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<br />Mr. David Culver <br />April 10, 2006 <br />Page 3 <br /> <br />Participants {e.g., the City)... shall [not] be obligated to pay the principal of, premium, if any, or <br />interest on the Bonds, or other costs incidental thereto...". The Agreement also expressly <br />provides that CSCDA is a public entity separate and apart from the Program Participants, and <br />"[i]ts debts, liabilities and obligations do not constitute debts, liabilities or obligations of any <br />party to [the] Agreement." <br /> <br />Accordingly, the Bonds proposed to be issued for the Financing will be indebtedness of <br />CSCDA, and the City will not be asked to approve or execute any of the documents relating to <br />the Financing. Moreover, the disclosure prepared for the Financing, used to market the Bonds, <br />will not have any information regarding the City and will not include the City's narne (other than <br />possibly with respect to where the project is located). The documents will be made available for <br />your review upon request. <br /> <br />In order to further limit CSCDA's financial liability and that of its Program Participants, <br />CSCDA requires that in connection with the loan of bond proceeds to the Borrower, the <br />Borrower must indemnify CSCDA and the applicable Prograrn Participant (the City) from all <br />losses, darnages, claims, actions, liabilities, costs and expenses of any conceivable nature, kind or <br />character relating to the Bonds and project. In this case, such indemnification will include the <br />City. We call attention, however, to the fact that such obligation may be subject to bankruptcy, <br />insolvency, reorganization, arrangement and other laws relating to or affecting creditors' rights, <br />to the application of equitable principles, to the exercise of judicial discretion in appropriate <br />cases and to possible limitations on legal remedies. <br /> <br />I hope that this letter assists you in understanding the role that the City will play in the <br />issuance of revenue bonds through CSCDA for the Financing. Attached for your reference are <br />drafts of (1) the TEFRA Resolution, (2) Notice of Public Hearing and (3) a suggested script <br />to be read at the public hearing. <br /> <br />If you have any further questions, please do not hesitate to contact me at (916) 329-7985. <br /> <br />DOCSSCI:367661.l <br />