Canadian Offering Memorandum Bay

CANADIAN OFFERING MEMORANDUM This Canadian offering memorandum constitutes an offering of the securities described herein only in those Canadian jurisdictions and to those persons where and to whom they may be lawfully offered for sale, and therein only by persons permitted to sell such securities. This Canadian offering memorandum is not, and under no circumstances is to be construed as, an advertisement or a public offering of the securities described herein. No securities commission or similar authority in Canada has reviewed or in any way passed upon this document or the merits of the securities described herein, and any representation to the contrary is an offence under applicable securities laws. BAY AREA TOLL AUTHORITY San Francisco Bay Area Subordinate Toll Bridge Revenue Bonds 2010 Series S-1 The Offering The securities being offered hereby are part of an offering of San Francisco Bay Area Subordinate Toll Bridge Revenue Bonds 2010 Series S-1 ("Bonds") of the Bay Area Toll Authority, a public agency created in 1997 by California law (the "Authority"). Attached to this Canadian offering memorandum and forming a part hereof is a copy of the information statement and supplement. The offering in Canada is being made by this Canadian offering memorandum and any decision to purchase the Bonds should be made solely on the information contained herein. The offering in Canada is being made solely in the Provinces of Ontario, Québec, British Columbia, Alberta and Manitoba (the "Offering Provinces"). Resale Restrictions The distribution of the Bonds in Canada is being made on a private placement basis. Accordingly, any resale of such Bonds must be made in accordance with an exemption from prospectus requirements and in compliance with the registration requirements of applicable securities laws, which vary depending on the province or pursuant to a discretionary exemption granted by the applicable Canadian securities regulatory authority. The Authority is not a reporting issuer in any province or territory of Canada. Purchasers of the Bonds are advised to seek legal advice prior to any resale of the Bonds. Relationship between the Authority and Certain Underwriters For the reasons described below, the Authority may be considered a "connected issuer" of Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), J.P. Morgan Securities Inc. ("J.P. Morgan") and Morgan Stanley & Co. Incorporated ("Morgan Stanley"), for the purposes of Canadian securities laws. For more information please see "Other Authority Obligations" in the attached information statement and "Underwriting", "Relationship of Certain Parties" and "Appendix IV" in the attached supplement. Standby Bond Purchase Agreements The Authority has entered into a standby bond purchase agreement dated June 1, 2008 (the "First Standby Bond Purchase Agreement"), a standby bond purchase agreement dated August 1, 2008 (the "Second Standby Bond Purchase Agreement") and a standby bond purchase agreement dated August 20, 2009 (the "Third Standby Bond Purchase Agreement", and collectively with the First Standby Bond Purchase Agreement and the Second Standby Bond Purchase Agreement, the "Standby Bond Purchase Agreements"). Under the Standby Bond Purchase Agreements, various banks have agreed (subject to - 2 - conditions specified in the agreements) to purchase the Authority's senior bonds that are variable rate demand bonds which have been tendered for purchase and are not successfully remarketed. An affiliate of J.P. Morgan is the agent for the liquidity providers under each of the Standby Bond Purchase Agreements and is a liquidity provider under the Third Standby Purchase Agreement. An affiliate of Merrill Lynch is a liquidity provider under each of the Standby Bond Purchase Agreements. Qualified Swap Agreements The Authority has entered into certain qualified swap agreements that as of May 1, 2010 had an aggregate notional amount of $2,265,700,000 (the "Qualified Swap Agreements"). Affiliates of Merrill Lynch, J.P. Morgan and Morgan Stanley are parties to certain of the Qualified Swap Agreements. None of the net proceeds received by the Authority from the offering of the Bonds are intended by the Authority to be used to pay amounts due or outstanding under the Standby Bond Purchase Agreements or the Qualified Swap Agreements. The decision to distribute the Bonds, including the determination of the terms of this offering, was made through negotiations between the Authority and the underwriters. Entities affiliated with the underwriters did not have any involvement in such decision or determination in such negotiation. Representation and Agreement by Purchasers Confirmations of the acceptance of offers to purchase the Bonds will be sent to purchasers in Canada who have not withdrawn their offers to purchase prior to the issuance of such confirmations. Each purchaser who receives a purchase confirmation will, by the purchaser's receipt thereof, be deemed to represent to the Authority and the dealer from whom such purchase confirmation is received that: (a) such purchaser is purchasing as principal, and not as agent, and meets one or more of the criteria to be classified an "accredited investor" as defined in National Instrument 45-106 - Prospectus and Registration Exemptions ("NI 45-106") but was not created and is not being used solely to purchase or hold securities as an "accredited investor"; and (b) if the dealer from whom the purchaser is purchasing Bonds is not registered in the relevant province where such purchaser resides as an "investment dealer" or "exempt market dealer", each as defined in National Instrument 31-103 – Registration Requirements and Exemptions ("NI 31-103"), the purchaser is not an individual but otherwise meets one or more of the criteria set out in section 1.1 of NI 31-103 in order to be classified a "permitted client" pursuant to that instrument, or the purchaser is an individual who owns financial assets (as defined in NI 45-106) with an aggregate realizable value before taxes in excess of Cdn.$5,000,000. In addition, each purchaser of Bonds who receives a purchase confirmation, by the purchaser's receipt thereof, will be deemed to have represented to the Authority and the dealer from whom such purchase confirmation was received, that the purchaser (a) has been notified by the Authority (i) that the Authority is required to provide information (''personal information'') pertaining to the purchaser as required to be disclosed in Schedule I of Form 45-106F1 under NI 45-106 (including its name, address, telephone number and the number and value of Bonds purchased), which Form 45-106F1 is required to be filed by the Authority under NI 45-106, (ii) that the personal information will be delivered to the Ontario Securities Commission (the ''OSC'') in accordance with NI 45-106, (iii) that such personal information is being collected indirectly by the OSC under the authority granted to it in securities legislation, (iv) that such personal information is being collected for the purposes of the administration and enforcement of the - 3 - securities legislation of Ontario, and (v) that the public official in Ontario who can answer questions about the OSC's indirect collection of the personal information is the Administrative Support Clerk at the OSC, Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario M5H 3S8, Telephone: (416) 593- 8314, and (b) has authorized the indirect collection of the personal information by the OSC. Further, by purchasing these Bonds, the purchaser acknowledges that its name and other specified information, including the number of Bonds it has purchased, may be disclosed to other Canadian securities regulatory authorities and may become available to the public in accordance with the requirements of applicable laws. The purchaser consents to the disclosure of that information. Canadian Federal Income Tax Considerations Prospective purchasers of Bonds should consult their own tax advisors regarding the Canadian federal income tax considerations relevant to the purchase of Bonds having regard to their particular circumstances. Rights of Action for Damages or Rescission The Authority, its members, its officers and any experts named herein may be located outside Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon the Authority or such persons. All of the assets of the Authority and such persons are located outside of Canada and, as a result, it may not be possible to satisfy a judgment against the Authority or such persons in Canada or to enforce a judgment obtained in Canadian courts against the Authority or such persons outside of Canada. Rights for Purchasers in Ontario Securities legislation in Ontario provides an Ontario purchaser (other than (a) a "Canadian financial institution" or a "Schedule III bank" (each as defined in NI 45-106), (b) the Business Development Bank of Canada or (c) a subsidiary of any person referred to in (a) or (b) above, if the person owns all the voting securities of the subsidiary, except the voting securities required by law to be owned by the directors of that subsidiary) with a statutory right of action for damages or rescission against an issuer and any selling security holder where the related offering memorandum contains a misrepresentation without regard to whether the purchaser relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser

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