enIorce such rights as exist
under the Agreement.
The preceding paragraph, however, is subject to the condition that iI, at any time aIter the principal oI
Bonds shall have been so declared due and payable, and beIore any judgment or decree Ior the payment oI the
moneys due shall have been obtained or entered as hereinaIter provided, there shall have been deposited with the
Trustee a sum which, together with any other amounts then held in the Bond Fund, is suIIicient to pay all the
principal oI such Bonds matured prior to such declaration and all matured installments oI interest (iI any) upon all
the Bonds, and the reasonable expenses (including reasonable attorneys` Iees) oI the Trustee, and any and all other
deIaults actually known to the Trustee (other than in the payment oI principal oI and interest on such Bonds due and
payable solely by reason oI such declaration) shall have been made good or cured to the satisIaction oI the Trustee
in its sole discretion or provision deemed by the Trustee to be adequate shall have been made thereIor; and provided
that iI there has been an Event oI DeIault aIter a draw upon a Credit Facility and Credit Facility has been reinstated,
then, and in every such case, the Holders oI at least a majority in aggregate principal amount oI the Bonds then
Outstanding (by written notice to the Authority and to the Trustee accompanied by the written consent oI the Credit
Provider, may, on behalI oI the Holders oI all Bonds, rescind and annul such declaration with respect to the Bonds
and its consequences and waive such deIault; provided that no such rescission and annulment shall extend to or shall
aIIect any subsequent deIault, or shall impair or exhaust any right or power consequent thereon. The Trustee shall
provide the Credit Provider with notice oI any such rescission.
Institution of Legal Proceedings by Trustee. In addition, iI one or more oI the Events oI DeIault under
the Indenture shall happen and be continuing, the Trustee in its sole discretion may, and upon the written request oI
a Credit Provider, or the Holders oI a majority in aggregate principal amount oI the Bonds then Outstanding with the
consent oI all Credit Providers, and upon being indemniIied to its satisIaction in its sole discretion thereIor
(including with respect to any expenses or liability the Trustee may incur) shall, proceed to protect or enIorce its
rights or the rights oI the Holders under the Indenture, by a suit in equity or action at law, either Ior the speciIic
perIormance oI any covenant or agreement contained therein, or in aid oI the execution oI any power therein
granted, or by mandamus or other appropriate proceeding Ior the enIorcement oI any other legal or equitable remedy
as the Trustee shall deem most eIIectual in support oI any oI its rights or duties under the Indenture.
Application of Moneys Collected by Trustee. Any moneys collected by the Trustee and moneys in the
Iunds and accounts (other than the Rebate Fund and the Bond Purchase Fund) on or aIter the occurrence oI an Event
oI DeIault shall be applied in the order Iollowing, at the date or dates Iixed by the Trustee and, in the case oI
distribution oI such moneys on account oI principal (or premium, iI any) or interest, upon presentation oI the Bonds,
and stamping thereon the payment, iI only partially paid, and upon surrender thereoI, iI Iully paid:
First: To the payment oI costs and expenses oI collection, just and reasonable compensation to the
Trustee Ior its own services and Ior the services oI counsel, agents and employees by it properly engaged
and employed, and Ior advances made pursuant to the provisions oI the Indenture; provided, that any
payments under a Credit Facility shall not be so applied.
Second: In case the principal oI none oI the Outstanding Bonds shall have become due and
remains unpaid, to the payment oI interest in deIault on the Outstanding Bonds in the order oI the maturity
thereoI, such payments to be made ratably and proportionately to the persons entitled thereto without
discrimination or preIerence, except as speciIied in the Indenture; provided, however, that no payment oI
interest shall be made with respect to any Bonds held by the Authority, the Corporation or actually known
by the Trustee to be held by any aIIiliate oI the Corporation, or any nominee oI the Authority, the
Corporation, or any aIIiliate oI the Corporation, until interest due on all Bonds not so registered shall have
been paid.
Third: In case the principal oI any oI the Outstanding Bonds shall have become due by
declaration or otherwise and remains unpaid, Iirst to the payment oI principal oI all Outstanding Bonds then
due and unpaid, then to the payment oI interest in deIault in the order oI maturity thereoI, and then to the
D-20
payment oI the premium thereon, iI any; in every instance such payment to be made ratably to the persons
entitled thereto without discrimination or preIerence, except as speciIied in the Indenture; provided,
however, that no payment oI principal or premium or interest shall be made with respect to any Bonds held
by the Authority, the Corporation or known by the Trustee to be held by any aIIiliate oI the Corporation or
any nominee oI the Authority, the Corporation, or any aIIiliate oI the Corporation, until all amounts due on
all Bonds not so held have been paid.
Fourth: To the Credit Provider, iI any, Ior amounts due under its Credit Facility other than as the
Holder oI Credit Provider Bonds, as certiIied by the Credit Provider to the Trustee.
Effect of Delay or Omission to Pursue Remedy. No delay or omission oI the Trustee or oI any Holder oI
Bonds to exercise any right or power arising Irom any deIault shall impair any such right or power or shall be
construed to be a waiver oI any such deIault or acquiescence therein, and every power and remedy given by the
Indenture to the Trustee or to the Holders may be exercised Irom time to time and as oIten as shall be deemed
expedient. In case the Trustee shall have proceeded to enIorce any right under the Indenture, and such proceedings
shall have been discontinued or abandoned because oI waiver or Ior any other reason, or shall have been determined
adversely to the Trustee, then and in every such case the Authority, the Trustee, the Credit Provider, iI any, and the
Holders oI the Bonds, severally and respectively, shall be restored to their Iormer positions and rights under the
Indenture; and all remedies, rights and powers oI the Authority, the Trustee, the Credit Provider and the Holders oI
the Bonds shall continue as though no such proceedings had been taken.
Covenant to Pay Bonds in Event of Default. The Authority covenants that, upon the happening oI any
Event oI DeIault, the Authority will pay to the Trustee upon demand, but only out oI Revenues, amounts made
available under a Credit Facility and any other Iunds pledged thereIor under the Indenture, Ior the beneIit oI the
Holders oI the Outstanding Bonds, the whole amount then due and payable thereon (by declaration or otherwise) Ior
interest or Ior principal and premium, or both, as the case may be, and all other sums which may be due under the
Indenture or secured thereby, including reasonable compensation to the Trustee, its agents and counsel, and any
expenses or liabilities incurred by the Trustee under the Indenture. In case the Authority shall Iail to pay the same
Iorthwith upon such demand, the Trustee, in its own name and as trustee oI an express trust, shall be entitled to
institute proceedings at law or in equity in any court oI competent jurisdiction to recover judgment Ior the whole
amount due and unpaid, together with costs and reasonable attorneys` Iees and expenses, subject, however, to the
condition that such judgment, iI any, shall be limited to, and payable solely out oI, Revenues, amounts made
available under a Credit Facility and any other Iunds pledged thereIor under the Indenture, and not otherwise. The
Trustee shall be entitled to recover such judgment as aIoresaid, either beIore or aIter or during the pendency oI any
proceedings Ior the enIorcement oI the Indenture, and the right oI the Trustee to recover such judgment shall not be
aIIected by the exercise oI any other right, power or remedy Ior the enIorcement oI the provisions oI the Indenture.
Trustee Appointed Agent for Bondholders. The Trustee is appointed the agent and attorney oI the
Holders oI all Bonds Outstanding under the Indenture Ior the purpose oI Iiling any claims relating to the Bonds.
Power of Trustee to Control Proceeding. In the event that the Trustee, upon the happening oI an Event
oI DeIault, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties under the
Indenture, whether upon its own discretion or upon the request oI Holders oI the Bonds, it shall have Iull power, in
the exercise oI its discretion Ior the best interests oI the Holders oI the Bonds or the Credit Provider, with respect to
the continuance, discontinuance, withdrawal, compromise, settlement or other disposal oI such action; provided,
however, that the Trustee shall not, unless there no longer continues an Event oI DeIault under the Indenture,
discontinue, withdraw, compromise or settle, or otherwise dispose oI any litigation pending at law or in equity, iI at
the time there has been Iiled with it a written request signed by the Credit Provider, iI any, or the Holders oI at least
a majority in principal amount oI the Bonds Outstanding under the Indenture opposing such discontinuance,
withdrawal, compromise, settlement or other disposal oI such litigation with the consent oI the Credit Provider.
All rights oI action under the Indenture or under any oI the Bonds secured by the Indenture which are
enIorceable by the Trustee may be enIorced by it without the possession oI any oI the Bonds, or the production
thereoI at the trial or other proceedings relative thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name as Trustee oI an express trust Ior the equal and ratable beneIit oI the
Bondholders, subject to the provisions oI the Indenture.
D-21
Limitation on Bondholders` Right to Sue. (a) (i) Except as provided in the Indenture, no Holder oI a
Bond issued under the Indenture shall have the right to institute any suit, action or proceeding at law or in equity, Ior
any remedy under or upon the Indenture, unless (i) such Holder shall have previously given to the Trustee written
notice oI the occurrence oI an Event oI DeIault under the Indenture; (ii) the Holders oI at least a majority in
aggregate principal amount oI all the Bonds then Outstanding shall have made written request upon the Trustee to
exercise the powers hereinbeIore granted or to institute such action, suit or proceeding in its own name; (iii) said
Holders shall have tendered to the Trustee indemnity satisIactory to it against the costs, expenses (including
reasonable attorneys` Iees) and liabilities to be incurred in compliance with such request; (iv) the Trustee shall have
reIused or omitted to comply with such request Ior a period oI thirty (30) days aIter such written request shall have
been received by, and said tender oI indemnity shall have been made to, the Trustee; and (v) each Credit Provider
shall have consented.
(ii) Such notiIication, request, tender oI indemnity and reIusal or omission are
declared, in every case, to be conditions precedent to the exercise by any Holder oI Bonds oI any
remedy under the Indenture; it being understood and intended that no one or more Holders shall
have any right in any manner whatever by his or her or their action to enIorce any right under the
Indenture, except in the manner provided in the Indenture, and that all proceedings at law or in
equity to enIorce any provision oI the Indenture shall be instituted, had and maintained in the
manner provided in the Indenture and Ior the equal beneIit oI all Holders oI the Outstanding
Bonds, subject to the provisions oI the Indenture.
(b) The right oI any Holder to receive payment oI the principal oI (and premium, iI any) and
interest on a Bond out oI Revenues, amounts made available under a Credit Facility and any other Iunds pledged
thereIor under the Indenture, as therein provided, on and aIter the respective due dates expressed in such Bond, or to
institute suit Ior the enIorcement oI any such payment on or aIter such respective dates, shall not be impaired or
aIIected without the consent oI such Holder, notwithstanding the Ioregoing or any other provision oI the Indenture.
Duties, Immunities and Liabilities of Trustee.
(a) The Trustee shall, prior to an Event oI DeIault under the Indenture, and aIter the curing oI
all Events oI DeIault under the Indenture which may have occurred, shall perIorm such duties and only such duties
as are speciIically set Iorth in the Indenture. The Trustee shall, during the existence oI any Event oI DeIault under
the Indenture (which has not been cured), exercise such oI the rights and powers vested in it by the Indenture, and
use the same degree oI care and skill in their exercise, as prudent persons would exercise or use under the
circumstances in the conduct oI their own aIIairs.
(b) No provision oI the Indenture shall be construed to relieve the Trustee Irom liability Ior
its own negligent action or its own negligent Iailure to act or its own willIul misconduct, except that:
(i) Prior to the occurrence oI any Event oI DeIault under the Indenture and aIter the
curing oI all Events oI DeIault which may have occurred, the duties and obligations oI the Trustee
shall at all times be determined solely by the express provisions oI the Indenture; the Trustee shall
not be liable except Ior the perIormance oI such duties and obligations as are speciIically set Iorth
in the Indenture; and no covenants or obligations shall be implied into the Indenture which are
adverse to the Trustee; and
(ii) At all times, regardless oI whether or not any Event oI DeIault shall exist,
(A) the Trustee shall not be liable Ior any error oI judgment made in good
Iaith by a Responsible OIIicer or OIIicers oI the Trustee unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent Iacts; and
(B) the Trustee shall not be personally liable with respect to any action
taken, permitted or omitted by it in good Iaith in accordance with the direction oI the
Holders oI not less than a majority, or such other percentage as may be required under the
D-22
Indenture, in aggregate principal amount oI the Bonds Outstanding relating to the time,
method and place oI conducting any proceeding Ior any remedy available to the Trustee,
or exercising any trust or power conIerred upon the Trustee under the Indenture; and
(C) in the absence oI bad Iaith on the part oI the Trustee, the Trustee may
conclusively rely, as to the truth oI the statements and the correctness oI the opinions
expressed therein, upon any certiIicate or opinion Iurnished to the Trustee conIorming to
the requirements oI the Indenture; but in the case oI any such certiIicate or opinion, the
Trustee shall be under a duty to examine the same to determine whether or not it
conIorms to the requirements oI the Indenture.
(iii) The Trustee may execute any oI the trusts or powers oI the Indenture and
perIorm the duties required oI it under the Indenture by or through attorneys, agents or receivers,
and shall be entitled to advice oI counsel concerning all matters oI trust and concerning its duties
under the Indenture and the Trustee shall not be responsible Ior any misconduct or negligence on
the part oI any attorney or agent appointed with due care by it under the Indenture.
(c) None oI the provisions contained in the Indenture shall require the Trustee to expend or
risk its own Iunds or otherwise incur individual Iinancial liability in the perIormance oI any oI its duties or in the
exercise oI any oI its rights or powers. The permissive right oI the Trustee to perIorm acts enumerated in the
Indenture or the Agreement shall not be construed as a duty or obligation under the Indenture.
Right of Trustee to Rely upon Documents, Etc. Except as otherwise provided in the Indenture:
(a) The Trustee may rely and shall be protected in acting upon any resolution, certiIicate,
statement, instrument, opinion, report, notice, request, consent, order, bond, direction, demand, election or other
paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) Any notice, request, direction, election, order or demand oI the Authority mentioned in
the Indenture shall be deemed to be suIIiciently evidenced by an instrument signed in the name oI the Authority by
an Authorized Authority Representative;
(c) The Trustee may consult with counsel oI its selection (who may include its own counsel
or counsel Ior the Authority or Bond Counsel) and the opinion oI such counsel shall be Iull and complete
authorization and protection in respect oI any action taken or suIIered by it under the Indenture in good Iaith and in
accordance with the opinion oI such counsel; and
(d) Whenever in the administration oI the trusts oI the Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or suIIering any action under the
Indenture, such matter (unless other evidence in respect thereoI be speciIically prescribed therein) may, in the
absence oI negligence or bad Iaith on the part oI the Trustee, be deemed to be conclusively proved and established
by a CertiIicate oI the Authority; and such CertiIicate oI the Authority shall, in the absence oI negligence or bad
Iaith on the part oI the Trustee, be Iull warrant to the Trustee Ior any action taken or suIIered by it under the
provisions oI the Indenture upon the Iaith thereoI.
(e) The Trustee shall have no responsibility with respect to any inIormation, statement or
recital in any oIIicial statement, oIIering memorandum or any other disclosure material prepared or distributed with
respect to the Bonds.
(I) The Trustee shall not be deemed to have knowledge oI an Event oI DeIault under the
Indenture, under the Agreement or any other document related to the Bonds unless it shall have actual knowledge at
its Principal OIIice.
D-23
(g) BeIore taking any action under the provisions oI the Indenture relating to DeIault, the
Trustee may require indemnity satisIactory to the Trustee be Iurnished Irom any expenses and to protect it against
any liability it may incur under the Indenture, subject to the provisions oI the Indenture relating to indemniIication.
(h) The immunities extended to the Trustee also extend to its directors, oIIicers, employees
and agents.
(i) The Trustee may accept, hold and draw upon the Credit Facility issued by itselI or by any oI its
corporate aIIiliates to provide security and a source oI payment Ior the Bonds. The Trustee covenants that it shall at
all times maintain adequate controls to manage any potential conIlict oI interest. Notwithstanding any other
provision in the Indenture to the contrary, while the Credit Provider issuing the Credit Facility or Alternate Credit
Facility is the Trustee or an aIIiliate oI the Trustee and such Credit Provider has not Iailed to honor a properly
presented draw on the Credit Facility or Alternate Credit Facility, the Trustee shall have no discretion with respect to
the acceleration oI the Bonds and shall do so only upon the written direction oI such Credit Provider. The Trustee
shall immediately tender its resignation and take prompt steps to have a successor trustee appointed satisIying the
requirements oI the Indenture iI such aIIiliated Credit Provider shall Iail at any time to honor a properly presented
draw on the Credit Facility.
Moneys Received by Trustee to Be Held in Trust. Subject to the provisions oI the Indenture relating to
deIeasance, all moneys received by the Trustee shall, until used or applied as provided in the Indenture, be held in
trust Ior the purposes Ior which they were received, but need not be segregated Irom other Iunds except to the extent
required by law or as otherwise provided therein. Except to the extent provided otherwise in the Indenture, any
interest allowed on any such moneys shall be deposited in the Iund to which such moneys are credited. Available
Amounts, moneys being held to become Available Amounts, amounts received under any Credit Facility and
proceeds oI any remarketing oI Bonds shall not be commingled with any other Iunds held by the Trustee under the
Indenture.
Resignation and Removal of Trustee and Appointment of Successor Trustee.
(a) The Trustee may at any time resign by giving written notice to the Authority, the
Corporation and the Credit Provider, iI any, and by giving to the Bondholders notice either by publication oI such
resignation, which notice shall be published at least once in a QualiIied Newspaper, or by giving Notice by Mail to
such Bondholders. The Trustee shall also mail a copy oI any such notice oI resignation to the Rating Agency. Upon
receiving such notice oI resignation, the Authority, with the advice and consent oI the Corporation and the consent
oI the Credit Provider shall promptly appoint a successor trustee by an instrument in writing. II no successor trustee
shall have been so appointed and have accepted appointment within thirty (30) days aIter the giving oI such notice
oI resignation by the resigning Trustee, the resigning Trustee may petition any court oI competent jurisdiction Ior
the appointment oI a successor trustee, or any Bondholder who has been a bona Iide Holder Ior at least six (6)
months may, on behalI oI himselI and others similarly situated, petition any such court Ior the appointment oI a
successor trustee. Such court may thereupon, aIter such notice, iI any, as it may deem proper and may prescribe,
appoint a successor trustee.
(b) In case at any time either oI the Iollowing shall occur:
(i) the Trustee shall cease to be eligible in accordance with the provisions oI the
Indenture and shall Iail to resign aIter written request thereIor by the Authority or by any Bondholder who has been
a bona Iide Holder Ior at least six (6) months, or
(ii) the Trustee shall become incapable oI acting, or shall be adjudged a bankrupt or
insolvent, or a receiver oI the Trustee or oI its property shall be appointed, or any public oIIicer shall take charge or
control oI the Trustee or oI its property or aIIairs Ior the purpose oI rehabilitation, conservation or liquidation,
then, in any such case, the Authority may remove the Trustee and, with the advice and consent oI the Corporation
and the consent oI the Credit Provider appoint a successor trustee by an instrument in writing, or any Bondholder
who has been a bona Iide Holder Ior at least six (6) months may, on behalI oI himselI and others similarly situated,
D-24
petition any court oI competent jurisdiction Ior the removal oI the Trustee, and the appointment oI a successor
trustee. Such court may thereupon, aIter such notice, iI any, as it may deem proper and may prescribe, remove the
Trustee, and appoint a successor trustee. Upon any removal oI the Trustee, any outstanding Iees and expenses oI
such Iormer Trustee shall be paid in accordance with the Indenture.
(c) The Authority or the Corporation, in the absence oI an Event oI DeIault, or the Holders oI
a majority in aggregate principal amount oI the Bonds at the time Outstanding may at any time remove the Trustee,
and with the consent oI the Credit Provider, iI any, appoint a successor trustee, by an instrument or concurrent
instruments in writing signed by the Authority, or the Corporation or such Bondholders, as the case may be.
(d) Any resignation or removal oI the Trustee, and appointment oI a successor trustee,
pursuant to any oI the provisions oI this section shall become eIIective only upon acceptance oI appointment by the
successor trustee as provided in the Indenture, and upon transIer oI the Credit Facility, iI any, then in eIIect to the
successor trustee.
Acceptance of Trust by Successor Trustee. Any successor trustee appointed as provided in the Indenture
shall execute, acknowledge and deliver to the Authority, the Corporation, the Credit Provider, iI any, and to its
predecessor Trustee an instrument accepting such appointment under the Indenture, and thereupon the resignation or
removal oI the predecessor Trustee shall become eIIective and such successor trustee, without any Iurther act, deed
or conveyance, shall become vested with all the rights, powers, trusts, duties and obligations oI its predecessor in the
trusts under the Indenture, with like eIIect as iI originally named as Trustee in the Indenture; but, nevertheless, on
the Written Request oI the Authority, the Request oI the Corporation or the request oI the successor trustee, the
Trustee ceasing to act shall execute and deliver an instrument transIerring to such successor trustee, upon the trusts
therein expressed, all the rights, powers and trusts oI the trustee so ceasing to act. Upon request oI any such
successor trustee, the Authority shall execute any and all instruments in writing necessary or desirable Ior more Iully
and certainly vesting in and conIirming to such successor trustee all such rights, powers and duties. Any Trustee
ceasing to act shall, nevertheless, retain a lien upon all property or Iunds held or collected by such Trustee to secure
the amounts due it as compensation, reimbursement, expenses and indemnity aIIorded to it by the Indenture.
No successor trustee shall accept appointment unless at the time oI such acceptance such successor trustee
shall be eligible under the provisions oI the Indenture.
Upon acceptance oI appointment by a successor trustee, the Authority or such successor trustee shall give
the Bondholders, the Credit Provider, iI any, and the Rating Agency notice oI the succession oI such trustee to the
trusts under the Indenture in the manner prescribed in the Indenture Ior the giving oI notice oI resignation oI the
Trustee.
Modification Without Consent of Bondholders.
(a) The Authority and the Trustee, without the consent oI or notice to any Bondholders Irom
time to time and at any time, with the consent oI each Credit Provider, iI any, but subject to the conditions and
restrictions contained in the Indenture, may enter into a Supplemental Indenture or Supplemental Indentures
amending or supplementing the Indenture as theretoIore in eIIect, which Supplemental Indenture or Indentures
thereaIter shall Iorm a part thereoI; and the Trustee, without the consent oI or notice to any Bondholders, with the
consent oI each Credit Provider, iI any, Irom time to time and at any time may consent to any Amendment to the
Agreement; in each case Ior any one or more oI the Iollowing purposes:
(i) to add to the covenants and agreements oI the Authority contained in the
Indenture, or oI the Corporation contained in the Agreement, other covenants and agreements
thereaIter to be observed, or to assign or pledge additional security Ior any oI the Bonds, or to
surrender any right or power therein reserved to or conIerred upon the Authority or the
Corporation; provided, that no such covenant, agreement, assignment, pledge or surrender shall
materially adversely aIIect the interests oI the Holders oI the Bonds;
D-25
(ii) to make such provisions Ior the purpose oI curing any ambiguity, inconsistency
or omission, or oI curing, correcting or supplementing any deIective provision contained in the
Indenture or the Agreement, or in regard to matters or questions arising under the Indenture or the
Agreement, as the Authority may deem necessary or desirable and not inconsistent with the
Indenture and which shall not materially adversely aIIect the interests oI the Holders oI the Bonds;
(iii) to modiIy, amend or supplement the Indenture or any Supplemental Indenture in
such manner as to permit the qualiIication thereoI under the Trust Indenture Act oI 1939 or any
similar Iederal statute hereaIter in eIIect, and, iI they so determine, to add to the Indenture or any
Supplemental Indenture such other terms, conditions and provisions as may be permitted by said
Trust Indenture Act oI 1939 or similar Iederal statute, and which shall not materially adversely
aIIect the interests oI the Holders oI the Bonds;
(iv) to provide Ior any additional procedures, covenants or agreements necessary to
maintain the status oI interest on the Bonds as excluded Irom gross income Ior Iederal income tax
purposes; provided that such Amendment or Supplemental Indenture shall not materially
adversely aIIect the interests oI the Holders oI the Bonds;
(v) to modiIy or eliminate the book-entry registration system Ior the Bonds;
(vi) to provide Ior the appointment oI a co-trustee or the succession oI a new
Trustee;
(vii) to change the description oI the Project in accordance with the provisions oI the
Agreement and oI the Tax CertiIicate;
(viii) to provide Ior an extension oI a Credit Facility or the provision oI an Alternate
Credit Facility;
(ix) to comply with requirements oI the Rating Agency in order to obtain or maintain
a rating on any Bonds;
(x) in connection with any other change which will not adversely aIIect the security
Ior the Bonds or the status oI interest on the Bonds as excluded Irom gross income Ior Iederal
income tax purposes or otherwise materially adversely aIIect the interests oI the Holders oI the
Bonds (such determination may be based upon an Opinion oI Counsel); or
(xi) to modiIy, alter, amend or supplement the Indenture or the Agreement in any
other respect, including amendments which would otherwise be described in the provisions oI the
Indenture under the caption 'ModiIication oI the Indenture With Consent oI Bondholders, iI the
eIIective date oI such Supplemental Indenture or Amendment is a date on which all Bonds
aIIected thereby are subject to mandatory tender Ior purchase or iI Notice by Mail oI the proposed
Supplemental Indenture or Amendment is given to Holders oI the aIIected Bonds at least thirty
(30) days beIore the eIIective date thereoI and, on or beIore such eIIective date, such Bondholders
have the right to demand purchase oI their Bonds pursuant to the Indenture.
(b) BeIore the Authority or the Trustee enters into a Supplemental Indenture and beIore the
Trustee consents to any Amendment to the Agreement pursuant to these provisions, the Authority or the Trustee, as
the case may be, shall cause notice oI the proposed execution oI the Supplemental Indenture or Amendment to be
given by mail to each Credit Provider and the Rating Agency. A copy oI the proposed Supplemental Indenture or
Amendment shall accompany such notice. Not less than one week aIter the date oI the Iirst mailing oI such notice,
the Authority and/or the Trustee may execute and deliver such Supplemental Indenture or Amendment, but only
aIter there shall have been delivered to the Trustee an Approving Opinion regarding such Supplemental Indenture or
Amendment.
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(c) Notwithstanding the Ioregoing provisions, the Trustee shall not be obligated to enter into
any such Supplemental Indenture which aIIects the Trustee`s own rights, duties or immunities under the Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such Supplemental
Indenture, and the Trustee shall not enter into any Supplemental Indenture or consent to any Amendment without
Iirst obtaining the written consent oI the Corporation. Any such Supplemental Indenture or Amendment may be
approved by an Authorized Authority Representative and need not be approved by resolution or other action oI the
Board oI Directors oI the Authority.
Modification with Consent of Bondholders.
(a) With the consent oI the Holders oI not less than a majority in aggregate principal amount
oI the Bonds at the time Outstanding, evidenced as provided in the Indenture, and each Credit Provider, iI any,
(i) the Authority and the Trustee may Irom time to time and at any time enter into a Supplemental Indenture or
Indentures Ior the purpose oI adding any provisions to or changing in any manner or eliminating any oI the
provisions oI the Indenture or oI any Supplemental Indenture; or (ii) the Trustee may consent to any Amendment to
the Agreement; provided, however, that no such Supplemental Indenture or Amendment will have the eIIect oI
extending the time Ior payment or reducing any amount due and payable by the Corporation pursuant to the
Agreement with respect to the Bonds without the consent oI the Holder oI each Bond so aIIected; and that no such
Supplemental Indenture shall (1) extend the Iixed maturity oI any Bond or reduce the rate oI interest thereon or
extend the time oI payment oI interest, or reduce the amount oI the principal thereoI, or reduce any premium payable
on the redemption thereoI, without the consent oI the Holder oI each Bond so aIIected, or (2) reduce the aIoresaid
percentage oI Holders whose consent is required Ior the execution oI such Supplemental Indenture or Amendment,
or permit the creation oI any lien on the Revenues and the other Iunds pledged to the payment oI the Bonds under
the Indenture, prior to or on a parity with the lien oI the Indenture, except as permitted in the Indenture, or permit the
creation oI any preIerence oI any Bondholder over any other Bondholder, except as permitted in the Indenture, or
deprive the Holders oI the Bonds oI the lien created by the Indenture upon the Revenues and the other Iunds pledged
to the payment oI the Bonds under the Indenture, without the consent oI the Holders oI all the Bonds then
Outstanding. Nothing in this paragraph shall be construed as making necessary the approval oI any Bondholder oI
any Supplemental Indenture or Amendment permitted by the provisions oI the Indenture.
(b) Upon receipt by the Trustee oI: (1) Approving Opinion regarding such Supplemental
Indenture or Amendment; and (2) evidence oI the consent oI the Bondholders and each Credit Provider, iI any, as
aIoresaid, the Trustee shall join with the Authority in the execution oI such Supplemental Indenture or shall consent
to such Amendment; provided, however, that (i) the Trustee shall not be obligated to enter into any such
Supplemental Indenture which aIIects the Trustee`s own rights, duties or immunities under the Indenture or
otherwise, in which case the Trustee may in its sole discretion, but shall not be obligated to, enter into such
Supplemental Indenture; and (ii) the Trustee shall not enter into such Supplemental Indenture or Amendment
without Iirst obtaining the Corporation`s written consent thereto.
(c) It shall not be necessary Ior the consent oI the Bondholders to approve the particular Iorm
oI any proposed Supplemental Indenture or Amendment, but it shall be suIIicient iI such consent shall approve the
substance thereoI.
(d) Promptly aIter the execution by the parties thereto oI any Supplemental Indenture or
Amendment, the Trustee shall mail a notice (prepared by the Corporation) setting Iorth in general terms the
substance oI such Supplemental Indenture or such Amendment to each Credit Provider, iI any, to each Bondholder
at the address contained in the Bond Register and to the Rating Agency. Any Iailure oI the Trustee to give such
notice, or any deIect therein, shall not, however, in any way impair or aIIect the validity oI any such Supplemental
Indenture or such Amendment.
Effect of Supplemental Indenture or Amendment. Upon the execution oI any Supplemental Indenture
or any Amendment to the Agreement pursuant to the provisions oI the Indenture, the Indenture or the Agreement, as
the case may be, shall be and be deemed to be modiIied and amended in accordance therewith, and the respective
rights, duties and obligations under the Indenture and the Agreement oI the Authority, the Trustee, the Corporation,
the Credit Provider and all Holders oI Outstanding Bonds shall thereaIter be determined, exercised and enIorced
thereunder and under the Agreement subject in all respects to such Supplemental Indenture and Amendment, and all
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the terms and conditions oI any such Supplemental Indenture or Amendment shall be part oI the terms and
conditions oI the Indenture or the Agreement, as the case may be, Ior any and all purposes.
Discharge of Indenture. II the entire indebtedness on all Bonds shall be paid and discharged in any one or
more oI the Iollowing ways:
(a) by the payment oI the principal oI, and premium, iI any, and interest on all Bonds, as and
when the same become due and payable; or
(b) by the delivery to the Trustee, Ior cancellation by it, oI all Bonds; or
(c) by providing Ior the payment or redemption thereoI as provided in the Indenture;
and iI all other sums payable under the Indenture by the Authority and all sums payable to each Credit Provider
under each Credit Agreement, iI any, shall be paid and discharged, then thereupon the Indenture shall cease,
terminate and become null and void, all liability oI the Authority and the Corporation in respect oI the Bonds shall
cease, terminate and be completely discharged, except: (i) that the Authority shall remain liable Ior such payment
but only Irom, and the Bondholders shall thereaIter be entitled only to payment (without interest accrued thereon
aIter such redemption date or maturity date) out oI, the money and Government Obligations deposited with the
Trustee as aIoresaid Ior their payment, subject, however, to the provisions oI the Indenture and (ii) that in the case oI
Bonds (or portions thereoI) Ior which provision Ior the payment or redemption thereoI has been made in accordance
with the provisions oI the Indenture relating to deIeasance, the provisions oI the Indenture relating to the transIer
and exchange oI such Bonds (or portions thereoI) and, iI so reserved by the Authority, the right to call the Bonds Ior
optional redemption prior to maturity shall continue to apply to such Bonds (or portions thereoI). Thereupon the
Trustee shall, upon Written Request oI the Authority, which the Authority shall provide upon direction oI the
Corporation, and upon receipt by the Trustee oI an Opinion oI Bond Counsel, stating that in the opinion oI the signer
all conditions precedent to the satisIaction and discharge oI the Indenture have been complied with, Iorthwith
execute proper instruments acknowledging satisIaction oI and discharging the Indenture. The Trustee shall mail
written notice oI such payment and discharge to the applicable Rating Agency. The satisIaction and discharge oI the
Indenture shall be without prejudice to the rights oI the Trustee to charge and be reimbursed by the Corporation Ior
any expenditures which it may thereaIter incur in connection herewith.
Discharge of Liability of Particular Bonds.
(a) Any Bond, or any portion thereoI such that the portion that is not considered paid in
accordance with this paragraph shall be in an Authorized Denomination, shall be deemed to be paid within the
meaning oI, and with the eIIect set Iorth in the Indenture when, whether upon or prior to the maturity or redemption
date, as applicable, (a) payment oI the principal and Purchase Price oI and premium, iI any, on such Bond or such
portion thereoI, plus interest thereon to the due date thereoI (whether such due date is by reason oI maturity or upon
redemption), either (i) shall have been made in accordance with the terms thereoI, or (ii) shall have been provided
Ior by irrevocably depositing with the Trustee in trust and irrevocably setting aside exclusively Ior such payment
(1) Available Amounts suIIicient to make such payment or (2) nonprepayable, noncallable Government Obligations
purchased with the Available Amounts and maturing as to principal and interest in such amounts and at such times
as will insure, without reinvestment, the availability oI suIIicient moneys, together with any other Available
Amounts needed by the Trustee Ior such purposes, to make such payment (based on an assumed interest rate equal
to the Maximum Interest Rate Ior periods Ior which the actual interest rate on the Bonds cannot be determined),
provided, however, that provision Ior the payment oI the Purchase Price oI such Bond may be made by means oI a
Credit Facility; (b) iI such Bond (or portion thereoI) is to be redeemed prior to the maturity thereoI, notice oI such
redemption shall have been given as provided in the Indenture or provision satisIactory to the Trustee shall have
been made Ior giving such notice; (c) all necessary and proper Iees, compensation and expenses oI the Trustee
pertaining to any such deposit shall have been paid or the payment thereoI provided Ior to the satisIaction oI the
Trustee; (d) the Trustee shall have been irrevocably instructed (by the terms oI the Indenture or a Written Request oI
the Authority) to apply such Available Amounts and Government Obligations to the payment oI the principal (and
unless such Purchase Price is to be paid Irom amounts made available under a Credit Facility, the Purchase Price) oI,
premium, iI any, and interest on the Bond (or portion thereoI) to be discharged; (e) the Authority and the Trustee
shall have received an Approving Opinion with respect to such deposit oI Available Amounts and/or Government
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Obligations; and (I) the Authority and the Trustee shall have received an Accountant`s CertiIicate veriIying that the
Available Amounts and Government Obligations so deposited, together with the interest earnings thereon (without
reinvestment) will be suIIicient to pay when due the principal (and unless such Purchase Price to be paid Irom
amounts made available under a Credit Facility, the Purchase Price) oI, premium, iI any, and interest on the Bond
(or portion thereoI) to be discharged to and including the earlier oI its maturity or redemption date. The Trustee
shall not be responsible Ior veriIying the suIIiciency oI Iunds or Government Obligations provided to eIIect the
deIeasance oI Bonds.
(b) The Authority and the Corporation may at any time surrender to the Trustee Ior
cancellation by it any Bonds previously authenticated and delivered which the Authority and the Corporation
lawIully may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall
be deemed to be paid and retired.
Payment of Bonds after Discharge. Notwithstanding any provisions oI the Indenture to the contrary, and
subject to applicable laws oI the State, any moneys deposited with the Trustee, in trust Ior the payment oI the
principal oI, or interest or premium on, any Bond remaining unclaimed Ior two (2) years aIter such payment has
become due and payable (whether on an Interest Payment Date, at maturity, upon call Ior redemption or by
declaration as provided in the Indenture), then such moneys shall be repaid to the Corporation upon its written
request, and the Holder oI such Bond shall thereaIter be entitled to look only to the Corporation Ior payment thereoI,
and all liability oI the Authority and the Trustee with respect to such moneys shall thereupon cease; provided,
however, that beIore the repayment oI such moneys to the Corporation as aIoresaid, the Trustee shall (at the expense
oI the Corporation) Iirst publish at least once in a QualiIied Newspaper a notice, in such Iorm as may be deemed
appropriate by the Corporation and the Trustee, in respect oI the amount so payable with respect to such Bond and in
respect oI the provisions relating to the repayment to the Corporation oI the moneys held Ior the payment thereoI. In
the event oI the repayment oI any such moneys to the Corporation as aIoresaid, the Holder oI the Bond in respect oI
which such moneys were deposited shall thereaIter be deemed to be an unsecured creditor oI the Corporation Ior
amounts equivalent to the respective amounts deposited Ior the payment oI the amount so payable with respect to
such Bond and so repaid to the Corporation (without interest thereon).
Limitation of Rights to Parties and Bondholders.
(a) Nothing in the Indenture or in the Bonds expressed or implied is intended or shall be
construed to give to any person other than the Authority, the Trustee, the Corporation, each Credit Provider, iI any,
and the Holders oI the Bonds any legal or equitable right, remedy or claim under or in respect oI the Indenture or
any covenant, condition or provision therein contained; and all such covenants, conditions and provisions are and
shall be held to be Ior the sole and exclusive beneIit oI the Authority, the Trustee, the Corporation, each Credit
Provider and the Holders oI the Bonds.
(b) To the extent that any provision oI the Indenture expressly conIers rights upon a Credit
Provider (including, without limitation, rights to provide consents or directions or to give or receive notices) the
parties agree and acknowledge that such Credit Provider is a third party beneIiciary oI such provision and that such
Credit Provider may enIorce such provision against the other parties to the Agreement.
LOAN AGREEMENT
Agreement to Acquire and Construct the Project. The Corporation agrees that it will acquire, construct,
install, improve, renovate, remodel, Iurnish and equip, or complete the acquisition, construction, installation,
improvement, renovation, remodeling, Iurnishing and equipping oI, the Project, and will acquire, construct, install,
improve, renovate, remodel, Iurnish and equip all other Iacilities and real and personal property deemed necessary
Ior the operation oI the Project as a part oI the Facilities, substantially in accordance with the description oI the
Project, including any and all supplements, amendments and additions or deletions thereto or thereIrom, it being
understood that the approval oI the Authority shall not be required Ior changes in such descriptions which do not
substantially alter the purpose and description oI the Project reIerred to above. The Corporation Iurther agrees to
proceed with due diligence to complete the Project within three years Irom the date oI the Agreement.
D-29
Establishment of Completion Date; Obligation of Corporation to Complete.
(a) As soon as the acquisition, construction, installation, improvement, renovation,
remodeling, Iurnishing and equipping oI the Project is completed, the Authorized Corporation Representative, on
behalI oI the Corporation, shall evidence the Completion Date by providing a certiIicate to that eIIect to the Trustee
stating the Costs oI the Project. Notwithstanding the Ioregoing, such certiIicate may state that it is given without
prejudice to any rights oI the Corporation against third parties Ior any claims or Ior the payment oI any amount not
then due and payable which exists at the date oI such certiIicate or which may subsequently exist.
(b) At the time such certiIicate is delivered to the Trustee, moneys remaining in the
Construction Fund (other than moneys relating to provisional payments permitted by the Agreement), including any
earnings resulting Irom the investment oI such moneys, shall be used as provided in the Indenture.
(c) In the event the moneys in the Construction Fund available Ior payment oI the Costs oI
the Project should be insuIIicient to pay the costs thereoI in Iull, the Corporation agrees to pay directly, or to deposit
in the Construction Fund moneys suIIicient to pay, any costs oI completing the Project in excess oI the moneys
available Ior such purpose in the Construction Fund. The Authority makes no express or implied warranty that the
moneys deposited in the Construction Fund and available Ior payment oI the Costs oI the Project under the
provisions oI the Agreement, will be suIIicient to pay all the amounts which may be incurred Ior such costs oI the
Project. The Corporation agrees that iI, aIter exhaustion oI the moneys in the Construction Fund, the Corporation
should pay, or deposit moneys in the Construction Fund Ior the payment oI, any portion oI the costs oI the Project
pursuant to the provisions oI this section, it shall not be entitled to any reimbursement thereIor Irom the Authority,
Irom the Trustee or Irom the Holders oI any oI the Bonds, nor shall it be entitled to any diminution oI the amounts
payable under the Agreement.
Repayment and Payment of Other Amounts Payable.
(a) (i) With respect to the Bonds, the Corporation covenants and agrees to pay to the
Trustee as a Repayment Installment, on or beIore each date provided in or pursuant to the Indenture Ior the payment
oI principal oI (whether at maturity or upon redemption or acceleration), premium, iI any, and/or interest on the
Outstanding Bonds, until the principal oI, premium, iI any, and interest on the Bonds shall have been Iully paid or
provision Ior the payment thereoI shall have been made in accordance with the Indenture, in immediately available
Iunds, Ior deposit in the Bond Fund, a sum equal to the amount then payable as principal (whether at maturity or
upon redemption or acceleration), premium, iI any, and interest upon the Outstanding Bonds as provided in the
Indenture. The Corporation agrees that any amounts due as a result oI the acceleration oI the maturity oI the Bonds
shall be due and payable immediately upon such acceleration.
(ii) Each payment made by the Corporation pursuant to this section shall at all times
be suIIicient to pay the total amount oI interest and principal (whether at maturity or upon redemption or
acceleration) and premium, iI any, then payable on the Bonds; provided that any amount held by the Trustee in the
Bond Fund on any due date Ior a Repayment Installment under the Indenture shall be credited against the
Repayment Installment due on such date, to the extent available Ior such purpose; and provided Iurther that, subject
to the provisions oI this paragraph, iI at any time the available amounts held by the Trustee in the Bond Fund are
suIIicient to pay all oI the principal oI and interest and premium, iI any, on the Bonds as such payments become due,
the Corporation shall be relieved oI any obligation to make any Iurther payments with respect to the Bonds under the
provisions oI this section. Notwithstanding the Ioregoing, iI on any date the amount held by the Trustee in the Bond
Fund is insuIIicient to make any required payments oI principal oI (whether at maturity or upon redemption or
acceleration) and interest and premium, iI any, on the Bonds as such payments become due, the Corporation shall
Iorthwith pay such deIiciency as a Repayment Installment under the Indenture.
(b) In addition to the Repayment Installments, the Corporation shall also pay to the Authority
or to the Trustee, as the case may be, 'Additional Payments.
Unconditional Obligation. The obligations oI the Corporation to make the payments required by the
Agreement and to perIorm and observe the other agreements on its part contained therein shall be absolute and
unconditional, irrespective oI any deIense or any rights oI setoII, recoupment or counterclaim it might otherwise
D-30
have against the Authority or the Trustee, and during the term oI the Agreement, the Corporation shall pay
absolutely the payments to be made on account oI the loan as prescribed in the Agreement and all other payments
required under the Indenture, Iree oI any deductions and without abatement, diminution or setoII. Until such time as
the principal oI, premium, iI any, and interest on the Bonds shall have been Iully paid, or provision Ior the payment
thereoI shall have been made as required by the Indenture, the Corporation (i) will not suspend or discontinue any
payments provided Ior in the Agreement with respect to the Bonds; (ii) will perIorm and observe all oI its other
covenants contained in the Agreement with respect to the Bonds, the Facilities and the Project; and (iii) except as
provided in the provisions oI the Agreement relating to prepayment, will not terminate the Agreement Ior any cause,
including, without limitation, the occurrence oI any act or circumstances that may constitute Iailure oI consideration,
destruction oI or damage to, or taking or condemnation oI, all or any part oI the Project or the Facilities, commercial
Irustration oI purpose, any change in the tax or other laws oI the United States oI America or oI the State or any
political subdivision oI either oI these, or any Iailure oI the Authority or the Trustee to perIorm and observe any
covenant, whether express or implied, or any duty, liability or obligation arising out oI or connected with the
Agreement or the Indenture.
Assignment of Authority`s Rights. As security Ior the payment oI the Bonds, the Authority will assign to
the Trustee the Authority`s rights, but not its obligations, under the Agreement, including the right to receive
payments under the Agreement (except (i) the rights oI the Authority to receive notices under the Agreement, (ii) the
right oI the Authority to receive certain payments, with respect to expenses and indemniIication and certain other
purposes under the Agreement, (iii) the right oI the Authority to give approvals or consents pursuant to the
Agreement; (iv) the right oI the Authority to access and inspect the Facilities; and (v) the right oI the Authority to
demand a report Irom the Corporation under the Agreement); and the Authority directs the Corporation to make the
payments required under the Agreement (except such payments Ior expenses and indemniIication and certain other
purposes) directly to the Trustee. The Corporation assents to such assignment and agrees to make payments directly
to the Trustee without deIense or setoII by reason oI any dispute between the Corporation and the Authority or the
Trustee.
The Corporation`s Maintenance of its Existence; Assignments.
(a) (i) The Corporation agrees that during the term oI the Agreement and so long as
any Bond is Outstanding, it will maintain its existence as a nonproIit religious corporation, operating a Iacility oI
higher education and meeting the requirements oI Section 501(c)(3) oI the Code, will not dissolve or otherwise
dispose oI all or substantially all oI its assets, and will not consolidate with or merge into another corporation or
permit one or more corporations to consolidate with or merge into it; provided, however, that the Corporation may,
without violating the agreements contained in this section, consolidate with or merge into another corporation or
permit one or more other corporations to consolidate with or merge into it, or sell or otherwise transIer to another
corporation all or substantially all oI its assets as an entirety and thereaIter dissolve iI: the Corporation is the
surviving, resulting or transIeree corporation, as the case may be; or iI the Corporation is not the surviving, resulting
or transIeree corporation, as the case may be, the surviving, resulting or transIeree corporation (i) is a corporation
organized under the laws oI the United States or any state, district or territory thereoI; (ii) is qualiIied to do business
in the State; (iii) is an organization meeting the requirements oI Section 501(c)(3) oI the Code, or a corresponding
provision oI the Iederal income tax laws then in eIIect; and (iv) assumes in writing all oI the obligations oI the
Corporation under the Agreement.
(ii) Notwithstanding the Ioregoing, as a condition precedent to any consolidation,
merger, sale or other transIer, the Trustee and the Authority shall receive an Opinion oI Bond
Counsel to the eIIect that such merger, consolidation, sale or other transIer will not, in and oI
itselI, result in the inclusion oI interest on the Bonds in gross income Ior Iederal income tax
purposes.
(iii) Notwithstanding any other provision oI this section, the Corporation need not
comply with any oI the above provisions oI this section other than the delivery oI the Opinion oI
Bond Counsel reIerred to in the second paragraph oI this section iI, at the time oI such transaction,
all oI the Bonds will be deIeased as provided in the Indenture.
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(b) II a merger, consolidation, sale or other transIer is eIIected, as provided in this section,
the provisions oI this section shall continue in Iull Iorce and eIIect and no Iurther merger, consolidation, sale or
transIer shall be eIIected except in accordance with the provisions oI this section.
Records and Financial Statements of Corporation. The Corporation shall maintain adequate books,
accounts and records in connection with the operation oI the Facilities in accordance with generally accepted
accounting principles and in compliance with the regulations oI any governmental regulatory body having
jurisdiction thereoI. The Corporation shall, within 120 days aIter the close oI each Iiscal year, submit to the
Authority (iI requested by the Authority), each Credit Provider and to the Trustee audited Iinancial statements with
respect to the Corporation Ior such Iiscal year. The Trustee shall have no duty to review such Iinancial statements.
The Trustee shall be permitted (but shall have no duty) at all reasonable times upon reasonable notice during the
term oI the Agreement to examine the books and records oI the Corporation with respect to the Project, subject to
the limitations expressed in the Agreement.
Maintenance and Repair; Taxes; Utility and Other Charges.
(a) For so long as the Facilities are in operation, the Corporation agrees to maintain, to the
extent permitted by applicable law and regulation, the Facilities, or cause the Facilities to be so maintained, during
the term oI the Agreement (i) in saIe condition and (ii) in good repair and in good operating condition consistent
with its historical practices, ordinary wear and tear excepted, making Irom time to time all necessary repairs thereto
and renewals and replacements thereoI.
(b) For so long as the Facilities are in operation, the Corporation agrees that between the
Authority and the Corporation, the Corporation will pay or cause to be paid during the term oI the Agreement all
taxes, governmental charges oI any kind lawIully assessed or levied upon the Facilities or any part thereoI, including
any taxes levied against the Facilities, all utility and other charges incurred in the operation, maintenance, use,
occupancy and upkeep oI the Facilities and all assessments and charges lawIully made by any governmental body
Ior public improvements that may be secured by a lien on the Facilities, provided that with respect to special
assessments or other governmental charges that may lawIully be paid in installments over a period oI years, the
Corporation, to the extent described above, shall be obligated under the Agreement to pay only such installments as
are required to be paid during the term oI the Agreement. The Corporation may, at the Corporation`s expense and in
the Corporation`s name, in good Iaith, contest any such taxes, assessments and other charges and, in the event oI any
such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during that period oI
such contest and any appeal thereIrom unless by such nonpayment the Facilities or any part thereoI will be subject to
loss or IorIeiture.
Tax Covenant. The Corporation covenants and agrees that it will at all times do and perIorm all acts and
things permitted by law and the Loan Agreement which are necessary in order to assure that interest paid on the
Bonds will be excluded Irom gross income Ior Iederal income tax purposes and will take no action that would result
in such interest not being so excluded. Without limiting the generality oI the Ioregoing, the Corporation agrees to
comply with the provisions oI the Tax Agreement. This covenant shall survive payment in Iull or deIeasance oI the
Bonds Ior the duration oI the useIul liIe oI the Project.
Continuing Disclosure. The Corporation covenants and agrees, whenever a Term Interest Rate Period oI
longer than nine months is in eIIect with respect to a Series oI Bonds or iI otherwise required by Rule 15c2-12, to
comply with the continuing disclosure requirements Ior such Series oI Bonds as promulgated under Rule 15c2-12, as
it may Irom time to time hereaIter be amended or supplemented. Notwithstanding any other provision oI the
Agreement, Iailure oI the Corporation to comply with the requirements oI Rule 15c2-12 applicable to the Bonds, as
it may Irom time to time hereaIter be amended or supplemented, shall not be considered an Event oI DeIault under
the Agreement or under the Indenture; however, the Trustee, at the written request oI the Remarketing Agent or the
Holders oI at least 25 aggregate principal amount oI Outstanding Bonds and upon receipt oI indemnity satisIactory
to the Trustee shall or any Bondholder or beneIicial owner (within the meaning oI Rule 15c2-12) oI any Bonds may
take such actions as may be necessary or appropriate, including seeking mandate or speciIic perIormance by court
order, to cause the Corporation to comply with its obligations pursuant to this paragraph.
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Special Services Covenant. The Corporation shall operate and maintain the Iacilities as an educational
institution within the territorial limits oI the City oI Riverside, CaliIornia as long as any Bonds remain Outstanding;
provided, however, the Authority, upon review oI such Iacts as it deems relevant, may, Irom time to time, allow the
Corporation to provide alternative services that provide public beneIit to the City oI Riverside, CaliIornia and its
residents, or deem this special services covenant to be satisIied in whole or in part.
Prohibited Uses Covenant. The Corporation covenants and agrees that no portion oI the proceeds oI the
Bonds will be used (1) to Iinance or reIinance any Iacility, place or building used or to be used Ior sectarian
instruction or study or as a place Ior devotional activities or religious worship or in connection with any part oI the
programs oI any school or department oI divinity, or (2) by a Person that is not a 501(c)(3) organization or a
governmental unit or by a 501(c)(3) organization (including the Corporation) in an unrelated trade or business, in
such manner or to such extent as would result in any oI the Bonds being treated as an obligation not described in
Section 103(a) oI the Code. The Corporation agrees to provide a report to the Authority regarding compliance with
this covenant upon any such written demand by the Authority, such report to be provided within ten Business Days
oI such request.
Events of Default.
(a) Any one oI the Iollowing which occurs and is continuing shall constitute an Event oI
DeIault pursuant to the Agreement:
(i) Iailure by the Corporation to pay or cause to be paid any amounts required to be
paid under the Agreement when due; or
(ii) iI any material representation or warranty made by the Corporation in the
Agreement or made by the Corporation in any document, instrument or certiIicate Iurnished to the
Trustee or the Authority in connection with the issuance oI the Bonds shall at any time prove to
have been incorrect in any respect as oI the time made;
(iii) Iailure oI the Corporation to observe and perIorm any covenant, condition or
agreement on its part required to be observed or perIormed under the Agreement, other than
making the payments reIerred to in (a)(i) above, which continues Ior a period oI thirty (30) days
aIter written notice Irom the Trustee or the Authority, which notice shall speciIy such Iailure and
request that it be remedied, unless the Authority and the Trustee shall agree in writing to an
extension oI such time period; provided, however, that iI the Iailure stated in the notice cannot be
corrected within such period, the Authority and the Trustee will not unreasonably withhold their
consent to an extension oI such time period iI corrective action is instituted within such period and
diligently pursued until the deIault is corrected;
(iv) The Corporation shall have repudiated its debts or become insolvent or admit in
writing its inability to pay its debts as they mature or shall apply Ior, consent to or acquiesce in the
appointment oI a trustee, custodian, liquidator or receiver Ior itselI or any part oI its property, or
shall take any action to authorize or eIIect any oI the Ioregoing; or in the absence oI any such
application, consent or acquiescence, a trustee, custodian, liquidator or receiver shall be appointed
Ior it or Ior a substantial part oI its property or revenues and shall not be discharged within a
period oI 60 days; or all, or any substantial part, oI the property oI the Corporation shall be seized,
or otherwise appropriated, or any bankruptcy, reorganization, debt arrangement or other
proceeding under any bankruptcy or insolvency law or any dissolution or liquidation proceeding
shall be instituted by or against the Corporation (or any action shall be taken to authorize or eIIect
the institution by it oI any oI the Ioregoing) and iI instituted against it, shall be consented to or
acquiesced in by it, or shall not be dismissed within a period oI 60 days; or
(v) the occurrence oI an Event oI DeIault under the Indenture.
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(b) The provisions oI subsection (a)(iii) above are subject to the limitation that the
Corporation shall not be deemed in deIault with respect to any covenant, condition or agreement to be observed or
perIormed by the Corporation under the Agreement, other than a covenant or agreement to make any payment
required to be made by the Corporation under the Agreement, iI and so long as the Corporation is unable to carry out
its agreements under the Agreement by reason oI strikes, lockouts or other industrial disturbances; acts oI public
enemies; orders oI any kind oI the government oI the United States or oI the State or any oI their departments,
agencies, or oIIicials, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning;
earthquake; Iire; hurricanes; storms; Iloods; washouts; droughts; arrests; restraint oI government and people; civil
disturbances; explosions; breakage or accident to machinery, transmission pipes or canals; partial or entire Iailure oI
utilities; or any other cause or event not reasonably within the control oI the Corporation; it being agreed that the
settlement oI strikes, lockouts and other industrial disturbances shall be entirely within the discretion oI the
Corporation, and the Corporation shall not be required to make settlement oI strikes, lockouts and other industrial
disturbances by acceding to the demands oI the opposing party or parties when such course is, in the judgment oI the
Corporation, unIavorable to the Corporation. This limitation shall not apply to any deIault under subsections (a)(i),
(a)(ii), (a)(iv) or (a)(v) above.
Remedies on Default.
(a) Whenever any Event oI DeIault shall have occurred and shall continue:
(i) Upon the occurrence oI an Event oI DeIault described in (a)(iv) above, and upon
the acceleration oI the maturity oI the Bonds as provided in the Indenture, the Trustee shall, and
upon the occurrence oI any other Event oI DeIault and with the prior consent oI the applicable
Credit Provider the Trustee may, by notice in writing delivered to the Corporation (with copies oI
such notice being sent to the Authority and the Credit Provider) declare the unpaid balance oI the
loan or any portion thereoI payable under the Agreement, in an amount equal to the Outstanding
principal amount oI the Bonds so accelerated, together with the interest accrued thereon, to be
immediately due and payable.
(ii) The Trustee may have access to and may inspect, examine and make copies oI
the books and records and any and all accounts, data and Iederal income tax and other tax returns
oI the Corporation.
(iii) The Authority or the Trustee may take whatever action or institute any
proceeding, at law or in equity, as may be necessary or desirable Ior the collection oI the payments
and other amounts then due pursuant to the Agreement and thereaIter to become due under the
Agreement or the enIorcement oI the perIormance and observance oI any obligation, agreement or
covenant oI the Corporation under the Agreement, including but not limited to instituting and
prosecuting to judgment or Iinal decree and enIorcing any such judgment or decree against the
Corporation and collect in the manner provided by law moneys decreed to be payable.
(b) The provisions oI subsection (a)(i) oI this section, however, are subject to the condition
that iI, at any time aIter any portion oI the loan shall have been so declared due and payable, and beIore any
judgment or decree Ior the payment oI the moneys due shall have been obtained or entered as hereinaIter provided,
there shall have been deposited with the Trustee a sum suIIicient to pay all the principal oI the Bonds matured prior
to such declaration and all matured installments oI interest (iI any) upon all such Bonds, with interest on such
overdue installments oI principal as provided in the Agreement, and the reasonable Iees and expenses oI the Trustee,
and any and all other deIaults actually known to the Trustee (other than in the payment oI principal oI and interest
on such Bonds due and payable solely by reason oI such declaration) shall have been made good or cured to the
satisIaction oI the Trustee or provision deemed by the Trustee to be adequate shall have been made thereIor, then,
and in every such case, the Holders oI at least a majority in aggregate principal amount oI the Bonds then
Outstanding, by written notice to the Authority and to the Trustee accompanied by the written consent oI the
applicable Credit Provider may, on behalI oI the Holders oI all the Bonds, rescind and annul such declaration and its
consequences and waive such deIault; provided that no such rescission and annulment shall extend to or shall aIIect
any subsequent deIault, or shall impair or exhaust any right or power consequent thereon.
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(c) In case the Trustee or the Authority shall have proceeded to enIorce its rights under the
Agreement and such proceedings shall have been discontinued or abandoned Ior any reason or shall have been
determined adversely to the Trustee or the Authority, then, and in every such case, the Corporation, the Trustee and
the Authority shall be restored respectively to their several positions and rights under the Agreement, and all rights,
remedies and powers oI the Corporation, the Trustee and the Authority shall continue as though no such action had
been taken (provided, however, that any settlement oI such proceedings duly entered into by the Authority, the
Trustee or the Corporation shall not be disturbed by reason oI this provision).
(d) In case proceedings shall be pending Ior the bankruptcy or Ior the reorganization oI the
Corporation under the Iederal bankruptcy laws or any other applicable law, or in case a receiver or trustee shall have
been appointed Ior any property oI the Corporation or in the case oI any other similar judicial proceedings relative to
the Corporation, or the creditors or property oI the Corporation, then the Trustee shall be entitled and empowered,
by intervention in such proceedings or otherwise, to Iile and prove a claim or claims Ior the whole amount owing
and unpaid pursuant to the Agreement and, in case oI any judicial proceedings, to Iile such prooIs oI claim and other
papers or documents as may be necessary or advisable in order to have the claims oI the Trustee allowed in such
judicial proceedings relative to the Corporation, its creditors or its property, and to collect and receive any moneys
or other property payable or deliverable on any such claims, and to distribute such amounts as provided in the
Indenture aIter the deduction oI its reasonable charges and expenses to the extent permitted by the Indenture. Any
receiver, assignee or trustee in bankruptcy or reorganization is authorized to make such payments to the Trustee, and
to pay to the Trustee any amount due it Ior reasonable compensation and expenses, including reasonable expenses
and Iees oI counsel incurred by it up to the date oI such distribution.
No Remedy Exclusive. No remedy conIerred upon or reserved to the Authority or the Trustee is intended
to be exclusive oI any other available remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under the Agreement or now or hereaIter existing at law or in equity
or by statute. No delay or omission to exercise any right or power accruing upon any deIault shall impair any such
right or power or shall be construed to be a waiver thereoI, but any such right and power may be exercised Irom time
to time and as oIten as may be deemed expedient. In order to entitle the Authority or the Trustee to exercise any
remedy reserved to it, it shall not be necessary to give any notice, other than such notice as may be expressly
required in the Agreement. Such rights and remedies as are given the Authority under the Agreement shall also
extend to the Trustee, and the Trustee and the Holders oI the Bonds shall be deemed third party beneIiciaries oI all
covenants and agreements contained in the Agreement except rights and remedies relating to Iees, indemniIication
and notiIication. To the extent that any covenants and agreements in the Agreement expressly grant rights to the
Credit Provider, it shall be deemed a third party beneIiciary oI such covenants and agreements.
Redemption of Bonds With Prepayment Moneys. By virtue oI the assignment oI certain rights oI the
Authority under the Agreement to the Trustee as is provided in the Agreement, the Corporation agrees to and shall
pay (or cause to be paid) directly to the Trustee any amount permitted to be paid by it. The Trustee shall use the
moneys so paid to it by the Corporation to eIIect redemption oI the Bonds in accordance with the Indenture on the
date speciIied Ior such redemption pursuant to the Agreement or to apply such prepayment to making provision Ior
the payment oI Bonds as provided in the Indenture.
Option to Prepay Repayment Installments. The Corporation shall have the option to prepay the
Repayment Installments payable under the Agreement with respect to all or any portion oI the Bonds (the principal
amount and Series designation to be speciIied by an Authorized Corporation Representative subject to the
requirement that the Outstanding Bonds oI each Series be in Authorized Denominations) by paying to the Trustee,
Ior deposit in the Bond Fund or such other Iund established Ior such purpose and held by the Trustee, the applicable
amount set Iorth in the Agreement.
Amount of Prepayment.
(a) In the case oI a prepayment oI the amount due under the Agreement with respect to all
Outstanding Bonds pursuant to the immediately preceding paragraph, the amount to be paid shall be a sum
suIIicient, together with other Iunds then on deposit with the Trustee and available Ior such purpose and the
principal oI and interest on any Government Obligations described in the Indenture then on deposit with the Trustee
which are due and payable on and beIore the applicable payment or redemption date and which Government
D-35
Obligations are then available Ior such purpose, to pay with Available Amounts (1) the principal oI all Outstanding
Bonds on the maturity date or on the redemption date, as applicable, oI such Bonds, plus interest accrued and to
accrue to the payment or redemption date oI the Bonds, plus premium, iI any, (2) all reasonable and necessary Iees
and expenses oI the Authority, the Trustee and the Remarketing Agent accrued and to accrue through Iinal payment
oI the Bonds, and (3) all other liabilities oI the Corporation accrued and to accrue under the Agreement with respect
to the Bonds.
(b) In the case oI prepayment oI the Repayment Installments with respect to less than all oI
the Outstanding Bonds, the amount payable shall be a sum suIIicient, together with other Iunds deposited with the
Trustee and available Ior such purpose and the principal oI and interest on any Governmental Obligations described
in the Indenture then on deposit with the Trustee which are due and payable on and beIore the applicable payment or
redemption date and which Government Obligations are then available Ior such purpose, to pay with Available
Amounts the principal amount oI and premium, iI any, and interest on the Bonds to be paid or redeemed with such
prepayment, as provided in the Indenture, and to pay expenses oI the payment or redemption, as applicable, oI such
Bonds.
E-1
APPENDI X E

FORM OF OPI NI ON OF BOND COUNSEL
Upon i ssuance of the Bonds, Or r i ck, Her r i ngton & Sutcl i ffe LLP, Bond Counsel to the Author i ty,
pr oposes to r ender i ts fi nal appr ovi ng opi ni on wi th r espect ther eto i n substanti al l y the fol l owi ng for m:
[ Date of Del i very]

Cal i f orni a Muni ci pal Fi nance Authori ty

Cal i f orni a Muni ci pal Fi nance Authori ty
Vari abl e Rate Revenue Bonds
(La Si erra Uni versi ty) Seri es 2008A and Seri es 2008B
(Fi nal Opi ni on)
Ladi es and Gentl emen:
We have acted as bond counsel to the California Municipal Finance Authority (the Authority)
i n connecti on wi th i ssuance of $12,000,000 aggregate pri nci pal amount of Cal i f orni a Muni ci pal Fi nance
Authori ty Vari abl e Rate Revenue Bonds (La Si erra University) Series 2008A (the Series 2008A Bonds)
and $12,405,000 aggregate pri nci pal amount of Cal i f orni a Muni ci pal Fi nance Authori ty Vari abl e Rate
Revenue Bonds (La Si erra Uni versi ty) Seri es 2008B (the Series 2008B Bonds and collectively with the
Series 2008A Bonds, the Bonds), issued pursuant to the provi si ons of the Joi nt Exerci se of Powers Act
(consti tuti ng Chapter 5 of Di vi si on 7 of Ti tl e 1 (commenci ng wi th Secti on 6500) of the Cal i f orni a
Government Code), and an i ndenture of trust, dated as of August 1, 2008 (the Indenture), between the
Authori ty and U.S. Bank Nati onal Associ ati on, as trustee (the Trustee). The Indenture provides that the
Bonds are i ssued f or the purpose of maki ng a l oan of the proceeds thereof to La Si erra Uni versi ty (the
Corporation), pursuant to a loan agreement, dated as of August 1, 2008 (the Loan Agreement),
between the Authori ty and the Corporati on. Capi tal i zed terms not otherwi se def i ned herei n shal l have the
meani ngs ascri bed thereto i n the I ndenture.
I n such connecti on, we have revi ewed the I ndenture, the Loan Agreement, the Tax Certi f i cate and
Agreement, dated the date hereof relating to the Bonds (the Tax Agreement), by and between the
Authori ty and the Corporati on, opi ni ons of counsel to the Trustee and the Corporati on, certi f i cates of the
Authori ty, the Trustee, the Corporati on and others, and such other documents, opi ni ons and matters to the
extent we deemed necessary to render the opi ni ons set f orth herei n.
We have rel i ed on the opi ni on of DLA Pi per, counsel to the Corporati on, regardi ng, among other
matters, the current qual i f i cati on of the Corporati on as an organi zati on descri bed i n Secti on 501(c)(3) of
the I nternal Revenue Code of 1986 (the Code) and the use of the facilities financed with the proceeds of
the Bonds i n acti vi ti es that are not consi dered unrel ated trade or busi ness acti vi ti es of the Corporati on
wi thi n the meani ng of Secti on 513 of the Code. We note that such opi ni on i s subj ect to a number of
qual i f i cati ons and l i mi tati ons. Fai l ure of the Corporati on to be organi zed and operated i n accordance wi th
the Internal Revenue Services requirements for the maintenance of i ts status as an organi zati on descri bed
i n Secti on 501(c)(3) of the Code, or use of the f aci l i ti es f i nanced or ref i nanced wi th the proceeds of the
Bonds i n acti vi ti es that are consi dered unrel ated trade or busi ness acti vi ti es of the Corporati on wi thi n the
E-2
meani ng of Secti on 513 of the Code, may resul t i n i nterest on the Bonds bei ng i ncl uded i n gross i ncome
f or f ederal i ncome tax purposes, possi bl y f rom the date of i ssuance of the Bonds.
The opi ni ons expressed herei n are based on an anal ysi s of exi sti ng l aws, regul ati ons, rul i ngs and
court deci si ons and cover certai n matters not di rectl y addressed by such authori ti es. Such opi ni ons may
be af f ected by acti ons taken or omi tted or events occurri ng af ter the date hereof . We have not undertaken
to determi ne, or to i nf orm any person, whether any such acti ons are taken or omi tted or events do occur or
any other maters come to our attenti on af ter the date hereof . Accordi ngl y, thi s opi ni on speaks onl y as of
i ts date and i s not i ntended to, and may not, be rel i ed upon i n connecti on wi th any such acti ons, events or
matters. Our engagement wi th respect to the Bonds has concl uded wi th thei r i ssuance, and we di scl ai m
any obl i gati on to update thi s l etter. We have assumed the genui neness of al l documents and si gnatures
presented to us (whether as ori gi nal s or as copi es) and the due and l egal executi on and del i very thereof
by, and val i di ty agai nst, any parti es other than the Authori ty. We have assumed, wi thout undertaki ng to
veri f y, the accuracy of the f actual matters represented, warranted or certi f i ed i n the documents, and of the
l egal concl usi ons contai ned i n the opi ni ons, ref erred to i n the second and thi rd paragraphs hereof .
Furthermore, we have assumed compl i ance wi th al l covenants and agreements contai ned i n the I ndenture,
the Loan Agreement and the Tax Agreement, i ncl udi ng (wi thout l i mi tati on) covenants and agreements
compl i ance wi th whi ch i s necessary to assure that f uture acti ons, omi ssi ons or events wi l l not cause
i nterest on the Bonds to be i ncl uded i n gross i ncome f or f ederal i ncome tax purposes.
We cal l attenti on to the f act that the ri ghts and obl i gati ons under the Bonds, the I ndenture, the
Loan Agreement and the Tax Agreement and thei r enf orceabi l i ty may be subj ect to bankruptcy,
i nsol vency, reorgani zati on, arrangement, f raudul ent conveyance, moratori um and other l aws rel ati ng to or
affecting creditors rights, to the application of equitabl e pri nci pl es, to the exerci se of j udi ci al di screti on
i n appropri ate cases and to the l i mi tati ons on l egal remedi es agai nst publ i c authori ti es of the State of
Cal i f orni a. We express no opi ni on wi th respect to any i ndemni f i cati on, contri buti on, penal ty, choi ce of
l aw, choi ce of f orum, choi ce of venue, wai ver or severabi l i ty provi si ons contai ned i n the f oregoi ng
documents nor do we express any opi ni on wi th respect to the state or qual i ty of ti tl e to or i nterest i n any
of the assets descri bed i n or as subj ect to the l i en of the I ndenture or the Loan Agreement, or the accuracy
or suf f i ci ency of the descri pti on contai ned therei n of , or the remedi es avai l abl e to enf orce l i ens on, any
such assets. Fi nal l y, we undertake no responsi bi l i ty f or the accuracy, compl eteness or f ai rness of the
Of f i ci al Statement or other of f eri ng materi al rel ati ng to the Bonds and express no opi ni on wi th respect
thereto.
Based on and subj ect to the f oregoi ng, and i n rel i ance thereon, as of the date hereof , we are of the
f ol l owi ng opi ni ons:
1. The Bonds consti tute the val i d and bi ndi ng l i mi ted obl i gati ons of the Authori ty.
2. The I ndenture has been dul y executed and del i vered by, and consti tutes the val i d and
bi ndi ng obl i gati on of , the Authori ty. The I ndenture creates a val i d pl edge, to secure the payment of the
pri nci pal of and i nterest on the Bonds, of the Revenues and any other amounts hel d by the Trustee i n any
f und or account establ i shed pursuant to the I ndenture, except the Rebate Fund and the Bond Purchase
Fund, subj ect to the provi si ons of the I ndenture permi tti ng the appl i cati on thereof f or the purposes and on
the terms and condi ti ons set f orth i n the I ndenture.
3. The Loan Agreement has been dul y executed and del i vered by, and consti tutes a val i d
and bi ndi ng agreement of , the Authori ty.
4. The Bonds are payabl e sol el y f rom the Revenues and the other amounts pl edged theref or
under the I ndenture. The Bonds are not a charge or l i en on the f unds or property of the Authori ty except
E-3
to the extent of the af orementi oned pl edge. Nei ther the f ai th and credi t nor the taxi ng power of the State
of Cal i f orni a or of any pol i ti cal subdi vi si on thereof i s pl edged to the payment of the pri nci pal of or
i nterest on the Bonds. The Bonds are not a debt of the State of Cal i f orni a, and sai d State i s not l i abl e f or
the payment thereof .
5. I nterest on the Bonds i s excl uded f rom gross i ncome f or f ederal i ncome tax purposes
under Secti on 103 of the Code and i s exempt f rom State of Cal i f orni a personal i ncome taxes. I nterest on
the Bonds i s not a speci f i c pref erence i tem f or purposes of the f ederal i ndi vi dual or corporate al ternati ve
mi ni mum taxes, al though we observe that i t i s i ncl uded i n adj usted current earni ngs when cal cul ati ng
corporate al ternati ve mi ni mum taxes, al though we observe that i t i s i ncl uded i n adj usted current earni ngs
when cal cul ati ng corporate al ternati ve mi ni mum taxabl e i ncome. We express no opi ni on regardi ng other
tax consequences rel ated to the ownershi p or di sposi ti on of , or the accrual or recei pt of i nterest on, the
Bonds.
Fai thf ul l y yours,
APPENDI X F

FORM OF LETTER OF CREDI T

F-1
IRREVOCABLE LETTER OF CREDIT
August [14], 2008
Letter of Credit No. NZS624716
U.S. Bank National Association
633 W. 5th Street, 24th Floor
Los Angeles, CA 90071
Attention: Corporate Trust
Ladies and Gentlemen:
We hereby establish in your favor at the request and for the account of La Sierra University,
a California nonprofit religious corporation, our irrevocable direct-pay letter of credit in the
amount of U.S. $24,805,622.00 (Twenty-Four Mill ion Eight Hundred Five Thousand Six
Hundred Twenty-Two and No/100 Dollars) in connection with the Bonds (as defined below)
available with ourselves by sight payment against presentation of one or more signed and dated
demands addressed by you to Wells Fargo Bank, National Association, Letter of Credit
Operations Office, San Francisco, California, each in the form of Annex A (an A Dr awi ng),
Annex B (a B Dr awi ng), Annex C (a C Dr awi ng), or Annex D (a D Dr awi ng) hereto, with
all instructions in brackets therein being complied with. Each such demand must be presented to
us in its original form or by facsimile transmission of such original form.
Each such presentation must be made at or before 5:00 p.m. San Francisco time on a
Business Day (as hereinafter defined) to our Letter of Credit Operations Office in San Francisco,
California (presently located at One Front Street, 21
st
Floor, San Francisco, California 94111).
This Letter of Credit expires at our Letter of Credit Operations Office in San Francisco,
California on August 1, 2010, or if such date is not a Business Day, then the first (1st)
succeeding Business Day thereafter (the Expi r ati on Date).
As used herein the term Busi ness Day shall mean a day on which our San Francisco Letter
of Credit Operations Office is open for business.
The amount of any demand presented hereunder will be the amount inserted in numbered
Paragraph 4 of said demand. By honoring any such demand we make no representation as to the
correctness of the amount demanded.
We hereby agree with you that each demand presented hereunder in full compliance with the
terms hereof will be duly honored by our payment to you of the amount of such demand, in
immediately available funds of Wells Fargo Bank, National Association:
(i) not later than 10:00 a.m., San Franci sco time, on the Business Day following the
Business Day on which such demand is presented to us as aforesaid if such presentation
is made to us at or before Noon, San Francisco time, or

F-2

(ii) not later than 10:00 a.m., San Francisco time, on the second Business Day following the
Business Day on which such demand is presented to us as aforesaid, if such presentation
is made to us after Noon, San Francisco time.
Notwithstanding the foregoing, any demand presented hereunder, in full compliance with the
terms hereof, for a C Drawing will be duly honored (i) not later than 11:45 a.m., San Francisco
time, on the Business Day on which such demand is presented to us as aforesaid if such
presentation is made to us at or before 8:45 a.m., San Francisco time, and (ii) not later than 11:00
a.m., San Francisco time, on the Business Day following the Business Day on which such
demand is presented to us as aforesaid if such presentation is made to us after 8:45 a.m., San
Francisco time.
If the remittance instructions included with any demand presented under this Letter of Credit
require that payment is to be made by transfer to an account with us or with another bank, we
and/or such other bank may rely solely on the account number specified in such instructions even
if the account is in the name of a person or entity different from the intended payee.
With respect to any demand that is honored hereunder, the total amount of this Letter of
Credit shall be reduced as follows:
(A) With respect to any A Drawing, the total amount of this Letter of Credit shall be reduced,
as to all demands subsequent to the appli cable demand, by the amount of the applicable
demand as of the time of presentation of such demand; pr ovi ded, however , that such
amount shall be automatically reinstated on the sixth (6
th
) Business Day following the
date such demand is honored by us, unless (i) you shall have received notice from us by
express courier, authenticated SWIFT message, facsimile transmission, or registered mail
no later than five (5) Business Days after such demand is honored by us that there shall
be no such reinstatement, or (ii) such sixth (6
th
) Business Day falls after the Expiration
Date;
(B) With respect to any B Drawing, the total amount of this Letter of Credit shall be reduced,
as to all demands subsequent to the appli cable demand, by the amount of the applicable
demand as of the time of presentation of such demand and shall not be reinstated;
(C) With respect to any C Drawing, the total amount of this Letter of Credit shall be reduced,
as of the ti me of presentation of the applicable demand and as to all demands subsequent
to the applicable demand, by the sum of (1) the amount inserted as principal in paragraph
5(A) of the applicable demand plus (2) the greater of (a) the amount inserted as interest
in paragraph 5(B) of the applicable demand and (b) interest on the amount inserted as
principal in paragraph 5(A) of the applicable demand calculated for fifty (50) days at the
rate of twelve percent (12%) per annum based on a year of 365 days (with any fraction of
a cent being rounded upward to the nearest whole cent); pr ovi ded, however , that if the
Bonds (as defined below) related to a C Drawing are remarketed and the remarketing
proceeds are paid to us prior to the Expiration Date, then on the day we receive such
remarketing proceeds the amount of this Letter of Credit shall be reinstated by an amount
which equals the sum of (i) the amount paid to us from such remarketing proceeds and
(ii) interest on such amount calculated for the same number of days, at the same interest
rate, and on the basis of a year of the same number of days as is specified in (2)(b) of this
paragraph (C) (with any fraction of a cent being rounded upward to the nearest whole

F-3

cent), wi th such rei nstatement and i ts amount bei ng promptl y advi sed to you; pr ovi ded,
however , that i n no event wi l l the total amount of al l C Drawi ng rei nstatements exceed
the total amount of al l Letter of Credi t reducti ons made pursuant to thi s paragraph (C).

Upon presentati on to us of a D Drawi ng ref erri ng to the 2008A Bonds (as def i ned bel ow) i n
compl i ance wi th the terms of thi s Letter of Credi t, no f urther demand whatsoever may be
presented hereunder ref erri ng to the 2008A Bonds (as def i ned bel ow). Upon presentati on to us
of a D Drawi ng ref erri ng to the 2008B Bonds (as def i ned bel ow) i n compl i ance wi th the terms of
thi s Letter of Credi t, no f urther demand whatsoever may be presented hereunder ref erri ng to the
2008B Bonds (as def i ned bel ow).
No more than one A Drawi ng ref erri ng to the 2008A Bonds (as def i ned bel ow) whi ch we
honor (i ) shal l be presented to us duri ng any consecuti ve twenty-seven (27) cal endar day peri od
or (i i ) shal l be f or an amount more than U.S.$197,261.00 (One Hundred Ni nety-Seven Thousand
Two Hundred Si xty-One Dol l ars). No more than one A Drawi ng ref erri ng to the 2008B Bonds
(as def i ned bel ow) whi ch we honor (i ) shal l be presented to us duri ng any consecuti ve twenty-
seven (27) cal endar day peri od or (i i ) shal l be f or an amount more than U.S.$203,361.00 (Two
Hundred Three Thousand Three Hundred Si xty-One Dol l ars).
I t i s a condi ti on of thi s Letter of Credi t that the amount avai l abl e f or drawi ng under thi s
Letter of Credi t shal l be decreased automati cal l y wi thout amendment upon our recei pt of each
reducti on authori zati on i n the f orm of Annex E to thi s Letter of Credi t (wi th al l i nstructi ons
therei n i n brackets bei ng compl i ed wi th) sent to us as an authenti cated SWI FT message or as a
si gned and dated ori gi nal f orm.
Thi s Letter of Credi t i s subj ect to, and engages us i n accordance wi th the terms of , the
Uni f orm Customs and Practi ce f or Documentary Credi ts (2007 Revi si on), Publ i cati on No. 600 of
the International Chamber of Commerce (the UCP); pr ovi ded, however , that i f any provi si on
of the UCP contradi cts a provi si on of thi s Letter of Credi t such provi si on of the UCP wi l l not be
appl i cabl e to thi s Letter of Credi t, and pr ovi ded fur ther that Arti cl e 32, the second sentence of
Arti cl e 36, and subsecti on (e) of Arti cl e 38 of the UCP shal l not appl y to thi s Letter of Credi t.
Furthermore, as provi ded i n the f i rst sentence of Arti cl e 36 of the UCP, we assume no l i abi l i ty or
responsi bi l i ty f or consequences ari si ng out of the i nterrupti on of our busi ness by Acts of God,
ri ots, ci vi l commoti ons, i nsurrecti ons, wars, acts of terrori sm, or by any stri kes or l ockouts, or
any other causes beyond our control . Matters rel ated to thi s Letter of Credi t whi ch are not
covered by the UCP wi l l be governed by the l aws of the State of Cal i f orni a, i ncl udi ng, wi thout
l i mi tati on, the Uni f orm Commerci al Code as i n ef f ect i n the State of Cal i f orni a, except to the
extent such l aws are i nconsi stent wi th the provi si ons of the UCP or thi s Letter of Credi t.
Thi s Letter of Credi t i s transf erabl e and may be transf erred more than once, but i n each case
onl y i n the amount of the f ul l unuti l i zed bal ance hereof to any si ngl e transf eree who you shal l
have advi sed us pursuant to Annex F has succeeded U.S. Bank Nati onal Associ ati on or a
successor trustee as Trustee under the I ndenture dated as of August 1, 2008 as suppl emented
from time to time (the I ndentur e) between the California Municipal Finance Authority, a joint
exerci se of powers authori ty and a publ i c enti ty of the State of California (the I ssuer ) and U.S.
Bank Nati onal Associ ati on, as Trustee, pursuant to whi ch (i ) U.S. $12,000,000.00 i n aggregate
principal amount of the Issuers Vari abl e Rate Revenue Bonds (La Si erra Uni versi ty) Seri es
2008A (the 2008A Bonds) and (ii) U.S. $12,405,000.00 in aggregate pri nci pal amount of the

F-4

Issuers Variable Rate Revenue Bonds (La Sierra University) Series 2008B (the 2008B Bonds,
together with the 2008A Bonds, the Bonds) were issued. Transfers may be ef f ected wi thout
charge to the transf eror and onl y through oursel ves and onl y upon presentati on to us of a dul y
executed i nstrument of transf er i n the f orm attached hereto as Annex F. Any transf er of thi s
Letter of Credi t as af oresai d must be endorsed by us on the reverse hereof and may not change
the pl ace of presentati on of demands f rom our Letter of Credi t Operati ons Of f i ce i n San
Franci sco, Cal i f orni a.
Al l payments hereunder shal l be made f rom our own f unds.
Thi s Letter of Credi t sets f orth i n f ul l our undertaki ng, and such undertaki ng shal l not i n any
way be modi f i ed, amended, ampl i f i ed or l i mi ted by ref erence to any document, i nstrument or
agreement ref erred to herei n (i ncl udi ng, wi thout l i mi tati on, the Bonds and the I ndenture), except
the UCP to the extent the UCP i s not i nconsi stent wi th or made i nappl i cabl e by thi s Letter of
Credi t; and any such ref erence shal l not be deemed to i ncorporate herei n by ref erence any
document, i nstrument or agreement except the UCP.
WELLS FARGO BANK,
NATI ONAL ASSOCI ATI ON
By:
Authori zed Si gnature

Letter of Credi t Operati ons Of f i ce
Tel ephone No.: 1-800-798-2815
Facsi mi l e No.: (415) 296-8905

F-5

Annex A to Wel l s Fargo Bank, Nati onal Associ ati on
I rrevocabl e Letter of Credi t No. NZS624716
WELLS FARGO BANK, NATI ONAL ASSOCI ATI ON
LETTER OF CREDI T OPERATI ONS OFFI CE
ONE FRONT STREET, 21
ST
FLOOR
SAN FRANCI SCO, CALI FORNI A 94111
FOR THE URGENT ATTENTI ON OF LETTER OF CREDI T MANAGER
[I NSERT NAME OF BENEFI CI ARY] (THE TRUSTEE) HEREBY CERTIFIES TO
WELLS FARGO BANK, NATI ONAL ASSOCIATION (THE BANK) WITH REFERENCE
TO I RREVOCABLE LETTER OF CREDI T NO. NZS624716 (THE LETTER OF CREDIT;
THE TERMS THE 2008A BONDS, THE 2008B BONDS, BONDS, BUSINESS DAY
AND THE INDENTURE USED HEREIN SHALL HAVE THEIR RESPECTIVE
MEANI NGS SET FORTH I N THE LETTER OF CREDI T) THAT:
(1) THE TRUSTEE I S THE TRUSTEE OR A SUCCESSOR TRUSTEE UNDER
THE I NDENTURE.
(2) THE TRUSTEE I S MAKI NG A DEMAND FOR PAYMENT UNDER THE
LETTER OF CREDI T WI TH RESPECT TO THE PAYMENT, ON AN
I NTEREST PAYMENT DATE (AS DEFI NED I N THE I NDENTURE), OF
ACCRUED AND UNPAI D I NTEREST WI TH RESPECT TO THE [I NSERT
2008A OR 2008B] BONDS.
(3) THE AMOUNT OF THI S DEMAND FOR PAYMENT WAS COMPUTED I N
ACCORDANCE WI TH THE TERMS AND CONDI TI ONS OF THE BONDS
AND THE I NDENTURE AND I S DEMANDED I N ACCORDANCE WI TH
THE I NDENTURE, WHI CH AMOUNT PLEASE REMI T TO THE
UNDERSI GNED AS FOLLOWS:
[I NSERT REMI TTANCE I NSTRUCTI ONS].
(4) THE AMOUNT HEREBY DEMANDED UNDER THE LETTER OF CREDI T
I S $[I NSERT AMOUNT].
(5) THE TRUSTEE HAS CONTACTED OR ATTEMPTED TO CONTACT BY
TELEPHONE AN OFFI CER OF THE BANKS LETTER OF CREDI T OFFI CE
I N SAN FRANCI SCO, CALI FORNI A REGARDI NG THE AMOUNT OF THI S
DEMAND AND THE DATE AND TI ME BY WHI CH PAYMENT I S
DEMANDED.

F-6

(6) I F THI S DEMAND I S RECEI VED BY YOU AT OR BEFORE NOON, SAN
FRANCI SCO TI ME ON A BUSI NESS DAY, YOU MUST MAKE PAYMENT
ON THI S DEMAND AT OR BEFORE 10:00 A.M., SAN FRANCI SCO TI ME,
ON THE NEXT BUSI NESS DAY. I F THI S DEMAND I S RECEI VED BY
YOU AFTER NOON, SAN FRANCI SCO TI ME, ON A BUSI NESS DAY, YOU
MUST MAKE PAYMENT ON THI S DEMAND AT OR BEFORE 10:00 A.M.,
SAN FRANCI SCO TI ME, ON THE SECOND BUSI NESS DAY FOLLOWI NG
SUCH BUSI NESS DAY.
[I NSERT NAME OF BENEFI CI ARY]
[I NSERT SI GNATURE AND DATE]
F-7

Annex B to Wel l s Fargo Bank, Nati onal Associ ati on
ST
FLOOR
FOR THE URGENT ATTENTI ON OF LETTER OF CREDI T MANAGER.
WELLS FARGO BANK, NATI ONAL ASSOCIATION (THE BANK) WITH REFERENCE TO
I RREVOCABLE LETTER OF CREDI T NO. NZS624716 (THE LETTER OF CREDIT; THE
TERMS THE 2008A BONDS, THE 2008B BONDS, BONDS, BUSINESS DAY AND THE
INDENTURE USED HEREIN SHALL HAVE THEIR RESPECTI VE MEANI NGS SET FORTH
I N THE LETTER OF CREDI T) THAT:
(1) THE TRUSTEE I S THE TRUSTEE OR A SUCCESSOR TRUSTEE UNDER THE
I NDENTURE.
(2) THE TRUSTEE I S MAKI NG A DEMAND FOR PAYMENT UNDER THE LETTER
OF CREDI T WI TH RESPECT TO THE PAYMENT OF THE PRI NCI PAL AMOUNT
OF, AND THE ACCRUED AND UNPAI D I NTEREST ON, REDEEMED BONDS
UPON AN OPTI ONAL AND/OR MANDATORY REDEMPTI ON OF LESS THAN
ALL OF THE [INSERT 2008A OR 2008B] BONDS CURRENTLY
OUTSTANDI NG.
ACCORDANCE WI TH THE TERMS AND CONDI TI ONS OF THE BONDS AND
THE I NDENTURE AND I S DEMANDED I N ACCORDANCE WI TH THE
I NDENTURE, WHI CH AMOUNT PLEASE REMI T TO THE UNDERSI GNED AS
FOLLOWS:

(4) THE AMOUNT HEREBY DEMANDED UNDER THE LETTER OF CREDI T I S
$[I NSERT AMOUNT WHI CH I S THE SUM OF THE TWO AMOUNTS
I NSERTED I N PARAGRAPH 5 BELOW].
(5) THE AMOUNT HEREBY DEMANDED I S EQUAL TO THE SUM OF (A)
$[I NSERT AMOUNT] BEI NG DRAWN WI TH RESPECT TO THE PAYMENT OF
THE PRI NCI PAL OF THE REDEEMED BONDS AND (B) $[I NSERT AMOUNT]
BEI NG DRAWN WI TH RESPECT TO THE PAYMENT OF THE UNPAI D
I NTEREST ON THE REDEEMED BONDS.
TELEPHONE AN OFFICER OF THE BANKS LETTER OF CREDI T OFFI CE I N
SAN FRANCI SCO, CALI FORNI A REGARDI NG THE AMOUNT OF THI S
DEMAND AND THE DATE AND TI ME BY WHI CH PAYMENT I S DEMANDED.
F-8

(7) I F THI S DEMAND I S RECEI VED BY YOU AT OR BEFORE NOON, SAN
FRANCI SCO TI ME ON A BUSI NESS DAY, YOU MUST MAKE PAYMENT ON
THI S DEMAND AT OR BEFORE 10:00 A.M., SAN FRANCI SCO TI ME, ON THE
NEXT BUSI NESS DAY. I F THI S DEMAND I S RECEI VED BY YOU AFTER
NOON, SAN FRANCI SCO TI ME, ON A BUSI NESS DAY, YOU MUST MAKE
PAYMENT ON THI S DEMAND AT OR BEFORE 10:00 A.M., SAN FRANCI SCO
TI ME, ON THE SECOND BUSI NESS DAY FOLLOWI NG SUCH BUSI NESS DAY.
F-9

Annex C to Wel l s Fargo Bank, Nati onal Associ ati on
ST
FLOOR
WELLS FARGO BANK, NATI ONAL ASSOCIATION (THE BANK) WITH REFERENCE TO
I NDENTURE.
(2) THE TRUSTEE I S MAKI NG A DEMAND FOR PAYMENT UNDER THE LETTER
OF CREDI T WI TH RESPECT TO THE PAYMENT OF THE PRI NCI PAL AMOUNT
OF, AND I NTEREST DUE ON, THOSE [ INSERT 2008A OR 2008B] BONDS
WHI CH THE REMARKETI NG AGENT (AS DEFI NED I N THE I NDENTURE) HAS
BEEN UNABLE TO REMARKET WI THI N THE TI ME LI MI TS ESTABLI SHED I N
THE I NDENTURE.
ACCORDANCE WI TH THE TERMS AND CONDI TI ONS OF THE BONDS AND
THE I NDENTURE AND I S DEMANDED I N ACCORDANCE WI TH THE
I NDENTURE, WHI CH AMOUNT PLEASE REMI T TO THE UNDERSI GNED AS
FOLLOWS:

$[I NSERT AMOUNT WHI CH I S THE SUM OF THE TWO AMOUNTS
I NSERTED I N PARAGRAPH 5 BELOW].
(5) THE AMOUNT OF THI S DEMAND I S EQUAL TO THE SUM OF (A) $[I NSERT
AMOUNT] BEI NG DRAWN WI TH RESPECT TO THE PAYMENT OF
PRI NCI PAL OF THE BONDS AND (B) $[I NSERT AMOUNT] BEI NG DRAWN
WI TH RESPECT TO THE PAYMENT OF I NTEREST DUE ON THE BONDS.

TELEPHONE AN OFFI CER OF THE BANKS LETTER OF CREDIT OFFICE IN
SAN FRANCI SCO, CALI FORNI A REGARDI NG THE AMOUNT OF THI S
DEMAND AND THE DATE AND TI ME BY WHI CH PAYMENT I S DEMANDED.
F-10

(7) I F THI S DEMAND I S RECEI VED BY YOU AT OR BEFORE 8:45 A.M., SAN
FRANCI SCO TI ME ON A BUSI NESS DAY, YOU MUST MAKE PAYMENT ON
THI S DEMAND AT OR BEFORE 11:45 A.M., SAN FRANCI SCO TI ME, ON SAI D
BUSI NESS DAY. I F THI S DEMAND I S RECEI VED BY YOU AFTER 8:45 A.M.,
SAN FRANCI SCO TI ME, ON A BUSI NESS DAY, YOU MUST MAKE PAYMENT
ON THI S DEMAND AT OR BEFORE 11:00 A.M., SAN FRANCI SCO TI ME, ON
THE BUSI NESS DAY FOLLOWI NG SAI D BUSI NESS DAY.
F-11

Annex D to Wel l s Fargo Bank, Nati onal Associ ati on
ST
FLOOR
[I NSERT NAME OF BENEFI CI ARY] (THE TRUSTEE) HEREBY CERTIFIES TO WELLS
FARGO BANK, NATI ONAL ASSOCIATION (THE BANK) WITH REFERENCE TO
I NDENTURE.
(2) THE TRUSTEE I S MAKI NG A DEMAND FOR PAYMENT UNDER THE LETTER OF
CREDI T WI TH RESPECT TO THE PAYMENT, AT STATED MATURI TY, UPON
ACCELERATI ON FOLLOWI NG AN EVENT OF DEFAULT, UPON MANDATORY
TENDER AS A WHOLE, OR UPON REDEMPTI ON AS A WHOLE, OF THE TOTAL
UNPAI D PRI NCI PAL OF, AND UNPAI D I NTEREST ON, ALL OF THE [ I NSERT
2008A OR 2008B] BONDS WHI CH ARE PRESENTLY OUTSTANDI NG.
ACCORDANCE WI TH THE TERMS AND CONDI TI ONS OF THE BONDS AND THE
I NDENTURE AND I S DEMANDED I N ACCORDANCE WI TH THE I NDENTURE,
WHI CH AMOUNT PLEASE REMI T TO THE UNDERSI GNED AS FOLLOWS:

$[I NSERT AMOUNT WHI CH I S THE SUM OF THE TWO AMOUNTS SET FORTH
I N PARAGRAPH 5, BELOW].
(5) THE AMOUNT OF THI S DEMAND I S EQUAL TO THE SUM OF (A) $[I NSERT
AMOUNT] BEI NG DRAWN WI TH RESPECT TO THE PAYMENT OF THE UNPAI D
PRI NCI PAL OF THE OUTSTANDI NG BONDS AND (B) $[I NSERT AMOUNT] BEI NG
DRAWN WI TH RESPECT TO THE PAYMENT OF THE UNPAI D I NTEREST ON THE
OUTSTANDI NG BONDS.
(6) THE TRUSTEE HAS CONTACTED OR ATTEMPTED TO CONTACT BY TELEPHONE
AN OFFICER OF THE BANKS LETTER OF CREDI T OFFI CE I N SAN FRANCI SCO,
CALI FORNI A REGARDI NG THE AMOUNT OF THI S DEMAND AND THE DATE
AND TI ME BY WHI CH PAYMENT I S DEMANDED.
F-12

(7) I F THI S DEMAND I S RECEI VED BY YOU AT OR BEFORE NOON, SAN FRANCI SCO
TI ME ON A BUSI NESS DAY, YOU MUST MAKE PAYMENT ON THI S DEMAND AT
OR BEFORE 10:00 A.M., SAN FRANCI SCO TI ME, ON THE NEXT BUSI NESS DAY.
I F THI S DEMAND I S RECEI VED BY YOU AFTER NOON, SAN FRANCI SCO TI ME,
ON A BUSI NESS DAY, YOU MUST MAKE PAYMENT ON THI S DEMAND AT OR
BEFORE 10:00 A.M., SAN FRANCI SCO TI ME, ON THE SECOND BUSI NESS DAY
FOLLOWI NG SUCH BUSI NESS DAY.
F-13

Annex E to Wel l s Fargo Bank, Nati onal Associ ati on
WELLS FARGO BANK, NATI ONAL ASSOCI ATI ON.
ST
FLOOR
LETTER OF CREDI T REDUCTI ON AUTHORI ZATI ON
[I NSERT NAME OF BENEFI CI ARY], WI TH REFERENCE TO LETTER OF CREDI T
NO. NZS624716 I SSUED BY WELLS FARGO BANK, NATI ONAL ASSOCI ATI ON (THE
BANK), HEREBY UNCONDITIONALLY AND IRREVOCABLY REQUESTS THAT THE
BANK DECREASE THE AMOUNT AVAI LABLE FOR DRAWI NG UNDER THE LETTER OF
CREDI T BY $[I NSERT AMOUNT].

[FOR SI GNED REDUCTI ON AUTHORI ZATI ONS ONLY]

By: [I NSERT SI GNATURE]

TI TLE: [I NSERT TI TLE]
DATE: [I NSERT DATE]

SI GNATURE GUARANTEED BY
[I NSERT NAME OF BANK]
By:
[I NSERT NAME AND TI TLE]

F-14

Annex F to Wel l s Fargo Bank, Nati onal Associ ati on

ST
FLOOR,
SAN FRANCI SCO, CALI FORNI A, 94111


[I NSERT DATE]

Subj ect: Your Letter of Credi t No. NZS624716

Ladi es and Gentl emen:

For val ue recei ved, we hereby i rrevocabl y assi gn and transf er al l of our ri ghts under the above-capti oned
Letter of Credi t, as heretof ore and hereaf ter amended, extended, i ncreased or reduced to:

[Name of Transferee]

[Address of Transferee]

By thi s transf er, al l of our ri ghts i n the Letter of Credi t are transferred to the transferee, and the
transf eree shal l have sol e ri ghts as benef i ci ary under the Letter of Credi t, i ncl udi ng sol e ri ghts rel ati ng to
any amendments, whether i ncreases or extensi ons or other amendments, and whether now exi sti ng or
hereaf ter made. You are hereby i rrevocabl y i nstructed to advi se f uture amendment(s) of the Letter of Credi t
to the transferee wi thout our consent or noti ce to us.

The ori gi nal Letter of Credi t i s returned wi th al l amendments to thi s date. Pl ease noti f y the transf eree
i n such f orm as you deem advi sabl e of thi s transf er and of the terms and condi ti ons to thi s Letter of Credi t,
i ncl udi ng amendments as transf erred.

You are hereby advi sed that the transf eree named above has succeeded U.S. Bank Nati onal
Associ ati on or a successor trustee as Trustee under the I ndenture dated as of August 1, 2008 as
supplemented from time to time (the Indenture) between the California Muni ci pal Fi nance Authori ty, a
joint exercise of powers authority and a public entity of the State of California (the Issuer) and U.S. Bank
Nati onal Associ ati on, as Trustee, pursuant to whi ch (i ) U.S. $12,000,000.00 i n aggregate pri nci pal amount
of the Issuers Variable Rate Revenue Bonds (La Si erra Uni versi ty) Seri es 2008A (the 2008A Bonds) and
(i i ) U.S. $12,405,000.00 i n aggregate pri nci pal amount of the Issuers Variable Rate Revenue Bonds (La
Si erra Uni versi ty) Seri es 2008B (the 2008B Bonds, together with the 2008A Bonds, the Bonds) were
i ssued.

Very trul y yours,

F-15

[I nsert Name of Transferor]

By:
[I nsert Name and Title]

TRANSFERORS SIGNATURE GUARANTEED

By:
[Bank Name]

By:

By i ts si gnature bel ow, the undersi gned transf eree acknowl edges that i t has dul y succeeded U.S. Bank
Nati onal Associ ati on or a successor trustee as Trustee under the I ndenture.

[I nsert Name of Transferee]

By:
Printed on Recycled Paper
IMAGEMASTER 800.452.5152

LSU Municipal Bond 2008

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