Item 10 - Resolution Approving Issuance of Subordinated Tax Allocation Refunding Bonds
- AGENDA REPORT SUMMARY
TO: Honorable Mayor and Members of the City Council,
- Honorable Chairman and Members of the Redevelopment
Agency, and Honorable Chairman and Members of the
Poway Public Financing Authority
FROM: James L. Bowersox, City Manager/Executive Dire~ ~
rr'
INITIATED BY: John D. Fitch, Assistant City Manager/Assistant Executive Director~)
Peggy A. Stewart, Director of Administrative servic~JV
DATE: May 4, 1993
SUBJECf: Resolutions Approving the Issuance of Subordinated Tax Allocation
Refunding Bonds, Series 1993 and Approving Certain Actions in
Connection Therewith
ABSTRACf
Authority is being requested for issuance of $110,000,000 in Subordinated Tax
Allocation Refunding Bonds (TABS), Series 1993. These bonds will refund previously
issued 1989 TA8S and 1991 TA8S and provide a new bond issue of $45.7 million to finance
various redevelopment capital improvement and low-mod housing projects.
- ENVIRONMENTAL REVIEW
Environmental review is not required according to CEQA guidelines.
FISCAL IMPACf
Proceeds of the Bonds will be used to refund certain outstanding obligations of the
Agency resulting in approximately $92,400 in annual debt service savings. In addition
the proceeds will finance approximately $45,000,000 in new projects for the Agency,
partially fund a reserve fund and pay costs of issuance.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
None
RECOMMENDATION
It is recommended that the City Council, Poway Public Financing Authority, and Poway
Redevelopment Agency adopt their respective resolutions and approve the appropriate
documents authorizing the sale of the bonds.
ACfION
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~ AGENDA REPORr_
CITY OF POW A Y
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TO: Honorable Mayor and Members of the City Council, Honorable
Chairman and Members of the Redevelopment Agency, and Honorable
Chairman and Members of the Poway Public Financing Authority
FROM: James L. Bowersox, City Manager/Executive Director
INITIATED BY: John D. Fitch, Assistant City Manager/Assistant Executive Director
Peggy A. Stewart, Director of Administrative servi~
DATE: May 4, 1993
SUBJECT: Resolutions Approving the Issuance of Subordinated Tax Allocation
Refunding Bonds, Series 1993 and Approving Certain Actions in
Connection Therewith
BACKGROUND
The Poway Redevelopment Agency issued $35,000,000 in Subordinated Tax Allocation
Bonds, Series 1989A (1989 TABS) on August I, 1989 to fund a variety of
redevelopment capital projects and low and moderate income housing projects. The
bonds were issued at an average interest rate of 7.26% and have an average annual
debt service payment of $2,880,060.
In October 1991, the Agency issued $9,330,000 Subordinated Tax Allocation Refunding
Bonds, Issue of 1991 (1991 TABS), in order to pay C. F. Poway, Ltd. (Cadillac
Fairview) for public improvements that were constructed on behalf of the Poway
Redevelopment Agency as part of the Pomerado Business Park. The bonds were issued
at an average interest rate of 7.32% and have an average annual debt service payment
of $813,520. Tax increment of the Agency is pledged to make debt service payments
on both of these bond issues.
FINDINGS
Issuance of these Subordinated Tax Allocation Refunding Bonds benefits the City of
Poway and the Redevelopment Agency in several ways. By refunding the two bond
issues cited above, the Agency will be able to obtain lower interest rates than are
currently being paid for debt service. Under current market conditions, the new
bond issue could be issued at 5.8% interest rate. The lower interest rate would
mean an annual savings of approximately $74,300 on the 1989 TABS and approximately
$18,100 on the 1991 TABS. This will result in a total savings of approximately $2.7
million over the life of the issue. The net present value of this savings is
approximately $1,380,000.
ACTION:
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In addition, the Agency has adequate excess tax increment to fund a tax allocation
bond issuing $45,700,000 to finance various redevelopment capital improvements and
low and moderate income housing projects. By combining the issuance of these new
tax allocation bonds with the refunding of the above bonds, the Agency saves an
overall issuance costs.
The additional $45,700,000 in new bond proceeds would be include $30,000,000 for
redevelopment capital improvement projects and $15,700,000 for low and moderate
income housing projects. Attachments I and J list proposed uses for these funds.
The refunding portion of this transaction is highly sensitive to interest rates. If
interest rates move down, the benefit of refunding will increase and if interest
rates increase, it may not be advantageous to proceed. This size of the bond
transaction will be reduced if there is no positive benefit to the Agency for either
of the refunding issues.
One unique feature proposed for the structure of this bond issue is a SWAP
enhancement. SWAP-enhanced bonds are included solely if they save the Agency money.
The Agency would enter into a SWAP Agreement by which the SWAP provider would either
make or receive variable interest payments to/from the bond buyer, depending upon
market conditions. The bond buyer would then be willing to accept a lower fixed
interest rate from the Agency if this feature is attached to the bonds. This
provision will be dropped from the structure at the time of issuance if there is no
positive benefit to the Agency.
In order to proceed with the issuance of the bonds and to provide instructions to
the Trustee, Registrar, and Paying Agent, it is necessary for the City Council to
adopt the following:
Bond Resolution The resolution approves the
of the City of Poway refunding and authorizes staff to proceed with
the documentation and execution of the
transaction. (Attachment A)
The Poway Public Financing Authority needs to adopt its attached bond resolution:
Bond Resolution The resolution approves the refunding
of the Poway Public and authorizes staff to proceed with the
Financing Authority documentation and execution of the transaction.
(Attachment B)
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The Poway Redevelopment Agency needs to adopt its attached bond resolution and
approve the following documents:
Bond Resolution of This resolution approves the refunding
the Poway Redevelopment and authorizes staff to proceed with
Agency the documentation and execution of the
transaction. (Attachment C)
Indenture of Trust The indenture is the contract between Bank of
America National Trust and Savings Association
as Trustee for the bondowners and the Agency
describing the terms of the transaction and the
sources of funds for repayment. (Attachment D)
Escrow Agreement The agreement basically describes that Bank of
America National Trust and Savings Association
will hold the proceeds of the new issue and how
and when those proceeds will be used to retire
the previous bond issues. (Attachment E)
Preliminary Official The POS is the sales document that is distri-
Statement buted to all interested buyers at the time of
sale of the bonds. (Attachment F)
Bond Purchase The BPS is the contract between PaineWebber
Agreement and the Agency describing how and when the money
is paid in exchange for the specified bonds.
(Attachment G)
Bond Counsel The Bond Counsel Services Agreement is the
Services Agreement contract between Stradling, Vocca, Carlson &
Rauth and the Agency describing the services to
be provided and the fees to be paid.
(Attachment H)
In addition to approving the bond issuance documents, it is necessary to identify
projects that will be funded through the use of the proceeds. Two lists,
Attachments I and J, are included for City Council/Redevelopment Agency review.
Attachment I includes those projects proposed to be funded through bonds secured by
the unrestricted "80%" tax increment. Those projects which willl be cooperative
projects undertaken with various taxing agencies ($14.950 million), major projects
($7.830 million), new appropriations for projects in progress ($6.846 million), and
unappropriated funds ($4.474 million). Attachment J includes those projects
recommended by the Redevelopment and Housing Advisory Committee which will meet the
housing needs within the project area. These projects will be secured by the $20%)
low-mod funds.
4 \993 "~ 10,1
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Attachment K is a description of the proposed renovation of the Poway High School
baseball fields. In order to have this projects completed for the 1994 season, it
is desirable to appropriate $50,000 and proceed with design as soon as possible.
ENVIRONMENTAL REVIEW
Environmental review is not required according to CEQA guidelines.
FISCAL IMPACT
This bond sale will result in an average annual debt service savings to the
Redevelopment Agency of $74,300 on the 1989A Tax Allocation Bonds, $18,100 in
average annual debt service savings on the 1991 Tax Allocation Refunding Bonds, and
approximately $45,700,000 in new bond proceeds to fund various redevelopment and low
and moderate income housing capital projects.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
None
RECOMMENDATION
It is recommended that the City Council, the Poway Public Financing Authority, and
the Redevelopment Agency on separate motions approve the following:
1. The City Council adopt the attached Bond Resolution for the City of Poway
(Attachment A).
2. The Poway Public Financing Authority adopt the attached Bond Resolution for
the Authority (Attachment B).
3. The Poway Redevelopment Agency adopt the attached Bond Resolution for the
Agency and approve the Indenture of Trust, the Escrow Agreement, the
Preliminary Official Statement, the Bond Purchase Agreement, and the Bond
Counsel Services Agreement (Attachments C, D, E, F, G, H).
4. Staff be directed to proceed with the issuance of the Subordinated Tax
Allocation Refunding Bonds, Series 1993. The refunding of the 1989 TABS or
the 1991 TABS are to be completed only if the interest rates remain low and
there continues to be a financial gain to the Agency. The Swap Agreement is
to be entered into only if there continues to be a financial gain to the
Agency.
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Agenda Report
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5. Approve the proposed development projects to be funded with bond proceeds
for both general and housing funds and appropriate $50,000 from
Redevelopment Fund Balances for the purpose of designing the improvements
for the renovation of the Poway High School baseball field. (Attachments 1,
J, K)
JLB:JDF:PAS
Attachments:
A. Bond Resolution, City of Poway
B. Bond Resolution, Poway Public Financing Authority
C. Bond Resolution, Poway Redevelopment Agency
D. Indenture of Trust
E. Escrow Agreement
F. Preliminary Official Statement
G. Bond Purchase Agreement
H. Bond Counsel Services Agreement
I. Proposed Redevelopment Capital Improvement Projects
J. Proposed Low and Moderate Income Housing Projects
K. Proposed Renovation of Baseball Fields at Poway High School
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RESOLUTION NO. 93-_
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF POWAY, CALIFORNIA, APPROVING THE
ISSUANCE BY THE POWAY REDEVELOPMENT AGENCY
OF ITS PAGUAY REDEVELOPMENT PROJECT AREA,
SUBORDINATED TAX ALLOCATION REFUNDING
BONDS, SERIES 1993 AND MAKING CERTAIN
DETERMINATIONS RELATING THERETO
WHEREAS, the poway Redevelopment Agency (the .Agency.) is a
redevelopment agency duly created, established and authorized
to transact business and exercise its powers, all under and
pursuant to the Community Redevelopment Law (Part 1 of Division
24 (commencing with Section 33000) of the Health and Safety
Code of the State of California) and the powers of the Agency
include the power to issue bonds for any of its corporate
purposes; and
WHEREAS, a Redevelopment Plan known as the .Paguay
Redevelopment Project Area. has been adopted and approved by an
Ordinance of the City of poway (the .City.), and all
requirements of law for and precedent to the adoption and
approval of said Redevelopment Plan have been duly complied
with; and
WHEREAS, the Agency desires to authorize the issuance and
sale of not to exceed $110,000,000 poway Redevelopment Agency,
paguay Redevelopment Project Area, Subordinated Tax Allocation
Refunding Bonds, Series 1993 (the .Bonds.) for the purpose of
refunding the Agency's $35,000,000 Paguay Redevelopment Project
Subordinated Tax Allocation Bonds, Series 1989A (the .1989A
Bonds") and its $9,330,000 Paguay Redevelopment Project Tax
Allocation Refunding Bonds, Issue of 1991 (the .1991 Bonds.),
and for the purpose of financing certain redevelopment
activities and projects ; and
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY
THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, AS FOLLOWS:
Section 1- The above recitals, and each of them, are true
and correct.
Section 2. This City Council finds and determines that it
is in the public interest that Bonds be issued to assist in the
financing of the paguay Redevelopment Project Area.
ATTACHMENT A
MAY 4 1993 ITEM to.l
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Section 3. The issuance of the Bonds in order to aid in
the financing of the Paguay Redevelopment Project Area, and for
the other purposes related thereto, all of which constitute a
"redevelopment activity," as such term is defined in Health and
Safety Code Section 33678, is hereby authorized and approved
pursuant to Health and Safety Code Section 33640.
Section 4. This Resolution shall take effect upon adoption.
PASSED, APPROVED AND ADOPTED this day of ,
1993.
Mayor, City of poway
(SEAL)
ATTEST:
City Clerk of the City
of Poway
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CLERK'S CERTIFICATE
I, Marjorie K. Wahlsten, City Clerk of the City of
Poway, do hereby certify that the foregoing resolution was duly
introduced approved and adopted by the City Council of the City
of poway at a regular meeting of said Council held on the
day of , 1993, by the following roll call vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ABSTAIN: Councilmembers:
City Clerk of the City of poway
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RESOLUTION NO.
RESOLUTION OF THE POWAY PUBLIC FINANCING
AUTHORITY APPROVING THE FORM OF AND AUTHORIZING
THE EXECUTION OF AN INDENTURE OF TRUST, A
PURCHASE CONTRACT AND AN OFFICIAL STATEMENT
RELATING TO THE ISSUANCE OF THE AGENCY'S SERIES
1993 SUBORDINATED TAX ALLOCATION REFUNDING
BONDS AND APPROVING CERTAIN ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the Authority is a joint powers authority
organized pursuant to Title 1, Division 7, Chapter 5 of the
Government Code of the State of California; and
WHEREAS, the Agency has previously issued its $35,000,000
Paguay Redevelopment Project Subordinated Tax Allocation Bonds,
Series 1989A (the "1989A Bonds") and its $9,330,000 paguay
Redevelopment Project Tax Allocation Refunding Bonds, Issue of
1991 (the "1991 Bonds"); and
WHEREAS, the Agency proposes to issue its not to exceed
$110,000,000 poway Redevelopment Agency paguay Redevelopment
Project Subordinated Tax Allocation Refunding Bonds, Series
1993 (the "1993 Bonds") to refund the Agency's outstanding
1989A Bonds and 1991 Bonds and to finance certain other
redevelopment activities and projects; and
WHEREAS, the purposes stated above will be accomplished by
the Authority purChasing such Bonds from the Agency and selling
such Bonds to paineWebber Incorporated (the "Underwriter")
pursuant to the Marks-Roos Local Bond Pooling Act of 1985
(Government Code Section 6584 et seq.); and
WHEREAS, there have been prepared and submitted to this
meeting forms of:
(1) a draft of the Indenture of the Agency; and
(2) a draft of the Preliminary Official Statement of the
Agency to be used in connection with the sale of the
Bonds (such Preliminary Official Statement in the form
presented at this meeting with such changes,
insertions and omissions as are made pursuant to this
Resolution, being referred to herein as "Preliminary
Official Statement"); and
(3) a draft of the proposed Bond Purchase Contract among
the Agency, the Authority and the Underwriter.
ATTACHMENT 8
MAY 4 1993 ITEM 10. I
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NOW, THEREFORE, BE IT RESOLVED by the Poway Public
Financing Authority, as follows:
Section 1. Subject to the provisions of Section 2 hereof,
the purchase of the Bonds in an aggregate principal amount not
to exceed One Hundred Ten Million Dollars ($110,000,000) on the
terms and conditions set forth in, and subject to the
limitations specified in, the Indenture and the Bond Purchase
Contract, is hereby authorized and approved. The Bonds will be
dated, will bear interest at the rates, will mature on the
dates, will be issued in the form, will be subject to
redemption, and will be as otherwise provided in the Indenture,
as the same will be completed as provided in this Resolution.
Section 2. The Indenture, in substantially the form
submitted at this meeting with such changes, insertions and
omissions as may be requested by Bond Counselor the
Underwriter and approved by the Chairman of the Agency, such
approval to be conclusively evidenced by the execution and
delivery thereof and made a part hereof as though set forth in
full herein, be and the same is hereby approved.
Section 3. The Bond Purchase Contract in substantially the
form submitted at this meeting with such changes, insertions
and omissions as may be requested by Bond Counselor the
Underwriter and approved by the Chairman of the Agency, such
approval to be conclusively evidenced by the execution and
delivery thereof and made a part hereof as though set forth in
full herein is her by approved. The Executive Director of the
Authority is hereb authorized and directed to execute the Bond
Purchase Contract n the form presented at this meeting with
such changes, inse tions and omissions as may be approved by
the Executive Dire tor, said execution being conclusive
evidence of such a proval.
Section 4. Th Preliminary Official Statement in
substantially the orm presented at this meeting with such
changes, insertion and omissions as may be requested by Bond
Counselor the Und rwriter and approved by the Chairman of the
Agency, such appro al to be conclusively evidenced by the
execution and deli ery thereof and made a part hereof as though
set forth in full erein is hereby approved and the use of the
Preliminary Offici 1 Statement in connection with the offering
and sale of the Bo ds is hereby authorized and approved.
Section 5. Th preparation and delivery of an Official
Statement, and its use by the Underwriter, in connection with
the offering and s le of the Bonds, be and the same is hereby
authorized and app oved. The Official Statement shall be in
substantially the orm of the Preliminary Official Statement
with such changes, insertions and omissions as may be requested
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by Bond Counselor the Underwriter and approved by the Chairman
of the Agency, such approval to be conclusively evidenced by
the execution and delivery thereof.
Section 6. The Chairman of the Authority, the Treasurer,
the Secretary of the Authority, and any other proper officer of
the Agency, acting singly, be and each of them hereby is
authorized and directed to execute and deliver any and all
documents and instruments, including any agreements with the
Agency relating to the Bonds, and to do and cause to be done
any and all acts and things necessary or proper for carrying
out the transactions contemplated by the Indenture, the Bond
Purchase Contract, the Official Statement, this Resolution and
any such agreements.
Section 7. This Resolution shall take effect immediately
upon its adoption.
PASSED, APPROVED and ADOPTED by the poway Public Financing
Authority of the City of poway, California, at a regular
meeting thereof this day of , 1993.
Chairman
(SEAL)
ATTEST:
Marjorie K. Wahlsten, Secretary
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STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN DIEGO )
I, Marjorie K. Wahlsten, Secretary of the poway Public
Financing Authority, do hereby certify the foregoing Resolution
No. was duly adopted by the poway Public Financing
Authority at a meeting of said Agency on the day of
, 1993, and that it was so adopted by the fOllowing
vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
Marjorie K. Walhsten,
Secretary Poway Public
Financing Authority
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RESOLUTION NO. R-93-
RESOLUTION OF THE POWAY REDEVELOPMENT AGENCY
AUTHORIZING THE ISSUANCE OF SUBORDINATED TAX
ALLOCATION REFUNDING BONDS OF SAID AGENCY IN A
PRINCIPAL AMOUNT NOT TO EXCEED ONE HUNDRED TEN
MILLION DOLLARS ($110,000,000) TO FINANCE
COSTS RELATING TO A REDEVELOPMENT PROJECT
KNOWN AS THE PAGUAY REDEVELOPMENT PROJECT AREA
AND APPROVING CERTAIN DOCUMENTS AND TAKING
CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
WHEREAS, the poway Redevelopment Agency (the "Agency") is
a redevelopment agency (a public body, corporate and politic)
duly created, established and authorized to transact business
and exercise its powers, all under and pursuant to the Community
Redevelopment Law (Part 1 of Division 24 (commencing with
Section 33000) of the Health and Safety Code of the State of
California) (the "Law") and the powers of the Agency include the
power to issue bonds for any of its corporate purposes; and
WHEREAS, the Redevelopment Plan for a redevelopment
project known and designated as "paguay Redevelopment Project
Area" has been adopted and approved by Ordinance No. 117 of the
City of Poway on December 13, 1983, and all requirements of law
for and precedent to the adoption and approval of the
Redevelopment Plan have been duly complied with; and
WHEREAS, in order to take advantage of favorable market
conditions, including the availability of municipal bond
insurance and interest rate swaps, and to accomplish the
corporate purposes of the Agency as set forth in the recitals of
an Indenture of Trust by and between the Agency and Bank of
America National Trust and Savings Association, as Trustee for
the Agency, the form of which has been presented at this meeting
(the "Indenture"), the Agency, after due investigation and
deliberation, has determined that it is in the interests of the
Agency to issue at this time subordinated tax allocation bonds
in a principal amount of not to exceed One Hundred Ten Million
Dollars ($110,000,000) pursuant to this Resoluti0n and the
Indenture, to be designated "poway Redevelopment Agency, paguay
Redevelopment Project Area, Subordinated Tax Allocation
Refunding Bonds, Series 1993" (the "Bonds") for the purposes of
providing funds to refund the Agency's $35,000,000 Paguay
Redevelopment Project Subordinated Tax Allocation Bonds, Series
1989A (the "1989A Bonds") and its $9,330,000 paguay
Redevelopment Project Tax Allocation Refunding Bonds, Issue of
1991 (the "1991 Bonds") and to finance certain Agency
ATTACHMENT C
MAY 4 1993 ITEM 10./
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redevelopment activities and projects, including, but not
limi ted to, low and moderate income housing projects; and
WHEREAS, the Agency is authorized to issue the Bonds
pursuant to the Law; and
WHEREAS, the Bonds are proposed to be issued pursuant to
an Indenture of Trust (the "Indenture") dated as of May 1, 1993,
by and between the Agency and Bank of America National Trust and
Savings Association, as Trustee, the preliminary form of which
is on file in the City Clerk's office and is presented at this
meeting; and
WHEREAS, the Agency has received an offer from
paineWebber Incorporated (the "Underwriter") to purchase the
Bonds from the poway Public Finance Authority (the "Authority");
and
WHEREAS, the Underwriter has prepared a Preliminary
Official Statement setting forth matters relating to the Agency
and the issuance of the Bonds, the preliminary form of which is
on file in the City Clerk's office and has been presented at
this meeting (the "Preliminary Official Statement"); and
WHEREAS, the Agency desires to proceed to issue the
Bonds; and
WHEREAS, the Agency has determined it in the best
interests of the Agency to employ the law firm of Stradling,
Yocca, Carlson & Rauth, a Professional Corporation, to represent
the Agency as bond counsel with respect to the issuance of the
Bonds ("Bond Counsel") pursuant to the terms of that certain
Bond Counsel Agreement dated April 22, 1993, and on file in the
City Clerk's office; and
WHEREAS, the Agency and the Underwriter have caused to be
prepared a Bond Purchase Contract by and among the Agency, the
Authority and the Underwriter, the preliminary form of which is
on file in the City Clerk's office and has been presented at
this meeting (the "Purchase Contract"); and
WHEREAS, the Agency desires to enter into an Escrow
Agreement by and among the Agency, the Trustee and the trustee
for the Agency's 1989A Bonds and 1991 Bonds, the preliminary
form of which has been presented at this meeting (the "Escrow
Agreement"); and
WHEREAS, the Agency desires to obtain municipal bond
insurance and to enter into an interest rate swap agreement with
respect to the Bonds if to do so will result in a lower overall
borrowing cost to the Agency ; and
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WHEREAS, the Agency with the aid of its staff has
reviewed the Indenture, Preliminary Official Statement, Purchase
Contract and Escrow Agreement; and the Agency wishes at this
time to approve the foregoing in the public interests of the
Agency and to authorize staff to execute and deliver any and all
documents and instruments, including any agreements with a
municipal bond insurer and an appropriate swap counterparty, in
order to accomplish the foregoing purposes and, subject to the
conditions set forth herein, to obtain municipal bond insurance
and an interest rate swap product with respect to the Bonds.
NOW, THEREFORE, the Poway Redevelopment Agency DOES
HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS:
SECTION 1. Each of the above recitals is true and
correct.
SECTION 2. The issuance of the Bonds in the principal
amount of not to exceed $110,000,000, with a final maturity of
not to exceed 33 years from the date of issuance thereof is
hereby authorized. The principal amount of the Bonds, the
principal maturity in each year and the rates of interest that
the Bonds shall bear shall be as set forth in the Purchase
Contract to be executed on behalf of the Agency in accordance
with Section 3 hereof. All other provisions of the Bonds shall
be governed by the terms and conditions set forth in the
Indenture. Capitalized terms used in this Resolution which are
not defined herein have the meaning ascribed to them in the
Indenture.
SECTION 3. The Purchase Contract and the Preliminary
Official Statement are hereby approved in substantially the form
presented at this meeting. The Chairman and the Secretary of
the Agency, or their designees, are hereby authorized and
directed for and on behalf of the Agency to execute and deliver
the Purchase Contract in substantially the form approved, with
such additions thereto and changes therein as are recommended by
Bond Counsel and the Executive Director of the Agency, and
approved by the officers executing said contract, such approval
to be conClusively evidenced by the execution and delivery
thereof; provided, however, that the Bond Purchase Contract
shall be signed only if the net interest cost on the Bonds does
not exceed 7.25\ per annum and the Underwriters' discount,
together with any original issue discount, does not exceed 4.0\
of the principal amount of the Bonds. The Chairman, or his
designee, is authorized to determine the day on which the Bonds
are to be priced in order to produce the lowest borrowing cost
for the Agency and may reject any terms presented by the
Underwriters if determined not to be in the best interest of the
Agency. The Chairman, or his designee, is hereby authorized to
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execute a final Official Statement in substantially the form of
the Preliminary Official Statement presented at this meeting and
approved, with such additions thereto and changes therein as are
recommended or approved by Bond Counsel to the Agency and the
officer executing the same to make such Preliminary Official
Statement "deemed" final and such Official Statement final as of
its date for purposes of Rule 15c2-12 of the Securities and
Exchange Commission, with such approval to be conclusively
evidenced by the execution and delivery of the final Official
Statement. The Underwriter is authorized to distribute the
Preliminary Official Statement to prospective purchasers of the
Bonds and to provide to the purchasers of the Bonds from the
Underwriter copies of the final Official Statement.
SECTION 4. The Indenture and the Escrow Agreement are
hereby approved in substantially the form presented at this
meeting, and the Chairman and the Secretary are hereby
authorized and directed for and on behalf of the Agency to
execute and deliver such documents in substantially the form
approved, with such additions thereto and changes therein as are
recommended by Bond Counsel and the Executive Director of the
Agency and approved by such officers, including, but not limited
to, any changes necessary to accomodate the addition or deletion
of an interest rate swap product, such approval to be
conclusively evidenced by the execution and delivery thereof.
SECTION 5. Bank of America National Trust and Savings
Association is hereby appointed as Trustee under the Indenture.
SECTION 6. The form of Bond Counsel Agreement dated
April 22, 1993 and on file in the City Clerk's office is hereby
approved, and the Executive Director of the Agency is hereby
authorized and directed for and on behalf of the Agency to
execute such agreement in the form approved, and Stradling,
Yocca, Carlson & Rauth, a Professional Corporation, is hereby
appointed as Bond Counsel to the Agency.
SECTION 7. The Bonds shall be executed on behalf of the
Agency by the manual or facsimile signature of the Chairman of
the Agency, and the seal of the Agency, or a facsimile thereof,
shall be impressed or imprinted thereon and attested with the
manual or facsimile signature of the Secretary of the Agency.
SECTION 8. The Executive Director of the Agency is
hereby authorized and directed to negotiate with interested swap
counterparties in connection with provision of and an interest
rate swap product execution of a swap agreement relating to the
Bonds, and, if the Executive Director of the Agency determines
that it is in the best interest of the Agency to secure an
interest rate swap facility for the Bonds and an interest rate
swap agreement on such terms as the Executive Director of the
04/23/93
5391Q/2345-51 - 4 -
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Agency determines are appropriate, in order to issue the Bonds
at a variable rate and enter into an interest rate swap
agreement with respect to the Bonds to produce a total interest
cost obligation of the Agency of not to exceed 7.25\ per annum.
The Board hereby authorizes and directs the Executive Director
to make such additions, deletions, changes and modifications to
the documents approved by this Resolution, and to execute any
documents the Executive Director deems necessary, to accomplish
the provision of municipal bond insurance and/or an interest
rate swap facility if the Executive Director determines, in his
sole discretion, subject only to the limitations set forth
herein, that to do so will result in a lower cost of borrowing
for the Agency than is currently available through a fixed-rate
issue.
SECTION 9. The Chairman, or his written designee, is
authorized to contract for all services necessary to effect the
issuance of the Bonds. Such services shall include, but not be
limited to, printing the Bonds, the Preliminary Official
Statement and the final Official Statement, obtaining legal
services, paying agent services, services relating to the
provision of an interest rate swap facility and/or municipal
bond insurance and any other services deemed appropriate as set
forth in a certificate of the Chairman, or his written
designee. The Chairman, or his written designee, is authorized
to pay for the cost of such services, together with other Costs
of Issuance, with Bond proceeds deposited to the Cost of
Issuance Fund established pursuant to the Indenture of Trust.
Without further approval of the Agency, the total amount
disbursed by the Trustee for such Costs of Issuance shall not
exceed 3\ of the principal amount of the Bonds.
SECTION 10. All actions heretofore taken by officers and
agents of the Agency with respect to the sale and issuance of
the Bonds are hereby approved, confirmed and ratified, and the
Chairman and the Secretary and the other officers of the Agency
responsible for the fiscal affairs of the Agency are hereby
authorized and directed to take any actions and execute and
deliver any and all certificates, instruments and documents as
are necessary to accompliSh the issuance, sale and delivery of
the Bonds in accordance with the provisions of this Resolution
04/23/93
5391Q/2345-51 - 5 -
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_.
and the fulfillment of the purposes of the Bonds as described in
the Indenture.
ADOPTED, SIGNED AND APPROVED this day of
, 1993.
Chairman of the poway
Redevelopment Agency
ATTEST:
Secretary of the Poway
Redevelopment Agency
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SECRETARY'S CERTIFICATE
I, Marjorie K. Wahlsten, Secretary of the poway
Redevelopment Agency, do hereby certify that the foregoing
resolution was duly adopted, signed and approved by the Poway
Redevelopment Agency at a regular meeting of said Agency held on
the day of , 1993 by the following roll call:
AYES: Members:
NOES: Members:
ABSENT: Members:
ABSTAIN: Members
Secretary of the poway
Redevelopment Agency
04/23/93
5391Q/2345-51 - 7 -
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POWAY REDEVELOPMENT AGENCY
TO
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Trustee
INDENTURE OF TRUST
SECURING $
PAGUAY REDEVELOPMENT PROJECT
TAX ALLOCATION REFUNDING BONDS, SERIES 1993
Dated as of May 1, 1993
ATTACH~'ENT D
MAY 4 1993 ITEM 10./
\
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TABLE OF CONTENTS
Pace
Recitals ................................................ . 1
Granting Clauses ........................................ . 3
ARTICLE I
SECTION 10l. Definitions ............................... . 4
ARTICLE II
THE BONDS
SECTION 20l. Amount, Issuance & Purpose of Bonds ....... . 16
SECTION 202. Nature of Bonds ........................... . 17
SECTION 203. Description of 1993 Fixed Rate Bonds ...... . 18
SECTION 204. Interest on the Bonds ..................... . 19
SECTION 205. Place of Payment of the Bonds ............. . 19
SECTION 206. Form of Bonds ............................. . 20
SECTION 207. Execution of Bonds ........................ . 22
SECTION 20S. Registration and Exchange of Bonds ........ . 23
SECTION 209. Bond Register ............................. . 23
SECTION 210. Delivery of the Bonds ..................... . 24
SECTION 211. Lost, Stolen, Destroyed or Mutilated Bonds . 25
SECTION 212. Cancellation of Bonds ..................... . 25
SECTION 213. Validity of the Bonds ...................... 25
SECTION 214. Description of 1993 Indexed Inverse
Floating/Fixed Rate Bonds and 1993 Indexed
Floating/Fixed Rate Bonds ................ . 26
SECTION 215. Interest on 1993 Indexed Inverse Floating/
Fixed Rate Bonds and 1993 Indexed Floating/
Fixed Rate Bonds .......................... . 26
SECTION 216. Extraordinary Conversion of 1993 Indexed
Inverse Floating/Fixed Rate Bonds and 1993
Indexed Floating/Fixed Rte Bonds ........... 29
SECTION 217. Optional Conversion of 1993 Indexed Inverse
Floating/Fixed Rate Bonds ................. . 30
SECTION 21S. Optional Conversion of 1993 Indexed
Floating/Fixed Rate Bonds ................. . 33
SECTION 219. Registration provisions With Respect to
Conversions of 1993 Indexed Inverse
Floating/Fixed Rate Bonds and 1993 Indexed
Floating/Fixed Rate Bonds ................. . 36
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ARTICLE III
REVENUES AND FUNDS
SECTION 301. Source of Payment of Bonds ................ . 36
SECTION 302. Creation of Funds and Accounts ............ . 39
SECTION 303. Sale of Bonds; Disposition of Bond
Proceeds and Prior Bond Proceeds;
Redevelopment Fund ....................... 39
SECTION 304. Final Balances ............................ . 41
SECTION 305. Security of Funds ......................... . 41
SECTION 306. Non-Presentment of Bonds .................. . 41
SECTION 307. Moneys to be Held in Trust ................ . 42
ARTICLE IV
REVENUES AND APPLICATION
SECTION 401. Tax Revenues ............................. . 42
SECTION 402. Special Fund .............................. 43
SECTION 403. Payments of Principal, Premium and
Interest ............................... . 47
SECTION 404. Revenues to be Held for all Bondowners;
Certain Exceptions ..................... . 47
SECTION 405. Payments under the Bond Insurance POlicy.. 47
ARTICLE V
INVESTMENT OF MONEYS
SECTION 501. Excess Investment Earnings ............... . 49
SECTION 502. Investment of Moneys in Funds ............ . 50
SECTION 503. Issuance of Parity Bonds ................. . 52
ARTICLE VI
REDEMPTION OF BONDS BEFORE MATURITY
SECTION 601. Limitation on Redemption .................. 54
SECTION 602. Optional Redemption ....................... 54
SECTION 603. Sinking Account Redemption ................ 54
SECTION 604. Call and Redemption; Notice of Redemption . 55
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SECTION 605. Redemption Fund ............................ 57
SECTION 606. Partial Redemption of Bonds oooo........................ .. 58
SECTION 607. Effect of Redemption ...................... 58
SECTION 60S. Purchase of Bonds ................................................ .. 58
SECTION 609. Selections of Bonds for Redemption ........ 58
ARTICLE VII
PAYMENT; FURTHER ASSURANCES
SECTION 70l. Payment of Principal or Redemption
Price of and Interest on Bonds .................. .. 59
SECTION 702. Covenants of the Agency................... 59
SECTION 703. Compliance with Indenture, Contracts,
Laws and Regulations ...................................... .. 64
ARTICLE VIII
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND BONDHOLDERS
SECTION 80l. Defaults .................................................................. .. 65
ARTICLE IX
THE TRUSTEE, THE PAYING AGENT THE MARKET AGENT
AND THE CO-REGISTRAR
SECTION 90l. Appointment, Duties, Immunities and
Liabilities of Trustee .................................. .. 69
SECTION 902. Liability of Trustee .......................................... .. 73
SECTION 903. Right of Trustee to Rely on Documents ........ .. 74
SECTION 904. Intervention by Trustee ................... 75
SECTION 905. Designation and Successor of Paying Agent;
Agreement with Paying Agent ........................ .. 75
SECTION 906. The Market Agent .................................................. .. 75
SECTION 907. The Co-Registrar .................................................. .. 76
ARTICLE X
SUPPLEMENTAL INDENTURES
SECTION 1001. Amendments: Supplemental Indentures ............ .. 76
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ARTICLE XI
DEFEASANCE
SECTION 1101. Defeasance .............. . . . . . . . . . . . . . . . . . . 79
ARTICLE XII
MISCELLANEOUS
SECTION 120l. Consents, Etc. of Bondowners ............. 81
SECTION 1202. Limitation of ~ights .. IO....... IO.... . IO..... 81
SECTION 1203. Severability....... IO.................... IO. 82
SECTION 1204. CUSIP Numbers ........... IO............. IO... 82
SECTION 1205. Successor is Deemed Included in All
References to Predecessor ..... IO, IO....... 82
SECTION 1206. Counterparts ...............10 . . . . . . . . . . . . . . 82
SECTION 1207. Applicable Law ......................... . . . 82
SECTION 1208. Captions .................... IO. IO'.......... 83
SECTION 1209. Compliance Certificates and Opinions ...... 83 .
SECTION 1210. Conflict with Trust Indenture Act of 1939 . 83
SECTION 1211. Successors ............ . . . . . . . . . . . . . . . . . . . . 83
SECTION 1212. Waiver of Personal Liability.............. 83
-, SECTION 1213. Notices .... IO............. IO..... IO...... IO... 84
SECTION 1214. Parties Interested Herein.................. 84
SECTION 1215. Rights of Bond Insurer..................... 84
SIGNATURE PAGE .......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
EXHIBIT A - FORMS OF BONDS ............................... A-l
EXHIBIT B - REPRESENTATIONS LETTER ....................... B-1
EXHIBIT C - SCHEDULE OF PRINCIPAL MATURITIES, INTEREST
RATES AND CUSIP NUMBERS ...................... C-l
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THIS INDENTURE OF TRUST, dated as of May 1, 1993, is
entered into between the Poway Redevelopment Agency, a public
body corporate and pOlitic (the "Agency"), and Bank of America
National Trust and Savings Association, a national banking
association, duly authorized to accept and execute trusts of
the character herein set forth, as trustee (the "Trustee").
R~~I~A~S :
WHEREAS, the Agency is a community redevelopment
agency (a public body, corporate and pOlitic) duly created,
established and authorized to transact business and exercise
its powers, all under and pursuant to Part 1 of Division 24
(commencing with Section 33000) of the Health and Safety Code
of the State of California (the "Community Redevelopment Law),
and the powers of the Agency include the power to issue bonds
or notes for any of its corporate purposes; and
WHEREAS, the Redevelopment Plan for a redevelopment
project known and designated as the "paguay Redevelopment
Project Area" has been adopted and approved on December 13,
1983, by Ordinance No. 117 of the City of poway and all
requirements of law for and precedent to the adoption and
approval of the Redevelopment Plan have been duly complied
with; and
WHEREAS, on July 25, 1989, the Agency adopted
Resolution No. R-89-25 (the "1989 Resolution") authorizing the
issuance of $35,000,000 principal amount of the poway
Redevelopment Agency, paguay Redevelopment Project Subordinated
Tax Allocation Bonds, Series 1989A, and on October 8, 1991, the
Agency adopted Resolution No. R-9l-17 (the "1991 Resolution")
authorizing the issuance of $9,330,000 Poway Redevelopment
Agency, paguay Redevelopment Project Subordinated Tax
Allocation Refunding Bonds, Issue of 1991 (collectively, the
"Prior Bonds") whi~h are secured by a lien against Pledged Tax
Revenues (as defined in the 1989 Resolution and the 1991
Resolution, respectively), which Pledged Revenues are paid into
a special fund of the Agency pursuant to Article 6 of Chapter 6
(commencing with Section 33670) of the Community Redevelopment
Law and Section 16 of Article XVI of the Constitution of the
State of California and as provided in the Redevelopment Plan;
and
WHEREAS, the Agency has also previously issued its
poway Redevelopment Agency, Paguay Redevelopment Project, Tax
Allocation Refunding Bonds, Series 1990A in the principal
amount of $21,595,000 ("Senior Lien Debt"); and
,
-
WHEREAS, the corporate purposes of the Agency will be
accomplished at this time by the issuance of tax allocation
refunding bonds in a principal amount of Dollars
($ ) pursuant to this Indenture and that certain
resolution of the Agency adopted on , 1993, providing
for the issuance of "poway Redevelopment Agency, Paguay
Redevelopment Project, Subordinated Tax Allocation Refunding
Bonds, Series 1993", the proceeds of which will be used to
finance the costs of implementing the Paguay Redevelopment
Project, to fund a debt service reserve fund, to refund the
Outstanding Prior Bonds, to pay a municipal bond insurance
premium and to pay a portion of the costs of issuing the Bonds;
and
WHEREAS, the Agency is authorized to issue the Bonds
pursuant to the Community Redevelopment Law and Article 11 of
Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with
Section 53580) of the California Government Code, as
supplemented and amended (the "Law") and, specifically, is
authorized to issue any types of bonds payable from its
revenues generally pursuant to Section 33641 of the Community
Redevelopment Law; and
WHEREAS, in connection with the advance refunding of
the Prior Bonds, a portion of the 1993 Bond proceeds will be
deposited, together with other available funds, into an escrow
fund (the "Prior Bonds Escrow Fund") established under a Prior
Bonds Escrow Deposit Agreement of even date herewith (the
"Prior Bonds Escrow Agreement") between the Agency and the
Trustee, as escrow agent (in such capacity, the "Prior Bonds
Escrow Agent"), and the amount so deposited will be invested in
specified "Government Obligations" (as defined in the
Indenture) the payments of principal and interest under which
will be used to pay all debt service requirements on the 1989
Bonds through and including December 15, 1999 and to redeem all
remaining 1989 Bonds on such date and to pay all debt service
requirements on the 1991 Bonds through and including
December 15, 2001 and to redeem all remaining 1991 Bonds on
such date; and
WHEREAS, upon the making of the above mentioned
deposit into the Prior Bonds Escrow Fund, the Prior Bonds will
no longer be "Outstanding" under each respective indenture
executed in connection with the issuance of the Prior Bonds and
will no longer be secured thereby ; and
WHEREAS, (the "Bond Insurer") has
made a commitment dated , 1993 to issue a pOlicy of
municipal bond insurance insuring the payment of principal and
interest on the Bonds (the "Commitment"); and
04/22/93
5158Q/2345/51 - 2 -
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WHEREAS, the execution and delivery of the Bonds and
the Indenture have been duly authorized and all things
necessary to make the Bonds, when executed by the Agency and
authenticated by the Trustee, valid and binding obligations of
the Agency and to make this Indenture a valid and binding
instrument for the security of the Bonds, have been done.
NOW, THEREFORE, THIS INDENTURE OF TRUST WITNESSETH:
That the Agency, in consideration of the premises, the
acceptance by the Trustee of the trusts hereby created, the
purchase and acceptance of the Bonds by the purchasers thereof,
and of other good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to secure the
payment of the principal of, premium, if any, and interest on
all Bonds outstanding hereunder from time to time, according to
their tenor and effect, and to secure the observance and
performance by the Agency of all the covenants expressed or
implied herein and in the Bonds, does hereby convey, pledge and
assign unto the Trustee, and unto its successors and assigns
forever and does hereby grant to it and them a security
interest, together with all right, title and interest of the
Agency, in: :
GRANTING CLAUSE FIRST
The Pledged Tax Revenues together with all other Revenues,
and all moneys and securities held by the Trustee in any fund
or account, other than the Rebate Fund, together with
investment earnings thereon established pursuant to the terms
of the Indenture and any and all other property of each name
and nature from time to time hereafter by delivery or by
writing of any kind pledged or assigned as and for additional
security hereunder, by anyone, to the Trustee, which is hereby
authorized to receive any and all such property at any and all
times and to hold and apply the same subject to the terms
hereof.
TO HAVE AND TO HOLD all and singular the Trust Estate,
whether now owned or hereafter acquired, unto the Trustee and
its respective successors in said trusts and assigns forever.
IN TRUST NEVERTHELESS, upon the terms and trusts herein set
forth for the equal and proportionate benefit, security and
protection of all present and future owners of the Bonds, from
time to time issued under and secured by this Indenture without
privilege, priority or distinction as to the lien or otherwise
of any of the Bonds over any of the other Bonds.
04/22/93
5158Q/2345/51 - 3 -
"
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PROVIDED, HOWEVER, that if the Agency, its successors or
assigns, shall pay, or cause to be paid, the principal of the
Bonds and the interest and premium, if any, due or to become
due thereon, at the times and in the manner mentioned in the
Bonds, according to the true intent and meaning thereof, and
shall cause the payments to be made into the Special Fund as
required hereunder or shall provide, as permitted by Article XI
hereof, for the payment thereof, and shall keep, perform and
observe all the covenants and conditions pursuant to the terms
of this Indenture to be kept, performed and observed by it, and
shall payor cause to be paid to the Trustee and all Paying
Agents all sums of money due or to become due to them in
accordance with the terms and provisions hereof, then this
Indenture and the rights hereby granted shall cease, determine
and be void; otherwise this Indenture is to be and remain in
full force and effect.
THIS INDENTURE OF TRUST FURTHER WITNESSETH, and it is
expressly declared, that all Bonds issued and secured hereunder
are to be issued, authenticated and delivered and the Revenues
hereby assigned and pledged are to be dealt with and disposed
of under, upon and SUbject to the terms, conditions,
stipulations, covenants, agreements, trusts, uses and purposes
as hereinafter expressed, and the Agency has agreed and
covenanted, and does hereby agree and covenant, with the
Trustee and with the respective holders from time to time of
the Bonds, as follows:
-
ARTICLE I
DEFINITIONS
Section 10l. Definitions.
(A) For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(1) "This Indenture" means this instrument as
originally executed or as it may from time to time be
supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable
provisions hereof.
(2) All references in this Indenture to designated
"Articles", "Sections" and other subdivisions are to the
designated Articles, Sections and other subdivisions of
this Indenture. The words "herein", "hereof", "hereto" ,
"hereby", and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
04/22/93
5158Q/2345/51 - 4 -
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(3) The terms defined in this Article have the
meanings assigned to them in this Article, and include the
plural as well as the singular.
(4) All accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
applicable generally accepted accounting principles as in
effect from time to time.
(S) Every NrequestN, "order", NdemandN,
NapplicationN, NappointmentN, "notice", NstatementN,
NcertificateN, NconsentN, or similar action hereunder by
the Agency shall, unless the form thereof is specifically
provided, be in writing signed by a duly authorized officer
or agent of the Agency with a duly authorized signature.
(B) For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
NAgencyN means the Poway Redevelopment Agency.
NAlternate Reserve Account SecurityN means one or more
letters of credit, surety bonds, bond insurance policies, or
other form of guaranty from a financial institution for the
benefit of the Trustee, the long-term, unsecured obligations of
which are rated not less than NAN by Moody's Investors Service.
or NAN by Standard & Poor's Corporation in substitution for or
in place of all or any portion of the Reserve Requirement.
NAnnual Debt ServiceN means, for any Bond Year, the
principal and interest payable on the Outstanding Bonds in such
Bond Year.
NAverage Index RateN means, with respect to the 1993
Indexed Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/Fixed Rate Bonds for each Interest Period, the average
rate per annum represented by the Index as applicable to each
day during such Interest Period, which Average Index Rate shall
be calculated on the Interest Calculation Date for each such
Interest Period. For the purpose of calculating the Average
Index Rate, the Index as published or otherwise announced on
any particular date shall be deemed applicable to such
pUblication or announcement date and each day thereafter to,
but not including, the next publication or announcement date
for the Index; provided, however, that if the publication or
announcement date for the Index occurs on or after an Interest
Calculation Date to and including the last day of the
applicable Interest Period, the Index as of the immediately
preceding publication or announcement date shall be deemed
applicable to such Interest Calculation Date and each day
thereafter through the end of the applicable Interest Period.
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-Base Rate- means, with respect to the 1993 Indexed
Inverse Floating/Fixed Rate Bonds, the rate of \ per annum.
-Bond" or -Bonds" or "1993 Bonds" means the -Poway
Redevelopment Agency, paguay Redevelopment Project,
Subordinated Tax Allocation Refunding Bonds, Series 1993,-
secured by this Indenture, including the 1993 Fixed Rate Bonds,
the 1993 Indexed Inverse Floating/Fixed Rate Bonds and the 1993
Indexed Floating/Fixed Rate Bonds.
-Bond Counsel- means the attorney or firm of attorneys
designated by the Agency at the time such term is applied
hereunder as its Bond Counsel.
-Bond Insurance POlicy- means the municipal bond new
issue insurance pOlicy issued by the Bond Insurer that
guarantees payment of principal of and interest on the Bonds.
"Bond Insurer" means , a
, or any successor thereto.
"Bond Rate" means (i) with respect to the 1993 Indexed
Inverse Floating/Fixed Rate Bonds, the rate of \ per :
annum; and (ii) with respect to the 1993 Indexed Floating/Fixed
Rate Bonds, the rate of \ per annum.
"Bond Year" means with respect to a particular issue
of Bonds, the period beginning on the Delivery Date and ending
-- on the Interest Payment Date that is closest to the date (the
-Anniversary Date-) that is twelve months subsequent to the
Delivery Date but is not subsequent to the Anniversary Date and
each successive twelve month (or shorter) periOd thereafter
until there are no longer any bonds of the issue outstanding.
"Bondowner- or -owner of Bonds, " or any similar term,
means any person who shall be the registered owner or his duly
authorized attorney, trustee or representative of any
Outstanding Bond. For the purpose of Bondowners' voting rights
or consents, Bonds owned by or held for the account of the
Agency, or the City, directly or indirectly (as certified by
the City or the Agency), shall not be counted.
-Business Day" means a day of the year other than a
Saturday or a Sunday or day on which banks in California or New
York are required or authorized to remain closed.
-Certificate" or "Certificate of the Agency" means a
certificate signed by the Chairman or Executive Director of the
Agency or their respective designees.
04/22/93
5158Q/2345/51 - 6 -
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"Chairman" means the chairman of the Agency appointed
pursuant to the Health and Safety Code of the State of
California, or other duly appointed officer of the Agency
authorized by the Agency by resolution or bylaw to perform the
functions of the chairman in the event of the chairman's
absence or disqualification.
"City" means the City of poway, California.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Conversion Date" means, with respect to the 1993
Indexed Inverse Floating/Fixed Rate Bonds or the 1993 Indexed
Floating/Fixed Rate Bonds, as applicable, the Scheduled
Conversion Date, Extraordinary Conversion Date or Optional
Conversion Date for such Bonds.
"Co-Registrar" means, with respect to the 1993 Indexed
Inverse Floating/Fixed Rate Bonds and the 1993 indexed
Floating/Fixed Rate Bonds, , or such
substitute Co-Registrar as may be appointed by the Agency
pursuant to Section 906 hereof.
"Costs of Issuance" means the costs and expenses
incurred in connection with the issuance and sale of the Bonds,
including but not limited to, any municipal bond insurance
premiums, the initial and first year annual administration fees
and expenses of the Trustee, legal fees and expenses of the
Trustee and the Agency, costs of printing the Official
Statement, fees of financial consultants, certain costs of
obtaining interest swap rates with respect to the Bonds,
SUbject to the prior approval of Bond Counsel, and other fees
and expenses set forth in a Certificate of the Agency.
"Costs of Issuance Fund" means the fund by that name
established and held by the Trustee pursuant to Section 302
hereof.
"County" means the County of San Diego.
"Delivery Date" means the date on which the Bonds are
delivered by the Trustee pursuant to this Indenture to the
original purchasers thereof.
"Effective Date" means the date so specified in the
confirmation dated as of the date of the Swap Agreement
confirming the transaction entered into between the Swap
Provider and the Agency.
"Escrow Agreement" means that certain Escrow Agreement
between the Agency and the Escrow Bank made and entered into as
of May 1, 1993 providing for the refunding of the Prior Bonds.
04/22/93
SlS8Q/2345/S1 - 7 -
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"Escrow Bank" means Bank of America National Trust and
Savings Association, together with any successors thereto.
"Escrow Fund" means the fund established by the Escrow
Agreement for the purpose of paying the principal, premium and
interest on the Prior Bonds to and including December 15, 1999
(in the case of the 1989 Bonds), and December lS, 2001 (in the
case of the 1991 Bonds), and to redeem the outstanding Prior
Bonds on such dates.
"Event of Default" means any of the events described
in Section 801 hereof.
"Executive Director" means the Executive Director of
the Agency or his designated representative.
"Extraordinary Conversion Date" means, with respect to
the 1993 Indexed Inverse Floating/Fixed Rate Bonds or the 1993
Indexed Floating/Fixed Rate Bonds, as applicable, the date of
any mandatory conversion to the Bond Rate upon the occurrence
of certain defaults or termination events under the applicable
Swap Agreement, as provided in Section 216 hereof.
"Finance Director" or "Finance Director of the Agency"
means the officer who is then performing the functions of
Finance Director of the City, in his or her capacity as finance
officer of the Agency.
"Fiscal Year" means any twelve (12) month period
beginning on July 1st and ending on the next following
June 30th.
"Government Obligations" means direct general
obligations (including obligations issued or held in book entry
form on the books of the Department of the Treasury) of the
United States of America and shall include cash or other coin
or currency of the United States of America that is legal
tender for payment of public or private debts.
"Identified Business Parks" means property included
within specified portions of the Project Area consisting of
commercial/industrial developments known as the .Poway Tech
Center, " "Parkway Business Center," "pomerado Business Park"
and the "Poway Corporate Center."
"Identified Business Park Obligations" means a
promissory note or notes heretofore issued or expected to be
issued by the Agency, pursuant to certain owner participation
agreements heretofore executed by the Agency with respect to
the Identified Business Parks, prior to or after the date
hereof and tax allocation bonds, if any, which the Agency may
issue hereafter to refinance such notes.
-
04/22/93
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"Indenture" means this Indenture of Trust between the
Agency and the Trustee, as it may be amended or supplemented by
any Supplemental Indenture entered into pursuant to the
provisions hereof.
"Independent Financial Consultant," "Independent
Engineer,""Independent Certified Public Accountant" or
"Independent Redevelopment Consultant" means any individual or
firm engaged in the profession involved, appointed by the
Agency, and who, or each of whom, has a favorable reputation in
the field in which his/her opinion or certificate will be
given, and:
(1) is in fact independent and not under
domination of the Agency;
(2) does not have any substantial interest,
direct or indirect, with the Agency, other than as original
purchaser of the Bonds; and
(3) is not connected with the Agency as an
officer or employee of the Agency, but who may be regularly
retained to make reports to the Agency. ,
"Index" means, with respect to the 1993 Indexed
Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/Fixed Rate Bonds:
(a) initially, the PSA Index; or
(b) if the PSA Index is materially modified or
is no longer published or announced, a substitute index
designated by the Swap Provider which is based on yield
evaluations at par of notes or bonds sUbject to tender upon
seven days notice, issued by not less than five "high grade"
component issuers, the interest on which is (i) not includable
in gross income of the holders thereof for purposes of federal
income tax under the Code and (ii) not sUbject to an
"alternative minimum tax" or similar tax under the Code unless
all such tax exempt notes or bonds are subject to such tax.
"Indexed Inverse Rate" means, with respect to any 1993
Indexed Inverse Floating/Fixed Rate Bond for any Interest
Period, a rate equal to the Bond Rate applicable to such 1993
Indexed Inverse Floating/Fixed Rate Bond plus the Base Rate
applicable to such 1993 Indexed Inverse Floating/Fixed Rate
Bond, minus the Average Index Rate; provided, however, that in
no event will the Indexed Inverse Rate be less than zero for
any Interest Period.
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"Indexed Variable Rate" means, with respect to the
1993 Indexed Floating/Fixed Rate Bonds for any Interest Period,
a rate equal to the greater of (a) the applicable Bond Rate or
(b) the applicable Bond Rate plus the Average Index Rate, minus
the Threshold Rate.
"Interest Calculation Date" means, with respect to the
1993 Indexed Inverse Floating/Fixed Rate Bonds and 1993 Indexed
Floating/Fixed Rate Bonds, the fourth Business Day preceding
each Interest Payment Date for such Bonds.
"Interest Period" means, with respect to the 1993
Indexed Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/Fixed Rate Bonds, each period from and including an
Interest Payment Date (or the Effective Date, in the case of
the initial Interest Period) to but not including the next
succeeding Interest Payment Date.
"Interest Account" means the account by that name
established and held by the Trustee pursuant to Section 302
hereof.
"Interest Payment Date" means June lS and December lS
of each year, commencing December lS, 1993.
"Law" means Part 1 of Division 24 (commencing with
Section 33000) of the Health and Safety Code of the State of
California, and all amendments thereto.
"Maximum Annual Debt Service" shall mean the largest
amount of Annual Debt Service for any Bond Year.
"1993 Fixed Rate Bonds" means the 1993 Bonds maturing
on June 1 of the years through , and .
"1993 Indexed Inverse Floating/Fixed Rate Bonds" means
the 1993 Bonds maturing on December lS, .
"1993 Indexed Floating/Fixed Rate Bonds" means the
1993 Bonds maturing on December IS, .
"Opinion of Counsel" means a written opinion of an
attorney or firm of attorneys of favorable reputation in the
field of municipal bond law. Any opinion of such counsel may
be based upon, insofar as it is related to factual matters,
information which is in the possession of the Agency as shown
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by a certificate or opinion of, or representation by, an
officer or officers of the Agency, unless such counsel knows,
or in the exercise of reasonable care should have known, that
the certificate, opinion or representation with respect to the
matters upon which his or her opinion may be based, as
aforesaid, is erroneous.
.Optional Conversion Adjustment. means, with respect
to any 1993 Indexed Inverse Floating/Fixed Rate Bond or 1993
Indexed Floating/Fixed Rate Bond to be converted to the
applicable Bond Rate on an Optional Conversion Date, the fixed
amount determined solely by the applicable Swap Provider as
being payable in accordance with the applicable Swap Agreement
in order to reverse or unwind, based on current market
conditions, the Swap Agreement payment obligations of the
Agency and the Swap Provider with respect to a notional amount
equal to the principal amount of the Bond to be converted,
taking into account any accrued unpaid amounts under the Swap
Agreement. The fixed amount, if any, so determined with
respect to an optional conversion may be payable by or to the
Swap Provider in the case of the 1993 Indexed Inverse
Floating/Fixed Rate Bonds or by (but not to) the Swap Provider
in the case of the 1993 Indexed Floating/Fixed Rate Bonds.
.Optional Conversion Date" means, with respect to any
1993 Indexed Inverse Floating/Fixed Rate Bond or 1993 Indexed
Floating/Fixed Rate Bond which is converted to bear interest at
the Bond Rate at the option of the Beneficial Owner, the date
of such optional conversion pursuant to section 217 or 21S
hereof, as applicable.
.Outstanding., when used as of any particular time
with reference to the Bonds and Parity Bonds, means, SUbject to
the provisions of Article II, all Bonds except:
(a) Bonds and Parity Bonds theretofore cancelled by
the Trustee or surrendered to the Trustee for
cancellation;
(b) Bonds or Parity Bonds paid or deemed to have been
paid pursuant to Section 1101 and Section 306
hereof; and
(c) Bonds or Parity Bonds in lieu of or in
substitution for which other Bonds or the Parity
Bonds shall have been authorized, executed,
issued and delivered by the Agency pursuant to
this Indenture or any Supplemental Indenture.
.PSA Index" means the PSA Municipal Swap Index
announced weekly by Municipal Market Data based upon the weekly
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interest rate resets of tax-exempt variable rate issues in a
data base maintained by Municipal Market Data in accordance
with specific criteria established by the Public Securities
Association.
"Parity Bonds" means any additional tax allocation
bonds (including, without limitation, bonds, notes, interim
certificates, debentures or other obligations) issued by the
Agency as permitted by Section S03 of this Indenture.
"Paying Agent" means any paying agent appointed by the
Agency pursuant to this Indenture.
"Permitted Investments" means any of the following
which at the time of investment are legal investments under the
laws of the State of California for the moneys proposed to be
invested therein: (a) Government Obligations; (b) Federal Home
Loan Mortgage Corporation participation certificates or senior
debt obligations; (c) Federal National Mortgage Association
mortgage-backed securities or senior debt obligations;
(d) certificates of deposit, time deposits or bankers'
acceptances with a maturity of one (1) year or less of any bank
(including the Trustee) the long-term debt obligations of which
or the long-term debt obligations of the holding company of
which have been rated A or better by Standard & Poor's
Corporation and having a short-term debt rating of A-l+ or
better by Standard and Poor's Corporation; (e) if the Bonds are
then rated, obligations rated at least as high as the Bonds by
Standard & Poor's Corporation; (f) taxable government money
market portfolios rated AAAmG by Standard & Poor's Corporation
and restricted to obligations with maturities of one year or
less issued or guaranteed as to payment of principal and
interest by the full faith and credit of the United States;
(g) deposits which are fully insured by the Federal Deposit
Insurance Corporation; (h) repurchase agreements with financial
institutions fully insured by the Federal Deposit Insurance
Corporation or any broker-dealer with "retail customers" which
falls under Securities Investors Protection Corporation
juriSdiction, which repurchase agreements are secured by any of
the obligations referred to in (a) above, provided that the
Trustee or a third party acting solely as agent for the Trustee
has possession of collateral equal to one hundred two percent
(102\) of the subject investment securing such repurchase
agreement and the Trustee has a perfected first security
interest in the collateral securing such repurchase agreement
or (i) an investment agreement approved by the Agency with a
financial institution rated at least in the two highest rating
categories by Moody's Investors Service, Inc. or Standard &
Poor's Corporation.
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"Pledged Tax Revenues" means Tax Revenues less (i) all
amounts required under the Senior Lien Debt Indenture or
similar instrument to pay principal of, interest and premium,
if any, on the Senior Lien Debt or any bonds issued to refund
the Senior Lien Debt, respectively, including amounts required
to replenish the Reserve Account under the Senior Lien Debt
Indenture, or the reserve account under any similar instrument
executed in connection with bonds issued to refund the Senior
Lien Debt, and other amounts secured thereunder pursuant to
such pledge and (ii) all amounts allocated to the Agency
pursuant to the law from the Indentified Business Parks.
"Prior Bonds" means the Obligations of the Agency with
respect to (i) $35,000,000 Poway Redevelopment Agency paguay
Redevelopment Project, Subordinated Tax Allocation Bonds,
Series 1989A, dated August 1, 1989, and (ii) $9,330,000 poway
Redevelopment Agency, paguay Redevelopment Project,
Subordinated Tax Allocation Refunding Bonds, Issue of 1991,
dated October 1, 1991.
"Project Area" means the project area described and
defined in the Redevelopment Plan.
"Rebate Fund" means the fund by that name established
and held by the Trustee pursuant to Section 302 hereof.
"Rebate Regulations" means any Final, Proposed, or
Temporary Treasury Regulations promulgated under Section 148(f)
of the Code.
"Record Date" means the close of business on the first
day of the calendar month in which any Interest Payment Date
occurs, whether or not such day is a Business Day.
"Redemption Fund" shall have the meaning set forth in
Section 605 hereof.
"Redevelopment Plan" means the Redevelopment Plan for
the Paguay Redevelopment Project, approved and adopted by the
City Council of the City of poway and includes any amendment
thereof hereafter or heretofore made pursuant to the Law.
"Redevelopment Project" means the Paguay Redevelopment
Project Area.
"Refunding Law" means Article 11 of Chapter 3 of Part
1 of Division 2 of Title 5 (commencing at Section 53580) of the
Government Code of the State of California, and all amendments
thereto.
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(a) A statement that the person or firm making or
giving such Report has read the pertinent provisions of
this Indenture to which such Report relates;
(b) A brief statement as to the nature and scope of
the examination or investigation upon which the Report is
based; and
(c) A statement that, in the opinion of such person
or firm, sufficient examination or investigation was made
as is necessary to enable said person or firm to express an
informed opinion with respect to the subject matter
referred to in the Report.
"Representations Letter" means the letter addressed to
the Depository Trust Company as set forth in Exhibit B attached
hereto.
"Reserve Requirement" means as of any date of
calculation, an amount equal to the lowest of (1) ten percent
(10\) of the original proceeds of the Bonds and any Parity
Bonds less original issue discount, if any, plus original issue
premium, if any, or (2) Maximum Annual Debt Service, or (3) one
hundred twenty-five percent (125\) of the average Annual Debt
Service of the Outstanding Bonds and Parity Bonds. The Agency
may at any time substitute an Alternate Reserve Account
Security for the cash on deposit in the Reserve Account to
satisfy the Reserve Requirement pursuant to Section 402(b)
hereof.
"Revenues" means all amounts held by the Trustee in
any fund or account established hereunder including any
investment earnings thereon but excluding amounts deposited in
the Rebate Fund.
"Scheduled Conversion Date" means (i) June 1, 20__,
when used with respect to the 1993 Indexed Inverse
Floating/Fixed Rate Bonds and (ii) December 1, 19__, when used
with respect to the 1993 Indexed Floating/Fixed Rate Bonds.
"Secretary" means the Secretary of the Agency.
"Senior Lien Debt" means the $21,595,000 poway
Redevelopment Agency, Paguay Redevelopment Project, Tax
Allocation Refunding Bonds, Series 1990A.
"Senior Lien Debt Indenture" means that certain
Indenture of Trust dated as of October 15, 1990 by and between
the Agency and Security Pacific National Bank, as trustee,
providing for the issuance of the Senior Lien Debt.
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.Serial Bond Principal Account. means the account by
that name established and held by the Trustee pursuant to
Section 302 hereof.
.SLG. means u.s. Treasury Securities State and Local
Government Series.
.Special Fund" means the fund by that name established
and held by the Trustee pursuant to Section 302.
.State" means the State of California.
.Supplemental Indenture. or .supplemental indenture.
means any indenture then in full force and effect which has
been duly entered into by the Agency under the Law, or any act
supplementary thereto or amendatory thereof, at a meeting of
the Agency duly convened and held, at which a quorum was
present and acted thereon, amendatory of or supplemental to
this Indenture; but only if and to the extent that such
Supplemental Indenture is specifically authorized hereunder.
.Surplus Account. means the account by that name
established and held by the Trustee pursuant to Section 302
hereof.
.Swap Agreement" means, with respect to the 1993
Indexed Inverse Floating/Fixed Rate Bonds or the 1993 indexed
Floating/Fixed Rate Bonds, as applicable, the interest rate
swap or cap agreement, including the appropriate confirmation,
relating to such Bonds as in effect between the Agency and the
applicable Swap Provider.
.Swap Provider. means, as applicable (a)
, , as party to the applicable Swap
Agreement for the 1993 indexed Inverse Floating/Fixed Rate
Bonds or (b) , , as
party to the applicable Swap Agreement for the 1993 Indexed
Floating/Fixed Rate Bonds; provided that, in each case, such
term shall also mean and refer to any entity to which the
rights and obligations of the Swap Provider under the
applicable Swap Agreement may be transferred in accordance with
the terms thereof or the issuer of any substitute Swap
Agreement entered into under the circumstances described in
Section 216 hereof; provided that, as provided in the Financing
Agreement, the Agency shall not designate or consent to the
designation of any such transferee or substitute Swap Provider
unless such designee is an entity whose senior long term debt
Obligations, other senior unsecured long term obligations or
claims paying abilities are rated in either of the two highest
rating categories by Moody's and S&P or whose Obligations under
the Swap Agreement are guaranteed by an entity so rated.
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-Swap Termination Payment- means, with respect to a
Swap Agreement, any settlement amount payable by the applicable
Swap Provider by reason or on account of the early termination
of such Swap Agreement, taking into account any accrued unpaid
amounts under the Swap Agreement.
-Tax Certificate" means that certain Tax Certificate
executed on the Delivery Date by the District with respect to
the Certificates.
-Tax Revenues" means that portion of taxes levied upon
taxable property in the Redevelopment Project and received by
the Agency for the Redevelopment Project pursuant to Article 6
of Chapter 6 of the Law and Section 16 of Article XVI of the
Constitution of the State of California, including all payments
and reimbursements, if any, to the Agency specifically
attributed to Ad valorem taxes lost by reason of tax exemptions
and tax rate limitations, but excluding tax revenues required
to be passed through to certain taxing entities pursuant to
agreements with such entities.
"Threshold Rate" means, with respect to the 1993
Indexed Floating/Fixed Rate Bonds, the rate of \ per annum. :
-Trust Estate" means the property conveyed to the
Trustee pursuant to the Granting Clauses hereof.
"Trustee" means the trustee appointed by the Agency
pursuant to Section 901 hereof, its successors and assigns, and
any other corporation or association which may at any time be
substituted in its place, as provided in this Indenture.
"20__ Term Bond Sinking Account- means the account by
that name established and held by the Trustee pursuant to
Section 302 hereof.
-Variable Rate Debt" means Debt that bears interest at
a variable, adjustable or floating rate.
ARTICLE II
THE BONDS
Section 20l. Amount. Issuance and PurDose of Bonds.
Under and pursuant to the Law, the Refunding Law and this
Indenture, Bonds of the Agency in a principal amount of
Dollars ($ ) shall be issued by
the Agency for the corporate purposes of the Agency by
providing funds for the financing of a portion of the cost of
implementing the Redevelopment Plan and for the advance
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refunding of the Outstanding Prior Bonds, each of which
purposes constitutes a "redevelopment activity" as such term is
defined in Health and Safety Code Section 33678, and such issue
of Bonds is hereby created and authorized.
Section 202. Nature of Bonds. The Bonds shall be and
are limited obligations of the Agency and are secured by an
irrevocable pledge (which pledge shall be effected in the
manner and to the extent hereinafter provided) of, and are
payable as to principal and interest from Pledged Tax Revenues
and other funds as hereinafter provided. The Bonds, premium,
if any, and interest thereon are not a debt of the City, the
State of California or any of its political subdivisions, and
neither the City, the State nor any of its political
subdivisions is liable on them. In no event shall the Bonds.
premium, if any, or interest thereon be payable out of any
funds or properties other than those of the Agency as set forth
in this Indenture. The Bonds do not constitute an indebtedness
within the meaning of any constitutional or statutory debt
limitation or restriction. Neither the members of the Agency
nor any persons executing the Bonds are liable personally on
the Bonds by reason of their issuance.
The Bonds shall be and are equally secured by an
irrevocable pledge of the Pledged Tax Revenues and other funds
as hereinafter provided, without priority for number, date of
sale, date of execution or date of delivery, except as
expressly provided herein.
The validity of the Bonds is not and shall not be
dependent upon: (a) the completion of the Redevelopment Project
or any part thereof, (b) the performance by anyone of his/her
obligations relative to the Redevelopment Project, or (c) the
proper expenditures of the proceeds of the Bonds.
Nothing in this Indenture shall preclude: (a) the
payment of the Bonds from the proceeds of refunding bonds
issued pursuant to the Law and the Refunding Law, or (b) the
payment of the Bonds from any legally available funds. Nothing
in this Indenture shall prevent the Agency from making advances
of its own funds, however derived, to any of the uses and
purposes mentioned in this Indenture.
In the event of a defeasance of the Bonds in accordance
with Article XI, the Trustee shall cause an accounting, which
may be in the form of its customary statements, for such periOd
or periOdS as shall be requested by the Agency to be prepared
and filed with the Agency, and the Trustee, upon the written
request of the Agency, shall release all rights of the
Bondowners under this Indenture except (i) the rights of the
Trustee to receive compensation and indemnification pursuant to
04/22/93
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Article IX and (ii) the right of the Bondowners to receive
interest and principal payments, and the Trustee shall execute
and deliver to the Agency all such instruments as the Agency
may request to evidence such release, discharge and
satisfaction, and upon written request of the Agency the
Trustee shall pay over or deliver to the Agency all moneys or
securities held by it pursuant to this Indenture which are not
required for the payment or redemption of Bonds not theretofore
surrendered for such payment or redemption and the Trustee's
fees and expenses.
provision shall be made by the Agency, satisfactory to
the Trustee, for first class mailed notice, postage prepaid, to
the Bondowners that such moneys are so available for such
payment.
Section 203. DescriDtion of 1993 Fixed Rate Bonds.
The Bonds shall be issued in an aggregate principal amount
of Dollars ($ )
and shall be designated "POWAY REDEVELOPMENT AGENCY, PAGUAY
REDEVELOPMENT PROJECT, SUBORDINATED TAX ALLOCATION REFUNDING
BONDS, SERIES 1993". The 1993 Fixed Rate Bonds shall be issued
in the form of fully registered bonds in denominations of
$S,OOO each or any whole multiple thereof. The 1993 Fixed Rate
Bonds shall be dated as of May 1, 1993 and shall be lettered
and numbered in the manner determined by the Trustee. The
Bonds shall be authenticated on the date of authentication
thereof by the Trustee. The 1993 Fixed Rate Bonds shall mature
on December 15 of the years and in the amounts and shall bear
interest at the rates per annum as follows:
Maturity Date Principal Interest
(December 15) Amount Rates
$ \
The Bonds maturing on December lS, 20__ and December 15, 20__
are sometimes referred to as the "Term Bonds."
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Section 204. Interest on the Bonds. The 1993 Fixed
Rate Bonds shall bear interest at the rates set forth in
Section 203 hereof, payable semiannually on December 15 and
December 15 of each year, commencing December 15, 1993. Each
Bond shall bear interest until its principal sum has been paid;
provided, however, that if funds are available for the payment
thereof in full in accordance with the terms of this Indenture,
the Bond shall cease to bear interest at its maturity.
Interest payable on the 1993 Fixed Rate Bonds shall be
calculated on the basis of a 360-day year of twelve (12) 30-day
months.
The 1993 Fixed Rate Bonds shall be numbered as the
Trustee shall determine and shall be dated May 1, 1993. Any
1993 Bonds shall bear interest from the Interest Payment Date
preceding their date of authentication, unless the date of
authentication is: (i) an Interest Payment Date, in which case
such 1993 Bonds shall bear interest from such date; or
(ii) prior to the first Interest Payment Date, in which case
such 1993 Bonds shall bear Interest from May 1, 1993, in the
case of the 1993 Fixed Rate Bonds, or from the Effective Date,
in the case of the 1993 Indexed Inverse Floating/Fixed Rate
Bonds and 1993 Indexed Floating/Fixed Rate Bonds; or :
(iii) after a Record Date with respect to an Interest Payment
Date but prior to such Interest Payment Date, in which case
such 1993 Bonds shall bear interest from such Interest Payment
Date; provided, however, if at the time of authentication of
any Bond, interest is in default on Outstanding Bonds, such
Bond shall bear interest from the Interest Payment Date to
which interest has previously been paid or made available for
payment. Interest on the Bonds shall be paid by the Trustee
(out of the appropriate funds as set forth herein) by check or
draft mailed by first class mail, postage prepaid on the
Interest Payment Date to the registered owner as his/her name
and address appear on the register kept by the Trustee at the
close of business on the Record Date preceding the Interest
Payment Date or upon request in writing made on or before the
Record Date preceding the Interest Payment Date by a Bondowner
of $1,000,000 or more in principal amount of Bonds, payment
shall be made on the Interest Payment Date by wire transfer in
immediately available funds to an account designated by such
Bondowner to the Trustee on or prior to the Record Date.
Section 20S. Place of Payment of the Bonds. The
principal of the Bonds and any premiums upon redemption thereof
prior to maturity shall be payable in lawful money of the
United States of America upon presentation and surrender at the
corporate trust office of the Trustee in Los Angeles,
California.
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Section 206. Forms of Bonds. The Bonds shall be
substantially in the forms attached hereto as Exhibit "A" and
by this reference incorporated herein, with such necessary or
appropriate variations, omissions and insertions as permitted
or required by this Indenture and by any supplemental indenture.
Any Bonds issued pursuant to this Indenture may be
initially issued in temporary form exchangeable for definitive
Bonds when the same are ready for delivery. The temporary
Bonds may be printed, lithographed or typewritten, shall be of
such denominations as may be determined by the Agency, sha 11 be
without coupons and may contain references to any of the
provisions of this Indenture as may be appropriate. Every
temporary Bond shall be executed by the Agency and
authenticated and delivered by the Trustee upon the same
conditions and in substantially the same form and manner as the
definitive Bonds. If the Agency issues temporary Bonds, it
will execute and furnish definitive Bonds without delay, and,
thereupon, the temporary Bonds shall be surrendered for
cancellation at the corporate trust office of the Trustee in
Los Angeles, California, or at such other place as the Agency
may approve. The Trustee shall deliver in exchange for the
surrendered temporary Bonds an equal aggregate principal amount :
of definitive Bonds of authorized denominations of this same
issue. Until exchanged, the temporary Bonds shall be entitled
to the same benefits under this Indenture as definitive Bonds
of this same issue.
Notwithstanding anything in this Indenture to the
contrary, the Bonds shall be initially issued in the form of a
separate single fully registered Bond for each maturity (which
may be typewritten). Upon initial issuance, the ownerShip of
each such Bond shall be registered in the Bond Register in the
name of Cede & Co. (the "Nominee"), as nominee of The
Depository Trust Company, New York, New York, and its
successors and assigns (the "Depository" or "DTC"). Except as
hereinafter provided, all Outstanding Bonds shall be registered
in the Bond Register in the name of the Nominee of the
Depository, as determined from time to time pursuant to this
Section.
with respect to the Bonds registered in the Bond
Register in the name of the Nominee, neither the Agency, nor
the Trustee, nor any paying agent shall have any responsibility
or obligation to any securities brokers and dealers, banks,
trust companies, clearing corporations and other entities, some
of whom directly or indirectly own DTC, from time to time for
which the Depository holds Bonds as securities depository (the
"Participant"), any person claiming a beneficial ownership
interest in the Bonds under or through DTC or any Participant,
or any other person which is not shown on the Bond Register as
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being a Bondowner, with respect to (i) the accuracy of any
records maintained by DTC or any Participant, (ii) the payment
by DTC or any Participant of any amount in respect to the
principal or redemption price of or interest on the Bonds,
(iii) any notice which is permitted or required to be given to
owners of Bonds under the Indenture, (iv) the selection by DTC
or any Participant of any person to receive payment in the
event of a partial redemption of the Bonds, or (v) any consent
given or other action taken by DTC as owner of Bonds. The
Agency, the Trustee and any paying agent may treat DTC (or its
nominee) as the sole and exclusive owner of the Bonds
registered in its name for the purpose of payment of the
principal or redemption price of and interest on such Bonds,
selecting the Bonds or portions thereof to be redeemed, giving
any notice permitted or required to be given to Bondowners
under the Indenture, registering the transfer of Bonds,
obtaining any consent or other action to be taken by Bondowners
of the Bonds and for all other purposes whatsoever; and neither
the Trustee nor the Agency or any paying agent shall be
affected by any notice to the contrary. The Trustee shall pay
all principal of, premium, if any, and interest on the Bonds
only at the times, to the accounts, at the addresses and
otherwise in accordance with the Representations Letter, and ,
all such payments shall be valid and effective to fully satiSfy -
and discharge the Agency's obligations with respect to payment
of principal of, premium, if any, and interest on the Bonds to
the extent of the sum or sums so paid. No person other than an
owner of a Bond, as shown in the Bond Register, shall receive a
Bond evidencing the obligation of the Agency to make payments
of principal, premium, if any, and interest pursuant to this
Indenture. Upon delivery by the Depository to the owners of
the Bonds, and the Agency of written notice to the effect that
the Depository has determined to substitute a new nominee in
place of the Nominee, and subject to the provisions herein with
respect to record dates, the word Nominee in this Indenture
shall refer to such substitute nominee of the Depository.
In order to qualify the Bonds for the Depository'S
book-entry system, the Agency will, at the closing of the
Bonds, execute and deliver to the Depository a Representations
Letter, in the form attached hereto as Exhibit B. The
execution and delivery of the Representations Letter shall not
in any other way limit the provisions of this Section or in any
other way impose upon the Agency or Trustee any obligation
whatsoever with respect to persons having interests in the
Bonds other than the owners of the Bonds, as shown on the Bond
Register. In addition to the execution and delivery of the
Representations Letter, the Agency shall take such other
actions, not inconsistent with this Indenture, as are
reasonably necessary to qualify the Bonds for the Depository'S
book-entry program.
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In the event that the Agency determines that it is in
the best interests of the beneficial owners of the Bonds that
they be able to obtain bond certificates, the Trustee shall,
upon the written instruction of the Agency, so notify DTC,
whereupon DTC shall notify the Participants of the availability
through DTC of bond certificates. In such event, the Bonds
will be transferable in accordance with the next succeeding
paragraph. DTC may determine to discontinue providing its
services with respect to the Bonds at any time by giving
written notice of such discontinuance to the Agency and the
Trustee and discharging its responsibilities with respect
thereto under applicable law. In such event, Bonds wi 11 be
transferable in accordance with the next succeeding paragraph.
Whenever DTC requests the Agency and the Trustee to do so, the
Trustee and the Agency will cooperate with DTC in taking
appropriate action after reasonable notice to arrange for
another securities depository to maintain custody of all
certificates evidencing the Bonds then Outstanding. In such
event, the Bonds will be transferable to such securities
depository in accordance with the next succeeding paragraph,
and thereafter, all references in this Indenture to DTC or its
nominee shall be deemed to refer to such successor securities
depository and its nominee, as appropriate.
In the event that any transfer or exchange of Bonds is
authorized under the fourth or sixth paragraphs of this
Section, such transfer or exchange shall be accomplished upon
receipt by the Trustee from the registered owner thereof of the
Bonds to be transferred or exchanged the appropriate
instruments of transfer to the permitted transferee, all in
accordance with the applicable provision of Section 20S
hereof. In the event Bond certificates are issued to owners
other than Cede & Co., its successor as nominee for DTC as
owner of all the Bonds, another securities depository as owner
of all the Bonds, or the nominee of such successor securities
depository, the provisions of Section 20S hereof shall also
apply to, among other things, the registration, exchange and
transfer of the Bonds and the method of payment of principal
of, premium, if any, and interest on the Bonds.
Notwithstanding any other provision of this Indenture
to the contrary, so long as any Bond is registered in the name
of the Nominee, all payments with respect to principal of,
premium, if any, and interest on such Bond and all notices with
respect to such Bond shall be made and given, respectively, as
provided in the Representations Letter or as otherwise
instructed by the Depository and acceptable to the Agency.
Section 207. Execution of Bonds. The Bonds shall be
signed on behalf of the Agency by its Chairman and by its
Secretary, by manual or facsimile signature, and the seal of
04/22/93
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---------
the Agency shall be impressed, imprinted or reproduced
thereon. The foregoing officers are hereby authorized and
directed to sign the Bonds in accordance with this Section. If
any Agency member or officer whose manual or facsimile
signature appears on the Bonds ceases to be a member or officer
before delivery of the Bonds, his/her signature is as effective
as if he or she had remained in office.
The Trustee shall date and authenticate the Bonds on
their registration and/or exchange to effectuate the
registration and exchange provisions set forth in Section 208
hereof, and only those Bonds that have endorsed on them a
certificate of authentication, substantially in the form set
forth in Exhibit A, duly executed by the Trustee, shall be
entitled to any rights, benefits or security under this
Indenture. No Bonds shall be valid or obligatory for any
purpose unless and until the certificate of authentication has
been duly executed by the Trustee. The certificate of the
Trustee upon any Bond shall be conclusive and the only evidence
that the Bond has been duly authenticated and delivered under
this Indenture. The Trustee's certificate of authentication on
any Bond shall be deemed to have been duly executed if manually
signed by an authorized signatory of the Trustee, but it shall
not be necessary that the same signatory sign the certificate
of authentication on all of the Bonds that may be issued
hereunder.
Section 208. Reaistration and Exchanae of Bonds. The
Bonds shall be issued only in fully registered form. The Bonds
may be exchanged for other Bonds of equal aggregate authorized
denominations. Transfer of ownership of a Bond or Bonds shall
be made by exchanging the same for a new Bond or Bonds. All
exchanges shall be made in such a manner and upon such
reasonable terms and conditions as may be determined and
prescribed by the Trustee. No transfer or exchange shall be
required during the period established by the Trustee for
selection of Bonds for redemption or after a Bond has been
selected for redemption. The person, firm or corporation
requesting the exchange shall pay any tax or governmental
charge that may be imposed in connection with the exchange.
The Agency shall pay all other registration and exchange costs
and charges including the cost of printing new Bonds. The
Trustee shall not be required to register the transfer or
exchange of any Bond during the period established by the
Trustee for selection of Bonds for redemption or on or after
the date on which a Bond has been selected for redemption.
Section 209. Bond Reaister. The Trustee will keep
at its corporate trust office initially in Los Angeles,
California, or at such other place as the Agency may approve,
sufficient books for the registration and transfer of the
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,
_.
Bonds. The books shall be open to inspection by the Agency at
all reasonable times during regular business hours; and, upon
presentation for such purpose, the Trustee shall under such
reasonable regulations as it may prescribe, register or
transfer, or cause to be registered or transferred, on the
register, the Bonds as hereinbefore provided. The Trustee and
Agency may conclusively rely upon the registration books of the
Trustee as to the registered owners and will not be affected by
any notice to the contrary. Upon the occurrence of an event of
default under Section 801 hereof resulting in payments under
the Bond Insurance Policy, the Bond Insurer and its designated
agent may inspect the registration books of the Trustee during
regular business hours upon reasonable prior notice to the
Trustee.
Section 210. Deliverv of the Bonds. Upon the
execution and delivery of this Indenture, the Agency shall
execute and deliver to the Trustee, and, upon the written
instructions of the Agency, the Trustee shall authenticate the
Bonds and deliver them or make them available for pickup to the
purchasers as directed by the Agency in writing as provided in
this Section 210.
Prior to the delivery by the Trustee of any of the
Bonds there shall have been filed with the Trustee:
(1) A copy, duly certified by the Secretary of the
Agency, of resolutions of the Agency authorizing the
issuance of the Bonds and the execution and delivery of
this Indenture.
(2) Original executed counterparts of this Indenture.
(3) An opinion of Counsel that the issuance of the
Bonds and the execution of this Indenture have been duly
and validly authorized, that all requirements under this
Indenture precedent to the delivery of the Bonds have been
satisfied and that the Bonds and the Indenture are valid
and binding obligations, enforceable against the Agency in
accordance with their terms (subject to any applicable
bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting the enforcement of creditor's rights
generally and subject also to the application of equitable
principles if equitable remedies are sought).
(4) A request and authorization to the Trustee on
behalf of the Agency directing the Trustee as to the
amounts required to be deposited into the Costs of Issuance
Fund.
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(5) A request and authorization to the Trustee on
behalf of the Agency to authenticate and deliver the Bonds
to the purchasers therein identified upon payment to the
Trustee, but for the account of the Agency, of a sum
specified in such request and authorization. The proceeds
of such payment shall be transferred and deposited pursuant
to Article III hereof and as indicated in such request and
authorization.
(6) An original executed counterpart of the
certification of the Agency establishing expectations to
the effect that the Bonds will not be "arbitrage bonds"
within the meaning of Section 148 of the Code.
(7) An original executed counterpart of the Escrow
Agreement.
Section 211. Lost. Stolen. Destroved or Mutilated
Bonds. Should any Bond become mutilated or be lost or
destroyed, the Agency shall cause to be executed, and the
Trustee shall authenticate and deliver, a new Bond of like
outstanding principal amount and maturity in exchange and
substitution for, and upon cancellation of, such mutilated Bond ,
or in lieu of and in substitution for such lost or destroyed
Bond; provided, however, that the Agency and the Trustee shall
50 execute, authenticate and deliver only if the Bond owner has
paid the reasonable expenses and charges of the Trustee in
connection therewith and, in the case of a lost or destroyed
Bond, has furnished to the Trustee evidence of such loss or
destruction and indemnity satisfactory to it. If any such Bond
shall have matured, or shall have been called for redemption,
instead of issuing a new Bond the Trustee may pay the same
without surrender thereof upon receipt of the aforementioned
indemnity.
Section 212. Cancellation of Bonds. All Bonds
surrendered to the Trustee for payment at maturity or, in the
case of call and redemption prior to maturity, at the
redemption date, shall upon payment therefor be cancelled
immediately and destroyed by the Trustee. A certificate of
destruction shall forthwith be transmitted to the Finance
Director. Any Bonds purchased by the Agency shall be deposited
with the Trustee and shall be cancelled immediately and
destroyed.
Section 213. Validitv of the Bonds. The validity of
the authorization and issuance of the Bonds is not dependent on
and shall not be affected in any way by any proceedings taken
by the Agency. The recital contained in the Bonds that they
are issued in accordance with the Constitution and laws of the
State and the laws of the Agency shall be conclusive evidence
04/22/93
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,
.
of their validity and of compliance with the provisions of law
- in their issuance.
Section 214. Descriotion of the 1993 Indexed Inverse
Floatina/Fixed Rate Bonds and the 1993 Indexed Floatina/fixed
Rate Bonds.
(a) The 1993 Indexed Inverse Floating/Fixed Rate
Bonds and 1993 Indexed Floating/Fixed Rate Bonds shall be in
denominations of $100,000 or any integral multiple thereof;
provided that such Bonds shall be in denominations of $5,000 or
any integral multiple thereof commencing on the applicable
Conversion Date.
(b) The 1993 Bonds shall mature on December 15
of the years and in the amounts, and shall bear interest at the
rates, set forth in Exhibit C hereto, subject to the further
provisions of Section 215 hereof as applicable to the 1993
Indexed Inverse Floating/Fixed Rate Bonds and 1993 Indexed
Floating/Fixed Rate Bonds. The 1993 Indexed Inverse .
Floating/Fixed Rate Bonds and the 1993 Indexed Floating/Fixed
Rate Bonds initially issued shall bear interest from the
Effective Date. ,
(c) Interest payable on each 1993 Indexed
Inverse Floating/Fixed Rate Bond and each 1993 Indexed
Floating/Fixed Rate Bond from and after the Conversion Date
applicable thereto (or the last preceding Interest Payment Date
to which interest has been paid at the Indexed Inverse Rate or
Indexed Variable Rate, as applicable, or the Effective Date
under the circumstances described in Section 216, 217 or 218
hereof), shall be calculated on the basis of a 360 day year
consisting of twelve 30 day months. Interest payable on each
1993 Indexed Inverse Floating/Fixed Rate Bond and each 1993
Indexed Floating/Fixed Rate Bond on or before the Conversion
Date applicable thereto (or the last preceding Interest Payment
Date to which interest has been paid at the Indexed Inverse
Rate or Indexed Variable Rate or the Effective Date as
aforesaid) shall be calculated on the basis of a 365 or 366 day
year (as applicable) and the actual number of days in the
Interest Period.
Section 215. Interest on 1993 Indexed Inverse
Floatina/Fixed Rate Bonds and 1993 Indexed Floatina/Fixed Rate
Bonds.
(a) Interest with respect to each 1993 Indexed
Inverse Floating/Fixed Rate Bond shall be calculated (i) from
the Effective Date to but not inCluding the applicable
Conversion Date (or the last preceding Interest Payment Date to
which interest has been paid at the Indexed Inverse Rate or the
04/22/93
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,
Effective Date under the circumstances described in Section 216
or 217 hereof), at a rate per annum equal to the Indexed
Inverse Rate and (ii) from and including the Conversion Date
(or the last preceding Interest Payment Date to which interest
has been paid at the Indexed Inverse Rate or the Effective Date
as aforesaid), at a rate per annum equal to the applicable Bond
Rate. On each Interest Calculation Date prior to the
Conversion Date for the 1993 Indexed Inverse Floating/Fixed
Rate Bonds, the Swap Provider for such 1993 Bonds shall be
required under the applicable Swap Agreement to calculate the
Average Index Rate and Indexed Inverse Rate for the Interest
Period then in effect and the total amount of interest coming
due on the 1993 Indexed Inverse Floating/Fixed Rate Bonds at
the Indexed Inverse Rate on the immediately succeeding Interest
Payment Date. For the purpose of calculating the total amount
of interest next coming due, the total principal amount of
Outstanding 1993 Indexed Inverse Floating/Fixed Rate Bonds
bearing interest at the Indexed Inverse Rate shall be
multiplied by the applicable Indexed Inverse Rate and the
product thereof shall be multiplied by a fraction, the
numerator of which is the actual number of days in such
Interest Period and the denominator of which is 365 or 366
depending on the number of days in the calendar year in which
the Interest Period ends.
(b) Interest with respect to each 1993 Indexed
Floating/Fixed Rate Bond shall be calculated (i) from the
Effective Date to but not including the applicable Conversion
Date (or the last preceding Interest Payment Date to which
interest has been paid at the Indexed Variable Rate or the
Effective Date under the circumstances described in Section 216
or 218 hereof), at a rate per annum equal to the Indexed
Variable Rate, and (ii) from and including the Conversion Date
(or the last preceding Interest Payment Date to which interest
has been paid at the Indexed Variable Rate or the Effective
Date as aforesaid), at a rate per annum equal to the applicable
Bond Rate. On each Interest Calculation Date prior to the
Conversion Date for the 1993 Indexed Floating/Fixed Rate Bonds,
the Swap Provider for such 1993 Bonds shall be required under
the applicable Swap Agreement to calculate the Average Index
Rate and Indexed Variable Rate for the Interest Period then in
effect. For the purpose of calculating the total amount of
interest next coming due, the total principal amount of
Outstanding 1993 Indexed Floating/Fixed Rate Bonds bearing
interest at the Indexed Variable Rate shall be multiplied by
the Indexed Variable Rate and the product thereof shall be
multiplied by a fraction, the numerator of which is the actual
number of days in such Interest Period and the denomination of
which is 365 or 366 depending on the number of days in the
calendar year in which the Interest Period ends.
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-
(c) Not later than 4:00 p.m., New York City
- time, on each Interest Calculation Date, the Swap Providers
shall be required under their respective Swap Agreements to
provide to the Trustee, in writing or by telephone or facsimile
transmission promptly confirmed in writing, the results of the
calculations described in subsections (a) and (b) above,
together with such supporting information as may be reasonably
necessary to enable the Trustee to confirm the mathematical
accuracy of such calculations. In the case of the Swap
Agreement for the 1993 Indexed Inverse Floating/Fixed Rate
Bonds, if such Swap Agreement is terminated under circumstances
which do not give rise to an extraordinary conversion pursuant
to Section 216 hereof (i.e., on account of an REvent of
DefaultR or RCredit Event Upon MergerR on the part of the
Agency as provided in the Swap Agreement), the applicable Swap
Provider shall no longer be required to make the calculations
described in subsection (a) above and, in such event, the
calculations shall be made by the Trustee not later than 4:00
p.m., New York City time, on each Interest Calculation Date.
As soon as practicable after receiving notice of or making such
calculations, the Trustee shall confirm the mathematical
accuracy of the foregoing calculations (if made by the Swap
Providers as aforesaid), calculate the total amount of interest ,
next coming due on the 1993 Indexed Inverse/Floating Fixed Rate
Bonds and the 1993 indexed Floating/Fixed Rate Bonds at the
Indexed Inverse Rate and the Indexed Variable Rate and notify
the Agency, in writing or by telephone or facsimile
transmission promptly confirmed in writing, of the total amount
of interest next coming due on the 1993 Indexed Inverse
Floating/Fixed Rate Bonds and 1993 Indexed Floating/Fixed Rate
Bonds and the Indexed Inverse Rate and Indexed Variable Rate at
which such interest has been calculated. The Trustee shall
also make the Indexed Inverse Rate and Indexed Variable Rate
available to Persons who request the same and identify
themselves as Beneficial Owners of 1993 Indexed Inverse
Floating/Fixed Rate Bonds and 1993 Indexed Floating/Fixed Rate
Bonds. All percentages resulting from the calculations
described in subsections (a) and (b) above shall be rounded
upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point (e.g., 9.876541\ (or
.09876541) being rounded to 9.87655\ (or .0987655), and all
dollar amounts used in or reSUlting from such calculations
shall be rounded to the nearest cent (with one-half cent being
rounded up). Each calculation made or confirmed by the Trustee
pursuant to this Section 215 shall be conclusive and binding on
the Agency, the Agency and the holders of the 1993 Indexed
Inverse Floating/Fixed Rate Bonds and the 1993 Floating Fixed
Rate Bonds.
(d) Notwithstanding the foregoing, no
calculation, confirmation, or notice of the Average Index Rate
04/22/93
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,
and the Indexed Inverse Rate or Indexed Variable Rate shall be
required to be made or given with respect to any 1993 Indexed
Inverse Floating/Fixed Rate Bonds or 1993 Indexed
Floating/Fixed Rate Bonds after the interest rate thereon has
been converted to the applicable Bond Rate. In the case of an
optional conversion of less than all 1993 Indexed Inverse
Floating/Fixed Rate Bonds or 1993 Indexed Floating/Fixed Rate
Bonds pursuant to Section 217 or 218 hereof, such calculations,
confirmations and notices shall only be made with respect to
the 1993 Indexed Inverse Floating/Fixed Rate Bonds or 1993
Indexed Floating/Fixed Rate Bonds which have not been so
converted.
Section 216. Extraordinarv Conversion. Prior to the
Scheduled Conversion Date, the interest rate on all, but not
less than all, 1993 Indexed Inverse Floating/Fixed Rate Bonds
or 1993 Indexed Floating/Fixed Rate Bonds (or both, as
applicable) shall be converted to the applicable Bond Rate upon
the early termination of the applicable Swap Agreement in the
event that an "Illegality" (as defined in such Swap Agreement)
shall have occurred with respect to the Agency or an "Event of
Default" or "Termination Event" (as defined in such Swap
Agreement) shall have occurred with respect to the Swap
Provider; subject, however, to the following further provisions:
(a) The conversion to the Bond Rate shall occur
on and be effective as of the Extraordinary Conversion Date,
which shall be the date on which the applicable Swap Agreement
is terminated; provided that, if the Extraordinary Conversion
Date is not an Interest Payment Date, the conversion shall be
retroactive to, and interest at the Bond Rate shall accrue from
(i) the last preceding Interest Payment Date to which interest
has been paid at the Indexed Inverse Rate or the Indexed
Floating Rate or (ii) the Effective Date if no such interest
has been paid.
(b) Each Swap Agreement provides that, upon the
occurrence of an Illegality with respect to the Agency or an
Event of Default or Termination Event with respect to the Swap
Provider, the party entitled to terminate the Swap Agreement
(or either party, if both are so entitled) shall notify the
Trustee of such occurrence and of any termination or proposed
termination of the Swap Agreement as a result of such
occurrence. No extraordinary conversion pursuant to this
Section shall be effective unless the Trustee receives the
foregoing notice. In addition, no such conversion shall be
effective if, prior to the Extraordinary Conversion Date, the
Trustee receives written notice from the Agency that a
substitute Swap Provider has entered into a substitute Swap
Agreement with the Agency upon substantially identical terms.
In the event that the Swap Agreement is terminated without
04/22/93
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\
substitution and the conversion occurs, the Agency shall pay
over, or cause to be paid over, to the Trustee any Swap
Termination Payment due from and actually made by the Swap
Provider, which shall be held in trust by the Trustee and paid
to the holders in whose names the converted Bonds were
registered as of the Extraordinary Conversion Date.
(c) As soon as-practicable after receipt of
notice of termination of a Swap Agreement, the Trustee shall
give written notice thereof and of the related conversion to
Bond Counsel, the Co-Registrar and the holders of the Bonds to
be converted. Such notice shall state that the conversion
shall be subject to cancellation if the existing Swap Agreement
is assumed or replaced as aforesaid, and if the conversion is
cancelled, the Trustee shall promptly give written notice of
such cancellation to the CO-Registrar and the holders of the
affected Bonds.
(d) Registrations of conversions pursuant to the
foregoing shall be made as set forth in Section 219 hereof.
Section 217. Ootional Conversion of 1993 Indexed
Inverse Floatina/Fixed Rate Bonds. On an Optional Conversion
Date prior to the Scheduled Conversion Date (as selected by the
Beneficial Owner electing to convert its Bonds), any Beneficial
owner of Indexed Inverse Floating/Fixed Rate Bonds may elect to
convert the interest rate on such Indexed Inverse
Floating/Fixed Rate Bonds to the Bond Rate in an amount not
- less than $1,000,000 or any integral multiple of $100,000 in
excess thereof. Upon the exercise of such election, the
conversion shall occur on the Optional Conversion Date,
retroactive to the last Interest Payment Date to which interest
on the converted Bonds has been paid at the Indexed Inverse
Rate (or to the Effective Date, if no such interest has been
paid); subject, however, to the following further provisions:
(a) Not later than 10:00 a.m., New York City
time, on the proposed Optional Conversion Date, the Market
Agent and the Beneficial Owner electing to convert its Indexed
Inverse Floating/Fixed Rate Bonds shall give telephonic notice
(promptly confirmed by telecopy) of such election to the
Trustee and the Swap Provider. Such notice shall: (i) specify
the principal amount of Indexed Inverse Floating/Fixed Rate
Bonds which the Beneficial Owner is electing to convert and the
CUSIP number and maturity date of such Bonds; (ii) request that
the Swap Provider provide a quote for the optional Conversion
Adjustment which would be due with respect to the proposed
conversion on such date, as specified below; (iii) specify the
method by which the Market Agent and the Swap Provider will be
able to contact such Beneficial Owner for purposes of the
further notices and confirmations described below; (iv) specify
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information identifying in appropriate detail the account to
which the Beneficial Owner wishes to have the Optional
Conversion Adjustment, if any, transferred if payable by the
Swap Provider; (v) aCknowledge and agree that, if the Optional
Conversion Adjustment is payable by the Beneficial Owner, the
Swap Provider shall have the right to rescind the conversion
under the circumstances described below and that. if any such
payment is not made by the Beneficial Owner when due and if the
conversion is not rescinded by the Swap Provider, the Trustee
shall deduct and pay over to the Swap Provider the unpaid
amount plus interest thereon as described below from subsequent
payments of principal, redemption price and interest under the
converted Bonds, which shall be non-transferable by the
Beneficial Owner until such unpaid amount and interest have
been paid in full; and (vi) provide evidence satisfactory to
the Market Agent that the Person providing the notice is the
Beneficial Owner of Indexed Inverse Floating/Fixed Rate Bonds
to be converted. Immediately upon receipt of such notice, the
Trustee shall send a copy thereof by te1ecopy to the
Co-Registrar:
(b) In connection with the foregoing notice:
(i) the Market Agent shall confirm to the Trustee, the ,
Co-Registrar and the Swap Provider that the evidence of beneficial ownerShip provided pursuant to subsection (a)(vi)
above is satiSfactory to it. and the Trustee, the Co-Registrar
and the Swap Provider may rely conclusively upon such
confirmation; and (ii) the Trustee shall provide the Swap
Provider and the Beneficial Owner with information identifying
in appropriate detail the account of the Trustee to which the
Optional Conversion Adjustment. if any (whether payable by the
Swap Provider or the Beneficial Owner), is to be transferred
for the benefit of and for retransfer to the party entitled to
receive the same pursuant to subsection (e) below.
(c) Pursuant to the Swap Agreement, the Swap
Provider shall use its reasonable efforts to provide a
preliminary quote for the Optional Conversion Adjustment to the
Beneficial Owner not later than 12:00 noon, New York City time,
on the Optional Conversion Date. The Optional Conversion
Adjustment shall represent the amount, calculated in accordance
with the Swap Agreement, which is payable by the Swap Provider
to the Beneficial Owner or by the Beneficial Owner to the Swap
Provider in order to reverse or unwind the Swap Agreement with
respect to a notional amount equal to the principal amount of
the Indexed Inverse Floating/Fixed Rate Bonds to be converted.
(d) The Beneficial Owner shall notify the Swap
Provider by telephone not later than 1:30 p.m.. New York City
time (promptly confirmed by telecopy to the Swap Provider, with
a duplicate confirmation telecopied to the Trustee), if the
04/22/93
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,
Beneficial Owner elects to proceed with the conversion on the
basis of a final quote for the Optional Conversion Adjustment
provided by the Swap Provider at the time of such telephonic
notice (which final quote may, but need not be, the same as the
preliminary quote previously provided pursuant to subsection
(c) above). Immediately upon receipt of the duplicate of such
confirmation, the Trustee shall send a copy thereof by telecopy
to the Co-Registrar. Delivery to the Swap Provider of such
notice shall be irrevocable and binding upon the Beneficial
Owner and the Swap Provider; provided that, if the Optional
Conversion Adjustment is calculated by the Swap Provider as
being an amount that would be payable by the Beneficial Owner,
the Swap Provider shall have the right to rescind the
conversion prior to receipt by the Swap Provider of telecopied
notice from the Trustee pursuant to subsection (e) below that
the Trustee has received payment of immediately available funds
in an amount equal to the Optional Conversion Adjustment if, in
the exclusive jUdgment of the Swap Provider, there has been a
material adverse change in market conditions since the time the
Swap Provider first quoted the Optional Conversion Adjustment
to the Beneficial Owner on the Optional Conversion Date.
Immediately upon receipt of notice that the Swap Provider has
rescinded any optional conversion pursuant to the foregoing, :
the Trustee shall give telephonic notice (promptly confirmed by
telecopy) of such rescission tO,the Co-Registrar and the
Beneficial Owner and the conversion shall not occur.
(e) Not later than 3:00 p.m., New York City
time, on the Optional Conversion Date the party owing the
Optional Conversion Adjustment shall pay such amount to the
Trustee for the benefit of the party to which the payment is
owed, in immediately available funds. Immediately after
receiving such payment, the Trustee shall deliver notice
thereof by telecopy to the Co-Registrar and the party to which
the payment is owed and shall transfer the payment to such
party in immediately available funds as soon as practicable
thereafter. Payments by the Trustee shall be made (i) to the
account specified in the Swap Agreement, if owed to the Swap
Provider; or (ii) to the account specified in the Beneficial
Owner s initial notice pursuant to subsection (a) above, if
owed to the Beneficial Owner.
(f) No conversion shall be effective if the Swap
Provider fails to make a required payment of the Optional
Conversion Adjustment relating to the proposed conversion.
However, if the Beneficial Owner fails to make a required
payment of the Optional Conversion Adjustment, the conversion
shall nevertheless occur unless rescinded by the Swap Provider,
but the Trustee shall thereafter deduct and pay over to the
Swap Provider, from subsequent payments of principal,
redemption price and interest coming due under the converted
-
04/22/93
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,
Bonds, an amount equal to the Optional Conversion Adjustment
due from the Beneficial Owner, plus interest at a rate
determined in accordance with the Swap Agreement on the
Optional Conversion Date and specified in a notice from the
Trustee to the Beneficial Owner. Immediately upon receipt of
notice that the Swap Provider has rescinded any optional
conversion or if the Swap Provider fails to make a required
payment of the Optional Conversion Adjustment when due, the
Trustee shall give telephonic notice (promptly confirmed by
telecopy) of such rescission or failure to the Co-Registrar and
the Beneficial Owner and the conversion shall not occur. If
the Beneficial Owner fails to make a required payment, but the
conversion nevertheless occurs and deductions are thereafter
made from such owner's converted Bond, the Bond shall be
non-transferable until such time as the amount (including
interest) owed to the Swap Provider has been paid in full.
(g) Notwithstanding the foregoing: (i) the Swap
Provider's obligation in respect of the conversion shall be
subject to (A) the condition precedent that the Swap Provider
is actively involved in the business of executing interest rate
swap agreements on the basis of tax-exempt market interest
rates on the Optional Conversion Date and (B) such other
factors as affect the Swap Provider's willingness to enter into
interest rate swap agreements based upon tax-exempt market
interest rates; and (ii) no optional conversion shall occur
unless, on or before the Optional Conversion Date, the Trustee
shall have received an Opinion of Counsel to the effect that
such conversion will not adversely affect any applicable
exemption of interest on the 1993 Bonds from federal income
taxation. The Trustee shall promptly notify the Market Agent,
the Swap Provider, the Co-Registrar, the Agency and the
registered owners of the 1993 Indexed Inverse Floating/Fixed
Rate Bonds if it does not receive an Opinion of Counsel to the
effect described in clause (ii) above.
(h) Registrations of conversions pursuant to the
foregoing shall be made as set forth in Section 219 hereof.
Section 218. ODtional Conversion of 1993 Indexed
Floatina/Fixed Rate Bonds. On any Optional Conversion Date
prior to the Scheduled Conversion Date (as selected by the
Beneficial Owner electing to convert its Bonds), any Beneficial
Owner of Indexed Floating/Fixed Rate Bonds may elect to convert
the interest rate on such Indexed Floating/Fixed Rate Bonds to
the Bond Rate in an amount not less than $1,000,000 or any
integral multiple of $100,000 in excess thereof. Upon the
exercise of such election, the conversion shall occur on the
Optional Conversion Date, retroactive to the last Interest
Payment Date to which interest on the converted Bonds has been
paid at the Indexed Variable Rate (or to the Effective Date, if
04/22/93
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,
- -
no such interest has been paid); subject, however, to the
- following further provisions:
(a) Not later than 10:00 a.m., New York City
time, on the proposed Optional Conversion Date, the Market
Agent and the Beneficial Owner electing to convert its Indexed
Floating/Fixed Rate Bonds shall give telephonic notice
(promptly confirmed by telecopy) of such election to the
Trustee and the Swap Provider. Such notice shall: (i) specify
the principal amount of Indexed Floating/Fixed Rate Bonds which
the Beneficial Owner is electing to convert and the CUSIP
number and maturity date of such Bonds; (E) request that the
Swap Provider provide a quote for the Optional Conversion
Adjustment which would be due with respect to the proposed
conversion on such date, as specified below; (iii) specify the
method by which the Market Agent and the Swap Provider will be
able to contact such Beneficial Owner for purposes of the
further notices and confirmations described below; (iv) specify
information identifying in appropriate detail the account to
which the Beneficial Owner wishes to have the Optional
Conversion Adjustment, if any, transferred; and (v) provide
evidence satisfactory to the Market Agent that the Person
providing the notice is the Beneficial Owner of Indexed
Floating/Fixed Rate Bonds to be converted. ' Immediately upon
receipt of such notice, the Trustee shall send a copy thereof
by telecopy to the CO-Registrar.
(b) In connection with the foregoing notice:
(i) the Market Agent shall confirm to the Trustee, the
Co-Registrar and the Swap Provider that the evidence of
beneficial ownership provided pursuant to subsection (a)(v)
above is satisfactory to it, and the Trustee, the CO-Registrar
and the Swap Provider may rely conclusively upon such
confirmation; and (E) the Trustee shall provide the Swap
Provider with information identifying in appropriate detail the
account of the Trustee to which the optional Conversion
Adjustment, if any, payable by the Swap Provider is to be
transferred for the benefit of and for retransfer to the
Beneficial Owner pursuant to subsection (e) below.
(c) Pursuant to the Swap Agreement, the Swap
Provider shall use its reasonable efforts to provide a
preliminary quote for the Optional Conversion Adjustment to the
Beneficial Owner not later than 12:00 noon, New York City time,
on the Optional Conversion Date. The Optional Conversion
Adjustment shall represent the amount, calculated in accordance
with the Swap Agreement, which is payable by the Swap Provider
to the Beneficial owner in order to reverse or unwind the Swap
Agreement with respect to a notional amount equal to the
principal amount of the Indexed Floating/Fixed Rate Bonds to be
converted.
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(d) The Beneficial Owner shall notify the Swap
Provider by telephone not later than 1:30 p.m., New York City
time (promptly confirmed by telecopy to the Swap Provider, with
a duplicate confirmation telecopied to the Trustee), if the
Beneficial owner elects to proceed with the conversion on the
basis of a final quote for the Optional Conversion Adjustment
provided by the Swap Provider at the time of such telephonic
notice (which final quote may, but need not be, the same as the
preliminary quote previoUSly provided pursuant to subsection
(c) above). Immediately upon receipt of the duplicate of such
confirmation, the Trustee shall send a copy thereof by telecopy
to the Co-Registrar. Delivery to the Swap Provider of such
notice shall be irrevocable and binding upon the Beneficial
Owner and the Swap Provider; provided that no conversion shall
be effective if the Swap Provider fails to make a required
payment of the Optional Conversion Adjustment relating to the
proposed conversion.
(e) Not later than 3:00 p.m., New York City
time, on the Optional Conversion Date the Swap Provider shall
pay the Optional Conversion Adjustment to the Trustee for the
benefit of the Beneficial Owner in immediately available
funds. Immediately after receiving such payment, the Trustee
shall deliver notice thereof by telecopy to the Co-Registrar
and the Beneficial Owner and shall transfer the payment to such
party in immediately available funds as soon as practicable
thereafter. Payment by the Trustee shall be made to the
account specified by the Beneficial Owner in such owner's
initial notice pursuant to subsection (a) above. If the Swap
Provider fails to make a required payment of the Optional
Conversion Adjustment when due, the Trustee shall give
telephonic notice of such failure to the co-Registrar and the
Beneficial Owner and the conversion shall not occur.
(f) Notwithstanding the foregoing: (i) the Swap
Provider's obligation in respect of the conversion shall be
subject to (A) the condition precedent that the Swap Provider
is actively involved in the business of executing interest rate
swap agreements on the basis of tax-exempt market interest
rates on the optional Conversion Date and (B) such other
factors as affect the Swap Provider's willingness to enter into
interest rate swap agreements based upon tax-exempt market
interest rates; and (ii) no optional conversion shall occur
unless, on or before the Optional Conversion Date, the Trustee
shall have received an Opinion of Counsel to the effect that
such conversion will not adversely affect any applicable
exemption of interest on the 1993 Bonds from federal income
taxation. The Trustee shall promptly notify the Market Agent,
the Swap Provider, the Agency and the registered owners of the
1993 Indexed Floating/Fixed Rate Bonds if it does not receive
an Opinion of Counsel to the effect described in clause (ii)
above.
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-
(g) Registrations of conversions pursuant to the
foregoing shall be made as set forth in Section 219 hereof.
Section 219. Reaistration Provisions With Resoect to
Conversions of 1993 Indexed Inverse Floatina/Fixed Rate Bonds
and 1993 Indexed Floatina/Fixed Rate Bonds.
(a) Except as provided in subsection (c) below,
and notwithstanding the provisions of Section 2.09(a) hereof,
for so long as the 1993 Bonds shall be registered in the name
of a Securities Depository or its nominee under a book entry
system of registration, the 1993 Indexed Inverse Floating/Fixed
Rate Bonds shall remain outstanding in the form of two separate
bond certificates for each maturity thereof, the first bearing
CUSIP number (the .Unconverted Inverse Rate") and
the second bearing CUSIP number (the "Converted
Inverse Rate Certificate"). Upon the initial issue of the 1993
Bonds, the Unconverted Inverse Rate Certificate shall be issued
in a principal amount equal to the entire aggregate principal
amount of the 1993 Indexed Inverse Floating/Fixed Rate Bonds
and the Converted Inverse Rate Certificate shall be issued in a
principal amount equal to zero dollars ($0). Except as
provided in Section 217(c) hereof, immediately upon the
conversion of any 1993 Indexed Inverse Floating/Fixed Rate
Bonds to the Bond Rate, the Trustee shall note in the
registration books kept by the Trustee a decrease in the
principal amount of the Unconverted Inverse Rate Certificate
and a corresponding increase in the principal amount of the
Converted Inverse Rate Certificate equal to the principal
amount of 1993 Indexed Inverse Floating/Fixed Rate Bonds so
converted. Concurrently with the notation in the registration
books as provided in the preceding sentence, the Trustee shall
so notify the CO-Registrar and the Securities Depository and
shall direct the Securities Depository, or the Co-Registrar on
behalf of the Securities Depository, to make a notation on the
conversion schedule set forth in the Unconverted Inverse Rate
Certificate of the decrease in the principal amount of the 1993
Indexed Inverse Floating/Fixed Rate ~onds whiCh remains
unconverted and to make a notation on the conversion schedule
set forth in the Converted Inverse Rate Certificate of the
corresponding increase in the principal amount of the 1993
Indexed Inverse Floating/Fixed Rate Bonds which have been
converted.
(b) Notwithstanding the provisions of Section
206 hereof, for so long as the 1993 Bonds shall be registered
in the name of a Securities Depository or its nominee under a
book entry system of registration, the 1993 Indexed
Floating/Fixed Rate Bonds shall remain outstanding in the form
of two separate bond certificates for each maturity thereof,
the first bearing CUSIP number (the .Unconverted
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Variable Rate Certificate") and the second bearing CUSIP number
(the "Converted Variable Rate Certificate"). Upon
the initial issue of the 1993 Bonds, the Unconverted Variable
Rate Certificate shall be issued in a principal amount equal to
the entire aggregate principal amount of the 1993 Indexed
Floating/Fixed Rate Bonds and the Converted Variable Rate
Certificate shall be issued in a principal amount equal to zero
dollars ($0). Except as provided in Section 219(d) hereof,
immediately upon the conversion of any 1993 Indexed
Floating/Fixed Rate Bonds to the Bond Rate, the Trustee shall
note in the registration books kept by the Trustee a decrease
in the principal amount of the Unconverted Variable Rate
Certificate and a corresponding increase in the principal
amount of the Converted Variable Rate Certificate equal to the
principal amount of 1993 Indexed Floating/Fixed Rate Bonds so
converted. Concurrently with the notation in the registration
books as provided in the preceding sentence, the Trustee shall
so notify the Co-Registrar and the Securities Depository and
shall direct the Securities Depository, or the Co-Registrar on
behalf of the Securities Depository, to make a notation on the
conversion schedule set forth in the Unconverted Variable Rate
Certificate of the decrease in the principal amount of the 1993
Indexed Floating/Fixed Rate Bond which remains unconverted and
to make a notation on the conversion schedule set forth in the
Converted Variable Rate Certificate of the corresponding
increase in the principal amount of the 1993 Indexed
Floating/Fixed Rate Bonds which have been converted.
(c) Notwithstanding the provisions of Section
206 hereof and subsection (a) above, if any 1993 Indexed
Inverse Floating/Fixed Rate Bonds are optionally converted to
the Bond Rate pursuant to Section 217 hereof and the Beneficial
owner thereof shall have failed to make a required payment of
the Optional Conversion Adjustment, the Trustee shall note in
the registration books kept by the Trustee a decrease in the
principal amount of the Unconverted Inverse Rate Certificate
equal to the principal amount of 1993 Indexed Inverse
Floating/Fixed Rate Bonds so converted, and the Trustee shall
so notify the Co-Registrar and the Securities Depository and
shall direct the Securities Depository, or the CO-Registrar on
behalf of the Securities Depository, to make a notation on the
conversion schedule set forth in the Unconverted Inverse Rate
Certificate of the decrease in the principal amount of the 1993
indexed Inverse Floating/Fixed Rate Bonds which remains
unconverted. Concurrently with the actions described in the
preceding sentence, the Trustee shall withdraw 1993 Indexed
Inverse Floating/Fixed Rate Bonds in an equal amount from the
book entry system of registration, shall issue, in the name of
the Trustee as nominee of such Beneficial Owner, a bond
certificate bearing a distinct CUSIP number (the "Certificated
Bond") and shall note in the registration books kept by the
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Trustee the registration of such Certificated Bond in a
principal amount equal to the principal amount of 1993 Indexed
Inverse Floating/Fixed Rate Bonds so converted.
The Trustee shall hold the Certificated Bond
issued pursuant to the preceding paragraph as nominee Qf the
Beneficial Owner of the 1993 Indexed Inverse Floating/Fixed
Rate Bonds with respect to which an Optional Conversion
Adjustment has not been paid for so long as such 1993 Indexed
Inverse Floating/Fixed Rate Bonds shall be subject to deduction
as provided in Section 217(f) hereof. The Certificated Bond
shall be in the form of the Converted Inverse Rate Certificate,
except that the Certificated Bond shall bear a legend to the
effect that so long as such 1993 Indexed Inverse Floating/Fixed
Rate Bonds shall be evidenced by the Certificated Bond, such
1993 Indexed Inverse Floating/Fixed Rate Bonds shall be
non-transferable and shall be sUbject to deduction as provided
in Section 217(f) hereof.
Immediately upon such 1993 Indexed Inverse
Floating/Fixed Rate Bonds becoming no longer subject to
deduction as provided in Section 217(f) hereof, the Trustee
shall cancel, and note in the registration books kept by the
Trustee the cancellation of, the corresponding Certificated
Bond and an increase in the principal amount of the Converted
Inverse Rate Certificate equal to the principal amount of
Certificated Bond so cancelled and shall reinstitute the book
- entry system of registration with respect to such 1993 Indexed
inverse Floating/Fixed Rate Bonds. Concurrently with the
notation in the registration books as provided in the preceding
sentence, the Trustee shall so notify the Co-Registrar and the
Securities Depository and shall direct the Securities
Depository, or the Co-Registrar on behalf of the Securities
Depository, to make a notation on the conversion schedule set
forth in the Converted Inverse Rate Certificate of an increase
in the principal amount of the converted Inverse Rate
Certificate equal to the principal amount of the Certificated
Bond so cancelled.
ARTICLE III
REVENUES AND FUNDS
Section 301. Source of Pavrnent of Bonds. The Bonds
and all payments required of the Agency hereunder are not
general Obligations of the Agency but are limited Obligations
as described in Section 202 hereof. The Pledged Tax Revenues
and all moneys held in the Special Fund and the Redemption Fund
are hereby conveyed, pledged and assigned absolutely and as a
first lien pledge as security for the equal and ratable benefit
04/22/93
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,~
of the Bondowners and shall be used for no other purpose than
payment of the principal of, premium (if any) and interest on
the Bonds, except as may be otherwise expressly authorized in
this Indenture.
Section 302. Creation of Funds and Accounts. There
was established pursuant to Resolutions Nos. R-89-25 and
R-91-17 and is hereby maintained with the Finance Director a
special trust fund called "The poway Redevelopment Agency,
paguay Redevelopment Project, Redevelopment Fund (hereinafter
sometimes called the "Redevelopment Fund") which Redevelopment
fund is continued for the purpose of this Indenture. There is
hereby created with the Trustee a special trust fund called
"The poway Redevelopment Agency, Paguay Redevelopment Project,
Special Fund" (hereinafter sometimes called the "Special Fund")
with special trust accounts contained therein known as the
"Interest Account," the "Serial Bond Principal Account," the
"20__ Term Bond Sinking Account," the "20__ Term Bond Sinking
Account", the "Reserve Account" and the "Surplus Account," a
special trust fund called the "Costs of Issuance Fund," and a
special trust fund called the "Rebate Fund." Article VI of
this Indenture creates the Redemption ,Fund described therein.
The Agency acknowledges that it has caused to be established ,
with the Escrow Bank a special trust fund designated the "Poway
Redevelopment Agency, paguay Redevelopment Project, Tax
Allocation Bonds, Prior Bonds Escrow Fund.
As long as any of the Bonds, or any interest on them,
remain unpaid, the Agency shall not have any beneficial right
or interest in the Pledged Tax Revenues except as provided in
this Indenture and the moneys in the foregoing funds and
accounts shall be used for no purposes other than those
required or permitted by this Indenture and the Law.
Each fund and account shall be maintained by the
Trustee as a separate and distinct trust fund or account to be
held, managed, invested, disbursed and administered as provided
in this Indenture. All moneys deposited in the funds and
accounts shall be used solely for the purposes set forth in
this Indenture. The Trustee shall keep and maintain adequate
records pertaining to each fund and account maintained by it
hereunder and all disbursements therefrom.
Section 303. Sale of Bonds: Disoosition of Bond
Proceeds and Prior Bond Proceeds: Redevelooment Fund. The
Agency has provided by resolution for the sale of the Bonds in
the manner provided by the Law and the Refunding Law.
(A) Simultaneously with delivery of the Bonds to the
purchaser thereof, the Trustee shall receive from the fiscal
agent for the Prior Bonds all moneys remaining in the Special
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Funds created pursuant to the resolutions authorizing the
issuance of the Prior Bonds, including any accounts therein,
and shall deposit such funds along with bond proceeds as
follows:
(1) To the Interest Account from Sond proceeds
an amount equal to the accrued interest paid by the
purchasers of the Bonds ($ ) ;
(2) To the Costs of Issuance Fund the amount of
$ ($ of which is from the Fiscal Agent
of the Prior Bonds) to pay Costs of Issuance;
(3) To the Reserve Account of the Special Fund
the amount of $ ; and
(4) To the Escrow Bank for deposit in the Escrow
Fund the amount of $ ($ from the Fiscal
Agent of the Prior Bonds and $ from the proceeds
of the Bonds); and
(5) To the Agency for deposit in the
Redevelopment Fund the amount of $ (of which
$ shall be immediately deposited in the Agency's
Low and Moderate Income Housing Fund).
(B) The moneys previously set aside in the
-, Redevelopment Fund from the proceeds of the Prior Bonds and the
moneys transferred to the Redevelopment Fund from the Prior
Bonds Reserve Accounts shall remain therein and shall be
subject to restriction as to yield as provided in Section 502
hereof, until from time to time expended for the purpose of
financing a portion of the costs of the Redevelopment Project
and other related costs, including in such costs:
(1) The payment of an amount of money in lieu
of taxes as authorized by Section 33401 of the Law in any
year during which the Agency owns property in the
Redevelopment Project, to any city, county, city and
county, district or other public corporation which would
have levied a tax upon such property had it not been exempt;
(2) The cost of any lawful activities in
connection with the implementation of the Redevelopment
Project, including, without limitation, those activities
authorized by Section 33445 of the Law; and
(3) The necessary expenses in connection with
the issuance and sale of the Bonds and fees of the Trustee
and Paying Agents not otherwise paid under paragraph D
below.
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All of the above uses constitute a "redevelopment
activity" as that term is defined in Health and Safety Code
Section 33678.
(C) The moneys deposited in the Costs of Issuance
Fund shall be applied by the Trustee to the payment of Costs of
Issuance as directed by a Certificate of the Agency. Any
moneys remaining in the Costs of Issuance Fund on June 1, 1994,
shall be transferred to the Agency for deposit in the
Redevelopment Fund. Thereafter, the Costs of Issuance Fund
shall be closed and all further responsibility for payment of
Costs of Issuance shall belong solely to the Agency.
Section 304. Final Balances. Upon the deposit with
the Trustee of moneys sufficient to pay all principal of,
premium, if any, and interest on the Bonds, and upon
satisfaction of all claims against the Agency hereunder,
including all fees, charges and expenses of the Trustee, and
any Paying Agent which are properly due and payable hereunder,
or upon the making of adequate provisions for the payment of
such amounts as permitted hereby, all moneys remaining in all
funds and accounts shall be paid to the Agency.
Section 305. Security of Funds. All moneys deposited
with the Trustee or with any agent of the Trustee appointed
pursuant to Section 905 of this Indenture shall be held in
trust and (except for moneys held by the Trustee, as Paying
Agent, or remitted to any Paying Agent for the payment of the
principal of, premium, if any, and interest on the Bonds and
except for amounts held in the Rebate Fund) shall, while held
by the Trustee, constitute part of the Trust Estate and shall
be and remain entitled to the benefit and shall be subject to
the security of this Indenture for the equal and proportionate
benefit of the owners of all Outstanding Bonds.
Section 306. Non-Presentment of Bonds. In the event
any Bond shall not be presented for payment when the principal
thereof becomes due, either at maturity or otherwise, or at the
date fixed for redemption thereof, if moneys sufficient to pay
such Bond shall have been deposited in the Special Fund or
Redemption Fund, as applicable, all liability of the Agency to
the owner thereof for the payment of such Bond shall forthwith
cease, terminate and be completely discharged, and thereupon,
SUbject to the last paragraph of Section 1101 hereof, it shall
be the duty of the Trustee to hold such moneys, without
liability for interest thereon, for the benefit of the owner of
such Bond who shall thereafter be restricted eXClusively to
such moneys, for any claim of whatever nature on his or her
part under this Indenture or on, or with respect to, said Bond.
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Section 307. Monevs to be Held in Trust. All moneys
required to be deposited with or paid to the Trustee under any
provisions of this Indenture shall be held by the Trustee in
trust and applied for the purposes herein specified.
ARTICLE IV
REVENUES AND APPLICATION
Section 401.
(A) Tax Revenues. As provided in the
Redevelopment Plan, pursuant to Article 6 of the Law and
Section 16 of Article XVI of the Constitution of the State of
California, taxes levied upon taxable property in the
Redevelopment Project each year by or for the benefit of the
State of California, any city, county, city and county,
district, or other public corporation (herein sometimes
collectively called -taxing agencies-) after the effective date
of the Ordinance approving the Redevelopment Plan (being
Ordinance No. 117 of the City of Poway, which was adopted on
December 13, 1983) shall be divided as follows: :
(a) That portion of the taxes which would be produced
by the rate upon which the tax is levied each year by or
for each of the taxing agencies upon the total sum of the
assessed value of the taxable property in the Redevelopment
Project as shown upon the assessment roll used in
connection with the taxation of such property by such
taxing agency last equalized prior to December 13, 1983,
(being the effective date of Ordinance No. 117, referred to
above) shall be allocated to and when collected shall be
paid into the funds of the respective taxing agencies as
taxes by or for the taxing agencies on all other property
are paid; and
(b) That portion of the levied taxes each year in
excess of the amount provided for in (a) above, to the
extent they constitute Pledged Tax Revenues shall be
allocated to and when collected shall be paid into the
Special Fund of the Agency.
The foregoing provisions of this Section are a portion
of the provisions of Article 6 of the Law as applied to the
Bonds and shall be interpreted in accordance with Article 6,
and the further provisions and definitions contained in
Article 6 are incorporated by reference herein and shall apply.
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04/22/93
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The Pledged Tax Revenues are hereby irrevocably
pledged to the payment of the principal of, premium, if any,
and interest on the Bonds and any Parity Bonds and, until all
of the Bonds, any Parity Bonds, and all interest thereon have
been paid (or until moneys for that purpose have been
irrevocably set aside), the Pledged Tax Revenues (subject to
the exception set forth in Section 402(f)) shall be applied
solely to the payment of the Bonds and any Parity Bonds plus
premium, if any, and the interest thereon as provided in this
Indenture. This allocation and pledge is for the exclusive
benefit of the Bondowners and the owners of any Parity Bonds
and shall be irrevocable.
Section 33645 of the Health and Safety Code provides,
in applicable part as follows: -The resolution, trust
indenture, or mortgage shall provide that tax increment funds
allocated to an agency pursuant to Section 33670 shall not be
payable to a trustee on account of any issued bonds when
sufficient funds have been placed with the trustee to redeem
all outstanding bonds of the issue.- This Indenture is
intended to comply with the above quoted provision and shall be
so construed.
.
(B) Swao Pavrnents. Any and all payments
received by the Trustee from the Swap Provider are hereby
irrevocably pledged to the payment of interest on the 1993
Bonds and, until the 1993 Indexed Floating/Fixed Rate Bonds and
until all such 1993 Indexed Inverse Floating/Fixed Rate and
1993 Indexed Floating/Fixed Rate Bonds and all interest thereon
have been paid (or until moneys for that purpose have been
irrevocably set aside), the payments received from the Swap
Provider shall be applied solely to the payment of the interest
on the 1993 Indexed Inverse Floating/Fixed Rate and the 1993
Indexed Floating/Fixed Rate Bonds as provided in this Indenture.
Section 402. Soecial Fund. The Agency shall payor
cause to be paid to the Trustee for deposit in the Special Fund
in accordance with this Section and Section 401 not later than
the sixth day prior to an Interest Payment Date all Pledged Tax
Revenues in the amounts set forth herein. The interest on the
Bonds until maturity shall be paid by the Trustee on behalf of
the Agency from the Interest Account of the Special Fund. At
the maturity of the Bonds, and, after all interest then due on
the Bonds then Outstanding has been paid or provided for,
moneys remaining in the Special Fund shall be applied to the
payment of the principal of any of such Bonds.
Without limiting the generality of the foregoing and
for the purpose of assuring that the payments referred to above
will be made as scheduled, the Pledged Tax Revenues accumulated
in the Special Fund shall be used in the following priority;
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,
provided, however, to the extent that deposits have been made
in any of the accounts referred to below from the proceeds of
the sale of the Bonds or otherwise, the deposits below need not
be made:
(a) Interest Account. Five (5) days prior to each
Interest Payment Date, the Trustee shall deposit moneys
into the Interest Account from the Special Fund so that the
balance in the Interest Account shall be equal to 180 days'
interest on the then Outstanding Bonds. Each such deposit,
insofar as it relates to the 1993 Indexed Inverse
Floating/Fixed Rate Bonds and the 1993 indexed
Floating/Fixed Rate Bonds prior to conversion, shall be
calculated at the applicable Bond Rate; provided that: (a)
in the event that the actual interest rate on such Bonds
(as determined on the applicable Interest Calculation Date)
exceeds the applicable Bond Rate, the Trustee shall either
(i) make an additional deposit, to the extent necessary to
pay interest in excess of the Bond Rate, from funds
provided by the Agency for such purpose on or before the
last Business Day preceding each Interest Payment Date, or
(b) upon notice that the applicable Swap Agreement has been
or is being terminated under circumstances giving rise to ,
an extraordinary conversion under Section 216 hereof,
immediately convert the affected Bonds to the applicable
Bond Rate in accordance with such Section; and (b) in the
case of the 1993 Indexed Inverse Floating/Fixed Rate Bonds,
in the event that the applicable Bond Rate exceeds the
actual interest rate on such Bonds (as determined on the
applicable Interest Calculation Date), the Trustee shall,
at the direction of the Agency, either (i) retain the
excess in the Special Fund as a credit against the next
deposit due from the Agency, or (ii) transfer such excess,
on behalf of the Agency, to the applicable Swap Provider to
the extent necessary to satisfy the Agency's net payment
obligations to such Swap Provider under the applicable Swap
Agreement. Moneys in the Interest Account shall be used
for the payment of interest on the Bonds as interest
becomes due.
(b) Reserve Account. After deposits have been made
pursuant to subparagraph (a) above, deposits shall be made
to the Reserve Account, if necessary, from amounts
deposited in the Special Fund in order to cause the amount
on deposit therein to equal the Reserve Requirement.
Amounts in the Reserve Account shall be transferred to the
Interest Account four (4) Business Days prior to the next
Interest Payment Date to pay interest on the Bonds as it
becomes due to the extent moneys credited to the Interest
Account prior to such transfer are insufficient therefor;
provided, however, that: (i) upon the occurrence of an
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,
Event of Default, all amounts in the Reserve Account shall
be transferred first to the Interest Account in an amount
equal to the interest due on the Bonds to the date of
acceleration minus the amount or amounts then held by the
Trustee in the Interest Account and second to the Principal
Account, in both cases to the extent necessary to pay
interest and principal coming due and payable on the Bonds;
and (ii) upon the payment or redemption in full of the
principal of, interest and redemption premium, if any, on
all of the Outstanding Bonds or upon provision therefor
pursuant to Section 1101, any or all of the amounts in the
Reserve Account shall be applied towards such payment. Any
portion of the Reserve Account which is in excess of the
Reserve Requirement shall be transferred to the Interest
Account six (6) Business Days prior to each Interest
Payment Date.
Anything to the contrary herein notwithstanding, the
Agency may at any time substitute an Alternate Reserve
Account Security, and upon such substitution, the Agency
shall be entitled to receive all moneys then held in the
Reserve Account free and clear of the lien of this
Indenture. In the event the Agency delivers an Alternate
Reserve Account Security, the Trustee shall hold and apply
such instrument pursuant to this Indenture so as to have
moneys available thereunder for the purposes and at the
times required under this Indenture.
(c) Serial Bond Princioal Account. Five (5) days
prior to each December 15, commencing December 15, 19 -, to
and including December 15, 20__, the Trustee shall withdraw
from the Special Fund and deposit in the Serial Bond
Principal Account an amount which, when added to the amount
deposited in the Serial Bond Principal Account from
proceeds of any refunding bonds or notes on or prior to
that date, will be equal to the principal becoming due and
payable on the Outstanding Bonds on December 15 of each
year. No deposit need be made into the Serial Bond
Principal Account if the amount contained therein five (5)
days prior to each December 15, commencing December 15,
19__ to and including December 15, 20__ is at least equal
to the principal to become due on the next succeeding
December 15, upon all of the Bonds issued hereunder and
then Outstanding.- All moneys deposited in the Serial Bond
Principal Account shall be used and withdrawn by the
Trustee solely for the purpose of paying the principal on
the Bonds as it shall become due and payable.
(d) 20 Term Bond Sinkina Account. Commencing
thirty-five (35) days prior to December 15, 20__ and
thirty-five (35) days prior to each December 15 thereafter.
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,
to and including December 15, 20__, deposits shall be made
into the 20__ Term Bond Sinking Account so that the balance
in such account five (5) days prior to December 15 of each
year shall equal the then current minimum sinking account
payment on the then Outstanding 20__ Term Bonds. All
moneys in the 20__ Term Bond Sinking Account shall be used
for the payment of principal on the 20__ Term Bonds as it
becomes due.
(e) 20 Term Bond Sinkina Account. Commencing
thirty-five (35) days prior to December 15, 20__ and
thirty-five (35) days prior to each December 15 thereafter,
to and including December 15, 20__, deposits shall be made
into the 20__ Term Bond Sinking Account so that the balance
in such account five (5) ,days prior to December 15 of each
year shall equal the then current minimum sinking account
payment on the then Outstanding 20__ Term Bonds. All
moneys in the 20__ Term Bond Sinking Account shall be used
for the payment of principal on the 20__ Term Bonds as it
becomes due.
(f) Surplus Account. It is the intent of this
Indenture that the deposits in subparagraphs (a), (b), (c)
and (d) above to the Interest Account, the Serial Bond
Principal Account, the 20__ Term Bond Sinking Account and
the 20__ Term Bond Sinking Account, respectively, shall be
made as scheduled.
If the above transfers have been made so that the
required amounts as of that time are in the Interest
Account, the Serial Bond Principal Account, the 20__ Term
Bond Sinking Account and the 20__ Term Bond Sinking Account
and the required transfer has been made to the Rebate Fund;
and (i) the Pledged Tax Revenues to be received by the
Agency in the current Fiscal Year, based upon the most
recent assessed valuation of taxable property in the
Redevelopment Project, as certified by the appropriate
officer of the County of San Diego, are at least equal to
1.25 times the Maximum Annual Debt Service on all Bonds and
Parity Bonds and any loans, advances or indebtedness
payable from Pledged Tax Revenues on a parity with the
Bonds pursuant to Section 33670 of the Law, as shown by the
certificate of the Finance Director, (ii) there has been no
material change in the status of the Redevelopment Project
which in the opinion of the Executive Director, said
opinion having been filed with the, Trustee, would be likely
to result in diminution of increment in the succeeding
Fiscal Year and (iii) the Trustee has on deposit in the
Reserve Account of the Special Tax Fund an amount equal to
the Reserve Requirement, any balances in the Surplus
Account may be used and applied upon the written direction
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of the Agency, for any lawful purpose, including without
limitation, the purchase and/or call and redemption of
Bonds and Parity Bonds.
Except to the extent set forth in the preceding
paragraph, all money in the Surplus Account shall be used
and withdrawn by the Trustee solely for the purpose of
replenishing the Interest Account, the Reserve Account, the
Serial Bond Principal Account, the 20__ Term Bond Sinking
Account or the 20__ Term Bond Sinking Account in such
order, in the event of any deficiency at any time in any of
such accounts, or for the purpose of paying the interest on
or principal of or redemption premiums, if any, on the
Bonds in the event that no other money of the Agency is
lawfully available therefor, or for the retirement
(together with other available money) of all Bonds then
outstanding.
Section 403. Pavrnents of PrinciDal. Premium and
Interest, The Trustee shall make available to the Paying
Agent, if any, from the Revenues sufficient amounts to pay the
principal of, premium, if any, and interest on, the Bonds as
the same become due and payable.
Section 404. Revenues to be Held for All Bondowners:
Certain ExceDtions. The Revenues shall, until applied as
provided in this Indenture, be held by the Trustee for the
benefit of the holders of all Outstanding Bonds, except that
any portion of the Revenues held pursuant to Section 306 hereof
representing principal or redemption price of and interest on,
any Bonds previoUSly called for redemption in accordance with
Article VI of this Indenture or previously matured shall be
held for the benefit of the holders of such Bonds only and
shall not be deposited or invested pursuant to Article V
hereof, notwithstanding any provision of Article V.
Section 405. Pavrnents under the Bond Insurance
Policv.
(A) If, on the third day preceding any Interest Payment
Date for the Bonds there is not on deposit with the Trustee
moneys sufficient to pay all principal of and interest on the
Bonds due on such date, the Trustee shall immediately notify
the Bond Insurer and , or its
successor as its Fiscal Agent (the "Fiscal Agent") of the
amount of such deficiency. If, by said Interest Payment Date,
the Agency has not provided the amount of such deficiency, the
Trustee shall simultaneously make available to the Bond Insurer
and to the Fiscal Agent the registration books for the Bonds
maintained by the Trustee. In addition:
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(i) The Trustee shall provide the Bond Insurer with a
list of the Bondowners entitled to receive principal or
interest payments from the Bond Insurer under the terms of
the Bond Insurance Policy and shall make arrangements for
the Bond Insurer and its Fiscal Agent (1) to mail checks or
drafts to Bondowners entitled to receive full or partial
interest payments from the Bond Insurer and (2) to pay
principal of the Bonds surrendered to the Fiscal Agent by
the Bondowners entitled to receive full or partial
principal payments from the Bond Insurer; and
(ii) The Trustee shall, at the time it makes the
registration books available to the Bond Insurer pursuant
to (a) above, notify Bondowners entitled to receive the
payment of principal of or interest on the Bonds from the
Bond Insurer (1) as to the fact of such entitlement (2)
that the Bond Insurer will remit to them all or part of the
interest payments coming due, (3) that, except as provided
in paragraph (b) below, in the event that any Bondowner is
entitled to receive full payment of principal from the Bond
Insurer, such Bondowner must tender his Bond with the
instrument of transfer in the form provided on the Bond
executed in the name of the Bond Insurer, and (4) that,
except as provided in paragraph (b) below, in the event
that such Bondowner is entitled to receive partial payment
of principal from the Bond Insurer, such Bondowner must
tender his Bond for payment first to the Trustee, which
shall note on such Bond the portion of principal paid by
the Trustee, and then, with the form of transfer executed
in the name of the Bond Insurer, to the Fiscal Agent, which
will then pay the unpaid portion of principal to the
Bondowner.
(B) In the event that the Trustee has notice that any
payment of principal of or interest on a Bond has been
recovered from a Bondowner pursuant to the united States
Bankruptcy Code by a trustee in bankruptcy in accordance with
the final, nonappealable order of a court having competent
juriSdiction, the Trustee shall, at the time it provides notice
to the Bond Insurer, notify all Bondowners that in the event
that any Bondowner's payment is so recovered, such Bondowner
will be entitled to payment from the Bond Insurer to the extent
of such recovery, and the Trustee shall furnish to the Bond
Insurer its records evidencing the payments Of principal of and
interest on the Bonds which have been made by the Trustee and
subsequently recovered from Bondowners, and the dates on which
such payments were made.
(C) The Bond Insurer shall, to the extent it makes payment
of principal of or interest on the Bonds, become subrogated to
the rights of the recipients of such payments inaccbrdance
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with the terms of the Bond Insurance Policy and, to evidence
such subrogation, (1) in the case of subrogation as to claims
for past due interest, the Trustee shall note the Bond
Insurer's rights as subrogee on the registration books
maintained by the Trustee upon receipt from, the Bond Insurer of
proof of the payment of interest thereon to the Bondowners of
such Bonds and (2) in the case of subrogation as to claims for
past due principal, the Trustee shall note the Bond Insurer's
rights as subrogee on the registration books for the Bonds
maintained by the Trustee upon receipt of proof of the payment
of principal thereof to the Bondowners of such Bonds.
ARTICLE V
INVESTMENT OF MONEYS
Section 501. Excess Investment Earninas.
(a) Establishment of Rebate Fund. As provided in the
Tax Certificate, the Trustee shall establish a special fund
with respect to the Bonds designated as the WRebate Fundw (the
wRebate FundW), and comply with the requirements below. All
money at any time deposited in the Rebate Fund shall be held in
trust, for payment to the United States Treasury. All amounts
on deposit in the Rebate Fund shall be governed by this
Section 501 and the Tax Certificate unless the Agency obtains
an Opinion of Counsel that the exclusion from gross income of
interest on the Bonds will not be adversely affected for
federal income tax purposes if such requirements are not
satisfied.
(i) Annual Comoutation. Within 55 days of the end
of each Bond Year with respect to the Bonds, the Agency shall
calculate or cause to be calculated the amount of rebatable
arbitrage, in accordance with Section 148(f)(2) of the Code and
Section 1.148-2 of the Rebate Regulations (taking into account
any applicable exceptions with respect to the computation of
the rebatable arbitrage, described, if applicable, in the Tax
Certificate (e.g., the temporary investments exceptions of
Section 148(f)(4)(B) and (C) of the Code), for this purpose
treating the last day of the applicable Bond Year as a
computation date, within the meaning of Section 1.148-8(b) of
the Rebate Regulations (the wRebatable ArbitrageW). The Agency
shall obtain expert advice as to the amount of the Rebatable
Arbitrage to comply with this Section.
(ii) Annual Transfer. within 55 days of the end of
each Bond Year with respect to the Bonds, upon the Agency's
written direction, an amount shall be deposited to the Rebate
Fund by the Trustee from any legally available funds provided
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by the Agency if and to the extent required, so that the
balance in the Rebate Fund shall equal the amount of Rebatable
Arbitrage so calculated in accordance with (i) of this
Subsection (a). In the event that immediately following the
transfer required by the previous sentence, the amount then on
deposit to the credit of the Rebate Fund exceeds the amount
required to be on deposit therein, upon written instructions
from the Agency, the Trustee shall withdraw the excess from the
Rebate Fund and then credit the excess to the Special Fund.
(iii) PaYment to the Treasurv. The Agency shall
direct the Trustee to pay to the United States Treasury, out of
amounts in the Rebate Fund,
(X) Not later than 60 days after the end of
(A) the fifth Bond Year with respect to the Bonds, and (B) each
applicable fifth Bond Year thereafter, an amount equal to at
least 90\ of the Rebatable Arbitrage calculated as of the end
of such Bond Year; and
(Y) Not later than 60 days after the payment of
all the Bonds, an amount equal to 100\ of the Rebatable
Arbitrage calculated as of the end of such Bond Year, and any ,
income attributable to the Rebatable Arbitrage, computed in
accordance with Section 148(f) of the Code.
In the event that, prior to the time of any payment
required to be made from the Rebate Fund, the amount in the
Rebate Fund is not sufficient to make such payment when such
payment is due, the Agency shall calculate or cause to be
calculated the amount of such deficiency and deposit an amount
received from any legally available source equal to such
deficiency in the Rebate Fund prior to the time such payment is
due. Each payment required to be made pursuant to this
Subsection (a)(iii) shall be made to the Internal Revenue
Service Center, Philadelphia, Pennsylvania 19255 on or before
the date on which such payment is due, and shall be accompanied
by Internal Revenue Service Form B038-T, or shall be made in
such other manner as provided under the Code as directed in
writing by the Agency.
(b) Disoosition of Unexoended Funds. Any funds
remaining in the Rebate Fund after redemption and payment of
the Bonds and the payments described in Subsection (a)(iii),
may be withdrawn by the Agency and utilized in any manner by
the Agency.
(c) Survival of Defeasance. Notwithstanding anything
in this Section or this Indenture of Trust to the contrary, the
Obligation to comply with the requirements of this Section
shall survive the defeasance of the Bonds.
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Section 502. Investment of Monevs in Funds. All
moneys held by the Trustee in the Special Fund (other than the
Reserve Account), the Surplus Account and the Redemption Fund
shall be (i) invested at the written direction of the Agency in
Permitted Investments, provided that such investments mature by
their terms prior to the date on which such moneys are required
to be paid out hereunder. If the Trustee receives no written
directions from the Agency as to the investment of moneys held
in any Fund or Account, the Trustee shall, pending receipt of
instructions, invest such moneys in a taxable government money
market portfolio as described in (iii) above.
(a) Moneys in the Redevelopment Fund may be invested
in any investment authorized by law for the investment of
Agency money, which will by'its terms mature not later than
the date the Agency estimates the moneys represented by the
particular investment will be needed for withdrawal from
such Fund.
(b) Moneys in the Interest Account, the Serial Bond
Principal Account, the 20__ Term Bond Sinking Account and
the 20__ Term Bond Sinking Account of the Special Fund
shall be invested only in Permitted Investments which will
by their terms mature on such dates as to ensure that
before each Interest Payment Date and principal payment
date there will be in such Accounts, from matured
obligations and other moneys already in such Accounts, cash
equal to the interest and principal payable on the
respective payment dates.
(c) Moneys held in the Reserve Account shall be
invested by the Trustee solely in Permitted Investments
consisting of (i) Government Obligations having a maturity
not greater than three years or beyond the date it is
anticipated that such moneys will be needed, whichever
comes first or (ii) an investment agreement which permits
withdrawals or deposits without penalty at such time as
such moneys will be needed or in order to replenish the
Reserve Account subject to the further provisions of this
Article V, amounts held by the Trustee in any Fund or
account three days prior to the use of such moneys will be
invested in Government Obligations maturing not later than
the date such moneys are to be used to pay the principal of
or interest on the Bonds. Such investments shall be made
in specific investments meeting the requirements of this
Section as directed in writing by the Agency (such written
request to be received by 12:00 noon two (2) days prior to
such investment) or, in the absence of such written
direction, by the Trustee in Permitted Investments
described in part (f) of the definition thereof.
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(d) Moneys in the Rebate Fund shall be invested in
Government Obligations which mature on or before the date
such amounts are required to be paid to the United States.
Except as otherwise provided herein, obligations
purchased as an investment of moneys in any of said Funds and
Accounts shall be deemed at all times to be a part of such
respective Fund and Account and the interest accruing thereon
and any gain realized from such investment shall be credited to
such Fund and Account and any loss, resulting from any such
authorized investment shall be charged to such Fund and Account
without liability to the Agency or the members and officers
thereof or to the Trustee. The Agency or the Trustee, as the
case may be, shall sell at the best price obtainable or present
for redemption any obligation so purchased whenever it shall be
necessary to do so in order to provide moneys to meet any
payment or transfer from such Fund and Account as required by
this Indenture. The investment constituting a part of such
Fund and Account shall be valued as frequently as deemed
necessary by the Bond Insurer, but not less often than
annually, at the market value of such investment, exclusive of
accrued interest. Deficiencies in the amount on deposit in any
Fund or Account resulting from a decline in market value shall :
be restored no later than the succeeding valuation date.
Section 503. Issuance of paritv Bonds. If at any
time the Agency determines it needs to do so, the Agency may
provide for the issuance of, and sell, Parity Bonds in such
principal amounts as it estimates will be needed. The issuance
and sale of any Parity Bonds shall be subject to the following
conditions precedent:
(a) The Agency shall be in compliance with all
covenants in this Indenture;
(b) The Parity Bonds shall be on such terms and
conditions as may be set forth in a supplemental indenture,
which shall provide for (i) bonds in accordance with this
Indenture, (ii) the deposit of moneys into the Reserve
Account in an amount (which may be represented by an
Alternate Reserve Account Security described in Section
402(b)) sufficient, together with the balance of the
Reserve Account, to equal the Reserve Requirement on all
Bonds expected to be outstanding including the Outstanding
Bonds, and (iii) the disposition of Pledged Tax Revenues in
the same manner as described in Section 402(d) hereof;
(c) Receipt of a certificate or opinion of an
Independent Financial Consultant showing:
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(i) For the current and each future Bond Year the
maximum annual debt service for each such Bond Year
with respect to all Bonds and Parity Bonds reasonably
expected to be Outstanding fOllowing the issuance of
the Parity Bonds;
(ii) For the then current Bond Year, the Pledged
Tax Revenues to be received by the Agency based upon
the most recent assessed valuation of taxable property
in the Redevelopment Project, including any
supplemental tax roll, certified by the appropriate
officer of the County of San Diego (exclusive of any
anticipated business inventory subvention revenues);
and
(iii) That for the then current Bond Year, the
Pledged Tax Revenues referred to in item (ii) are at
least equal to 125\ of the maximum annual debt service
referred to in item (i) above, and that the Agency is
entitled under the Law and the Redevelopment Plan to
receive taxes under Section 33670 of the Law in an
amount sufficient to meet expected debt service with
respect to all Bonds and Parity Bonds; and ,
(d) The Parity Bonds shall mature on and interest
shall be payable on the same dates as the Bonds (except the
first interest payment may be from the date of the Parity
Bonds until the next succeeding December 15 or December 15).
Notwithstanding the foregoing, if the Agency is in
compliance with all covenants set forth in this Indenture, the
Agency may issue and sell obligations pursuant to the Law
having a lien on the Pledged Tax Revenues which is junior to
the Bonds herein authorized and which shall be payable solely
from .surplus. as then declared or which may thereafter be
declared pursuant to Section 402 hereof (as used herein
.obligations. shall, include, without limitation, bonds, notes,
interim certificates, debentures or other obligations, loans,
advances or other forms of indebtedness incurred by the Agency).
ARTICLE VI
REDEMPTION OF BONDS BEFORE MATURITY
Section 601. Limitation on Redemotion. The Bonds
shall be sUbject to redemption prior to maturity in authorized
denominations only as provided in this Article VI.
Section 602. Ootional Redemotion. Bonds maturing on
or before December 15, 20__ are not subject to call and
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optional redemption prior to maturity. The Bonds maturing on
December 15, 20_ are subject to redemption p,rior to maturity
at the option of the Agency, on December 15, 20_ or on any
Interest Payment Date thereafter in whole, or in part in
amounts that are in authorized denominations and are as nearly
as possible proportional among maturities and by lot within a
maturity, The Interest Payment Date on which Bonds are to be
presented for redemption is sometimes referred to as the
-redemption date,- Bonds called for redemption shall be
redeemed at the redemption prices (expressed as a percentage of
the principal amount of Bonds to be redeemed) plus accrued
interest to the redemption date as shown in the following table:
Redemotion Date Redemotion Price
December 15, 20_ and December 15, 20 - 102\
December lS, 20_ and December lS, 20_ 101\
December lS, 20_ and thereafter 100\
Section 603. Sinkina Account Redemotion. The Bonds
maturing December 15, 20_ are subject to mandatory redemption
in part, by lot, from sinking account installments on December
15, 20_ and on each December 15 thereafter to and including ,
December 15, 20_, at a redemption price equal to 100 percent
of the principal amount thereof plus accured interest, if any,
to the redemption date without premium. The following sinking
account installments are calculated to be sufficient to redeem
the principal amount of the 20_ Term Bonds:
Redemption Principal
Dates Amount
$
*
*Maturity
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The Bonds maturing December 15, 20__ are subject to
mandatory redemption in part. by lot. from sinking account
installments on December 15. 20__ and on each December lS
thereafter to and including December 15, 20__. at a redemption
price equal to 100 percent of the principal amount thereof plus
accured interest, if any. to the redemption date without
premium. The following sinking account installments are
calculated to be sufficient to redeem the principal amount of
the 20__ Term Bonds:
Redemption Principal
Dates Amount
$
*
*Maturity
Section 604. Call and RedemDtion: Notice of
RedemDtion. The Agency may by resolution direct the call and
redemption prior to maturity of Bonds by the Trustee pursuant
to Sections 602 and 606 hereof and shall give notice to the
Trustee of the redemption at least sixty (60) days prior to the
redemption date.
Notice of redemption prior to maturity shall be given
by first class mail. postage prepaid. not less than thirty (30)
nor more than sixty (60) days prior to the redemption date to
the Bond Insurer and to the registered owner of each such Bond
at the address shown on the registration books of the Trustee.
Neither the failure to receive such notice nor any defect in
any notice mailed shall affect the sufficiency of the
proceedings for the redemption of any Bonds. The notice of
redemption shall state (a) the redemption date; (b) the
redemption price; (c) the CUSIP number; (d) the principal
portion to be redeemed and the maturity thereof; (e) the
numbers of the Bonds to be redeemed; (f) as to any Bonds
redeemed in part only. the registered Bond numbers and the
principal portion thereof to be redeemed; and (g) that interest
on the principal portion of the Bonds designated for redemption
shall cease to accrue from and after the redemption date and
that on the redemption date there shall become due and payable
on each of such Bonds the redemption price for each Bond;
provided, however, whenever any call for redemption includes
all Outstanding Bonds, the numbers of the Bonds and principal
portion need not be stated.
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The actual receipt by the Bondowner of any Bond or
notice of redemption shall not be a condition precedent to
redemption, and failure to receive notice shall not affect the
validity of the proceedings for the redemption of the Bonds or
the cessation of interest on the redemption date. Notice of
redemption of Bonds shall be given by the Trustee on behalf of
the Agency and at the expense of the Agency.
A certificate by the Trustee that notice of redemption
has been given in accordance with this Indenture shall be
conclusive as against all parties, and no Bondowner whose Bond
is called for redemption may object to the redemption or the
cessation of interest on the redemption date by claiming or
showing that he failed to receive actual notice of call and
redemption.
In addition to the foregoing notice, further notice
shall be given by the Trustee as set out below, but no defect
in said further notice nor any failure to give all or any
portion of such further notice shall in any manner defeat the
effectiveness of a call for redemption if notice thereof is
given as above prescribed.
,
Each further notice of redemption shall be sent at
least two (2) days prior to the notice to be sent as
hereinbefore provided by registered or certified mail or
overnight delivery service to the registered securities
depositories listed below and to any other registered
securities depositories provided to the Trustee in writing by
the Agency then in the business of holding substantial amounts
of obligations of types comprising the Bonds by first-class
mail to the original purchaser of the Bonds, including any
syndicate manager of the underwriting syndicate originally
purchasing the Bonds and by first class mail to one or more
national information services listed below that disseminate
notice of redemption of obligations on the Bonds.
Recistered Securities DeDositories
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530
Attention: Diana Difiglia
Telecopy: (516) 227-4039 or 4190
Midwest Securities Trust Company
Capital Structures-Call Notification
440 South LaSalle Street
Chicago, Illinois 60605
Telecopy: (312) 663-2343
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Philadelphia Depository Trust Company
Reorganization Division
1900 Market Street
Philadelphia, Pennsylvania 19103
Attention: Bond Department
Telecopy: (215) 496-5058
National Information Services
Financial Information, Inc.'s Financial Daily
Called Bond Service
30 Montgomery Street, lOth Floor
Jersey City, New Jersey 07302
Attention: Editor
Interactive Data Corporation's Bond Service
22 Cortland Street, 32nd Floor
New York, New York 10007
Kenny Information Service's Called Bond Service
55 Broad Street, 29th Floor
New York, New York 10004
:
Moody's Municipal and Government
99 Church Street, 8th Floor
New York, New York 10007
Attention: Municipal News Report
Standard and Poor's Called Bond Record
25 Broadway, 3rd Floor
New York, New York 10004
Upon the payment of the redemption price of any Bonds
being redeemed, each check or other transfer of funds issued
for such purpose shall bear the CUSIP number identifying, by
issue and maturity, the Bonds being redeemed with the proceeds
of such check or other transfer.
Section 605. Redemotion Fund. Prior to the mailing
of notice as required above, the Trustee shall establish,
maintain and hold in trust a separate fund which is hereby
created for the purpose of this Indenture entitled -Poway
Redevelopment Agency, Paguay Redevelopment Project,
Subordinated Tax Allocation Refunding Bonds, Series 1993
Redemption Fund- (hereinafter referred to as the -Redemption
Fund"), Except in the event Bonds are to be called from
refunding bond proceeds, the Agency shall pay to the Trustee
for deposit in the Redemption Fund (or, as to sinking account
redemption pursuant to Section 603 hereof, in the 20_ Term
Bond Sinking Account or in the 20_ Term Bond Sinking Account
of the Special Fund) prior to mailing notice of optional or
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sinking account redemption to the Bondowners, moneys for the
purpose of and sufficient to redeem, at the premiums, if any,
payable as provided in this Indenture, the Bonds designated in
the notice of redemption. The moneys must be set aside in the
Redemption Fund (or in the 20__ Term Bond Sinking Account or in
the 20__ Term Bond Sinking Account, as the case may be) solely
for that purpose and shall be applied on or after the
redemption date to the payment (principal and premium, if any)
of the Bonds to be redeemed upon presentation and surrender of
the Bonds. Any remaining balance in the Redemption Fund
following the payment of the Bonds to be redeemed shall be
transferred to the Special Fund.
Section 606. Partial Redemotion of Bonds. Upon
surrender of any Bond redeemed in part only, the Agency shall
execute and the Trustee shall authenticate and deliver to the
registered owner, at the expense of the Agency, a new Bond or
Bonds of authorized denominations equal in aggregate principal
amount to the unredeemed portion of the Bond surrendered and of
the same interest rate and same maturity. A partial redemption
shall be valid upon payment of the amount required to be paid
to the registered owner, and the Agency and the Trustee shall
be released and discharged from all liability to the extent of :
such payment.
Section 607. Effect of Redemotion. Notice of
redemption having been duly given as provided above, and moneys
for payment of the principal of, premium, if any, and interest
payable upon redemption of the Bonds being set aside as
provided above, the Bonds, or parts thereof, called for
redemption shall, on the redemption date, become due and
payable at the redemption price specified in the notice.
Interest on the Bonds, or parts thereof, as the case may be,
called for redemption shall cease to accrue. The Bonds, or
parts thereof redeemed, shall cease to be entitled to any lien,
benefit or security under this Indenture, and the Owners of the
Bonds shall have no rights except to receive payment of the
redemption price upon surrender of the Bonds, and, in the case
of partial redemption of Bonds, also to receive a new Bond or
Bonds for the unredeemed balance as provided above.
Section 608. Purchase of Bonds. In lieu of
redemption or otherwise, the Agency is hereby authorized to
purchase Bonds on the open market at any time and the Trustee
will settle these purchases from moneys deposited by the Agency
with the Trustee at a price not to exceed the principal amount
of Bonds plus the applicable premium and accrued interest, if
any, to the date of purchase plus brOkerage fees, if any.
Section 609. Selection of Bonds for RedemDtion. For
the purposes of redemption, Bonds of denominations greater than
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$5,000 will be deemed to consist of $5,000 portions, and any
such portion may be separately redeemed. If less than all
Outstanding Bonds maturing on December 15, 20__ are redeemed
pursuant to Section 603, or if Bonds maturing on December 15,
20__ or December 15, 20__ are purchased pursuant to Section
608, each of the remaining sinking account payments for the
respective Bonds shall be reduced by amounts that are in
authorized denominations and are as nearly as possible
proportional among the remaining sinking account payments.
ARTICLE VII
PAYMENT; FURTHER ASSURANCES
Section 701. PaYment of Principal or Redemption Price
of and Interest on Bonds. The Agency shall promptly payor
cause the Trustee to pay the principal or redemption price of,
and the interest on, every Bond issued hereunder according to
the terms thereof, but shall be required to make such payment
or cause such payment to be made only out of Revenues.
Section 702. Covenants of the Aaencv. As long as the
Bonds are Outstanding and unpaid, the Agency shall (through its
proper members, officers, agents or employees) faithfully
perform and abide by all of the covenants, undertakings and
provisions contained in this Indenture or in any Bond issued
hereunder, including the following covenants and agreements for
the benefit of the Bondowners which are necessary, convenient
and desirable to secure the Bonds and will tend to make them
more marketable; provided, however, that the covenants do not
require the Agency to expend any funds other than the Pledged
Tax Revenues:
Covenant 1. Complete Redevelopment Proiect: Amendment
to Redevelopment Plan. The Agency covenants and agrees that it
will diligently carry out and continue to completion in a sound
and economical manner, with all practicable dispatch, the
Redevelopment Project in accordance with its duty to do so
under and in accordance with the Law and the Redevelopment
Plan. The Redevelopment Plan may be amended as provided in the
Law but no amendment shall be made unless it will not
SUbstantially impair the security of the Bonds or the rights of
the Bondowners, as shown by an Opinion of Counsel, based upon a
certificate or opinion of an Independent Financial Consultant
appointed by the Agency.
Covenant 2. Use of Proceeds, Manaaement and Ooeration
of Properties. The Agency covenants and agrees that the
proceeds of the sale of the Bonds will be deposited and used as
provided in this Indenture and that it will manage and operate
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all properties owned by it comprising any part of the
Redevelopment Project in a sound and businesslike manner
consistent with the Redevelopment Plan.
Covenant 3. No Priority. The Agency covenants and
agrees that it will not issue any obligations (other than
obligations which refund the Senior Lien Debt) payable, either
as to principal or interest, from the Pledged Tax Revenues
which have any lien upon the Pledged Tax Revenues prior to or
superior to the lien of the Bonds. Except as permitted by
Section 503 hereof, it will not issue any obligations, payable
as to principal or interest, from the Pledged Tax Revenues
which have any lien upon the Pledged Tax Revenues on a parity
with the Bonds. Notwithstanding the foregoing, nothing in this
Indenture shall prevent the Agency (i) from issuing and selling
pursuant to law refunding obligations payable from and having
any lawful lien upon the Pledged Tax Revenues, if such
refunding obligations are issued for the purpose of, and are
sufficient for the purpose of, refunding all of the Outstanding
Bonds or Parity Bonds, (ii) from issuing and selling
obligations which have, or purport to have, any lien upon the
Pledged Tax Revenues which is junior to the Bonds, or (iii)
from issuing and selling bonds or other obligations which are
payable in whole or in part from sources other than the Pledged
Tax Revenues. As used herein .obligations. shall include,
without limitation, bonds, notes, interim certificates,
debentures or other obligations, loans, advances, or other
forms of indebtedness incurred by the Agency.
Covenant 4. Punctual Pavrnent. The Agency covenants
and agrees that it will duly and punctually payor cause to be
paid the principal of and interest on each of the Bonds on the
date, at the place and in the manner provided in the Bonds. In
order to prevent any claims for interest after maturity, the
Agency will not, directly or indirectly, extend or consent to
the extension of time for the payment of any claim for interest
on any Bonds and will not, directly or indirectly, be a party
to or approve any such arrangements by purChasing or funding
said claims for interest or in any other manner.
Covenant 5. Pavrnent of Taxes and Other Charaes. The
Agency covenants and agrees that it will from time to time pay
and discharge, or cause to be paid and discharged, all payments
in lieu of taxes required by law or otherwise, service charges.
assessments or other governmental charges which may lawfully be
imposed upon the Agency or any of the properties then owned by
the Agency in the Redevelopment Project, or upon the revenues
and income therefrom, and will pay all lawful claims for labor,
materials and supplies which if unpaid might become a lien or
Charge upon any of the properties, revenues or income or which
might impair the security of the Bonds or the use of Pledged
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Tax Revenues or other legally available funds to pay the
principal of and interest on the Bonds, all to the end that the
priority and security of the Bonds shall be preserved;
provided, however, that nothing in this covenant shall require
the Agency to make any such payment so long as the Agency in
good faith shall contest the validity of the payment.
Covenant 6. Books and Accounts: Financial Statements.
The Agency covenants and agrees that it will at all times keep,
or cause to be kept, proper and current books and accounts
(separate from all other records and accounts) in which
complete and accurate entries shall be made of all transactions
relating to the Redevelopment Project and the Pledged Tax
Revenues and other funds relating to the Redevelopment
Project. The Agency will prepare within one hundred eighty
(180) days after the close of each of its Fiscal Years a
complete financial statement or statements for the year, in
reasonable detail covering the Redevelopment Project and the
Tax Revenues and other funds, accompanied by an opinion of an
Independent Certified Public Accountant appointed by the
Agency, and will furnish a copy of such statement or statements
to the Trustee, the original purchasers of the Bonds, the Bond
Insurer, and to any rating agency which maintains a rating on
the Bonds, and, upon written request, to any Bondowner. Each
annual budget prepared by the Agency shall be sent to the Bond
Insurer fOllowing adoption. The Agency shall also provide to
the Bond Insurer such additional information as the Bond
Insurer may reasonably request from time to time.
Covenant 7. Eminent Domain Proceedinas. The Agency
covenants and agrees that if all or any part of the
Redevelopment Project should be taken, by eminent domain
proceedings or other proceedings authorized by law, for any
pUblic or other use under which the property will be tax
exempt, it shall take all steps necessary to adjust accordingly
the base year valuation of the Redevelopment Project.
Covenant 8. DisDosition of ProDertv. The Agency
covenants and agrees that it will not dispose of more than ten
percent (10\) of the land area in the Redevelopment Project
(except property shown in the Redevelopment Plan in effect on
the date this Indenture is approved as planned for public use,
or property to be used for pUblic streets, public offstreet
parking, sewage facilities, parks, easements or right-of-way
for public utilities, or other similar uses) to public bodies
or other persons or entities whose property is tax exempt,
unless such disposition will not result in'the security of the
Bonds or the rights of Bondowners being substantially impaired,
as shown by an Opinion of Counsel, based upon the certificate
or opinion of an Independent Financial Consultant appointed by
the Agency.
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Covenant 9. Statement of Indebtedness. The Agency
covenants and agrees to file annually with the County Auditor a
statement of indebtedness as provided by section 33675 of the
Law.
Covenant 10. Protection of Securitv and Riahts of
Bondowners. The Agency covenants and agrees to preserve and
protect the security of the Bonds and the rights of the
Bondowners and to contest by court action or otherwise (a) the
assertion by any officer of any government unit or any other
person whatsoever against the Agency that (i) the Law is
unconstitutional or (ii) that the Pledged Tax Revenues pledged
hereunder cannot be paid to the Agency for the debt service on
the Bonds (b) any other action affecting the validity of the
Bonds or diluting the security therefor or (c) any assertion by
the United States of America or any department or agency
thereof or any other person that the interest received by the
Bondowners is taxable under federal income tax laws by reason
of any action of the Agency. The Agency covenants and agrees
to take no action which, in the Opinion of Counsel, would
result in (a) the Pledged Tax Revenues being withheld unless
the withholding is being contested in good faith, and (b) the
interest received by the Bondowners,becoming taxable under
California income tax laws.
Covenant 11. Tax Covenants:
Federal Tax Covenants. Notwithstanding any other
provision of this Indenture, absent an Opinion of Counsel that
the exclusion from gross income of interest with respect to the
Bonds will not be adversely affected for federal income tax
purposes, the Agency covenants to comply with all applicable
requirements of the Code necessary to preserve such exclusion
from gross income and specifically covenants, without limiting
the generality of the foregoing, as follows:
(a) Private Activitv. The Agency will take no action
or refrain from taking any action or make any use of the
proceeds of the Bonds or of any other monies or property
which would cause the Bonds to be .private activity bonds.
within the meaning of Section 141 of the Code;
(b) Arbitraae. The Agency will make no use of the
proceeds of the Bonds or of any other amounts or property,
regardless of the source, or take any action or refrain
from taking any action which will cause the Bonds to be
.arbitrage bonds. within the meaning of Section 148 of the
Code;
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(c) Federal Guarantv. The Agency will make no use of
the proceeds of the Bonds or take or omit to take any
action that would cause the Bonds to be "federally
guaranteed" within the meaning of Section 149(b) of the
Code;
(d) Information Reoortina. The Agency will take or
cause to be taken all necessary action to comply with the
informational reporting requirement of Section 149(e) of
the Code;
(e) Hedae Bonds. The Agency will make no use of the
proceeds of the Bonds or any other amounts or property,
regardless of the source, or take any action or refrain
from taking any action that would cause the Bonds to be
considered "hedge bonds" within the meaning of Section
149(g) of the Code unless the Agency takes all necessary
action to assure compliance with the requirements of
Section 149(g) of the Code to maintain the exclusion from
gross income of interest on the Bonds for federal income
tax purposes; and
(f) Miscellaneous. The Agency will take no action or
refrain from taking any action inconsistent with its
expectations stated in that certain Tax Certificate
executed on the Delivery Date by the Agency in connection
with the Bonds and will comply with the covenants and
requirements stated therein and incorporated by reference
herein.
Covenant 11. Taxation of Leased Prooertv. Whenever
any property in the Redevelopment Project has been redeveloped
and thereafter is leased by the Agency to any person or persons
(other than a public agency), or whenever the Agency leases
real property in the Redevelopment Project to any person or
persons (other than a public agency) for redevelopment, the
property shall be assessed and taxed in the same manner as
privately owned property, as required by Section 33673 of the
Law, and the lease or contract shall provide (a) that the
lessee shall pay taxes upon the assessed value of the entire
property and not merely upon the assessed value of his or its
leasehold interest, and (b) that if for any reason the taxes
levied on the property in any year during the term of the lease
or contract are less than the taxes which would have been
levied if the entire property had been assessed and taxed in
the same manner as privately owned property, the lessee shall
pay such difference to the Agency within thirty (30) days after
the taxes for the year become payable to the taxing agencies
and in no event later than the delinquency date of such taxes
established by law. All such payments shall be treated as Tax
Revenues, and when received by the Agency shall be transferred
to the Trustee for deposit in the Special Fund.
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Covenant 12. Tax Revenues. The Agency shall comply
with all requirements of the Law to insure the allocation and
payment to it of the Tax Revenues, and agrees that it has not
entered into any agreements with other tax entities as of the
Delivery Date for the pass-through of any Tax Revenues to such
entities and will not thereafter enter into any such agreement
which requires payment to such taxing entities prior to deposit
of Tax Revenues in the Special Fund. The Agency has not and
will not incur any loans, obligations or indebtedness repayable
from Tax Revenues such that the total aggregate debt service on
said loans, obligations or indebtedness incurred from and after
the date of adoption of the Redevelopment Plan, when added to
the total aggregate debt service on the Bonds will exceed the
maximum amount of Tax Revenues to be divided and allocated to
the Agency pursuant to the Redevelopment Plan.
Covenant 13. Certification of Tax Revenues. The
Agency shall cause to be prepared and delivered to the Bond
Insurer and any rating agency then rating the Bonds, annually,
within one hundred and eighty (180) days after the close of
each Fiscal Year, so long as any of the Bonds are Outstanding,
a Certificate of the Agency setting forth a calculation of (i)
the total amount of Tax Revenues remaining available to be
received by the Agency within the Plan Limit and (ii) the total
amount of future debt service on loans, advances and
indebtedness remaining to be paid from the Tax Revenues,
including, without limitation, the Bonds, the Senior Lien Debt
and the Identified Business Park Obligations. .The Agency
covenants that it will not file any statement of indebtedness
(pursuant to Section 33675 of the Redevelopment Law) which will
cause the amount of Tax Revenues remaining available to the
Agency (as described in clause (i) above) to be less than the
amount of debt service remaining payable by the Agency (as
described in clause (ii) above), after application of such Tax
Revenues to pay such debt service and that, to the extent
possible, it will redeem Bonds pursuant to Section 602 hereof
from current Pledged Tax Revenues such that (i) above is equal
to or greater than (ii) above following redemption.
Section 703. Comoliance with Indenture. Contracts.
Laws and Reaulations. The Agency shall faithfully observe and
perform all the covenants, conditions and requirements of this
Indenture, shall not issue any Bonds in any manner other than
in accordance with this Indenture, and shall not exercise its
discretion in any way that might materially weaken, diminish or
impair the security intended to be given pursuant to this
Indenture. Subject to the limitations and consistent with the
covenants, conditions and requirements contained in this
Indenture, the Agency shall comply with the terms, covenants
and provisions, express or implied, of all contracts concerning
or affecting the application of proceeds of the Bonds or the
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Revenues. The Agency shall comply promptly, fully and
faithfully with and abide by any statute, law, ordinance,
order, rule or regulation, judgment, decree, direction or
requirement now in force or hereafter enacted, adopted,
prescribed, imposed or entered by any competent governmental
authority or agency applicable to or affecting the
Redevelopment Project.
ARTICLE VIII
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND BONDHOLDERS
Section 801. Defaults
A. Events of Default. Each of the following shall
constitute an event of default:
(1) Default by the Agency on any Interest
Payment Date in the payment of the principal of,
sinking account payment of, interest on or redemption
premium (if any) on the Bonds coming due and payable
on such date, whether at maturity, by acceleration or
otherwise;
(2) Default by the Agency in the observance of
any of the covenants, agreements or conditions
contained in this Indenture or in the Bonds, where the
default continues for a period of thirty (30) days
following written notice to the Agency; or
(3) The Agency shall file a petition seeking
reorganization or arrangement under the federal
bankruptcy laws or any other applicable law of the
United States of America or the State, or if a court
of competent jurisdiction shall approve a petition,
filed with or without the consent of the Agency,
seeking reorganization under the federal bankruptcy
laws or any other applicable law of the United States
of America or the State, or if, under the provisions
of any other law for the relief or.aid of debtors, any
court of competent jurisdiction shall assume custody
or control of the Agency or of the whole or any
substantial part of its property.
In each and every event of default described in (1)
above the Trustee shall, with the consent of the Bond Insurer,
and in each and every event of default described in (2) or (3)
above, the Trustee may, with the consent of the Bond Insurer,
and shall, with the consent of the Bond Insurer, if so
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requested by the owners of not less than a majority in
- aggregate principal amount of the Bonds at the time Outstanding
(such request to be in writing to the Trustee and the Agency),
declare the principal of all of the Bonds then Outstanding and
the interest accrued thereon, to be due and payable
immediately, and upon any such declaration the same shall
become and shall be immediately due and payable, anything in
the Indenture or in the Bonds to the contrary notwithstanding.
On the date of declaration of acceleration, amounts in the
Reserve Account and all other amounts in the Special Fund and
accounts therein shall be applied by the Trustee pursuant to
this Indenture.
With the consent of the Bond Insurer, such declaration
may be rescinded by the owners of not less than a majority of
the Bonds then Outstanding provided the Agency cures such
default or defaults including the deposit with the Trustee of a
sum sufficient to pay all principal on the Bonds matured prior
to such declaration and all matured installments of interest
(if any) upon all the Bonds then Outstanding, with interest at
the rate of twelve percent (12\) per annum on such overdue
installments of principal and, to the extent such payment of
interest on interest is lawful at that time, on such overdue
installments of interest, so that the Agency is currently in
compliance with all payment, deposit and transfer provisions of
this Indenture and has deposited an amount sufficient to pay
any expenses incurred by the Trustee in connection with such
default.
Immediately upon becoming aware of the occurrence of
an event of default, the Trustee shall give notice of such
event of default to the Bond Insurer and to the Agency by
telephone confirmed in writing. Such notice shall also state
whether the principal of the Bonds shall have been declared to
be or have immediately become due and payable. The Trustee
shall also give such notice to the owners of the Bonds by first
class mail, postage prepaid.
Notwithstanding anything contained herein to the
contrary, the Bond Insurer, acting alone, shall have the right,
to direct all remedies upon default, and the Bond Insurer shall
be entitled to notify the Trustee, and the Trustee shall accept
such notice, of the occurrence of an event of default. If the
Trustee acts upon the instructions of the Bond Insurer as
provided in this paragraph, the Trustee shall be held harmless
for all acts or omissions of acts based on such instructions,
except that the Trustee shall not be held harmless for its own
negligent acts.
B. Aoolication of Funds uoon Acceleration. All of
the Pledged Tax Revenues and all sums in the Funds provided for
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in this Indenture upon the date of the declaration of
acceleration as provided in this Section 801, and all sums
thereafter received by the Trustee hereunder, shall be applied
by the Trustee in the order following upon presentation and
surrender of the Bonds.
First, to the payment of the costs and expenses of the
Trustee and of the owners of the Bonds in declaring such
event of default, including reasonable compensation to its
or their agents, attorneys and counsel;
Second, in case the principal of the Bonds shall not
have become due and shall not then be due and payable, to
the payment of the interest in default in the order of the
maturity of the installments of such interest, with
interest on the overdue installments at the rate of twelve
percent (12\) per annum on the Bonds (to the extent that
such interest on overdue installments shall have been
collected), such payments to be made ratably to the persons
entitled thereto without discrimination or preference;
Third, in case the principal of the Bonds shall have
become and shall be then due and payable, to the payment of
the whole amount then owing and unpaid upon the Bonds for
principal and interest, with interest on the overdue
principal and installments of interest at the rate of
twelve percent (12\) per annum on the Bonds (to the extent
that such interest on overdue installments of interest
shall have been collected), and, in case such moneys shall
be insufficient to pay in full the whole amount so owing
and unpaid upon the Bonds, then to the payment of such
principal and interest without preference or priority of
principal over interest, or interest over principal, or of
any installment of interest over any other installment of
interest, ratably to the aggregate of such principal and
interest.
C. Certain Remedies of Bondowners. Subject to the
consent of the Bond Insurer, in each Event of Default the
Trustee (upon receipt of indemnification from Bondowners to so
act), shall have the right, for the equal benefit and
protection of all Bondowners similarly situated:
(1) By mandamus, suit, action or proceeding, to
compel the Agency and its members, officers, agents or
employees to perform each and every term, provision
and covenant contained in this Indenture and in the
Bonds, and to require the carrying out of any or all
covenants and agreements of the Agency and the
fulfillment of all duties imposed upon it by the Law;
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(2) By suit, action or proceeding in equity, to
enjoin any acts or things which are unlawful, or the
violation of any of the Bondowners' rights; or
(3) Upon the happening of any event of default
(as defined in this Section 801), by suit, action or
proceeding in any court of competent jurisdiction, to
require the Agency and its members and employees to
account as if it and they were the trustees of an
express trust.
D. Non-Waiver. Nothing in this Section or in any
other provisions of this Indenture, or in the Bonds, shall
affect or impair the obligation of the Agency,which is
absolute and unconditional, to pay the principal of and
interest on the Bonds to the respective owners of the Bonds at
the date of maturity, as herein provided, or affect or impair
the right, which is also absolute and unconditional, of the
owners to institute suit to enforce the payment by virtue of
the contract embodied in the Bonds.
No remedy conferred upon any Bondowner, the Bond
Insurer or the Trustee by this Indenture is intended to be
exclusive of any other remedy, but each remedy is cumulative
and in addition to every other remedy and may be exercised
without exhausting and without regard to any other remedy
conferred by the Law or any other law of the State of
California. No waiver of any default or breach of any duty or
contract by any Bondowner, the Bond Insurer or the Trustee
shall affect any subsequent default or breach of any duty or
contract or shall impair any rights or remedies on the
subsequent default or breach. No delay or omission of any
Bondowner, the Bond Insurer or the Trustee to exercise any
right or power accruing upon any default shall impair any such
right or power or shall be construed as a waiver of any default
or acquiescence therein. Every substantive right and every
remedy conferred upon the Bondowners, the Bond Insurer or the
Trustee may be enforced and exercised as often as may be deemed
expedient. In case any suit, action or proceeding to enforce
any right, or exercise any remedy, shall be brought and should
said suit, action or proceeding be abandoned, or be determined
adversely to the Bondowners, the Bond Insurer or the Trustee,
then, and in every such case, the Agency or the Trustee, the
Bond Insurer and the Bondowners shall be restored to their
former positions, rights and remedies as if the suit, action or
proceeding had not been brought or taken.
E. Actions bv the Trustee as Attornev-in-Fact. Any
suit, action or proceeding which any Bondowner shall have the
right to bring to enforce any right or remedy hereunder may be
brought by the Trustee for the equal benefit and protection of
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all owners of Bonds similarly situated and the Trustee is
hereby appointed (and the successive respective registered
owners of the Bonds issued hereunder, by taking and holding the
same, shall be conclusively deemed so to have appointed it) the
true and lawful attorney-in-fact of the respective registered
owners of the Bonds for the purpose of bringing any suit,
action or proceeding and to do and perform any and all acts and
things for and on behalf of the respective registered owners of
the Bonds as a class or classes, as may be necessary or
advisable in the opinion of the Trustee as attorney-in-fact;
provided, however, the Trustee shall not be required to act
hereunder pursuant to this subparagraph E unless and until it
shall receive indemnification satisfactory to it that its fees
and expenses (including its reasonable attorneys fees and
expenses) will be paid and reimbursed.
F. General. After the issuance and delivery of the
Bonds, this Indenture, and any supplemental indentures, shall
be irrepealable, but shall be subject to modification or
amendment to the extent and in the manner provided in this
Indenture, but to no greater extent and in no other manner.
,
ARTICLE IX
THE TRUSTEE AND THE PAYING AGENT
Section 901. Aooointment. Duties. Immunities and
Liabilities of Trustee.
(a) The Agency hereby appoints Bank of America
National Trust and Savings Association as Trustee and Paying
Agent and designates the principal corporate trust office of
the Trustee as the principal place of payment for the Bonds,
such appointment and designation to remain in effect until
notice of change is filed with the Trustee. The Trustee shall,
prior to an Event of Default, and after the curing of all
Events of Default which may have occurred, perform such duties
and only such duties as are .specifically set forth in this
Indenture. The Trustee shall, during the existence of any
Event of Default (which has not been cured), exercise such of
the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in
the conduct of his own affairs. All references to the Trustee
in this Article IX include references to the Trustee when it is
acting as Paying Agent and bond registrar.
(b) The Agency may replace the Trustee with another
authorized Trustee at any time unless an Event of Default shall
have occurred and then be continuing, and shall remove the
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Trustee if at any time requested to do so by an instrument or
concurrent instruments in writing signed by the Bondowners of
not less than a majority in aggregate principal amount of the
Bonds then Outstanding (or their attorneys duly authorized in
writing) or if at any time the Trustee shall cease to be
eligible in accordance with subsection (e) of this Section, or
shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee or its
property shall be appointed, or any pUblic officer shall take
control or charge of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation;
in each case by giving written notice of such removal to the
Trustee, and thereupon shall appoint a successor Trustee by an
instrument in writing.
(c) The Trustee may at any time resign by giving
written notice of such resignation to the Agency and the
Bondowners, by first class mail. Upon receiving such notice of
resignation, the Agency shall promptly appoint a successor
Trustee by an instrument in writing.
(d) Any removal or resignation of the Trustee and
appointment of a successor Trustee shall become effective upon
acceptance of appointment by the successor Trustee. Promptly
upon such acceptance, the Agency shall notify the Bondowners
and the Bond Insurer, in writing. If no successor Trustee
shall have been appointed and have accepted appointment within
45 days of giving notice of removal or notice of resignation as
aforesaid, the resigning Trustee or any Bondowner (on behalf of
himself and all other Bondowners) may petition any court of
competent jurisdiction at the expense of the Agency for the
appointment of a successor Trustee, and such court may
thereupon, after such notice (if any) as it may deem proper,
appoint such successor Trustee. Any successor Trustee
appointed under this Indenture shall signify its acceptance of
such appointment by executing and delivering to the Agency and
to its predecessor Trustee a written acceptance thereof, and
thereupon such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the moneys,
estates, properties, rights, powers, trusts, duties and
obligations of such predecessor Trustee, with like effect as if
originally named Trustee herein; but, nevertheless, at the
request of the Agency or the request of the successor Trustee,
such predecessor Trustee shall execute and deliver any and all
instruments of conveyance or further assurance and do such
other things as may reasonably be required for more fully and
certainly vesting in and confirming to such successor Trustee
all the right, title and interest of such predecessor Trustee
in and to any property held by it under this Indenture and
shall pay over, transfer, assign and deliver to the successor
Trustee any money or other property subject to the trusts and
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conditions herein set forth. Upon request of the successor
Trustee, the Agency shall execute and deliver any and all
instruments as may be reasonably required for more fully and
certainly vesting in and confirming to such successor Trustee
all such moneys, estates, properties, rights, powers, trusts,
duties and obligations.
(e) Any Trustee appointed under the provisions of
this Section in succession to the Trustee shall be a trust
company or commercial bank having trust powers and having a
corporate trust office located within or without the State,
having a combined capital and surplus of at least fifty million
dollars ($50,000,000), unless otherwise approved by the Bond
Insurer, and subject to supervision or examination by federal
or state authority. If such bank or trust company pUblishes a
report of condition at least annually, pursuant to law or to
the requirements of any supervising or examining authority
above referred to, then for the purpose of this Section the
combined capital and surplus of such bank or trust company
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this subsection (e), the
Trustee shall resign immediately in the manner and with the
effect specified in this Section.
(f) Any company into which the Trustee may be merged
or converted or with which it may be consolidated or any
company resulting from any merger, conversion or consolidation
to which it shall be a party or any company to which the
Trustee may sell or transfer all or substantially all of its
corporate trust business, provided such company shall be
eligible under subsection (e) of this Section, shall be the
successor to such Trustee without the execution or filing of
any paper or any further act, anything herein to the contrary
notwithstanding.
(g) The permissive right of the Trustee to do things
enumerated or contemplated by this Indenture shall not be
construed as a duty and the Trustee shall not be liable in the
performance of its obligations hereunder except for its
negligence or willful misconduct.
(h) The Trustee shall not be required to take notice
or be deemed to have notice of any event of default hereunder
except failure by the Agency to cause to be made any of the
payments to the Bondowners, unless the Trustee shall be
specifically notified in writing of such event of default by
the Agency or by the registered owners of at least twenty-five
percent (25\) in aggregate principal amount of all Bonds then
outstanding.
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(i) The Trustee shall not be required to give any
bonds or surety in respect of the execution of its trusts and
powers hereunder.
(j) Before taking any action under this Indenture at
the request of the Bondowners, the Trustee may require that a
satisfactory indemnity bond be furnished by the Bondowners for
the reimbursement of all expenses, including attorneys' fees,
to which it may be put and to protect it against all liability,
except liability which is adjudicated to have resulted from its
negligence or willful misconduct in connection with any action
so taken.
(k) All moneys received by the Trustee or any Paying
Agent shall, until used or applied or invested as herein
provided, be held in trust for the purposes for which they were
received and shall not be commingled with the general funds of
the Trustee or any Paying Agent, but need not be segregated
from other funds except to the extent required by law.
(1) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This subsection shall not be construed to
limit the effect of subsection (a) of this section;
(2) The Trustee shall not be liable hereunder
for any error of judgment made in good faith by an officer of
the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(3) The Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Agency, the Bond
Insurer or the Bondowners of a majority in aggregate principal
amount of the Bonds Outstanding relating to the time, method
and place of conducting any proceeding or any remedy available
to the Trustee, or the exercise of any trust or power conferred
upon the Trustee, under this Indenture; and
(4) No provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
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(5) The Trustee shall not be liable for any
action taken by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture.
(m) The Agency agrees to pay the reasonable costs and
expenses of the Trustee and those of its attorneys and agents
pursuant to this Indenture, as set forth in the fee schedule
delivered to the Agency from time to time.
(n) The Trustee may be removed at any time, at the
request of the Agency, for any breach of the Trust set forth
herein.
Section 902. Liabilitv of Trustee. The recitals,
statements and representations by the Agency contained in this
Indenture or in the Bonds shall be taken and construed as made
by and on the part of the Agency, and not by the Trustee, and
the Trustee does not assume, and shall not have, any
responsibility or obligations for the correctness of any
thereof or of the sufficiency or validity of this Indenture or
the Bonds. The Trustee shall, however, be responsible for its
representations contained in its certificate of authentication :
on the Bonds.
The Trustee undertakes to perform such duties, and
only such duties as are specifically set forth in this
Indenture and no implied duties or Obligations shall be read
into this Indenture against the Trustee.
In accepting the trust hereby created, the Trustee
acts solely as Trustee for the Bondowners and not in its
individual capacity and all persons, including without
limitation the Bondowners and the City or the Agency having any
claim against the Trustee arising from this Indenture shall
look only to the funds and accounts held by the Trustee
hereunder for payment except as otherwise provided herein.
Under no circumstances shall the Trustee be liable in its
individual capacity for the Obligations evidenced by the Bonds.
The Trustee shall not be accountable for the use or
application by the Agency or any other party of any funds which
the Trustee has released under this Indenture.
The Agency covenants to indemnify the Trustee and to
hold it harmless against any loss, liability, expenses or
advances, including, but not limited to, fees and expenses of
counsel and other experts, incurred or made without negligence
or willful misconduct on the part of the Trustee, (i) in the
exercise and performance of any of the powers and duties
hereunder by the Trustee, (ii) relating to or arising out of
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the Redevelopment Project, or the conditions, occupancy, use,
possession, conduct or management of, or work done in or about,
or from the planning, design, acquisition, installation or
construction of the Redevelopment Project or any part thereof,
or (iii) arising out of material fact or omission or alleged
omission to state a material fact necessary to make the
statements made, in light of the circumstances under which they
were made, not misleading in any official statement or other
offering circular utilized in connection with the sale of the
Bonds, including the costs and expenses of defending itself
against any claim of liability arising under this Indenture.
The Trustee's rights to indemnification hereunder and to
payment of its fees and expenses pursuant to Section 9.01(m)
hereof, shall survive its resignation or removal and the final
payment or defeasance of the Bonds.
The Trustee may become the owner or pledgee of Bonds
with the same rights it would have if it were not Trustee, and,
to the extent permitted by law, may act as depositary for and
permit any of its officers or directors to act as a member of,
or in any other capacity with respect to, any committee formed
to protect the rights of Bondowners, whether or not such
committee shall represent the Bondowners of a majority in
principal amount of the Bonds then Outstanding.
Section 903. Riaht of Trustee to Relv on Documents.
The Trustee shall be protected hereunder in acting upon any
notice, resolution, request, consent, order, certificate,
report, opinion, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the
proper party or parties, including, without limitation, all
disbursement requisitions and notices. The Trustee may consult
with Counsel, who may be Counsel of or to the Agency, with
regard to legal questions, and the opinion of such Counsel
shall be full and complete authorization and protection in
respect of any action taken or suffered by it hereunder in good
faith and in accordance therewith. The Trustee may employ
attorneys, agents or receivers in the performance of any of its
duties hereunder'and shall not be answerable for the misconduct
of such attorney, agent or receiver selected by it with
reasonable care.
The Trustee as bond registrar shall not be bound to
recognize any Person as a Bondowner unless and until such Bond
is submitted for inspection, if required, and his title thereto
satisfactorily established, if disputed.
Whenever in the administration of the trusts imposed
upon it by this Indenture the Trustee shall deem it necessary
or desirable that a matter be proved or established prior to
taking or suffering any action hereunder, such matter (unless
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other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate of the Agency, and such
certificate shall be full warrant to the Trustee for any action
taken or suffered in good faith under the provisions of this
Indenture in reliance upon such certificate, but in its
discretion the Trustee may, in lieu thereof, accept other
evidence of such matter or may require such additional evidence
as to it may seem reasonable.
Section 904. Intervention bv Trustee. In any
judicial proceedings to which the Agency is a party and which
in the opinion of the Trustee and its Counsel has a substantial
bearing on the interest of owners of the Bonds, the Trustee may
in its discretion intervene on behalf of Bondowners and, upon
being indemnified to its satisfaction therefor, shall do so if
requested in writing by the owners of a majority in aggregate
principal amount of all Bonds then Outstanding.
Section 905. Desianation and Successor of pavina
Aaent: Aareement with pavina Aaent. The Trustee shall be a
Paying Agent for the Bonds. Any Paying Agent appointed under
the provisions of this Section shall be a commercial bank or
trust company eligible to act as Trustee hereunder. The
Trustee may remove or replace any Paying Agent by written
instrument, which removal or replacement shall not require any
consents or approvals. The Trustee shall notify all Bondowners
by mail of and upon appointment, removal or replacement. of the
Paying Agent, such notice to include the name and address of
the then appointed Paying Agent, if any.
Any commercial bank or trust company with or into
which any Paying Agent may be merged or consolidated, or to
which the assets and business of such Paying Agent may be sold,
shall be deemed the successor of such Paying Agent for the
purposes of this Indenture. If the position of Paying Agent
shall become vacant for any reason, the Agency or Trustee may
appoint a bank or trust company located in the same city as
such Paying Agent to fill such vacancy. The Paying Agent shall
enjoy the same protective provisions in the performance of its
duties hereunder as are specified in Sections 901, 902, 903 and
904 hereof with respect to the Trustee insofar as such
provisions may be applicable.
Section 906. The Market Aaent. paineWebber
Incorporated is hereby appointed as the initial Market Agent
for the 1993 Indexed Inverse Floating/Fixed Rate Bonds and as
such shall perform all duties of the Market Agent under this
1993 Supplemental Trust Indenture. The Market Agent may be
removed at any time by the Agency, with the consent of the
Trustee and the Swap Provider; provided a successor Market
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- Agent has been appointed prior to the effective date of the
removal. The Market Agent, including any successor appointed
pursuant hereto, shall be a member of the National Association
of Securities Dealers, Inc. having capitalization of at least
$25,000,000 and be authorized by law to perform all the duties
imposed upon it, by this Indenture. The Market Agent may
resign upon 30 days written notice delivered to the Trustee;
provided a successor Market Agent has been appointed prior to
the effective date of the resignation. In the event of the
removal or resignation of the Market Agent, the successor
Market Agent shall be appointed by the Trustee with the consent
of the Agency and with the consent or at the direction of the
Swap Provider.
Section 907. The Co-Reaistrar. ,
is hereby appointed as the initial Co-Registrar for the 1993
Indexed Inverse Floating/Fixed Rate Bonds and the 1993 indexed
Floating/Fixed Rate Bonds and as such shall perform all duties
of the co-Registrar and comply with all directions to the
CO-Registrar under this Indenture. The Co-Registrar, including
any successor appointed pursuant hereto, shall be acceptable to
the Securities Depository and be authorized by law to perform
all the duties imposed upon it by this Indenture. The
Co-Registrar shall serve as such for so long as any 1993
Indexed inverse Floating/Fixed Rate Bond or 1993 Indexed
Floating/Fixed Rate Bond shall not have been converted to bear
interest at the Bond Rate hereunder, subject to earlier removal
or resignation as hereinafter provided.
The Co-Registrar may be removed at any time by the Agency
upon 30 days written notice delivered to the Co- Registrar, the
Trustee and the Securities Depository; provided that, if
requested by the Securities Depository or the Trustee, a
successor Co-Registrar has been appointed prior to the
effective date of the removal. The Co-Registrar may resign
upon 30 days written notice delivered to the Trustee, the
Securities Depository and the Agency; provided that, if
requested by the Securities Depository or the Trustee, a
successor Co-Registrar has been appointed prior to the
effective date of the resignation. In the event of the removal
or resignation of the CO-Registrar, the successor CO-Registrar
shall be appointed by the Agency with the consent of the
Trustee and the Securities Depository. At the request of the
Agency and with the consent of the Securities Depository and
the Trustee, the Agency may appoint the Trustee to act as
successor Co-Registrar hereunder.
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ARTICLE X
SUPPLEMENTAL INDENTURES
Section 1001. Amendments: Suoolemental Indentures.
This Indenture, and the rights and obligations of the Agency
and of the Bondowners, may be modified or amended at any time
by Supplemental Indenture adopted by the Agency: (a) without
notice to or the consent of Bondowners, if the modification or
amendment is for the purpose of issuing Parity Bonds, for the
purpose of adding covenants and agreements further to secure
Bond payment, to prescribe further limitations and restrictions
on Bond issuance, to surrender rights or privileges of the
Agency, to make modifications not affecting any Outstanding
series of Bonds or Parity Bonds, for the purpose of curing any
ambiguities, defects or inconsistent provisions in this
Indenture or to insert such provisions clarifying matters or
questions arising under this Indenture as are necessary and
desirable to accomplish the same, provided that the
modifications or amendments do not materially adversely affect
the rights of the Bondowners or the Trustee; or (b) for any
purpose with the consent of the Bondowneis of not less than
sixty percent (60\) in aggregate principal amount of the
Outstanding Bonds and any Parity Bonds, exclusive of Bonds or
Parity Bonds, if any, owned by the Agency or the City, and
obtained as hereinafter set forth; provided, however, that no
modification or amendment shall, without the express consent of
the Bondowner of the Bond or Parity Bond affected, reduce the
principal amount of any Bond or Parity Bond, reduce the
interest rate payable on it, extend its maturity or the times
for paying interest, change the monetary medium in which
principal and interest is payable, or create a mortgage, pledge
or lien upon the revenues superior to or.on a parity with the
pledge and lien created for the Bonds, and any Parity Bonds or
reduce the percentage of consent of Bondowners required for
amendment or modification and provided further, that no
amendments affecting the duties, obligations or rights of the
Trustee shall take affect without the consent of the Trustee,
and no amendment shall be made pursuant to subparagraph (b)
without the prior written consent of the Bond Insurer, which
consent shall not be.unreasonably withheld.
Any act done pursuant to a modification or amendment
permitted by this Section 1001 shall be binding upon all the
Bondowners, and shall not be deemed an infringement of any of
the provisions of this Indenture or of the Law, whatever the
character of the act may be, and may be done and performed as
fully and freely as if expressly permitted by the original
terms of this Indenture, and no Bondowner shall have any right
or interest to Object to the action, to question its propriety
or to enjoin or restrain the Agency or its officers from taking
any action pursuant to such modification or amendment.
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The Bond Insurer shall be provided with a full
transcript of all proceedings related to the execution of any
supplemental indenture.
A. Callina Bondowners' Meetina. If the Agency shall
desire to obtain the Bondowners' consent, it shall duly adopt a
resolution calling a meeting of the Bondowners for the purpose
of considering .the action for which consent is desired.
B. Notice of Meetina. Notice specifying the
purpose, place, date and hour of a Bondowners' meeting shall be
mailed, postage prepaid by the Agency, to the respective
Bondowners at their addresses appearing on the bond register as
maintained by the Trustee. The notice shall set forth the
nature of the proposed action for which consent is desired.
The place, date and hour of the meeting and the date or dates
of mailing the notice shall be determined by the Agency in its
discretion; provided that such notice shall be mailed at least
15 days prior to the date of the Bondowners' meeting.
The actual receipt by any Bondowner of notice of any
Bondowners' meeting shall not be a condition precedent to the
holding of the meeting, and failure to receive notice shall not ,
affect the validity of the proceedings at the meeting. A
certificate by the Secretary of the Agency approved by
resolution of the Agency, that the meeting has been called and
that notice has been given as provided herein, shall be
conclusive as against all parties and no Bondowner shall have
the right to show that he failed to receive actual notice of
the meeting.
C. Votina Oualifications. The Trustee shall prepare
and deliver to the chairman of the meeting a statement of the
names and addresses of the registered owners of Bonds. This
statement shall show maturities, serial numbers and principal
amounts so that voting qualifications can be determined. No
Bondowners shall be entitled to vote at the meeting unless
their names appear upon the statement. No Bondowner shall be
permitted to vote with respect to a larger aggregate principal
amount of Bonds than is set against such Bondowner's name on
the statement.
D. Aaencv-Owned Bonds. The Agency covenants that it
will present at the meeting a certificate, signed and verified
by one of its members and by the Finance Director, stating the
Bond numbers and principal amounts of all Bonds owned by, or
held for account of, the Agency or the City, directly or
indi rectly. No person shall be permitted at the meeting to
vote or consent with respect to any Bond appearing upon the
certificate, or any Bond which is established at or prior to
the meeting to be owned by the Agency or the City, directly or
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indirectly, and no such Bond (in this Indenture referred to as
"Agency-owned Bonds") shall be counted in determining whether a
quorum is present at the meeting.
E. Ouorum and Procedure. A representation of at
least sixty percent (60\) in aggregate principal amount of the
Bonds then Outstanding (exclusive of Agency-owned Bonds, if
any) shall be necessary to constitute a quorum at any meeting
of Bondowners, but less than a quorum may adjourn the meeting
from time to time, and the meeting may be held as adjourned
without further notice, whether such adjournment shall have
been held by a quorum or by less than a quorum. The Agency
shall, by an instrument in writing, appoint a temporary
chairman of the meeting, and the meeting shall be organized by
the election of a permanent chairman and secretary. At any
meeting each Bondowner shall be entitled to one vote for every
$5,000 principal amount of Bonds with respect to which he shall
be qualified to vote as set forth above, and the vote may be
given in person or by proxy duly appointed by an instrument in
writing presented at the meeting. The Agency and/or the
Trustee by their duly authorized representatives and counsel,
may attend any meeting of the Bondowners, but shall not be
required to do so. ,
F. Vote Reauired. At any Bondowners' meeting there
shall be submitted for the consideration and action of the
Bondowners a statement of the proposed action for which consent
is desired. If the action is consented to and approved by
Bondowners holding at least sixty percent (60\) in aggregate
principal amount of the Bonds then Outstanding (eXClusive of
Agency-owned Bonds), the chairman and secretary of the meeting
shall so certify in writing to the Agency. The certificate
shall constitute complete evidence of consent of the Bondowners
under the provisions of this Indenture. A certificate signed
and verified by the chairman and the secretary of any
Bondowners' meeting shall be conclusive evidence and the only
competent evidence of matters stated in the certificate
relating to proceedings taken at the meeting.
ARTICLE XI
DEFEASANCE
Section 1101. Defeasance. If the Agency shall payor
cause to be paid, or there shall be otherwise paid or
provisions for payment made to or for the Bondowners, the
principal, premium, if any, and interest due or to become due
thereon at the time and in the manner stipulated therein, and
if the Agency shall keep, perform and observe all and singular
the covenants and promises in the Bonds' and in this Indenture
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expressed as to be kept, performed and observed by it or on its
part, and shall payor cause to be paid to the Trustee all sums
of money due or to become due according to the provisions
hereof then this Indenture and the lien, rights and interest
created hereby shall cease, determine and become null and void
(except as to any surviving rights of registration, transfer or
exchange of Bonds herein provided for, except for the rights of
the Trustee to receive compensation and indemnification in
accordance with Article IX hereof and except for the Obligation
to calculate and pay amounts to the federal government pursuant
to Section 501 hereof), whereupon the Trustee shall cancel and
discharge this Indenture, and execute and deliver to the Agency
such instruments in writing as shall be requested by the Agency
and requisite to discharge this Indenture, and release, assign
and deliver unto the Agency any and all the estate, right,
title and interest in and to any and all right assigned or
pledged to the Trustee or otherwise subject to this Indenture,
except moneys or securities held by the Trustee for the payment
of the principal of, premium, if any, and interest on the Bonds.
The lien of this Indenture shall be discharged, if the
Agency shall pay and discharge the entire indebtedness on all
Bonds Outstanding in anyone or more of the following ways:
(a) By paying or causing to be paid the principal of
and interest on all Bonds Outstanding, together with all
amounts due the Trustee as and when the same become due and
payable;
(b) By depositing with the Trustee or separate escrow
agent, in a special trust fund created for such purpose, at
or before maturity, available moneys which, together with
the other moneys then on deposit in the Special Fund and
Accounts therein, is fully sufficient to pay all Bonds
Outstanding, including all principal and'interest together
with all amounts due the Trustee; or
(c) By depositing with the Trustee or separate escrow
agent, in a special trust created for such purpose, moneys
invested in non-callable Government Obligations in such
amount as an Independent Financial Consultant shall
determine will, together with the interest to accrue
thereon without reinvestment and moneys then on deposit in
the Special Fund and accounts therein, be fully sufficient
to pay and discharge any indebtedness on all Bonds
(including all principal and interest and redemption
premiums, if any, together with all amounts due the
Trustee) at or before maturity the cash-flow projections of
which shall be verified by an independent nationally
recognized certified public accountant; then, at the option
of the Agency, and notwithstanding that all Bonds shall not
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have been surrendered for payment, the pledge of the
Pledged Tax Revenues and other funds provided for in this
Indenture and all other obligations of the Agency under
this Indenture with respect to all Bonds Outstanding shall
cease and terminate, except only the obligation of the
Agency to payor cause to be paid to the owners of the
Bonds not so surrendered and paid all sums due thereon and
the rights of the Trustee to indemnification and payment of
fees under Article IX hereof. Notice of the exercise of
such option shall be filed with the Trustee.
Any funds held by the Trustee after discharge of the
lien of the Indenture including any funds which have not
been claimed by the person entitled thereto within three
(3) years of the date upon which such funds were scheduled
to be paid, or which are not required for said purpose,
shall be paid over to the Agency and thereafter Bondowners
shall look only to the Agency for payment.
ARTICLE XII
MISCELLANEOUS
Section 1201. Consents. Etc. of Bondowners. Any
consent, approval, direction or other instrument required by
this Indenture to be signed and executed by the Bondowners may
be in any number of concurrent writings of similar tenor and
may be signed or executed by such Bondowners in person or by
agent appointed in writing. Proof of the execution of any such
consent, approval, direction or other instrument or of the
writing appointing any such agent, if made in the following
manner, shall be sufficient for any of the purposes of this
Indenture, and shall be conclusive in favor of the Trustee with
regard to any action taken under such request or other
instrument, namely:
(a) The fact and date of the execution by any person
of any such instrument or writing may be proved by the
certificate of any officer in any jurisdiction who by law has
power to take acknowledgments within such jurisdiction that the
person signing such instrument or writing acknowledged before
him the execution thereof, or by affidavit of any witness to
such execution;
(b) The fact of ownership of Bonds and the amount or
amounts, numbers and other identification of such Bonds, and
the date of holding the same shall be proved by the
registration books maintained by the Trustee pursuant to
Section 209 hereof.
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Section 1202. Limitation of Riahts. With the
- exception of rights herein expressly conferred, nothing
expressed or mentioned in or to be implied from this Indenture
or the Bonds is intended or shall be construed to give to any
person other than the parties hereto, and the holders of the
Bonds any legal or equitable right, remedy or claim under or in
respect to this Indenture. This Indenture and all of the
covenants, conditions and provisions hereof are intended to be
and are for the sole and exclusive benefit of the parties
hereto, and the Bondowners as herein provided.
Section 1203. Severabi1itv. If any provision of this
Indenture shall be invalid, inoperative or unenforceable as
applied in any particular case in any jurisdiction or
jurisdictions or in all jurisdictions, or in all cases because
it conflicts with any other provision or provisions hereof or
any constitution or statute or rule of pUblic policy, or for
any other reason, such circumstances shall not have the effect
of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained
invalid, inoperative, or unenforceabl~ to any extent whatever.
The invalidity of anyone or more phrases, sentences,
clauses or Sections in this Indenture contained, shall not
affect the remaining portions of this Indenture, or any part
thereof.
Section 1204. CUSIP Numbers. CUSIP identification
numbers will be imprinted on the Bonds, but such numbers shall
not constitute a part of the contract evidenced by the Bonds
and no liability shall attach to the Agency or any of the
officers or agents because of or on account of said numbers.
Any error or omission with respect to the numbers shall not
constitute cause for refusal by the successful bidder to accept
delivery of and pay for the Bonds.
Section 1205. Successor is Deemed Included in All
References to Predecessor. Whenever in this Indenture or any
Supplemental Indenture either the Agency or the Trustee is
named or referred to, such reference shall be deemed to include
the successors or assigns thereof, and all the covenants and
agreements in this Indenture contained by or on behalf of the
Agency or the Trustee shall inure to the benefit of the
respective successors and assigns thereof whether so expressed
or not.
Section 1206. CounterDarts. This Indenture may be
simultaneously executed in several counterparts, each of which
shall be an original and all of which shall constitute but one
and the same instrument.
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Section 1207. Aoolicable Law. This Indenture shall
be governed by and construed in accordance with the laws of the
State of California.
Section 1208. Caotions. The captions or headings in
this Indenture are for convenience only and in no way define,
limi t , or describe the scope or intent of any provisions or
sections of this Indenture.
Section 1209. Comoliance Certificates and Ooinions.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, excluding
the certificate of destruction pursuant to Section 212 hereof,
shall include:
(a) a statement that the Person or Persons making
such certificate or opinion have read such covenant or
condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of the signers,
they have made or caused to be made such examination or
investigation as is necessary to enable them to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion
of the signers, such condition or covenant has been complied
with.
Section 1210. Conflict with Trust Indenture Act of
.ll.3..2. . If this Indenture is qualified under the Trust Indenture
Act of 1939, as amended (the "39 Act") and any provision of the
39 Act limits, qualifies or conflicts with another provision
hereof which is required to be included in this Indenture by
any of the provisions of the 39 Act, such required provision
shall control.
Section 1211. Successors. Whenever in this Indenture
either the Agency or the Trustee is named or referred to, such
reference shall be deemed to include the successors or assigns
thereof, and all the covenants and agreements in this Indenture
contained by or on behalf of the Agency or the Trustee shall
bind and inure to the benefit of the respective successors and
assigns thereof whether so expressed or not.
Section 1212. Waiver of Personal Liabilitv. No
member, officer, agent or employee of the Agency shall be
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individually or personally liable for the payment of the
principal of or interest on the Bonds; but nothing herein
contained shall relieve any such member, officer, agent or
employee from the performance of any official duty provided by
law.
Section 1213. Notices. All written notices to be
given under this Indenture shall be given by mail or personal
delivery to the party entitled thereto at its address set forth
below, or at such other address as the party may provide to the
other parties in writing from time to time. Notice shall be
effective upon receipt or, in the case of personal delivery,
upon delivery to the address set forth below:
If to the Agency: 'Poway Redevelopment Agency
13325 Civic Center Drive
Poway, California 92064
Attn: Executive Director
If to the Trustee: Bank of America National Trust
and Savings Association
Attn: Corporate Trust Division
Ref. No.
If to the Bond Insurer:
Section 1214. Parties Interested Herein. Nothing in
this Indenture expressed or implied is intended or shall be
construed to confer upon, or to give to, any person or entity,
other than the Agency, the Trustee, the Bond Insurer, the
Paying Agent, if any, and the registered owners of the Bonds,
any right, remedy or claim under or by reason of this
Indenture, or any covenant, condition or stipulation hereof,
and all covenants, stipulations, promises and agreements in
this Indenture, contained by and on behalf of the Agency shall
be for the sole and exclusive benefit of the Agency, the
Trustee, the Bond Insurer, the Paying Agent, if any, and the
registered owners of the Bonds.
Section 1215. Riahts of Bond Insurer. At such times
as the Bond Insurer is in default under the Bond Insurance
POlicy or is not obligated under the Bond Insurance Policy, the
provisions under this Indenture relating to the Bond Insurer
shall cease to be in effect.
04/22/93
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,
--------------------- ---..------ - ---------------------- - -- --------..----------------- -- -----------------
IN WITNESS WHEREOF, the poway Redevelopment Agency,
California has caused these presents to be signed in its name and
on its behalf by its Executive Director and to evidence its
acceptance of the trusts hereby created the Trustee has caused
these presents to be signed in its name and behalf by one of its
duly authorized signatories all as of the day of
, 1993.
POWAY REDEVELOPMENT AGENCY
By:
Executive Director
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Trustee
By:
Authorized Signatory
04/22/93
5158Q/2345/51 - 85 -
,
EXHIBIT A
(FORM OF BOND)
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
POWAY REDEVELOPMENT AGENCY
PAGUAY REDEVELOPMENT PROJECT
SUBORDINATED TAX ALLOCATION REFUNDING BONDS
SERIES 1993
Interest Rate Maturitv Date Issue Date CUSIP
, 1993
REGISTERED OWNER:
PRINCIPAL SUM:
The POWAY REDEVELOPMENT AGENCY (the "Agency"), a
public body, corporate and politic, duly organized and existing
under the laws of the State of California (the "State"), for
value received, hereby promises to pay (but solely out of the
funds hereinafter mentioned) to the registered owner specified
above or registered assigns (herein sometimes referred to as
"registered owner") the principal sum stated above on the date
stated above and to pay the registered owner on each June 15
and December 15, commencing on December 15, 1993 (each such
date an "Interest Payment Date") by check or draft mailed to
him or her by first class mail, postage prepaid as his or her
name and address appear on the register kept by the Trustee as
of the close of business on the first (1st) day of the calendar
month in which any Interest Payment Date occurs, whether or not
such day is a business day (the "record date"), interest on the
principal sum from the Interest Payment Date next preceding the
date of authentication hereof (unless (i) the date of
authentication hereof is an Interest Payment Date, in which
event from that Interest Payment Date, (ii) the date of
authentication hereof is after the record date and prior to the
next succeeding Interest Payment Date, in which event from said
Interest Payment Date, or (iii) the date of authentication
hereof is on or before , (in which event from
, 1993), until the principal hereof shall have been
paid or provided for in accordance with the Indenture
hereinafter referred to, at the rate per annum set forth above;
provided however, if, at the time of authentication of any
Bond, interest is in default on outstanding Bonds, such Bond
shall bear interest from the Interest Payment Date to which
interest has previously been paid or made available for
payment. Both principal and interest on this Bond are payable
04/22/93
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,
in lawful money of the United States of America, and (except
for interest which is payable by check or draft as stated
above) are payable upon presentation and surrender of this Bond
at the corporate trust office of Bank of America National Trust
and Savings Association, Trustee, in Los Angeles, California.
This Bond and the interest hereon are not a debt of
the City of poway (the "City"), the State of California or any
of its pOlitical sUbdivisions, and neither the City, the State
nor any of its pOlitical subdivisions is liable for the payment
of any principal or interest on this Bond. In no event shall
this Bond or the interest hereon be payable out of any funds or
properties other than the funds of the Agency as set forth in
the Indenture hereinafter mentioned. This Bond does not
constitute an indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction.
Neither the members of the Agency nor any persons executing
this Bond are liable personally on this Bond by reason of its
issuance.
This Bond is one of a duly authorized issue of Bonds
of the Agency designated "poway Redevelopment Agency, paguay
Redevelopment Project, Subordinated Tax Allocation Refunding :
Bonds, Series 1993" (herein called the "Bonds"), in an
aggregate principal amount of Dollars
( ), all of like tenor (except for bond numbers and
amounts) and all of which have been issued pursuant to and in
full conformity with the Constitution and laws of the State of
California and particularly the Community Redevelopment Law
(Part 1 of Division 24 of the Health and Safety Code of the
State of California) and Article 11 of Chapter 3 of Part 1 of
Division 2 of Title 5 of the Government Code of the State of
California for the purpose of refunding the outstanding
$35,000,000 poway Redevelopment Agency, Paguay Redevelopment
Project, Subordinated Tax Allocation Bonds, Series 1989A, dated
August 1, 1989, and the $9,330,000 Poway Redevelopment Agency,
Paguay Redevelopment Project, Subordinated Tax Allocation
Bonds, Issue of 1991, dated October 1, 1991 (collectively, the
"Prior Bonds"). The Bonds are authorized by and issued
pursuant to an Indenture of Trust dated as of , 1993
between the Agency and the Trustee (the "Indenture"). Copies
of the Indenture are on file with the Secretary of the Agency
and the Trustee. All of the Bonds are secured in accordance
with the terms of the Indenture, reference to which is hereby
made for a specific description of the security provided for
the Bonds, for the nature, extent and manner of enforcement of
such security, for the covenants and agreements made for the
benefit of the registered owners, and for a statement of the
rights of the registered owners. By the acceptance of this
Bond the registered owner hereof consents to all of the terms,
conditions and provisions of the Indenture. In the manner
04/22/93
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,
.
provided in the Indenture, the Indenture and the rights and
obligations of the Agency and of the registered owners may
(with certain exceptions as stated in the Indenture) be
modified or amended with the consent of the registered owners
of not less than sixty percent (60%) in an aggregate principal
amount of outstanding Bonds, exclusive of Agency-owned Bonds,
unless the modification or amendment is for the purpose of
curing ambiguities, defects, or accomplishing the other
purposes set forth in the Indenture in which case the consent
of the registered owners is not required.
The principal of and interest on this Bond are secured
by an irrevocable pledge of, and are payable solely out of, the
Pledged Tax Revenues (as that term is defined in the Indenture)
and certain other available moneys, all as more particularly
set forth in the Indenture. The Indenture is adopted under and
this Bond is issued under and is to be construed in accordance
with the laws of the State of California.
Bonds maturing on or prior to December 15, 20__ are
not sUbject to redemption prior to maturity. Bonds maturing on
December 15, 20__, are subject to redemption prior to maturity
at the option of the Agency in whole or in part from the :
proceeds of refunding bonds or any other source of available
funds on December 15, 20__, or on any Interest Payment Date
thereafter. If less than all of the Bonds outstanding are to
be redeemed at anyone time, the Bonds to be redeemed shall be
redeemed on a pro rata basis, and by lot within a maturity.
Bonds called for redemption shall be redeemed at a redemption
price (expressed as a percentage of the principal amount of
Bonds to be redeemed) plus accrued interest to the redemption
date as shown in the following table:
Redemotion Date Redemotion Price
December 15, ____ and June 15, ____ 102\
December 15, ____ and June 15, ____ 101\
December 15, ____ and thereafter 100\
Additionally, the Agency may buy Bonds on the open
market at a price, including brokerage fees, not to exceed par
plus the applicable premium.
The Bonds maturing December 15, 20__ (the "20__ Term
Bonds") are subject to mandatory redemption in part from
sinking account installments on December 15, 20__ and on each
December 15 thereafter to and including December 15, 20__, at a
redemption price equal to 100 percent of the principal amount
thereof plus accrued interest, if any, to the redemption date
without premium. The following sinking account installments
are calculated to be sufficient to redeem the principal amount
of the 20__ Term Bonds:
04/22/93
5158Q/5164Q/2345/51 A-3
,
Redemption Principal
Dates Amount
$
*
*Maturity
The Bonds maturing December 15, 20__ (the "20__ Term
Bonds") are sUbject to mandatory redemption in part from
sinking account installments on December 15, 2005 and on each
December 15 and December 15 thereafter to and including
December 15, 20 --, at a redemption price equal to 100 percent
of the principal amount thereof plus accrued interest, if any,
to the redemption date without premium. The following sinking
account installments are calculated to be sufficient to redeem
the principal amount of the 20__ Term Bonds:
Redemption Principal
Dates Amount
$
*
*Maturity
04/22/93
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,
- -
For the purpose of selecting Bonds by lot, Bonds in
excess of $5,000 will be assigned a separate number for each
$5,000 of principal they represent.
As provided in the Indenture, notice of redemption
prior to maturity shall be given by first class mail, postage
prepaid, not less than thirty (30) nor more than sixty (60)
days prior to the redemption date to the registered owner
hereof at the address shown on the registration books of the
Trustee. Neither the failure to receive such notice nor any
defect in any notice mailed shall affect the sufficiency of the
proceedings for the redemption of any Bonds. If notice of
redemption has been given as provided in the Indenture, and
moneys for payment of the principal of, premium, if any, and
interest payable upon redemption of the Bonds has been set
aside with the Trustee, the Bonds, or parts thereof, called for
redemption shall, on the redemption date, become due and
payable at the redemption price specified in the notice, and
interest on the Bonds, or parts thereof, as the case may be,
called for redemption shall cease to accrue and the registered
owners of such Bonds shall have no rights except to receive
payment of the redemption price upon surrender of the Bonds.
:
This Bond is issued in fully registered form and is
negotiable upon proper transfer of registration. This Bond may
be exchanged for an aggregate principal amount of Bonds of
other authorized denominations. This Bond is transferable by
the registered owner, in person or by his or her attorney duly
authorized in writing, at the corporate trust office of the
Trustee in Los Angeles, California, upon surrender and
cancellation of this Bond but only in the manner, subject to
the limitations and upon payment of the charges provided in the
Indenture. Upon transfer, a new Bond of any authorized
denomination or denominations for the same aggregate principal
amount of the same issue will be issued to the transferee in
exchange therefor. No transfer or exchange shall be required
during the period established by the Trustee for selection of
Bonds for redemption or after a Bond has been selected for
redemption.
The Agency and the Trustee may treat the registered
owner of this Bond (as evidenced by the Trustee's registration
books) as its absolute owner for all purposes, and the Agency
and the Trustee shall not be affected by any notice to the
contrary.
This Bond shall not be entitled to any benefit under
the Indenture, or become valid or obligatory for any purpose,
until the certificate of authentication hereon endorsed shall
have been signed by the Trustee.
04/22/93
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,
It is hereby recited, certified and declared that any
and all acts, conditions and things required to exist, to
happen and to be performed precedent to and in the issuance of
this Bond exist, have happened and have been performed in due
time, form and manner as required by the Constitution and laws
of the State of California.
IN WITNESS WHEREOF, the poway Redevelopment Agency has
caused this Bond to be signed on its behalf by its Chairman and
Secretary by facsimile signature, and the seal of the Agency to
be reproduced hereon, all as of the day of ,
1993.
Chairman of the poway Redevelopment
Agency
(SEAL)
Secretary of the Poway
Redevelopment Agency
04/22/93
5158Q/5164Q/2345/51 A-6
,
-
LEGAL OPINION
I hereby certify that the following is a full, true and
correct copy of the signed legal opinion of Stradling, Yocca,
Carlson & Rauth, a Professional Corporation, Newport Beach,
California, on file in the office of the poway Redevelopment
Agency, which opinion is dated the date the bonds referred to
therein were delivered and paid for.
EXECUTIVE DIRECTOR
04/22/93
5158Q/5164Q/2345/51 A-7
,
- ,-
(FORM OF CERTIFICATE OF AUTHENTICATION OF BOND)
This is one of the Bonds described in the
within-mentioned Indenture.
Dated: BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Trustee
By
Authorized Signatory
(FORM OF ASSIGNMENT OF BOND)
For value received the undersigned hereby sells,
assigns and transfers unto
whose social security or other tax
identifying number is the within-mentioned ,Bond
and hereby irrevocably constitutes and appoints
, attorney, to
transfer the same on the Bond register of the Trustee with full
power of substitution in the premises.
Dated:
NOTE: The signature to this
assignment must correspond
with the name as written on
the face of the within Bond
in every particular, without
alterations or enlargement or
any change whatsoever.
Signature Guaranteed By:
Note: Signature(s) must be guaranteed by a member firm of
the New York Stock Exchange or a commercial bank or
trust company.
04/22/93
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,
STATEMENT OF INSURANCE
, doing business in California as
Insurance Company (" ") has issued a policy
containing the following provisions with respect to the Poway
Redevelopment Agency, Paguay Redevelopment Project Subordinated
Tax Allocation Refunding Bonds, Series 1993 (the "Bonds"), such
policy being on file at the principal office of the Trustee, as
paying agent (the "Paying Agent").'
hereby unconditionally and irrevocably
agrees to pay for disbursement to the Bondholders that portion
of the principal of and interest on the Bonds which is then due
for payment and whiCh the issuer of the Bonds (the "Issuer")
shall have failed to provide. Due for payment means, with
respect to the principal, the stated maturity date thereof, or
the date on which the same shall have been duly called for
mandatory sinking fund redemption, but not any earlier date on
which the payment of principal of the Bonds is due by reason of
acceleration, and with respect to interest, the stated date for
payment of such interest. ,
Upon receipt of telephonic or telegraphic notice,
subsequently confirmed in writing, or written notice by
registered or certified mail, from a Bondholder or the Paying
Agent to that the required payment of
principal or interest has not been made by the Issuer to the
Paying Agent, on the due date of such
payment or within one business day after receipt of notice of
such nonpayment, whichever is later, will make a deposit of
funds, in an account with , or its successor as its
agent (the "Fiscal Agent"), sufficient to make the portion of
such payment not paid by the Issuer. Upon presentation to the
Fiscal Agent of evidence satisfactory to it of the Bondholder's
right to receive such payment and any appropriate instruments
of assignment required to vest all of such Bondholder's right
to such payment in , the Fiscal Agent will
disburse such amount to the Bondholder.
As used herein the term "Bondholder" means the person other
than the Issuer who at the time of nonpayment of a Bond is
entitled under the terms of such Bond to payment thereof.
The pOlicy is non-cancellable for any reason.
, doing business in California as
Insurance Company
04/22/93
5158Q/51640/2345/51 A-9
,
EXHIBIT A
(continued)
FORM OF 1993 INDEXED INVERSE FLOATING/FIXED RATE BOND
NUMBER AMOUNT
$
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
POWAY REDEVELOPMENT AGENCY,
PAGUAY REDEVELOPMENT PROJECT,
SUBORDINATED TAX ALLOCATION REFUNDING BONDS,
SERIES 1993
INTEREST RATE MATURITY DATE EFFECTIVE DATE CUSIP
Equal to the Indexed December 15, 20 - , 1993
inverse Rate (herein
described) until converted;
equal to the Bond Rate of
\ per annum after
conversion. See interest
provisions herein.
REGISTERED OWNER
PRINCIPAL AMOUNT DOLLARS
The POWAY REDEVELOPMENT AGENCY (the "Agency"), a public
body, corporate and politic, duly organized and existing under
the laws of the State of California (the "State"), for value
received, promises to pay to the Registered Owner named above,
or registered assigns, but solely from the Pledged Revenues
hereinafter mentioned, on the Maturity Date specified above,
unless this Bond shall have been previously called for
redemption in whole or in part and payment of the redemption
price shall have been duly made or provided for, the Principal
Amount shown above (or such portion thereof as shall be
represented by this Bond, as recorded on the conversion
schedule referred to herein) and to pay (but only out of said
Pledged Revenues) interest thereon at the annual rate specified
above from the most recent Interest Payment Date (as
hereinafter defined) the date of authentication, unless the
date of authentication is either: (i) an Interest Payment Date
(as hereinafter defined), in which case this Bond shall bear
04/22/93
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,
-..---
interest from such date; or (ii) prior to the first Interest
Payment Date, in which case this Bond shall bear interest from
the Effective Date; or (iii) after a Record Date with respect
to an Interest Payment Date but prior to such Interest Payment
Date, in which case this Bond shall bear interest from such
Interest Payment Date. The principal or redemption price of
and interest on this Bond may be paid in any coin or currency
of the United States of America which, at the time of payment,
is legal tender for the payment of public or private debts.
The principal or redemption price of this Bond is payable
upon presentation and surrender hereof at the principal
corporate trust office of Bank of America National Trust and
Savings Association, Los Angeles, California, as trustee under
the Indenture referred to herein (together with any successor
trustee, the "Trustee"). Interest shall be paid by check or
draft mailed to the Registered owner hereof, as shown on the
registration books kept by the Trustee as of the close of
business on the applicable Record Date (each as hereinafter
defined) or, at the election of any such Registered Owner of
Bonds in an aggregate principal amount of $1,000,000 or more,
by wire transfer to a designated account; provided that any
such election shall be received by the Trustee in writing not
less than five days prior to the record date for the payment of
interest to which it relates.
..-- Interest shall be payable on December 15, 1993 and each
December 15 and June 15 thereafter (each, an "Interest Payment
Date"). The record date for any Regular Interest Payment Date
(each, a "Regular Record Date") shall be the first (1st) day of
the calendar month in which any Regular Interest Payment Date
occurs, whether or not a Business Day.
This Bond is one of the Agency's Subordinated Tax
Allocation Refunding Bonds, Series 1993 (the "Bonds"), issued
in the aggregate principal amount of $ , consisting of
$ of "1993 Fixed Rate Bonds," $ of "1993
Indexed Inverse Floating/Fixed Rate Bonds" and $ of
"1993 Indexed Floating/Fixed Rate Bonds," all issued pursuant
to a trust indenture dated as of , 1993 (the
"Indenture") between the Agency and the Trustee. Reference is
made to the Indenture for a statement of the purposes for which
the Bonds are issued, and for provisions concerning, inter
.A.lll : the application of the proceeds of the Bonds; the
Pledged Revenues assigned and pledged for the security of the
Bonds and other bonds which have been or may be issued under
the Indenture; the issuance of additional bonds under the
Indenture, the incurrence of other indebtedness, and the liens
and security interests which may be granted to secure such
additional bonds and other indebtedness on a superior, parity
or subordinate basis; the rights and obligations of the Agency
04/22/93
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,
---------------
and the Trustee; provisions relating to the rights of the
Registered Owners of the Bonds; and amendments to the
Indenture. Executed counterparts of the Indenture are on file
at the principal corporate trust office of the Trustee.
Effective simultaneously with the issuance of the Bonds,
the Agency and , , Branch have entered
into an interest rate swap agreement in respect of the 1993
Indexed Inverse Floating/Fixed Rate Bonds expiring on
, 20__ and an interest rate cap agreement in respect
of the 1993 Indexed Floating/Fixed Rate Bonds expiring on
, (subject in each case to earlier termination
as set forth therein). Each of the foregoing agreements (or
any substitute interest rate swap or cap agreement entered into
pursuant to the Indenture) is herein referred to as a "Swap
Agreement." , , (or any successor
under the initial swap Agreements or provider of a substitute
Swap Agreement) is herein referred to as the "Swap Provider."
Copies of the initial Swap Agreements are on file at the
principal corporate trust office of the Trustee.
Prior to the earlier of December 15, 20__ (the "Scheduled .
Conversion Date") or the effective date of any optional or -
extraordinary conversion herein described, the 1993 Indexed
Inverse Floating/Fixed Rate Bonds shall bear interest at the
Indexed Inverse Rate (hereinafter defined), calculated on the
basis of a 365 or 366 day year (as applicable) and the actual
number of days in the applicable interest period. Thereafter,
such Bonds shall bear interest at the Bond Rate of \ per
annum, calculated on the basis of a 360 day year consisting of
twelve 30 day months. Subject to the further provisions of the
Indenture, the Indexed Inverse Rate for each applicable period
shall mean the sum of the Bond Rate of \ per annum plus a
Base Rate of \ per annum, less the applicable Average
Index Rate (as defined in the Indenture). The Average Index
Rate represents an average interest rate for the applicable
period based on a specified index of tax-exempt variable rate
issues (initially, the PSA Municipal Swap Index).
Pursuant to the Indenture, the 1993 Indexed Inverse
Floating/Fixed Rate Bonds are subject to optional conversion
(in principal amounts of $1,000,000 and integral multiples of
$100,000 in excess thereof) to the Bond Rate prior to the
Scheduled Conversion Date, in which event certain sums
representing an Optional Conversion Adjustment (as defined in
the Indenture) may be payable by or to the Swap Provider in
connection with the reversal or unwinding of the Swap Agreement
with respect to a notional amount corresponding to the
principal amount of the 1993 Indexed Inverse Floating/Fixed
Rate Bonds, to be converted. In addition, if the applicable
Swap Agreement is terminated upon the occurrence of certain
04/22/93
5158Q/51640/2345/51 A-12
,
-~---
- -
specified events of default on the part of the Swap Provider or
other termination events with respect to the Agency or the Swap
Provider and if no substitute Swap Agreement is provided, the
1993 Indexed Inverse Floating/Fixed Rate Bonds shall be sUbject
to extraordinary conversion (as a whole, but not in part) to
the Bond Rate. Unless it occurs on an Interest Payment Date,
any such optional or extraordinary conversion shall be
effective retroactive to the last preceding Interest Payment
Date to which interest at the Indexed Inverse Rate was paid or
to the Effective Date if no such interest has been paid.
[THIS BOND REPRESENTS THE PRINCIPAL AMOUNT OF 1993 INDEXED
INVERSE FLOATING/FIXED RATE BONDS WHICH HAVE NOT BEEN CONVERTED
TO THE BOND RATE AND WHICH CONTINUE TO BEAR INTEREST AT THE
INDEXED INVERSE RATE. SUCH PRINCIPAL AMOUNT WHICH REMAINS
UNCONVERTED IS AS RECORDED BY THE TRUSTEE OR CO-REGISTRAR ON
THE CONVERSION SCHEDULE ATTACHED HERETO AND MADE A PART HEREOF.]
[THIS BOND REPRESENTS THE PRINCIPAL AMOUNT OF 1993 INDEXED
INVERSE FLOATING/FIXED RATE BONDS WHICH HAVE BEEN CONVERTED TO,
AND BEAR INTEREST AT, THE BOND RATE AND AS TO WHICH (IN THE
CASE OF AN OPTIONAL CONVERSION) ALL SUMS OWED TO THE APPLICABLE
SWAP PROVIDER IN RESPECT OF SUCH CONVERSION HAVE BEEN PAID IN
FULL. SUCH PRINCIPAL AMOUNT WHICH HAS BEEN CONVERTED AND AS TO
WHICH ALL SUMS OWED TO THE SWAP PROVIDER HAVE BEEN PAID IS AS
RECORDED BY THE TRUSTEE OR CO-REGISTRAR ON THE CONVERSION
SCHEDULE ATTACHED HERETO AND MADE A PART HEREOF.]
[THIS BOND IS A 1993 INDEXED INVERSE FLOATING/FIXED RATE BOND
WHICH HAS BEEN CONVERTED TO, AND BEARS INTEREST AT, THE BOND
RATE, BUT AS TO WHICH (IN THE CASE OF AN OPTIONAL CONVERSION)
ALL SUMS OWED TO THE APPLICABLE SWAP PROVIDER IN RESPECT OF
SUCH CONVERSION HAVE NOT BEEN PAID IN FULL. NOTWITHSTANDING
ANY OTHER PROVISION HEREOF OR OF THE INDENTURE, UNTIL SUCH TIME
AS ALL SUCH SUMS OWED TO THE SWAP PROVIDER (INCLUDING INTEREST
ON UNPAID AMOUNTS) HAVE BEEN PAID IN FULL, PAYMENTS OF
PRINCIPAL, REDEMPTION PRICE AND INTEREST OTHERWISE DUE
HEREUNDER SHALL BE WITHHELD AND PAID OVER TO THE SWAP PROVIDER,
AND THIS BOND SHALL BE NON-TRANSFERABLE ON THE BOND REGISTER
REFERRED TO HEREIN.]
THIS BOND IS A LIMITED OBLIGATION OF THE AGENCY AND IS
PAYABLE SOLELY FROM THE SOURCES REFERRED TO HEREIN. NEITHER
THE CREDIT NOR THE TAXING POWER OF THE COUNTY OF SAN DIEGO OR
THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF
IS PLEDGED FOR THE PAYMENT OF THIS BOND, NOR SHALL THIS BOND BE
OR BE DEEMED AN OBLIGATION OF THE COUNTY OF SAN DIEGO OR OF THE
STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF.
THE AGENCY HAS NO TAXING POWER.
04/22/93
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,
The Bonds are being issued by means of a book-entry system
with no physical distribution of bond certificates to be made
except as provided in the Indenture. One bond certificate with
respect to each date on which the Bonds are stated to mature or
with respect to each form of Bonds, registered in the name of
the Securities Depository (as defined in the Indenture) or its
nominee, is being issued and required to be deposited with the
Securities Depository and immobilized in its custody. The
book-entry system will evidence, positions held in the Bonds by
the Securities Depository's participants, beneficial ownership
of the Bonds in authorized denominations being evidenced in the
records of such participants. Transfers of ownership shall be
effected on the records of the Securities Depository and its
participants pursuant to rules and procedures established by
the Securities Depository and its participants. The Agency and
the Trustee will recognize the Securities Depository or its
nominee, while the registered owner of this Bond, as the owner
of this Bond for all purposes, including (i) payments of
principal of, and redemption premium, if any, and interest on,
this Bond, (ii) notices and (iii) voting. Transfer of
principal, interest and any redemption premium payments to
participants of the Securities Depository, and transfer of
principal, interest and any redemption premium payments to
beneficial owners of the Bonds by participants of the
Securities Depository will be the responsibility of such
participants and other nominees of such beneficial owners. The
Agency, the Trustee and the will not be responsible
or liable for such transfers of payments or for maintaining,
supervising or reviewing the records maintained by the
Securities Depository, its nominee, its participants or persons
acting through such participants. While the Securities
Depository or its nominee is the owner of this Bond,
notwithstanding the provision hereinabove contained, payments
of principal of, redemption premium, if any, and interest on
this Bond shall be made in accordance with existing
arrangements between the Trustee and the Securities
Depository. EXCEPT AS OTHERWISE PROVIDED IN THE INDENTURE,
THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART,
ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A
SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR
SECURITIES DEPOSITORY.
REDEMPTION PROVISIONS
Mandatorv Redemotion. The Bonds maturing on and after
December 15, 20__ are SUbject to mandatory sinking fund
redemption in direct order of maturity on December 15 of the
years (commencing in 20__) and in the amounts set forth with
respect to each such maturity in the Indenture, at a redemption
04/22/93
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,
.-
price equal to the principal amount thereof plus accrued
interest to the redemption date as set forth in the Indenture.
Any redemption of this Bond under the preceding paragraphs
shall be made as provided in the Indenture upon not less than
thirty nor more than sixty days notice by mailing a copy of the
redemption notice by first class mail, postage prepaid to the
registered holder hereof at the address shown on the bond
register of the Agency maintained by the Trustee unless such
notice is waived by the holders of the Bonds to be redeemed;
provided, however, that failure to mail any notice or any
defect therein or in the mailing thereof, as it affects any
particular Bond, shall not affect the validity of the
proceedings for redemption of any other Bonds.
If less than all Bonds are to be called for optional
redemption, the Trustee shall select Bonds for such redemption
in any order of maturity designated by the Agency and by lot
within a maturity. If less than all Bonds of a maturity are to
be called for mandatory redemption, the Trustee shall select
Bonds of such maturity for redemption by lot.
In the event that less than the full principal amount
hereof shall have been called for redemption, the registered
owner hereof shall surrender this Bond in exchange for one or
more new Bonds in an aggregate principal amount equal to the
unredeemed portion of the principal amount hereof.
If the Agency deposits with the Trustee funds sufficient to
pay the principal or redemption price of any Bonds becoming due
at maturity, by call for redemption or otherwise, together with
interest accrued to the due date, interest on such Bonds will
cease to accrue on the due date, and thereafter the holders
will be restricted to the funds so deposited as provided in the
Indenture.
OPTION TO PURCHASE CALLABLE BONDS
The Bonds maturing on or after December 15, 20_ (the
"Callable Bonds") are subject to call for mandatory tender for
purchase at any time on or after December 15, 20_, in whole or
in part, at the fOllowing Purchase Prices, expressed as
percentages of the principal amount of each Callable Bond, or
portion thereof, so purchased, plus accrued interest thereon to
the Purchase Date:
04/22/93
5158Q/5164Q/2345/51 A-15
,
----,,--, -----~-
Period During Which Purchased Purchase
of both dates inclusive Price
December 15, 20__ through June 15, 20 -- 102\
December 15, 20__ through June 15, 20__ 101
December 15, 20__ and thereafter 100
The option to call the Callable Bonds for mandatory tender
for purchase (the "Option Rights") may be exercised (i) by the
Agency with respect to any or all of the Callable Bonds (in
integral multiples of $5,000), from any maturities of Callable
Bonds selected by the Agency and within a maturity by lot by
the Trustee (or by the Securities Depository so long as the
book entry system for the 1993 Bonds is in effect) or (ii) if
the Agency elects to sell Option Rights with respect to any
maturity of the Callable Bonds (as hereinafter described), by
the purchasers of such Option Rights (the "Option Rights
Owner") with respect to the Callable Bonds of the same
maturity, selected by lot, as the Option Rights held by such
Option Rights Owner. Prior to the execution by the Agency of a
contract for sale of any Option Rights, the Agency shall cause
the Trustee to give notice of the proposed sale to the
registered owners of the Callable Bonds to which such Option
Rights pertain.
Any Callable Bond mandatorily tendered for purchase must be
delivered to the Trustee on or prior to the Purchase Date and
upon such delivery, the Purchase Price will be paid by the
Trustee to the registered owner thereof. Any Bond so called
for mandatory tender which is not so presented shall be deemed
to have been purchased. In no event shall the registered owner
of any Callable Bond which is called for mandatory tender for
purchase be entitled to interest accruing after the Purchase
Date.
In the event this Bond (or any portion hereof) is selected
for mandatory tender for purchase, notice will be mailed no
more than 60 days nor fewer than 30 calendar days prior to the
Purchase Date to the Registered Owner. Failure to mail notice
to the Registered Owner of any other Callable Bonds or any
defect in the notice to such owner shall not affect the
exercise of the Option Right with respect to this Bond.
In case an Event of Default, as defined in the Indenture,
shall have occurred, the principal of all 1993 Bonds then
outstanding under the Indenture may become due and payable
before their maturity dates.
This Bond is registered as to both principal and interest
on the bond register to be kept for that purpose at the
04/22/93
5158Q/5164Q/2345/51 A-16
,
principal corporate trust office of the Trustee, and both
principal and interest shall be payable only to the Registered
Owner hereof. This Bond may be transferred in accordance with
the provisions of the Indenture, and no transfer hereof shall
be valid unless made at said office by the Registered Owner in
person or by his duly authorized attorney and noted hereon.
The Trustee is not required to transfer or exchange any Bond on
or after the fifth day prior to the mailing of notice calling
any Bonds for redemption. The Agency and the Trustee may treat
the Registered Owner of this Bond as the absolute owner hereof
for all purposes, whether or not this Bond shall be overdue,
and shall not be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal
or redemption price of or interest on this Bond, or for any
claim based hereon or on the Indenture, against any member,
officer or employee, past, present or future, of the Agency or
of any successor body, under any constitutional provision,
statute or rule of law, or by the enforcement of any assessment
or by any legal or equitable proceeding or otherwise, all such
liability of such members, officers or employees being released
as a condition of and as consideration for the execution of the
Indenture and the issuance of this Bond.
This Bond is not valid unless the Certificate of
Authentication and Registration endorsed hereon is duly
executed by the Trustee.
04/22/93
51580/51640/2345/51 A-17
,
. ---"--._---_.
IN WITNESS WHEREOF, the poway Redevelopment Agency has
caused this Bond to be executed in its name and on its behalf
by the manual or facsimile signature of its Chairman and has
caused its corporate seal, or a facsimile thereof, to be
affixed hereto or printed hereon, attested by the manual or
facsimile signature of its Secretary.
POWAY REDEVELOPMENT AGENCY
[SEAL]
Attest:
By: By:
Secretary Chairman
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This Bond is one of the Bonds described in the within
mentioned Indenture.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, Trustee
By:
Authorized Officer
DATE OF AUTHENTICATION:
04/22/93
5158Q/5164Q/2345/51 A-18
,
STATEMENT OF INSURANCE
Municipal Bond Insurance Policy No. (the "Policy")
with respect to payments due for principal of and interest on
this Bond has been issued by ("
" ) . The POlicy has been delivered to the United
States Trust Company of New York, New York, New York, as the
Insurance Trustee under said Policy ("Insurance Trustee"), and
will be held by such Insurance Trustee or any successor
insurance trustee. The POlicy is on file and available for
inspection at the principal office of the Insurance Trustee and
a copy thereof may be secured from or the
Insurance Trustee. All payments required to be made under the
Policy shall be made in accordance with the provisions
thereof. The owner of this bond acknowledges and consents to
the SUbrogation rights of as more fully
set forth in the Policy.
04/22/93
5158Q/5164Q/2345/51 A-19
,
[UNCONVERTED BONDS]
CONVERSION SCHEDULE
1993 Indexed Inverse Floatina/Fixed Rate Bonds
Total
Converted Unconverted Authorized
Date Cl) Amount (2) Amount (3) Sianature
, 1993 $ -0- $
(1) Date of issue and effective date of each conversion
thereafter. Any conversion made on a date other than an
Interest Payment Date (i.e., December 15 shall be
effective retroactive to the last preceding Interest
Payment Date to which interest at the Indexed Inverse Rate
was paid or to , 1993 if no such interest has
been paid.
(2) Represents principal amount converted on any date.
(3) Represents total amount which has not been converted.
04/22/93
5158Q/5164Q/2345/51 A-20
,
[CONVERTED BONDS]
CONVERSION SCHEDULE
1993 Indexed Inverse Floatina/Fixed Rate Bonds
Total
Converted Converted Authorized
Date (1) Amount (2) Amount (3) Sianature
, 1993 $ -0- $ -0-
--
(1) Date of issue and effective date of each conversion
thereafter. Any conversion made on a date other than an
Interest Payment Date (i.e., December 15) shall be
effective retroactive to the last preceding ,Interest
Payment Date to which interest at the Indexed Inverse Rate
was paid or to , 1993 if no such interest has
been paid.
(2) Represents principal amount converted on any date;
provided, in the case of any optional conversion that all
sums owed to the Swap Provider on account of such
conversion have been paid. If any such sums are unpaid as
to a particular optional conversion, the converted amount
will not be recorded on this conversion schedule until
payment in full is made.
(3) Represents cumulative total of converted amounts recorded.
04/22/93
5158Q/51640/2345/51 A-21
,
-- ----------.--
[FORM OF ASSIGNMENT]
ASSIGNMENT
For value received hereby sells,
assigns and transfers unto (Tax I.D.
No. ) the within Bond issued by the Poway
Redevelopment Agency, a nd all rights thereunder, hereby
irrevocably appointing Attorney to transfer
said Bond on the bond register, with full power of substitution
in the premises.
By:
Dated:
Signature Guaranteed:
Notice: The Assignor's signature to this assignment
must correspond with the name as it appears upon the face of
the within Bond in every particular without alteration or any
change whatever.
04/22/93
5158Q/5164Q/2345/51 A-22
,
EXHIBIT A
(continued)
FORM OF 1993 INDEXED FLOATING/FIXED RATE BOND
NUMBER AMOUNT
$
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
POWAY REDEVELOPMENT AGENCY,
PAGUAY REDEVELOPMENT PROJECT,
SUBORDINATED TAX ALLOCATION REFUNDING BONDS,
SERIES 1993
INTEREST RATE MATURITY DATE EFFECTIVE DATE CUSIP
Equal to the Indexed December 15, 20_ , 1993
Variable Rate (herein
described) until converted;
equal to the Bond Rate of
\ per annum after
conversion. See interest
provisions herein.
REGISTERED OWNER
PRINCIPAL AMOUNT DOLLARS
The POWAY REDEVELOPMENT AGENCY (the "Agency"), a
pUblic body, corporate and politic, duly organized and existing
under the laws of the State of California (the "State"), The
poway Redevelopment Agency (the "Agency"), for value received,
promises to pay to the Registered OWner named above, or
registered assigns, but solely from the Pledged Revenues
hereinafter mentioned, on the Maturity Date specified above,
unless this Bond shall have been previously called for
redemption in whole or in part and payment of the redemption
price shall have been duly made or provided for, the Principal
Amount shown above (or such portion thereof as shall be
represented by this Bond, as recorded on the conversion
schedule referred to herein) and to pay (but only out of said
Pledged Revenues) interest thereon at the annual rate specified
04/22/93
5158Q/51640/2345/51 A-23
,
-- --- -
above from the most recent Interest Payment Date (as
hereinafter defined) the date of authentication, unless the
date of authentication is either (i) an Interest Payment Date
(as hereinafter defined), in which case this Bond shall bear
interest from such date; or (ii) prior to the first Interest
Payment Date, in which case this Bond shall bear interest from
the Effective Date; or (iii) after a Record Date with respect
to an Interest Payment Date but prior to such Interest Payment
Date, in which case this Bond shall bear interest from such
Regular or Special Interest Payment Date. The principal or
redemption price of and interest on this Bond may be paid in
any coin or currency of the United States of America which, at
the time of payment, is legal tender for the payment of public
or private debts.
The principal or redemption price of this Bond is
payable upon presentation and surrender hereof at the principal
corporate trust office of Bank of America National Trust and
Savings Association, Los Angeles, California, as trustee under
the Indenture referred to herein (together with any successor
trustee, the "Trustee"). Interest shall be paid by check or
draft mailed to the Registered Owner hereof, as shown on the
registration books kept by the Trustee as of the close of
business on the applicable Record Date (each as hereinafter
defined) or, at the election of any such Registered Owner of
Bonds in an aggregate principal amount of $1,000,000 or more,
by wire transfer to a designated account; provided that any
such election shall be received by the Trustee in writing not
less than five days prior to the record date for the payment of
interest to which it relates.
Interest shall be payable on December 15, 1993 and
each December 15 and June 15 thereafter (each, a "Regular
Interest Payment Date"). The record date for any Interest
Payment Date (each, a "Record Date") shall be the first day of
each calendar month in which an Interest Payment Date occurs,
whether or not a Business Day.
This Bond is one of the Agency's Subordinated Tax
Allocation Refunding Bonds, Series 1993 (the "Bonds"), issued
in the aggregate principal amount of $ , consisting of
$ of "1993 Fixed Rate Bonds," $ of "1993
Indexed Inverse Floating/Fixed Rate Bonds. and $ of
"1993 Indexed Floating/Fixed Rate Bonds," all issued pursuant
to a trust indenture dated as of , (the
"Indenture") between the Agency and the Trustee. Reference is
made to the Indenture for a statement of the purposes for which
the Bonds are issued, and for provisions concerning, inter
~: the application of the proceeds of the Bonds; the
Pledged Revenues assigned and pledged for the security of the
Bonds and other bonds which have been or may be issued under
04/22/93
5158Q/5164Q/2345/51 A-24
,
the Indenture; the issuance of additional bonds under the
Indenture, the incurrence of other indebtedness, and the liens
and security interests which may be granted to secure such
additional bonds and other indebtedness on a superior, parity
or subordinate basis; the rights and obligations of the Agency
and the Trustee; provisions relating to the rights of the
Registered Owners of the Bonds; and amendments to the
Indenture. Executed counterparts of the Indenture are on file
at the principal corporate trust office of the Trustee.
Effective simultaneously with the issuance of the
Bonds, the Agency and , have entered
into an interest rate swap agreement in respect of the 1993
Indexed InVerse Floating/Fixed Rate Bonds expiring on
December 15, 20__ and an interest rate cap agreement in respect
of the 1993 Indexed Floating/Fixed Rate Bonds expiring on
December 15, (subject in each case to earlier termination
as set forth therein). Each of the foregoing agreements (or
any substitute interest rate swap or cap agreement entered into
pursuant to the Indenture) is herein referred to as a "Swap
Agreement." , (or any successor
under the initial Swap Agreements or provider of a substitute
Swap Agreement) is herein referred to as the "Swap Provider."
Copies of the initial Swap Agreements are on file at the
principal corporate trust office of the Trustee.
Prior to the earlier of ,(the "Scheduled
Conversion Date") on the effective date of any optional or
extraordinary conversion herein described, the 1993 Indexed
Floating/Fixed Rate Bonds shall bear interest at the Indexed
Variable Rate (hereinafter defined), calculated on the basis of
a 365 or 366 day year (as applicable) and the actual number of
days in the applicable interest period. Thereafter, such Bonds
shall bear interest at the Bond Rate of \ per annum,
calculated on the basis of a 360 day year consisting of twelve
30 day months. Subject to the further provisions of the
Indenture, the Indexed Variable Rate for each applicable period
shall mean the sum of the Bond Rate of \ per annum plus
the applicable Average Index Rate (as defined in the
Indenture), less a Threshold Rate of \ per annum. The
Average Index Rate represents an average interest rate for the
applicable period based on a specified index of tax-exempt
variable rate issues (initially, the PSA Municipal Swap Index).
Pursuant to the Indenture, the 1993 Indexed Floating/Fixed
Rate Bonds are subject to optional conversion (in principal
amounts of $1,000,000 and integral multiples of $100,000 in
excess thereof) to the Bond Rate prior to the Scheduled
Conversion Date. In addition, if the applicable Swap Agreement
is terminated upon the occurrence of certain specified events
of default on the part of the Swap Provider or other
04/22/93
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,
termination events with respect to the or the Swap
Provider and if no substitute Swap Agreement is provided, the
1993 Indexed Floating/Fixed Rate Bonds shall be subject to
extraordinary conversion (as a whole, but not in part) to the
Bond Rate. Unless it occurs on an Interest Payment Date, any
such optional or extraordinary conversion shall be effective
retroactive to the last preceding Interest Payment Date to
which interest at the Indexed Inverse Rate was paid or to the
Effective Date if no such interest has been paid.
[THIS BOND REPRESENTS THE PRINCIPAL AMOUNT OF 1993 INDEXED
FLOATING/FIXED RATE BONDS WHICH HAVE NOT BEEN CONVERTED TO THE
BOND RATE AND WHICH CONTINUE TO BEAR INTEREST AT THE INDEXED
INVERSE RATE. SUCH PRINCIPAL AMOUNT WHICH REMAINS UNCONVERTED
IS AS RECORDED BY THE TRUSTEE OR CO-REGISTRAR ON THE CONVERSION
SCHEDULE ATTACHED HERETO AND MADE A PART HEREOF.]
[THIS BOND REPRESENTS THE PRINCIPAL AMOUNT OF 1993 INDEXED
FLOATING/FIXED RATE BONDS WHICH HAVE BEEN CONVERTED TO, AND
BEAR INTEREST AT, THE BOND RATE. SUCH PRINCIPAL AMOUNT WHICH
HAS BEEN CONVERTED IS AS RECORDED BY THE TRUSTEE OR
CO-REGISTRAR ON THE CONVERSION SCHEDULE ATTACHED HERETO AND
MADE A PART HEREOF.]
THIS BOND IS A LIMITED OBLIGATION OF THE AUTHORITY AND IS
PAYABLE SOLELY FROM THE SOURCES REFERRED TO HEREIN. NEITHER
THE CREDIT NOR THE TAXING POWER OF THE COUNTY OF SAN DIEGO OR
THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF
IS PLEDGED FOR THE PAYMENT OF THIS BOND, NOR SHALL THIS BOND BE
OR BE DEEMED AN OBLIGATION OF THE COUNTY OF SAN DIEGO OR OF THE
STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF.
THE AUTHORITY HAS NO TAXING POWER.
The Bonds are being issued by means of a book-entry system
with no physical distribution of bond certificates to be made
except as provided in the Indenture. One bond certificate with
respect to each date on which the Bonds are stated to mature or
with respect to each form of Bonds, registered in the name of
the Securities Depository Nominee (as defined in the Indenture)
or its nominee, is being issued and required to be deposited
with the Securities Depository and immobilized in its custody.
The book-entry system will evidence, positions held in the
Bonds by the Securities Depository's participants, beneficial
ownerShip of the Bonds in authorized denominations being
evidenced in the records of such participants. Transfers of
ownership shall be effected on the records of the Securities
Depository and its participants pursuant to rules and
procedures established by the Securities Depository and its
participants. The Agency and the Trustee will recognize the
Securities Depository or its nominee, while the registered
owner of this Bond, as the owner of this Bond for all purposes,
04/22/93
5158Q/5164Q/2345/51 A-26
,
- -
including (i) payments of principal of, and redemption premium,
if any, and interest on, this Bond, (ii) notices and (iii)
voting. Transfer of principal, interest and any redemption
premium payments to participants of the Securities Depository,
and transfer of principal, interest and any redemption premium
payments to beneficial owners of the 1993 Bonds by participants
of the Securities Depository will be the responsibility of such
participants and other nominees of such beneficial owners. The
Agency, the Trustee and the will not be responsible
or liable for such transfers of payments or for maintaining,
supervising or reviewing the records maintained by the
Securities Depository, its nominee, its participants or persons
acting through such participants. While the Securities
Depository or its nominee is the owner of this Bond,
notwithstanding the provision hereinabove contained, payments
of principal of, redemption premium, if any, and interest on
this Bond shall be made in accordance with existing
arrangements between the Trustee and the Securities
Depository. EXCEPT AS OTHERWISE PROVIDED IN THE INDENTURE,
THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART,
ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A
SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR
SECURITIES DEPOSITORY.
REDEMPTION PROVISIONS
Mandatorv RedemDtion. The Bonds maturing on and after
December 15, 20__ are subject to mandatory sinking fund
redemption in direct order of maturity on December 15 of the
years (commencing in 20__) and in the amounts set forth with
respect to each such maturity in the Indenture, at a redemption
price equal to the principal amount thereof plus accrued
interest to the redemption date as set forth in the Indenture.
Any redemption of this Bond under the preceding
paragraphs shall be made as provided in the, Indenture upon not
less than thirty nor more than sixty days notice by mailing a
copy of the redemption notice by first class mail, postage
prepaid to the registered holder hereof at the address shown on
the bond register of the Agency maintained by the Trustee
unless such notice is waived by the holders of the Bonds to be
redeemed; provided, however, that failure to mail any notice or
any defect therein or in the mailing thereof, as it affects any
particular Bond, shall not affect the validity of the
proceedings for redemption of any other Bonds.
If less than all Bonds are to be called for optional
redemption, the Trustee shall select Bonds for such redemption
in any order of maturity designated by the Agency and by lot
04/22/93
5158Q/5164Q/2345/51 A-27
,
within a maturity. If less than all Bonds of a maturity are to
be called for mandatory redemption, the Trustee shall select
Bonds of such maturity for redemption by lot.
In the event that less than the full principal amount
hereof shall have been called for redemption, the registered
owner hereof shall surrender this Bond in exchange for one or
more new Bonds in an aggregate principal amount equal to the
unredeemed portion of the principal amount hereof.
If the Agency deposits with the Trustee funds
sufficient to pay the principal or redemption price of any
Bonds becoming due at maturity, by call for redemption or
otherwise, together with interest accrued to the due date,
interest on such Bonds will cease to accrue on the due date,
and thereafter the holders will be restricted to the funds so
deposited as provided in the Indenture.
OPTION TO PURCHASE CALLABLE BONDS
The Bonds maturing on or after December 15, 20__ (the -
"Callable Bonds") are subject to call for mandatory tender for
purchase at any time on or after December 15, 20__, in whole or
in part, at the following Purchase Prices, expressed as
percentages of the principal amount of each Callable Bond, or
portion thereof, so purchased, plus accrued interest thereon to
the Purchase Date:
Period During Which Purchased Purchase
(both dates inclusive) Price
December 15, 20__ through June 15, 20__ 102\
December 15, 20__ through June 15, 20__ 101
December 15, 20 -- and thereafter
The option to call the Callable Bonds for mandatory
tender for purchase (the "Option Rights") may be exercised
(i) by the Agency with respect to any or all of the Callable
Bonds (in integral multiples of $5,000), from any maturities of
Callable Bonds selected by the and within a maturity
by lot by the Trustee (or by the Securities Depository so long
as the book entry system for the Bonds is in effect) or (ii) if
the Agency elects to sell option Rights with respect to any
maturity of the Callable Bonds (as hereinafter described), by
the purchasers of such Option Rights (the "Option Rights
Owner") with respect to the Callable Bonds of the same
maturity, selected by lot, as the Option Rights held by such
Option Rights Owner. Prior to the execution by the Agency of a
04/22/93
5158Q/5164Q/2345/51 A-28
,
-
contract for sale of any Option Rights, the Agency shall cause
the Trustee to give notice of the proposed sale to the
registered Owners of the Callable Bonds to which such Option
Rights pertain.
Any Callable Bond mandatorily tendered for purchase
must be delivered to the Trustee on or prior to the Purchase
Date and upon such delivery, the Purchase Price will be paid by
the Trustee to the registered owner thereof. Any Bond so
called for mandatory tender which is not so presented shall be
deemed to have been purchased. . In no event shall the
registered Owner of any Callable Bond which is called for
mandatory tender for purchase be entitled to interest accruing
after the Purchase Date.
In the event this Bond (or any portion hereof) is
selected for mandatory tender for purchase, notice will be
mailed no more than 60 days nor fewer than 30 calendar days
prior to the Purchase Date to the Registered Owner. Failure to
mail notice to the Registered Owner of any other Callable Bonds
or any defect in the notice to such owner shall not affect the
exercise of the Option Right with respect to this Bond.
In case an Event of Default, as defined in the
Indenture, shall have occurred, the principal of all Bonds then
outstanding under the Indenture may become due and payable
before their maturity dates.
This Bond is registered as to both principal and
interest on the bond register to be kept for that purpose at
the principal corporate trust office of the Trustee, and both
principal and interest shall be payable only to the Registered
Owner hereof. This Bond may be transferred in accordance with
the provisions of the Indenture, and no transfer hereof shall
be valid unless made at said office by the Registered Owner in
person or by his duly authorized attorney and noted hereon.
The Trustee is not required to transfer or exchange any Bond on
or after the fifth day prior to the mailing of notice calling
any Bonds for redemption. The Agency and the Trustee may treat
the Registered Owner of this Bond as the absolute owner hereof
for all purposes, whether or not this Bond shall be overdue,
and shall not be affected by any notice to the contrary.
No recourse shall be had for the payment of the
principal or redemption price of or interest on this Bond, or
for any claim based hereon or on the Indenture, against any
member, officer or employee, past, present or future, of the
Agency or of any successor body, under any constitutional
provision, statute or rule of law, or by the enforcement of any
assessment or by any legal or equitable proceeding or
otherwise, all such liability of such members, officers or
~
04/22/93
5158Q/5164Q/2345/51 A-29
,
employees being released as a condition of and as consideration
for the exec~tion of the Indenture and the issuance of this
Bond.
This Bond is not valid unless the Certificate of
Authentication and Registration endorsed hereon is duly
executed by the Trustee.
IN WITNESS WHEREOF, the poway Redevelopment Agency has
caused this Bond to be executed in its name and on its behalf
by the manual or facsimile signature of its Chairman and has
caused its corporate seal, or a facsimile thereof, to be
affixed hereto or printed hereon, attested by the manual or
facsimile signature of its Secretary.
POWAY REDEVELOPMENT AGENCY
[SEAL]
Attest:
By:
Chairman
By:
Secretary
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This Bond is one of the Bonds described in the within
mentioned Indenture.
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION, Trustee
By:
Authorized Officer
DATE OF AUTHENTICATION:
04/22/93
51580/5164Q/2345/51 A-30
,
STATEMENT OF INSURANCE
Municipal Bond Insurance POlicy No. (the
"Policy") with respect to payments due for principal of and
interest on this Bond has been issued by
(" " ) . The POlicy has been delivered to the United
States Trust Company of New York, New York, New York, as the
Insurance Trustee under said POlicy ("Insurance Trustee"), and
will be held by such Insurance Trustee or any successor
insurance trustee. The POlicy is on file and available for
inspection at the principal office of the Insurance Trustee and
a copy thereof may be secured from or the
Insurance Trustee. All payments required to be made under the
Policy shall be made in accordance with the provisions
thereof. The owner of this bond acknowledges and consents to
the subrogation rights of as more fully
set forth in the POlicy.
,
-
04/22/93
5158Q/5164Q/2345/51 A-31
,
--~----
[UNCONVERTED BONDS]
CONVERSION SCHEDULE
1993 Indexed Floatina/Fixed Rate Bonds
Total
Converted Unconverted Authorized
Date (1) Amount (2) Amount (3) Sianature
, 1993 $ -0- $
(1) Date of issue and effective date of each conversion
thereafter. Any conversion made on a date other than an
Interest Payment Date (i.e., December 15) shall be
effective retroactive to the last preceding Interest
Payment Date to which interest at the Indexed Inverse Rate
was paid or to , 1993 if no such interest has
been paid.
(2) Represents principal amount converted on any date.
(3) Represents total amount which has not been converted.
04/22/93
5158Q/5164Q/2345/51 A-32
,
[CONVERTED BONDS]
CONVERSION SCHEDULE
1993 Indexed Floatina/Fixed Rate Bonds
Total
Converted Converted Authorized
Date (1) Amount (2) Amount (3) Sianature
, 1993 $ -0- $ -0-
(1) Date of issue and effective date of each conversion
thereafter. Any conversion made on a date other than an
Interest Payment Date (i.e., December 15) shall be
effective retroactive to the last preceding Interest
Payment Date to which interest at the Indexed Inverse Rate
was paid or to , 1993 if no such interest has
been paid.
(2) Represents principal amount converted on any date.
(3) Represents cumulative total of converted amounts recorded.
04/22/93
5158Q/5164Q/2345/51 A-33
,
- --------
[FORM OF ASSIGNMENT]
ASSIGNMENT
For value received hereby sells,
assigns and transfers unto (Tax I.D.
No. ) the within Bond issued by the Poway
Redevelopment Agency, and all rights thereunder, hereby
irrevocably appointing Attorney to
transfer said Bond on the bond register, with full power of
substitution in the premises.
By:
Dated:
Signature Guaranteed:
Notice: The Assignor's signature to this assignment
must correspond with the name as it appears upon the face of
the within Bond in every particular without alteration or any
change whatever.
04/22/93
5158Q/5164Q/2345/51 A-34
,
EXHIBIT B
POWAY REDEVELOPMENT AGENCY
PAGUAY REDEVELOPMENT PROJECT
SUBORDINATED TAX ALLOCATION REFUNDING BONDS, SERIES 1993
, 1993
The Depository Trust Company
55 Water Street
New York, NY 10004
Attention: General Counsel's Office
Re: Poway Redevelopment Agency, paquay
Redevelopment Project, Subordinated Tax Allocation
Refundina Bonds. Series 1993
Ladies and Gentlemen:
The purpose of this letter is to set out certain matters
relating to the above-referenced Bonds (the "Bonds"). The
Bonds will be issued pursuant to an Indenture of Trust dated as
of June 1, 1993 from the poway Redevelopment Agency (the
"Agency") to Bank of America National Trust and Savings
Association (the "Trustee"). PaineWebber Incorporated is the
underwriter of the Bonds (the .Underwriter") and is
distributing the Bonds through The Depository Trust Company
("DTC").
To induce DTC to accept the Bonds as eligible for deposit
at DTC and act in accordance with its Rules and Regulations
with respect to the Bonds, the Agency and the Trustee make the
fOllowing respective representations to DTC:
l. Subsequent to Closing on the Bonds on or before
June 15, 1993, the Agency shall cause the Underwriter to
deposit with DTC one Bond certificate registered in the name of
DTC's nominee, Cede & Co., for each stated maturity of the
Bonds in the face amounts set forth on Schedule A hereto, the
total of which represents 100\ of the aggregate principal
amount of such Bonds, and such Bond certificates shall remain
in DTC's custody as provided in the Indenture.
2. In the event of a redemption or any other similar
transaction resulting in retirement of all Bonds outstanding or
a reduction in aggregate principal amount of Bonds outstanding
("full or partial redemption") the Agency or the Trustee shall
04/22/93
5158Q/51640/2345/51 B-1
,
give DTC notice of such event not less than 30 days nor more
than 60 days prior to the redemption date. In the event of an
advance refunding of all or part of the Bonds outstanding, the
Agency or the Trustee shall give DTC notice of such event on
the earliest possible date after the sale of the bonds but no
later than the date the proceeds of such bonds are deposited in
escrow.
3. The Indenture provides for the solicitation of
consents from and voting by holders of the Bonds under certain
circumstances. The Agency or the Trustee shall establish a
record date for such purposes and give DTC notice of such
record date not less than 15 calendar days in advance of such
record date to the extent possible.
4. In the event of an invitation by the Agency to tender
the Bonds, notice to Bondholders by the Agency, specifying the
terms of the tender and the date such notice is to be mailed to
Bondholders or published (the "Notice Date") shall be sent to
DTC by a secure means (e.g., legible facsimile transmission,
registered or certified mail, overnight express delivery) in a
timely manner designed to assure that such notice is in DTC's
possession no later than the close of business on the business
day before the Notice Date.
5. In the event of a partial redemption or an advance
refunding of part of the Bonds outstanding, the Agency or the
Trustee shall send DTC a notice specifying: (1) the amount of
each maturity of Bonds to be redeemed or refunded; (2) in the
case of a refunding, the maturity date(s) established under the
refunding; and (3) the date such notice is to be mailed to
Bondholders (the "Notice Date"). Such notice shall be sent to
DTC by legible facsimile transmission, registered or certified
mail, or overnight express delivery two business days before
the Notice Date. The Trustee will forward such notice either
in a separate secure transmission for each CUSIP number or in a
secure transmission for each CUSIP number or in a secure
transmission for multiple CUSIP numbers, which includes a
manifest or list of each CUSIP number submitted in that
transmission. The Trustee in sending such notice shall have a
method to verify subsequently the use of such means and
timeliness of the notice, which method may include written
confirmation by DTC. The Notice Date shall be (i) not less
than 30 days nor more than 60 days prior to the redemption date
or, (ii ) in the case of an advance refunding within seven
business days of the date the proceeds are deposited in escrow.
6. All notices and payment advices sent to DTC shall
contain the CUSIP number of the Bonds.
04/22/93
5158Q/5164Q/2345/51 B-2
,
,-
7. Notices to DTC by facsimile transmission shall be sent
to DTC's Call Notification Department at (516) 227-4039 or
(516) 227-4190. Notices to DTC by mail or any other means
shall be sent to:
The Depository Trust Company
Call Notification Department
Muni Reorganization Manager
711 Stewart Avenue
Garden City, NY 11530
8. Interest payments shall be paid to Cede & Co., as
nominee of DTC, or its registered assigns in next-day funds on
each payment date (or the equivalent in accordance with
existing arrangements between the Trustee and Cede & Co.).
Such payments shall be made payable to the order of Cede & Co.
Principal payments shall be paid to Cede & Co., as nominee of
DTC, or its registered assigns in next day funds on each
payment date (or the equivalent in accordance with existing
arrangements between the Trustee and Cede & Co.). Such
payments shall be made payable to the order of Cede & Co. and
shall be addressed as follows:
The Depository Trust Company
Muni Redemption Department
55 Water Street, 50th Floor
New York, NY 10041
Attention: Collection Supervisor
9. Subject to the provisions of the Indenture, DTC may
direct the Agency or the Trustee in writing to use any other
telephone number for facsimile transmission, address or
department of DTC as the number, address or department to which
payments of interest or principal or notices may be sent.
10. In the event of a reduction in aggregate principal
amount of Bonds outstanding or an advance refunding of part of
the Bonds outstanding, DTC, in its discretion, (a) may request
the Trustee to issue and authenticate a new Bond certificate or
(b) may make an appropriate notation on the Bond certificate
indicating the date and amounts of such reduction in principal,
except in the case of final maturity, in which case the
certificate must be presented to the Trustee prior to payment.
11. In the event the Agency determines pursuant to the
Indenture that beneficial owners of the Bonds shall be able to
obtain certificated Bonds, the Trustee shall so notify DTC of
the availability of Bond certificates, and the Trustee shall
issue, transfer and exchange Bond certificates in appropriate
amounts as required by DTC and other Bondholders pursuant to
the Indenture.
04/22/93
5158Q/51640/2345/51 B-3
,
12. DTC may determine to discontinue providing its service
as securities depository with respect to the Bonds at any time
by giving reasonable notice to the Agency or the Trustee (at
which time DTC will confirm with the Agency or the Trustee the
aggregate principal amount of the Bonds outstanding) and
discharging its responsibilities with respect thereto under
applicable law. Under such circumstances, whenever DTC
requests the Agency or the Trustee to do so, the Agency and the
Trustee will cooperate with DTC in taking appropriate action to
make available one or more certificates evidencing the Bonds to
any DTC Participant having Bonds credited to its DTC account,
as shall be specified in writing to the Agency or the Trustee
by DTC.
POWAY REDEVELOPMENT AGENCY
By:
Executive Director
,
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By
Authorized Officer's Signature
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Trustee
By:
Authorized Officer
04/22/93
5158Q/5164Q/2345/51 B-4
,
EXHIBIT C
Schedule of Principal Maturities, Interest Rates
and CUSIP Number
Maturing Interest
~ Princioal Rate CUSIP
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
20_
20_
20_
20_
* Represents the Bond Rate after conversion.
* Two CUSIP numbers obtained for 20_ maturity and for
20_ maturity represent unconverted and converted
Bonds of each such maturity.
04/22/93
51580/5164Q/2345/51 C-1
,
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made and entered into as of
, 1993, by and between the poway Redevelopment Agency
(the "Agency") and Bank of America National Trust and Savings
Association, a national banking association having a corporate
trust office in Los Angeles, California, and being qualified to
accept and administer the trusts hereby created (the "Escrow
Bank").
i't.l'rN:;..s..s.E.l'H:
WHEREAS, the Agency has heretofore duly issued its
$35,000,000 Paguay Redevelopment Project, Subordinated Tax
Allocation Bonds, Series 1989A (the "1989 Bonds") pursuant to
Resolution No. R-89-__ (the "1989 Bonds Resolution"), and its
$9,330,000 paguay Redevelopment Project, Subordinated Tax
Allocation Bonds, Issue of 1991 (the "1991 Bonds"), pursuant to
Resolution No. R-91-__ (the "1991 Bonds Resolution"); and
WHEREAS, the Agency has determined to issue, pursuant
to an Indenture of Trust dated as of May 1, 1993, between the
Agency and Bank of America National Trust and Savings
Association, as Trustee (the "Indenture"), its Poway
Redevelopment Project Tax Allocation Refunding Bonds, Series
1993 (the "Bonds"), in the aggregate principal amount of
Million Dollars ($ ) for the purpose of
providing moneys which will be sufficient (i) to provide for
the payment when due of the principal of and interest on the
1989 Bonds to and including December 15, ____ and the 1991
Bonds to and including December 15, ____, (ii) to redeem the
remaining outstanding 1989 Bonds on December 15, ____ at par
plus a redemption premium of \ of the principal amount of
such 1989 Bonds and the remaining outstanding 1991 Bonds on
December 15, ____ at par plus a redemption premium of ___\ of
the principal amount of such 1991 Bonds (the sum of the amounts
referred to in clauses (i) and (ii) of this preamble with
respect to the 1989 Bonds and the 1991 Bonds, respectively, are
hereinafter referred to as the "Redemption Price" for each of
such issues); and
WHEREAS, the Indenture contemplates the setting aside
of a portion of the proceeds of the Bonds in order to provide
for the payment of the Redemption Price of the 1989 Bonds and
the 1991 Bonds and that such proceeds shall be deposited along
with certain amounts transferred from the 1989 Bonds,Resolution
and the 1991 Bonds Resolution in a special trust fund to be
ATTACHMENT E
MAY 4 1993 ITEM 10. J
- -
created hereunder to be known as the "Escrow Fund" to be
maintained by the Escrow Bank (the "Escrow Fund"); and
WHEREAS, the Agency has taken action to cause to be
issued or delivered to the Escrow Bank for deposit in or credit
to the Escrow Fund certain direct, noncallable obligations of
the United States of America (the "Government Obligations"),
all as listed on Exhibit A attached hereto and made a part
hereof, in an amount which, together with income to accrue on
the securities held in such Fund and an initial cash balance of
$.26, have been certified by Ernst & Young, certified public
accountants, in a report on file with the Agency, to be
sufficient to pay when and as due the Redemption Price of the
1989 Bonds and the 1991 Bonds, respectively;
NOW, THEREFORE, the Agency and the Escrow Bank hereby
agree as follows:
Section 1. Establishment. Fundina and Maintenance of
Escrow Fund. The Escrow Bank agrees to establish and maintain
until the Redemption Price of the 1989 Bonds and the 1991 Bonds
has been paid in full a fund designated as the "Escrow Fund".
The Escrow Bank further agrees to hold the securities,
investments and moneys in such Fund at all times as a special
and separate trust fund (wholly segregated from all other
securities, investments or moneys on deposit, in immediately
available funds, with the Escrow Bank). The Agency agrees to
cause the Fiscal Agent for the 1989 Bonds and the 1991 Bonds to
transfer to the Escrow Bank for deposit to the Escrow Fund the
amount of $ , and to cause the Trustee to transfer to
the Escrow Bank proceeds of the Bonds in the amount of
$ for deposit to the Escrow Fund. Such amounts will
be sufficient to purchase and the Escrow Bank is hereby
directed to purchase, in the Escrow Bank's own name, on behalf
of the Agency, the Government Obligations. The Government
Obligations, according to the report of Ernst & Young, will
mature as to principal and interest in such amounts and at such
times as will, together with the initial cash balance in the
Escrow Fund of $ , insure the availability of sufficient
moneys to pay the Redemption Price of the 1989 Bonds and the
1991 Bonds, respectively, so as to constitute a complete
defeasance of the 1989 Bonds within the meaning of Section 3 of
the 1989 Bonds Resolution and of the 1991 Bonds within the
meaning of Section 3 of the 1991 Bonds Resolution.
Concurrently with the execution and delivery of this Escrow
Agreement, the Escrow Bank shall receive the Government
Obligations which shall be purchased with the immediately
available funds caused to be deposited by the Agency, as
described above. All securities, investments and moneys in the
Escrow Fund are hereby irrevocably pledged, subject to the
provisions of Section 2 hereof, to secure the payment of the
Redemption Price of the 1989 Bonds and the 1991 Bonds.
04/22/93
5393Q/2345-51 - 2 -
.-------
The escrow created hereby shall be irrevocable, and
the Escrow Bank is hereby appointed to act as pledge holder for
the benefit of the holders of the liens created hereunder. The
owners of the 1989 Bonds and the 1991 Bonds shall have a lien,
to the extent of unpaid principal of and interest on the 1989
Bonds and the 1991 Bonds, respectively, on the principal of and
interest on the Government Obligations and all other moneys
held by the Escrow Bank hereunder, until those respective
amounts are used and applied in accordance with this Escrow
Agreement.
Section 2. Investment of the Escrow Fund.
(a) The Agency and the Escrow Bank each shall take
all remaining necessary action to have issued and registered in
the name of the Escrow Bank, for the account of the Escrow
Fund, the Government Obligations set forth on Exhibit A
attached hereto. Except as otherwise provided in Sections 2(b)
and 2(c), the Escrow Bank shall not reinvest any cash portion
of the Escrow Fund and shall hold such funds uninvested in the
Escrow Fund.
(b) Upon receipt by the Escrow Bank of moneys
representing maturing principal of, or interest payments on,
the Exhibit A United States state and Local Government
Securities in the amount and on the dates indicated in Exhibit
B hereto, the Escrow Bank shall reinvest such moneys in United
States Treasury Certificates of Indebtedness, State and Local
Government Series ("SLGS") which mature on the dates indicated
on Exhibit B. The Escrow Bank shall invest such amounts in
SLGS for the period specified therein at a yield of 0.0\,
unless the Escrow Bank shall have received an opinion of
nationally recognized bond counsel ("Bond Counsel") to the
effect that investment of such moneys at a higher yield will
not adversely affect the exemption of interest on the 1989
Bonds from federal income taxation or the exclusion from gross
income for federal income tax purposes of interest on the 1991
Bonds or the Bonds, in which event the Escrow Bank shall be
provided with the maximum yield available as approved by such
opinion. At least 45 days prior to the reinvestment date set
forth in Exhibit B, the Escrow Bank will request, in writing,
from the Agency a completed application to purchase SLGS which
the Agency will provide to the Escrow Bank not later than 25
days prior to the date on which the SLGS are to be purchased.
The Escrow Bank shall submit the subscription for SLGS to the
Federal Reserve Bank in Seattle, Washington (or such other
Federal Reserve Bank which is authorized to deliver the SLGS to
the Escrow Bank at its Los Angeles location) at least 15 days
prior to the date on which such SLGS are to be purchased. If
SLGS are not available at the reinvestment date set forth on
Exhibit B, the Escrow Bank shall purchase the SLGS on the
04/22/93
5393Q/2345-51 - 3 -
,
earliest date thereafter that such SLGS become available and
shall hold such amounts uninvested in the applicable account of
the Escrow Fund until such date as the purchases may be made.
The Escrow Bank shall not incur any liability as a result of
errors in any SLGS application provided by the Agency or as a
result of its inability to purchase SLGS where such instruments
are no longer available for purchase from the United States
government.
(c) Upon the written direction of the Agency, but
subject to the conditions and limitations herein set forth, the
Escrow Bank shall purchase substitute Government Obligations
with the proceeds derived from the sale, transfer, redemption
or other disposition of Government Obligations then on deposit
in the Escrow Fund in accordance with the provisions of this
Section 2(c). Such sale, transfer, redemption or other
disposition of Government Obligations then on deposit in the
Escrow Fund and substitution of other Government Obligations
shall be effected by the Escrow Bank upon the written direction
of the Agency, but only by a simultaneous transaction and only
upon receipt by the Escrow Bank of (i) a certificate from a
nationally recognized firm of independent certified public
accountants certifying that (a) the Government Obligations to
be substituted, together with the Government Obligations and
other moneys, if any, which will continue to be held in the
Escrow Fund will mature in such principal amounts and earn
interest in such amounts and at such times so that sufficient
moneys will be available from maturing principal and interest
on such Government Obligations, together with any uninvested
moneys, to make all payments required by Section 3 hereof which
have not previously been made, and (b) the amounts and dates of
the anticipated payments by the Escrow Bank of the Redemption
Price will not be diminished or postponed thereby, (ii) the
Escrow Bank shall receive an unqualified opinion of Bond
Counsel to the effect that the sale, transfer, redemption or
other disposition and substitution of Government Obligations
will not adversely affect the exclusion from gross income for
federal income tax purposes of interest on the Bonds or the
1989 Bonds with respect to reinvestments of amounts in the 1989
Bonds Account or the 1991 Bonds with respect to reinvestments
of amounts in the 1991 Bonds Account, and (iii) the Escrow Bank
shall have received the written consent of Financial Guaranty
Insurance Company to such substitution.
(d) To the extent that the proceeds from any sale,
transfer, redemption or other disposition of Government
Obligations pursuant to Section 2(c) will not be required at
any time for the purpose of making a payment required by
Section 3 hereof, as certified by a nationally recognized firm
of independent certified public accountants, such moneys shall
be paid over upon the direction of the Agency as received by
04/22/93
5393Q/2345-51 - 4 -
,
___n______
the Escrow Bank, free and clear of any trust, lien, pledge or
assignment securing the 1989 Bonds or the 1991 Bonds, as
applicable, or otherwise existing hereunder or under the 1989
Bonds Resolution or the 1991 Bonds Resolution, respectively,
but shall be subject to such investment and expenditure
limitations as are considered necessary by Bond Counsel in
connection with the opinion required by Section 2(c)(ii) above.
(e) The Escrow Bank shall not be liable or
responsible for any loss resulting from any reinvestment made
pursuant to this Agreement and in full compliance with the
provisions hereof.
Section 3. Pavment and Redemotion of the 1985 Bonds
and the 1986 Bonds. The Agency hereby requests and irrevocably
instructs the Escrow Bank, and the Escrow Bank hereby agrees,
to collect and deposit in the Escrow Fund the principal of and
interest on the Government Obligations held in the 1989 Bonds
Account and the 1991 Bonds Account promptly as such principal
and interest become due, and to apply, subject to the
provisions of Section 2 hereof, such principal and interest,
together with any other moneys and the principal of and
interest on any other securities deposited in those accounts,
to the payment of the amounts set forth in Exhibit C under the
caption "Total Debt Service Requirements of the 1989 Bonds and
the 1991 Bonds", Upon payment in full of the Redemption Price
of the 1989 Bonds and the 1991 Bonds, the Escrow Bank shall
transfer any moneys or securities remaining in the Escrow Fund
to the Agency, and this Agreement shall terminate. The Escrow
Fund cash flow is set forth in Exhibit C attached hereto.
Section 4. Possible Deficiencies: Amounts in Excess
of Reauired Cash Balance,
(a) If at any time the Escrow Bank has actual
knowledge that the moneys in the Escrow Fund, including the
anticipated proceeds of the Government Obligations, will not be
sufficient to make all payments required by Section 3 hereof,
the Escrow Bank shall notify the Agency in writing as soon as
is reasonably practicable of such fact, the amount of such
deficiency and, to the best of its information, the reason
therefor.
(b) Upon receipt of the notice specified in
subsection (a) of this Section, the Agency shall deposit in the
Escrow Fund, from any legally available moneys, such additional
moneys as may be required to meet fully the aggregate amounts
to become due and payable in connection with the payment of the
Redemption Price of the 1989 Bonds or the 1991 Bonds, as
applicable. Such additional deposit, if any, will be invested
subject to any limitations which may be imposed in an opinion
04/22/93
5393Q/2345-51 - 5 -
,
-
of Bond Counsel, which the Agency shall obtain if such
- additional deposit is to be invested.
(c) So long as the Escrow Bank has provided any
notice required by Section 4(a) above, the Escrow Bank shall in
no manner be responsible for the Agency's failure to make any
such deposit.
Section 5. Fees and Costs.
(a) The Escrow Bank's annual fees and costs for all
duties to be carried out by it under this Agreement will be
paid in accordance with an agreement to be entered into between
the Agency and the Escrow Bank. The parties hereto agree that
the duties and obligations of the Escrow Bank shall, except as
otherwise expressly provided herein, be governed by provisions
identical to the provisions set forth in Article IX of the
Indenture.
(b) The Escrow Bank shall also be entitled to
additional fees and reimbursements for costs incurred,
including, but not limited to, legal and accountants' services,
in connection with any litigation which may at any time be
instituted involving this Agreement.
(c) The fees of and the costs incurred by the Escrow
Bank shall in no event be deducted or payable from, or
constitute a lien against, the Escrow Fund until all of the
1989 Bonds and the 1991 Bonds have been paid and discharged in
full.
Section 6. Severability. If any section, paragraph,
sentence, clause or provisions of this Agreement shall for any
reason be held to be invalid or unenforceable, the invalidity
or unenforceability of such section, paragraph, sentence,
clause or provisions shall not affect any of the remaining
provisions of this Agreement.
Section 7. Successors or Assians. Whenever herein
the Agency or the Escrow Bank are named or are referred to,
such provisions shall be deemed to include any successor of the
Agency, or the Escrow Bank, immediate or intermediate, whether
so expressed or not. All of the stipulations, obligations and
agreements by or on behalf of, and other provisions for the
benefit of, the Agency, or the Escrow Bank contained herein:
(1) Shall bind and inure to the benefit of any
such successor, and
-
04/22/93
5393Q/2345-51 - 6 -
,
(2) Shall bind and inure to the benefit of any
officer, board, authority, agent or instrumentality to
whom or to which there shall be transferred by or in
accordance with the law any right, power or duty of
the Agency, or the Escrow Bank, respectively, or of
its successor, the possession of which is necessary or
appropriate to comply with any such stipulations,
obligations, agreements or other provisions hereof.
Section 8. Termination. This Escrow Agreement shall
terminate when all transfers required to be made by the Escrow
Bank under the provisions hereof shall have been made. Any
moneys remaining in the Escrow Fund at the time of such
termination shall be distributed to the Agency.
Section 9. Governina Law. This Escrow Agreement
shall be governed by the applicable laws of the State of
California.
Section 10. Headinas. Any headings preceding the
text of the several Sections hereof, and any table of contents
appended to copies hereof, shall be solely for convenience of
reference and shall not constitute a part of this Escrow
Agreement, nor shall they affect its meaning, construction or
effect.
Section 11. Execution of Counteroarts. This
Agreement may be executed in any number of counterparts, each
of which shall for all purposes be deemed to be an original and
all of which shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the poway Redevelopment Agency and
Security Pacific National Bank, as Escrow Bank, have caused
this Escrow Agreement to be executed each on its behalf as of
the day and year first above written.
POWAY REDEVELOPMENT AGENCY
By:
Executive Director
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Escrow Bank
By:
Authorized Officer
04/22/93
5393Q/2345-51 - 7 -
-
EXHIBIT A
-- I. Open Market Government Obligations Purchased with
Amounts Transferred from the 1989 Bonds Resolution
Type of Maturity Interest Principal Purchase
Securitv Date Rate Amount Price
Total $ $
--------- =============
---------
II. Open Market Government Obligations Purchased with
Amounts Transferred from the 1991 Bonds Resolution
Type of Maturity Interest Principal Purchase
Security Date Rate Amount Price
Total $ $
-------------
-------------
* Upon receipt of the Open Market Government Obligations, the
Escrow Bank is to wire transfer to PaineWebber Incorporated the
total purchase price of $ .
04/22/93
5393Q/2345-51 - 8 -
,
-.
United States State and Local Government
Government Securities Purchased with Bond Proceeds
Maturi ty Interest Principal
Date Rate Amount
04/22/93
5393Q/2345-51 - 9 -
,
-
EXHIBIT B
Reinvestment of
Amounts in Escrow Fund
Date Exhibit Amount to
A Moneys be Invested Principal Maturity Interest
Received* in SLGS Amount Date Rate
~.
*Represents reinvestment of interest paid on United States State
and Local Government Securities listed in Exhibit A.
04/22/93
5393Q/2345-51 - 10 -
,
-~
PRELIMINARY OFFICIAL STATEMENT DATED MAY ___, 1993
In the opinion of Stradling, Yocca, Carlson & Rauth, a
Professional Corporation, Newport Beach, California, Bond
Counsel, under existing statutes, regulations, rulings and
judicial decisions, and assuming certain representations and
compliance with certain covenants and requirements described
herein, interest on the Bonds is excluded from gross income for
federal income tax purposes and is not an item of tax
preference for purposes of calculating the federal alternative
minimum tax imposed on individuals a~corporations. In the
further opinion of Bond Counsel, interest on the Bonds is
exempt from State of California personal income taxes. See
"CONCLUDING INFORMATION - Tax Exemption" herein.
NEW ISSUE - FULL BOOK-ENTRY ONLY RATINGS:
$103,355,000*
POJlAY REDEVELOPMENT AGENCY
PAGUAY REDEVELOPMENT PROJECT
SUBORDINATED TAX ALLOCATION REFUNDING BONDS
SERIES 1993
Dated: 1993 Fixed Rate Bonds: May 1, 1993 Due: December 15,
1993 Indexed Inverse Floating/ as shown on
Fixed Rate Bonds and 1993 inside front
Indexed Floating/Fixed Rate cover
Bonds: Date of Original
Issuance
The poway Redevelopment Agency (the "Agency") is offering
$103,355,000* of its paguay Redevelopment Project Subordinated
Tax Allocation Refunding Bonds, Series 1993 (the "Bonds")
consisting of $ of 1993 Fixed Rate Bonds, $ of
1993 Indexed Inverse Floating/Fixed Rate Bonds and $
of 1993 Indexed Floating/Fixed Rate Bonds.
The Bonds are limited obligations of the Agency payable solely
from and secured by the Pledged Revenues (defined herein) to be
derived from the paguay Redevelopment Project Area and from the
amounts on deposit in certain funds as described herein. The
Bonds are issued pursuant to an Indenture of Trust dated as of
May 1, 1993 (the "Indenture"), between the Agency and Bank of
America National Trust and Savings Association, Los Angeles,
California, as trustee (the "Trustee"). The Pledged Revenues
*Preliminary. subject to change
ATTACHMEr-IT F
lAZlJAS:1871-04/l9/93 MAY 41993 ITEM 10./
,
--------..---...- -
are to be received by the Agency and deposited pursuant to the"
Indenture. The proceeds of the Bonds will be used to refund I
certain outstanding obligations of the Agency, to finance new
projects for the Agency, to partially fund a reserve fund for
the Bonds and to pay costs of issuance of the Bonds, all as
described herein. ,
Interest on the Bonds is payable on June 15 and December 15 of
each year, commencing December 15, 1993. The Bonds are being
issued as fully registered bonds, registered in the name of
Cede & Co. as nominee of The Depository Trust Company, New
York, New York ("DTC") , and will be available to actual
purchasers of the Bonds (the "Beneficial Owners") under the
book-entry system maintained by DTC, only through brokers and
dealers who are or act through DTC Participants as described
herein. Beneficial Owners will not be entitled to receive
physical delivery of the Bonds. The 1993 Fixed Rate Bonds will
be issued in denominations of $5,000, or any integral multiples
thereof, and the 1993 Indexed Inverse Floating/Fixed Rate Bonds
and the 1993 Indexed Floating/Fixed Rate Bonds will be issued
in denominations of $100,000 or any integral multiple thereof.
Principal of, premium, if any, and interest on the Bonds is
payable by the Trustee to DTC and, so long as DTC or its
nominee remains the registered Bondholder, disbursement of such
payments to DTC Participants is the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners is the
responsibility of DTC Participants. In the event that the
book-entry system is no longer used with respect to the Bonds,
the Beneficial Owners will become the registered owners of the
Bonds and will be paid principal of, premium, if any, and
interest by the Trustee, all as described herein. See "THE
BONDS -- Book-Entry Only System" herein.
The 1993 Indexed Inverse Floating/Fixed Rate Bonds and the 1993
Indexed Floating/Fixed Rate Bonds will bear interest at a
variable rate until December 15, and December 15, ,
respectively (in each case, the applicable "Scheduled
Conversion Date"). In certain circumstances, upon the
occurrence of a default or termination event under the terms of
the respective swap agreement, the interest rate on the 1993
Indexed Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/Fixed Rate Bonds, as applicable, will convert to a
fixed rate prior to the Scheduled Conversion Date. In
addition, under certain circumstances described herein, the
purchasers of 1993 Indexed Inverse Floating/Fixed Rate Bonds
may elect to convert such Bonds to bear interest at a fixed
rate prior to the Scheduled Conversion Date. The purchaser of
any such Bonds is directed to the discussions herein under the
captions "THE BONDS", and "APPENDIX F" for a full description
of the interest rate calculations and the circumstances under
which the interest rate on such bonds may convert to a fixed
rate prior to the Scheduled Conversion Date.
LA2/JAS:1871-04/19/93
,
The Bonds are subject to redemption as described herein. The
Bonds are being issued for sale to the poway Public Financing
Authority (the "Authority"), and will be resold by the
Authority to paineWebber Incorporated (the "Underwriter").
[INSURANCE LANGUAGE TO COME]
THE BONDS (AND INTEREST THEREON) SHALL NOT CONSTITUTE A CHARGE
AGAINST THE GENERAL CREDIT OF THE AGENCY. UNDER NO
CIRCUMSTANCES SHALL THE AGENCY BE OBLIGATED TO PAY PRINCIPAL OF
OR INTEREST ON THE BONDS EXCEPT FRC>>! THE TRUST ESTATE,
INCLUDING THE PLEDGED REVENUES RECEIVED BY THE AGENCY. THE
BONDS (AND INTEREST THEREON) ARE NOT A DEBT, OBLIGATION OR
LIABILITY OF THE CITY OF P01IAY, THE STATE OF CALIFORNIA OR ANY
OF ITS POLITICAL SUBDIVISIONS (OTHER THAN THE AGENCY), NOR DO
THEY CONSTITUTE A PLEDGE OF THE FAITH AND CREDIT OR THE TAXING
POWER OF ANY OF THE FOREGOING (INCLUDING THE AGENCY). THE
AGENCY BAS NO TAXING POWER. THE BONDS DO NOT CONSTITUTE ANY
INDEBTEDNESS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR
STATUTORY DEBT LIMIT OR RESTRICTION.
This cover page contains certain information for reference
only. It is not a summary of this issue. Investors must read
the entire Official Statement, including information under the
headings "RISK FACTORS" and "LIMITATIONS OF TAX REVENUES" to
obtain information essential to the making of an informed
investment decision.
The Bonds are offered when, as and if issued, subject to the
approval as to their legality by Stradling, Yocca, Carlson &
Rauth, a Professional Corporation, Newport Beach, California,
Bond Counsel, and certain other conditions. Certain legal
matters will be passed upon for the Underwriter by its counsel,
Nossaman, Guthner, Knox & Elliott, Los Angeles, California. It
is expected that the Bonds in book-entry form will be available
for delivery in New York, New York on or about May ___, 1993.
paineWebber Incorporated
Dated: May ___, 1993
LAZ/JAS:1871-04/19/93
,
""TIJIITY SOlEDUlE
$ 1993 Fbed Rate Bonds
cans;sting of:
$ Seri.l Bonds
Maturity Pdncipal Price
lDecemb@r 15 of) Amount Interest Rate nr yield
$ Te... Bonds
$ % Term Bonds Due December 15. ____ Price or Yield, _____%
$ % Term Bonds Due December 15. ____ Price or Yield: _____%
$ 1993 Indexed Inverse FloatinglFixed Rate Bonds
Scheduled Interest Interest Rate
Principal Conversion Rate to On or After Price
Maturitv Amount Date Float;n;nT -.- or Yield
$ 1993 Indexed FloatinglFixed Rate Bonds
Scheduled Interest Interest Rate
Principal Conversion Rate to On or After Price
Maturity Amount Date Floatin~(zr- '- or Yield
(1) From the date of delivery to, but not including t _____ ___X per annum
plus %t minus the Average Index Rate, as defined herein; provided that in no
event will this rate be less than zero for any Interest Period. In certa; n
circumstances. upon the occurrence of certain defaults or tenmination events under the
terms of the related Swap Agreement, the interest rate on the 1993 Indexed Inverse
Floating/Fixed Rated Bonds will convert to ____% prior to the Schedule Conversion Date.
(2) From the date of delivery to, but not including . _%. the greater
of (i) ______% per annum or (ii) _____% per annum plus the Average Index Rate, as
defined herein, minus _____X. In certain circumstances, upon the occurrence of certain
defaults or tennination events under the tenns of the related Swap Agre~ent, the
interest rate on the 1993 Indexed Floating/Fixed Rate Bonds will convert to ____% prior
to the Scheduled Conversion Date.
LA2/JAS:1B71-04/19/93
,
No dealer, broker, salesperson or other person has
been authorized by the Agency or the Underwriter to give any
information or to make any representation other than as
contained in this Official Statement in connection with the
offering described in it and, if given or made, such other
information or representation must not be relied upon as having
been authorized by the Agency or the Underwriter. This
Official Statement does not constitute an offer to sell or the
sOlicitation of an offer to buy any securities other than those
described on the cover page, nor shall there be any offer to
sell, solicitation of an offer to buy or sale of such
securities by any person in any jurisdiction in which it is
unlawful for such person to make such offer, solicitation or
sale.
The Official Statement is not to be construed as a
contract with the purchasers of the Bonds. Statements
contained in this Official Statement which involves estimates,
forecasts or matters of opinion, whether or not expressly so
described herein, are intended solely as such and are not to be
construed as a representation of facts.
The information contained in this Official Statement
(which includes the Appendices) has been obtained by the Agency
from official sources deemed reliable. No representation is
made, however, as to the accuracy or completeness of such
information, and nothing contained in this Official Statement
is, or shall be relied upon as, a contract with the purchasers
of the Bonds. This Official Statement is submitted in
connection with the sale of the securities described in it and
may not be reproduced or used, in whole or in part, for any
other purposes. The information and expressions of opinion
contained in this Official Statement are subject to change
without notice and neither the delivery of this Official
Statement nor any sale made by means of its shall, under any
circumstances, create any implication that there have not been
changes in the affairs of the Agency since the date of this
Official Statement.
The Agency, the Bond Insurer and the Swap Provider
certify this Preliminary Official Statement to be "deemed
final" as of its date, except for the omission of certain final
pricing and related information, as required by Rule 15c2-12 of
the Securities and Exchange Commission.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY ~
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN '~
THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
LA2/JAS:1871-04/19/93
,
----.------...-.-
CITY P01lAY
San Diego County, California
CITY COUNCIL
Don Higginson, Mayor
Robert C. Emery, Vice Mayor
B. Tony Snesko, Counci1member
Susan Callery, Counci1member
Mickey Cafagna, Counci1member
P01lAY REDEVELOPMENT AGENCY
Don Higginson, Chairperson
Robert C. Emery, Deputy Chairperson
B. Tony Snesko, Member
Susan Callery, Member
Mickey Cafagna, Member
AGENCY/CITY STAFF
James L. Bowersox, Executive Director/City Manager
John D. Fitch, Assistant Executive Director/
Assistant City Manager
Marjorie K. Wah1sten, Secretary/City Clerk
Stephen M. Eckis, City Attorney
Peggy A. Stewart, Director of Administrative Services
Reba Wright-Quast1er, Director of Planning Services
David Narevsky, Redevelpment Manager
BOND COUNSEL
Stradling, Yocca, Carlson & Rauth
a Professional Corporation
Newport Beach, California
REDEVELOPMENT CONSULTANT
Rosenow Spevacek Group, Inc.
Santa Ana, California
TRUSTEE
Bank of America National Trust and
Savings Association
Los Angeles, California
,
[AREA MAP TO COME]
LA2/JAS:1871-04/19/93
,
~~---
TABLE OF CONTENTS
~
INTRODUCTION.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 1
General.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 1
The City and the Agency........................ 2
Other Agency Obligations....................... 3
Security for the Bonds......................... 5
THE REFUNDING PLAN.................................................................. 5
SOURCES AND USES OF FUNDS.......................... 6
Source of Funds................................................................ 6
Use of Funds...................................................................... 6
THE BONDS.......................................... 7
Description of the 1993 Bonds.................. 7
Optional Redemption............................ 8
Mandatory Sinking Fund Redemption.............. 8
Notice of Redemption........................... 9
Registration, Exchange and Transfer............ 9
Mutilated, Lost, Destroyed or Stolen Bonds..... 10
Issuance of Additional Indebtedness............ 10
Book-Entry Only System......................... 11
DEBT SERVICE SCHEDULE.............................. 14
SOURCES OF PAYMENT AND SECURITY FOR THE BONDS...... 15
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Limited Obl.igations........................................................ 15
Tax Revenues...................................................................... 15
Reserve Account................................................... 17
Loans from the City of Poway................... 18
Low and Moderate Income Housing Requirements... 18
INSURANCE ON THE BONDS............................. 19
SWAP PROVIDER...................................... 19
RISK FACTORS....................................... 19
Tax Revenues; Pledged Revenues................. 19
Estimated Revenues............................. 20
Current Litigation............................. 21
Change in Law.................................. 22
Reduction in Inflationary Rate................. 22
Levy and Collection............................ 22
Assessment Appeals and Tax Delinquencies....... 22
Development Risks.............................. 23
Direct and Overlapping Indebtedness............ 23
Bankruptcy and Foreclosure..................... 24
i.
LA2/JAS:1871-04/14/93
,
- -
TABLE OF CONTENTS
~
LIMITATIONS ON TAX REVENUES........................ 26
Property Tax Limitations - Article XIIIA....... 26
Implementing Legislation....................... 27
Property Tax Collection Procedures............. 28
Property Tax Administrative Costs.............. 31
Special Subventions........................................................ 31
Unitary Property............................................................. 31
Additional Limitation on Tax Revenues.......... 32
Low and Moderate Income Housing Requirements... 33
Tax Increment Limitation....................... 34
Appropriations Limitations; Article XIIIB
of the California Constitution............ 34
State Budget................................... 35
THE AGENCy.................................................................................. 36
General. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 36
Members.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 36
Staff.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. '" .. .. .. .. .. .. .. .. 37
Agency Powers and Duties....................... 37
Agency Financial Statements.................... 38
THE PAGUAY DEVELOPMENT PROJECT..................... 39
General.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 39
The Projects; Purchase of Improvements......... 40
Amendment of the Plan.................................................... 40
Tax Revenue Projections........................ 40
Assessment Appeals............................. 47
Delinquent Taxes Within the Project Area....... 47
Project Area Owner Bankruptcy.................. 48
Direct and Overlapping Debt.................... 52
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE..... 52
Disposition of Bonds Proceeds.................. 52
Costs of Issuance Funds........................ 52
Special Funds; Deposit and Transfer of
Amounts Therein...................................................... 52
Investment of Fund and Accounts................ 54
Covenants of the Agency........................ 55
The Trustee........................................................................ 58
Amendment of Indenture......................... 59
Events of Default............................................................ 59
Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Defeasance.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 61
ii.
LA2/JAS:1871-04/14/93
,
----
TABLE OF CONTENTS
~
CONCLUDING INFORMATION............................. 61
Unde~wri ting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Legal Opinion.................................. 61
Rating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Verification of Mathematical Accuracy.......... 62
Tax Exemption.................................. 63
Litigation.................................... . 64
No General Obligation of the City
or the Agency............................. 65
Miscellaneous. . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 65
APPENDIX A - SELECTED DEFINITIONS.................. A-1
APPENDIX B - CITY OF POWAY GENERAL ECONOMIC AND
FINANCIAL INFORMATION................ B-1
APPENDIX C - AUDITED FINANCIAL STATEMENTS OF
AGENCY FOR FISCAL YEAR 1992/93....... C-1
APPENDIX D - MAP OF THE PROJECT AREA.............. D-1
APPENDIX E - FORM OF LEGAL OPINION................ E-1
APPENDIX F - DEFINITIONS AND PROVISIONS RELATING
TO THE 1993 INDEXED INVERSE FLOATING/
FIXED RATE BONDS AND THE 1993 INDEXED
FLOATING/FIXED RATE BONDS............ F-1
APPENDIX G - BOND INSURANCE POLICY................. G-1
APPENDIX H - REDEVELOPMENT REPORT OF ROSENOW SPEVACEK
GROUP, INC........................... . H-1
Hi.
IA?I'''C.1a." nA/1""n.,
,
-
$103.355.000*
POWAY REDEVBLOPIIBlIT AGENCY
PAGUAY REDEVBLOPIIBlIT PROJBC'r
SUBORDINATED TAX ALLOCATION REFUNDING BONDS
SERIBS 1993
CONSISTING OF
$ 1993 Indexed Floating/Fixed Rate Bonds
$ 1993 Indexed Inverse Floating/Fixed Rate Bonds
$ 1993 pixed Rate Bonds
INTRODUCTION
General
The purpose of this Official Statement. which includes
the cover. the table of contents and the Appendices, is to
provide certain information concerning the sale by the poway
Redevelopment Agency (the "Agency") of $103,355,000* aggregate
principal amount of its paguay Redevelopment Project
Subordinated Tax Allocation Refunding Bonds. Series 1993 (the
"Bonds"), consisting of $ amount of 1993 Indexed Inverse
Floating/Fixed Rate Bonds, $ amount of 1993 Indexed
Floating/Fixed Rate Bonds and $ amount of 1993 Fixed
Rate Bonds. See APPENDIX F hereto for the specific terms and
definitions relating to the 1993 Indexed Inverse Floating/Fixed
Rate Bonds and the 1993 Indexed Floating/Fixed Rate Bonds.
The Bonds are being issued pursuant to the
Constitution and laws of the State of California. and
particularly an Indenture of Trust dated as of May 1, 1993 (the
"Indenture"). between the Agency and Bank of America National
Trust and Savings Association, Los Angeles, California, as
trustee (the "Trustee").
Proceeds of the Bonds will be used to refund the
certain outstanding obligations of the Agency (described
below). to construct certain new improvements. to partially
fund a reserve fund for the Bonds, and to pay costs of issuing
the Bonds. The obligations of the Agency to be refunded
consist of the Agency's paguay Redevelopment Project
Subordinated Tax Allocation Bonds, Series 1989A, issued in the
original principal amount of $35,000,000 (the "Series 1989A
BOnds") and its paguay Redevelopment Project Subordinated Tax
Allocation Refunding Bonds, Issue of 1991, issued in the
original principal amount of $9,330,000 (the "Series 1991
Bonds") collectively, the Series 1989A Bonds and the
Series 1991 Bonds shall be referred to herein as the "Prior
Bonds"). The Prior Bonds were issued to assist the Agency in
*Preliminary, subject to change
,
the financing of improvements in its paguay Redevelopment
Project Area (the "Project Area"), pursuant to the California
Community Redevelopment Law, constituting Part 1 of Division 24
(commencing with Section 33000) of the California Health and
Safety Code (the "Redevelopment Law") (see "THE PAGUAY
REDEVELOPMENT PROJECT" herein). The Agency has undertaken the
paguay Redevelopment Project (the "Project") to make various
public improvements in blighted areas of the City of poway (the
"City"), including road improvements, school building and field
improvements, park and recreational projects, drainage, water,
sewer and reclamation projects, and low and moderate income
housing projects.
This Official Statement contains brief descriptions
of, among other things, the Agency, the Bonds, the Project
Area, the Bond Insurer, and the Indenture. Such descriptions
do not purport to be comprehensive or definitive. All
references in this Official Statement to documents are
qualified in their entirety by reference to such documents, and
references to the Bonds are qualified in their entirety by
reference to the form of Bond included in the Indenture.
During the offering period with respect to the Bonds, copies of
the Indenture and other documents described in this Official
Statement may be obtained at the office of the Agency. After
delivery of the Bonds, copies of these documents may be
obtained from the Trustee or the Agency. Capitalized terms
used herein not otherwise defined in Appendix A hereof shall
have the meanings given them in the Indenture, unless the
context clearly requires otherwise or unless otherwise defined
herein.
The City and the Agency
The City of poway is located in the inland valley of
San Diego County, California, approximately 25 miles north of
downtown San Diego along Interstate 15, just south of Rancho
Bernardo. The City presently has a population of 45,263. For
other selected information concerning the City, see "APPENDIX B
- CITY OF POWAY GENERAL ECONOMIC AND FINANCIAL INFORMATION"
hereto.
The Agency was created pursuant to the Redevelopment
Law, and was activated on April 26, 1983 by City Ordinance No.
96. The members of the City Council serve as the governing
board of the Agency, and the City Manager acts as its Executive
Director. On December 13, 1983, the Agency adopted a
Redevelopment plan (the "Plan") for the Project pursuant to
Ordinance No. 117. The Agency is currently in the process of
Amending the plan (see "THE PAGUAY REDEVELOPMENT PROJECT -
Amendment of Plan" herein).
2.
JAS:1868(4/13/93)
,
.
The Project Area consists of approximately 8,200 acres
comprised of residential, industrial, commercial and public
uses. Assessed valuation for 1992-93 was $1,216,587,278, which
was an increase of $1,013,256,365 over the Base Year of 1983-84.
The Redevelopment Law provides a means for the
financing of redevelopment projects through the use of tax
allocation revenues. Under this mechanism, the assessed
valuation of property within a redevelopment project area on
the assessment roll last equalized prior to the adoption of the
redevelopment plan becomes the base year assessment roll, and
the increase in taxable valuation in subsequent years over the
base year becomes the increment upon which taxes levied may be
allocated to a redevelopment agency. All taxes collected
thereafter upon the taxable valuation increment (the increase
in taxable valuation above the base year assessment roll) are
available to the redevelopment agency for redevelopment
projects, and may be pledged to the payment of the debt service
on obligations issued to finance or refinance a redevelopment
project. Redevelopment agencies themselves have no authority
to levy property taxes.
Other Agency Obligations
The Agency has issued, entered into or is subject to
other obligations which affect the total Tax Revenues ( defined
below) available to the Agency for debt service on the Bonds,
some of which have a claim on Tax Revenues superior to that of
the Bonds.
Pass-Through Agreements. The Agency has entered into
an agreement with the County of San Diego (the "County"), dated
March 7, 1984, by virtue of which the Agency became obligated
to pass through to the County an initial amount of $28,000 from
the tax increment generated in the Project Area for fiscal year
1984-85, plus an amount escalating by 7% for every subsequent
fiscal year. Additionally, if the Agency makes a finding which
reduces or eliminates its obligation to set aside low and
moderate income housing funds (see "Low and Moderate Income
Housing Requirements" below), the amount of the reduction must
be added to the pass-through amount. The Agency has also
entered into an agreement with the pomerado Cemetery District
(the "District"), dated October 23, 1984, obligating the Agency
to pass through to the District an initial amount of $250 from
the tax increment for fiscal year 1984-85, plus an amount
escalating by 7% for every subsequent fiscal year. See "THE
PAGUAY REDEVELOPMENT PROJECT - Table III" for a description of
the projected amounts payable under these Pass-Through
Agreements. Pledged Revenues (as defined below) exclude
3.
JAS:1868(4/13/93)
,
amounts needed to make payments under the Pass-Through
Agreements. The Agency is currently negotiating pass-through
agreements with the County, the College District,
the Unified School District and the Cemetary
District in conjunction with its proposed Plan amendment. See
"THE PAGUAY REDEVELOPMENT PROJECT - Amendment of the Plan"
herein.
Low and Moderate Income Housing Requirements.
Sections 33334.2 and 33334.3 of the Redevelopment Law require
redevelopment agencies to set aside in a Low and Moderate
Income Housing Fund not less than 20% of all tax increment
derived each year from redevelopment project areas, for the
purposes of improving the community's supply of low and
moderate income housing. This low and moderate income housing
requirement can be reduced or eliminated under certain
circumstances. The Pledged Revenues include the Agency's
obligations with regard to the Low and Moderate Income Housing
Fund because certain of the Bond proceeds will be expended on
improving the community's suppy of low and moderate income
housing. In addition to this pledge, the Agency is obligated
to expend certain of the monies currently on deposit in its Low
and Moderate Housing Fund. See "SOURCES OF PAYMENT AND
SECURITY FOR THE BONDS - Low and Moderate Income Housing
Requirements" herein.
Other Agency Obligations. In addition to the Prior
Bonds, the Agency has also previously issued its paguay
Redevelopment Project, Tax Allocation Refunding Bonds, Series
1990A, in the original principal amount of $21,595,000 (the
"Senior Lien Bonds"). As of December 15, 1992, there were
$20,555,000 of the Senior Lien Bonds outstanding. The lien on
Tax Revenues for payment of the Senior Lien Bonds is senior to
the lien of the Bonds, and the amounts necessary to pay
principal of, premium of, if any, and interest on the Senior
Lien Bonds is excluded from Pledge Revenues.
The Agency has also entered into various owner
participation agreements (the "OPA's") in which two of the
OPA's are senior to the Bonds in terms of certain Tax Revenues
(the "Business Park Obligations"). The Business Park
Obligations will be senior to the Bonds in terms of entitlement
to be paid from Tax Revenues collected with respect to the
properties within the respective Business Parks (See "THE
PAGUAY REDEVELOPMENT PROJECT - Owner Participation Agreements. (
herein) . Amounts payable under the Business Park Obligations
for fiscal year 1992-93 will be approximately $179,000.. -.'
-- - - ----
See "THE PAGUAY REDEVELOPMENT PROJECT - Table III"
herein for a description of debt service payments on the Senior
Lien Bonds, and projections of payments on the Business Parks
Obligations.
4.
JAS:1868(4/13/93)
\
-
Security for the Bonds
The Bonds are payable solely from and are secured by
Pledged Revenues (as defined below) to be derived from the
Project Area, and the amounts on deposit in certain funds aa
described herein. The Project Area consists of approximately
8,200 acres of land within the City. The total assessed
valuation of taxable property in the Project Area for fiscal
year 1992/93 was approximately $1,013,;256,365 greater than the
adjusted assessed valuation in the Base Year. (See "THE PAGUAY
REDEVELOPMENT PROJECT - Table I" herein). Pursuant to the
Redevelopment Law, the maximum amount of tax increment which
the Agency can currently receive from the Project Area is
$408,489,000. See "LIMITATIONS ON TAX REVENUES - Tax Increment
Limitations" herein.
The term "Tax Revenues" (defined more fully herein)
encompasses all taxes annually allocated to the Agency with
respect to the Project Area, (see "SOURCES OF PAYMENT AND
SECURITY FOR THE BONDS - Tax Revenues" herein). See also
"LIMITATIONS ON TAX REVENUES - Tax Increment Limitations"
herein.
"Pledged Revenues" means Tax Revenues derived from the
property located within the Project Area, less (i) amounts
required to pay principal of, premium, if any, and interest on
the Senior Lien Bonds or refunding bonds therefor, including
all amounts required to replenish the reserve account
established for the Senior Lien Bonds and to pay other amounts
secured thereunder, (ii) all amounts required to be paid to
other taxing entities pursuant to the Pass-Through Agreements
(as defined in APPENDIX A hereto); and (iii) all amounts
allocated to the Agency pursuant to the Redevelopment Law
payable under the Business Park obligations. See "THE PAGUAY
REDEVELOPMENT PROJECT - Tax Revenue Projections" herein for a
description of the current and projected Pledged Revenues.
Numerous risk factors affect the amount, projections
and timing of receipt by the Agency of Pledged Revenues. See
"THE BONDS - Tax Revenues, " "RISK FACTORS," "LIMITATIONS ON TAX
REVENUE" and APPENDIX H herein.
THE REFUNDING PLAN
The proceeds of the Bonds will be used for the purpose
of refunding the Prior Bonds in the principal amount of
$ , to finance certain improvements in the Project
Area, to partially fund a reserve fund for the Bonds and to pay
costs of issuance of the Bonds.
5.
JAS:1868(4/13/931
,
Concurrent with the issuance of the Bonds, the Agency
will enter into a Refunding Escrow Agreement dated as of May 1,
1993 (the "Escrow Agreement") with Bank of America National
Trust and Savings Association, acting as escrow bank (the
"Escrow Bank"). A portion of the proceeds from the sale of the
Bonds will be deposited in the escrow fund established under
the Escrow Agreement (the "The Escrow Fund") for the Agency's
Series 1989A Bonds and the Series 1991 Bonds. Amounts
deposited into the Escrow Fund will be invested solely in
direct, non-callable, general obligations of the United States
Department of the Treasury, the principal of and interest on
which, together with any available cash to be held uninvested,
will be sufficient to pay the principal of and interest and
premium on the Prior Bonds to and including the dates of
redemption thereof and to redeem the Prior Bonds on their
respective redemption dates. See "CONCLUDING INFORMATION"
herein.
The moneys and securities held in the Escrow Fund are
pledged to the payment of the Series 1989A and the Series 1991
Bonds. Neither the monies or the principal of the escrow
securities deposited with the Escrow Bank nor the interest nor
the interest thereon will be available for the payment of the
Bonds.
SOURCES AND USES OF FUHDS
The proceeds from the sale of the Bonds will be
disbursed as fo11owsI
Sources of Fundsl
Bond Proceeds.....""..""""....."""""."." $103,355,000*
Accrued Interest"...".".".""""""..."."""
Series 1989A Reserve Fund...............
Series 1991 Reserve Fund................
Total
Use of Fundsl
Underwriter's DiSCjUnt..................
Costs of Issuance.l """""""""""""""""""""
Interest Account""""""""""""""""""""""""
Reserve Account"""""""""""""""""""""""""
Redevelopment Fund......................
Total
.l/Inc1udes $ Bond Insurance premiums.
*Preli.inlry. subject to chlnge
6.
JAS:1868(4/13/93)
,
THE BONDS
De.cr~pt~on of the 1993 Bonds
The Bonds will be issued in fully registered form
without coupons. The 1993 Fixed Rate Bonds w~ll be issued in
the denom~nat~on of $5,000 or any ~ntegral mu1t~ple thereof,
and shall be dated Hay 1, 1993. The 1993 Indexed Inverse
Floating/Fixed Rate Bonds and the 1993 Indexed Floating/Fixed
Rate Bonds shall be dated the date of ~ssuance, and shall be
~ssued in denominations of $100,000 or any integral multiple
thereof until converted to the applicable Bond Rate (as
provided for in APPENDIX F hereof), and thereafter shall be in
denominations of $5,000 or any integral multiple thereof. The
Bonds will mature on the dates and in the amounts set forth on
the inside front cover of this Official Statement. The Bonds,
when issued, will be registered in the name of Cede & Co., as
registered owner and nominee of The Depository Trust Company,
New York, New York ("DTC"). So long as DTC, or Cede & Co. as
its nominee, is the registered owner of all Bonds, all payments
on the Bonds will be made directly to DTC, and disbursement of
such payments to the DTC Participants (defined below) will be
the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners (defined below) will be the
responsibility of the DTC Participants, as more fully described
hereinafter. (See "Book-Entry Only System" belOW.)
Interest on the 1993 Fixed Rate Bonds will be computed
on the basis of a 360-day year of 30-day months and will be
payable on December 15, 1993 and semiannually thereafter on
each December 15 and June 15 (the "Interest Payment Dates.).
Interest on the 1993 Fixed Rate Bonds will be payable at the
respective rates per annum set forth on the cover of this
Official Statement, to the owners of record as of the close of
business on the first day of the month in which any Interest
Payment Date occurs, regardless of whether such day is a
business day (the "Record Date"). Any Bonds shall bear
interest from the Interest paymetn Date preceding their date of
authentication, unless the date-of authentication is I (i) an
Interest payment Date, in which case such Bonds shall bear
interest from such date~ or (ii) prior to the first Interest
Payment Date, in which case such Bonds shall bear Interest from
June 1, 1993, in the case of the 1993 Fixed Rate Bonds, or from
ten Effective Date, in the case of the 1993 Indexed Inverse
Ploating/Fixed Rate Bonds and 1993 Indexed Floating/Fixed Rate
Bonds~ or (iii) after a Record Date with respect to an Interest
Payment Date but prior to such Interest Payment Date, in which
case, such Bonds shall bear interest from such Interest Payment
Date~ provided, however, if at the time of authentication of
any Bond, interest is in default on Outstanding Bonds, such
Bond shall bear interest from the Interest Payment Date to
which interest has previously been paid or made available for
payment.
7.
JAS:1868(4/13/93)
"
.__.~
Interest on the 1993 Indexed Inverse Floating/Fixed
Rate Bonds and the 1993 Indexed Floating/Fixed Rate Bonds shall
be calculated and payable all as described in APPENDIX F hereto.
Interest on the Bonds shall be paid by the Trustee by
check or draft mailed by first class mail, postage prepaid on
the Interest payment Date to the registered owner as his or her
name and address appears on the register kept by the Trustee at
the close of business on the Regular Record Date preceding the
Interest payment Date or, upon request in writing made before
the Regular Record Date preceding the Interest Payment Date by
a Bondowner of $1,000,000 or more in principal amount of Bonds,
payment shall be made on the Interest Payment Date by wire
transfer in immediately available funds to an account
designated by such Bondowner to the Trustee. Should payment
come due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day without
accruing additional interest from the Interest Payment Date.
Optional Redemption
The Bonds maturing on or before December 15, ____, are
not subject to call and optional redemption prior to maturity.
The Bonds maturing on December 15, are subject to
redemption prior to maturity at the option of the Agency, on
December 15, ____ or on any Interest Payment Date thereafter,
in whole or in part in amounts that are in authorized
denominations and are as nearly as possible proportional among
maturities and by lot within a maturity, at the following
redemption prices, expressed as a percentage of the principal
amount to be redeemed, together with accrued interest to the
date of redemption:
Redemotion Dates Redemotion Prices
December 15, ____ and June 15, ____ 102%
December 15, ____ and June 15, ____ 101
December 15, ____ and thereafter 100
Mandatory Sinkinq Fund Redemption
The outstanding Bonds maturing on December 15, ____,
are subject to mandatory sinking fund redemption in part, by
lot, at a redemption price equal to 100% of their principal
amount toqether with accrued interest to the date fixed for
redemption, without premium, on the dates and in the aggregate
principal amounts listed below:
Redemption Date
(December 15) Princitlal Amount
[To come]
8.
JAS:1868(4/13/93)
,
--
Notice of Redemption
Notice of redemption will be given by the Trustee on
behalf of the Agency to owners of any Bonds designated for
redemption. Such notice of redemption shall state (a) the
redemption date; (b) the redemption price; (c) the numbers of
the Bonds to be redeemed; (d) as to any Bonds to be redeemed in
part only, the registered Bond numbers and the principal
portion of the Bonds designated for redemption; and (e) that
interest on the principal portion on the Bonds designated for
redemption shall cease to accrue from and after the redemption
date, and that on the redemption date there shall become due
and payable on each of such Bonds the redemption price for such
Bonds. At least thirty (30) days but no more than sixty (60)
days prior to the redemption date, the Trustee shall mail such
notice, first class, postage prepaid, to such respective owners
at their addresses appearing on the Bond register. The actual
receipt by any owner of notice of such redemption shall not be
a condition precedent thereto, and neither the failure to
receive such notice nor any defect therein shall affect the
sufficiency of the proceedings for the redemption of such
Bonds. A certification by the Trustee that notice of such
redemption has been given as provided in the Indenture shall be
conclusive as against all parties, and it shall not be open to
- any owner to show that he or she failed to receive actual
notice of call and redemption.
Registration, Exchange and Transfer
The Bonds may be transferred or exchanged upon
surrender thereof to the Trustee, but only in the manner and
subject to the limitations and payment of charges provided in
the Indenture.
Upon such reasonable terms and conditions as the
Agency may prescribe, the Trustee shall deliver a new fUlly
authenticated and registered Bond or Bonds of authorized
denomination, of the same maturity and in the same aggregate
principal amount.
The person requesting the exchange will be required to
pay any tax or other governmental charge imposed by law on such
transfer or exchange. The Trustee shall not be required to
register a transfer or make an exchange of any Bond (i) during
the period established by the Trustee for the selection of
Bonds for redemption, or (ii) if such Bond has been called for
redemption in whole or in part.
l.
JAS:1868(4/13/93)
\
-~---~-_."-
The Agency and the Trustee may treat the owner, as
shown on the Bond register at the relevant time, as the
absolute owner of that Bond for any and all purposes and the
Agency and the Trustee shall not be affected by any notice to
the contrary.
Mutilated, Lost, Destroyed or Stolen Bonds
The Agency has covenanted that it shall not issue any
obligations (other than obligations to refund the Senior Lien
BOnds) payable on a basis Senior to the lien of the Bonds on
Pledged Revenues. If any Bond is mutilated, lost, stolen or
destroyed, the Agency shall execute, and the Trustee shall
authenticate and deliver, a new Bond in replacement thereof in
the same aggregate principal amount and of the same maturity.
Any such mutilated Bond shall be surrendered to the Trustee,
and in the case of a lost, stolen, or destroyed Bond, the
Trustee and the Agency may require satisfactory evidence of
such loss, theft or destruction and indemnity prior to
authenticating a new Bond. The owner shall pay the reasonable
expenses of the Trustee in connection with replacing a
mutilated, lost, stolen, or destroyed Bond.
Issuance of Additional Indebtedness
The Agency has covenanted that it shall not issue any
obligations (other than obligations to refund the Senior Lien
Bonds) payable on a basis senior to the lien of the Bonds on
Pledged Revenues. If at any time the Agency determines it
needs to do so, the Agency may provide for the issuance of, and
sell, obligations having a lien on Pledged Revenues on a parity
with the Bonds (the "Parity Bonds") in such principal amounts
as it estimates will be needed. The issuance and sale of any
Parity Bonds shall be subject to the following conditions
precedent:
(a) The Agency shall be in compliance with all
covenants in the Indenture;
(b) The Parity Bonds shall be on such terms and
conditions as may be set forth in a supplemental resolution or
indenture, which shall provide for (i) bonds substantially in
accordance with the Indenture, (ii) the deposit of moneys into
the Reserve Account in an amount (which may be represented by
an Alternate Reserve Account Security described in the
Indenture) sufficient, together with the balance of the Reserve
Account, to equal the Reserve Requirement on all Bonds expected
to be Outstanding, including the proposed Parity Bonds, and
(iii) the disposition of surplus Pledged Revenues in
substantially the same manner as provided in the Indenture;
10.
JAS:1868(4/13/93)
\
(c) Receipt of a certificate or opinion of an
Independent Financial Consultant showing:
(i) For the current and each future Bond Year
the maximum annual debt service for each such Bond Year
with respect to all Bonds and Parity Bonds reasonably
expected to be Outstanding following the issuance of the
Parity Bonds;
(ii) For the then current Bond Year, the Pledged
Revenues to be received by the Agency based upon the most
recent assessed valuation of taxable property in the
Redevelopment Project, including any supplemental tax roll,
certified by the appropriate officer of the County of San
Diego (exclusive of any anticipated business inventory
subvention revenues); and
(iii) That for the then current and each future
Bond Year, the Pledged Revenues referred to in item (ii)
are at least equal to 125% of the maximum annual debt
service referred to in item (i) above, and that the Agency
is entitled under the Redeve10ment Law and the
Redevelopment plan to receive taxes under Section 33670 of
the Redevelopment Law in an amount sufficient to meet
expected debt service with respect to all Bonds and Parity
Bonds; and
(d) The Parity Bonds shall mature on and interest
shall be payable on the same dates as the Bonds (except the
first interest payment may be from the date of the Parity Bonds
until the next succeeding December 15 or June 15).
Notwithstanding the foregoing, if the Agency is in
compliance with all covenants set forth in the Indenture, the
Agency may issue and sell obligations pursuant to the
Redevelopment Law, having a lien on the Pledged Revenues which
is junior to the Bonds and which shall be payable solely from
surplus as then declared or which may thereafter be declared
pursuant to the Indenture (as used herein "obligations" shall
include, without limitation, bonds, notes, interim
certificates, debenture or other obligations, loans, advances
or other forms of indebtedness incurred by the Agency).
Book-Entry Only System
The Depository Trust Company ("DTC") will act as
securities depository for the Bonds. The ownership of one
fully registered Bond in the aggregate principal amount of each
maturity of the Bonds will be registered in the name of Cede &
11.
JAS:1868(4/13/93)
,
-
Co., as nominee for DTC. DTC is a limited-purpose trust
company organized under the laws of the State of New York, 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 provisions of
Section 17A of the Securities Exchange Act of 1934, as
amended. DTC holds securities of the DTC Participants and
facilitates transactions among DTC participants in such
securities through electronic book-entry changes in accounts of
the DTC Participants, thereby eliminating the need of physical
movement of securities certificates. DTC Participants include
securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations, some of
whom (and/or their representative) own DTC. Access to the DTC
system is also available to other entities such as banks,
brokers, dealers and trust companies that clear through or
maintain a custodian relationship with a DTC participant,
either directly or indirectly (the "Indirect Participants").
Each DTC Participant will receive a credit balance in
the records of DTC in the amount of such DTC Participant's
interest in the Bonds. Each person for whom a DTC Participant
acquires an interest in the Bonds, as nominee, may desire to
make arrangements with such DTC Participant to receive a credit
balance in the records of such DTC Participant, and may desire
to make arrangements with such DTC Participant to have all
notices of prepayment or other communications to DTC, which may
affect such person, forwarded in writing by such DTC
Participant and to receive notification of all interest
payments. Neither the Agency nor the Trustee will have any
responsibility or obligation with respect to the payments to or
the selection of the beneficial interests in the Bonds to be
prepaid in the event of prepayment of less than all Bonds or
providing of notice to the DTC participants or the persons for
whom they act as nominees with respect to the Bonds. For the
purposes of this Official Statement, the term "Beneficial
Owner" shall hereinafter be defined as the person for whom the
DTC Participant acquires an interest in the Bonds.
AS LONG AS CEDE & CO., OR ITS SUCCESSOR AS A NOMINEE
OF DTC, IS THE OWNER OF THE BONDS, REFERENCES HEREIN TO THE
OWNERS OF THE BONDS SHALL MEAN CEDE & CO., AS AFORESAID, AND
SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS. THE
BENEFICIAL OWNERS WILL NOT RECEIVE BONDS REPRESENTING THEIR
BENEFICIAL OWNERSHIP INTERESTS IN THE BONDS. IT IS ANTICIPATED
THAT EACH BENEFICIAL OWNER WILL RECEIVE A WRITTEN CONFIRMATION
OF THE OWNERSHIP INTEREST ACQUIRED BY SUCH BENEFICIAL OWNER IN
THE BONDS FROM THE PERSON OR ENTITY FROM WHOM SUCH OWNERSHIP
INTEREST IS ACQUIRED.
12.
JAS:1868(4/13/93)
,
Principal and interest payments with respect to the
Bonds will be made to DTC or its nominee, Cede & Co., as the
owner of the Bonds. Disbursal of such payments to DTC
Participants is the responsibility of DTC~ disbursal of such
payments to the Beneficial Owners is the responsibility of the
DTC Participants and the Indirect Participants. Upon receipt
of moneys, DTC's current practice is immediately to credit the
accounts of the DTC Participants in accordance with their
respective holdings shown on the records of DTC. Payments by
the DTC Participants and the Indirect Participants to the
Beneficial Owners will be governed by standing instructions and
customary practices, as is now the case with municipal
securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of
such DTC participant or Indirect Participant and not of DTC,
the Agency or the Paying Agent, subject to any statutory and
regulatory requirements as may be in effect from time to time.
No assurance can be given by the Agency or the Trustee that DTC
and the DTC Participants will make prompt transfer of payments
to the Beneficial Owners.
DTC may determine to discontinue providing its
services with respect to the Bonds at any time by giving notice
to the Agency and discharging its responsibilities with respect
thereto under applicable law. Under such circumstances, if
there is not a successor securities depository, the Bonds are
required to be delivered as described in the Indenture. The
Beneficial Owner upon registration of Bonds held in the
Beneficial Owner's name will become the Owner of the Bonds.
The Agency may at any time discontinue the use of the
system of book-entry only transfers through DTC (or a successor
securities depository). In such event, the Bonds will be
required to be delivered as described in the Indenture.
In the event that the book-entry only system is
discontinued, payments of principal and interest with respect
to the Bonds shall be payable as described in the section
entitled "THE BONDS - Description of the Bonds" herein.
13.
JAS:1868(4/13/93)
,
_._-~ -
DEBT SERVICE SCHEDULE
Set forth below is the schedule of annual debt service
on the 1993 Bonds.
Princioa1
Year Sinking
(ending Fund Total Annual
Dec. 151 Maturities Pavments Interest(2) Debt Service
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2006
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
TOTALS
(1) Term Bonds maturity for the 1993 Bonds.
(2) Interest on the 1993 Indexed Inverse/Fixed Rate Bonds and the 1993
Indexed Floating/Fixed Rate Bonds is presented at the applicable Bond
Rate. (See APPENDIX F hereto.)
14.
JAS:1868(4/13/93)
,
SOURCES OF PAYMENT AND SECURITY FOR THE BONDS
Genera1
The Bonds are secured by an irrevocable pledge of
(i) the Pledged Revenues payable to the Agency, (ii) any
proceeds of the Bonds originally deposited with the Trustee,
including all monies deposited and held from time to time by
the Trustee in the funds and accounts, including the Reserve
Account, established pursuant to the Indenture (other than the
Rebate Fund), and (iii) income and appreciation with respect to
the investment of amounts on deposit in the funds and accounts
established under the Indenture (other than the Rebate Fund)
prior to the disposition of such funds pursuant to the
Indenture (collectively, the "Trust Estate").
The Pledged Revenues shall be applied to the payment
of the principal of, premium, if any, and interest on the Bonds
and any Parity Bonds and to maintain the Reserve Account in an
amount equal to the Reserve Requirement.
If an event of default occurs under the Indenture
which results in insufficient amounts within the Trust Estate
with which to pay the principal of, premium (if any) and
interest on the Bonds, to the extent the Trustee recovers any
monies following an event of default under the Indenture, such
monies and any resulting deficiencies in the payments of
principal of and interest on the Bonds will be applied ratably
to the aggregate of such principal and interest. See "SUMMARY
OF CERTAIN PROVISIONS OF THE INDENTURE -- Remedies."
Limited Obligations
The Bonds are not a debt of the City, the State or any
of its pOlitical subdivisions, and neither the City, the State
nor any of its political subdivisions, other than the Agency is
liable therefor. The principal of, premium, if any, and
interest on the Bonds are payable solely from the Trust
Estate. The Agency's obligation under the Indenture is a
limited obligation payable solely from Pledged Revenues
allocated to the Agency and from other amounts pledged under
the Indenture. The Bonds do not constitute an indebtedness
within the meaning of any constitutional or statutory debt
limit or restriction.
Tax Revenues
As provided in the Plan, and pursuant to Article 6 of
Chapter 6 of the Community Redevelopment Law (commencing with
Section 33670 of the California Health and Safety Code) and
15.
JAS:1868(4/13/93)
"
Section 16 of Article XVI of the Constitution of the State of
California, taxes levied upon taxable property in the Project
Area each year by or for the benefit of the State of California
and any city, county, city and county, district or other public
corporation (herein collectively referred to as "Taxing
Agencies") for fiscal years beginning after the effective date
of the Plan, are divided as follows:
l. To Taxina Aaencies: That portion of the taxes
which would be produced by the rate upon which the tax is
levied each year by or for each of said Taxing Agencies
upon the total sum of the assessed value of the taxable
property in the Project Area, as shown upon the assessment
roll used in connection with the taxation of such property
by such Taxing Agency last equalized prior to the ordinance
approving the Plan, shall be allocated to, and when
collected shall be paid into the funds of the respective
Taxing Agencies as taxes by or for said Taxing Agencies on
all other property are paid; and
2. To the Aaencv: Except for taxes which are
attributable to a tax rate levied by a Taxing Agency for
the purpose of producing revenues to repay bonded
indebtedness approved by the voters of the Taxing Agency on
or after January 1, 1989, which shall be allocated to and
when collected shall be paid, to the respective Taxing
Agency, the portion of said levied taxes each year in
excess of such amount shall be allocated to, and when
collected shall be paid to, a special fund of the Agency to
pay principal of and interest on loans, moneys advanced to,
or indebtedness (whether funded, refunded, assumed or
otherwise) incurred by the Agency to finance or refinance,
in whole or in part, improvements within the Project Area.
Such portion, sUbject to such exclusions and deductions as
are set forth in proceedings for the adoption of the Plan,
and as further described below, is herein referred to as
"Tax Revenues."
Pledged Revenues consist of only a portion of the Tax
Revenues, limited by other Agency obligations.
The Agency has no power to levy and collect taxes, and
any provision of law limiting property taxes or allocating
additional sources of income to taxing agencies and having the
effect of reducing the property tax rate must necessarily
reduce the amount of Pledged Revenues that would otherwise be
available to pay debt service with respect to the Bonds and,
thus reduce the amount of the Trust Estate. Likewise,
broadened property tax exemptions could have a similar effect.
(See "RISK FACTORS" below. ) Additionally, Tax Revenues may be
16.
JAS:1868(4/13/93)
,
-
reduced each year by a collection fee charged by the County.
(See "LIMITATIONS ON TAX REVENUES - Property Tax Administrative
Costs. herein.)
Conversely, any increase in the present tax rate or
assessed valuation, or any reduction or elimination of present
property tax exemptions, would necessarily increase the amount
of Pledged Revenues that would be available to pay the Bonds.
(See "LIMITATIONS ON TAX REVENUES. for discussion of the
Constitutional constraints of increasing tax rates and assessed
valuation.)
Reserve Account
Pursuant to the Indenture, a Reserve Account will be
held by the Trustee in trust for the benefit of the Agency and
the owners of the Bonds. The amount on deposit in the Reserve
Account is required to be maintained at an amount equal to the
Reserve Requirement, as defined below.
The "Reserve Requirement" means an amount equal to the
lowest of (1) ten percent (10\) of the original proceeds of the
Bonds and any Parity Bonds less original issue discount, if
any, plus original issue premium, if any, (2) Maximum Annual
Debt Service, or (3) one hundred and twenty five percent (125\)
of the average Annual Debt Service of the Outstanding Bonds and
Parity Bonds. The initial amount to be deposited from the
proceeds of the sale of the Bonds and from amounts transferred
from the accounts established for the Prior Bonds into the
Reserve Account is $ . This amount will initially
equal the Reserve Requirement.
In the event that the amount on deposit in the Reserve
Account six (6) Business Days prior to any Interest Payment
Date exceeds the Reserve Requirement, the Trustee will withdraw
from the Reserve Account all amounts in excess of the Reserve
requirement and transfer such amounts to the Interest Account
for application as a credit towards the deposit then required
to be made by the Agency pursuant to the Indenture. Upon the
payment or redemption in full of principal of and interest on,
or defeasance of Outstanding Bonds, amounts in the Reserve
Account shall be credited to such payment, redemption or
defeasance.
If five (5) Business Days prior to any Interest
Payment Date, the amount on deposit in the Reserve Account is
less than the Reserve Requirement, the Trustee will withdraw
from the Special Fund and transfer to the Reserve Account,
after making any required deposits to the Interest Account, an
amount necessary to restore the balance in the Reserve Account
to the Reserve Requirement.
17.
JAS:186B(4/13/93)
,
Monies in the Reserve Account shall be transferred to
the Interest Account four (4) Business Days prior to each
Interest Payment Date, and, upon the occurrence of an Event of
Default, to the Principal Account, to the extent monies in
those accounts are insufficient to make the interest and
principal payments coming due on the appropriate dates.
The Agency may at any time substitute an Alternate
Reserve Account Security for the moneys then on deposit in the
Reserve Account, and upon such substitution, the Agency shall
be entitled to receive all moneys then held in the Reserve
Account free and clear of the lien of the Indenture. In the
event the Agency delivers an Alternate Reserve Account
Security, the Trustee shall hold and apply such instrument
pursuant to the Indenture so as to have moneys available
thereunder for the purposes and at the times required under the
Indenture.
Loans from the City of poway
The City of poway has made loans to the Agency for
various public improvement projects, on which the present
outstanding principal balance is approximately $14.4 million
with interest accruing at a rate per annum equal to the City's
average rate of return (estimated at $ million in
fiscal year 1992-93). These loans by the City to the Agency
are payable from Tax Revenues to the extent they are available
to the Agency after it has met its obligations on the Senior
Lien Bonds, the Bonds, the Business Park Obligations and any
Parity Bonds and in no manner have a lien on Tax Revenues
superior thereto or on a parity therewith.
Low and Moderate Income Housing Requirements
Chapter 1337, Statutes of 1976, added Sections 33334:2
and 33334.3 to the Redevelopment Law, requiring redevelopment
agencies to set aside in a Low and Moderate Income Housing Fund
not less than 20\ of all tax increment annually derived from
redevelopment project areas adopted after December 31, 1976 for
the purposes of improving the community's supply of low and
moderate income housing. This low and moderate income housing
requirement can be reduced or eliminated if the redevelopment
agency finds that: (i) no need exists in the community to
improve or increase the supply of low and moderate income
housing; (ii) some stated percentage less than 20\ of the tax
increment is sufficient to meet the housing need; or
(iii) other substantial efforts, including the obligation of
funds from state, local and federal sources for low and
moderate income housing of equivalent impact are being provided
for the community.
18.
JAS:1868(4f13f93)
\
The authority to make the finding described in
clause (Hi) above expires on June 30, 1993. Pursuant to the
Redevelopment Law, housing set-aside funds may be pledged only
to the repayment of bonds to the extent proceeds of such bonds
are expended on qualifying housing purposes. Since the Plan
for the Project was adopted December 13, 1983, the Agency is
subject to this statutory requirement. Since the Agency is
using Bond proceeds to satisfy the low and moderate income
housing requirements, Pledged Revenues include the Agency's
obligations with regard to the 20\ set-aside.
The Agency is currently defending on appeal a lawsuit
alleging that it has not met its obligations with respect to
the low and moderate income housing requirements of the
Redevelopment Law. For a discussion of such litigation, see
"CONCLUDING INFORMATION - Litigation" herein.
IRSURARCE OR THE BONDS
[To Come]
SWAP PROVIDER
[To Come]
RISK FAC'l'ORS
The following summaries do not purport to be a
complete statement of all factors which may be considered as
risks in evaluating the credit quality of the Bonds, and the
Official Statement should be read in its entirety.
Tax Revenues; Pledged Revenues
Tax Revenues allocated to the Agency, a portion of
which constitute Pledged Revenues which secure the Bonds, are
determined by the incremental assessed value of taxable
property in the Project Area, the current rate or rates at
which property in the Project Area is taxed, and the percentage
of taxes collected in the Project Area. Several types of
events which are beyond the control of the Agency could occur
and cause a reduction in available Tax Revenues and consequent
reduction in the Pledged Revenues. A reduction of taxable
values of property in the Project Area or a reduction of the
rate of increase in taxable values of property in the project
Area caused by economic or other factors beyond the Agency's
control (such as a relocation out of the Project Area by one or
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_ ___ _ _m..____________
more major property owners, successful appeals by property
owners for a reduction in a property's assessed value, a
reduction in the rate of transfers of property, construction
activity or other events that permit reassessment of property
at lower values, or the destruction of property caused by
natural or other disasters) could occur, thereby causing a
reduction in the Pledged Revenues. (See TABLE II in the
Section entitled "THE PAGUAY REDEVELOPMENT PROJECT - Tax
Revenue Projections.") This risk increases in proportion to
the percent of total assessed value attributable to any single
assessee in the Project Area and in relation to the
concentration of property in the Project Area in terms of size
or land use. (See TABLE V in "THE PAGUAY REDEVELOPMENT PROJECT
- Ten Largest Taxpayers" hereunder.) Any reduction in Tax
Revenues, whether for any of the foregoing or fOllowing reasons
or any other reason, could have an adverse effect on the
Agency's ability to meet its obligations under the Indenture
and the Agency's ability to pay the principal of and interest
on the Bonds.
Estimated Revenues
To estimate the total Tax Revenues available to pay
debt service on the Bonds, the Agency has made certain
assumptions with regard to future assessed valuation in the
Project Area, future tax rates, percentage of taxes collected
and the amount of funds available for investment. For example,
no level of growth in the assessed value of property in the
Project Area can be assured. The Agency believes its
assumptions to be reasonable, but there is no assurance that
these assumptions will be realized and to the extent that the
assessed valuation or the tax rates are less than the Agency's
assumptions, the total Tax Revenues available to pay debt
service on the Bonds will be less than those projected and such
reduced Tax Revenues may be insufficient to provide for the
payment of principal of, premium, if any, and interest on the
Bonds. For example, the Agency has not reduced projected
Pledged Revenues by the amount of the County administrative
charge or by possible delinquencies in property tax
collection. See "LIMITATION ON TAX REVENUES - Property Tax
Administrative Costs" and "Property Tax Collection Procedures"
herein. See Table II in "THE PAGUAY REDEVELOPMENT PROJECT -
Tax Revenue Projections" herein.
Certain other assumptions on which the projections are
based may also not be realized; in particular, the projections
assume the Agency's existing and future compliance on an annual
basis with its low and moderate income housing obligations.
If, as a result of some cause in the future, the Agency is
found to have not met its annual funding requirements for the
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,
.
Low and Moderate Income Housing Fund, Pledged Revenues in later
years could be reduced, thus adversely affecting the Agency's
ability to make timely payments of principal and interest on
the Bonds. See "SOURCES OF PAYMENT AND SECURITY FOR THE BONDS
- Low and Moderate Income Housing Requirements" herein. Also,
the projections assume the Senior Lien Bonds and the
obligations which are prior in right to the Pledged Revenues
are paid on a regular basis. To the extent of any default on
these obligations in the future, such assumption may be invalid
and Pledged Revenues may be reduced because of the prior claim
of such obligations on the Tax Revenues, thus adversely
affecting the security for the Bonds.
The projections of Tax Revenues in "THE PAGUAY
REDEVELOPMENT PROJECT - Tables II and III" herein reflect total
Tax Revenues over the life of the Bonds in excess of the total
amount of dollars permitted to be captured by the Agency over
the life of the Redevelopment Plan. See "LIMITATIONS ON TAX
REVENUES - Tax Increment Limitation" herein. Pursuant to the
Indenture, the Agency has covenanted to not enter into
obligations which, over the life of the Redevelopment Plan,
will cause it to exceed the limitation on total tax increment
of $408,489,000 (or such larger amount as may be subsequently
permitted pursuant to an amendment to the Redevelopment Plan).
Further, the Agency has covenanted to annually calculate the
remaining Tax Revenues under the Plan limits and to reserve
excess Tax Revenues to ensure debt service requirements do not
exceed the remaining available Tax Revenues. The Agency is
currently in the process of amending the Plan (See "THE PAGUAY
REDEVELOPMENT PROJECT - Amendment of Plan" herein.) In the
event of substantial growth in Tax Revenues, to comply with
this covenant the Agency may need to prepay the Bonds prior to
maturity or take other measures to avoid exceeding the plan tax
increment limitation prior to the payment in full of the
Bonds. See "THE BONDS - Extraordinary Redemption" herein.
Current Litigation
The Agency is currently defending a lawsuit on appeal which
alleged that it had not met its obligations with respect to the
low and moderate income housing requirements of the
Redevelopment Law. For a discussion of the litigation, see
"CONCLUDING INFORMATION - Litigation" herein.
Change in Law
In addition to the other limitations on Tax Revenues
described herein under "LIMITATIONS ON TAX REVENUES," the
California electorate or Legislature could adopt a
constitutional or legislative property tax decrease with the
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,
._--,-~ --------------------.---
effect of reducing Tax Revenues payable to the Agency. There
is no assurance that the California electorate or Legislature
will not at some future time approve additional limitations
that could reduce the Tax Revenues and adversely affect the
security of the Bonds.
Reduction in Inflationary Rate
As described in greater detail below, Article XIIIA of
the California Constitution provides that the full cash value
base of real property used in determining taxable value may be
adjusted from year to year to reflect the inflationary rate,
not to exceed a two percent increase for any given year, or may
be reduced to reflect a reduction in the consumer price index
or comparable local data. Such measure is computed on a
calendar year basis. See "LIMITATIONS ON TAX REVENUES" herein.
Levy and Collection
The Agency has no independent power to levy and
collect property taxes. Any reduction in the tax rate or the
implementation of any constitutional or legislative property
tax decrease could reduce the Tax Revenues, and accordingly,
could have an adverse impact on the ability of the Agency to
pay debt service on the Bonds secured by the Pledged Revenues.
Likewise, delinquencies in the payment of property taxes could
have an adverse effect on the Agency's ability to make timely
debt service payments. See "LIMITATIONS ON TAX REVENUES -
Property Tax Collection Procedures" herein.
Assessment Appeals and Tax Delinquencies
Property taxable values may be reduced as a result of
a successful appeal of the taxable value determined by the
County Assessor. An appeal may result in a reduction to the
Assessor's original taxable value and a tax refund to the
applicant/property owner. See "THE PAGUAY REDEVELOPMENT
PROJECT-ASSESSMENT APPEALS" herein for a discussion of
assessment appeals within the Project Areas.
Economic Risks
The Agency's ability to make payments on the Bonds
will be partially dependent upon the economic strength of the
Project Area (see "THE PAGUAY REDEVELOPMENT PROJECT" herein).
If there is a decline in the general economy of the Project
Area, the owners of property may be less able or less willing
to make timely payments of property taxes causing a delay or
stoppage of Tax Revenues received by the Agency from the
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,
.
Project Area. See "THE PAGUAY REDEVELOPMENT PROJECT" herein
for a discussion of the principal taxpayers of the parcels in
the Project Area.
Direct and Overlapping Indebtedness
The ability of land owners within the Project Area to
pay property tax installments as they come due could be
affected by the existence of other taxes and assessments,
imposed upon the land. In addition, other public agencies
whose boundaries overlap those of the Project Area could,
without consent of the Agency, and in certain cases without the
consent of the owners of the land within the Project Area
impose additional taxes or assessment liens on the property
within the Project Area to finance public improvements to be
located inside of or outside of the Project Area. A statement
of direct and overlapping indebtedness on land within the
Project Area is included herein under the heading "THE PAGUAY
REDEVELOPMENT PROJECT SITE - Direct and Overlapping Debt"
herein. See also "Bankruptcy and Foreclosure" below.
Bankruptcy and Foreclosure
The payment of property taxes by owners may be limited
by bankruptcy, insolvency, or other laws generally affecting
creditors rights or by the laws of the State relating to
judicial foreclosure.
The various legal opinions to be delivered
concurrently with the delivery of the Bonds (including Bond
Counsel's approving legal opinion) will be qualified, as to the
enforceability of the various legal instruments, by bankruptcy,
reorganization, insolvency or other similar laws affecting the
rights of creditors generally.
Although bankruptcy proceedings would not cause the
property tax obligation of a landowner to become extinguished,
such bankruptcy could result in a delay in collection of Tax
Revenues, and would increase the likelihood of a delay or
default in payment of the principal of and interest on the
Bonds.
On July 30, 1992, the United States Court of Appeals
for the Ninth Circuit issued its opinion a bankruptcy case
entitled In re Glasolv Marine Industries. In that case, the
court held that ad valorum property taxes levied by Snohomish
County in the State of Washington after the date that the
property owner filed a petition for bankruptcy were not
entitled to priority over a secured creditor with a prior lien
on the property. Although the court upheld the priority of
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,
--
unpaid taxes imposed before the bankruptcy petition, unpaid
taxes imposed after the filing of the bankruptcy petition were
declared to be "administrative expenses" of the bankruptcy
estate, payable after all secured creditors. As a result, the
secured creditor was able to foreclose on the property and
retain all the proceeds of the sale except the amount of the
pre-petition taxes.
According to the court's ruling, as administrative
expenses, post-petition taxes would have to be paid, assuming
that the debtor had sufficient assets to do so. In certain
circumstances, payment of such administrative expenses may be
allowed to be deferred. Once the property is transferred out
of the bankruptcy estate (through foreclosure or otherwise) it
would at that time become sUbject to current ad valorem taxes.
Glasolv is controlling precedent on bankruptcy courts
in the State of California. The lien date for property taxes
in California is the March 1 preceding the fiscal year for
which the taxes are levied. Therefore, under Glasoly, a
bankruptcy petition filing would prevent the lien for property
taxes levied in subsequent fiscal years to attach so long as
the property was a part of the estate in bankruptcy. To the
extent Glasolv is applied to property owners within the
Agency's redevelopment project areas who file for bankruptcy
and whose property taxes are a source of tax increment for the
Agency, the amount of tax increment may be reduced.
[DISCUSSION OF ANY MAJOR OWNERS IN BANKRUPTCY TO COME.]
Payments by RTC
The ability of the County to collect property taxes
may be limited in certain respects with regard to properties in
which the Federal Deposit Insurance Corporation (the "FDIC") or
the Resolution Trust Company (the "RTC") has an interest. On
June lO, 1991 an RTC Statement of POlicy Regarding the Payment
of State and Local Real Property Taxes (the "Policy Statement")
was issued. The FDIC has adopted a substantially identical
policy. The POlicy Statement applies to the RTC when it is
liquidating assets in its corporate and receivership
capacities; it does not apply when the RTC is acting as a
conservator. The POlicy Statement provides, in part, that
owned real property of the RTC is subject to state and local
real property taxes if those taxes are assessed according to
the property's value, and that the RTC is immune from ad
valorem real property taxes assessed on other bases. The
Policy Statement also provides that the RTC will pay its proper
tax obligations when they become due and will pay claims for
delinquencies as promptly as is consistent with sound business
24.
JAS:1868(4/13/93)
,
.
practice and the orderly administration of the institution's
affairs, unless abandonment of the RTC interest in the property
is appropriate.
Although a permanent nonpayment of taxes by the RTC
with respect to property held by it in the Project Area could
adversely affect the security for the Bonds, the Agency is
generally unable to predict what effect, if any, the
application of the Policy Statement will have in the event of
a delinquency in the payment of property taxes relating to a
parcel within the project Area in which the FDIC or the RTC has
an interest. The Agency also is unable to predict what effect,
if any, the application of the Policy Statement will have on
the payment of the principal of, and interest on, the Bonds.
LIMITATIONS ON TAX REVENUES
Property Tax Limitations - Article XIIIA
California voters, on June 6, 1978, approved an
amendment (commonly known as both Proposition 13 and the
Jarvis-Gann Initiative) to the California Constitution. This
amendment, which added Article XIIIA to the California
Constitution, among other things, affects the valuation of real
property for the purpose of taxation in that it defines the
full cash value of property to mean "the county assessor's
valuation of real property as shown on the 1975-76 tax bill
under full cash value, or thereafter, the appraised value of
real property when purchased, newly constructed, or a change in
ownership has occurred after the 1975 assessment." The full
cash value may be adjusted annually to reflect inflation at a
rate not to exceed 2\ per year or any reduction in the consumer
price index or comparable local data, or any reduction in the
event of declining property value caused by damage, destruction
or other factors. The amendment further limits the amount of
any ad valorem tax on real property to l\ of the full cash
value except that additional taxes may be levied to pay debt
service on indebtedness approved by the voters prior to July 1,
1978. In addition, an amendment to Article XIIIA was adopted
in June 1986 by initiative which exempts any bonded
indebtedness approved by two-thirds of the votes cast by the
voters for the acquisition or improvement of real property from
the 1\ limitation.
On September 22, 1978, the California Supreme Court
upheld the amendment over challenges on several state and
federal constitutional grounds (Amador Valley Joint Union
School District v. State Board of Eaualization). The Court
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,
-.
reserved certain constitutional issues and the validity of
legislation implementing the amendment for future determination
in proper cases.
In the general election held November 4, 1986, voters
of the State of California approved two measures, Propositions
58 and 60, which further amended Article XIIIA. Proposition 58
amended Article XIIIA to provide that the terms "purchase" and
"change of ownership," for purposes of determining full cash
value of property under Article XIIIA, do not include the
purchase or transfer of (1) real property between spouses and
(2) the principal residence and the first $1,000,000 of other
property between parents and children. This amendment to
Article XIIIA may reduce the rate of growth of local property
tax revenues.
Proposition 60 amended Article XIIIA to permit the
Legislature to allow persons over age 55, who sell their
residence and buy or build another of equal or lesser value
within two years in the same county, to transfer the old
residence's assessed value to the new residence. Revenue and
Taxation Code Section 69.5 implements Proposition 60. As a
result of the Legislature's action, property tax revenues may
be reduced. Further changes in Article XIIIA could erode Tax
Revenue growth as well.
Implementing Legislation
Enacted by the California Legislature to implement
Article XIIIA (Statutes of 1978, Chapter 292, as amended)
provides that, notwithstanding any other law, local agencies
may not levy any property tax, except to pay debt service on
indebtedness approved by the voters prior to July 1, 1978, and
that each county will levy the maximum tax permitted by Article
XIIIA of $4.00 per $100 assessed valuation (based on the
traditional practice in California of using 25\ of full cash
value as the assessed value for tax purposes). The legislation
further provided that, for the 1978/79 fiscal year only, the
tax levied by each county was to be appropriated among all
taxing agencies within the county in proportion to their
average share of taxes levied in certain previous years.
The apportionment of property taxes in fiscal years
after 1978/79 has been revised pursuant to Statutes of 1979,
Chapter 282, which provided relief funds from State moneys
beginning in fiscal year 1978/79 and is designed to provide a
permanent system for sharing State taxes and budget surplus
funds with local agencies. Under Chapter 282, cities and
counties receive about one-third more of the remaining property
tax revenues collected under Article XIIIA instead of direct
26.
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,
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State aid. School districts receive a correspondingly reduced
amount of property taxes, but receive compensation directly
from the State and are given additional relief. Chapter 282
did not affect the derivation of the base levy ($4.00 per $100
assessed valuation) and the bonded debt tax rate.
Effective as of the 1981-82 fiscal year, assessors in
California no longer record property values in the tax rolls at
the assessed value of 25\ of market values. All taxable
property is shown at full market value. In conformity with
this change in procedure, all taxable property value included
in this Official Statement is shown at 100\ of market value and
all general tax rates reflect the $l per $100 of taxable
value. Tax rates for bond service and pension liability are
also applied to 100\ of market value.
Future assessed valuation growth allowed under Article
XIIIA (new construction, change of ownership, 2\ annual value
growth) will be allocated on the basis of "situs" among the
jurisdictions that serve the tax rate area within which the
growth occurs except for certain utility property assessed by
the State Board of Equalization ("Unitary Property") which is
allocated by a different method as described under "--Unitary
Property" below.
Property Tax Collection Procedures
Classifications. In California, property which is
subject to ad valorem taxes is classified as "secured" or
"unsecured." Secured and unsecured property are entered on
separate parts of the assessment roll maintained by the county
assessor.
The secured classification includes property on which
any property tax levied by the County becomes a lien on that
property sufficient, in the opinion of the County assessor, to
secure payment of the taxes. Every tax which becomes a lien on
secured property has priority over other liens (except certain
federal claims) on the secured property, regardless of the time
of the creation of other liens. A tax levied on unsecured
property does not become a lien against the taxes on unsecured
property, but may become a lien on certain other property owned
by the taxpayer.
Collections and Distributions. The County levies a 1\
property tax on behalf of all taxing agencies in the County.
The taxes collected are allocated on the basis of a formula
established by State law enacted in 1979. Under this formula,
the County and all other taxing entities receive a base year
allocation plus an allocation on the basis of "situs" growth in
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JAS:1868(4/13/93)
,
assessed value (new construction, change of ownership, and
inflation) prorated among the jurisdictions which serve the tax
rate areas within which the growth occurs. Tax rate areas are
specifically defined geographic areas which were developed to
permit the levying of taxes for less than county-wide or less
than city-wide special districts. In addition, the County
levies and collects additional approved property taxes and
assessments on behalf of any taxing agency within the County.
Property taxes on the secured roll are due in two
installments, on November 1 and February 1. If unpaid, such
taxes become delinquent on December 10 and April 10,
respectively, and a 10\ penalty attaches to any delinquent
payment. If such taxes remain unpaid as of June 30 of the
fiscal year in which the taxes are levied, the property
securing the taxes may only be redeemed by a payment of the
delinquent taxes and the delinquency penalty, plus costs and a
redemption penalty of 1-1/2\ per month from the original
June 30th date to the time of redemption, If taxes are unpaid
for a period of five years or more, the tax-defaulted
properties are thereafter subject to sale by the county tax
collector as provided by law.
Property taxes on the unsecured roll are due as of the
March 1 lien date and become delinquent if unpaid by
August 31. A lO\ penalty attaches to delinquent taxes on
property on the unsecured roll, and an additional penalty of
1-1/2\ per month begins to accrue on November 1. The taxing
authority has four ways of COllecting unsecured personal
property taxes: 0) a civil action against the taxpayer;
(2) filing of a certificate in the office of the county clerk
specifying certain facts in order to obtain a judgment lien on
certain property of the taxpayer; (3) filing a certificate of
delinquency for record in the county recorder's office in order
to obtain a lien on certain property of the taxpayer; and
(4) secure and sale of personal property, improvements or
possessory interests belonging or assessed to the assessee.
San Diego County follows certain procedures for
distribution of property tax payments to local jurisdictions,
including the Agency.
1. By October 2, an apportionment of about 65\ of
taxes from the unsecured roll dated before September 1 is made;
2. My mid-December, an apportionment of 40\ of
annual secured tax levy, or in the case of redevelopment
agencies, 40\ of tax revenues due to be received from
application of tax rates to incremental assessed valuation is
made;
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3. By mid-January, unsecured receipts are increased
to 94\;
4. By mid-February, half of the 1\ levy of secured
taxes is distributed;
5. By early June, 94\ of the 1\ levy and debt
service collections are distributed.
6. By early August, the balance of both secured and
unsecured levies are distributed.
The County's current policy is to spread the
allocation of delinquent taxes and penalties over all
redevelopment agencies in the County. See APPENDIX H hereto
for a further discussion of the County's policy.
Supplemental Assessments. SB 813 (Chapter 498,
statutes of 1983), enacted in 1983, provides for the
supplemental assessment and taxation of property as of the
occurrence of a change in ownership or completion of new
construction. previously, statutes enabled the assessment of
such changes only as of the next March 1 tax lien date
following the change and thus delayed the realization of
increased property taxes from the new assessments for up to 14
months. As enacted, Chapter 498 provided increased revenue to
redevelopment agencies to the extent that supplemental
assessments as a result of new construction or changes of
ownership occur within the boundaries of redevelopment projects
subsequent to the March 1 lien date. To the extent such
supplemental assessments occur within the Project Area, Tax
Revenues may increase.
Property Tax Administrative Costs
In 1990, the Legislature enacted SB 2557 (Chapter 466,
Statutes of 1990) which allows counties to charge for the cost
of assessing, collecting and allocating property tax revenues
to local government jurisdictions on a prorated basis. There
is currently proposed legislation to eliminate the counties'
abi li ty to levy such charges, but at this time there is no
indication as to whether or not such legislation will become
law.
The County currently deducts the Agency's prorated
share of administrative costs before apportioning the Tax
Revenues to the Agency. For Fiscal Year 1991-92, the County
charged a fee of approximately ___ percent (_\) of the Tax
Revenues apportioned to the Agency.
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The projections of Tax Revenue described herein under
the heading "THE PAGUAY REDEVELOPMENT PROJECT" do not reflect
any reduction for such collection fees.
Special Subventions*
Prior to the 1991/92 Fiscal Year, the Agency, like
many other redevelopment agencies, received annual subventions
from the State, commonly referred to as Special Subventions.
Legislative changes in 1990, however, significantly altered the
statutory scheme for payment of these Special Subventions and
prohibited redevelopment agencies from pledging Special
Subventions as security for bonds issued after July 31, 1990.
The Agency received no subventions with respect to the
Project Area or in the Fiscal Year ending June 30, 1992 and no
longer receives any State Special Subvention revenue.
Unitary Property
AB 2890 (Statutes of 1986, Chapter 1457) provides
that, commencing with the Fiscal Year 1988/89, assessed value
derived from State-assessed unitary property (consisting mostly
of operational property owned by utility companies) is to be
allocated county-wide as follows: (i) each tax rate area will
receive the same amount from each assessed utility received in
the previously fiscal year unless the applicable county-wide
values are insufficient to do so, in which case values will be
allocated to each tax rate area on a prorata basis; and (ii) if
values to be allocated are greater than in the previously
fiscal year, each tax rate area will receive a prorata share of
the increase from each assessed utility according to a
specified formula. Additionally, the lien date on
State-assessed property is changed from March 1 to January 1.
AB 454 (Chapter 921, Statutes of 1987) modified
AB 2890 and provided that revenues derived from Unitary
Property, commencing with the 1988-89 fiscal year, wi 11 be
allocated as follows: (1) for revenues generated from the 1\
tax rate, (a) each jurisdiction, including redevelopment
project areas, will receive a percentage up to 102\ of its
prior year State-assessed unitary revenue; and (b) if
countywide revenues generated from Unitary Property are greater
than 102\ of the previous year's revenues, each jurisdiction
will receive a percentage share of the excess unitary revenues
by a specified formula allocating the prior year's revenue plus
a 1\ ratio, and (2) for revenue generated from the application
* Review with Agency and RSG
30.
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,
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of the debt service tax rate to county-wide unitary taxable
value, each jurisdiction will receive a percentage share of
revenue based on the jurisdiction's annual debt service
requirements and the percentage of property taxes received by
each jurisdiction from unitary property taxes. This provision
applies to all Unitary Property except railroads whose valuation
will continue to be allocated to individual tax rate areas.
The provisions of AB 454 do not constitute an
elimination of the assessment of any State-assessed properties
nor a revision of the method of assessing utilities by the
State Board of Equalization. Generally AB 454 allows valuation
growth or decline of Unitary Property to be shared by all
jurisdictions in a county.
Each jurisdiction in the County receives a percentage
share of unitary property tax revenue based on their percentage
change in annual debt service requirements from the two
preceding fiscal years and in the County's ad valorem debt
service levy for the secured roll exclusive of unitary property.
See Table C of APPENDIX H hereto for a summary of
unitary property payments received by the Agency.
Additional Limitation on Tax Revenues
An initiative to amend the California Constitution
entitled "Property Tax Revenues - Redevelopment Agencies" was
approved by California voters at the November 8, 1988 general
election. Under prior law, a redevelopment agency using tax
increment revenue receives additional property tax revenue
whenever a local government increases its property tax rate to
payoff its general obligation bonds. This initiative amended
the California Constitution to allow the California Legislature
to prohibit redevelopment agencies from receiving any of the
property tax revenue raised by increased property tax rates
imposed by local governments to make payments on their bonded
indebtedness. The initiative only applies to tax rates levied
to finance bonds approved by the voters on or after January 1,
1989. AB 89 (Chapter 250, Statutes of 1989), amended Section
33670 of the Law to implement the amendment to the California
Constitution made by the initiative. Any revenue reduction to
redevelopment agencies would depend on the number and value of
the general obligation bonds approved by voters in future
years. The Agency does not currently project receiving any Tax
Revenues as a result of general obligation bonds which may be
approved on or after January 1, 1989.
31.
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Low and Moderate Income Housing Requirements
Chapter l337, Statutes of 1976, added Sections 33334.2
and 33334.3 to the Redevelopment Law, requiring redevelopment
agencies to set aside in a Low and Moderate Income Housing Fund
not less than 20\ of all tax increment annually derived from
redevelopment project areas adopted after December 31, 1976 for
the purposes of improving the community's supply of low and
moderate income housing. This low and moderate income housing
requirement can be reduced or eliminated if the redevelopment
agency finds that: (i) no need exists in the community to
improve or increase the supply of low and moderate income
housing; (ii) some stated percentage less than 20\ of the tax
increment is sufficient to meet the housing need; or
(iii) other substantial efforts, including the obligation of
funds from state, local and federal sources for low and
moderate income housing of equivalent impact are being provided
for the community.
The authority to make the finding described in
clause (iii) above expires on June 30, 1993. Pursuant to the
Redevelopment Law, housing set-aside funds may be pledged only
to the repayment of bonds to the extent proceeds of such bonds
are expended on qualifying housing purposes. Since the Plan
for the Project was adopted December 13, 1983, the Agency is
subject to this statutory requirement. Since the Agency is
using Bond proceeds to satisfy the set-aside requirements,
Pledged Revenues include amounts related to the 20\ set-aside.
See "THE PAGUAY REDEVELOPMENT PROJECT - The Project" for a
description of the housing element of the Bonds.
Tax Increment Limitation
The Redevelopment Law requires the Agency to adopt a
limit on the amount of tax increment the Agency may receive
with respect to each of its redevelopment project areas. The
maximum amount of tax increment the Agency may currently
receive from the Project Area was established in the amount of
$408,489,000. Based on Agency records, the Agency has received
approximately $48,770,011 of tax increment to date from the
Project Area. Tax increment pledged to existing obligations,
including debt service on the Bonds, totals [$204,498,666.]-
The Agency has covenanted to not enter into obligations which
would cause it to exceed the applicable limit, and in light of
current development projections,t he agency does not reasonably
expect to exceed this amount (See "APPENDIX H" hereto for a
description of the projected development and collection of Tax
Revenues. The Agency is currently in the process of amending
the Plan. (See "THE PAGUAY REDEVELOPMENT PROJECT - Amendment
of Plan" herein).
32.
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Appropriations Limitations; Article XIIIB of the California
Constitution
On November 6, 1979, California voters approved
Proposition 4, the so-called Gann Initiative, which added
Article XIIIB to the California Constitution. The principal
effect of Article XIIIB is to limit the annual appropriations
of the State and any city, county, school district, authority
or other political subdivision of the State to the level of
appropriations for the prior fiscal year, as adjusted for
changes in the cost of living, population and services rendered
by the government entity. The "base year" for establishing
such appropriation limit is 1978-79 fiscal year and the limit
is to be adjusted annually to reflect changes in population,
consumer prices and certain increases in the cost of services
provided by these public agencies.
Appropriations subject to Article XIIIB include
generally the proceeds of taxes levied by the State or other
entity of local government, exclusive of certain State
subventions, refunds of taxes, and benefit payments from
retirement, unemployment insurance and disability insurance
funds. Proceeds of taxes include, but are not limited to, all
tax revenues and the proceeds to an entity of government from
(1) regulatory licenses, user charges, and user fees (but only
to the extent such proceeds exceed the cost of providing the
service or regulation) and (2) the investment of tax revenues.
Article XIIIB includes a requirement that if an
entity's revenues in any year exceed the amounts permitted to
be spent, the excess would have to be returned by revising tax
rates or fee schedules over the subsequent two years. While
the tax rate is assumed to decline to one percent of taxable
value and remain constant in subsequent years, current law
permits taxing entities deriving revenues from the one percent
rate to reduce their levies under certain circumstances. It is
the apparent intent of the law to insulate the other taxing
entities and redevelopment agencies from the effects of such
reductions on their property tax revenues.
Effective September 30, 1980, the California
Legislature added Section 33678 to the Law which provided that
the allocation of taxes to a redevelopment agency for the
purpose of paying principal of, or interest on, loans,
advances, or indebtedness shall not be deemed the receipt by
such agency of proceeds of taxes levied by or on behalf of the
* To be updated.
33.
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,
agency within the meaning of Article XIIIB, nor shall such
portion of taxes be deemed receipt of proceeds of taxes by, or
an appropriation subject to the limitation of, any other public
body within the meaning or for the purpose of the Constitution
and laws of the State of California, including Section 33678 of
the Law. The constitutionality of Section 33678 has been
upheld in two California appellate court decisions Brown v.
Communitv Redevelooment Aaencv of the Citv of Santa Ana and
Bell Communitv Aaencv v. Woolev. The plaintiff in Brown v.
Communi tv Redevelooment Aaencv of the Citv of Santa Ana
petitioned the California Supreme Court for a hearing of this
case. The California Supreme Court formally denied the
petition and therefore the earlier court decisions are now
fina 1 and binding. On the basis of these court decisions, the
Agency has not adopted such an appropriations 1 imit .
State Budget
A State Budget for State fiscal 1992-93 was adopted
September 2, 1992. To balance the budget, the State made
substantial spending cuts in many governmental services and
operations and made significant reallocations of revenues among
local agencies, including redevelopment agencies. The Agency
was subject to this reallocation of funds in the form of a
reduction in tax increment revenues in the amount of
$1,570,000. The Agency has allocated available cash to pay
this amount.
The State's economy has continued in a stagnant
condition, causing a substantial budget deficit for the State.
While the 1993/94 budget process is still in its initial
states, the 1993/94 budget proposed by the Governor on
January 8, 1993 (the "Governor's Budget") contains significant
decreases in spending. With respect to redevelopment agencies,
the Governor's Budget shifted approximately $300 million
statement in tax increment revenues from redevelopment agencies
to schools. This $300 million shift includes continuing the
$200 million shift imposed under the 1992/93 budget, plus an
additional $100 million funded by the limitation of tax
increment revenues a redevelopment agency could receive
annually to pay the amount necessary to meet current year debt
service.
The Governor's Budget represents the initial state of
the 1993/94 budget negotiations, and the Agency cannot predict
which, if any, of the provisions with respect to redevelopment
agencies will be included in the 1993/94 budget as finally
enacted, or the financial impact on the Agency of the final
budget agreement. If required to pay an additional shift of
tax increment, the Agency intends to pay this amount from money
on hand.
34.
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,
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-
THE AGERCY
General
The Poway Redevelopment Agency was activated by the
adoption of City Ordinance No. 96 on April 26, 1983. The City
Council declared itself to be the Agency and acted upon
redevelopment matters by the adoption of a Survey Area as
required by the Redevelopment Law.
Subsequently, the paguay Redevelopment Project was
defined within the Survey Area. After the accomplishment of
all legally required proceedings including properly noticed
public hearings, a Redevelopment Plan for the Paguay
Redevelopment Project was adopted by Ordinance No. 11 7 on
December 13, 1983, which established the equalized tax roll for
fiscal 1983-84 as the base year roll for the Project.
Members *
Chairperson Don Higginson graduated from Brigham Young
University in 1979 with a B.A. in Political Science. He
received his J.D. from Western State Law School in 1982, and
served for two years as legal liaison with the San Diego County
Sheriffs Department. For the past five years Mr. Higginson has
served as Corporate Counsel for Mail Boxes Etc. and is
currently Vice President of FranX, Ltd. He is an active member
of the San Diego Bar Association and is a current member of the
Antitrust and Trade Regulation Section of the State Bar of
California. Mr. Higginson sits on the Franchise Task Force of
the Senate Select Committee on Small Business. He currently
serves as vice Chairman of the Hospice Foundation.
Mr. Higginson served as Mayor/Chairperson in 1989.
Deputy Chairperson Robert C. Emery is employed as a
middle school teacher. He holds a Bachelor's degree in
political science from San Diego State University and a
Master's degree in psychology from the University of San
Diego. He was first elected to the City Council at the time of
incorporation of the City in 1980. He has previously served as
Mayor in 1982, 1985 and 1988. Mr. Emery has also served as an
elected member to the poway Planning and Development Program,
an advisory group to the San Diego Planning Commission.
* To be updated by Agency
35.
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,
Member B. Tony Snesko joined the United States Navy in
1963 and attained the rank of 2nd Class Boatswainsmate. Upon
being discharged he joined the Los Angeles Police Department
for two years, and then left the L.A.P.D. to attend college in
San Diego. In 1975, Mr. Snesko began, and is currently the
President of, San Diego Attorney Service, Inc. , which has
seventeen employees.
[Rew Member Resumes To Come]
Staff
Executive Director James L. Bowersox also is City
Manager, and has served as the first and only City Manager
since his selection and appointment in 1981 shortly after
incorporation. He previously served in the City of Cerritos as
Assistant City Manager and in administrative posts in La Mesa
and Tulare since 1970. He holds a Bachelor's degree from San
Diego State University.
The Agency staff under the leadership of the Executive
Director provides ongoing resources to the elected officials,
including pOlicy papers and background information to assist
the elected officials in the development of Agency and
municipal policies. The pOlicies developed through this
process are implemented by the staff under the direction of the
Executive Director/City Manager.
Agency Powers and Duties
The Agency is charged with the responsibility for
elimination of blight through the process of redevelopment.
All powers of the Agency are vested in its five-member
governing body. The Agency exercises all of the governmental
functions authorized under the Redevelopment Law and has, among
other powers, the authority to acquire, administer, develop and
sell or lease property, including the right of eminent domain,
and the right to issue bonds and spend the proceeds thereof.
The Agency may sell or lease property within a
redevelopment area in conformity with the redevelopment plan
for such project area, may specify the period within which such
redevelopment must begin, may establish certain restraints and
controls over the development, and may set the period in which
such development must be completed. Further, the Agency may,
out of funds available to it for such purposes, pay all or part
of the value of land, cost of buildings, facilities, structures
or other improvements to be publicly owned and operated, to the
extent that such improvements are of benefit to such project
area and are in strict conformity with such redevelopment plan.
36.
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-
Pursuant to the Redevelopment Law, redevelopment is
defined as the planning, development, replanning, redesign,
clearance, reconstruction or rehabilitation, or any combination
of these, of all or part of a survey area and the provisions of
such residential, commercial, industrial, public or other
structures or spaces as may be appropriate or necessary in the
interest of the general welfare, including recreational and
other facilities incidental or appurtenant to them.
Agency Financial statements
The Agency accounts for its financial transactions
through funds representing the Project. A copy of the Agency's
audited annual financial statements for the fiscal year ended
June 30, 1992 were prepared by the certified pUblic accounting
firm of Moreland & Associates, Inc. of Newport Beach,
California. The Agency's audited financial statement for the
fiscal year which ended June 30, 1992 are attached hereto as
Exhibit C. The Agency has covenanted in the Indenture that it
will cause its annual audited financial statements to be
prepared within 180 days after the close of each fiscal year.
Copies of the audited financial statements for the fiscal year
ended June 30, 1992, as well as the Agency's audited financial
statements for other fiscal years can be obtained at the office
of the Director of Administrative Services at City Hall, 13325
Civic Center Drive, Poway, California 92064.
THE PAGUAY REDEVELOPMENT PROJECT*
General
The research and study for the proposed use of the
redevelopment process was a by-product of the development and
adoption of the general plan for the City of Poway. The
Council found need for the activation of a redevelopment
agencyin April, 1983, and after all required hearings, approval
for conformity with the Gefteral Plan by the Planning
Commission, and other required steps, adopted the Redevelopment
Plan for the paguay Redevelopment Project by Ordinance No. 117
on December 13, 1983. (Paguay is the Indian spelling for poway
and is pronounced the same.)
The Project Area consists of approximately 8,200
acres, and is comprised of residential, industrial, commercial
and public uses. Assessed valuation for fiscal year 1992-93
was $1,2l6,587,278, an increase of $l,013,256,369 over the Base
Year of 1983-84.
* Tables to be updated.
37.
JAS:186B(4/13/93)
,
The poway Redevelopment Agency then was directed by
the Council to implement the Plan's purposes, which include
provision of pUblic improvements, development of senior citizen
housing, blight mitigation and improvement of the City's
economic base and employment opportunities by catalytic actions
with regard to commercial and industrial potentials.
Table I illustrates the breakdown of land uses within
the Project Area:
TABLE I
POWAY REDEVELOPMENT AGERCY
PAGUAY REDEVELOPMENT PROJECT
Summary of Land Use
as of , 199_
[TO COME]
Source:
38.
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,
- -
TABLE I I
POWAY REDEVELOPMENT AGENCY
Paguay Redevelopment Project
Taxable Valuation and Tax Revenues
Fiscal Total Incremental
Year Incrementa I Assessed
Ending Assessed Valuation
June 30 Secured Unsecured Total Valuation (Secured Only)
1984 $197,663,660 $ 5,667,249 $203,330.909 $ $
1985 209,819,715 11 , 602 , 990 221,422.705 18,091,796 12,156,055
1986 245,254,867 7,838,170 253.093.037 49.762,128 47,591,207
1987 324,331,257 5.690,645 330,021,902 126,690,993 126,667,597
1988 416,751,859 8,407,983 425,159,842 221,828,933 219,088,199
1989 527,000.371 10,050,517 537,050,888 333,719,979 329,336,711
1990 721,631,225 14,594.263 736,225.488 532,894,579 523,967,565
1991 942,132,046 19,650,416 961,782,462 758,451,553 744,468,386
1992 1,104,549,799 26,507,055 1,131,056,854 927,725,945 906,886,139
1993 1,192,612,473 33.949,2201,226,561,693 1,023,230,784 994,948,813
Source: County of San Diego
Tax Revenues produced from this incremental assessment
will be approximately $11.05 million in fiscal year 1992-93.
For projections of growth in incremental assessed valuation and
Tax Revenue, see "Tax Revenue Projections" below.
The Projects
The Project represents a variety of public improvement
projects undertaken by the Agency in an aggressive capital
construction program begun in 1983. Designed to eradicate
blight conditions, the program has included road projects to
correct design and infrastructure deficiencies in major
arterials so as to meet traffic standards, along with
installation of signals, curbs, gutters, medians, and
sidewalks. Another part of the program has consisted of
improvements to school buildings, facilities and fields made in
conjunction with the poway Unified School District. Other
projects have included park and recreational improvements,
drainage, water, sewer and wastewater reclamation projects, and
low and moderate income housing projects.
[DISCUSSION OF PROJECTS FUNDED BY SERIES 1989A BONDS AND
SERIES 1991 BONDS, PLUS NEW MONEY PROJECTS (INCLUDING LOW
AND MODERATE INCOME HOUSING), TO COME]
39.
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,
Owner Participation Agreements
The Agency has entered into four separate owner
participation agreements (each an "OPA") to provide financing
for the acquisition of redevelopment improvements for the
property included within a specified portion of the Project
Area, consisting of certain commercial-industrial
developments. Such developments consist of approximately 750
acres in the southern part of the Project Area. Amounts
payable under the OPA for the Tech Business Center and the OPA
for the Poway Corporate Center (collectively, the "Business
Park Obligations") will be senior to the Bonds in terms of
entitlement to be paid from the Tax Revenues collected with
respect to the properties within the respective development.
For 1992-93, amounts payable under the Business Park
Obligations will be approximately $179,000.
The following is a description of the OPA's which are
senior to the Bonds with respect to certain Tax Revenues:
Tech Business Center. In November, 1990, the Agency
and Tech Business Center entered into an Owner Participation
Agreement in which Tech Business Center agreed to finance
$6,350,000 of public improvements in exchange for a Note of
$6,350,000, payable from 79\ of Tax Revenues attributable to an
118 acre industrial park known as Tech Business Center. The
total amount outstanding on the Note, including interest, is
$ .
Poway Corporate Center. In November, 1990, the Agency
and poway Corporate Center entered into an Owner Participation
Agreement in which poway Corporate Center agreed to finance
$2,500,000 of public improvements in exchange for a Note of
$2,500,000, payable from 79\ of Tax Revenues attributable to a
77 acre industrial park known as Poway Corporate Center. The
total amount outstanding on the Note, including interest, is
$ .
The following two OPA's are subordinate to the Bonds:
CF Poway. In December 1985, the Agency and CF Poway,
Ltd. entered into an Owner participation Agreement in which
CF Poway, Ltd. agreed to finance $16,800,000 of public
improvements in exchange for a Note of $16,800,000, payable
from 79\ of Tax Revenues attributable to a 290 acre industrial
park known as pomerado Business Park. Such Note has been
partially paid down as a result of $7,748,000 payment in
November, 1991, and has been amended so that the remaining
portion of the Note is payable from 79\ of Tax Revenues
attributable to the site after the first $812,137 annually of
Tax Revenues is paid to the Agency. The total amount
outstanding on the Note, including interest, is
$ .
40.
JAS:1868(4/13/93)
,
Parkway Business Center. In December 1988, the Agency
and Parkway Business Center, Ltd. entered into an Owner
Participation Agreement in which Parkway Business Center, Ltd.
agreed to finance $17,500,000 of public improvements in
exchange for a Note of $17,500,000, payable from 79% of Tax
Revenues attributable to a 269 acre industrial park known as
Parkway Business Center. The total amount outstanding on the
Note, including interest, is $ . Parkway Business
Center, Ltd. , is currently in bankruptcy and is in default
under its obligation to the Agency. The Agency cannot predict
if and when Parkway Business Center, Ltd. will emerge from
bankruptcy, or the effect such bankruptcy will have on the
developer's ability or willingness to pay its property taxes in
a timely manner. See "RISK FACTORS - Bankruptcy" herein. See
also "THE PAGUAY REDEVELOPMENT PROJECT - Table V" for an
illustration of how the developer's status will affect debt
service coverage on the Bonds.
Amendment of Plan
[To come]
Tax Revenue Projections
Tax Revenues are those amounts derived by the Agency
each year from the levy and collection of taxes on any increase
in the taxable valuation of land, improvements and personal
property in the Project Area, over the base year taxable
valuation of such property. Pledged Revenues comprise Tax
Revenues less assorted required deductions for various
obligations, both existing and future. See "INTRODUCTION -
Security for the Bonds." Primary Pledged Revenues are
restricted to Tax Revenues attributable to the Project Area.
See "SOURCES OF PAYMENT AND SECURITY FOR THE BONDS -- Tax
Revenues herein."
The Agency has retained Rosenow Spevacek Group, Inc.
("RSG") as its redevelopment consultant. RSG has examined
development potential within the Project Area and the
projection of the growth of tax increment revenues over the
remaining life of the Project Area. [DESCRIPTION OF RSG TO
COME] Attached hereto as EXHIBIT H is a copy of the
Redevelopment Consultant's Report.
[DESCRIPTION OF RSG REPORT TO COME]
Table III shows projected growth of the tax increment
for the Project Area. Table IV presents projected Pledged
41.
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,
Revenues available for payment of principal of, premium if any,
and interest on the Bonds. Table V shows debt service and
projected coverage derived from Pledged Revenues, and Table VI
lists the ten largest taxpayers in the Project Area.
TABLE In
POWAY REDEVELOPMENT AGENCY
PAGUAY REDEVELOPMENT PROJECT
Projection of Assessed Value and Incremental Tax Revenue
Fiscal Years 1992/93 - 1999/00
(OOO's Omitted)
Fiscal Year Projected Net
Ending Total Assessed Incremental Estimated Gross
June 30 Valuation (1) Valuation (2) Tax Increments(3)
1993
1994
1995
1996
1997
1998
1999
2000
Source: Rosenow Spevacek Group, Inc.
(1) Contains the projected growth for both the secured and
unsecured portion of the tax roll. The value for Fiscal
Year 1992-93 is an estimated preliminary value calculated
by the Auditor-Controller's Office. A growth rate of 5\ is
used for all years and includes new development values
expected to be added to the tax roll due to the completion
of ongoing construction projects. (See Table B of
APPENDIX H for a summary of new development projects.)
(2) Total Assessed Valuation less Base Year Value of
$203,330,909.
(3) Net Incremental Valuation multiplied by the average tax
levy rate for the Project Area. For Fiscal Year 1992-93
the tax rate used is 1.081049\; for 1993-94 the rate is
1.06\; for 1994-95 the rate is 1.04\; 1. 02% for 1995-96;
and 1.0% for 1996-97 and each year thereafter.
42.
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,
TABLE IV
POWAY REDEVELOPMENT AGENCY
PAGUAY REDEVELOPMENT PRO.:JECT
Projected Pledged Revenues
Fiscal Years 1992/93-1999/00
(OOO's Omitted)
Fiscal
Year Estimated Pass-Through Senior Lien Business Available
Ending Gross Tax Agree- Bonds Debt Park PI edged
June 30 Increment( 1) ments (2) Service (3) Obliaations 14\ Revenues
1993 [To camel
1994
1995
1996
1997
199B
1999
2000
Source: Rosenow Spevacek Group, Inc.
(1) See Table III.
(2) Contains the projected pass-through payments to the County
of San Diego and to the Pomerado Cemetery District.
(3) Debt service on the Senior Lien Bonds.
(4) [Description of calculation of Business Park Obligations.
TO COME.]
\
TABLE V
POWAY REDEVELOPMENT AGENCY
PAGUAY REDEVELOPMENT PROJECT
Subordinated Tax Allocation Refunding Bonds
Series 1993
Debt Service Coverage Schedule
fiscal
Endin9 Available Adjusted Total
Year Pledged Pledged Debt
June 30 Revenues{ll Revenues(3) PrinclDal Interest Service C3l Coveraae (4)
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
44.
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,
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Source: Rosenow Spevacek Group, Inc. PaineWebber Incorporated.
(1) See Table IV,
(2) Available Pledged Revenues less amounts estimated to be
lost due to developer delinquency and bankruptcy (see
discussion of Table VI and "THE PAGUAY REDEVELOPMENT
PROJECT - Business Park Obligations" and - "Parkway
Business Center" herein).
(3) Excludes accrued interest.
(4) Adjusted Pledged Revenues divided by Total Debt Service.
45.
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,
TABLE VI
POWAY REDEVELOPMENT AGENCY
paguay Redevelopment Project
Ten Largest Taxpayers
1992-93 Assessment Roll
Percentage
1992-93 of Secured
Assessed Assessed
Name Valuation Valuation
C.F. Poway Ltd. $32,985,415 [To
come]
R & R Partners - Poway 15,140,282
Standard Pacific LP 14,301,079
poway Industrial Properties 12,471,960
Beecroft, Joseph N. & Lois M. 11 ,460,817
Von Der Ahe Frederick T. 8,559,156
Cushman Stephen P. 8,044,629
Burnham Pacific Properties Inc. 7,800,000
Hal-Mart Stores Inc. 7.426.180
Nowell Norman N. & Sandra L. 7.129.247
$195.872.139
Properties on which tax increment has been pledged to
pay the Business Park Obligations, and the properties of
Parkway Business Center, Ltd., which is currently in
bankruptcy, have not been included in Table VI. If included,
Parkway Business Center, Ltd., would have ranked No. 1, Tech
Business Center would have ranked No. 3, and Mission DAI-I
would have ranked No. 6, and the top ten would have represented
15.29% of total assessed valuation in the Project Area.
Source: Rosenow Spevacek Group, Inc.
46.
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,
Assessment Appeals
Property taxable values determined by the County
Assessor may be subject to an appeal by the property owner.
Assessment appeals are annually filed with the County
Assessment Appeals Board for a hearing and resolution. At the
time of filing, applicants are required to estimate an opinion
of value. The resolution of an appeal may result in a
reduction to the Assessor's original taxable value and a tax
refund to the applicant/property owner. The reduction in
future project area taxable values and the refund of taxes
affects all taxing entities. including the Agency. See
"LIMITATIONS ON TAX REVENUES - property Tax Collection
Procedures.
[DISCUSS ANY MAJOR REASSESSMENTS.]
Delinquent Taxes within the Project Area
Pledged Revenues with respect to the Project Area are
determined by the percentage of taxes collected with the
Project Area. As of , 1992, $ , which
represents approximately ___ \ of the total tax increment levy
for all property within the Project Area for the 1991-92 tax
year, was delinquent. See APPENDIX H hereto for a further
discussion of delinquent properties within the Project Area.
See also Table 3, APPENDIX B, for an illustration of property
tax delinquencies within the entire City of Poway.
Historical Growth
The following Table illustrates the historical growth
of Tax Revenues generated by property located within the
Project Area:
TABLE VII
POWAY REDEVELOPMENT AGENCY
PAGUAY REDEVELOPMENT PROJECT
Tax Revenue Generation From Project Area
Fiscal Years 1989/90-1992/93
Incremental
Fiscal Year Assessed Value Over Estimated Actual Tax
Endina June 30 Base Value (1) Revenue Revenues
1989 $333,719,979 $3,958,389 $5,163,771
1990 $532,942,779 $6,231,203 $7,500,534
1991 $758,451,553 $8,495,017 $9,548,455
1992 $919,469,750 $10,l45,699 $10,682,633
1993 $1,013,256,369 $11,074,990 N/A
Source: County of San Diego Auditor-Controller; City of Poway
Finance Dept.
(1) Base Value for the Project Area was established as
$203,330,909.
(2) Includes payments from the secrued, unsecured and unitary
rolls.
47.
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,
__ ____._____n____ _n __..____.______ --- --
Direct and Overlapping Debt
The following Table illustrates the direct and
overlapping bonded indebtedness on land within the Project
Area, as of 1, 1993:
[To come]
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
The following is a brief summary of certain provisions
of the Indenture. This summary in not intended to be
definitive or comprehensive and is qualified in its entirety by
reference to such document for the complete terms thereof. For
a summary of specific definitions and terms relating to the
1993 Indexed Inverse Floating/Fixed Rate Bonds and the 1993
Indexed Floating/Fixed Rate Bonds, see APPENDIX F hereto.
Disposition of Bond Proceeds
The proceeds of the sale of the Bonds shall be
received by the Trustee and, to the extent not deposited with
the Escrow Bank as payment of the Prior Bonds, deposited in the
Costs of Issuance Fund, the Interest Account, the Reserve
Account and the Redevelopment Fund as described herein under
"SOURCES AND USES OF FUNDS."
48.
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,
Costs of Issuance Fund
Pursuant to the Indenture, a portion of the proceeds
of the Bonds will be deposited with the Trustee in the Costs of
Issuance Funds on the date of delivery of the Bonds. The
monies in the Costs of Issuance Fund will be disbursed to pay
costs of issuing the Bonds, and other related financing costs
from time to time upon receipt of written requests of the
Agency.
Special Fund; Deposit and Transfer of Amounts Therein
All Pledged Revenues will be deposited by the Trustee
in the Special Fund not later than the fifth Business Day prior
to an Interest Payment Date. On or before each Interest
Payment Date, the Trustee will transfer from the Special Fund
and deposit into the following respective accounts (each of
which the Trustee will establish and maintain within the
Special Fund), the following amounts in the following order of
priori ty; provided, however, to the extent that deposits have
been made in any of the Accounts referred to below from the
proceeds of the sale of the Bonds or otherwise, the deposits
below need not be made:
(a) Interest Account. Deposits shall be made by the
Trustee from moneys in the Special Fund into the Interest
Account so that the balance in the Interest Account five
(5) Business Days prior to the next Interest Payment Date
shall be equal to 180 days' interest on the then
Outstanding Bonds. Moneys in the Interest Account shall be
used for the payment of interest on the Bonds as interest
becomes due.
(b) Reserve Account. After deposits have been made
pursuant to subparagraph (a) above, deposits shall be made
to the Reserve Account, if necessary, from amounts
deposited in the Special Fund in order to cause the amount
on deposit therein to equal the Reserve Requirement.
Amounts in the Reserve Account shall be transferred to the
Interest Account four (4) Business Days prior to the next
Interest Payment Date to pay interest on the Bonds as it
becomes due to the extent moneys credited to the Interest
Account prior to such transfer are insufficient therefor;
provided, howeve r , that: (i) upon the occurrence of an
Event of Default, all moneys in the Reserve Account shall
be transferred first to the Interest Account in an amount
equal to the interest due on the Bonds to the date of
acceleration minus the amounts then held by the Trustee in
the Interest Account, and second to the Principal Account,
in both cases to the extent necessary to pay interest and
49.
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,
-~-_._~--_._-
principal coming due and payable on the Bonds; and (ii)
upon the payment or redemption in full of the principal of,
interest and redemption premium, if any, on all of the
Outstanding Bonds or upon defeasance thereof pursuant to
the Indenture, any or all of the amounts in the Reserve
Account shall be applied towards such payment. Any portion
of the Reserve Account which is in excess of the Reserve
Requirement shall be transferred to the Interest Account
six (6) Business Days prior to each Interest Payment Date.
(c) Principal Account. Not later than four (4)
Business Days before each December 15 on which principal of
the Bonds is due by reason of regularly maturing Bonds or
as a mandatory sinking fund installment, the Trustee shall
withdraw from the Special Fund and deposit moneys in the
Principal Account in an amount which, when added to the
amount contained in the Principal Account on that date,
will be equal to the principal becoming due and payable on
the Outstanding Bonds on such date. All moneys deposited
in the Principal Account shall be used and withdrawn by the
Trustee solely for the purpose of paying the principal on
the Bonds as it shall become due and payable.
(d) Surplus Account. Provided (i) no Event of
Default shall have occurred and be continuing, (ii) that
any required transfer has been made to the Rebate Fund,
then, beginning January 2, 1994, at such time as the
Trustee has on deposit in the Special Fund or the Accounts
therein Pledged Revenues or other moneys which will be an
amount sufficient to pay the principal and interest coming
due on the next two Interest Payment Dates, and has on
deposit in the Reserve Account an amount equal to the
Reserve Requirement, additional Pledged Revenues received
between the date of such determination and the next
Interest Payment Date shall be deemed "Surplus Pledged
Revenues" and shall be deposited in the Surplus Account and
paid by the Trustee to the Agency upon written direction
for use for any lawful purpose. To the extent the
conditions precedent to the release of Surplus Pledged
Revenues have been met, at such time as the Agency receives
Surplus Pledged Revenues, such Surplus Pledged Revenues may
be retained by and used and applied by the Agency for any
lawful purpose; orovided,that no funds deposited in the
Interest Account, the Principal Account or the Reserve
Account shall be payable to the Agency.
Investment of Funds and Accounts
Amounts held in the Redevelopment Fund, the Costs of
Issuance Fund, the Rebate Fund, the Special Fund and the
accounts therein (other than the Reserve Account) shall be
50.
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invested and reinvested by the Agency (as to the Redevelopment
Fund) or the Trustee (as to the other Funds and accounts), at
the direction of the Agency, in Permitted Investments, provided
that such investments mature by their terms prior to the date
on which such moneys are required to be paid out thereunder.
Amounts held in the Reserve Account shall be invested by the
Trustee solely in Permitted Investments consisting of
(i) Government Obligations having a maturity not greater than
three (3) years or beyond the date it is anticipated that such
moneys will be needed, whichever comes first, or (ii) an
investment agreement, as described in the definition of
Permitted Investments, which permits withdrawals or deposits
without penalty at such time as such moneys will be needed or
in order to replenish the Reserve Account. Amounts held by the
Trustee in any Fund or account three days prior to the use of
such moneys will be invested in Government Obligations maturing
not later than the date such moneys are to be used to pay the
principal of or interest on the Bonds. Moneys in the Rebate
Fund shall be invested in Government Obligations which mature
before the date such amounts are required to be paid to the
United States. Notwithstanding the foregoing, the Agency may
at any time deliver an Alternate Reserve Account Security to
the Trustee without regard to the requirements for the
investment of the Reserve Account.
Any or all interest or gain received from such
investments of moneys in the Special Fund and the accounts
therein shall be deposited by the Trustee in the Special Fund
and respective accounts therein, and any loss incurred in
connection with such investments shall be debited against the
Fund or account from which the investment was made. The
Trustee shall have no liability or responsibility for any loss
resulting from any investment made in accordance with the
provisions of the Indenture.
Covenants of the Agency
So long as any of the Bonds are outstanding, the
Agency is required, for the benefit of the owners of the Bonds,
to faithfully perform and abide by all of the covenants
described below; provided, however, that the covenants do not
require the Agency to spend any monies other than the Pledged
Revenues.
Completion of Project; Amendment to Plan. The Agency
has covenanted to pursue the Project to completion with all
practical dispatch and in a sound and economical manner and to
comply in all material respects with the Redevelopment Law and
the Plan. The Project may be amended but only as will not
5l.
JAS:1868(4/13/93)
,
impair the security of the Bonds or rights of the owners of the
Bonds as shown by an opinion of counsel based upon a
consultant's certificate.
Use of the Proceeds; Management and Operation of
Properties. The Agency has covenanted to apply the Bond
proceeds as provided in the Indenture and to manage its
properties in the Project Area in a sound and businesslike
manner, consistent with the Plan.
No Priority. The Agency has covenanted that, except
as described herein, it will not issue (i) obligations senior
to the Bonds in right of payment from the Pledged Revenues,
except for bonds issued to refund the Senior Lien Bonds,
provided debt service on such refunding bonds in each year is
less than regularly scheduled debt service on the Senior Lien
Bonds, or (ii ) except for bonds issued to refund all
outstanding Bonds and previously issued Parity Bonds, bonds on
a parity with the Bonds in right of payment from Pledged
Revenues, unless certain conditions are met. (See "THE BONDS -
Issuance of Additional Indebtedness" herein. ) The Agency
reserves the right to (i) issue and sell, pursuant to law,
refunding obligations payable from and having any lawful lien
upon the Pledged Revenues, if such refunding obligations are
issued for the purpose of, and are sufficient for the purpose
of, refunding all of the Outstanding Bonds or Parity Bonds;
( ii) issue and sell obligations which have, or purport to have,
any lien upon the Pledged Revenues which is junior to the Bonds
or any Parity Bonds; or (iii) issue and sell bonds or other
obligations which are payable in whole or in part from sources
other than the Pledged Revenues. As used herein "obligations"
shall include, without limitation, bonds, notes, interim
certificates, debentures or other obligations, loans, advances,
or other forms of indebtedness incurred by the Agency.
Punctual Payment. The Agency has covenanted that
principal of and interest with respect to the Bonds will be
paid punctually and in accordance with the requirements of the
Indenture. The Agency has also covenanted not to extend or
permit extensions of time for payment of claims for interest on
the Bonds.
Payment of Taxes and other Charges. The Agency wi 11
pay and discharge all taxes, service charges, assessments and
other governmental charges lawfully imposed upon the Agency or
any properties owned by the Agency in the Project Area, or upon
the revenues or income therefrom, and will pay all lawful
claims for labor, materials and supplies which if unpaid may
become a lien or charge upon the security of the Bonds and any
Parity Bonds when the same shall become due; provided, that the
Agency may defer any such payment which it contests the
validity thereof in good faith.
52.
JAS:1868(4/13/93)
,
Books and Accounts; Financial Statements. The Agency
has covenanted to keep complete and separate records and
accounts of all transactions relating to the Project, the
Pledged Revenues, and funds related to the Project, and to
prepare audited financial statements covering the Tax Revenues
and other funds within 180 days after the close of each fiscal
year.
Eminent Domain Proceedings. If any portion of the
Project Area becomes tax exempt as a result of being taken for
public or other use under eminent domain or other legal
proceedings, the Agency shall adjust the base year valuation of
the Project Area accordingly.
Disposition of Property. The Agency may not itself
dispose of more than 10\ of the land area in the Project Area
to public bodies or other persons or entities whose property is
tax exempt (other than property shown by the Plan, in effect on
the date the Indenture is approved, as planned for such
property to be used for public streets, parking facilities, or
easements or rights-of-way for public utilities, or other
similar uses) unless, as a result of such action, the taxes
from the Project Area eligible for allocation to the Agency
pursuant to the law will not be substantially impaired, as
shown by an opinion of counsel based on a consultant's
certificate.
Protection of Security and Rights of Bondowners. The
Agency has covenanted to contest any assertion against it that
the Redevelopment Law is unconstitutional or that the Pledged
Revenues cannot be paid to the Agency for debt service on the
Bonds, or any action affecting the Bonds or security therefor.
The Agency will take no action that in an opinion of counsel
would result in withholding of Pledged Revenues (except
withholding being contested in good faith), or loss of tax
exemption of the interest on the Bonds under California law.
Federal Tax Covenants. The Agency has covenanted to
comply with all applicable requirements of the Internal Revenue
Code of 1986, as amended (the "Code"), and regulations
thereunder, such that the interest on the Bonds will remain
excluded from gross income for federal income tax purposes and,
without limiting the generality of the foregoing, has
covenanted specifically that (i) it will make no use of the
proceeds of the Bonds that would cause the Bonds to be
"arbitrage bonds" within the meaning of Section l48 of the Code
and applicable regulations; (ii) it will not make any use of
proceeds of the Bonds that would cause the Bonds to be "private
activity bonds" within the meaning of Section 141 of the Code;
(iii) it will ensure that principal of and interest on the
53.
JAS:1868(4/13/93)
,
Bonds will not be directly or indirectly guaranteed by the
United States and that no monies in the funds or accounts
created by the Indenture will be used in making loans
guaranteed by the united States or invested in obligations
guaranteed by the United States, with specified exceptions; and
(iv) it will keep accounts as required by the Indenture.
Taxation of Leased Property. Whenever any property in
the Project Area has been redeveloped and thereafter is leased
by the Agency to any person or persons or whenever the Agency
leases real property in the Project Area to any person or
persons for redevelopment, the property shall be assessed and
taxed in the same manner as privately owned property, as
required by the Redevelopment Law.
Pledged Revenues; Limitation on Indebtedness. The
Agency covenants to comply with all legal requirements to
assure its receipt of the Pledged Revenues, including timely
filings with San Diego County. The Agency has covenanted that
it has not and will not enter any agreements requiring
pass-through of Pledged Revenues to other taxing entities prior
to deposit in the Special Fund. The Agency has not (after the
date of adoption of the Plan) and will not incur obligations
payable from the Tax Revenues, the debt service or other
payments on which, together with debt service on all other
obligations, including, without limitation, the Bonds, the
Senior Lien Bonds, the Business Park Obligations and any Parity
Bonds, will exceed the limitation of the total amount of Tax
Revenues which may be collected and allotted to the Agency in
accordance with the Redevelopment Plan; provided, however, that
such calculation shall not include the debt service on
obligations payable from proceeds placed in an escrow fund
which shall be designated as the sole source of payment for
such obligations.
[COVENANT ON PREPAYMENT - TO COME]
The Trustee
The Agency has reserved the right to remove any
Trustee and appoint a successor, at any time other than during
the existence of an event of default, and shall replace the
Trustee if the owners of at least a majority in aggregate
principal amount of Bonds so request in writing, or in other
circumstances as specified in the Indenture. The Trustee may
resign at any time upon written notice to the Agency and the
owners of the Bond and after appointment of a successor. The
54.
JAs:1868(4/13/93)
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-
Trustee will not be liable in connection with the performance
of its duties under the Indenture, except for its own
negligence or willful misconduct.
Amendment of Indenture
The Agency may at any time, without notice to or the
consent of the owners of the Bonds, adopt supplements to the
Indenture (i) to provide for the issuance of Parity Bonds in
accordance with the Indenture, (ii) to cure any ambiguities,
defects or inconsistent provisions or to clarify matters or
questions arising thereunder, provided that such action does
not materially adversely affect the interests of the owners of
the Bonds; (iii) to add covenants and agreements further to
secure Bond payment, to prescribe further restrictions and
limitations upon Bond issuance, to surrender rights or
privileges of the Agency, and to make modifications not
affecting any outstanding series of Bonds or Parity Bonds; and
(iv) to preserve the exclusion of interest on the Bonds from
gross income for federal income tax purposes.
In addition to the supplements described in the
preceding paragraph, the Agency, with the consent of the
Trustee to the extent its duties, obligations or rights are
affected, may at any time adopt any supplements waiving,
mOdifying, altering, amending, adding to or rescinding any
provisions of the Indenture with the consent of the owners of
at least 60\ of the aggregate principal amount of the Bonds and
any Parity Bonds then outstanding; provided, however, that such
shall not permit without the express consent of the affected
Bondowner (a) a reduction of the principal amount of any Bond
or the rate of interest thereon, (b) an extension of the
maturity or the date for paying interest on any Bond or change
in the monetary medium for payment, (c) create a mortgage,
pledge or lien upon the revenues superior to or on a parity
with the pledge and lien created for the Bonds and any Parity
Bonds except as otherwise expressly permitted by the Indenture,
or (d) a reduction of the aggregate principal amount of Bonds
and Parity Bonds.
Events of Default
Anyone or more of the following events constitutes an
event of default under the Indenture:
(a) Default by the Agency in the payment of the
principal of, interest on or redemption premium, if any, on
the Bonds when due;
(b) Default by the Agency in the observance of any of
the covenants, agreements or conditions contained in the
55.
JAS:1868(4/13/93)
,
~~._------
Indenture or in the Bonds, which would result in interest
on the Bonds being includable in gross income for federal
income tax purposes;
(c) Default by the Agency in the observance of any of
the agreements, conditions or covenants on its part in the
Indenture or in the Bonds, other than as described in (b)
above, which default shall have continued for a period of
sixty (60) days after the Agency shall have been given
notice in writing of such default; or
(d) The filing by the Agency of, or the approval by a
court of, a petition seeking reorganization or arrangement
of the Agency under applicable bankruptcy laws, or the
assumption of custody or control of the Agency or all or a
substantial part of its property by a court under laws for
relief or aid of debtors.
Remedies
Following the occurrence of an event of default
described under (a), (b) or (d) of the preceding section, the
Trustee shall declare the principal of and accrued interest on
the Bonds to be due and payable immediately. In each event of
default the Trustee (upon receipt of indemnification from
Bondowners) shall have the right for the equal benefit and
protection of all owners similarly situated to take the
following actions, all as more fully described in the Indenture:
(a) By mandamus, suit, action or proceeding to compel
the Agency and its members, officers, agents or employees
to perform and carry out the duties, covenants and
agreements with the owners as provided in the Indenture and
imposed by the Redevelopment Law;
(b) By suit in equity to enjoin any acts or things
which are unlawful or violate the rights of the owners; or
(c) Upon the happening of an event of default, by
suit to require the Agency and its members and employees to
account as the trustees of an express trust.
The declaration of principal and interest to be due
may, upon certain conditions, be rescinded by the owners of a
majority in aggregate principal amount of the Outstanding Bonds.
Upon any acceleration of the Bonds, the Trustee shall,
following payment of the costs and expenses (including
compensation to their agents, attorneys and counsel) of the
Trustee and the Bondowners in declaring such Event of Default,
56.
JAS:1868(4/13/93)
,
transfer first to the Interest Account an amount equal to
(i) the interest due on the Bonds to the date of acceleration
minus amounts then held by the Trustee in the Interest Account,
and then to the Principal Account all of the moneys held in the
Reserve Account and any other amounts held in the Special Fund
and the Accounts therein or in the Redemption Fund. After the
above transfers have been made, all sums in the Special Fund
and the Accounts therein upon the date of the declaration of
acceleration, and all sums thereafter received by the Trustee
under the Indenture, shall be applied by the Trustee to the
payment of all other outstanding fees and expenses of the
Trustee and thereafter in the fOllowing order upon presentation
of the Bonds:
First, amounts in the Principal Account, if any, shall
be applied to the payment in full of the principal of the
Outstanding Bonds; and
Second, amounts in the Interest Account shall be
applied to the payment of interest coming due and payable on
the Bonds as of the date of acceleration.
Defeasance
The Agency may cause all of its obligations under the
Indenture with respect to the Bonds to cease and terminate,
except for the obligation of the Agency to pay sums due on any
defeased Bonds not surrendered for payment and to pay sums due
the Trustee and except for certain covenants of the Agency to
comply with the Code, by (a) paying or causing payment of
principal of and interest due on the Bonds, as and when the
same become due and payable, or (b) depositing money with the
Trustee or a separate escrow agent in a special trust fund at
or before maturity which, together with amounts then on deposit
in the Special Fund, is fully sufficient to pay the principal
of and interest on the Bonds, or (c) depositing in trust with
the Trustee or another escrow agent certain non-callable
obligations of the United States in an amount as will, together
with interest to accrue thereon, without reinvestment, and
together with monies then on deposit in the Special Fund, be
sufficient to pay the principal of, premium, if any, and
interest on the Bonds at or before maturity, as verified by a
certified public accountant.
.
57.
JAS:1868(4/13/93)
,
CONCLUDIRG INFORMATION
Underwriting
The Agency has agreed to sell the Bonds to the Poway
Public Financing Authority (the "Authority"), a joint powers
authority comprised of the Agency and the City. The
Underwriter has agreed, subject to certain conditions, to
purchase the Bonds from the Authority at a purchase price of
$ (the principal amount of the Bonds, less an
Underwriter's discount of $ ) , plus accrued interest
on the Bonds. The Underwriter's obligations are subject to
certain conditions precedent, and they will be obligated to
purchase all such Bonds if any such Bonds are purchased. The
public offering prices may be changed from time to time by the
Underwriter.
Legal Opinion
The legal opinion of Stradling, Yocca, Carlson &
Rauth, a Professional Corporation, Newport Beach, California,
Bond Counsel, approving the validity of the Bonds will be made
available to purchasers at the time of original delivery. The
form of such opinion is set forth as Appendix E to this
Official Statement and a copy of the legal opinion will be
printed on the back of each definitive Bond. Certain legal
matters have been passed upon for the Underwriter by Nossaman,
Guthner, Knox & Elliott, Los Angeles, California. Certain
other legal matters have been passed on for the Agency by its
counsel and for the City by the Office of the City Attorney.
Rating
and
have assigned the Bonds the ratings of and
based upon the policy of bond insurance provided by the Bond
Insurer, insuring the timely payment of the principal of and
interest on the Bonds. Such ratings reflect only the views of
such organizations, and an explanation of the significance of
such ratings may be obtained from and
. The and
ratings assigned by and
to an issue of securities insured by the Bond Insurer reflect
in part and
evaluation of the Bond Insurer and the reinsurance arrangements
described above under "INSURANCE ON THE BONDS." There is no
assurance that the ratings will continue for any given period
of time or that they will not be revised downward or withdrawn
entirely by such rating agencies if in the judgment of such
rating agencies circumstances so warrant. Any such downward
revision or withdrawal of such ratings may have an adverse
effect on the market price of the Bonds.
58.
JAS:186B(4/13/93)
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Verification of Mathematical Accuracy
Ernst & Young, Memphis, Tennessee, independent
accounts, upon delivery of the Agency Bonds, will deliver a
report on the mathematical accuracy of certain computations,
contained in schedules provided to them which were prepared by
the Agency, relating to (a) the sUfficiency of the anticipated
receipts from the securities deposited with the Bank (the
"Escrow Securities") to pay, when due, the principal whether at
maturity or upon prior redemption, interest and redemption
premium requirements of the Series 1989A Bonds and the
Series 1991 Bonds and, (b) the "yield" on the Escrow Securities
and on the Bonds considered by Bond Counsel in connection with
the tax opinion rendered by such firm. See "TAX" herein.
The report of Ernst & Young will include the statement
that the scope of their engagement is limited to verifying the
mathematical accuracy of the computations contained in such
schedules provided to them, and that they have no obligation to
update their report because of events occurring, or data or
information coming to their attention, subsequent to the date
of their report.
Tax Exemption
In the opinion of Stradling, Yocca, Carlson & Rauth, a
Professional Corporation, Newport Beach, California, Bond
Counsel, under existing laws, regulations, rulings and judicial
decisions, interest on the Bonds is excluded from gross income
for federal income tax purposes, and is not an item of tax
preference for purposes of the federal alternative minimum tax
imposed on individuals and corporations. In the further
opinion of Bond Counsel, interest on the Bonds is exempt from
State of California personal income taxes. Bond Counsel notes
that, with respect to corporations, interest on the Bonds will
be included as an adjustment in the calculation of the
alternative minimum taxable income, which may affect the
alternative tax liability of such corporations.
Bond Counsel's opinion as to the exclusion from gross
income of interest on the Bonds is based upon certain
representations of fact and certifications made by the Agency,
the Underwriter and others and is subject to the condition that
the Agency complies with all requirements of the Code that must
be satisfied subsequent to the issuance of the Bo~ds to assure
that interest and original issue discount on the Bonds will not
become includable in gross income for federal income tax
purposes. Failure to comply with such requirements of the Code
might cause interest and original issue discount on the Bonds
59.
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to be included in gross income for federal income tax purposes
retroactive to the date of issuance of the Bonds. The Agency
has covenanted to comply with all such requirements.
Should the interest and original issue discount with
respect to the Bonds become includable in gross income for
federal income tax purposes, the Bonds are not subject to early
redemption and will remain outstanding until maturity or until
redeemed in accordance with the Indenture.
Bond Counsel's opinion may be affected by action taken
(or not taken) or events occurring (or not occurring) after the
date hereof. Bond Counsel has not undertaken to determine, or
to inform any person, whether any such actions taken or events
are taken or do occur. Although Bond Counsel has rendered an
opinion that interest and original issue discount on the Bonds
is excluded from gross income for federal income tax purposes
provided that the Agency continues to comply with certain
requirements of the Code, the accrual or receipt of interest on
the Bonds may otherwise affect the income tax liability of the
recipient. The extent of these other tax consequences will
depend upon the recipient's particular tax status and other
items of income or deductions. Bond Counsel expresses no
opinion regarding any such consequences. Accordingly, all
potential purchasers should consult their tax advisors before
purchasing any of the Bonds.
Litigation
At the time of delivery of and payment for the Bonds,
an officer of the Agency will deliver a certification that,
except as described below, to the best of such officer's
knowledge, there is no action, controversy, suit, proceeding,
inquiry or investigation or other proceeding of any kind at law
or in equity, before or by any court, public board or body,
pending or threatened against or affecting the Agency or any
officer of the Agency in their official capacity, wherein an
unfavorable decision, ruling or finding would adversely affect
the creation, organization, existence or powers of the Agency
or the titles of its members and officers to their respective
offices, or restrain or enjoin the issuance, sale and delivery
of the Bonds or the collection of any monies, Tax Revenues or
property pledged or to be pledged under the Indenture, or
adversely affect any authority for the issuance of the Bonds or
the validity or enforceability of the Bonds or the resolutions
adopted in furtherance of the issuance thereof or the rights,
powers, duties or obligations of the Agency with respect to the
monies, Tax Revenues and assets pledged or to be pledged to pay
the principal or redemption price of or interest on the Bonds.
60.
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On August 9, 1991 two low-income residents of the City
- (the "Plaintiffs") brought suit in the Superior Court of the
State of California, County of San Diego (Case Number 625859)
alleging that the policies and practices of the Agency do not
meet its obligations with respect to the provision and
improvement of the City's supply of affordable housing, as
required by the Redevelopment Law. The Plaintiffs further
allege that the Agency has underfunded its Low and Moderate
Income Housing Fund (the "Housing Fund") for fiscal years 1983
through 1990, has not properly accounted for Housing Fund
monies and has impermissibly committed to reimburse the City
for lease payments made to holders of $10 million in
certificates of participation issued by the City and the Agency
in August, 1986. On March 3, 1993, the trial court entered
judgment in favor of defendants, ruling that the Agency had
properly funded the Housing Fund. Plaintiffs appealed that
portion of the jUdgment to the Fourth District Court of Appeal,
Civil No. D016608. The appeal is currently pending before the
appellate court. The parties have substantially completed
briefing the case and oral arguments are expected to be heard
within the next 90 days. The court will then have an
additional 90 days to render its opinion.
The Agency cannot predict how the Appellate Court will
decide in this matter or whether the Agency will be required to
pay Pledged Revenues in satisfaction of a potential judgment in
this case. The Agency currently believes that it has
sufficiently reserved funds for a potentially adverse judgment.
80 General Obligation of the City or the Agency
The Bonds shall not constitute a charge against the
general credit of the Agency. Under no circumstances shall the
Agency be obligated to pay principal of or interest on the
Bonds except from the Trust Estate, including the Pledged
Revenues received by the Agency. The Bonds are not a debt,
obligation, or liability of the City of poway, the State of
California or any of its pOlitical subdivisions (other than the
Agency) , nor do they constitute a pledge of the faith and
credit or taxing power of any of the foregoing (including the
Agency) . The Agency has no taxing power. The Bonds do not
constitute an indebtedness within the meaning of any
constitutional or statutory debt limit or restriction.
Miscellaneous
This Official Statement does not constitute a contract
with the purchasers of the Bonds.
-
61.
JAs:186B(4/13/93)
,.
----------- ------~ - -----~-----
Any statements made in this Official Statement
involving matters of opinion or estimates, whether or not so
expressly stated, are set forth as such and not as
representations of fact, and no representation is made that any
of the estimates will be realized. The Agency has not
undertaken with the Underwriter or any other person to update
the information in this Official Statement on a periodic basis,
except under certain limited circumstances for a short period
fOllowing the delivery of the Bonds.
The execution and delivery of the Official Statement
have been duly authorized by the Agency.
POWAY REDEVELOPMENT AGENCY
By
Chairperson
62.
JAs:1868(4/13/93)
,
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APPENDIX A
SELECTED DEFINITIONS
Unless otherwise defined in the Official Statement,
capitalized terms used therein shall have the following
meanings:
"Agency" means the poway Redevelopment Agency.
"Alternate Reserve Account Security" means one or more
letters of credit, surety bonds, bond insurance policies, or
other form of guaranty from a financial institution for the
benefit of the Trustee, the long-term, unsecured obligations of
which are rated not less than "A" by Moody's Investors Service,
or "A" by Standard' Poor's Corporation in substitution for or
in place of all or any portion of the Reserve Requirement.
"Annual Debt Service" means, for any Bond Year, the
principal and interest payable on the Outstanding Bonds in uch
Bond Year.
"Bond Year" means the twelve (12) month period commencing
on December 16 of each year and endings on December 15 of the
following year, except that the initial Bond Year shall
commence on the date of issuance of the Bonds.
"Business Day" means a day of the year other than a
Saturday, Sunday or day on which banks in California,
Washington or Rew York are required or authorized to remain
closed.
"Business Parks" means property included within specified
portion of the Project Area consisting of commercial/industrial
developments known as the "poway Tech Center," and the "poway
Corporate Center."
"Business Park Obligations" means a promissory note or
notes expected to be issued by the Agency, pursuant to certain
owner participation agreements heretofore executed by the
Agency with respect to the Identified Business Parks, after the
date of the issuance of the Bonds for an approximate aggregate
principal amount of $8,850,000 and tax allocation bonds, if
any, which the Agency may issue after the date to refinance
such notes.
"City" means the City of poway, California.
A-2
JAS:1869(4/19/93)
,
- ____u______ ____________~___
"Code" means the Internal Revenue Code of 1986, as amended.
"County" means the County of San Diego, California.
"Fiscal Year" means any twelve (12) month period beginning
on July 1 and ending on the next following June 30th.
"Government Obligations" means direct general obligations
(including obligations issued or held in book entry form on the
books of the Department of the Treasury) of the United States
of America and shall include cash or other coin or currency of
the United States of America that is legal tender for payment
of public or private debts.
"Indenture" means the Indenture of Trust between the Agency
and the Trustee, as originally adopted or as it may be amended
or supplemented by any Supplemental Indenture entered into
pursuant to the provisions thereof.
"Interest Payment Date" means June 15 and December 15 of
each year, commencing December 15, 1993.
"Maximum Annual Debt Service" means the largest amount of
Annual Debt Service for any Bond Year.
"Outstanding", when used as of any particular time with
reference to Bonds, means, subject to the provisions of Article
XI of the Indenture, all Bonds except:
(a) Bonds theretofore cancelled by the Trustee or
surrendered to the Trustee for cancellation;
(b) Bonds paid or deemed to have been paid pursuant
to the Indenture; and
(c) Bonds in lieu of or in substitution for which
other Bonds shall have been authorized, executed,
issued and delivered by the Agency pursuant to
the Indenture or any Supplemental Indenture.
"Parity Bonds" means any additional tax allocation notes
(including, without limitation, bonds, notes, interim
certificates, debentures or other obligations) issued by the
Agency as permitted by the Indenture payable out of Pledged
Revenues and ranking on a parity with the Bonds.
*["Pass-Through Agreements" means the agreements entered
into prior to the date hereof pursuant to Section 33401 of the
Health and Safety Code with (1) the County of San Diego, dated
March 7, 1984, and (ii) the Pomerado Cemetery District, dated
October 23, 1984. ]
* Update
A-3
JAS:1869(4/19/93)
,
.-
"Permitted Investments" means any of the following which at
the time of investment are legal investments under the laws of
the State of California for the moneys proposed to be invested
therein: (a) Government Obligations; (b) Federal Home Loan
Mortgage Corporation participation certificates or senior debt
obligations; (c) Federal National Mortgage Association
mortgage-backed securities or senior debt obligations; (d)
certificates of deposit, time deposits or bankers' acceptances
with a maturity of one (1) year or less of any bank (including
the Trustee) the long-term debt obligations of which or the
long-term debt obligations of the holding company of which have
been rated A or better by Standard & Poor's Corporation and
having a short-term debt rating of A-l+ or better by Standard
and Poor's Corporation; (e) if the Bonds are then rated,
obligations rated at least as high as the Bonds by Standard &
Poor's Corporation; (f) taxable government money market
portfolios rated AAAmG by Standard & Poor's Corporation and
restricted to obligations with maturities of one year or less
issued or guaranteed a to payment of principal and interest by
the full faith and credit of the United States; (g) deposits
which are fully insured by the Federal Deposit Insurance
Corporation; (h) repurchase agreements with financial
institutions fully insured by the Federal Deposit Insurance
Corporation or any broker-dealer with "retail customers" which
falls under Securities Investors Protection Corporation
jurisdiction, which repurchase agreements are secured by any of
the obligations referred to in (a) above, provided that the
Trustee or a third party acting solely as agent for the Trustee
has possession of collateral equal to one hundred and two
percent (102%) of the subject investment securing such
repurchase agreement and the Trustee has a perfected first
security interest in the collateral securing such repurchase
agreement or (i) an investment agreement approved by the Agency
with a financial institution rated in one of the two highest
rating categories of Standard & Poor's Corporation or Moody'S
Investors Service, Inc.
."pledged Revenues" means Tax Revenues less (i) all amounts
required under the Senior Lien Bonds Indenture of similar
instrument to pay principal of, interest and premium, if any,
on the Senior Lien Bonds or any bonds issued to refund the
Senior Lien Bonds, respectively, including amounts required to
replenish the Reserve Account under the Senior Lien Bonds
Indenture, or the reserve account under any similar instrument
executed in connection with bonds issued to refund the Senior
Lien Bonds, and other amounts secured thereunder pursuant to
such pledge, (ii) all amounts allocated to the Agency pursuant
.Check about pass-through agreements.
-
A-4
JAS:1869(4/19/93)
,
-
to the law from the Business Parks, (iii) an amount equal to
one percent (1%) of the Tax Revenues and (iv) ____% of the
amounts set aside as provided in Section 33334.2 and 33334.3 of
the Health and Safety Code of the State of California.
"Project Area" means the project area described and defined
in the Redevelopment Plan.
"Redevelopment Plan" means the Redevelopment Plan for the
paguay Redevelopment Project, approved and adopted by the City
Council of the City of poway by Ordinance No. 117 on
December 13, 1983 and includes any amendment thereof hereafter
or heretofore made pursuant to the Redevelopment Law.
"Redevelopment Project" means the paguay Redevelopment
Project described in the Redevelopment Plan.
"Regular Record Date" means the close of business on the
first day of the month in which an Interest Payment Date occurs.
"Regulations" means the income tax regulations promulgated
or proposed by the Department of Treasury from time to time
with respect to obligations issued pursuant to Sections 103 and
l4l to 150 of the Code.
"Reserve Requirement" means as of any date of calculation,
an amount equal to the lowest of (1) ten percent (10%) of the
original proceeds of the Bonds and any Parity Bonds, or (2)
Maximum Annual Debt Service, or (3) one hundred twenty-five
percent (125%) of the average Annual Debt Service of the
Outstanding Bonds and Parity Bonds.
"Revenues" means all amounts held by the Trustee in any
fund or account established under the Indenture including any
interest earnings thereon but excluding amounts deposited in
the Rebate Fund.
"Senior Lien Bonds" means the poway Redevelopment Agency,
paguay Redevelopment Project, Tax Allocation Refunding Bonds,
Series 1990A in the principal amount of $21,595,000.
"Series 1989A Bonds" means the Agency's paguay
Redevelopment Project Subordinated Tax Allocation Bonds, Series
1989A.
"Series 1991 Bonds" means the Agency's paguay Redevelopment
Project, Subordinated Tax Allocation Refunding Bonds, Issue of
1991, in the original principal amount of $9,330,000.
"Standard & Poor's" means Standard & Poor's Corporation,
New York, New York, and its successors and assigns.
A-5
JAS:1869(4/19/93)
,
-
"State" means the State of California.
"Tax Revenues" means that portion of taxes levied upon
taxable property in the Project Area and received by the Agency
for the Project Area pursuant to Article 6 of Chapter 6 of the
Redevelopment Law and Section 16 of Article XVI of the
Constitution of the State of California, including all payments
and reimbursements, if any, to the Agency specifically
attributed to ~ valorem taxes lost by reason of tax exemptions
and tax rate limitations, but excluding tax revenues required
to be passed through to certain taxing entities pursuant to
agreements with such entities.
A-6
JAS:1869(4/19/93)
,
APPENDIX B*
CITY OF POWAY
GENERAL ECONOMIC AND FIRAHCIAL INFORXATIOH
The following material is descriptive of the City of
poway. It has been prepared by or excerpted from sources as
noted herein and has not been reviewed by Bond Counselor the
Underwriter.
History and Location
poway developed as an unincorporated community until
November 1980, when its 33,500 residents voted to incorporate
an area of about 38 square miles. It began its formal
existence as a City on December 1, 1980. In November, 1986,
the City annexed an additional 1,325 acres, for a total area of
about 40 square miles. poway is located inland about three
miles east of Interstate Highway 15, and is surrounded on three
sides by the City of San Diego. Driving distance southerly to
downtown San Diego or the San Diego International Airport is
about 25 miles. The terrain is hilly and steep in some areas
with gentle slopes in the center of the City. poway is
relatively new in that over 70% of the housing stock postdates
1970.
City Organization
The City has, since incorporation, been governed and
operated under the Council-Manager form of government. The
City Manager directs a work force of 216 full-time employees
and appoints department heads on the basis of specialized
knowledge, experience and education in their area of
responsibility. The City employees are members of the State
Public Employees Retirement System. The contributions to the
System are current and no unfunded contractual liability exists
for past services.
Population
At incorporation in 1980, there were about 33,500 in
the City limits. poway has grown to 43,933 (1990 census) and
expects to be built out according to general plan estimates at
52,000. poway is a low density community predominately of
single family homes. Table 1 illustrates comparative
population figures.
*To be updated
B-1
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Audits
The City, all its funds and the poway Redevelopment
Agency are audited annually by the certified public accounting
firm of Moreland & Associations, Inc. of 610 Newport Center
Drive, Suite 600, Newport Beach, California 92660.
Copies of the audited financial statements for the
respective fiscal years 1984-1985 through 1991-92 are on file
with the City.
Retail and TOtal Taxable Sales
Retail sales (see Table 4) increased over 30% in the
period of 1985 to 1991. Total sales (see Table 5) increased
over 35% in the same seven-year period.
B-5
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-
-
Construction Activity
Residential and commercial construction values for
fiscal years 1983-84 through 1991-92 are shown in Table 6.
TABLE 6
CITY OF POWAY
Construction Activity
1983-84 to 1991-92
Residential and Cnmmercial Construction
Value of Value of Value of
Fiscal Number Dwelling Residential Commercial Industrial
Year of Permits Units Construction Construction Construction
1983-84 864 373 $ 40,681,510 $ 1,206,057 NIA
1984-85 691 191 48,596,185 3,605,592 NIA
1985-86 1,303 596 68,636,940 2,544,400 NIA
1986-87 1.287 636 107,298,476 2,128,201 $2,736,161
1987-88 1,948 407 91,244,133 20,778,035 1,174,449
1988-89 1,716 404 89,449,956 8,960,829 6,553,967
1989-90 1,619 281 70,107,550 1,343,125 11,692,368
1990-91 1,286 340 53,810,212 1,082,843 6,044,276
1991-92 1,273 50 17,152,028 16,157,812 1,538,382
Source: City of Poway Planning Department
Housing and Income
The average selling price for new and existing single
family homes is about $261,000. 1988 median income for poway
was $45,837, the highest of incorporated cities in the County.
The median age of poway residents is 30.6, and the
family/household size was 3.21 in 1988. Owner occupancy is
high, and poway is predominantly a single family community.
The following Table compares the components of the
housing element for the entire City of poway, including
property located within the Project Area, with those of other
surrounding communities, including vacancy rates:
B-8
"
TABLE 7
HOUSING INFORMATION BY JURISDICTION
as of January I, 1992
Jurisdiction !Ulill WililL F..it yU Ho...lL Hi l i toryii !Ulill !I.Ilill v.c.ntU
POWIY 22,637 18,467 3,338 797 35 21,850 737 3.5%
Kearny Me'l 55,924 33,358 20,542 740 1,284 53,566 2,358 4.2%
Coutal 40,306 18,650 20.753 481 422 36,203 4,103 10.2%
University 20,930 7,955 12,973 2 0 19,693 1,237 5.9%
DeL Mer-Mira
Mesl 37,563 27.294 9,949 321 0 15,683 1,880 5.0%
North San Diego 29,954 19.433 10,440 81 0 26,885 3.069 10.2%
Mir...r 454 0 0 108 346 451 3 0.7%
Ell iott-Navajo 35.119 22,972 9.295 388 2,464 33,537 1,582 4.5%
1 Single f..ily attached and detached units.
2 Two or aore units in I structure.
3 Includes .obile ho.e. on .iLitary blses.
4 Includes all per.anent on-base and off-blse .ilitary units. Does not incLude private housing
occupied by .ilitlry personnel.
5 Total vacant units divided by totaL houling units.
Source: San Diego Association of Governments
B-9
,
- -
-
Climate
poway, as part of San Diego County, has a relatively
dry climate and its inland location spares it much of the
summer fog experienced along the coast. Temperatures are
frost-free over 350 days per year, and the City receives on the
average approximately 11 inches of rain, principally between
the months of October and April.
B-1O
,
-~~..~------
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,
- -
TABLE 9
COUR'l'Y OF SAN DXBGO
Civilian Labor Force, Employment and Unemployment
Unemployment
~ Labor Force Emnloved Unemnloved Ratioll)
1979 744,800 698,700 46,100 6.2%
1980 754,900 705,300 49,600 6.6
1981 802,200 746,800 55,400 6.9
1982 837,100 759,500 77 ,600 9.3
1983 877 ,100 805,100 72,000 8.2
1984 915,300 860,800 54,500 6.0
1985 967,200 915,900 51,300 5.3
1986 1,010,900 960,500 50,400 5.0
1987 1,059,100 1,011.400 47,700 4.5
1988 1,126,500 1,078,300 48.200 4.3
1989 1,173,400 1,127,200 46,200 3.9
1990 1,174,400 1,121,600 52,800 4.5
1991 1,176,200 1,104,100 72,100 6.1
(1) Unadjusted for season.
Source: State of California Employment Development Department
8-12
,
TABLE 10
CITY OF POWAY
Ten Pr~nc~pal Employers
April, 1993
Type of Number of
~ Business EmDlovees III
poway Unified School District School 3,000
Anacomp Inc. Manufactures m~cro-
graphic equip. 857
pomerado Hospital Hospital 700
Wal*Mart Retail department
store 300
City of poway Government 280
Von's Grocery store 167
Executone Information Systems Business telephone
systems 150
Target Retail department
store 130
New poway Ford Automobile dealer 105
K-Mart Retail department
store 75
Source: City of poway
(1) Includes part-time employees.
B-13
,
-
TABLE 11
CITY OF POWAY
'.ren Largest Property Taxpayers
June 30, 1992
Percentage
of 1991-92
Assessed Citywide Assessed
HAmg Valuation Valuation
Parkway Business Center
Partners $ 45,469,804 1. 90%
C. F. poway Ltd. 39,154,875 1.64
Tech Business Center 31,248,170 1.31
Standard Pacific LP 18,066,101 0.76
R & R Partners - poway 14,480,679 0.61
Gateway Medical JV 13,397,619 0.56
poway Industrial Properties 12,145,806 0.51
Beecroft, Jose N. & Lois M. 11,236,096 0.47
VMC National Properties 9,009,297 0.38
Lucky Stores, Inc. 8.977.400 ~
Totals: S203.l85.847 8.51%
Source: San Diego County Assessor's Office and City of poway
Finance Department.
Bmployment and Industry
poway is part of the Metropolitan Statistical Area
(MSA) comprised of San Diego County. Non-agricultural
employment figures are compiled at the MSA level. The trade
and service sectors have been the largest employers in the
County, accounting for almost half of all jobs since 1980.
Growth in the service sector has averaged 6% per year, followed
by growth in the retail trade sector at 6.5% per year.
Projected employment figures for 1989 indicate that the trade,
service, manufacturing and government sectors will retain their
prominence 1 growth in the construction sector will continue and
employment in agriculture will continue to decline.
The City of poway is primarily a residential
community, thus, there are few major employers in the
community. The City itself, the pomerado Hospital District and
the poway Unified School District are the largest employers in
the area. Numerous small businesses make up the rest of the
B-14
,
employment base in the community. In addition, there are plans
in place to add to the employment base by developing the South
poway Industrial Park.
Transportation
poway is served by a variety of transportation modes.
Commercial air travel is supplied by Lindbergh Field,
approximately 25 miles south in San Diego, and is supplemented
by private and charter plan service from the Palomar Airport,
about 20 minutes to the west. Automobile travel is facilitated
by Interstate 15 which runs north/south several miles to the
west of Poway. Bus travel is supplied by the San Diego County
Regional Transit District and is supplemented by commuter
service from poway to downtown San Diego.
Services and Facilities
The City of poway supplies its residents with water
and sewer service. Power is supplied by San Diego Electric and
Gas, and telephone service by Pacific Bell. The City has its
own parks and community services departments and provides fire
protection service, but contracts for police service from the
County.
Health acre facilities are provided by pomerado
Hospital, a l30-bed, full-service facility. Educational
facilities in the poway Unified School District include 17
elementary schools (12 public and 5 private), 3 middle schools
and 3 high schools, one of which is a continuation school.
These educational facilities serve the populace of poway as
well as the neighboring communities of Rancho Bernardo and
Rancho Penasquitos. Several schools within the Authority have
recently been awarded national honors for excellence.
The cOmmunity is served by four savings and loan
associations and six banks.
Recreational facilities in the City of poway include
two community parks, one at the Community Center and one
surrounding Lake poway, a man-made lake. The Community Center
also includes lighted softball/baseball fields and a swimming
pool. Golfing is available at local nonmembership country
clubs. A new 81S-seat poway Center for the Performing Arts
opened in 1990, and features profesional touring artists,
entertainers and community programs. Residents of poway have
excellent access to cultural and recreational facilities in the
metropolitan San Diego area as well.
B-1S
,
--
APPENDIX C
AUDITED FINANCIAL STATEJlENTS OF THE AGENCY
FOR FISCAL YEAR 1992-93
-
C-l
JAS:1869{3/20/93)
,
APPENDIX E
FORK OF PROPOSED LEGAL OPINION
E-l
JAS:1869(3/20/93)
"
-- _.._------~
APPENDIX F
DEFINITIONS AND PROVISIONS RELATING TO THE 1993
INDEXED IRVERSE FLOATING/FIXED RATE BONDS AND THE
1993 INDEXED FLOATING/FIXED RATE BONDS
DEFINITIONS
In connection with the interest on the 1993 Indexed Inverse
Floating/Fixed Rate Bonds and 1993 Indexed Floating/Fixed Rate
Bonds, the following terms shall have the meanings set forth
below:
"Average Index Rate" means, with respect to the 1993
Indexed Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/Fixed Rate Bonds for each Interest Period, the average
rate per annum represented by the Index as applicable to each
day during such Interest Period, which Average Index Rate shall
be calculated on the Interest Calculation Date for each such
Interest Period. For the purpose of calculating the Average
Index Rate, the Index as published or otherwise announced on
any particular date shall be deemed applicable to such
publication or announcement date and each day thereafter to,
but not including, the next publication or announcement date
for the Index; provided, however, that if the publication or
announcement date for the Index occurs on or after an Interest
Calculation Date to and including the last day of the
applicable Interest Period, the Index as of the immediately
preceding publication or announcement date shall be deemed
applicable to such Interest Calculation Date and each day
thereafter through the end of the applicable Interest Period.
"Base Rate" means, with respect to the 1993 Indexed Inverse
Floating/Fixed Rate Bonds, the rate of ____, per annum.
"Bond Rate" means, (i) with respect to the 1993 Indexed
Inverse Floating/Fixed Rate Bonds, the rate of ____, per annum;
and (ii) with respect to the 1993 Indexed Floating/Fixed Rate
Bonds, the rate of ____, per annum.
"Conversion Date" means, with respect to the 1993 Indexed
Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/Fixed Rate Bonds, as applicable, the Scheduled
Conversion Date, Extraordinary Conversion Date or Optional
Conversion Date for such Bonds.
"Credit Event upon Merger" means, with respect to the 1993
Indexed Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/Fixed Rate Bonds, the occurrence of a consolidation,
F-l
JAS:1869(4/13/93)
,
amalgamation or merger by a party or its guarantor, a transfer
of all or substantially all of such party's or guarantor's
assets to another entity, or a reorganization, incorporation or
reincorporation, reconstitution or recapitalization of such
party or its guarantor, if the creditworthiness of the
resulting, surviving, transferee, reorganized, recapitalized or
successor entity is materially weaker than that of the party or
its guarantor immediately prior to the occurrence of such
action.
"Effective Date" means, with respect to the 1993 Indexed
Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/Fixed Rate Bonds, the date on which the Bonds are
issued and delivered by the Agency.
"Extraordinary Conversion Date" means, with respect to the
1993 Indexed Inverse Floating/Fixed Rate Bonds and the 1993
Indexed Floating/Fixed Rate Bonds, as applicable, the date of
any mandatory conversion to the Bond Rate upon the occurrence
of a Swap Provider Default or Swap Termination Event with
respect to the Swap Provider or Illegality with respect to the
Agency under the respective Swap Agreement.
"Illegality" means, with respect to the Swap Agreements, a
change in law or interpretation thereof which makes it unlawful
for a party to a Swap Agreement to perform any obligation or
comply with the terms of such Swap Agreement.
"Index" means, with respect to the 1993 Indexed Inverse
Floating/Fixed Rate Bonds or the 1993 Indexed Floating/Fixed
Rate Bonds:
(a) initially, the PSA Index; or
(b) if the PSA Index is materially modified or is no
longer published or announced, a substitute index designated by
the Swap Provider which is based on yield evaluations at par of
notes or bonds subject to tender upon seven days notice, issued
by not less than five "high grade" component issuers, the
interest on which is (i) not includable in gross income of the
owners thereof for purposes of federal income tax under the
Internal Revenue Code of 1986, as amended (the "Code") and (ii)
not subject to an "alternative minimum tax" or similar tax
under the Code, unless all such tax-exempt notes or bonds are
subject to such tax.
"Indexed Inverse Rate" means, with respect to any 1993
Indexed Inverse Floating/Fixed Rate Bond for any Interest
Period, a rate equal to the Bond Rate applicable to such
Inverse 1993 Indexed Floating/Fixed Rate Bond plus the Base
F-2
JAS:1869(4/13/93)
,:
-_._._.__.__._-------~
Rate appl~cable to such 1993 Indexed Inverse Float~ng/F~xed
Rate Bond, m~nus the Average Index Ratel prov~ded, however,
that ~n no event w~ll the Indexed Inverse Rate be less than
zero for any Interest Per~od.
"Indexed Var~able Rate" means, w~th respect to the 1993
Indexed Float~ng/Fixed Rate Bonds for any Interest Period, a
rate equal to the greater of (a) the applicable Bond Rate or
(b) the applicable Bond Rate plus the Average Index Rate, minus
the Threshold Rate.
"Interest Calculat~on Date" means, w~th respect to the 1993
Indexed Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/F~xed Rate Bonds, the fourth Bus~ness Day preceding
each Interest Payment Date for such Bonds.
"Interest Payment Date" means June 15 and December 15 of
each year, commencing December 15, 1993.
"Interest Period" means, with respect to the 1993 Indexed
Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/Fixed Rate Bonds, each period from and including an
Interest Payment Date (or the Effective Date, in the case of
the initial Interest Period) to but not including the next
succeeding Interest Payment Date.
"Market Agent" means, with respect to the 1993 Indexed
Inverse Floating/F~xed Rate Bonds, paineWebber Incorporated or
such subst~tute Market Agent as may be appointed by the Trustee
with the consent of the Swap Provider.
"Optional Conversion Adjustment" means, with respect to any
1993 Indexed Inverse Floating/Fixed Rate Bond or 1993 Indexed
Floating/F~xed Rate Bond to be converted on an Optional
Conversion Date, the fixed amount determined solely by the
applicable Swap Provider as being payable by or to the Swap
Provider (as here~nafter described) in order to reverse or to
unwind, based on current market conditions, the Swap Agreement
payment obligations of the Agency and the Swap Provider with
respect to such 1993 Indexed Inverse Floating/Fixed Rate Bond
or 1993 Indexed Floating/Fixed Rate Bond, taking into account
any accrued unpaid amounts under the applicable Swap
Agreement. The fixed amount, if any, so determined with
respect to an optional conversion may be payable by or to the
Swap Provider in the case of the 1993 Indexed Inverse
Floating/Fixed Rate Bonds or by (but not to) the Swap Provider
in the case of the 1993 Indexed Floating/Fixed Rate Bonds.
- "Optional Conversion Date" means, with respect to any
Indexed Inverse Floating/Fixed Rate Bond or Indexed
Floating/Fixed Rate Bond which is converted to bear interest at
F-3
JAS:1869(4/13/93)
,
.
-- the Bond Rate at the option of the beneficial owner, the date
of such optional conversion, which shall be a Business Day and
which shall not occur during the period from and including the
Regular Record Date (defined in the Indenture as the 15th day
of each May and November), to but not including the next
succeeding Interest Payment Date.
.PSA Index" means the PSA Municipal Swap Index announced
weekly by Municipal Market Data based upon the weekly interest
rate resets of tax-exempt variable rate issues in a data base
maintained by Municipal Market Data in accordance with specific
criteria established by the Public Securities Association.
.Swap Agreement" means, with respect to the 1993 Indexed
Inverse Floating/Fixed Rate Bonds or the 1993 Indexed
Floating/Fixed Rate Bonds, as applicable, the interest rate
swap or cap agreement, including the appropriate confirmation,
reltaing to such Bonds as in effect between the Agency and the
applicable Swap Provider.
.Swap Provider" means, as applicable (a)
, , as party to the applicable Swap
Agreement for the 1993 Indexed Inverse Floating/Fixed Rate
Bonds or (b) , ,
as party to the applicable Swap Agreement for the 1993 Indexed
Floating/Fixed Rate Bonds~ provided that, in each case, such
term shall also mean and refer to any entity to which the
rights and obligations of the Swap Provider under the
applicable Swap Agreement may be transferred in accordance with
the terms thereof or the issuer of any substitute Swap
Agreement entered into under the circumstances described in the
Indenture~ provided that the Agency shall not designate or
consent to the designation of any such transferee or substitute
Swap Provider unless such designee is an entity whose senior
long term debt obligations, other senior unsecured long term
obligations or claims paying abilities are rated in either of
the two highest rating categories by Moody's and S&P or whose
obligations under the Swap Agreement are guaranteed by an
entity so rated.
"Swap Provider Default" means, with respect to the 1993
Indexed Inverse Floating/Fixed Rate Bonds and the 1993 Indexed
Floating/Fixed Rate Bonds, the occurrence of any of the
following events: (a) the Swap Provider fails to make any
payment due under the Swap Agreement and such non-payment
continues for three (3) Business Days following notice thereof
from the AgencYI (b) any representation made by the Swap
Provider under the Swap Agreement proves to have been false or
misleading in any material respect as of the time it was made
or reaffirmed~ (C) the Swap Provider fails to perform or
F-4
JAS:1869(4/13/93)
"
---
observe any other covenant or agreement under the Swap
Agreement and such failure continues unremedied for thirty (30)
days following notice thereof from the Agency to the Swap
Provider; (d) certain events of bankruptcy or insolvency occur
with respect to the Swap Provider; or (e) the guarantee, if
any, of the guarantor of the Swap Provider expires, terminates,
ceases to be in full force and effect or such guarantor
repudiates or challenges the validity of such guarantee.
"Swap Termination Event" means with respect to a Swap
Provider, (a) an Illegality affecting the Swap Provider or any
guarantor of its obligations under the applicable Swap
Agreement, (b) a Credit Event upon Merger, or (c) the rating of
the Swap Provider's long-term, unsecured, unsubordinated debt
obligations is withdrawn, suspended or reduced below "A-", in
the case of Standard and Poor's Corporation, or is withdrawn,
suspended or reduced below "A3", in the case of Moody'S
Investors Service Inc.
"Swap Termination Payment" means with respect to a Swap
Agreement, any settlement amount payable by the applicable Swap
Provider by reason or on account of the early termination of
such Swap Agreement, taking into account any unpaid amounts
under the applicable Swap Agreement.
"Threshold Rate" means, with respect to the 1993 Indexed
Floating/Fixed Rate Bonds, the rate of ____, per annum.
1993 INDEXED INVERSE FLOATING/FIXED RATE BONDS
Interest
Interest with respect to each Indexed Inverse
Floating/Fixed Rate Bond shall be calculated (a) from the
Effective Date to but not including the Scheduled Conversion
Date (as defined below), at a rate per annum equal to the
Indexed Inverse Rate and (b) from and including the Scheduled
Conversion Date, at a rate per annum equal to the applicable
Bond Rate. Under the circumstances described below, the
Indexed Inverse Floating/Fixed Rate Bonds may be converted to
bear interest at the applicable Bond Rate prior to the
Scheduled Conversion Date.
Interest on the 1993 Indexed Inverse Floating/Fixed Rate
Bond bearing interest at the applicable Bond Rate shall be
computed on the basis of a 360-day year consisting of twelve
30-day months. Interest on each 1993 Indexed Inverse
Floating/Fixed Rate Bond bearing interest at the Indexed
Inverse Rate shall be calculated on the basis of a 365 or 366
day year (as
F-5
JAS:1869(4/13/93)
,-
.
-
- applicable) and the actual number of days in the Interest
Period.
Prospective purchasers of the 1993 Indexed Inverse
Floating/Fixed Rate Bonds should note that because the interest
rate with respect to these bonds prior to the Scheduled
Conversion Date will be determined by subtracting the Average
Index Rate from the sum of the Base Rate and the applicable
Bond Rate, interest with respect to the 1993 Indexed Inverse
Floating/Fixed Rate Bonds will:
decrease as the Average Index Rate increases, and
increase as the Average Index Rate decreases.
In the event that there shall have been designated an
Extraordinary Conversion Date upon termination of the Swap
Agreement with respect to the 1993 Indexed Inverse
Floating/Fixed Rate Bonds, and the Agency shall not have
entered into a new Swap Agreement for such Bonds on
substantially identical terms, then the interest rate on the
1993 Indexed Inverse Floating/Fixed Rate Bonds shall be
converted on such date to a rate of interest equal to the
applicable Bond Rate, retroactive to the last Interest Payment
Date on which interest on the 1993 Indexed Inverse
Floating/Fixed Rate Bonds has been paid in fall (or to the
- Effective Date, in the case of the initial Interest Period),
and such rate shall continue in effect thereafter. See
"Mandatory Conversion on Extraordinary Conversion Date" below.
In the event there shall have been designated an Optional
Conversion Date with respect to all or a portion of the 1993
Indexed Inverse Floating/Fixed Rate Bonds, and the Optional
Conversion Adjustment has been paid or payment has been
provided for and the other conditions precedent set forth in
the Indenture have been met, then the interest rate on such
1993 Indexed Inverse Floating/Fixed Rate Bonds shall be
converted on such date to a rate of interest equal to the
applicable Bond Rate, retroactive to the last Interest Payment
Date on which interest on such 1993 Indexed Inverse
Floating/Fixed Rate Bonds has been paid in full (or to the
Effective Date, in the case of the initial Interest Period),
and such rate shall continue in effect thereafter. See
"Optional Conversion" below.
Swap Agreement
As a condition to the delivery of the 1993 Indexed Inverse
Floating/Fixed Rate Bonds, the Agency will enter into the Swap
Agreement relating to such Bonds with the applicable Swap
Provider. (See "THE SWAP PROVIDER" herein.) Pursuant to the
F-6
JAS:1869(4/13/93)
,-
------
Swap Agreement, the Agency effectively hedges its obligation to
pay the floating rate of interest due on the 1993 Indexed
Inverse Floating/Fixed Rate Bonds since the Swap Provider
agrees to pay to the Agency an equal floating rate on a
notional principal amount of the 1993 Indexed Inverse
Floating/Fixed Rate Bonds and on a net (same day) basis, the
Agency agrees to pay to the Swap Provider a fixed rate equal to
the applicable Bond Rate. The hedging referenced above shall
cease to exist following a default on the part of the Agency
under the Swap Agreement or a Credit Event upon Merger on the
part of the Agency which would enable the Swap Provider to
terminate the Swap Agreement in accordance with its terms and
may require the Agency to pay a termination amount to the Swap
Provider. Upon the occurrence of such an event, the Agency
will continue to be obligated to pay the Indexed Inverse Rate.
The Agency's obligations under the Swap Agreement for the 1993
Indexed Inverse Floating/Fixed Rate Bonds will be secured by a
security interest in the Pledged Revenues (as defined in the
Indenture) .
Pursuant to the Indenture and the Swap Agreement for the
1993 Indexed Inverse Floating/Fixed Rate Bonds, the Swap
Provider will be required to calculate, on each Interest
Calculation Date prior to the Scheduled Conversion Date, the
Average Index Rate and Indexed Inverse Rate for the Interest
Period then in effect. The Swap Provider shall notify the
Trustee of such calculations not later than 4:00 p.m. on each
Interest Calculation Date and the Trustee shall thereupon make
the Indexed Inverse Rate available to persons who request the
same and identify themselves as holders (or beneficial owners)
of 1993 Indexed Inverse Floating/Fixed Rate Bonds. All
calculations so made shall be conclusive and binding on the
Agency and the Bondholders.
On the Scheduled Conversion Date for the 1993 Indexed
Inverse Floating/Fixed Rate Bonds, the interest rate thereon
shall automatically convert to, and thereafter be payable at
the applicable Bond Rate.
Mandatory Conversion on Bxtraordinary Conversion Date
Prior to the Scheduled Conversion Date, the 1993 Indexed
Inverse Floating/Fixed Rate Bonds shall be subject to mandatory
conversion to the applicable Bond Rate upon the occurrence of
an Extraordinary Conversion Date with respect to such Bonds.
The Extraordinary Conversion Date (if applicable) shall be the
date on which the Swap Agreement is terminated if such
termination results from the occurrence of an Illegality with
respect to the Agency or the occurrence and continuance of a
Swap Provider Default or Swap Termination Event with respect to
the Swap Provider and if the Agency shall have failed to enter
F-7
JA$:1869(4/13/93)
,
~-
.
-
- into a substitute Swap Agreement at a cost to the Agency which
does not exceed the amount, if any, of the Swap Termination
Payment (excluding net unpaid amounts paid by the Swap
Provider) required by the terms of the Swap Agreement to be
paid to the Agency by the Swap Provider upon such a termination
and actually paid. Any such mandatory conversion shall occur
on the Extraordinary Conversion Date, retroactive to the last
Interest Payment Date to which interest at the Indexed Inverse
Rate has been paid (or to the Effective Date, in the case of
the initial Interest Period).
As soon as practicable after receiving notice of a
termination (or proposed termination) of the Swap Agreement
resulting from an Illegality with respect to the Agency, Swap
Provider Default or Swap Termination Event referred to above,
the Trustee shall give written notice of the termination (or
proposed termination) to the holders of the 1993 Indexed
Inverse Floating/Fixed Rate Bonds. Under certain
circumstances, depending on the nature of the occurrence
resulting in the termination of the Swap Agreement, it may not
be practicable for the Trustee to give such notice to the
holders prior to the Extraordinary Conversion Date and,
accordingly, receipt of such notice by the holders prior to
such date shall not be a condition precedent to the mandatory
conversion on such date. The mandatory conversion shall not
occur if the Agency enters into a substitute Swap Agreement (as
described above) prior to the termination of the existing Swap
Agreement, whether or not the Trustee has given prior notice to
the holders of the termination.
If an Illegality shall occur with respect to the Agency or
a Swap Provider Default or a Swap Termination Event shall occur
with respect to the Swap Provider, and if no substitute Swap
Provider is found, the Swap Termination Payment, if any, which
is due from the Swap Provider and is actually paid shall be
paid over to the holders of the 1993 Indexed Inverse
Floating/Fixed Rate Bonds. Neither the Agency nor the Bond
Insurer shall be obligated to pay such holders any Swap
Termination Payment which is due from, but not actually paid
by, the Swap Provider.
There is no assurance that the Swap Termination Payment
will be treated as tax exempt interest for purposes of federal
income tax or California personal income tax or corporate net
income tax.
Optional Conversion
On any Optional Conversion Date prior to the Scheduled
Conversion Date, any beneficial owner of 1993 Indexed Inverse
Floating/Fixed Rate Bonds may elect to convert the interest
F-B
JAS:1869(4/13{93)
,
rate on such 1993 Indexed Inverse Floating/Fixed Rate Bonds to
the applicable Bond Rate in an amount not less than $1,000,000
or any integral multiple of $100,000 in excess thereof. Upon
the exercise of such election as described below, the
conversion shall occur on the Optional Conversion Date,
retroactive to the last Interest Payment Date to which interest
on the converted Bonds has been paid at the 1993 Indexed
Inverse Rate (or to the Effective Date, in the case of the
initial Interest Period).
Not later than 10:00 a.m., New York City time, on the
proposed Optional Conversion Date, the Market Agent and the
beneficial owner electing to convert its 1993 Indexed Inverse
Floating/Fixed Rate Bonds shall give telephonic notice
(promptly confirmed by telecopy) of such election to the
Trustee and the Swap Provider. Such notice shall (a) specify
the principal amount of 1993 Indexed Inverse Floating/Fixed
Rate Bonds which the beneficial owner is electing to convert
and the CUSIP number and maturity date of such Bonds, (b)
request that the Swap Provider provide a quote for the Optional
Conversion Adjustment which would be due with respect to the
proposed conversion on such date, as specified below, (C)
specify the method by which the Market Agent and the Swap
Provider will be able to contact such beneficial owner for
purposes of the further notices and confirmations described
below, (d) specify information identifying in appropriate
detail the account to which the beneficial owner wishes to have
the Optional Conversion Adjustment transferred if payable by
the Swap Provider, (e) acknowledge and agree that, if the
Optional Conversion Adjustment is payable by the beneficial
owner, the Swap Provider shall have the right to rescind the
conversion under the circumstances described below and that, if
any such payment is not made by the beneficial owner when due
and if the conversion is not rescinded by the Swap Provider,
the Trustee shall deduct and pay over to the Swap Provider the
unpaid amount plus interest thereon as described below from
subsequent payments of principal, redemption price and interest
under the converted Bonds, which converted Bonds shall be
non-transferable by the beneficial owner until such unpaid
amount and interest have been paid in full and (f) provide
evidence satisfactory to the Market Agent that the person
providing the notice is the beneficial owner of 1993 Indexed
Inverse Floating/Fixed Rate Bonds to be converted.
Pursuant to the Swap Agreement, the Swap Provider shall use
its reasonable efforts to provide a preliminary quote for the
Optional Conversion Adjustment to the beneficial owner not
later than 12:00 noon, New York City time, on the Optional
Conversion Date. The Optional Conversion Adjustment shall
represent the amount, calculated in accordance with the Swap
F-9
JAS:1869(4/13/93)
,.
- Agreement, which is payable by the Swap Provider to the
beneficial owner or by the beneficial owner to the Swap
Provider in order to reverse or unwind the Swap Agreement with
respect to a notional amount equal to the principal amount of
the 1993 Indexed Inverse Floating/Fixed Rate Bonds to be
converted.
The beneficial owner shall notify the Swap Provider by
telephone not later than 1:30 p.m., New York City time, on the
Optional Conversion Date, (promptly confirmed by telecopy and
with a duplicate copy of such telecopy notice sent to the
Trustee) if the beneficial owner elects to proceed with the
conversion on the basis of a quote for the Optional Conversion
Adjustment provided by the Swap Provider at the time of such
telephonic notice (which quote may, but need not, be the same
as the preliminary quote provided on or before 12:00 noon).
Delivery to the Swap Provider of such notice shall be
irrevocable and binding upon the beneficial owner, the Agency
and the Swap Provider; provided that, if the Optional
Conversion Adjustment is calculated by the Swap Provider as
being an amount that would be payable by the beneficial owner,
the Swap Provider shall have the right to rescind the
conversion prior to receipt by the Swap Provider of telecopied
notice from the Trustee that the Trustee has received payment
of immediately available funds in an amount equal to the
Optional Conversion Adjustment if, in the exclusive judgment of
the Swap Provider, there has been a material adverse change in
market conditions since the time the Swap Provider first quoted
the Optional Conversion Adjustment to the beneficial owner on
the Optional Conversion Date. The Swap Provider shall notify
the Trustee in writing if it elects to exercise its right to
rescind the conversion by the beneficial owner.
Not later than 3:00 p.m., New York City time, on the
Optional Conversion Date, the party owing the Optional
Conversion Adjustment shall pay such amount to the Trustee for
the benefit of the party to which the payment is owed, in
immediately available funds. Immediately after receiving such
payment, the Trustee shall deliver notice thereof by telecopy
to the party to which the payment is owed and shall transfer
the payment to such party in immediately available funds as
soon as practicable thereafter.
There is no assurance that the Optional Conversion
Adjustment, if payable to the beneficial ovner, will be treated
as tax exempt interest for purposes of federal income tax or
California personal income tax or corporate net income tax.
No conversion shall be effective if the Swap Provider fails
to make the required payment, if any, of the Optional
Conversion Adjustment relating to the proposed conversion.
F-lO
JAS:la69(4/13/93)
\
- ---...---..------- ------
However, if the beneficial owner fails to make the required
payment, if any, of the Optional Conversion Adjustment, the
conversion shall nevertheless occur unless rescinded by the
Swap Provider, but the Trustee shall thereafter deduct and pay
over to the Swap Provider, from subsequent payments of
principal, redemption price and interest coming due under the
converted Bond, an amount equal to the Optional Conversion
Adjustment due from the beneficial owner, plus interest at a
rate determined on the Optional Conversion Date in accordance
with the Swap Agreement, and the converted Bond shall be
non-transferable by the beneficial owner until payment to the
Swap Provider has been made in full. The Swap Provider shall
notify the Trustee in writing if it elects to rescind the
conversion by the beneficial owner that failed to make the
required payment of the Optional Conversion Adjustment.
Notwithstanding the foregoing: (a) the Swap Provider's
obligation in respect of the conversion shall be subject to (i)
the condition precedent that the Swap Provider is actively
involved in the business of executing interest rate swap
agreements on the basis of tax-exempt market interest rates on
the Optional Conversion Date and (ii) such other factors as
affect the Swap Provider's willingness to enter into interest
rate swap agreements based upon tax-exempt market interest
rates; and (b) no optional conversion shall occur if, on or
before the Optional Conversion Date, the Trustee shall have
received an Opinion of Bond Counsel to the effect that such
conversion will adversely affect any applicable exemption of
interest on the 1993 Bonds from federal income taxation, it
being understood, however, that the Trustee is under no
obligation to seek an Opinion of Bond Counsel regarding any
proposed optional conversion.
Bondholders Have No Rights Against Swap Provider
The Swap Agreement sets forth, among other things, the
rights and obligations of the Swap Provider and the Agency,
including the measure of payments due upon the occurrence of an
Extraordinary Conversion Date thereunder. Neither the
Bondholders nor any person other than the Agency shall have any
rights under the Swap Agreement or against the Swap Provider,
and the Swap Provider shall not be responsible for the claims
or losses of any party other than the Agency, and then only to
the extent set forth in the Swap Agreement.
1993 IHDEX FLOATING/FIXED RATE BORDS
Interest
Interest with respect to each 1993 Indexed Floating/Fixed
Rate Bond shall be calculated (a) from the Effective Date to
but not including the Scheduled Conversion Date, at a rate per
F-ll
JAS:1869(4/13/93)
,
- -
- annum equal to the Indexed Variable Rate, and (b) from and
including the Scheduled Conversion Date, at a rate per annum
equal to the applicable Bond Rate. Under the circumstances
described below, the 1993 Indexed Floating/Fixed Rate Bonds may
be converted to bear interest at the applicable Bond Rate prior
to the Scheduled Conversion Date.
Interest on the 1993 Indexed Floating/Fixed Rate Bonds
bearing interest at the applicable Bond Rate shall be computed
on the basis of a 360-day year consisting of twelve 30-day
months. Interest on each 1993 Indexed Floating/Fixed Rate Bond
bearing interest at the Indexed Variable Rate shall be
calculated on the basis of a 365 or 366 day year (as
applicable) on the actual number of days in the Interest Period.
Prospective purchasers of the 1993 Indexed Floating/Fixed
Rate Bonds should note that, prior to ,-
the interest rate on such bonds viII remain at the minimum rate
of __' unless the Average Index Rate for the applicable
Interest Period exceeds _' and if the Average Index Rate
does exceed _%, only the excess over ____, is added to the
minimum rate for that Interest Period. The interest rate on
the 1993 Indexed Floating/Fixed Rate Bonds is ~ the Average
Index Rate and does DQt fluctuate with the Average Index Rate
unless the Average Index Rate for the applicable Interest
Period exceeds ____i.
In the event that there shall have been designated an
Extraordinary Conversion Date upon termination of the Swap
Agreement with respect to the 1993 Indexed Floating/Fixed Rate
Bonds, and the Agency shall not have entered into a new Swap
Agreement for such Bonds on substantially identical terms, then
the interest rate on the 1993 Indexed Floating/Fixed Rate Bonds
shall be converted on such date to a rate of interest equal to
the applicable Bond Rate, retroactive to the last Interest
Payment Date on which interest on the 1993 Indexed
Floating/Fixed Rate Bonds has been paid in full (or to the
Effective Date, in the case of the initial Interest Period),
and such rate shall continue in effect thereafter. See
"Mandatory Conversion on Extraordinary Conversion Date" below
In the event there shall have been designated an Optional
Conversion Date with respect to all or a portion of the 1993
Indexed Floating/Fixed Rate Bonds, and the Optional Conversion
Adjustment has been paid and the other conditions precedent set
forth in the Indenture have been met, then the interest rate on
such 1993 Indexed Floating/Fixed Rate Bonds shall be converted
on such date to a rate of interest equal to the applicable Bond
Rate, retroactive to the last Interest Payment Date on vhich
interest on such 1993 Indexed Floating/Fixed Rate Bonds has
F-12
JAS:1869(4/13/93)
,
been paid in full (or to the Effective Date, in the case of the
initial Interest Period), and such rate shall continue in
effect thereafter. See "Optional Conversion" below.
SWAP AGREEMENT
As a condition to the delivery of the 1993 Indexed
Floating/Fixed Rate Bonds, the Agency will enter into the Swap
Agreement relating to such Bonds with the applicable Swap
Provider. (See "THE SWAP PROVIDER" herein) Pursuant to the
Swap Agreement, the Agency effectively hedges it obligation to
pay the floating rate of interest due on the 1993 Indexed
Floating/Fixed Rate Bonds by making a lump sum payment to the
Swap Provider, in consideration of which the Swap Provider
agrees to pay to the Agency from time to time amounts equal to
the interest coming due on the 1993 Indexed Floating/Fixed Rate
Bonds in excess of the applicable Bond Rate.
Pursuant to the Indenture and the Swap Agreement for the
1993 Indexed Floating/Fixed Rate Bonds, the Swap Provider will
be required to calculate, on each Interest Calculation Date
prior to the Scheduled Conversion Date, the Average Index Rate
and Indexed Variable Rate for the Interest Period then in
effect. The Swap Provider shall notify the Trustee of such
calculations not later than 4:00 p.m. on each Interest
Calculation Date and the Trustee shall thereupon make the
Indexed Variable Rate available to persons who request the same
and identify themselves as holders (or beneficial owners) of
1993 Indexed Floating/Fixed Rate Bonds. All calculations so
made shall be conclusive and binding on the Agency and the
Bondholders.
On the Scheduled Conversion Date for the 1993 Indexed
Floating/Fixed Rate Bonds, the interest rate thereon shall
automatically convert to, and thereafter be payable at, the
applicable Bond Rate.
Mandatory Conversion on Extraordinary Conversion Date
Prior to the Scheduled Conversion Date, the 1993 Indexed
Floating/Fixed Rate Bonds shall be subject to mandatory
conversion to the applicable Bond Rate upon the occurrence of
an Extraordinary Conversion Date with respect to such Bonds.
The Extraordinary Conversion Date (if applicable) shall be the
date on which the Swap Agreement is terminated if such
termination results from the occurrence of an Illegality with
respect to the Agency or the occurrence and continuance of a
Swap Provider Default or Swap Termination Event with respect to
the Swap Provider and if the Agency shall have failed to enter
into a substitute Swap Agreement at a cost to the Agency which
F-13
JAS:1869(4/13/93)
,
.
- -
does not exceed the amount, if any, of the Swap Termination
Payment (excluding net unpaid amounts paid by the Swap
Provider) required by the terms of the Swap Agreement to be
paid to the Agency by the Swap Provider upon such a termination
and actually paid. Any such mandatory conversion shall occur
on the Extraordinary Conversion Date, retroactive to the last
Interest payment Date to which interest at the Indexed Variable
Rate has been paid (or to the Effective Date, in the case of
the initial Interest Period).
As soon as practicable after receiving notice of a
termination (or proposed termination) of the Swap Agreement
resulting from an Illegality with respect to the Agency, Swap
Provider Default or Swap Termination Event referred to above,
the Trustee shall give written notice of the termination (or
proposed termination) to the holders of the 1993 Indexed
Floating/Fixed Rate Bonds. Under certain circumstances,
depending on the nature of the occurrence resulting in the
termination of the Swap Agreement, it may not be practicable
for the Trustee to give such notice to the holders prior to the
Extraordinary Conversion Date and, accordingly, receipt of such
notice by the holders prior to such date shall not be a
condition precedent to the mandatory conversion on such date.
The mandatory conversion shall not occur if the Agency enters
into a substitute Swap Agreement (as described above) prior to
the termination of the existing Swap Agreement, whether or not
the Trustee has given prior notice to the holders of the
termination.
If an Illegality shall occur with respect to the Agency, or
a Swap Provider Default or a Swap Termination Event shall occur
with respect to the Swap Provider, and if no substitute Swap
Provider is found, the Swap Termination Payment, if any, which
is due from the Swap Provider and is actually paid shall be
paid over to the holders of the 1993 Indexed Floating/Fixed
Rate Bonds. Neither the Agency nor the Bond Insurer shall be
obligated to pay such holders any Swap Termination Payment
which is due from, but not actually paid by, the Swap Provider.
~ere is no assurance that the Swap TeDdnation paJlll8nt
will be treated as tax exempt interest for purposes of federal
income tax or California personal income tax or corporate net
income tax.
Optional Conversion
On any Optional Conversion Date prior to the Scheduled
Conversion Date, any beneficial owner of 1993 Indexed
Floating/Fixed Rate Bonds may elect to convert the interest
rate on such 1993 Indexed Floating/Fixed Rate Bonds to the
F-14
JAS:I869(4/13/93)
,
applicable Bond Rate in an amount not less than $1,000,000 or
any integral multiple of $100,000 in excess thereof. Upon the
exercise of such election as described below, the conversion
shall occur on the Optional Conversion Date, retroactive to the
last Interest Payment Date to which interest on the converted
Bonds has been paid at the Indexed Variable Rate (or to the
Effective Date, in the case of the initial Interest Period).
Not later than 10100 a.m., New York City time, on the
proposed Optional Conversion Date, the Market Agent and the
beneficial owner electing to convert its 1993 Indexed
Floating/Fixed Rate Bonds shall give telephonic notice
(promptly confirmed by telecopy) of such election to the
Trustee and the Swap Provider. Such notice shall (a) specify
the principal amount of 1993 Indexed Floating/Fixed Rate Bonds
which the beneficial owner is electing to convert and the CUSIP
number and maturity date of such Bonds, (b) request that the
Swap Provider provide a quote for the Optional Conversion
Adjustment which would be due with respect to the proposed
conversion on such date, as specified below, (c) specify the
method by which the Market Agent and the Swap Provider will be
able to contact such beneficial owner for purposes of the
further notices and confirmations described below, (d) specify
information identifying in appropriate detail, the account to
which the beneficial owner wishes to have the Optional
Conversion Adjustment, if any, transferred, and (e) provide
evidence satisfactory to the Market Agent that the person
providing the notice is the beneficial owner of 1993 Indexed
Floating/Fixed Rate Bonds to be converted.
Pursuant to the Swap Agreement, the Swap Provider shall use
its reasonable efforts to provide a preliminary quote for the
Optional Conversion Adjustment to the beneficial owner not
later than 12100 noon, New York City time, on the Optional
Conversion Date. The Optional Conversion Adjustment shall
represent the amount, calculated in accordance with the Swap
Agreement, which is payable by the Swap Provider to the
beneficial owner in order to reverse or unwind the Swap
Agreement with respect to a notional amount e~al to the
principal amount of the 1993 Indexed Ploating Fixed Rate Bonds
to be converted.
The beneficial owner shall notify the Swap Provider by
telephone not later than 1130 p.m., New York City time, on the
Optional Conversion Date, (promptly confirmed by telecopy and
with a duplicate copy of such telecopy notice sent to the
Trustee) if the beneficial owner elects to proceed with the
conversion on the basis of a quote for the Optional Conversion
Adjustment provided by the Swap Provider at the time of such
telephonic notice (which quote may, but need not, be the same
F-15
JAS:1869(4/13/93)
,
. ___ __ m__
as the preliminary quote provided on or before 12:00 noon).
Delivery to the Swap Provider of such notice shall be
irrevocable and binding upon the beneficial owner, the Agency
and the Swap Provider.
Not later than 3:00 p.m., New York City time, on the
Optional Conversion Date, the Swap Provider shall pay the
Optional Conversion Adjustment to the Trustee for the benefit
of the beneficial owner, in immediately available funds.
Immediately after receiving such payment, the Trustee shall
transfer the payment to the beneficial owner, in immediately
available funds, to the account designated in such party's
initial notice, and the Trustee shall deliver notice thereof by
telecopy to such party. No conversion shall be effective if
the Swap Provider fails to make the required payment of the
Optional Conversion Adjustment relating to the proposed
conversion.
There is no assurance that the Optional Conversion Adjustment
viII be treated as tax exempt interest for purposes of federal
income tax or California personal income tax or corporate net
income tax.
Notwithstanding the foregoing: (a) the Swap Provider's
obligation in respect of the conversion shall be subject to (i)
the condition precedent that the Swap Provider is actively
involved in the business of executing interest rate swap
agreements on the basis of tax-exempt market interest rates on
the Optional Conversion Date and (ii) such other factors as
affect the Swap Provider's willingness to enter into interest
rate swap agreements based upon tax-exempt market interest
rates 1 and (b) no optional conversion shall occur if, on or
before the Optional Conversion Date, the Trustee shall have
received an Opinion of Bond Counsel to the effect that such
conversion will adversely affect any applicable exemption of
interest on the Bonds from federal income taxation, it being
understood, however, that the Trustee is under no obligation to
seek an Opinion of Bond Counsel regarding any proposed optional
conversion.
Bondholders Have No Rights .Against Swap Provider
The Swap Agreement sets forth, among other things, the
rights and obligations of the Swap Provider and the .Agency,
including the measure of payments due upon the occurrence of an
Extraordinary Conversion Date thereunder. Neither the
Bondholders nor any person other than the Agency shall have any
rights under the Swap Agreement or against the Swap Provider,
and the Swap Provider shall not be responsible for the claims
or losses of any party other than the Agency, and then only to
the extent set forth in the Swap Agreement.
F-16
~As:'e69(4/'3/93)
,-
----- ----.--
-
APPENDIX B
REDEVELOPIlEN'l' REPORT OF
ROSENOW SPEVACEK GROUP, IRC.
.
F-18
JAS:1169(4/13f93)
,
,
.
____ ..,...........'1. .T
J~\.
~D-
3. Offerina the Bonds. The Underwriter agrees to offer
all the Bonds to the public initially at the prices (or yields)
set forth on the cover pages of the Official Statement of the
Agency pertaining to the Bonds, dated , 1993 (the
Official statement, together with all appendices thereto, and with
such changes therein and supplements thereto an are consented to
in writing by the Underwriter, are herein called the "Official
statement"). subsequent to the initial public offering of the
Bonds, the Underwriter reserves the right to change the public
offering prices (or yields) as it deems necessary in connection
with the marketing of the Bonds. The Bonds may be offered and
sold to certain dealers at prices lower than such initial public
offering prices. "Public Offering" shall include an offering to a
representative number of institutional investors or registered
investment companies, regardless of the number of such investors
to which the Bonds are sold.
4. Deliverv of Official Statement on the Date Hereof. The
Agency shall deliver to the Underwriter ten (10) copies of the
Official statement manually executed on behalf of the Agency by
the Chairperson or the Executive Director. The Agency shall also
deliver a sufficient number of copies of the Official statement to
enable the Underwriter to distribute a single copy of each
Official Statement to any potential customer of the Underwriter
requesting an Official statement during the time period beginning
when the Official statement becomes available and ending on the
End Date (defined below). The Agency shall deliver these copies
to the Underwriter within seven (7) business days after the
execution of this Purchase Contract and in sufficient time to
accompany or precede any sales confirmation that requests payment
from any customer of the Underwriter, The Underwriter shall inform
the Agency in writing of the End Date, and covenants to file the
Official statement with a nationally recognized municipal
securities information repository ("NRMSIR) on a timely basis.
"End Date" as used herein is that date which is the earlier
of:
(a) ninety (90) days after the end of the underwriting
period (as defined in SEC Rule l5c2-12 adopted by the Securities
and Exchange Commission on June 28, 1989 ("Rule 15c2-12"); or
(b) the time when the Official statement becomes
available from a NRMSIR, but in no event less than twenty-five
(25) days after the underwriting period (as defined in Rule
l5c2-12) ends.
pursuant to the Resolution, the Agency has authorized the
use of the Official statement in connection with the public
3
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\
---...-..-
- -
offering of the Bonds, The Agency also has consented to the use
by the Underwriter prior to the date hereof of the Preliminary
Official Statement of the Agency dated , 1993,
relating to the Bonds in connection with the public offering of
the Bonds (which, together with all appendices thereto, is herein
called the "Preliminary Official Statement"). An authorized
officer of the Agency has certified to the Underwriter on behalf
of the Agency that such Preliminary Official Statement was deemed
to be final as of its date for purposes of Rule l5c2-l2, with the
exception of certain final pricing and related information
referred to in Rule 15c2-12. The Underwriter has distributed a
single copy of each preliminary Official statement to potential
customers on request.
5. The Closina. At 9:00 A.M., California time,
on 1993, or at such other time or on such earlier or
later business day as shall have been mutually agreed upon by the
Agency, the Authority and the Underwriter, the Agency will deliver
(i) the Bonds to The Depository Trust Company ("DTC") in New York,
New York, and ( ii) the closing documents hereinafter mentioned at
the offices of Stradling, Yocca, Carlson & Rauth, Newport Beach,
California, or another place to be mutually agreed upon by the
Agency, the Authority and the Underwriter. The Authority will
accept such delivery from the Agency, and the Underwriter will
accept such delivery from the Authority. The Underwriter will pay
the purchase price of the Bonds as set forth in Section 1 hereof
by wire transfer of immediately available funds, which payment
will satisfy the Authority's Obligation to pay the purchase price
of the Bonds to the Agency pursuant to Section 1 hereof. This
payment and deli very, together with the delivery of the
aforementioned documents, is herein called the .Closing."
6. Aaencv Representations. Warranties and Covenants. The
Agency represents, warrants and covenants to the Authority and the
Underwriter that:
(a) ~~raanization. Existence and Authoritv. The
Agency is a public body corporate and politic, organized and
existing under the Constitution and laws of the State, including
the Redevelopment Law, with full right, power and authority to
adopt the Resolution, to issue the Bonds, and to execute, deliver
and perform its obligations under the Bonds, this Purchase
Contract, the Escrow Agreement, the Indenture and the Resolution
(the Bonds, Purchase Contract, Indenture, the Resolution [the Swap
Agreement] and such other documents required to be executed by the
Agency in connection with the issuance of the Bonds as described
in the Official Statement are collectively referred to herein as
the "Agency Documents").
(b) Due Authorization and Approval. By all necessary
4
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,
official action of the Agency, the Agency has duly authorized and
approved the adoption or execution and delivery of, and the
performance by the Agency of the obligations on its part contained
in, the Agency Documents, and has approved the use by the
Underwriter of the preliminary Official statement and the Official
statement and, as of the date hereof, such authorizations and
approvals are in full force and effect and have not been amended,
modified or rescinded. When executed and delivered by the parties
thereto the Agency Documents will constitute the legally valid and
binding obligations of the Agency enforceable upon the Agency in
accordance with their respective terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws or equitable principles relating to or affecting
creditors rights generally. The Agency has complied, and will at
the Closing be in compliance in all respects, with the terms of
the Agency Documents.
(c) Official Statement Accurate. The Official
Statement is, and at all times subsequent to the date of the
Official statement up to and including the Closing will be, true
and correct in all material respects, and the Official Statement
contains, and up to and including the Closing will contain, no
misstatement of any material fact and does not, and up to and
including the Closing will not, omit any statement necessary to
make the statements contained therein, in the light of the
circumstances in which such statements were made, not misleading.
(d) Underwriter's Consent to Amendments and Supplements
to Official Statement. The Agency will advise the Underwriter
promptly of any proposal to amend or supplement the Official
Statement from the delivery of the Official Statement to the End
Date, and will not effect or consent to any such amendment or
supplement without the consent of the Underwriter, which consent
will not be unreasonably withheld. The Agency will advise the
Underwriter promptly of the institution of any proceedings known
to it by any governmental agency prohibiting or otherwise
affecting the use of the Official Statement in connection with the
offering, sale or distribution of the Bonds.
(e) Aaencv Aareement to Amend or Supplement Official
Statement. For a period beginning on the date hereof and
continuing until the End Date, (a) the Agency will not adopt any
amendment of, or supplement to, the Official Statement to which
the Underwriter shall object in writing or which shall be
disapproved by the Underwriter's counsel and (b) if any event
relating to or affecting the Trustee or the Agency shall occur as
a result of which it is necessary, in the opinion of Underwriter's
Counsel, to amend or supplement the Official statement in order to
make the Official Statement not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser
5
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,
of the Bonds, the Agency will forthwith prepare and furnish to the
Underwriter a reasonable number of copies of an amendment of, or
supplement to, the Official Statement (in form and substance
satisfactory to Underwriter's Counsel) which will amend or
supplement the Official Statement so that it will not contain an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time the Official
Statement is delivered to a purchaser of the Bonds, not misleading.
(f) No Material Chanae in Finances. At the time of the
Closing, there shall not have been any material adverse change in
the financial condition of the Agency or any material adverse
change in the valuation of taxable property in the paguay
Redevelopment project Area (the "project Area") (as described in
the Official Statement) since June 30, 1992.
(g) No Breach or Default. As of the time of acceptance
hereof and as of the Closing, except as otherwise disclosed in the
Official Statement, the Agency is not and will not be in breach of
or in default under any applicable constitutional provision, law
or administrative rule or regulation of the State or the United
States, or any applicable jUdgment or decree or any trust
agreement, loan agreement, bond, note, resolution, ordinance,
agreement or other instrument to which the Agency is a party or is
otherwise subject, and no event has occurred and is continuing
which, with the passage of time or the giving of notice, or both,
would constitute a default or event of default under any such
instrument which breach, default or event could have an adverse
effect on the Agency's ability to perform its obligations under
the Agency Documents; and, as of such times, except as disclosed
in the Official Statement, the authorization, execution and
delivery of the Agency Documents and compliance by the Agency with
the provisions of each of such agreements or instruments do not
and will not conflict with or constitute a breach of or default
under any applicable constitutional provision, law or
administrative rule or regulation of the State or the United
States, or any applicable judgment, decree, license, permit, trust
agreement, loan agreement, bond, note, resolution, ordinance,
agreement or other instrument to which the Agency (or any of its
officers in their respective capacities as such) is subject, or by
which it or any of its properties is bound, nor will any such
authorization, execution, delivery or compliance result in the
creation or imposition of any lien, charge or other security
interest or encumbrance of any nature whatsoever upon any of its
assets or properties or under the terms of any such law,
regulation or instrument, except as may be provided by the Agency
Documents. The Agency specifically refers the Authority and the
Underwriter to the "CONCLUDING INFORMATION-Litigation" portion of
the Official Statement, and the description therein of certain
_.
6
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\
pending litigation concerning the Agency's Low and Moderate
Housing Fund (the "Housing Litigation"), and the Agency makes no
representations concerning the Agency's compliance with the Law as
it relates to the Housing Litigation.
(h) No Litiaation. (1) As of the time of acceptance
hereof and as of the Closing, except as disclosed in the Official
Statement, there is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court,
government agency, public board or body, pending or to the best
knowledge of the Agency threatened:
(i) in any way questioning the corporate existence
of the Agency or the titles of the officers of the Agency to their
respective offices;
(ii) affecting, contesting or seeking to prohibit,
restrain or enjoin the issuance or delivery of any of the Bonds,
or the payment or collection of any amounts pledged or to be
pledged to pay the principal of and interest on the Bonds, or in
any way contesting or affecting the validity of the Agency
Documents or the consummation of the transactions on the part of
the Agency contemplated thereby, or contesting the exclusion of
the interest on the Bonds from taxation or contesting the powers
of the Agency;
(iii) which may result in any material adverse
change relating to the financial condition of the Agency; or
(iv) contesting the completeness or accuracy of
the Preliminary Official Statement or the Official Statement or
any supplement or amendment thereto or asserting that the
preliminary Official Statement or the Official Statement contained
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
(2) To the best knowledge of the Agency there is no
basis for any action, suit, proceeding, inquiry or investigation
of the nature described in clauses (i) through (iv) above.
(i) No Prior Liens on Tax Revenues. As of the time of
acceptance hereof and as of the Closing the Agency does not and
will not have outstanding any indebtedness which is secured by a
lien on the Pledged Revenues superior to or on a parity with the
lien of the Bonds on the Pledged Revenue, except as disclosed in
the Official Statement.
7
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,
- -
(j) Further Cooperation; Blue SkY. The Agency will
furnish such information, execute such instruments and take such
other action in cooperation with the Underwriter as the
Underwriter may reasonably request in order (i) to qualify the
Bonds for offer and sale under the Blue Sky or other securities
laws and regulations of such states and other jurisdictions of the
United States as the Underwriter may designate and (ii) to
determine the eligibility of the Bonds for investment under the
laws of such states and other jurisdictions, and will use its best
efforts to continue such qualifications in effect so long as
required for the distribution of the Bonds; orovided, however,
that the Agency will not be required to execute a special or
general consent to service of process or qualify as a foreign
corporation in connection with any such qualification in any
jurisdiction.
(k) Bonds Issued Per Indenture; Pledae. The Bonds,
when issued, executed and delivered in accordance with the
Indenture and sold to the Underwriter as provided herein, will be
legally valid and binding obligations of the Agency, entitled to
the benefits of the Indenture and enforceable in accordance with
their terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors rights
generally, and upon execution and delivery of the Bonds, the
Indenture will provide, for the benefit of the owners from time to
time of the Bonds, a legally valid and binding pledge of and lien
on the funds and accounts pledged to such Bonds under the
Indenture and the Revenues pledged under the Indenture as provided
in and contemplated by the Indenture.
(1) Consents and Approvals, All authorizations,
approvals, licenses, permits, consents and orders of or filings
with any governmental authority, legislative body, board, agency
or commission having jurisdiction in the matters which are
required for the due authorization of, which would constitute a
condition precedent to or the absence of which would adversely
affect the due performance by the Agency of, its obligations in
connection with the Agency Documents have been duly obtained or
made.
(m) No Other Bonds. Between the date of this Purchase
Contract and the date of Closing, the Agency will not, without the
prior written consent of the Underwriter, and except as disclosed
in the Official Statement, offer or issue any bonds, notes or
other obligations for borrowed money, or incur any material
liabilities, direct or contingent.
(n) Certificates. Any certificate signed by any
authorized officer of the Agency and delivered to the Underwriter
8
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,
shall be deemed to be a representation and warranty by the Agency
to the Underwriter as to the statements made therein.
(0) Comoliance With the Redevelooment Law. As of the
time of acceptance hereof and as of the date of the Closing,
except as otherwise disclosed in the Official Statement and as to
the subject matter of the Housing Litigation, the Agency has
complied with the filing requirements of Sections 33080, 33080.6
and 33334.6 of the Redevelopment Law as applicable to the Agency
and the Project Area.
7. Covenants. The Authority represents, warrants and
covenants to the Agency and the Underwriter that:
(a) Due Oraanization. Existence and Authoritv. The
Authority is a joint powers authority, duly organized and existing
under the Constitution (the "Constitution") and laws of the State,
including the JPA Act, with full right, power and authority to
adopt, enter into, execute and deliver this Purchase Contract and
to perform its obligations thereunder.
(b) Due Authorization and Approval. By all necessary
official action, the Authority has duly authorized and approved
the execution and delivery of, and the performance by the
Authority of the obligations on its part contained in this
Purchase Contract, and has approved the use by the Underwriter of
the Preliminary Official Statement, and the Official Statement
and, as of the date hereof, such authorizations and approvals are
in full force and effect and have not been amended, modified or
rescinded. When executed and delivered by the parties thereto,
this Purchase Contract will constitute the legally valid and
binding obligations of the Authority enforceable upon the
Authority in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
relating to or affecting creditors rights generally. The Authority
has complied, and will at the Closing be in compliance in all
respects, with the terms of this Purchase Contract.
(c) Official Statement Accu~. The Official
Statement is, and at all times subsequent to the date of the
Official Statement up to and including the Closing will be, true
and correct in all material respects, and the Official Statement
contains, and up to and including the Closing will contain, no
misstatement of any material fact and does not, and up to and
including the Closing will not, omit any statement necessary to
make the statements contained therein, in the light of the
circumstances in which such statements were made, not misleading.
9
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,
- -
(d) Consent to Amendments and Suoolements to Official
Statement. The Authority will advise the Underwriter promptly of
any proposal to amend or supplement the Official Statement and
will not effect or consent to any such amendment or supplement
without the consent of the Underwriter, which consent will not be
unreasonably withheld. The Authority will advise the Underwriter
promptly of the institution of any proceedings known to it by any
governmental agency prohibiting or otherwise affecting the use of
the Official Statement in connection with the offering, sale or
distribution of the Bonds.
(e) AYthoritv Aareement to Amend or Supplement Official
Statement. If, at any time prior to the End Date, any event
occurs as a result of which the Official Statement as then amended
or supplemented would include an untrue statement of a material
fact, or omit to state any material fact necessary in order to
make the statements contained therein, in the light of the
circumstances under which they were made, not misleading, and, in
the reasonable opinion of the Underwriter, an amended or
supplemented Official Statement should be delivered in connection
with the offers or sales of the Bonds to reflect such event, the
Authority promptly will prepare at its expense an amendment or
supplement which will correct such statement or omission.
(f) No Material Chanae in Finances. At the time of the
Closing, there shall not have been any material adverse changes in
the financial condition of the Authority.
--
(g) No Breach or Default. As of the time of acceptance
hereof and as of the time of the Closing, except as otherwise
disclosed in the Official Statement, the Authority is not and will
not be in breach of or in default under any applicable
constitutional provision, law or administrative rule or regulation
of the State or the United States, or any applicable judgment or
decree or any trust agreement, loan agreement, bond, note,
resolution, ordinance, agreement or other instrument to which the
Authority is a party or is otherwise subject, and no event has
occurred and is continuing which, with the passage of time or the
giving of notice, or both, would constitute a default or event of
default under any such instrument which breach, default or event
could have an adverse effect on the Authority's ability to perform
its obligations under this Purchase Contract; and, as of such
times, except as disclosed in the Official Statement, the
authorization, execution and delivery of this Purchase Contract
and compliance by the Authority with the provisions thereof do not
and will not conflict with or constitute a breach of or default
under any applicable constitutional provision, law or
administrative rule or regulation of the State or the United
States or any applicable judgment, decree, license, permit, trust
agreement, loan agreement, bond, note, resolution, ordinance,
10
jas:l963
,
agreement or other instrument to which the Authority (or any of
its officers in their respective capacities as such) is subject,
or by which it or any of its properties is bound, nor will any
such authorization, execution, delivery or compliance result in
the creation or imposition of any lien, charge or other security
interest or encumbrance of any nature whatsoever upon any of its
assets or properties or under the terms of any such law,
regulation or instrument except as provided in this Purchase
Contract.
(h) No Litiaation. (1) As of the time of acceptance
hereof and the Closing, except as disclosed in the Official
Statement, there is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court,
government agency, public board or body, pending or to the best
knowledge of the Authority threatened:
(i) in any way questioning the corporate existence
of the Authority or the titles of the officers of the Authority to
their respective offices;
(ii ) affecting, contesting or seeking to prohibit,
restrain or enjoin the issuance or delivery of any of the Bonds,
or the payment or collection of any amounts pledged or to be
pledged to pay the principal of and interest on the Bonds, or in
any way contesting or affecting the validity of the Agency
Documents or the consummation of the transactions on the part of
the Authority contemplated thereby, or contesting the exclusion of
the interest on the Bonds from taxation or contesting the powers
of the Agency or its authority to issue and sell the Bonds and to
pledge the Pledged Revenues for repayment thereof;
(iii) which may result in any material adverse
change relating to the financial condition of the Authority;
(iv) contesting the completeness or accuracy of
the Preliminary Official Statement or the Official statement or
any supplement or amendment thereto or asserting that the
Preliminary Official Statement or the Official Statement contained
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make
the statements therein, in light of all the circumstances under
which they were made, not misleading; or
(v) challenging the ability of the Authority to
sell the Bonds to the Underwriter.
(2) To the best knowledge of the Authority, there is
no basis for any action, suit, proceeding, inquiry or
investigation of the nature described in clauses (i) through (v)
above.
11
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,
-
(i) Consents and Aoorovals. All authorizations,
approvals, licenses, permits, consents and orders of or filings
with any governmental authority, legislative body, board, agency
or commission having jurisdiction in the matters which are
required for the due authorization of, which would constitute a
condition precedent to or the absence of which would adversely
affect the due performance by the Authority of its obligations in
connection with, this Purchase Contract have been duly obtained or
made, except as may be required under the Blue Sky or securities
laws of any state in connection with the offering and sale of the
Bonds.
(j) Certificates. Any certificate signed by any
authorized officer of the Authority and delivered to the
Underwriter shall be deemed to be a representation and warranty by
the Authority to the Underwriter as to the statements made therein.
(k) Compliance with JPA Act. As of the time of
acceptance hereof and as of the date of Closing, except as
otherwise disclosed in the Official Statement, the Authority has
complied with the filing requirements of Section 6503.5 of the JPA
Act.
8. Closina Conditions. The Underwriter has entered into
this Purchase Contract in reliance upon the representations,
warranties and covenants herein and the performance by the
Authority and the Agency of their respective obligations
hereunder, both as of the date hereof and as of the date of the
Closing. The Underwriter's obligations under this Purchase
Contract are and shall be subject to the following additional
conditions:
(a) Brina-Down Representation. The representations,
warranties and covenants of the Agency and the Authority contained
herein shall be true and correct at the date hereof and at the
time of the Closing, as if made on the date of the Closing.
(b) Executed Aareements and Performance Thereunder. At
the time of the Closing:
(i) the Agency Documents shall be in full force
and effect, and shall not have been amended, modified or
supplemented except with the written consent of the Underwriter;
(ii) there shall be in full force and effect such
resolutions (the "Authorizing Resolutions") as, in the opinion of
Stradling, Yocca, Carlson & Rauth ("Bond Counsel"), shall be
necessary in connection with the transactions on the part of the
Authority and the Agency contemplated by this Purchase Contract,
the Official Statement, and the Agency Documents;
12
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,
(iii) the Agency shall perform or have performed
its obligations required or specified in the Agency Documents to
be performed at or prior to closing;
(iv) the Authority shall perform or have performed
its obligations required as specified in this Purchase Contract to
be performed at or prior to Closing; and
(v) the Official Statement shall not have been
supplemented or amended, except pursuant to Paragraphs 6(e) and
7(e) or as otherwise may have been agreed to in writing by the
Underwriter.
(c) No Default. At the time of the Closing, no default
shall have occurred or be existing under this Purchase Contract,
the Authorizing Resolutions, or the Agency Documents and neither
the Agency nor the Authority shall be in default in the payment of
principal or interest on any of its bonded indebtedness which
default shall adversely impact the ability of the Agency to make
payments on the Bonds.
(d) Termination Events. The Underwriter shall have the
right to terminate this Purchase Contract, without liability
therefor, by written notification to the Authority and the Agency
if at any time at or prior to the Closing:
(i) any event shall occur which causes any
statement contained in the Official Statement to be materially
misleading or results in a failure of the Official Statement to
state a material fact necessary to make the statements in the
Official Statement, in the light of the circumstances under which
they were made, not misleading; or
(ii) the marketability of the Bonds or the market
price thereof, in the opinion of the Underwriter, has been
materially adversely affected by an amendment to the Constitution
of the united States or by any legislation in or by the Congress
of the united States or by the State, or the amendment of
legislation pending as of the date of this Purchase Contract in
the Congress of the United States, or the recommendation to
Congress or endorsement for passage (by press release, other form
of notice or otherwise) of legislation by the President of the
United States, the Treasury Department of the united States, the
Internal Revenue Service or the Chairman or ranking minority
member of the Committee on Finance of the United States Senate or
the Committee on Ways and Means of the United States House of
Representatives, or the proposal for consideration of legislation
by either such Committee, or the presentment of legislation for
consideration as an option by either such Committee, or by the
13
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,
-
staff of the Joint Committee on Taxation of the Congress of the
United States, or the favorable reporting for passage of
legislation to either House of the Congress of the united States
by a Committee of such House to which such legislation has been
referred for consideration, or any decision of any Federal or
state court or any ruling or regulation (final, temporary or
proposed) or official statement on behalf of the united States
Treasury Department, the Internal Revenue Service or other Federal
or State authority materially adversely affecting the Federal or
State tax status of the Authority, or the interest on bonds or
notes or obligations of the general character of the Bonds; or
(iii) any legislation, ordinance, rule or
regulation shall be introduced in, or be enacted by any
governmental body, department or agency of the States or a
decision by any court of competent jurisdiction within the State
or any court of the United States shall be rendered which, in the
reasonable opinion of the Underwriter, materially adversely
affects the market price of the Bonds; or
(iv) legislation shall be enacted by the Congress
of the United States, or a decision by a court of the United
States shall be rendered, or a stop order, ruling, regulation or
official statement by, or on behalf of, the Securities and
Exchange Commission or any other governmental agency having
jurisdiction of the subject matter shall be issued or made to the
effect that the issuance, offering or sale of obligations of the
general character of the Bonds, or the issuance, offering or sale
of the Bonds, including all underlying obligations, as
contemplated hereby or by the Official Statement, is in violation
or would be in violation of, or that obligations of the general
character of the Bonds, or the Bonds, are not exempt from
registration under, any provision of the federal securities laws,
including the Securities Act of 1933, as amended and as then in
effect, or that the Indenture needs to be qualified under the
Trust Indenture Act of 1939, as amended and as then in effect; or
(v) additional material restrictions not in force
as of the date hereof shall have been imposed upon trading in
securities generally by any governmental authority or by any
national securities exchange which restrictions materially
adversely affect the Underwriter's ability to market the Bonds; or
(vi) a general banking moratorium shall have been
established by federal or State authorities; or
(vii) the United States has become engaged in
hostilities which have resulted in a declaration of war or a
national emergency or there has occurred any other outbreak of
hostilities or a national or international calamity or crisis,
14
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,
- --------- ------ ---- ------------..--- - ----~------ ------
financial or otherwise, the effect of such outbreak, calamity or
crisis on the financial markets of the United States, being such
as, in the reasonable opinion of the Underwriter, would affect
materially and adversely the ability of the Underwriter to market
the Bonds (it being agreed by the Underwriter that there is no
outbreak, calamity or crisis of such character as of the date
hereof) ; or
(viii) the commencement of any action, suit or
proceeding described in Paragraphs 6 (h) or 7(h) hereof which, in
the judgment of the Underwriter, materially adversely affects the
market price of the Bonds; or
(ix) there shall be in force a general suspension
of trading on the New York Stock Exchange; or
(x) the market for the Bonds or the market prices
of the Bonds or the ability of the Underwriter to enforce
contracts for the sale of the Bonds shall have been materially and
adversely affected, in the reasonable professional judgment of the
Underwri ter ; or
(xi) an event described in paragraph (e) of
Sections 6 or 7 hereof shall have occurred which, in the
reasonable professional judgment of the Underwriter, requires the
preparation and publication of a supplement or amendment to the
Official Statement; or
(xii) any rating of the Bonds by a national rating
agency shall have been withdrawn or downgraded.
(e) Closina Documents. At or prior to the Closing, the
Underwriter shall receive with respect to the Bonds (unless the
context otherwise indicates) the following documents:
(1) Bond Opinion. An approving opinion of Bond
Counsel dated the date of the Closing and substantially in the
form included as APPENDIX E to the Official Statement, together
with a letter from such counsel, dated the date of the Closing and
addressed to the Underwriter, to the effect that the foregoing
opinion may be relied upon by the Underwriter to the same extent
as if such opinion were addressed to them.
(2) Supplemental Opinion. A supplemental opinion
or opinions of Bond Counsel addressed to the Underwriter, in form
and substance acceptable to counsel for the Underwriter, and dated
the date of the Closing to the following effect:
( i) The Agency has full power and authority
to execute, deliver and perform the Agency Documents, and the same
15
jas:1963
,
have been duly authorized, executed and delivered by the Agency
- and constitute the legal, valid and binding obligations of the
Agency, are in full force and effect as of the Closing, and are
enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or
other laws affecting enforcement of creditors rights and by the
application of equitable principles if equitable remedies are
sought.
(ii) The Authority has full power and
authority to execute, deliver and perform this Purchase Contract,
and the same has been duly authorized, executed and delivered by
the Authority and constitutes the binding agreement of the
Authority, is in full force and effect as of the Closing, and is
enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws
affecting enforcement of creditors rights and by the application
of equitable principles if equitable remedies are sought.
(iii) The statements contained in the
Official Statement on the cover page and under the captions
"INTRODUCTION," "THE REFUNDING PLAN," "THE BONDS," "SOURCES OF
PAYMENT AND SECURITY FOR THE BONDS," "LIMITATIONS ON TAX
REVENUES, " "SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE,"
"CONCLUDING INFORMATION - Tax Exemption,. and "APPENDICES A, E and
F, " insofar as such statements purport to summarize certain
provisions relating to the Bonds, the Indenture or of the
Redevelopment Law, the JPA Act or state and federal tax law,
fairly and accurately summarize the information presented therein;
provided that Bond Counsel need not express any opinion with
respect to any financial or statistical information contained
therein.
(iv) The Bonds are not subject to the
registration requirements of the Securities Act of 1933, as
amended, and the Indenture is exempt from qualification pursuant
to the Trust Indenture Act of 1939, as amended.
(v) The Authority is a joint powers authority
duly organized and existing under the laws of the State.
(vi) Upon the issuance of the Bonds, the
remaining obligations of the Agency under the Owner Participation
agreements relating to the Poway Corporate Center and pomerado
Business will be subordinated to the lien against Pledged
Revenues for the payment of principal, premium (if any) and
interest on the Bonds.
(vii ) that the Prior Bonds are deemed to be
paid within the meaning and with the effect expressed in the
documents relating to the issuance thereof.
16
jas:1963
,
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(3) Aaencv Counsel Opinion. An opinion of Counsel
to the Agency, dated as of the Closing and addressed to Bond
Counsel and the Underwriter, in form and substance acceptable to
counsel for the Underwriter, to the following effect:
(i) The Agency is a public body, corporate
and politic, duly organized and validly existing under the laws of
the State.
( ii) The Agency Documents have been duly
authorized, executed and delivered by the Agency and, assuming due
authorization, execution and delivery by the other parties
thereto, constitute the valid, legal and binding obligations of
the Agency enforceable in accordance with their respective terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency or other laws affecting enforcement of creditors rights
and by the application of equitable principles if equitable
remedies are sought.
(iii) The resolutions approving and
authorizing the execution and delivery of the Agency Documents and
approving the Official Statement have been duly adopted at a
meeting of the governing body of the Agency, which was called and
held pursuant to law and with all public notice required by law
and at which a quorum was present and acting throughout and the
Resolution is in full force and effect and has not been modified,
amended or rescinded.
(iv) The execution and delivery of the Agency
Documents and the Official Statement and compliance with the
provisions of the Agency Documents, under the circumstances
contemplated thereby, (1) to the best of such counsels' knowledge
based on inquiry deemed sufficient by them for the purpose of this
opinion, do not and will not in any material respect conflict with
or constitute on the part of the Agency a breach of or default
under any agreement or other instrument to which the Agency is a
party or by which it is bound, and (2) do not and will not in any
material respect constitute on the part of the Agency a violation,
breach of or default under any existing law, regulation, court
order or consent decree to which the Agency is subject;
(v) The Official Statement has been duly
authorized by the governing body of the Agency and executed on its
behalf by an authorized officer of the Agency;
(vi) No additional authorization, approval,
consent, waiver or any other action by any person, board or body,
public or private, not previously obtained is required as of the
date of the Closing for the Agency to enter into the Agency
Documents or to perform its obligations under the Agency Documents;
17
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(vii) Except as otherwise disclosed in the
- Official statement, there is no litigation, proceeding, action,
suit, or investigation at law or in equity before or by any court,
governmental agency or body, pending or, to the best of such
counsel's knowledge, threatened (nor to the best of such counsel's
knowledge any basis therefor) against the Agency, challenging the
creation, organization or existence of the Agency, or the validity
of the Bonds or the Agency Documents or seeking to restrain or
enjoin the repayment of the Bonds or in any way contesting or
affecting the validity of the Bonds or the Agency Documents or any
of the transactions referred to therein or contemplated thereby or
contesting the authority of the Agency to enter into or perform
its obligations under any of the Bonds or the Agency Documents, or
under which a determination adverse to the Agency would have a
material adverse effect upon the financial condition or the
revenues of the Agency, or which, in any manner, questions the
right of the Agency to issue or to use the Pledged Revenues for
repayment of the Agency Note or affects in any manner the right or
ability of the Agency to enter into the Agency Note or to collect
or pledge the Pledged Revenues for repayment of the Agency Note;
(viii) with respect to the discussion in the
Official Statement under the captions "INTRODUCTION-The City and
the Agency," "THE REFUNDING PLAN," "THE AGENCY," "THE PAGUAY
REDEVELOPMENT PROJECT," "CONCLUDING INFORMATION-Litigation," and
APPENDICES BAND D," insofar as such statements purport to
summarize information with respect to the Agency and the Project
Area, without having undertaken to determine independently the
accuracy, completeness or fairness of the discussion under such
captions, nothing has come to the attention of such counsel as of
the date of this opinion which would lead such counsel to believe
that such discussion (excluding therefrom the financial and
statistical data and forecasts included therein, as to which no
opinion need be expressed) contains any untrue statement of a
material fact or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and
(ix) The Agency is in full compliance with
the Redevelopment Law, including the filing requirements of
Sections 33080 to 33080.6 and 33334.6 of the Redevelopment Law,
except with respect to such matters as are the subject of the
Housing Litigation, as to which no opinion is expressed.
(4) Authoritv Counsel Opinion. An opinion of
Counsel to the Authority, dated the date of the Closing and
addressed to Bond Counsel and the Underwriter, in form and
substance acceptable to counsel for the Underwriter substantially
to the following effect:
l8
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\
(i) The Authority is a joint powers
authority, duly created and lawfully existing under the laws and
the Constitution of the state;
(ii ) The Authority has full legal power and
lawful authority to enter into this Purchase Contract;
(iii) The resolution ("Authority Resolution")
of the Authority approving and authorizing the execution and
delivery of this Purchase Contract has been duly adopted at a
meeting of the governing board of the Authority, which was called
and held pursuant to the law and with all public notice required
by law and at which a quorum was present and acting throughout and
the Authority Resolution is in full force and effect and has not
been modified, amended or rescinded;
(iv) This Purchase Contract has been duly
authorized, executed and delivered by the Authority and
constitutes the valid, legal and binding obligation of the
Authority enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or
other laws affecting enforcement of creditors rights and by the
application of equitable principles if equitable remedies are
sought;
(v) Except as otherwise disclosed in the
Official Statement, there is no litigation, action, suit,
proceeding or investigation (or any basis therefor) at law or in
equity before or by any court, governmental agency or body,
pending or threatened against the Authority, challenging the
creation, organization or existence of the Authority, or the
validity of this Purchase Contract, the Indenture or the OPA or
seeking to restrain or enjoin any of the transactions referred to
therein or herein or contemplated thereby or hereby or contesting
the authority of the Authority to enter into or perform its
obligations under this Purchase Contract, the Indenture or the
Agency Note, or under which a determination adverse to the
Authority would have a material adverse effect upon the financial
condition or the revenues of the Authority, or which, in any
manner, questions the right of the Authority to purchase and sell
the Bonds.
(5) Trustee Counsel Ooinion. The opinion of counsel to
the Trustee, dated the date of the Closing, addressed to Bond
Counsel and the Underwriter, in form and substance acceptable to
counsel for the Underwriter substantially to the following effect:
(i) The Trustee is a national banking
association duly organized and validly existing under the laws of
the united States.
19
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- -
(ii) The Trustee has duly authorized the
- execution and delivery of the Indenture and the Escrow Agreement.
(iii) The Indenture and the Escrow Agreement
have been duly entered into and delivered by the Trustee and
assuming due, valid and binding authorization, execution and
delivery by the other parties thereto, constitute the legal, valid
and binding obligations of the Trustee enforceable against the
Trustee in accordance with their terms, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights generally, or by general principles of equity.
(iv) acceptance by the Trustee of the duties
and obligations under the Indenture and the Escrow Agreement and
compliance with provisions thereof will not conflict with or
constitute a breach of or default under any law or administrative
regulation to which the Trustee is subject.
(v) All approvals, consents and orders of any
governmental authority or agency having jurisdiction in the matter
which would constitute a condition precedent to the performance by
the Trustee of its duties and obligations under the Indenture and
the Escrow Agreement have been obtained and are in full force and
effect.
(6) Underwriter's Counsel Ooinion. An opinion,
dated the date of the Closing addressed to the Underwriter, of
Nossaman, Guthner, Knox & Elliott counsel to the Underwriter, in
such form as may be acceptable to the Underwriter and counsel to
the Underwriter.
(7) Ooinion of Bond Insurer Counsel. An opinion
of counsel to the Bond Insurer, dated as of the date of the
Closing, addresses to the Underwriter and in form and substance
acceptable to counsel to the Underwriter, substantially to the
following effect:
(i) the Bond Insurer has been duly
incorporated and is validly existing and in good standing under
the laws of the State of .
(ii) the Bond Insurance POlicy was issued in
the ordinary course of business and constitutes the legal, valid
and binding obligations of the Bond Insurer enforceable in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, rehabilitation, and other
similar laws of general applicability relating to or affecting
creditors' and/or claimants' rights against insurance companies
and to general equity principles.
20
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,
(iii) the information contained in the
Official Statement under the heading "INSURANCE ON THE BONDS" does
not, insofar as it relates to the Bond Insurance POlicy and the
Bond Insurer, contain any untrue statement of a material fact or,
insofar as it relates to the Bond Insurance Policy, intentionally
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(8) Aaencv Certificate. A certificate of the
Agency, dated the date of the Closing, signed on behalf of the
Agency by the Executive Director or Finance Director or other duly
authorized officer of the Agency to the effect that:
(i) The representations, warranties and
covenants of the Agency contained herein and in the Agency
Documents are true and correct in all material respects on and as
of the date of the Closing as if made on the date of the Closing
and the Agency has complied with all of the terms and conditions
of this Purchase Contract required to be complied with by the
Agency at or prior to the date of the Closing; and
(ii) No event affecting the Agency has
occurred since the date of the Official Statement which has not
been disclosed therein or in any supplement or amendment thereto
which event should be disclosed in the Official Statement in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(9) Authoritv Certificate. A certificate of the
Authority, dated the date of the Closing, signed on behalf of the
Authority by the Chairman or other duly authorized officer of the
Authority to the effect that:
(i) The representations, warranties and
covenants of the Authority contained herein are true and correct
in all material respects on and as of the date of the Closing as
if made on the date of the Closing and the Authority has complied
with all of the terms and conditions of this Purchase Contract
required to be complied with by the Authority at or prior to the
date of Closing; and
(ii) No event affecting the Authority has
occurred since the date of the Official Statement which has not
been disclosed therein or in any supplement or amendment thereto
which event should be disclosed in the Official Statement in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
21
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,
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(10) Trustee's Certificate. A Certificate of the
Trustee, dated the date of Closing, addressed to the Authority,
the Agency and the Underwriter, in form and substance acceptable
to counsel for the Underwriter to the following effect:
(i) The Trustee is duly organized and
existing as a national banking association in good standing under
the laws of the United States, having the full power and authority
to accept and perform its duties under the Indenture;
(ii ) Subject to the provisions of the
Indenture, the Trustee will apply the proceefs from the Bonds to
the purposes specified in the Indenture; and
I
,
(iii) Within the scope rf its trust
obligations under the Indenture, the Trustee agrees to cooperate
with the Underwriter and its counsel, at thebexpense of the
Underwriter, in endeavoring to qualify the B nds for offering and
sale under the securities or blue sky laws o~ such jurisdictions
of the United States as the Underwriter may ~equest; orovided.
however, that the Trustee will not be requir d to execute a
special or general consent to service of pro ess or qualify as a
foreign corporation in connection with any spch qualification in
any jurisdiction in which it is not now so sfbject.
( 11) . A certificate,
dated the Closing Date, signed by an authori ed officer or
representative of Rosenow Spevacek Group, In . ("Consultant") and
-- addressed to the Agency and the Underwriter,1 to the effect that
(i) any and all information submitted by the! Consultant to the
Underwriter in connection with the preparatirn of the Preliminary
Official Statement and the Official Statemen was and is true and
correct; (ii) the statements with respect to the financial
projections contained in the Preliminary Off~cial Statement and
the Official Statement, under the caption "T E PAGUAY
REDEVELOPMENT PROJECT" and in "APPENDIX H" d not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necess~rY to make the
statements therein, in the light of the circ mstances in which
they were made, not misleading. I
(12) w . A certificate,
dated the Closing Date, in form and substance acceptable to the
Underwriter, of an authorized officer of officers of the Swap
Provider, to the effect that the informatio~in the Official
Statement under the captions "APPENDIX F - S ap Agreement" and
"Swap Agreement Provider" is true and correct in all material
respects.
22
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\
( 13) Swao Provider Counsel Ooinion. An opinion of
counsel to the Swap Provider, dated the date of delivery of the
Swap Agreement, in form and substance acceptable to the
Underwriter, to the effect that the Swap Provider has full power
and authority to execute, deliver and carry out the terms of the
Swap Agreement, the Swap Agreement is in full force and effect and
is valid and binding upon the Swap Provider and that the
information in te Official Statement under the captions "APPENDIX
F - Swap Agreement" and "Swap Agreement Provider" is true and
correct in all material respects.
(14) Ratina. Evidence as of the Closing Date
satisfactory to the Representative that the Bonds have received,
at a minimum, a rating of from Moody's Investors Service
and from Standard & Poor's Corporation (or such other
equivalent rating as Moody's Investors Service and Standard &
Poor's Corporation shall issue), and that such ratings have not
been revoked or downgraded.
(15) Transcriots. Two transcripts of all
proceedings relating to the authorization and issuance of the
Bonds.
(16) Official Statement. The Official Statement
and each supplement or amendment, if any, thereto, executed on
behalf of the Agency by a duly authorized officer of the Agency.
(17) Documents. An original executed copy of each
of the Agency Documents and the Authority Documents.
(18) Aaencv Resolution. Two copies certified by
the Secretary or Assistant Secretary of the Agency, of each
resolution of the Agency relating to the Agency Documents, the
actions contemplated thereby and the Pledged Revenues, provided
that such resolutions may be contained in the transcripts provided
pursuant to Paragraph 8(e)(13) above.
(19) Authoritv Resolution. Two copies certified
by the Secretary or Assistant Secretary of the Authority, of each
resolution of the Authority relating to the Authority Documents,
the Bonds and the transactions contemplated thereby, provided that
such resolutions may be contained in the transcripts provided
pursuant to Paragraph 8(e)(13) above.
(20) llJ1ll. Evidence that the federal tax
information form 8038-G has been prepared for filing.
(21) Nonarbitraae Certificate. A tax and
nonarbitrage certificate in form satisfactory to Bond Counsel.
23
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.
.
(22) CDAC Statement. A copy of the Notice of Sale
required to be delivered to the California Debt Advisory
Commission pursuant to Section 53583 of the Government Code and
Section 8855(g) of the Government Code.
(23) Additional Documents. Such additional
certificates, instruments and other documents as the Underwriter
or its counsel may reasonably deem necessary.
If the Agency or the Authority shall be unable to satisfy
the conditions contained in this Purchase Contract, or if the
obligations of the Underwriter shall be terminated for any reason
permitted by this Purchase Contract, this Purchase Contract may be
terminated by the Underwriter, and none of the Underwriter, the
Agency or the Authority shall be under further obligation
hereunder.
9 . Exoenses. The Underwriter shall be under no obligation
to pay, and the Authority and the Agency shall payor cause to be
paid, the expenses incident to the performance of the obligations
of the Authority and the Agency hereunder including but not
limited to:
(a) the costs of the preparation and printing, or other
reproduction (for distribution on or prior to the date hereof) of
the Agency Documents and the cost of preparing, printing, issuing
and delivering the definitive Bonds;
(b) the fees and disbursements of any counsel,
financial advisors, accountants or other experts or consultants
retained by the Authority or the Agency;
(c) the fees and disbursements of Bond Counsel;
(d) the cost of preparation and printing the
Preliminary Official Statement and any supplements and amendments
thereto and the cost of preparation and printing of the Official
Statement, including a reasonable number of copies thereof for
distribution by the Underwriter;
(e) charges of rating agencies for the rating of the
Bonds; and
(f) the cost of preparation and printing of Blue Sky
and legal investment memoranda, if any, to be used by it and the
cost of printing of this Purchase Contract.
The Underwriter shall pay and neither the Authority nor the
Agency shall be under any obligation to pay all expenses incurred
by it in connection with the public offering and distribution of
24
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\
the Bonds, including the fees and disbursements of Nossaman,
Guthner, Knox & Elliott, counsel to the Underwriter, and any
advertising expenses.
10. Notice. Any notice or other communication to be given
to the Agency or the Authority under this Purchase Contract may be
given by delivering the same in writing to such entity at 13325
Civic Center Drive, Poway, California 92064, Attention: Executive
Director.
Any notice or other communication to be given to the
Underwriter under this Purchase Contract may be given by
delivering the same in writing to PaineWebber, Incorporated, 725
S. Figueroa Street, 41st Floor, Los Angeles, California, 90017,
Attention: Municipal Finance Department.
11. Entire Aareement. This Purchase Contract, when
accepted by the Agency and the Authority, shall constitute the
entire agreement among the Agency, the Authority and the
Underwriter and is made solely for the benefit of the Agency, the
Authority and the Underwriter (including the successors or assigns
of any Underwriter). No other person shall acquire or have any
right hereunder by virtue hereof, except as provided herein. All
the Agency's and the Authority's representations, warranties and
agreements in this Purchase Contract shall remain operative and in
full force and effect, regardless of any investigation made by or
on behalf of the Underwriter, until the earlier of (a) delivery of
and payment for the Bonds hereunder, and (b) any termination of
this Purchase Contract.
12. Counteroarts. This Purchase Contract may be executed
by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but a 11 such
counterparts shall together constitute but one and the same
instrument.
13. Severabilitv. In case anyone or more of the
provisions contained herein shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provision hereof.
14. state of California Law Governs. The validity,
interpretation and performance of this Purchase Contract sha 11 be
governed by the laws of the State.
15. No Assianment. The rights and Obligations created by
this Purchase Contract shall not be subject to assignment by the
Underwriter, the Agency or the Authority without the prior written
consent of the other parties hereto.
25
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,
16. Definitions. Terms not otherwise defined herein shall
- have the same meaning an when used in the Indenture.
PAINEWEBBER INCORPORATED
By:
Title:
Accepted as of the date first stated
above:
POWAY REDEVELOPMENT AGENCY
By:
Chairperson
ATTEST:
By:
Secretary
POWAY PUBLIC FINANCING
AUTHORITY
By:
Chairman
ATTEST:
By:
Secretary
26
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,
EXHIBIT A
Maturitv p' . Price
r1nc1oal Couoon
or Yield
jas:1963 27
,
- -
AGREEMENT RE
- BOND COUNSEL SERVICES
April 22, 1993
The poway Redevelopment Agency (hereinafter referred
to as the "Agency") and Stradling, Yocca, Carlson & Rauth, a
Professional corporation, (hereinafter referred to as "Bond
Counsel") hereby agree as follows:
1. SERVICES
The Agency retains Bond Counsel to provide, and Bond
Counsel agrees to provide, legal services in connection with
the Agency's issuance of bonds (hereinafter referred to as the
"Bonds") to refund its $35,000,000 paguay Redevelopment Project
Subordinated Tax Allocation Refunding Bonds, Series 1989A and
its $9,330,000 paguay Redevelopment Project Subordinated Tax
Allocation Refunding Bonds, Issue of 1991, to finance certain
redevelopment activities, to finance certain Agency
pass-through obligations and to finance certain low and
moderate income housing projects. Such services will be
divided into two phases: (a) program planning and development
of a financing plan; and (b) implementation of the financing
plan.
In the first phase -- the planning stage -- we would expect:
(i) to research applicable laws and ordinances
relating to the proposed program, including
federal and state tax laws, securities laws and
other laws that may be applicable and also
including laws applicable to the "Swap"
derivative financing structure currently proposed;
( ii) to attend conferences and consult with the
Agency/City staff (including the Agency Executive
Director) and counsel regarding such laws, to
participate with any financial advisors,
underwriters, derivative products specialists,
developers, lenders and other experts retained by
the Agency in structuring the financing; and
(iii) to consult with other firms active in the bond
practice when necessary to ensure that any novel
approaches being considered would be generally
accepted in the bond community.
In the second phase -- the implementation stage -- we would
expect:
--
ATTACHMENT H
MAY 4 1993 ITEM 10, I
,
--
(i) to supervise and prepare documentation of all
steps to be taken through the issuance of the
Bonds including:
a. drafting all resolutions, rules and
regulations of the Agency and all other
basic documents relating to the security of
the Bonds, in consultation with the Agency,
its counsel and financial advisors,
underwriters, swap providers and other
experts;
b. preparing the record of proceedings for the
authorization, sale and issuance of the
Bonds by City and Agency as members of the
joint powers authority;
c. preparing documents relating to the
financing, including the indenture, swap
agreement, cap agreement and escrow
agreement;
d. assisting in the preparation or review of
any description in the official statement or
placement memorandum of California and
federal law pertinent to the validity of the
Bonds and tax treatment of interest paid
thereon, the terms of the Bonds and our
opinion;
e. reviewing the Bond purchase contracts or the
bidding documents and participating in the
related negotiations;
f. attending information meetings and other
conferences scheduled by the Agency, the
financial advisors, swap providers or the
underwriters;
g. consulting with counsel to the Agency
concerning any legislation or litigation
during the course of the financing;
h. consulting with the trustee and counsel to
the trustee;
i. preparing the form of the Bonds, and
supervising their production or printing,
signing, authentication and delivery; and
04/22/93
5516Q/2345-51 - 2 -
,
-- -..---
-
j . rendering any necessary collateral legal
opinions as to the inapplicability of the
registration requirements of federal
securities laws and other matters related to
the issuance of the Bonds, the joint powers
authority and Agency authority with respect
to the financing generally.
(ii) to render a final legal opinion pertaining to the
issuance of the Bonds to the effect that:
a. the Bonds have been properly authorized and
issued and are valid and binding obligations;
b. the essential sources of security for the
Bonds have been legally provided; and
c. all interest on the Bonds is excludable from
gross income for federal income tax purposes
and exempt from California personal income
taxation.
2. INDIVIDUAL RESPONSIBLE FOR PROVIDING SERVICES
The Agency agrees to accept and Bond Counsel agrees to
provide the aforementioned services primarily through Denise E.
Hering and Carol L. Lew.
Should the above attorneys be unable to provide such
services due to death, disability, or similar event, Bond
Counsel reserves the right to substitute unilaterally another
of its attorneys to provide such services, and such
substitution shall not alter or affect in any way Bond
Counsel's other obligations under this agreement.
3. a. Bond Fee
The Agency agrees to pay Bond Counsel a fee in
accordance with the schedule attached hereto as Exhibit 1,
provided that payment of such fee is entirely contingent upon
the successful sale of the Bonds, and payment thereof is to be
made from the proceeds of the Bonds.
b. Out-of Pocket Exoenses
The Agency also agrees to reimburse Bond Counsel for the
actual cost of out-of-pocket expenses reasonably incurred,
excluding any indirect cost such as Bond Counsel's overhead, in
connection with the provision of the aforementioned services,
including
04/22/93
5516Q/2345-51 - 3 -
,
(i) telephone, telex, and telegram charges,
( ii) messenger and delivery charges,
(iii) traveling expenses, for travel at the Agency's
request,
(iv) document production charges, and
(v) similar out-of-pocket expenses.
4. FOLLOW-UP SERVICES
Bond counsel agrees to provide without additional cost
normal follow-up consultation and related services fOllowing the
sale of the Bonds. Should the Agency require Bond Counsel to
provide extraordinary services after the sale of the Bonds, such
services shall be provided at an additional fee to be agreed upon
at a later date.
Date: POWAY REDEVELOPMENT AGENCY
By
STRADLING, YOCCA, CARLSON & RAUTH
a Professional Corporation
a 0 7
~) / /
By '~l/ - ~ ~
Carol L. ew
04/22/93
5516Q/2345-51 - 4 -
,
EXHIBIT 1
Tax Allocation Bond Fee Schedule
Basic Fee: The fee for the services described in the
Agreement to which this Schedule is attached shall be based
upon the total principal amount of bonds authorized and sold
and will be computed in accordance with the following schedule:
Princioal Amount of Bonds Ee.e
$1,000,000 or less $15,000
$1,000,001 to $5,000,000 $15,000 plus 1/4 of
1% of the excess
over $1,000,000
$5,000,001 to $15,000,000 $25,000 plus 1/5 of
1% of the excess
over $5,000,000
$15,000,001 or more $45,000 plus 1/10 of
1% of the excess
over $15,000,000
Out-of-Pocket Exoenses: In addition to the Basic Fee
and the Current Fee, Bond Counsel shall be reimbursed for
out-of-pocket expenses incurred pursuant to Section 3(b) of the
Agreement.
04/22/93
5516Q/2345-51 - 5 -
PROPOSED REDEVELOPMENT PROJECTS
IN ANTICIPATION OF THE SALE OF THE
1993 TAX ALLOCATION BONDS
The following is a summary of proposed redevelopment projects to be funded through
the sale of a $30 million 1993 Tax Allocation Bond Issue and summary of available
unrestricted resources of the Agency:
I. Revenues
A. Proceeds of 1993 Tax Allocation Bonds $30.00 mill ion
B. Substitution of funding for the Sports Park $ 2.00 mi 11 ion
C. Available Fund Balance $ 1.10 million
Total available $33.10 mi 11 ion
II. Projects Proposed to be Funded
A. Cooperative projects to be undertaken with various
taxing agencies as a consequence of amending the
Paquay Redevelopment Plan.
I. County of San Diego $ 5.000 mill ion
(Project of benefit to County/Poway)
2. Palomar Community College District $ 5.200 million
(Purchase of land for college campus)
3. Poway Unified School District $ 4.500 mill ion
(Rehabilitation of Poway Schools)
4. Palomar Pomerado Hospital District $ .200 million
(Purchase of land for industrial medical
cl inic.)
5. San Diego County Office of Education $ .050 mill ion
(Planning for training facility)
Total $14.950 million
B. Major Projects
1. Scripps Poway Parkway $2.030 mill ion
(Substitution for Transnet funding which will
be diverted to street maintenance.)
2. Water Treatment Plant Upgrade $2.500 mill ion
3. Poway Creek Storm Water Detention Basin $3.300 million
Tota 1 $7.830 mill ion
ATTACHMENT I
MAY 4 1993 ITEM 10- {
,
Proposed Redevelopment Projects
- Page 2
C. New Appropriations for Projects in Progress
1. Old Poway Park Completion $ .890 million
2. Parking Lot for Old Poway Park $ .088 million
3. Blacksmith's Shop - Old Poway Park $ .015 mill ion
4. Landscaping and Improvement of Driveway at
Poway Royal Mobile Estates $ .100 million
5. Removal of Glen Oak Medians $ .055 mi 11 ion
6. Poway High School Baseball Fields $ .381 million
7. Community Road Widenings South of Aubrey
Street and Poway Road including right-of-way $ 1. 200 mi 11 ion
8. East Community Park Baseball Field
Improvement $ .075 million
9. Improved Pedestrial Access Between Poway
High School and Performing Arts Center $ .010 million
10. Improvements to Community Park Auditorium
HVAC and Sound Systems $ .032 million
11. Reconfiguration of Performing Arts Center
HVAC $ .125 mill ion
12. Restoration of Funds to Library Construction
Fund $ 1.875 million
13. Construction of Sports Park $ 2.000 mill ion
Total $ 6.846 million
D. Summary of Proposed Expenditures
1. Cooperative Projects $14.950 million
2. Major Projects $ 7.830 million
3. Projects In Progress $ 6.846 million
Total $29.626 mill ion
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Proposed Redevelopment Projects
Page 3
E. Remaining Available for Projects
1. Proceeds of Bond Issue, Fund
Balance, Repayment for Sports Park $ 3.474 mill ion
2. Interest Income (estimated) $ 1. 000 mi 11 ion
Total (Cost) $ 4.474 million
F. Non-Cash Assets (estimated value)
I. Long's Drugs $ 1.600 mill ion
2. Parkway Business Center Loan
(includes penalty and interest) $ 1.580 mill ion
3. Auto Center Property $ .600 mi 11 ion
4. Old Poway Property $ .750 million
5. Security Pacific Bank $ .300 mill ion
T ota 1 $ 4.830 million
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POWAYREDEVELOPMENTAGENCY
- Low and Moderate Income Housing Fund
Budget for the June 1993 Bond Issue
Huber Property Senior Project
Estimated assistance at $25,000 per unit
for 110 units. $2,750,000
Briehan Family Project
Estimated acquisition and development of
50 unit single-family units. $7,300,000
Cost of one year of maintenance 120,000
Gateway Park Road Property
Acqusition of property. $1,606,000
Single-Family Acquisition Program
- Estimated budget for three year program
Assumes 30 year mortage at 8% for $79K principal;
Agency write-down of $100,000 per unit
(approximately 12 dwelling units) $1,200,000
Residential Rehabilitation/Preservation Program
Estimated participation in three year program $1,250,000
Reserve for the Acquisition of Haley Ranch Estates $ 1,500,000
TOTAL $15,726,000
C:\BUDGET\BONO.93
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ATTACHMENT J
MAY 4 1993 ITEM 10. {
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RENOVATION OF BASEBALL FIELDS
AT POWAY HIGH SCHOOL
On May 17, 1992, the City Council endorsed a five-element plan for the improvement
of baseball/softball facilities with the City. The essential elements of this plan
are as follows:
1. Construct a sports park in the industrial park and relocate all adult
softball to that facility.
2. Renovate the softball fields at the Community Center to accommodate
youth baseball.
3. Move Pony/Colt from Tierra Bonita School temporarily to the Community Park.
4. Expand Little League to former Pony/Colt field at Tierra Bonita School.
5. Renovate the baseball fields at Poway High School which would allow for
use by the Pony/Colt teams.
To date, some aspect of all five of these projects has been initiated. The one
significant remaining project is the renovation of the baseball fields at Poway High
School. This project includes the following:
I. Restroom and concession facility $130,000
2. Access bridge $ 10,000
3. Warning track $ 14,000
4. Lighting $125,000
5. Bleachers $ 92,000
6. Windscreens $ 10.000
Tota 1 $381,000
In order to ensure that the baseball field improvements are complete for the 1994
season, design should begin immediately. In order to accomplish the design phase,
$50,000 should be appropriated from the Redevelopment Agency Fund Balance. The
remaining funds needed for improvements ($331,000) would be available from the
proceeds of the 1993 Tax Allocation Bond Issue.
ATTACHMENT K
MAY 4 1993 ITEM 10,1
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