Res 87-026RESOLUTION NO. R7-(~ ~6
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY ACTING AS THE LEGISLATIVE BODY OF THE
SOUTH POWAY COMMUNITY FACILITIES DISTRICT
NO. 1 (POMERADO BUSINESS PARK PROJECT)
DECLARING THE RESULTS OF A SPECIAL ELECTION,
AUTHORIZING THE ISSUANCE OF ITS 1987 SPECIAL
TAX REFUNDING BONDS IN A PRINCIPAL AMOUNT OF
THIRTY-TWO MILLION EIGHT HUNDRED THOUSAND
DOLLARS ($32,800,000), AND APPROVING CERTAIN
DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the City Council of the City of Poway,
California (hereinafter referred to as the "legislative body of
the local agency'), has heretofore undertaken proceedings and
declared the necessity to issue bonds on behalf of the South
Poway Community Facilities District No. 1 (Pomerado Business
Park Project) (the "District") pursuant to the terms and
provisions of the Mello-Roos Community Facilities Act of 1982,
as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of
the Government Code of the State of California (the 'Act"); and
WHEREAS, pursuant to Resolution No. 87-011 adopted by
the legislative body of the District on the 27th day of
January, 1987, the bond proposition (attached as Exhibit A
hereto and incorporated herein by reference) was submitted to
CF Poway, Ltd., the sole qualified elector within the District,
and was unanimously approved at an election held on March 3,
1987; and
WHEREAS, the legislative body of the District has
determined that it would be prudent in the management of the
District's fiscal affairs to issue refunding bonds to defease
the District's Special Tax Bonds Series 1985 in order to
realize net debt service savings over the maturity of the
refunding bonds; and
WHEREAS, based upon Resolution No. 87-011 and the
election, the District is now authorized to issue refunding
bonds in one or more series, pursuant to the Act and the
provisions of Article 11 of Chapter 3 of Division 2 of Title 5
of the Government Code of the State of California, in an
aggregate principal amount not to exceed $40,000,000 for the
purpose of refunding the District's Special Tax Bonds Series
1985 as set forth in Resolution No. 87-011; and
WHEREAS, the legislative body of the District hereby
desires to proceed to issue the refunding bonds in an aggregate
principal amount of $32,800,000 designated as the "South Poway
Community Facilities District No. 1, 1987 Special Tax Refu.nding
Bonds" (the "Bonds"); and
WHEREAS, the legislative body of the District has
determined in accordance with Government Code Section 53360.4
that a negotiated sale of the Bonds to Drexel Burnham Lambert
Incorporated in accordance with the terms of the Bond Purchase
Agreement approved as to form by this legislative body in
Resolution No. 87-015 will result in a lower overall cost to
the District than a public sale;
NOW, THEREFORE, the City Council of the City of Poway
acting as the legislative body of the South Poway Community
Facilities District No. 1 DOES HEREBY RESOLVE, ORDER AND
DETERMINE AS FOLLOWS:
SECTION 1. Each of the above recitals is true and
correct.
SECTION 2. The Registrar of Voters of the County of
San Diego has certified to the legislative body of the District
that Proposition A and Proposition B presented to the qualified
elector of the District on March 3, 1987, copies of which are
attached as Exhibit A, have received a unanimous vote of the
qualified elector voting at said election, and Proposition A
and Proposition B each has carried, and, accordingly, the
legislative body of the District is hereby authorized to issue
from time to time as determined by the legislative body bonds
for the benefit of the District for the purposes set forth in
Proposition A and to take the necessary steps to levy the
special tax authorized by Proposition A.
SECTION 3. The issuance of the Bonds in a principal
amount of $32,800,000 is hereby authorized pursuant to the Act
and the provisions of Article 11 of Chapter 3 of Division 2 of
Title 5 of the Government Code of the State of California. The
Bonds shall mature on the dates and pay interest at the rates
set forth in Exhibit B hereto and shall be substantially in the
form set forth in Exhibit B hereto. All other provisions of
the Bonds shall be governed by the terms and conditions set
forth in a Supplement to Resolution to be prepared by Bond
Counsel to the District and executed by the Mayor or the City -
Manager, which Supplement to Resolution, upon execution, shall
be attached to the original'and all copies of this Resolution
by the City Clerk as Exhibit C. The Supplement to Resolution
shall be substantially in the form attached hereto as Exhibit
B, with such additions thereto and changes therein as are
recommended or approved by Bond Counsel to the District and the
City Manager, with such approval to be conclusively evi'denced
by the execution and delivery of the Supplement to Resolution.
4897k/2468-03
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SECTION 4. The Bonds shall be executed on behalf of
the District by the manual or facsimile signature of the Mayor,
and the seal of the District, or a facsimile thereof, shall be
impressed or imprinted thereon and attested with the manual or
facsimile signature of the City Clerk.
SECTION 5. The form of the Escrow Agreement presented
at this meeting is hereby approved and the Mayor or City
Manager and the City Clerk are hereby authorized and directed
to execute an Escrow Agreement in substantially the form hereby
approved, with such additions thereto and changes therein as
are recommended or approved by Bond Counsel to the District and
the City Manager, with such approval to be conclusively
evidenced by the execution and delivery of the Escrow Agreement.
SECTION 6. Ail actions heretofore taken by officers
and agents of the City and the District with respect to the
sale and issuance of the Bonds are hereby approved, confirmed
and ratified, and the Mayor, the City Manager, his written
designee, and the City Clerk are hereby authorized and directed
to take any actions and execute and deliver any and all
documents as are necessary to accomplish the issuance, sale and
delivery of the Bonds in accordance with the provisions of this
Resolution.
SECTION 7. Security Pacific National Bank is hereby
appointed to act as Fiscal Agent for the Bonds and as the
Escrow Bank pursuant to the Escrow Agreement.
ADOPTED, SIGNED AND APPROVED this 3rd day of March,
1987 by the City Council of the City of Poway acting as the
legislative body of the South Poway Community Facilities
District No. 1 (Pomerado Business Park Project).
Mayor, Cit~£ Powa~?
ATTEST:
City C~e. rk, City of Poway
-3-
4897k/2468-03
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
i,Marjorie K. Wahl~ten , City Clerk of the City of Poway,
do hereby certify that the foregoing Resolution was duly
adopted by the City Council of said City acting in its capacity
as the legislative body of the South Poway Community Facilities
District No. 1 (Pomerado Business Park Project) at a meeting of
said City Council held on the/rd day of March, 1987, and that
it was so adopted by the following vote:
AYES: Brannon, Emery, Higginson, Kruse, Tarzy
NOES: None
ABSTAIN: None
ABSENT: None
City Clerk, City of Poway
4897k/2468-03
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EXHIBIT A
OFFICIAL BALLOT
SOUTH POWAY COIe~4UNITY FACILITIES DISTRICT NO. 1
OF
THE CITY OF POWAY
SPECIAL BOND ELECTION
March 3, 1987
The landowner voting this ballot is entitled to one
vote for each acre, or portion of an acre, of land owned within
the South Poway Community Facilities District No. 1 (Pomerado
Business Park Project).
To vote, stamp a cross (+) in the voting square after
the word "YES" or after the word "NO". All marks otherwise
made are forbidden. All distinguishing marks are forbidden and
make the ballot void.
If you wrongly mark, tear, or deface this ballot,
return it to the Registrar of Voters and obtain another.
PROPOSITION NO. A: Shall the
South Poway Community Facilities District
No. 1 (Pomerado Business Park Project)
(the "District") incur an
indebtedness and issue bonds in the
maximum aggregate principal amount of
$40,000,000, with interest at a coupon
rate or rates not to exceed the maximum
interest rate permitted by law, the-pro-
ceeds of which will be used to refund and
defease the District's Special Tax Bonds
Series 1985 and shall the Special Tax
approved by the voters of the District
and authorized to be levied in accordance
with Ordinance No. 182 of the City be
levied to repay such bonded indebtedness?
YES
NO
PROPOSITION NO. B: Shall
the appropriations limit, as defined
in Subdivision (h) of Section 8 of
Article XIII B of the California Con-
stitution for the District be an amount
equal to all of the proceeds of the
Special Tax collected annually, as
adjusted for changes in the cost of
living and changes in population
pursuant to the provisions of Article
XIII B?
YES
NO
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4897k/2468-03
EXHIBIT B
SUPPLEMENT TO RESOLUTION
TABLE OF CONTENTS
Section 1.01
Section 2.01
Section 2.02
Section 2.03
Section 2.04
Section 2.05
Section 2.06
Section 2.07
Section 2.08
Section 2.09
Section 2.10
Section 2.11
Section 2.12
Section 3.01
Section 3.02
Section 3.03
Section 3.04
Section 3.05
Section 3.06
Section 3.07
Section 3.08
Section 3.09
Section 3.10
Article I
Definitions
Definitions .............................
Article II
General Authorization and Bond Terms
Amount, Issuance, Purpose and Nature
of Bonds ................................
Payment of 1985 Bonds ...................
Type and Nature of Bond .................
Equality of Bonds, Pledge of Net Taxes..
Description of Bonds; Interest Rates ....
Place and Form of Payment ...............
Form of Bonds; Temporary Bonds ..........
Execution and Authentication ............
Bond Register ................... '. .......
Registration of Exchange or Transfer ....
Mutilated, Lost, Destroyed or Stolen
Bonds ...................................
Validity of Bonds .......................
Article III
Creation of Funds and Application of
Proceeds and Net Taxes
Creation of Funds .......................
Disposition of Bond Proceeds; Costs
of Issuance Fund ........................
Deposit and Disbursement of Special
Tax Revenues; Costs of Issuance Fund ....
Special Tax Fund ........................
Redemption Fund .........................
Reserve Fund ............................
Excess Investment Earnings Fund .........
Administrative Expense Fund .............
Acquisition Fund ........................
Investments .............................
Page
6
7
7
8
· 8
9
10
10
11
11
12
12
12
13
14
15
16
17
20
20
21
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Page
Section 4.01
Section 4.02
Section 4.03
Section 4.04
Section 4.05
Section 5.01
Section 5.02
Section 6.01.
Section 6.02
Section 6.03
Section 7.01
Section 7.02
Section 7.03
Section 7.04
Section 8.01
Section 8.02
Section 8.03
Section 9.01
Section 9.02
Article IV
Redemption of Bonds
Redemption of Bonds .....................
Selection of Bonds for Redemption .......
Notice of Redemption ....................
Partial Redemption of Bonds .............
Effect of Notice and Availability of
Redemption Money ........................
Article V
Covenants and Warranty
Warranty ................................
Covenants ...............................
Article VI
Amendments to Resolution
Supplemental Resolutions or Orders Not
Requiring Bondowner Consent .............
Supplemental Resolutions or Orders
Requiring Bondowner Consent .............
Notation of Bonds; Delivery of Amended
Bonds ...................................
Article VII
Fiscal Agent
Fiscal Agent ............................
Removal of Fiscal Agent .................
Resignation of Fiscal Agent .............
Liability of Fiscal Agent ...............
Article VIII
Events of Default; Remedies
Events of Default .......................
Remedies of Owners ......................
Actions by Fiscal Agent as Attorney-in-
Fact ....................................
Article IX
Defeasance and Parity Bonds
Defeasance ..............................
Conditions for the Issuance of
Parity Bonds ........................
22
24
24
25
25
25
26
29
30
31
32
33
33
33
34
34
36
36
37
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Page
Article X
Miscellaneous
Section 10.O1
Section 10.02
Section 10.03
Section 10.04
Section 10.05
Section 10.06
Section 10.07
Section 10.08
Cancellation of Bonds ...................
Execution of Documents and Proof of
Ownership ...............................
Unclaimed Moneys ........................
Provisions Constitute Contract ..........
Future Contracts ........................
Further Assurances ......................
Severability ............................
Notices .................................
Signatures .............................................
Exhibit "1"
Exhibit "2"
Form of Special Tax Bond
Requisition for Disbursement of
Project Costs
4O
41
41
42
42
43
43
43
43
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SUPPLEMENT TO RESOLUTION NO. 87-026
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise
requires, the following terms shall have the following meanings:
"Acquisition Agreement" means the Acquisition Agreement
between the District and CF Poway, Ltd. dated as of December
30, 1985.
"Act" means the Mello-Roos Community Facilities Act of
1982, as amended, Sections 53311 et seq. of the California
Government Code.
"Administrative Expenses" means the administrative costs
with respect to the calculation and collection of the Special
Taxes, or costs otherwise incurred by the City staff on behalf
of the District in order to carry out the purposes of the
District as set forth in the Resolution of Formation and the
fees and expenses of the Fiscal Agent and the Escrow Bank.
"Authorized Investments" means, subject to applicable law,
United States Treasury notes, bonds, bills or certificates of
indebtedness (including United States Treasury Obligations -
State and Local Government Series ("SLGS") or other direct
obligations issued by the United States Treasury for which the
faith and credit of the United States are pledged for the
payment of principal and interest); and (except with respect to
the defeasance of the Bonds as permitted by Section 9.01
hereof) obligations issued by banks for cooperatives, federal
and land banks, federal intermediate credit banks, federal home
loan banks, the Federal Home Loan Bank Board, the Tennessee
Valley Authority, or other federal agencies or United States
government-sponsored enterprises; and (except with respect to
Section 9.01) any other investment in which funds of the
District may be legally invested, including taxable government
money market portfolios restricted to obligations with
maturities of one year or less insured or fully guaranteed as
to the principal and interest thereon by the full faith and
credit of the United States of America and tax-exempt
obligations rated in the highest rating category by either
Standard & Poor's Corporation or Moody's Investors Service, Inc.
"Bond Counsel" means an attorney at law or a firm of
attorneys selected by the District of nationally recognized
standing in matters pertaining to the tax-exempt nature of
interest on bonds issued by states and their political
subdivisions duly admitted to the practice of law before the
highest court of any state of the United States of America or
the District of Columbia.
"Bond Register" means the books which the Fiscal Agent'
shall keep or cause to be kept on which the registration and
transfer of the Bonds shall be recorded.
t'Bondowner" or "Owner" means the person or persons in whose
name or names any Bond is registered.
"Bonds" means the South Poway Community Facilities District
No. 1 1987 Special Tax Refunding Bonds.
"Bond Year" means the year commencing each February 2 and
ending each February 1.
"City" means the City of Poway, California.
"Code" means the Internal Revenue Code of 1986, as amended.
"Computation Year" means the twelve (12) month period
commencing on March 10 and ending on March 9 of the following
year.
"Costs of Issuance" means the costs and expenses incurred
in connection with the issuance and sale of the Bonds including
the acceptance and initial annual fees and expenses of the
Fiscal Agent and the Escrow Bank, legal fees and expenses,
costs of printing the Bonds and Official Statement, fees of
financial consultants and other fees and expenses set forth in
a Certificate of the City Manager, or his designee.
"Delivery Date" means the date on which the Bonds were
issued.
"District" means the South Poway Community Facilities
District No. I (Pomerado Business Park Project) established
pursuant to the Act and Resolution No. 85-093 adopted by the
legislative body of the District on November 26, 1985.
"Escrow Bank" means Security Pacific National Bank,
together with any successors thereto.
"Escrow Agreement" means that certain agreement between~the
District and the Escrow Bank made and entered into as of March
1, 1987 providing for the refunding of the 1985 Bonds.
"Fiscal Agent" means Security Pacific National Bank, and
any successor thereto.
02/22/87
4899k/2468-03 -2-
"Fiscal Year" means the period beginning on July 1 and
ending on the next following June 30.
"Gross Proceeds" means the sum of the following amounts:
(i) original proceeds, being the amounts received by the
District, or held by the Fiscal Agent as proceeds of the
original issuance of the Bonds (after payment of all expenses
of issuing the Bonds); (ii) investment proceeds, being amounts
received at any time by the District or the Fiscal Agent, such
as interest and dividends, resulting from the investment of
proceeds of the Bonds, including profits and less losses
received on such investment; (iii) transferred proceeds (as
defined in Section 1.103-14(e)(2)(ii) of the Regulations) of
the 1985 Bonds; (iv) amounts, other than original proceeds and
investment proceeds, held in any fund or account and reasonably
expected to be used to pay principal of or interest on the
Bonds; (v) securities or obligations pledged as security for
the payment of the Bonds by an ultimate obligor (or a related
person) or the District; (vi) amounts used to pay principal or
interest with respect to the Bonds; and (vii) amounts received
as a result of investing the amounts listed in clauses (i)
through (vi).
"Independent Financial Consultant" means a financial
consultant or firm of such consultants generally recognized to
be well qualified in the financial consulting field, appointed
and paid by the District and satisfactory to and approved by
the Fiscal Agent (which shall be under no liability by reason
of such approval) and who, or each of whom:
(1) is in fact independent and not under the
domination of the District;
(2) does not have any substantial interest, direct or
indirect, with the District; and
(3) is not connected with the District as a member,
officer or employee of the District, but who may be
regularly retained to make annual or other reports to the
District.
"Interest Payment Date" means each February 2 and August 2,
commencing August 2, 1987 and, if any such day is not a
business day, the business day next succeeding such date.
"Investment Property" means any security (as said term is
defined in Section 165(g)(2)(A) or (B) of the Code),
obligation, annuity or investment-type property, excluding,
however, obligations the interest on which is excluded from
gross income for federal income tax purposes under Section 103
of the Code.
02/22/87
4899k/2468-03 -3-
"1985 Bonds" means the District's $30,000,000 Special Tax
Bonds Series 1985 issued pursuant to Resolution No. 85-109.
"Maximum Annual Debt Service" shall be the maximum sum
obtained for any Bond Year prior to the final maturity on the
Bonds by totaling the following for each Bond Year:
(1) the principal amount of all outstanding Bonds and
any Parity Bonds payable in such Bond Year either at
maturity or pursuant to a Sinking Fund Payment; and
(2) the interest payable on the aggregate principal
amount of the Bonds and any Parity Bonds outstanding in
such Bond Year if the Bonds and any Parity Bonds are
retired as scheduled.
"Net Taxes" means the amount of all Special Taxes received
by the District from the Treasurer-Tax Collector of the County
of San Diego, together with the proceeds from the sale of
property collected pursuant to the foreclosure provisions of
this Resolution for the delinquency of such Special Taxes and,
when and if received, the $820,000 to be paid to the District
by the Poway Redevelopment Agency pursuant to the terms of the
Owner Participation Agreement between the Poway Redevelopment
Agency and CF Poway, Ltd. dated December 30, 1985.
"Nonpurpose Obligation" means any security or obligation
(other than an obligation on which interest is excludable from
gross income for federal income tax purposes under Section 103
of the Code) in which Gross Proceeds are invested and which is
not acquired to carry out the governmental purpose of the Bonds.
"Ordinance" means Ordinance No. 182 adopted by the
legislative body providing for the levying of the Special Tax.
"Outstanding Bonds" means all Bonds theretofore issued by
the District, except:
(1) Bonds theretofore cancelled or surrendered for
cancellation in accordance with Section 9.01 hereof; and
(2) Bonds for payment or redemption of which monies
shall have been theretofore deposited in trust (whether
upon or prior to the maturity or the redemption date of
such Bonds), provided that, if such Bonds are to be ~ -
redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in this
Resolution or any applicable Parity Bond resolution.
02/22/87
4899k/2468-03 -4-
"Parity Bonds" means all bonds, notes or other similar
evidences of indebtedness hereafter issued, payable out of the
Net Taxes and which, as provided in this Resolution or any
Supplemental Resolution, rank on a parity with the Bonds.
"Project" means certain real and other tangible property
with an estimated useful life of five years or longer, which is
to be acquired or constructed within and without the District,
for street and road improvements and a bridge, as more
particularly described in the Acquisition Agreement.
"Project Costs" means the amounts necessary to finance the
Project, to create and replenish any necessary reserve funds,
to pay the annual costs associated with the Bonds or any Parity
Bonds, including, but not limited to, remarketing, credit
enhancement, Fiscal Agent and other fees and to pay any
"incidental expenses" of the District, as such term is defined
in the Act.
"Purchase Price", for the purpose of computation of the
Yield of the Bonds, has the same meaning as the term "issue
price" in Sections 1273(b) and 1274 of the Code, and, in
general, means the initial offering price to the public (not
including bond houses and brokers, or similar persons or
organizations acting in the capacity of underwriters or
wholesalers) at which price a substantial amount of the Bonds
are sold or, if the Bonds are privately placed, the price paid
by the Original Purchaser or the acquisition cost of the
Original Purchaser. The term "Purchase Price"; for the purpose
of computation of the Yield of Nonpurpose Obligations, means
the fair market value of the Nonpurpose Obligations on the date
of use of Gross Proceeds for acquisition thereof, or, if later,
on the date that Investment Property constituting a Nonpurpose
Obligation becomes a Nonpurpose Obligation of the Bonds.
"Record Date" means the fifteenth day of the month
preceding an Interest Payment Date or, if such day is not a
business day, the business day next preceding such date of any
year in which any of the Bonds are outstanding.
"Regulations" means regulations adopted by the Department
of Treasury from time to time with respect to obligations
issued pursuant to Section 103 of the Code.
"Reserve Requirement" means, as of any date of calculation,
an amount equal to $3,000,000.
"Resolution" means Resolution No. of the District,
together with this Supplement to Resolution, as amended or
supplemented pursuant to the terms hereof.
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4899k/2468-03 -5-
"Resolution of Formation" means Resolution No. 85-093
adopted by the legislative body of the District on November 26,
1985, pursuant to which the City formed the District.
"Sinking Fund Payment" means the annual payment to be
deposited in the Redemption Fund to redeem a portion of the
Term Bonds in accordance with the schedule set forth in Section
4.01(b) hereof.
"Special Taxes" means the taxes authorized to be levied by
the District and in accordance with the Ordinance, the
Resolution of Formation, the Act and the voter approval
obtained at the November 26, 1985 and the March 3, 1987
elections in the District.
"Supplemental Resolution" means any resolution authorizing
the issuance of any Parity Bonds.
"Term Bonds" means the Bonds maturing on February 2, 2011.
"Treasurer" means the Treasurer of the City acting on
behalf of the District.
"Underwriter" means Drexel Burnham Lambert Incorporated.
"Yield" means that yield which, when used in computing the
present worth of all payments of principal and interest (or
other payments in the case of Nonpurpose Obligations which
require payments in a form not characterized as principal and
interest) on a Nonpurpose Obligation or on the Bonds produces
an amount equal to the Purchase Price of such Nonpurpose
Obligation or the Bonds, as the case may be, all computed as
prescribed in the applicable Tax Regulations.
ARTICLE II
GENERAL AUTHORIZATION AND BOND TERMS
Section 2.01. Amount, Issuance, Purpose and Nature of
Bonds. Under and pursuant to the Act, the Bonds in the amount
of $32,800,000, together with any Parity Bonds, shall be issued
for the purposes of constructing, acquiring and completing the
Project, provided that the aggregate principal amount of the
Bonds and any Parity Bonds shall not exceed the total
indebtedness approved by the qualified electors of the District
in accordance with the Act. The Bonds shall be and are limited
obligations of the District and shall be payable as to the
principal thereof and interest thereon and any premiums upon
the redemption thereof solely from, the Net Taxes, the amounts
in the funds created hereunder and earnings thereon.
02/22/87
4899k/2468-03 -6-
Section 2.02. Payment of 1985 Bonds.
In connection with the refunding of the 1985 Bonds:
(a) Section 3.02 hereof provides for the deposit of a
portion of the proceeds of the sale of the Bonds and certain
other available moneys in the 1985 Bonds Escrow Fund
established by the Escrow Bank in a sufficient sum to
accomplish the refunding of the 1985 Bonds. Upon delivery of
the Bonds hereunder, such sums are to be deposited with the
Escrow Bank and to be used as provided in the Escrow Agreement.
(b) The Agency and/or the Escrow Bank, as the case may be,
shall take all action necessary to pay and retire the 1985
Bonds as set forth in (c) below, including, without limitation,
all actions required by this Resolution.
(c) The Agency hereby directs the Escrow Bank to transfer
to the Fiscal Agent for the 1985 Bonds, from time to time, the
amounts available in the 1985 Bonds Escrow Fund to pay the
principal of, premium and interest on the 1985 Bonds at
maturity on or prior to March 2, 1996 and upon the call and
redemption of the 1985 Bonds remaining outstanding on March 2,
1996 at a price of par plus a premium of 3~.
Section 2.03. Type and Nature of Bond. The Bonds and
interest thereon, together with any premium paid thereon upon
redemption, are not obligations of the City, but are limited
obligations of the District secured by and payable from an
irrevocable first lien on the Net Taxes. Except with respect
to the Special Tax, neither the faith and credit nor the taxing
power of the District or the City is pledged for the payment of
the Bonds or the interest thereon, and no Owner of the Bonds
may compel the exercise of the taxing power by the District or
the City or the forfeiture of any of their property. The
principal of and interest on the B6nds and premiums upon the
redemption thereof, if any, are not a debt of the District, the
City, the State of California or any of its political
subdivisions within the meaning of any constitutional or
statutory limitation or restriction. The Bonds are not a legal
or equitable pledge, charge, lien, or encumbrance, upon any of
the District's property, or upon any of its income, receipts,
or revenues, except the Net Taxes which are, under the terms of
this Resolution and the Act, set aside for the payment of the
Bonds and interest thereon and neither the members of the
legislative body of the District or the City Council of the
City nor any persons executing the Bonds are liable personally
on the Bonds by reason of their issuance.
Notwithstanding anything contained in this Resolution, the
District shall not be required to advance any money derived
from any source of income other than the Net Taxes for the
02/22/87
4899k/2468-03 -7-
payment of the interest on or the principal of the Bonds or for
the performance of any covenants herein contained. The
District may, however, advance funds for any such purpose,
provided that such funds are derived from a source legally'
available for such purpose.
Section 2.04. Equality of Bonds, Pledge of Net Taxes.
Pursuant to the Act and this Resolution, the Bonds and any
Parity Bonds shall be equally payable from the Net Taxes
without priority for number, date of the Bonds, date of sale,
date of execution, or date of delivery, and the payment of the
interest on and principal of the Bonds and any Parity Bonds and
any premiums upon the redemption thereof, shall be exclusively
paid from the Net Taxes which are hereby set aside for the
payment of the Bonds and any Parity Bonds. The Net Taxes and
any interest earned on the Net Taxes shall constitute a trust
fund held for the benefit of the Owners to be applied to the
payment of the interest on and principal of the Bonds and any
Parity Bonds and so long as any of the Bonds and any Parity
Bonds or interest thereon remain Outstanding shall not be used
for any other purpose, except as permitted by this Resolution
or any Supplemental Resolution.
Nothing in this Resolution or any Supplemental Resolution
shall preclude: (a) the redemption prior to maturity of any
Bonds subject to call and redemption and payment of said Bonds
from proceeds of refunding bonds issued under the Act as the
same now exists or as hereafter amended, or under any other law
of the State of California; or (b) the issuance, subject to the
limitations contained herein, of Parity Bonds which shall be
payable from Net Taxes.
Section 2.05. Description of Bonds; Interest Rates. The
Bonds shall be issued in fully registered form in denominations
of $5,000 or any integral multiple thereof within a single
maturity and shall be numbered as desired by the Fiscal Agent.
The Bonds shall be designated "SOUTH POWAY COMMUNITY FACILITIES
DISTRICT NO. 1 1987 SPECIAL TAX REFUNDING BONDS". The Bonds
shall be dated as Of February 2, 1987 and shall mature and be
payable on February 2 and August 2 in the years and in the
aggregate principal amounts and shall be subject to and shall
bear interest at the rates set forth in the table below:
Date
Principal Amount Interest Rate
February 2, 1989
August 2, 1989
February 2, 1990
August 2, 1990
February 2, 1991
August 2, 1991
100,000.00
200,000.00
200,000.00
205,000.00
200,000.00
200,000.00
5 o00%
5 ooo%
5 5oo%
5 5o0%
5 750%
5 750%
02/22/87
4899k/2468-03 -8-
February 2, 1992 210
August 2, 1992 215
February 2, 1993 255
August 2, 1993 265
February 2, 1994 310
August 2, 1994 320
February 2, 1995 370
August 2, 1995 380
February 2, 1996 435
August 2, 1996 450
February 2, 1997 505
February 2, 2011 27,980
000
000
000
000
000
000
000
000
000
000
000
000
00 6
O0 6
00 6
00 6
00 6
00 6
00 6
00 6
O0 6
00 6
00 6
O0 7
o00%
oo0%
2oo%
200%
400%
400%
600%
6oo%
75o%
750%
80o%
125%
Interest shall be payable with respect to each Bond on each
Interest Payment Date until the principal sum of that Bond has
been paid; provided, however, that if at the maturity date of
any Bond (or if the same is redeemable and shall be duly called
for redemption, then at the date fixed for redemption) funds
are available for the payment or redemption thereof, in full
accordance with terms of this Resolution, such Bonds shall then
cease to bear interest. Interest due on the Bonds shall be
calculated on the basis of a 360-day year comprised of twelve
30-day months.
Section 2.06. Place and Form of Payment. The Bonds shall
be payable both as to principal and interest, and as to any
premiums upon the redemption thereof, in lawful money of the
United States of America. The principal of the Bonds and any
premiums due upon the redemption thereof shall be payable upon
presentation thereof at the principal corporate trust office of
the Fiscal Agent in Los Angeles, California. Interest on any
Bond shall be payable from the Interest Payment Date next
preceding the date of authentication of that Bond, unless (i)
such date of authentication is an Interest Payment Date in
which event interest shall be payable from such date of
authentication, (ii) the date of authentication is after a
Record Date but prior to the immediately succeeding Interest
Payment Date, in which event interest shall be payable from the
Interest Payment Date immediately succeeding the date of
authentication or (iii) the date of authentication is prior to
the close of business on the first Record Date in which event
interest shall be payable from February 2, 1987; provided,
however, that if at the time of authentication of such Bond,
interest is in default, interest on that Bond shall be payable
from the last Interest Payment Date to which the interest has
been paid or made available for payment. Interest on any Bond
shall be paid to the person whose name shall appear in the Bond
Register as the Owner of such Bond as of the close of business
on the Record Date. Such interest shall be paid by check of
the Fiscal Agent mailed by first class mail, postage prepaid,
02/22/87
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to such Bondowner at his or her address as it appears on the
Bond Register.
Section 2.07. Form of Bonds; Temporary Bonds. The
definitive Bonds shall be printed from steel engraved or
lithographic plates, and the Bonds and the certificate of
authentication shall be substantially in the form attached
hereto as Exhibit A, which form is hereby approved and adopted
as the form of the Bonds and of the certificate of
authentication.
Until definitive Bonds shall be prepared, the District may
cause to be executed and delivered in lieu of such definitive
Bonds temporary bonds in typed, printed, lithographed or
engraved form and in fully registered form, subject to the same
provisions, limitations and conditions as are applicable in the
case of definitive Bonds, except that they may be in any
denominations authorized by the District. Until exchanged for
definitive Bonds, any temporary bond shall be entitled and
subject to the same benefits and provisions of this Resolution
as definitive Bonds. If the District issues temporary Bonds,
it will execute and furnish definitive Bonds without
unnecessary delay and thereupon any temporary Bond may be
surrendered to the Fiscal Agent at its office, without expense
to the Owner, in exchange for a definitive Bond of the same
maturity, interest rate and principal amount in any authorized
denomination. All temporary Bonds so surrendered shall be
cancelled by the Fiscal Agent and shall not be reissued.
Section 2.08. Execution and Authentication. The Bonds
shall be signed on behalf of the District by the manual or
facsimile signature of the Mayor of the City and by the manual
or facsimile signature of the City Clerk, or any duly appointed
deputy clerk, in their capacity as officers of the District,
and the seal of the District (or a facsimile thereof) shall be
impressed, imprinted, engraved or otherwise reproduced thereon,
and attested by the signature of the City Clerk. In case any
one or more of the officers who shall have signed or sealed any
of the Bonds shall cease to be such officer before the Bonds so
signed and sealed have been authenticated and delivered by the
Fiscal Agent (including new Bonds delivered pursuant to the
provisions hereof with reference to the transfer and exchange
of Bonds or to lost, stolen, destroyed or mutilated Bonds),
such Bonds shall nevertheless be valid and may be authenticated
and'delivered as herein provided, and may be issued as if the
person who signed or sealed such Bonds had not ceased to hold
such office.
Only such Bonds as shall bear thereon such certificate of
authentication in the form set forth in Exhibit A hereto shall
be entitled to any right or benefit under this Resolution, and
02/22/87
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no Bond shall be valid or obligatory for any purpose until such
certificate of authentication shall have been duly executed by
the Fiscal Agent.
Section 2.09. Bond Register. The Fiscal Agent will keep
or cause to be kept, at its corporate trust office, sufficient
books for the registration and transfer of the Bonds which
shall be open to inspection by the District during all regular
business hours, and, upon presentation for such purpose, the
Fiscal Agent shall, under such reasonable regulations as it may
prescribe, register or transfer or cause to be transferred on
said Bond Register, Bonds as herein provided.
The District and the Fiscal Agent may treat the Owner of
the Bond whose name appears on the Bond Register as the
absolute Owner of the Bond for any and all purposes, and the
District and the Fiscal Agent shall not be affected by any
notice to the contrary. The District and the Fiscal Agent may
rely on the address of the Bondowner as it appears in the Bond
Register for any and all purposes. It shall be the duty of the
Bondowner to give written notice to the Fiscal Agent of any
change in the Bondowner's address so that the Bond Register may
be revised accordingly.
Section 2.10. Registration of Exchange or Transfer. The
registration of any Bond may, in accordance with its terms, be
transferred upon the Bond Register by the person in whose name
it is registered, in person or by his or her duly authorized
attorney, upon surrender of such Bond for cancellation at the
corporate trust office of the Fiscal Agent, accompanied by
delivery of written instrument of transfer in a form approved
by the Fiscal Agent and duly executed by the Bondowner or his
or her duly authorized attorney.
Bonds may be exchanged at the corporate trust office of the
Fiscal Agent for a like aggregate principal amount of Bonds of
other authorized denominations of the same maturity. The
Fiscal Agent will not charge the Owner for any new Bond issued
upon any exchange, but shall require the Bondowner requesting
such exchange to pay any tax or other governmental charge
required to be paid with respect to such exchange. Whenever
any Bond or Bonds shall be surrendered for registration of
transfer or exchange, the District shall execute and the Fiscal
Agent shall authenticate and deliver a new Bond or Bonds of the
same maturity, for a like aggregate principal amount; provided
that the Fiscal Agent shall not be required to register
transfers or make exchanges of (i) Bonds for a period of 15
days next preceding any selection of the Bonds to be redeemed,
or (ii) any Bonds chosen for redemption.
02/22/87
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Section 2.11. Mutilated, Lost, Destroyed or Stolen Bonds.
If any Bond shall become mutilated, the District shall execute,
and the Fiscal Agent shall authenticate and deliver, a new Bond
of like tenor, date and maturity in exchange and substitution
for the Bond so mutilated, but only upon surrender to the
Fiscal Agent of the Bond so mutilated. Every mutilated Bond so
surrendered to the Fiscal Agent shall be cancelled by the
Fiscal Agent pursuant to Section 10.01. If any Bond shall be
lost, destroyed or stolen, evidence of such loss, destruction
or theft may be submitted to the Fiscal Agent and, if such
evidence is satisfactory to the Fiscal Agent and, if any
indemnity satisfactory to the District and the Fiscal Agent
shall be given, the District, at the expense of the Bondowner,
shall execute and the Fiscal Agent shall authenticate and
deliver, a new Bond of like tenor and maturity, numbered and
dated as such Fiscal Agent shall determine in lieu of and in
substitution for the Bond so lost, destroyed or stolen. Any
Bond issued in lieu of any Bond alleged to be mutiliated, lost,
destroyed or stolen, shall be equally and proportionately
entitled to the benefits hereof with all other Bonds issued
hereunder. The Fiscal Agent shall not treat both the original
Bond and any replacement Bond as being outstanding for the
purpose of determining the principal amount of Bonds which may
be executed, authenticated and delivered hereunder or for the
purpose of determining any percentage of Bonds outstanding
hereunder, but both the original and duplicate Bond shall be
treated as one and the same. Notwithstanding any other
provision of this Section, in lieu of delivering a new Bond
which has been mutilated, lost, destroyed or stolen, and which
has matured, the Fiscal Agent may make payment with respect to
such Bonds.
Section 2.12. Validity of Bonds. The validity of the
authorization and issuance of the Bonds shall not be affected
in any way by any proceedings taken by the District for the
financing of the Project, or by any contracts made by the
District in connection therewith, and shall not be dependent
upon the completion of the financing of the Project or upon the
performance by any person of his obligation with respect to the
Project, and the recital contained in the Bonds that the same
are issued pursuant to the Act shall be conclusive evidence of
their validity and of the regularity of their issuance.
ARTICLE III
CREATION OF FUNDS AND APPLICATION OF PROCEEDS AND NET TAXES
Section 3.01. Creation of Funds. There is hereby created
and established and shall be maintained by the Fiscal Agent of
the District the following funds:
02/22/87
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(1) The South Poway Community Facilities
District No. 1 1987 Costs of Issuance Fund (the "Costs
of Issuance Fund").
(2) The South Poway Community Facilities
District No. 1 1987 Special Tax Fund (the "Special Tax
Fund") in which there shall be established and created
an Interest Account and a Principal Account.
(3) The South
District No. 1 1987
Fund").
Poway Community Facilities
Redemption Fund (the "Redemption
(4) The South Poway Community Facilities
District No. 1 1987 Reserve Fund (the "Reserve Fund").
(5) The South Poway Community Facilities
District No. 1 1987 Excess Investment Earnings Fund
(the "Excess Investment Earnings Fund").
(6) The South Poway Community Facilities
District No. 1 1987 Administrative Fund (the
"Administrative Fund").
(7) The South Poway Community Facilities
District No. 1 1987 Acquisition Fund (the "Acquisition
Fund").
Section 3.02. Disposition of Bond Proceeds and the 1985
Bond Proceeds. The proceeds of the sale of the Bonds and the
1985 Bond proceeds shall be received by the Fiscal Agent on
behalf of the District and deposited as follows:
(1) The amount representing the accrued interest
equal to $242,301.46 on the Bonds shall be deposited in the
Interest Account of the Special'Fund from Bond proceeds,
and such amount shall be applied to the payment of interest
on August 2, 1987;
(2) $167,829.11 shall be deposited in the Costs of
Issuance Fund from Bond proceeds;
(3) $3,000,000 shall be placed in the Reserve Fund
from Bond proceeds;
(4) $3,220,489 on deposit in the 1985 Bonds Reserve
Fund, $2,652,000 on deposit in the 1985 Bonds Special Fund,
and $28,752,095.89 of Bond proceeds, shall be deposited in
the 1985 Bonds Escrow Fund established with the Escrow Bank
and be applied in accordance with the Escrow Agreement to
discharge the 1985 Bonds;
02/22/87
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(5) After making the transfers required by (4) above,
all remaining amounts on deposit in the 1985 Bonds Special
Fund, the 1985 Bonds Reserve Fund and the 1985 Bonds
Administrative Fund shall be transferred to the Special
Fund; and
(6) Ail amounts on deposit in the 1985 Bonds
Acquisition Fund shall be transferred to the Acquisition
Fund.
Section 3.03. Deposits to and Disbursements from Special
Tax Fund; Costs of Issuance Fund. The Treasurer shall, on each
date on which the Special Taxes have been collected by the
District from the Tax-Collector-Treasurer of the County of San
Diego and in no event later than seven days prior to the
Interest Payment Date on which such Special Taxes will be
needed to pay amounts due in accordance with the terms of this
Resolution, transfer the Special Taxes to the Fiscal Agent for
deposit in the Special Tax Fund, to be held in trust and
transferred on the dates and in the amounts set forth in the
following Sections, in the following order of priority, to:
(1) The Interest Account;
(2) The Principal Account;
(3) The Redemption Fund;
(4) The Reserve Fund;
(5) The Excess Investment Earnings Fund; and
(6) The Administrative Fund.
Notwithstanding anything herein to the contrary, moneys
transferred to the Special Tax Fund from the Acquisition Fund
in accordance with Section 3.09 hereof shall, unless in the
opinion of Bond Counsel another use of such funds will not
impair the exclusiOn from gross income of interest on the
Bonds, be held in a separate account within the Special Tax
Fund known as the "Purchase Account" which the Fiscal Agent is
directed to establish when and if such transfer is required to
be made and moneys in such separate account shall be invested
in tax-exempt Authorized Investments or in Authorized
Inv6stments at a Yield not in excess of the Yield on the Bonds
and shall be applied only (i) to the purchase of Bonds by the
District in the open market, at a price not to. exceed the
principal amount thereof plus accrued interest, which Bonds
shall thereupon be cancelled, (ii) to make interest payments on
the Bonds, or (iii) to redeem Bonds at the earliest redemption
date permitted by this Resolution, without premium.
02/22/87
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Moneys deposited in the Costs of Issuance Fund shall be
applied by the Fiscal Agent to the payment of Costs of Issuance.
Any moneys remaining in the Costs of Issuance Fund on August 1,
1987 shall be transferred by the Fiscal Agent to the Interest
Account.
Section 3.04. Special Tax Fund. The principal and
interest on the Bonds until maturity, otherwise than by
redemption, shall be paid by the Fiscal Agent from the Special
Tax Fund. At the maturity of the Bonds and, after all
principal and interest then due on the Bonds then outstanding
has been paid or provided for, moneys in the Special Tax Fund
shall be transferred to the District.
For the purpose of assuring that the payment of principal
and interest on the Bonds will be made when. due, on or prior to
each February 1 and August 1, the Fiscal Agent shall make the
following transfers first to the Interest Account and then to
the Principal Account; provided, however, that to the extent
that deposits have been made in the Interest Account or the
Principal Account from the proceeds of the sale of the Bonds or
otherwise, the transfer from the Special Tax Fund need not be
made:
(a) To the Interest Account, an amount such that the
balance in the Interest Account one (1) day prior to each
Interest Payment Date shall be equal to the installment of
interest due on the Bonds on said Interest Payment Date.
Moneys in the Interest Account shall be used for the
payment of interest on the Bonds as the same become due.
(b) To the Principal Account, an amount such that the
balance in the Principal Account one (1) day prior to
February 2 and August 2 of each year shall equal the
principal payment due on the Bonds maturing on the next
succeeding February 2 and August 2, respectively. Moneys
in the Principal Account shall be used for the payment of
the principal of such Bonds as the same become due at
maturity.
Section 3.05. Redemption Fund.
(a) After the deposits have been made to the Interest
Account and the Principal Account as required by the preceding
section, the Fiscal Agent shall next transfer into the
Redemption Fund from the Special Tax Fund the amount needed to
make the balance in the Redemption Fund equal to the Sinking
Fund Payment due on the outstanding Term Bonds on the next
succeeding February 2 or August 2. Moneys so deposited in the
Redemption Fund shall be used and applied by the Fiscal Agent
to call and redeem the largest principal amount of outstanding
02/22/87
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Term Bonds which can be called with the moneys available and
any such call and redemption shall be made in accordance with
the provisions and according to the Sinking Fund Payment
schedule set forth in Section 4.01(b) hereof.
In lieu or partially in lieu of such call and
redemption, moneys deposited in the Redemption Fund as set
forth above may be used to purchase outstanding Bonds in the
manner hereinafter provided. Purchases of outstanding Bonds
may be made by the District at public or private sale as and
when and at such prices as the District may in its discretion
determine but only at prices (including brokerage or other
expenses) not more than par plus accrued interest plus the
premium applicable at the next following call date according to
the premium schedule established pursuant to Section 4.01(a)
hereof, and any accrued interest payable upon the purchase of
Bonds may be paid from the amount reserved in the Interest
Account for the payment of interest on the next following
Interest Payment Date.
(b) After making the deposits to the Interest Account and
the Principal Account pursuant to Section 3.04 above and to the
Redemption Fund for Sinking Fund Payments then due pursuant to
subparagraph (a) of this section, and in accordance with the
District's election to call Bonds for optional redemption as
set forth in Section 4.01(a), the Fiscal Agent shall transfer
from the Special Tax Fund and deposit in the Redemption Fund
moneys available for the purpose and sufficient to pay the
principal and the premiums payable as provided in Section
4.01(a) on the Bonds called for optional redemption.
Moneys set aside in the Redemption Fund shall be used
solely for the purpose of redeeming Bonds and shall be applied
on or after the redemption date to the payment of principal and
premium on the Bonds to be redeemed upon presentation and
surrender of such Bonds. If, after all of the Bonds have been
redeemed and cancelled or paid and cancelled, there are moneys
remaining in the Redemption Fund, said moneys shall be
transferred to the Special Tax Fund; provided, that if said
moneys are part of the proceeds of refunding bonds said moneys
shall be transferred to the fund or account created for the
payment of principal of and interest on such refunding bonds.
Section 3.06. Reserve Fund. There shall be maintained in
the Reserve Fund an amount equal to the Reserve Requirement.
Moneys in the Reserve Fund shall be used solely for the
purpose of paying the principal of, including Sinking Fund
Payments, and interest on the Bonds when due in the event that
the moneys in the Special Tax Fund are insufficient therefor or
moneys in the Redemption Fund are insufficient to make a
02/22/87
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mandatory redemption in accordance with the provisions of
Section 4.01(b). If the amounts in the Special Tax Fund are
insufficient for such purpose, the Fiscal Agent shall withdraw
from the Reserve Fund for deposit in the Interest Account or
the Principal Account or the Redemption Fund moneys necessary
for such purpose. On each date that the Fiscal Agent makes a
transfer from the Reserve Fund to the Interest Account, the
Principal Account or the Redemption Fund, the Fiscal Agent
shall notify the Treasurer, in writing, as to the date and
amount of such transfer. The District shall then take the
steps necessary to cause to be deposited to the Special Tax
Fund the amount needed to replenish the Reserve Fund to the
Reserve Requirement either through including such amount in the
next annual Special Tax levy, or otherwise.
Notwithstanding anything herein to the contrary, whenever
moneys are withdrawn from the Reserve Fund, after making the
required transfers to the Interest Account, the Principal
Account and the Redemption Fund, the Fiscal Agent shall
transfer to the Reserve Fund the amount needed to restore the
amount of such fund to the Reserve Requirement. The Fiscal
Agent shall make such transfer from the available moneys in the
Special Tax Fund. Moneys in the Special Tax Fund shall be
deemed available .for transfer to the Reserve Fund only if the
Fiscal Agent determines that such amounts will not be needed to
make the deposits required to be made to the Interest Account,
the Principal Account and the Redemption Fund.
Notwithstanding any provision herein to the contrary,
moneys in the Reserve Fund in excess of the Reserve Requirement
shall be withdrawn from the Reserve Fund by the Fiscal Agent on
each February 2 and August 2 and transferred to the Special Tax
Fund.
Section 3.07. Excess Investment Earnings Fund.
(a) The District shall calculate Excess Investment
Earnings in accordance with paragraph (b) and shall pay Excess
Investment Earnings to the United States government in
accordance with paragraph (c). The term "Excess Investment
Earnings" means an amount equal to the sum of:
(i) the excess of:
(A) the aggregate amount earned from the Delivery
Date on all Nonpurpose Obligations in which Gross Proceeds
of the Bonds are invested (other than amounts attributable
to an excess described in this subparagraph (i)), over
(B) the amount that would have been earned if the
yield on such Nonpurpose Obligations (other than amounts
02/22/87
4899k/2468-03 -17-
attributable to an excess described in this subparagraph
(i)) had been equal to the yield on the Bonds,
plus
(ii) any income attributable to the excess described
in paragraph (i).
(b) At or prior to the last day of the first Computation
Year, the District shall calculate the Excess Investment
Earnings referenced in subparagraph (i) of paragraph (a) and
shall deposit the same into the Excess Investment Earnings Fund
to the extent funds are available first from the Special Tax
Fund and then from any legally available funds. Thereafter,
prior to the last day of each Computation Year and on the date
of the retirement of the Bonds, the District shall calculate
the amount of Excess Investment Earnings referenced in
subparagraphs (i) and (ii) of paragraph (a) and direct
corresponding transfers into the Excess Investment Earnings
Fund. The calculations shall be made by a nationally
recognized bond counsel, an Independent Certified Public
Accountant or another organization whose calculations of rebate
under Section 148(f) of the Code have been accepted by other
public agencies in the State retained by the District in
accordance with the following:
(1) Except as provided in (2), in determining the
amount described in subparagraph (i)(A) of paragraph (a),
the aggregate amount earned on Nonpurpose Obligations shall
include (i) all income realized under federal income tax
accounting principles (whether or not the person earning
such income is subject to federal income tax) with respect
to such Nonpurpose Obligation and with respect to the
reinvestment of investment receipts from such Nonpurpose
Obligations (without regard to the transaction costs
incurred in acquiring, carrying, selling or redeeming such
Nonpurpose Obligations), including, but not limited to,
gain or loss realized on the disposition of such Nonpurpose
Obligations (without regard to when such gains are taken
into account under Section 453 of the Code relating to the
taxable year of inclusion of gross income), and income under
Section 1272 of the Code (relating to original issue
discount) and (ii) any unrealized gain or loss as of the
date of retirement of the Bonds if any Nonpurpose Obligation
'is retained after such date.
(2) In determining the amount described in
subparagraph (i) of paragraph (a), an obligation or security
shall be treated as acquired for its fair market value at
the time it becomes a Nonpurpose Obligation, so that gain or
loss on the disposition of such an obligation or security
shall be computed with reference to such fair market value
as its adjusted basis.
02/22/87
4899k/2468-03 -18-
(3) In determining the amount described in
subparagraph (i)(B) of paragraph (a), the Yield on the Bonds
shall be determined based on the actual Yield of the Bonds
during the period between the Delivery Date and the date the
computation is made (with adjustments for discount or
premium).
(4) In determining the amount described in
subparagraph (ii) of paragraph (a), all income attributable
to the excess described in subparagraph (i) of paragraph (a)
must be taken into account, whether or not that income
exceeds the Yield on the Bonds, and no amount may be treated
as "negative arbitrage."
(5) In determining the amount described in subsection
(a) of this Section, there shall be excluded any amount
earned on any fund or account which is used primarily to
achieve a proper matching of revenues and annual debt
service on the Bonds during each Bond Year and which is
depleted at least once a year except for a reasonable
carryover amount not in excess of the greater of one year's
earnings on such fund or account or one-twelfth (1/12) of
annual debt service on the Bonds, as well as amounts earned
on said earnings if the gross earnings on all such funds and
accounts for the Computation Year are less than $100,000.
(c) Upon written direction of the District, the Fiscal
Agent shall pay Excess Investment Earnings to the United States
government in installments with the first payment to be made not
later than thirty (30) days after the end of the fifth
Computation Year and with subsequent payments to be made not
later than five (5) years after the preceding payment was due.
The District shall assure that each installment is in an amount
equal to at least 90 percent of the Excess Investment Earnings
with respect to the Bonds as of the close of the computation
period. Upon the direction of the District, which direction
shall be given before thirty (30) days after the retirement of
the Bonds, the Fiscal Agent shall pay from the Excess Investment
Earnings Fund, or the District shall pay directly, 100 percent
of the theretofore unpaid Excess Investment Earnings of the
Bonds. The Fiscal Agent or the District shall remit such
payments to the United States government at the address and in
the manner directed by the District prescribed by the
Regulations as the same may be in time to time in effect,
together with such reports and statements prepared by District
as may be prescribed by such Regulations. If the Fiscal Agent
follows the written instructions as supplied by the District, it
shall be deemed to have complied with this subsection and shall
have no responsibility to calculate Excess Investment Earnings
or to take action in the absence of instructions from the
District.
02/22/87
4899k/2468-03 -19-
(d) In order to assure that Excess Investment Earnings are
paid to the United States rather than to a third party,
investments by the District in certificates of deposit and in
investment agreements shall be made only in accordance with the
Regulations therefor as from time to time in effect.
(e) The District shall keep and retain for a period of six
(6) years following the retirement of the Bonds records of the
determinations made pursuant to this Section. The Fiscal Agent
shall keep a record of all investments made with moneys on
deposit in any Fund or Account held by it hereunder and shall
provide such records to the District at least quarterly. Such
records shall contain a reference to the date of purchase, the
date of sale, the purchase price, the sales price, the principal
amount and coupon rate of each obligation purchased or sold.
(f) Payments pursuant to this Section shall be made to the
maximum extent possible from moneys on deposit in the Excess
Investment Earnings Fund and, to the extent of any deficiency
therein for such purpose, shall be made from the Special Tax
Fund. In the event of any remaining deficiency in available
moneys for the purposes of such transfer, such deficiency shall
be paid by the District from any available funds.
(g) Notwithstanding the foregoing, the foregoing method of
computing Excess Investment Earnings may be modified, in whole
or in part, without the consent of the Owners of the Bonds upon
receipt by the District of an opinion of Bond CounSel to the
effect that such modification will not adversely affect the
exclusion from gross income of interest on the Bonds.
Section 3.08. Administrative Expense Fund. After making
the transfers required by Sections 3.04, 3.05, 3.06 and 3.07,
the Fiscal Agent shall withdraw from the Special Tax Fund and
place in the Administrative Expense Fund an amount necessary to
pay all Administrative Expenses. Moneys in the Administrative
Expense Fund may be invested in any Authorized Investments,
provided that the maturity or maturities thereof shall not
exceed 30 days from the date of purchase.
Section 3.09. Acquisition Fund.
(a) The moneys in the Acquisition Fund shall be applied
exclusively to pay the Project Costs. Amounts for Project Costs
shall be disbursed by the Fiscal Agent only upon receipt of a
sequentially numbered written requisition, substantially in the
form attached hereto as Exhibit B, from the City Manager, or his
designee, or such other person as is designated in writing to
the Fiscal Agent by the legislative body of the District,
stating that (1) the conditions to the release of such funds
stated in the Acquisition Agreement have been satisfied, (2) the
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name of the person to whom payment is due, (3) the amount to be
paid, (4) the purpose for which the obligation to be paid was
incurred, (5) there has not been filed with or served upon the
District notice of any lien, right to lien or attachment upon,
stop notice or claim affecting the right to receive payment of,
any of the moneys payable to any of the persons named in such
certificate or written requisition, which has not been released
or will not be released simultaneously with the payment of such
obligation, other than materialmen's or mechanic's liens
accruing by mere operation of law, and (6) sufficient money
remains in the Acquisition Fund to pay all remaining costs of
acquisition, construction and financing of the Project. Each
requisition shall be accompanied by the invoices which are being
paid or by other evidence of payment of such amounts by the
District. The Fiscal Agent shall have no liability for
disbursing funds in accordance with the provisions of this
Section 3.09(a).
(b) Upon receipt of a certificate from the City Manager, or
his designee, that all Project Costs have been paid, the Fiscal
Agent shall transfer moneys on deposit in the Acquisition Fund
to the Special Tax Fund.
(c) Notwithstanding anything herein to the contrary, if on
August 2, 1988, any funds remain on deposit in the Acquisition
Fund, the Fiscal Agent shall not later than 30 days thereafter
invest such amounts in tax-exempt obligations or shall restrict
the Yield on such amounts such that the Yield on such amounts is
not in excess of the Yield on the Bonds (as set forth in the
Non-Arbitrage Certificate of the District), unless in the
opinion of Bond Counsel such restriction is not necessary to
prevent interest on the Bonds from being included in gross
income for federal income tax purposes.
Section 3.10. Investments. Moneys held in any of the Funds
and Accounts under this Resolution Shall be invested only in
Authorized Investments which shall be deemed at all times to be
a part of such Funds and Accounts. Any income realized or loss
resulting from such Authorized Investments shall be credited or
charged to the Fund or Account from which such investment was
made; provided, however, (i) investment earnings on all amounts
deposited in the Acquisition Fund prior to August 2, 1988 shall
be deposited (1) in the Acquisition Fund until the Project is
completed, and (2) thereafter, in the Special Tax Fund, (ii)
investment earnings on all amounts in the Excess Investment
Earnings Fund shall be deposited therein, and (iii) all other
investment earnings shall be deposited in the Special Tax Fund.
Moneys in the Funds and Accounts held under this Resolution may
be from time to time invested by the Fiscal Agent at the
direction of the Treasurer subject to the following restrictions:
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(a) Moneys in the Acquisition Fund shall be invested in
Authorized Investments which will by their terms mature as close
as practicable to the date the District estimates the moneys
represented by the particular investment will be needed for
withdrawal from the Acquisition Fund.
(b) Moneys in the Redemption Fund shall be invested only in
Authorized Investments which will by their terms mature on such
dates so as to ensure the payment of principal and interest on
the Bonds as the same become due.
(c) The moneys in the Reserve Fund may be invested
initially only in Authorized Investments which mature not later
than February 2, 1992 and thereafter shall be invested in
Authorized Investments which mature not more than six months
from the date of purchase by the Fiscal Agent, provided that no
such Authorized Investment shall mature later than the final
maturity of the Bonds.
The Fiscal Agent shall sell at the best price obtainable or
present for redemption any obligations so purchased whenever it
may be necessary to do so in order to provide moneys to meet any
payment or transfer for such funds and accounts or from such
funds and accounts. For the purpose of determining at any given
time the balance in any such funds, any such investments
constituting a part of such funds and accounts shall be valued
at their cost. Notwithstanding anything herein to the contrary,
neither the Fiscal Agent nor the Treasurer shall be responsible
for any loss from investments, sale or transfer authorized
pursuant to this Resolution.
The Fiscal Agent shall provide the District with monthly
reports relating to the investments made in all Funds and
Accounts and the investment earnings, income or loss posted to
each Fund or Account.
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01. Redemption of Bonds.
(a) Optional Redemption. The Bonds maturing on or before
February 2, 1997 are not subject to call and redemption prior to
maturity. The Bonds maturing on February 2, 2011 may be
redeemed, at the option of the District on February 2, 1997, or
on any Interest Payment Date thereafter, prior, to maturity in
whole or in part, by lot, at the following redemption prices,
expressed as a percentage of par value, together with accrued
interest to the date of redemption.
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Redemption Dates
February 2, 1997 and August 2, 1997
February 2, 1998 and August 2, 1998
February 2, 1999 and August 2, 1999
February 2, 2000 and thereafter
Redemption Prices
103%
102%
lO1%
lOO%
In the event the District shall elect to redeem Bonds as
provided in this Section 4.01(a), the District shall give
written notice to the Fiscal Agent of its election so to
redeem, the redemption date and the principal amount of the
Bonds to be redeemed. The notice to the Fiscal Agent shall be
given at least 45 but no more than 90 days prior to the
redemption date or such shorter period as shall be acceptable
to the Fiscal Agent.
(b) Mandatory Sinking Fund Redemption.
(i) The outstanding Term Bonds maturing on February
2, 2011 will be called before maturity and redeemed from the
Sinking Fund Payments that have been deposited into the
Redemption Fund on August 2, 1997, and on each February 2 and
August 2 thereafter prior to maturity, in accordance with the
schedule of Sinking Fund Payments set forth below. The Term
Bonds so called for redemption shall be redeemed at a
redemption price for each redeemed Bond equal to the principal
amount thereof, plus accrued interest to the redemption date
without premium as follows:
Date
August 2, 1997
February 2, 1998
August 2, 1998
February 2, 1999
August 2, 1999
February 2, 2000
August 2, 2000
February 2, 2001
August 2, 2001
February 2, 2002
August 2, 2002
February 2, 2003
August 2, 2003
February 2, 2004
August 2, 2004
February 2, 2005
August 2, 2005
February 2, 2006
August 2, 2006
February 2, 2007
Principal Amount
$ 520 000.00
580000.00
605000.00
~70 i 000.00
695.000.00
720000.00
745.000.00
770.000.00
795.000.00
825,000.00
855,000.00
885,000.00
915,000.00
950,000.00
985 000.00
1,020.000.00
1,055,000.00
1,090,000.00
1,130,000.00
1,170,000.00
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August 2, 2007
February 2, 2008
August 2, 2008
February 2, 2009
August 2, 2009
February 2, 2010
August 2, 2010
February 2, 2011
1,215,000.00
1,255,000.00
1,30o,000.00
1,345,000.00
1,395,000.00
1,445,000.00
1,495,000.00
1,550,000.00
Section 4.02. Selection of Bonds for Redemption. If less
than all of the Outstanding Bonds are to be redeemed, the
Fiscal Agent shall select the Bonds to be redeemed by lot in
any manner which the Fiscal Agent deems fair; provided,
however, that the portion of any Bond of a denomination of more
than $5,000 to be redeemed shall be in the principal amount of
$5,000 or a multiple thereof, and that, in selecting portions
of such Bonds for redemption, the Fiscal Agent shall treat each
such Bond as representing that number of Bonds of $5,000
denomination which is obtained by dividing the principal amount
of such Bond to be redeemed in part by $5,000. The Fiscal
Agent shall promptly notify the District in writing of the
Bonds, or portions thereof, selected for redemption.
Section 4.03. Notice of Redemption. When Bonds are due
for redemption under Section 4.01(b) above and when the Fiscal
Agent receives notice from the District of its election to
redeem Bonds under Section 4.01(a) above, the Fiscal Agent
shall give notice, in the name of the District, of the
redemption of such Bonds. Such notice of redemption shall (a)
specify the serial numbers and the maturity date or dates of
the Bonds selected for redemption, except that where all the
Bonds subject to redemption, or all the Bonds of one maturity,
are to be redeemed, the serial numbers thereof need not be
specified; (b) state the date fixed for redemption and
surrender of the Bonds to be redeemed; (c) state the redemption
price; (d) state the place or places where the Bonds are to be
redeemed; and (e) in the case of Bonds to be redeemed only in
part, state the portion of such Bond which is to be redeemed.
Such notice shall further state that on the date fixed for
redemption, there shall become due and payable on each Bond or
portion thereof called for redemption, the principal thereof,
together with any premium, and interest accrued to the
redemption date, and that from and after such date, interest
thereon shall cease to accrue and be payable. At least 30 days
bug no more than 60 days prior to the redemption date, the
Fiscal Agent shall mail a copy of such notice, by first class
mail, postage prepaid, to the respective Owners thereof at
their addresses appearing on the Bond Register. The actual
receipt by the Owner of any Bond of notice of such redemption
shall not be a condition precedent thereto, and failure to
receive such notice shall not affect the validity of the
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proceedings for the redemption of such Bonds, or the cessation
of interest on the redemption date. A certificate by the
Fiscal Agent that notice of such redemption has been given as
herein provided shall be conclusive as against all parties and
the Owner shall be entitled to show that he or she failed to
receive notice of such redemption.
Section 4.04. Partial Redemption of Bonds. Upon surrender
of any Bond to be redeemed in part only, the District shall
execute and the Fiscal Agent shall authenticate and deliver to
the Bondowner, at the expense of the District, a new Bond or
Bonds of authorized denominations equal in aggregate principal
amount to the unredeemed portion of the Bonds surrendered, with
the same interest rate and the same maturity.
Section 4.05. Effect of Notice and Availability of
Redemption Money. Notice of redemption having been duly given,
as provided in Section 4.03, and the amount necessary for the
redemption having been made available for that purpose and
being available therefor on the date fixed for such redemption:
(a) The Bonds, or portions thereof, designated for
redemption shall, on the date fixed for redemption, become
due and payable at the redemption price thereof as provided
in this Resolution, anything in this Resolution or in the
Bonds to the contrary notwithstanding;
(b) Upon presentation and surrender thereof at the
corporate trust office of the Fiscal Agenti the redemption
price of such Bonds shall be paid to the Owner thereof;
(c) After the redemption date the Bonds or portions
thereof so designated for redemption shall be deemed to be
no longer outstanding and such Bonds or portions thereof
shall cease to bear further interest; and
(d) After the date fixed for redemption no Owner of
any of the Bonds or portions thereof so designated for
redemption shall be entitled to any of the benefits of this
Resolution, or to any other rights, except with respect to
payment of the redemption price and interest accrued to the
redemption date from the amounts so made available.
ARTICLE V
COVENANTS AND WARRANTY
Section 5.01. Warranty. The District shall preserve and
protect the security of the Bonds and the rights against all
claims and demands of all persons.
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Section 5.02. Covenants. So long as any of the Bonds
issued hereunder are Outstanding and unpaid, the District makes
the following covenants with the Bondowners under the
provisions of the Act and this Resolution (to be performed' by
the District or its proper officers, agents or employees),
which covenants are necessary, convenient and desirable to
secure the Bonds and tend to make them more marketable;
provided, however, that said covenants do not require the
District to expend any funds or moneys other than the Special
Taxes:
(a) Punctual Payment; Against Encumbrances. The District
covenants that it will receive all Net Taxes in trust and will
immediately deposit the Net Taxes with the Fiscal Agent and the
District shall have no beneficial right or interest in the
amounts so deposited except as provided by this Resolution.
All such Net Taxes, whether received by the District in trust
or deposited with the Fiscal Agent as trustee, all as herein
provided, shall nevertheless be disbursed, allocated and
applied solely to the uses and purposes herein or therein set
forth, and shall be accounted for separately and apart from all
other money, funds, accounts or other resources of the District.
The District covenants that it will duly and
punctually pay or cause to be paid the principal of and
interest on every Bond issued hereunder, together with the
premium, if any, thereon on the date, at the place and in the
manner set forth in the Bonds and in accordance with this
Resolution to the extent Special Taxes are available therefor,
and that the payments into the Funds and Accounts created
hereunder will be made, all in strict conformity with the terms
of the Bonds and this Resolution, and that it will faithfully
observe and perform all of the conditions, covenants and
requirements of this Resolution and all Supplemental
Resolutions and of the Bonds issued hereunder.
The District will not mortgage or otherwise encumber,
pledge or place any charge upon any of the Net Taxes, except as
provided in the ReSolution, and will not issue any obligation
or security superior to or on a parity with the Bonds payable
in whole or in part from the Net Taxes, other than Parity Bonds.
(b) Levy of Special Tax. The legislative body of the
District shall cause the Treasurer to levy the Special Tax in
an amount sufficient to pay the principal of and interest on
the Bonds, any Parity Bonds and the Administrative Expenses and
any amounts required to maintain the Reserve Fund at the
Reserve Requirement so long as any Bonds issued under this
Resolution are outstanding.
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(c) Commence Foreclosure Proceedings. The District
covenants for the benefit of the Owners of the Bonds that it
will commence appropriate foreclosure proceedings within the
earlier of 150 days of notice of a delinquency in the aggregate
Special Tax collections or 150 days from receipt of Special
Taxes from the County of San Diego in an amount which is less
than the Special Tax levied, and diligently pursue to
completion such foreclosure proceedings in the event any
Special Tax installment becomes delinquent.
(d) Payment of Claims. The District will pay and
discharge any and all lawful claims for labor, materials or
supplies which, if unpaid, might become a lien or charge upon
any portion of the Project owned by the District or upon the
Net Taxes or any part thereof, or upon any funds in the hands
of the Fiscal Agent, or which might impair the security of the
Bonds; provided that nothing herein contained shall require the
District to make any such payments so long as the District in
good faith shall contest the validity of any such claims.
(e) Books and Accounts. The District will keep proper
books of records and accounts, separate from all other records
and accounts of the District, in which complete and correct
entries shall be made of all transactions relating to the
Project, the levy of the Special Tax and the deposits to the
Special Tax Fund. Such books of record and accounts shall at
all times during business hours be subject to the inspection of
the Fiscal Agent or of the Owners of not less than ten percent
(10X) of the principal amount of the Bonds then outstanding or
their representatives authorized in writing.
(f) Tax Covenants. In order to preserve the exclusion
from gross income of interest on the Bonds for federal income
tax purposes, the District covenants to comply with all
applicable requirements of the Code, together with any
amendments thereto or regulations promulgated thereunder
necessary to preserve such exclusion from gross income and
specifically covenants, without limiting the generality of the
foregoing, that:
(1) it will make no use of the proceeds of the Bonds
at any time which will cause the Bonds to be "arbitrage
bonds" within the meaning of Section 148 of the Code and
applicable Regulations adopted thereunder by the Internal
Revenue Service;
(2) it will not use in excess of 5~ o.f the proceeds of
the Bonds to make or finance loans to any person other than
a governmental unit (other than loans which are used to
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acquire or carry Nonpurpose Investments or are for the
purpose of enabling the borrower to finance any governmental
tax or assessment of general application for a specific
essential governmental function, all as set forth in Section
141(c) of the Code);
(3) it will neither use nor permit the use of more than
l0x of the proceeds of the Bonds for any private business
use, or enter into an arrangement such that more than l0x of
the proceeds of the Bonds is, directly or indirectly,
secured by any interest in (i) property used or to be used
for a private business use or (ii) payments in respect of
such property or to be derived from payments in respect of
property, or borrowed money, used or to be used for a
private business use, all as set forth in Section 141(b) of
the Code, or take any other action which would cause the
Bonds to be "private activity bonds" within the meaning of
Section 141(a) of the Code;
(4) it will ensure that the payment of principal of and
interest on the Bonds shall not be directly or indirectly
guaranteed (in whole or in part) by the United States (or
any agency or instrumentality thereof) and no portion of the
moneys contained in any of the Funds or Accounts created
herein shall be (i) used in making loans guaranteed by the
United States (or any agency or instrumentality thereof);
(ii) invested directly or indirectly in deposits or accounts
insured by the Federal Deposit Insurance Corporation,
Federal Savings and Loan Insurance Corporation, National
Credit Union Administration or any other similar federally
chartered corporation; (iii) otherwise invested directly or
indirectly in obligations guaranteed (in whole or in part)
by the United States (or any agency or instrumentality
thereof); except (1) during the initial period following
issuance of the Bonds and ending on the final expenditure of
the Bond proceeds; (2) for amounts held in the Reserve
Account, or other reserve funds satisfying Section 148(d) of
the Code; (3) for amounts held in the Special Fund and other
bona fide debt service funds; (4) for investments in
obligations issued by the United States Treasury; (5) for
investments in obligations guaranteed by the Federal
National Mortgage Association, Government National Mortgage
Association or Federal Home Loan Mortgage Corporation, or
(6) for investments permitted under Regulations issued
.pursuant to Section 149(b)(3)(B) of the Code; and
(5) (i) it shall keep a detailed accounting of all
transactions contemplated under this Resolution or in any
way relating to the receipt or disbursement of any of the
Gross Proceeds of the Bonds for a period of six years after
the later of the date of payment of all Excess Investment
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Earnings to the United States or the date the District
disburses the last of the Gross Proceeds of the Bonds; (ii)
except for the investment of moneys in tax-exempt bonds or
Gross Proceeds invested during an applicable temporary
period permitted under the Regulations, it will not allow
Gross Proceeds of the Bonds to be invested at any time in
Nonpurpose Obligations with a Yield in excess of the Yield
on the Bonds; (iii) it will neither invest Gross Proceeds
nor cause Gross Proceeds to be invested in Nonpurpose
Obligations if the yield on such Nonpurpose Obligations
would be less than the yield that would have resulted in an
arm's-length transaction; and (iv) it will not sell or
otherwise dispose of or cause to be sold or otherwise
disposed of Nonpurpose Obligations, if such sale or
disposition would result in a smaller profit or larger loss
than would have resulted from a sale at. fair market value
arrived at in an arm's-length transaction.
(g) Completion of Project. The District will diligently
carry out and continue to completion with all practical dispatch
the acquisition and construction of the Project in accordance
with the Act. and the proceedings for the formation of the
District and in a sound and economical manner. The Project to
be acquired or constructed may be amended as provided in the
Act, but no amendment may be made which would substantially
impair the security of the Bonds or the rights of the Owners.
The District will maintain the Project, or cause it to be
maintained, in accordance with the customary and reasonable
maintenance and repair practices for such facilities.
ARTICLE VI
AMENDMENTS TO RESOLUTION
Section 6.01. Supplemental Resolutions or Orders Not
Requiring Bondowner Consent. The District may from time to
time, and at any time, without notice to or consent of any of
the Bondowners, adopt resolutions or orders supplemental hereto
for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other
provision herein, or to make any other provision with respect to
matters or questions arising under this Resolution or in any
additional resolution or order, provided that such action is not
materially adverse to the interest of the Bondowners;
(b) to add to the covenants and agreements of and the
limitations and the restrictions upon the District contained in
this Resolution, other covenants, agreements, limitations and
restrictions to be observed by the District which are not
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contrary to or inconsistent with this Resolution as theretofore
in effect;
(c) to provide for the issuance of any Parity Bonds, and to
provide the terms and conditions under which such Parity Bonds
may be issued, subject to and in accordance with the provisions
of this Resolution;
(d) to modify, amend or supplement this Resolution in such
manner as to permit the qualification hereof under the Trust
Indenture Act of 1939, as amended, or any similar federal
statute hereafter in effect, and to add such other terms,
conditions and provisions as may be permitted by said act or
similar federal statute, and which shall not materially
adversely affect the interests of the Owners of the Bonds; or
(e) to modify, alter, amend or supplement this Resolution
in any other respect which is not materially adverse to the
Bondowners.
Section 6.02. Supplemental Resolutions or Orders Requiring
Bondowner Consent. Exclusive of the resolutions or orders
supplemental hereto set forth in Section 6.01, the Owners of not
less than 60~ in aggregate principal amount of the Bonds then
outstanding shall have the right to consent to and approve the
adoption by the District of such resolutions or orders
supplemental hereto as shall be deemed necessary or desirable by
the District for the purpose of waiving, modifying, alternate,
amending, adding to or rescinding, in any particular, any of the
terms or provisions contained in this Resolution; provided,
however, that nothing herein shall permit, or be construed as
permitting, (a) an extension of the maturity date of the
principal, or the payment date of interest on, any Bond (b) a
reduction in the principal amount of, or redemption premium on,
any Bond or the rate of interest thereon, (c) a preference or
priority of any Bond or Bonds over any other Bond or Bonds, or
(d) a reduction in the aggregate principal amount of the Bonds
the Owners of which are required to consent to'such resolution
or order, without the consent of the Owners of all Bonds then
outstanding.
If at any time the District shall desire to adopt a
resolution or order supplemental hereto, which pursuant to the
terms of this section shall require the consent of the
Bondowners, the District shall so notify the Fiscal Agent and
shall deliver to the Fiscal Agent a copy of the proposed
resolution or order. The Fiscal Agent shall, at the expense of
the District, cause notice of the proposed resolution or order
to be mailed, by first class mail postage prepaid, to all
Bondowners at their addresses as they appear in the Bond
Register. Such notice shall briefly set forth the nature of the
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proposed resolution or order and shall state that a copy thereof
is on file at the office of the Treasurer for inspection by all
Bondowners. The failure of any Bondowners to receive such
notice shall not affect the validity of such resolution or order
when consented to and approved by the Owners of not less than
60% in aggregate principal amount of the Bonds then outstanding
as required by this section. Whenever at any time within one
year after the date of the first mailing of such notice, the
Fiscal Agent shall receive an instrument or instruments
purporting to be executed by the Owners of not less than 60~ in
aggregate principal amount of the Bonds then outstanding, which
instrument or instruments shall refer to the proposed resolution
or order described in such notice, and shall specifically
consent to and approve the adoption thereof by the District
substantially in the form of the copy referred to in such notice
as on file with the Treasurer, such proposed resolution or
order, when duly adopted by the District, shall thereafter
become a part of the proceedings for the issuance of the Bonds.
In determining whether the Owners of 60~ of the aggregate
principal amount of the Bonds have consented to the adoption of
any supplemental resolution or order, Bonds which are owned by
the District or by any person directly or indirectly controlling
or controlled by or under the direct or indirect common control
with the District, shall be disregarded and shall be treated as
though they were not outstanding for the purpose of any such
determination.
Upon the adoption of any resolution or order supplemental
hereto and the receipt of consent to any such resolution or
order from the Owners of not less than 60~ in aggregate
principal amount of Bonds outstanding in instances where such
consent is required pursuant to the provisions of this section,
this Resolution shall be, and shall be deemed to be, modified
and amended in accordance therewith, and the respective rights,
duties and obligations under this Resolution of the District and
all Owners of Bonds then outstanding shall thereafter be
determined, exercised and enforced hereunder, subject to all
respects to such modifications and amendments.
Section 6.03. Notation of Bonds; Delivery of Amended
Bonds. After the effective date of any action taken as
hereinabove provided, the District may determine that the Bonds
may bear a notation, by endorsement in form approved by the
District, as to such action, and in that case upon demand of the
Own.er of any Bond Outstanding at such effective date and
presentation of his Bond for the purpose at the office of the
Fiscal Agent or at such additional offices as.the Fiscal Agent
may select and designate for that purpose, a suitable notation
as to such action shall be made on such Bonds. If the District
shall so determine, new Bonds so modified as, in the opinion of
the District, shall be necessary to conform to such action shall
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be prepared and executed, and in that case upon demand of the
Owner of any Bond outstanding at such effective date such new
Bonds shall be exchanged at the office of the Fiscal Agent or at
such additional offices as the Fiscal Agent may select and-
designate for that purpose, without cost to each Owner, for
Bonds then outstanding, upon surrender of such outstanding Bonds.
ARTICLE VII
FISCAL AGENT
Section 7.01. Fiscal Agent. Security Pacific National
Bank, having a corporate trust office in Los Angeles,
California, is hereby appointed Fiscal Agent for the District
for the purpose of receiving all money which the District is
required to deposit with the Fiscal Agent hereunder and to
allocate, use and apply the same as provided in the Resolution.
The Fiscal Agent is hereby authorized to and shall mail by
first class mail, postage prepaid, interest payments to the
Bondowners, select Bonds for redemption, and maintain the Bond
Register. The Fiscal Agent is hereby authorized to pay the
principal of and premium, if any, on the Bonds when the same are
duly presented to it for payment at maturity or on call and
redemption, to provide for the registration of transfer and
exchange of Bonds presented to it for such purposes, to provide
for the cancellation of Bonds all as provided in this
Resolution, and to provide for the authentication of Bonds, and
shall perform all other duties assigned to or imposed on it as
provided in this Resolution. The Fiscal Agent shall keep
accurate records of all funds administered by it and all Bond
paid and discharged by it.
The Fiscal Agent is hereby authorized to redeem the Bonds
when duly presented for payment at maturity, or on redemption
prior to maturity. The Fiscal Agent shall cancel all Bonds upon
payment thereof in accordance with the provisions of Section
10.01 hereor. The Fiscal Agent shall keep accurate records of
all Bonds paid and discharged and cancelled by it.
The District shall from time to time, subject to any
agreement between the District and the Fiscal Agent then in
force, pay to the Fiscal Agent compensation for its services,
reimburse the Fiscal Agent for all its advances and
expenditures, including, but not limited to, advances to and
fee~ and expenses of independent accountants, counsel and
engineers or other experts employed by it in the exercise and
performance of its powers and duties hereunder, and indemnify
and save the Fiscal Agent harmless against expenses and
liabilities not arising from its own negligence or willful
misconduct which it may incur in the exercise and performance of
its powers and duties hereunder.'
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Section 7.02. Removal of Fiscal Agent. The District may at
any time at its sole discretion remove the Fiscal Agent
initially appointed, and any successor thereto, by delivering to
the Fiscal Agent a written notice of its decision to remove the
Fiscal Agent and may appoint a successor or successors thereto;
provided that any such successor shall be a bank or trust
company doing business and having a principal office in Los
Angeles, California, having a combined capital (exclusive of
borrowed capital) and surplus of at least fifty million dollars
($50,000,000), and subject to supervision or examination by
federal or state authority. Any removal shall become effective
only upon acceptance of appointment by the successor Fiscal
Agent. 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 purposes 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.
Section 7.03. Resignation of Fiscal Agent. The Fiscal
Agent may at any time resign by giving written notice to the
District and by giving to the Owners notice of such resignation,
which notice shall be mailed to the Owners at their addresses
appearing in the registration books in the office of the Fiscal
Agent. Upon receiving such notice of resignation, the District
shall promptly appoint a successor Fiscal Agent by an instrument
in writing. Any resignation or removal of the Fiscal Agent and
appointment of a successor Fiscal Agent shall become effective
only upon acceptance of appointment by the successor Fisaal
Agent.
Section 7.04. Liability of Fiscal Agent. The recitals of
fact and all promises, covenants and agreements contained herein
and in the Bonds shall be taken as statements, promises,
covenants and agreements of the District, and the Fiscal Agent
assumes no responsibility for the correctness of the same and
makes no representations as to the validity or sufficiency of
this Resolution or of the Bonds, and shall incur no
responsibility in respect thereof, other than in connection with
its duties or obligations specifically set forth herein or in
the Bonds or in the certificate of authentication assigned to or
imposed upon the Fiscal Agent. The Fiscal Agent shall be under
no responsibility or duty with respect to the issuance of the
Bonds for value. The Fiscal Agent shall not be liable in
con~ection with the performance of its duties hereunder, except
for its own negligence or willful misconduct. .
The Fiscal Agent shall be protected in acting upon any
notice, resolution, request, consent, order, certificate,
report, Bond or other paper or document believed by it to be
02/22/87
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genuine and to have been signed or presented by the proper party
or parties. The Fiscal Agent may consult with counsel, who may
be counsel to the District, 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 hereunder in good faith and in accordance therewith.
The Fiscal Agent shall not be bound to recognize any person
as the Owner of a Bond unless and until such Bond is submitted
for inspection, if required, and his title thereto
satisfactorily established, if disputed.
Whenever in the administration of its duties under the
Resolution the Fiscal Agent shall deem it necessary or desirable
that a matter be proved or established prior to taking or
suffering any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed)
may, in the absence of bad faith on the part of the Fiscal
Agent, be deemed to be conclusively proved and established by a
written certificate of the District, and such certificate shall
be full warrant to the Fiscal Agent for any action taken or
suffered under the provisions of the Resolution upon the faith
thereof, but in its discretion the Fiscal Agent may, in lieu
thereof, accept other evidence of such matter or may require
such additional evidence as to it may seem reasonable.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.01. Events of Default. Any one or more of the
following events shall constitute an "event of default":
(a) Default in the due and punctual payment of the
principal of or redemption premium, if any, on any Bond when
and as the same shall become due and payable, whether at
maturity as therein expressed, by declaration or otherwise;
(b) Default in the due and punctual payment of the
interest on any Bond when and as the same shall become due
and payable; or
(c) Default shall be made by the District in the
observance of any of the agreements, conditions or covenants
on its part in the Resolution or in the Bonds contained, and
such default shall have continued for a period of thirty
(30) days after the District shall have been given notice in
writing of such default by the Fiscal Agent.
Section 8.02. Remedies of Owners. Following the occurrence
of an event of default, any Owner shall have the right for the
equal benefit and protection of all Owners similarly situated:
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(a) By mandamus or other suit or proceeding at law or
in equity to enforce his rights against the District and any
of the members, officers and employees of the District, and
to compel the District or any such members, officers or
employees to perform and carry out their duties under the
Act and their agreements with the Owners as provided in the
Resolution;
(b) By suit in equity to enjoin any actions or things
which are unlawful or violate the rights of the Owners; or
(c) Upon the happening of an event of default (as
defined in Section 8.01), by a suit in equity to require the
District and its members, officers and employees to account
as the trustee of an express trust.
Nothing in this article or in any other'provision of the
Resolution, or in the Bonds, shall affect or impair the
obligation of the District, which is absolute and unconditional,
to pay the interest on and principal of the Bonds to the
respective Owners of the Bonds at the respective dates of
maturity, as. herein provided, out of the Net Taxes pledged for
such payment, or affect or impair the right of action, which is
also absolute and unconditional, of such Owners to institute
suit to enforce such payment by virtue of the contract embodied
in the Bonds and in the Resolution.
A waiver of any default or breach of duty or contract by any
Owner shall not affect any subsequent default or breach of duty
or contract, or impair any rights or remedies on any such
subsequent default or breach. No delay or omission by any Owner
to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a
waiver of any such default or an acquiescence therein, and every
power and remedy conferred upon the Owners by the Act or by this
article may be enforced and exercised from time to time and as
often as shall be deemed expedient by the Owners.
If any suit, action or proceeding to enforce any right or
exercise any remedy is abandoned or determined adversely to the
Owners, the District and the Owners shall be restored to their
former positions, rights and remedies as if such suit, action or
proceeding had not been brought or taken.
No remedy herein conferred upon or reserved to the Owners is
intended to be exclusive of any other remedy. Every such remedy
shall be cumulative and shall be in addition t.o every other
remedy given hereunder or now or hereafter existing, at law or
in equity or by statute or otherwise, and may be exercised
without exhausting and without regard to any other remedy
conferred by the Act or any other law.
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Section 8.03. Actions by Fiscal Agent as Attorney-in-
Fact. Any su/t, action or proceeding which any Owner shall have
the right to bring to enforce any right or remedy hereunder may
be brought by the Fiscal Agent for the equal benefit and
protection of all Owners, and the Fiscal Agent is hereby
appointed (and the successive respective Owners of the Bonds and
interest coupons 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 Owners for the purpose
of bringing any such suit, action or proceeding and to do and
perform any and all acts and things for and on behalf of the
Owners as a class or classes, as may be necessary or advisable
in the opinion of the Fiscal Agent as such attorney-in-fact.
ARTICLE IX
DEFEASANCE AND PARITY BONDS
Section 9.01. Defeasance. If the District shall pay or
cause to be paid, or there shall otherwise be paid, to the
Owners of all outstanding Bonds the interest due thereon and the
principal thereof, at the times and in the manner stipulated
therein and in the Resolution, then the Owners of such Bonds
shall cease to be entitled to the pledge of Net Taxes, and all
covenants, agreements and other obligations of the District to
the Owners of such Bonds under the Resolution shall thereupon
cease, terminate and become void and be discharged and
satisfied. In such event, the Fiscal Agent shall execute and
deliver to the District all such instruments as may be desirable
to evidence such discharge and satisfaction, and the Fiscal
Agent shall pay over or deliver to the District all money or
securities held by them pursuant to the Resolution which are not
required for the payment of the interest due on and the
principal of such Bonds. Any outstanding Bond shall be deemed
to have been paid within the meaning expressed in the first
paragraph of this section if the Bonds are paid in any one or
more of the following ways:
(a) by paying or causing to be paid the principal of
and interest with respect to all Bonds outstanding, as and
when the same become due and payable;
(b) by depositing with the Fiscal Agent, in trust, at
or before maturity, money which, together with the amounts
then on deposit in the Special Tax Fund, the Costs of
Issuance Fund and the Redemption Fund, is fully sufficient
to pay the principal of and interest on al! Bonds
outstanding as and when the same shall become due and
payable; or
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(c) by depositing with the Fiscal Agent, in trust,
direct obligations of, or obligations guaranteed by, the
United States of America, in which the District may lawfully
invest its money, in such amount as the Fiscal Agent shall
determine will, together with the interest to accrue thereon
and moneys then on deposit in the Special Tax Fund, the
Costs of Issuance Fund and the Redemption Fund, together
with the interest to accrue thereon, be fully sufficient to
pay and discharge the principal of and interest on all Bonds
outstanding as and when the same shall become due and pay-
able; then, at the election of the District, and notwith-
standing that any Bonds shall not have been surrendered for
payment, all obligations of the District under this Resolu-
tion with respect to all outstanding Bonds shall cease and
terminate, except for the obligation of the Fiscal Agent to
pay or cause to be paid to the Owners of the Bonds not so
surrendered and paid, all sums due thereon. Notice of such
election shall be filed with the Fiscal Agent not less than
thirty (30) days prior to the proposed defeasance date. On
or prior to the defeasance date, there shall be provided to
the Fiscal Agent a certificate of a certified public
accountant stating its opinion as to the sufficiency of the
moneys or securities deposited with the Fiscal Agent to pay
and discharge the principal of and interest on all Bonds
outstanding as and when the same shall become due and
payable, and an opinion of a nationally-recognized Bond
Counsel (which may rely upon the opinion of the certified
public accountant) to the effect that the Bonds have been
legally defeased in accordance with this Resolution. Upon
being provided with the required report of a certified
public account and opinion of bond counsel, the Fiscal
Agent, upon request of the District, shall release the
rights of the Bondholders under this Resolution and execute
and deliver to the District all such instruments as may be
desirable to evidence such release, discharge and
satisfaction, and the Fiscal Agent shall pay over or deliver
to the District any funds held by the Fiscal Agent at the
time of a defeasance, which are not required for the purpose
of paying and discharging the principal of or interest on
the Bonds when due. The Fiscal Agent shall, at the written
direction of the District, mail, first class, postage
prepaid, a notice to the Bondholders, in the form directed
by the District, stating that the defeasance has occurred
Section 9.02. Conditions for the Issuance of Parity Bonds.
The District may at any time after the issuance and delivery of
the Bonds hereunder issue Parity Bonds payable, from the Net
Taxes and secured by a lien and charge upon the Net Taxes equal
to the lien and charge securing the Outstanding Bonds
theretofore issued hereunder, but only subject to the following
specific conditions, which are hereby made conditions precedent
to the issuance of any such Parity Bonds:
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(a) The District shall be in compliance with all
covenants set forth in this Resolution and a certificate of the
District to that effect shall have been filed with the Fiscal
Agent.
(b) The issuance of such Parity Bonds shall have been
duly authorized pursuant to the Act and all applicable laws, and
the issuance of such Parity Bonds shall have been provided for
by a Supplemental Resolution duly adopted by the District which
shall specify the following:
(1) The purpose for which such Parity Bonds are
to be issued and the fund or funds into which the proceeds
thereof are to be deposited, including a provision requiring
the proceeds of such Parity Bonds to be applied solely for
(i) the purpose of aiding in financing the Project,
including payment of all costs incidental to or connected
with such financing, and/or (ii) the purpose of refunding
any Bonds, including payment of all costs incidental to or
connected with such refunding;
(2) The authorized principal amount of such
Parity Bonds;
(3) The date and the maturity date or dates of
such Parity Bonds; provided that (i) each maturity date
shall fall upon the same date as is the maturity date for
the Bonds or a maturity date after the maturity of the Term
Bonds, (ii) all such Parity Bonds of like maturity shall be
identical in all respects, except as to number, and (iii)
fixed serial maturities or mandatory sinking account
payments, or any combination thereof, shall be established
to provide for the retirement of all such Parity Bonds on or
before their respective maturity dates;
(4) The interest payment dates for such Parity
Bonds; provided that interest payment dates shall be on the
same semiannual dates as the Interest Payment Dates for the
Bonds;
(5) The denomination and method of numbering of
such Parity Bonds;
(6) The redemption premiums, if any, and the
redemption terms, if any, for such Parity Bonds; provided
that, in the event that less than all of such Parity Bonds
are to be redeemed at any one time, the Fiscal Agent shall
redeem that amount of Bonds issued prior to the issuance of
such Parity Bonds and that amount of such Parity Bonds in
the proportion which the then outstanding principal amount
of Bonds issued prior to the issuance of such Parity Bonds
02/22/87
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bears to the then outstanding principal amount of such
Parity Bonds;
(7) The amount and due date of each mandatory
sinking fund account payment, if any, for such Parity Bonds;
(8) The amount, if any, to be deposited from the
proceeds of such Parity Bonds in any interest account;
(9) The amount, if any, to be deposited from the
proceeds of such Parity Bonds in any reserve account;
provided that such reserve account shall be increased at or
prior to the time such Parity Bonds become outstanding to an
amount at least equal to the Maximum Annual Debt Service on
all then outstanding Bonds and Parity Bonds, and that an
amount at least equal to the Maximum Annual Debt Service on
all outstanding Bonds shall be maintained thereafter in such
reserve account;
(10) The form of such Parity Bonds; and
(11) Such other provisions as are necessary or
appropriate and not inconsistent with the Resolution.
(c) The Fiscal Agent shall have received the following
documents or money or securities, all of such documents dated or
certified, as the case may be, as of the date of delivery of
such Parity Bonds by the Fiscal Agent (unless the Fiscal Agent
shall accept any of such documents bearing a prior date):
(1) A certified copy of the Supplemental
Resolution authorizing the issuance of such Parity Bonds;
(2) A written request of the District as to the
delivery of such Parity Bonds;
(3) An opinion of Bond Counsel to the effect that
(a) the District has the right and power under the Act to
adopt the Resolution and all Supplemental Resolutions
thereto, and the Resolution and all such Supplemental
Resolutions have been duly and lawfully adopted by the
District, are in full force and effect and are valid and
binding upon the District and enforceable in accordance with
their terms (except as enforcement may be limited by
bankruptcy, insolvency, reorganization and other similar
laws relating to the enforcement of creditors' rights), and
no other authorization for the Resolution or such
Supplemental Resolutions is required; (b) 'the Resolution
creates the valid pledge which it purports to create of the
Net Taxes as provided in the Resolution, subject to the
application thereof to the purposes and on the conditions
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permitted by the Resolution; (c) such Parity Bonds are valid
and binding limited obligations of the District, enforceable
in accordance with their terms (except as enforcement may be
limited by bankruptcy, insolvency, reorganization and other
similar laws relating to the enforcement of creditors'
rights) and the terms of the Resolution and all Supplemental
Resolutions thereto and entitled to the benefits of the
Resolution and all such Supplemental Resolutions and the
Act, and such Parity Bonds have been duly and validly
aulthorized and issued in accordance with the Act and the
Resolution and all such Supplemental Resolutions; and (d)
the issuance of the Parity Bonds will not adversely affect
the exclusion from gross income for federal income tax
purposes of interest on the Bonds or the exemption from
State of California personal income taxation;
(4) A certificate of the District containing such
statements as may be reasonably necessary to show compliance
with the requirements of the Resolution;
(5) A certificate of an Independent Financial
Consultant certifying that the maximum Special Tax that may
be levied by the District pursuant to the Act and the
applicable resolutions and ordinances of the District is at
least 1.15 times the amount required to pay debt service on
all Outstanding Bonds and Parity Bonds;
(6) If the issuance of the Parity Bonds would
result in publicly financed indebtedness on land with the
District in excess of $32,800,000, exclusive of indebtedness
issued prior to the Bonds, the total amount of indebtedness
issued subsequent to the Bonds imposing a tax or assessment
lien on the land located within the District, including the
Parity Bonds, will not exceed thirty-three percent (33%) of
the total fair market value of the land and existing
improvements within the District appraised to include the
value of any additional facilities to be constructed with
the proceeds of such Parity Bonds; and
(7) Such further documents, money and securities
as are required by the provisions of the Resolution and the
Supplemental Resolution providing for the issuance of such
Parity Bonds.
ARTICLE X
MISCELLANEOUS
Section 10o01. Cancellation of Bonds. Ail Bonds
surrendered to the Fiscal Agent for payment upon maturity or for
redemption shall upon payment therefor and any Bond purchased by
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the District as authorized herein shall be cancelled forthwith
and shall not be reissued. The Fiscal Agent shall destroy such
Bonds, as provided by law, and furnish to the District a
certificate of such destruction.
Section 10.02. Execution of Documents and Proof of
Ownership. Any request, direction, consent, revocation of
consent, or other instrument in writing required or permitted by
this Resolution to be signed or executed by Bondowners may be in
any number of concurrent instruments of similar tenor may be
signed or executed by such Owners in person or by their
attorneys appointed by an instrument in writing for that
purpose, or by the bank, trust company or other depository for
such Bonds. Proof of the execution of any such instrument, or
of any instrument appointing any such attorney, and of the
ownership of Bonds shall be sufficient for the purposes of this
Resolution (except as otherwise herein provided), if made in the
following manner:
(a) The fact and date of the execution by any Owner or his
or her attorney of any such instrument and of any instrument
appointing any such attorney, may be proved by a signature
guarantee of any bank or trust company located within the United
States of America. Where any such instrument is executed by an
officer of a corporation or association or a member of a
partnership on behalf of such corporation, association or
partnership, such signature guarantee shall also constitute
sufficient proof of his authority.
(b) As to any Bond, the person in whose name the same shall
be registered in the Bond Register.shall be deemed and regarded
as the absolute Owner thereof for all purposes, and payment of
or on account of the principal of any such Bond, and the
interest thereon, shall be made only to or upon the order of the
registered Owner thereof or his or her legal representative.
All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Bond and the interest thereon
to the extent of the sum or sums to be paid. The Fiscal Agent
shall not be affected by any notice to the contrary.
Nothing contained in this Resolution shall be construed as
limiting the Fiscal Agent to such proof, it being intended that
the Fiscal Agent may accept any other evidence of the matters
herein stated which the Fiscal Agent may deem sufficient. Any
request or consent of the Owner of any Bond shall bind every
future Owner of the same Bond in respect of anything done or
suffered to be done by the Fiscal Agent in pursuance of such
request or consent.
Section 10.03. Unclaimed Moneys. Anything in the
Resolution to the contrary notwithstanding, any money held by
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the Fiscal Agent intrust for the payment and discharge of any
of the Bonds which remain unclaimed for five (5) years after the
date when such Bonds have become due and payable, if such money
was held by the Fiscal Agent at such date, or for five (5) years
after the date of deposit of such money if deposited with the
Fiscal Agent after the said date when such Bonds become due and
payable, shall, at the written request of the District, be
repaid by the Fiscal Agent to the District, as its absolute
property and free from trust, and the Fiscal Agent shall
thereupon be released and discharged with respect thereto and
the Owners shall look only to the District for the payment of
such Bonds; provided, however, that, before being required to
make any such payment to the District, the Fiscal Agent shall,
at the expense of the District, cause to be mailed to the
registered Owners of such Bonds at their addresses as they
appear on the registration books of the Fiscal Agent a notice
that said money remains unclaimed and that, after a date named
in said notice, which date shall not be less than thirty (30)
days after the date of the mailing of such notice, the balance
of such money then unclaimed will be returned to the District.
Section 10.04. Provisions Constitute Contract. The
provisions of this Resolution shall constitute a contract
between the District and the Bondowners and the provisions
hereof shall be construed in accordance with the laws of the
State of California.
In case any suit, action or proceeding to enforce any right
or exercise any remedy shall be brought or taken and the
Bondowner or the Fiscal Agent shall prevail, the Bondowner or
the Fiscal Agent shall be entitled to receive from the Special
Tax Fund reimbursement for reasonable costs, expense, outlays
and attorney's fees and should said suit, action or proceeding
be abandoned, or be determined adversely to the Bondowners or
the Fiscal Agent, then the District, the Fiscal Agent and the
Bondowners shall be restored to their former positions, rights
and remedies as if such suit, action or proceeding had not been
brought or taken.
After the issuance and delivery of the Bonds this Resolution
shall be irrepealable, but shall be subject to modifications to
the extent and in the manner provided in this Resolution, but to
no greater extent and in no other manner.
Section 10.05. Future Contracts. Nothing herein contained
shall be deemed to restrict or prohibit the District from making
contracts or creating bonded or other indebtedness payable from
the general fund of the District or from taxes'or any source
other than the Net Taxes as defined herein, and, from and after
the sale of the Bonds, the general fund of the District shall
not include the Net Taxes and no contract or other obligations
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payable from the general fund of the District shall be payable
from the Net Taxes, except as provided herein.
Section 10.06. Further Assurances. The District will
adopt, make, execute and deliver any and all such further
resolutions, instruments and assurances as may be reasonable
necessary or proper to carry out the intention or to facilitate
the performance of the Resolution, and for the better assuring
and confirming unto the Owners of the Bonds of the rights and
benefits provided in the Resolution.
Section 10.07. Severability. If any covenant, agreement or
provision, or any portion thereof, contained in this Resolution,
or the application thereof to any person or circumstance, is
held to be unconstitutional, invalid or unenforceable, the
remainder of this Resolution and the application of any such
covenant, agreement or provision, or portion thereof, to other
persons or circumstances, shall be deemed severable and shall
not be affected thereby, and this Resolution and the Bonds
issued pursuant hereto shall remain valid and the Bondowners
shall retain all valid rights and benefits accorded to them
under the laws of the State of California.
Section 10.08. Notices. Any notices required to be given
to the District with respect to the Bonds or this Resolution
shall be mailed, first class, or personally delivered to the
City Manager and the City Clerk at 13325 Civic Center Drive,
Poway, California 92064, and all notices to the Fiscal Agent
shall be mailed, first class, or personally delivered to the
Fiscal Agent at 333 South Beaudry Avenue, 24th Floor, Los
Angeles, California 90017, Attention: Corporate Trust Division
(W24-30), Reference No. 1-7-
SIGNED AND APPROVED this __ day of March, 1987 by
the City Manager of the City of Poway acting on behalf of the
South Poway Community Facilities District No. 1 (Pomerado
Business Park Project).
nge
r -
ATTEST:
City Cl~rk, City of Poway
02/22/87
4899k/2468-03 -43-
EXHIBIT "A"
No.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
SOUTH POWAY COMMUNITY FACILITIES DISTRICT NO.
(POMERADO BUSINESS PARK PROJECT)
1987 SPECIAL TAX REFUNDING BOND
INTEREST RATE
MATURITY DATE
DATED DATE CUSIP NUMBER
REGISTERED OWNER:
PRINCIPAL AMOUNT
THE SOUTH POWAY COMMUNITY FACILITIES DISTRICT NO. 1
(POMER3~DO BUSINESS PARK PROJECT) (the "District") situated in
the City of Poway, State of California (the "City"), FOR VALUE
RECEIVED, hereby promises to pay solely from Special Taxes (as
hereinafter defined) to be collected in the District, to the
Registered Owner named above, or registered assigns, on the
Maturity Date set forth above, unless redeemed prior thereto as
hereinafter provided, the Principal Amount set forth above, and
to pay interest on such Principal ~Jnount from February 2, 1987
or from the most recent interest payment date to which interest
has been paid or duly provided for, semiannually on February 2
and August 2 (each an "Interest Payment Date"), commencing
August 2, 1987 at the Interest Rate set forth above, until the
Principal Amount hereof is paid or made available for payment.
The principal of and premium, if any, on this Bond are payable
to the Registered Owner hereof in lawful money of the United
States of America upon presentation and surrender of this Bond
at the corporate trust office of Security Pacific National Bank
(the "Fiscal Agent") in Los Angeles, California. Interest on
this Bond shall be paid by check of the Fiscal Agent mailed to
the Registered Owner hereof as of the close of business on the
15th day of the month preceding the month in which the Interest
Payment Date occurs or, if such day is not a business day, on
the next succeeding business day (the "Record Date") at such
Registered Owner's address as it appears on the registration
books maintained by the Fiscal Agent.
02/22/87
4899k/2468-03 A-1
This Bond is one of a duly authorized issue of "South Poway
Community Facilities District No. 1 (Pomerado Business Park
Project) 1987 Special Tax Refunding Bonds" (the "Bonds") issued
in the aggregate principal amount of $32,800,000 pursuant to
the Mello-Roos Community Facilities Act of 1982, as amended,
Sections 53311, et seq., of the California Government Code (the
"Act") and Article 11 of Chapter 3 of Division 2 of Title 5 of
the California Government Code for the purpose of financing the
installation and acquisition of certain improvements in the
District (the "Project"). The issuance of the Bonds and the
terms and conditions thereof are provided for by a resolution
adopted by the City Council of the City of Poway acting in its
capacity as the legislative body of the District (the
"Legislative Body") on March 3, 1987 (the "Resolution"), and
this reference incorporates the Resolution herein, and by
acceptance hereof the Registered Owner of this Bond assents to
said terms and conditions. The Resolution is adopted under and
this Bond is issued under, and both are to be construed in
accordance with, the laws of the State of California.
Pursuant to the Act and the Resolution, the principal of,
premium, if any, and interest on this Bond are payable solely
from the annual special taxes authorized under the Act to be
collected within the District (the "Special Taxes"). Any tax
for the payment hereof shall be limited to the Special Tax,
except to the extent that provision for payment has been made
by the Legislative Body, as may be permitted by law.
Interest on this Bond shall be payable from the Interest
Payment Date next preceding the date of authentication hereof,
unless such date of registration is after a Record Date but on
or prior to an Interest Payment Date, in which event interest
will be payable from such Interest Payment Date, or unless such'
date of authentication is prior to the first Record Date, in
which event interest will be payabl~ from February 2, 1987.
The Bonds maturing on February 2, 2011 may be redeemed at
the option of the District on February 2, 1997, or on any
Interest Payment Date thereafter prior to maturity, in whole or
in part, by lot, at the following redemption prices, expressed
as a percentage of par value, together with accrued interest to
the date of redemption:
Redemption Dates
Redemption Prices
February 2, 1997 and August 2, 1997
February 2, 1998 and August 2, 1998
February 2, 1999 and August 2, 1999
February 2, 2000 and thereafter
103%
102%
101%
100%
02/22/87
4899k/2468-03 A-2
In addition, the Term Bonds maturing on February 2, 2011
shall be subject to mandatory redemption prior to maturity, in
part, by lot, from Sinking Fund Payments (as defined in the
Resolution) at a price of par to the extent, in the manner and
subject to the terms of the Resolution.
In addition, the Bonds are subject to mandatory redemption,
in whole or in part, on the Interest Payment Date following a
determination by the District, in its sole discretion, that the
Project, or any required portions thereof, cannot be acquired
or constructed in accordance with the provisions of the
Resolution at a price of par to the extent, in the manner and
subject to the terms of the Resolution.
Notice of redemption with respect to the Bonds to be
redeemed shall be given to the Registered Owners thereof, in
the manner, to the extent and subject to the provisions of the
Resolution.
This Bond shall be registered in the name of the Registered
Owner hereof, as to both principal and interest.
Each registration and transfer of registration of this Bond
shall be entered by the Fiscal Agent on the Bond Register and
authenticated by its manual signature upon the certificate of
authentication and registration endorsed hereon.
No transfer hereof shall be valid for any purpose unless
made by the Registered Owner, by execution of the form of
assignment endorsed hereon, and authenticated as herein
provided, and the principal hereof, ~interest hereon and any
redemption premium shall be payable only to the Registered
Owner or to such Registered Owner's order.
The Fiscal Agent shall require any Registered Owner
requesting transfer or exchange to pay any tax or other
governmental charge required to be paid with respect to such
transfer or exchange.
THE BONDS DO NOT CONSTITUTE OBLIGATIONS OF THE CITY OF
POWAY OR THE DISTRICT FOR WHICH THE CITY OF POWAY OR THE
DISTRICT IS OBLIGATED TO LEVY OR PLEDGE, OR HAS LEVIED OR
PLEDGED, GENERAL OR SPECIAL TAXATION, OTHER THAN THE SPECIAL
TAXES. THE DISTRICT HAS COVENANTED FOR THE BENEFIT OF THE
OWNERS OF THE BONDS THAT IT WILL COMMENCE WITHIN 150 DAYS AND
DILIGENTLY PURSUE TO COMPLETION APPROPRIATE FORECLOSURE ACTIONS
IN THE EVENT OF DELINQUENCIES OF ANY SPECIAL TAX INSTALLMENTS
LEVIED FOR PAYMENT OF PRINCIPAL AND INTEREST.
This Bond shall not become valid or obligatory for any
purpose until the certificate of authentication and
registration hereon endorsed shall have been dated and signed
by the Paying Agent.
02/22/87
4899k/2468-03 A-3
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required by law to exist, happen and be
performed precedent to and in the issuance of this Bond have
existed, happened and been performed, in due time, form and
manner as required by law, and that the amount of this Bond,
together with all other indebtedness of the District, does not
exceed any debt limit prescribed by the laws or Constitution of
the State of California.
IN WITNESS WHEREOF, South Poway Community Facilities
District No. 1 (Pomerado Business Park Project) has caused this
Bond to be dated as of February 2, 1987, to be signed by the
Mayor of the City of Poway by his facsimile signature and
attested by the signature of the City Clerk.
Mayor of the/City of~ow~y,
sitting as ~he legisla~ve body of
South Poway'Community/Facilities
District No. 1 (Pomerado Business
Park Project)
ATTE ST:
City Cierk of the City of Poway,
sitting as the legislative body of
South~Dway Community Facilities
District No. 1 (Pomerado Business
Park Project)
02/22/87
4899k/2468-03 A-4
FORM OF FISCAL AGENT'S CERTIFICATE
OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described in the within defined
Resolution.
Dated:
By: SECURITY PACIFIC NATIONAL
BANK, as Fiscal Agent
By:
Authorized Signatory
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign
and transfer unto the within-mentioned
registered Bond and hereby irrevocably constitute(s) and
appoint(s) attorney, to transfer the
same on the books of the Fiscal Agent with full power of
substitution in the premises.
Dated:
Signature Guaranteed
Note: Signature(s) must be
guaranteed by a member firm
of the New York Stock
Exchange or a commercial
bank or trust company.
Notice: The signature on this
assignment must correspond
with the name(s) as written on
the face of the within Bond in
every particular without
alteration or enlargement, or
any change whatsoever.
02/22/87
4899k/2468-03 A-5
EXHIBIT "B"
REQUISITION FOR DISBURSEMENT OF PROJECT COSTS
The undersigned, a duly authorized representative of
South Poway Community Facilities District No. 1 (Pomerado
Business Park Project), hereby certifies to Security Pacific
National Bank, Fiscal Agent, for purposes of disbursing funds
from the Acquisition Fund to pay Project Costs that:
(1) The Fiscal Agent is to pay to the payees set forth on
Exhibit 1 hereto the amount set forth next to each payee's name
for the item described on Exhibit 1;
(2) The conditions to the release of these amounts from
the Acquisition Fund have been satisfied;
(3) There has not been filed with or served upon the
District notice of any lien, right to lien or attachment upon,
stop notice or claim affecting the right to receive payment of,
any of the moneys payable to any of the payees named on Exhibit
1 hereto which has not been released or will not be released
simultaneously with the payment of such amounts, other than
materialmen's or mechanic's liens accruing by mere operation of
law; and
(4) Sufficient money remains in the Acquisition Fund to
pay all remaining costs of acquisition, construction and
financing of the Project.
Dated:
SOUTH POWAY COMMUNITY FACILITIES
DISTRICT NO. 1 (POMERADO BUSINESS
PARK PROJECT)
By:
Authoriz~ Dffic~/
02/22/87
4899k/2468-03
EXHIBIT 1
Payee
Amount Due
Purpose of
Expenditure
02/22/87
4899k/2468-03
EXHIBIT C
SUPPLEMENT TO RESOLUTION
TABLE OF CONTENTS
Section 1.01
Section 2.01
Section 2.02
Section 2.03
Section 2.04
Section 2.05
Section 2.06
Section 2.07
Section 2.08
Section 2.09
Section 2.10
Section 2.11
Section 2.12
Section 3.01
Section 3.02
Section 3.03
Section 3.04
Section 3.05
Section 3.06
Section 3.07
Section 3.08
Section 3.09
Section 3.10
Page
Article I
Definitions
Definitions ............................. 1
Article II
General Authorization and Bond Terms
Amount, Issuance, Purpose and Nature
of Bonds ................................ 6
Payment of 1985 Bonds ................... 7
Type and Nature of Bond ................. 7
Equality of Bonds, Pledge of Net Taxes.. 8
Description of Bonds; Interest Rates .... 8
Place and Form of Payment ................ 9
Form of Bonds; Temporary Bonds .......... 10
Execution and Authentication ............ 10
Bond Register ........................... 11
Registration of Exchange or Transfer .... 11
Mutilated, Lost, Destroyed or Stolen
Bonds ................................... 12
Validity of Bonds ....................... 12
Article iii
Creation of Funds and Application of
Proceeds and Net Taxes
Creation of Funds ........................ 12
Disposition of'Bond Proceeds and the
1985 Bond Proceeds ...................... 13
Deposit and Disbursement of Special
Tax Revenues; Costs of Issuance Fund .... 14
Special Tax Fund ........................ 15
Redemption Fund ......................... 15
Reserve Fund ............................ 16
Excess Investment Earnings Fund ......... 17
Administrative Expense Fund ............. 20
Acquisition Fund ........................ 21
Investments ............................. 21
-i-
Page
Section 4.01
Section 4.02
Section 4.03
Section 4.04
Section 4.05
Section 5.01
Section 5.02
Section 6.01
Section 6.02
Section 6.03
Section 7.01
Section 7.02
Section 7.03
Section 7.04
Section 8.01
Section 8.02
Section 8.03
Section 9.01
Section 9.02
Article IV
Redemption of Bonds
Redemption of Bonds .....................
Selection of Bonds for Redemption .......
Notice of Redemption ....................
Partial Redemption of Bonds .............
Effect of Notice and Availability of
Redemption Money ........................
Article V
Covenants and Warranty
Warranty ................................
Covenants ...............................
Article VI
Amendments to Resolution
Supplemental Resolutions or Orders Not
Requiring Bondowner Consent .............
Supplemental Resolutions or Orders
Requiring Bondowner Consent .............
Notation of Bonds; Delivery of Amended
Bonds ...................................
Article VII
Fiscal Agent
Fiscal Agent ............................
Removal of Fiscal Agent .................
Resignation of Fiscal Agent .............
Liability of Fiscal Agent ...............
Article VIII
Events of Default; Remedies
Events of Default .......................
Remedies of Owners ......................
Actions by Fiscal Agent as Attorney-in-
Fact ....................................
Article IX
Defeasance and Parity Bonds
Defeasance ..............................
Conditions for the Issuance of
Parity Bonds and Other Additional
Indebtedness ............................
23
24
24
25
25
26
26
29
3O
31
32
33
33
33
34
35
36
36
38
-ii-
Page
Article X
Miscellaneous
Section 10.01
Section 10.02
Section 10.03
Section 10.04
Section 10.05
Section 10.06
Section 10.07
Section 10.08
Cancellation of Bonds ...................
Execution of Documents and Proof of
Ownership ...............................
Unclaimed Moneys ........................
Provisions Constitute Contract ..........
Future Contracts ........................
Further Assurances ......................
Severability ............................
Notices .................................
Signatures .............................................
Exhibit "1"
Exhibit "2"
Form of Special Tax Bond
Requisition for Disbursement of
Project Costs
41
41
42
42
43
43
43
44
44
-iii-
SUPPLEMENT TO RESOLUTION
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise
requires, the following terms shall have the following meanings:
"Acquisition Agreement" means the Acquisition Agreement
between the District and CF Poway, Ltd. dated as of December
30, 1985.
"Act" means the Mello-Roos Community Facilities Act of
1982, as amended, Sections 53311 et seq. of the California
Government Code.
"Administrative Expenses" means the administrative costs
with respect to the calculation and collection of the Special
Taxes, or costs otherwise incurred by the City staff on behalf
of the District in order to carry out the purposes of the
District as set forth in the Resolution of Formation and the
fees and expenses of the Fiscal Agent and the Escrow Bank.
"Authorized Investments" means, subject to applicable law,
United States Treasury notes, bonds, bills or certificates of
indebtedness (including United States Treasury Obligations -
State and Local Government Series ("SLGS") or other direct
obligations issued by the United States Treasury for which the
faith and credit of the United States are pledged for the
payment of principal and interest); and (except with respect to
the defeasance of the Bonds as permitted by Section 9.01
hereof) obligations issued by banks for cooperatives, federal
and land banks, federal intermediate credit banks, federal home
loan banks, the Federal Home Loan Bank Board, the Tennessee
Valley Authority, or other federal agencies or United States
government-sponsored enterprises; and (except with respect to
Section 9.01) any other investment in which funds of the
District may be legally invested, including taxable government
money market portfolios restricted to obligations with
maturities of one year or less insured or fully guaranteed as
to the principal and interest thereon by the full faith and
credit of the United States of America and tax-exempt
obligations rated in the highest rating category by either
Standard & Poor's Corporation or Moody's Investors Service, Inc.
"Bond Counsel" means an attorney at law or a firm of
attorneys selected by the District of nationally recognized
standing in matters pertaining to the tax-exempt nature of
interest on bonds issued by states and their political
subdivisions duly admitted to the practice of law before the
highest court of any state of the United States of America or
the District of Columbia.
"Bond Register" means the books which the Fiscal Agent
shall keep or cause to be kept on which the registration and
transfer of the Bonds shall be recorded.
"Bondowner" or "Owner" means the person or persons in whose
name or names any Bond is registered.
"Bonds" means the South Poway Community Facilities District
No. 1 1987 Special Tax Refunding Bonds.
"Bond Year" means the year commencing each February 2 and
ending each February 1.
"Certificate of the City Manager" means a written
certificate executed by the City Manager of the City or any
written designee of the City whose specimen signature has been
filed with the Fiscal Agent.
"City" means the City of Poway, California.
"Code" means the Internal Revenue Code of 1986, as amended.
"Computation Year" means the twelve (12) month period
commencing on March 10 and ending on March 9 of the following
year.
"Costs of Issuance" means the costs and expenses incurred
in connection with the issuance and sale of the Bonds including
the acceptance and initial annual fees and expenses of the
Fiscal Agent and the Escrow Bank, legal fees and expenses,
costs of printing the Bonds and Official Statement, fees of
financial consultants and other fees and expenses set forth in
a Certificate of the City Manager, or his designee.
"Delivery Date" means the date on which the Bonds were
issued.
"District" means the South Poway Community Facilities
District No. 1 established pursuant to the Act and Resolution
No. 85-093 adopted by the legislative body of the District on
November 26, 1985.
"Escrow Bank" means Security Pacific National Bank,
together with any successors thereto.
"Escrow Agreement" means that certain agreement between the
District and the Escrow Bank made and entered into as of March
1, 1987 providing for the refunding of the 1985 Bonds.
03/07/87
4979k/2468-03 -2-
"Fiscal Agent" means Security Pacific National Bank, and
any successor thereto.
"Fiscal Year" means the period beginning on July 1 and
ending on the next following June 30.
"Gross Proceeds" means the sum of the following amounts:
(i) original proceeds, being the amounts received by the
District, or held by the Fiscal Agent as proceeds of the
original issuance of the Bonds (after payment of all expenses
of issuing the Bonds); (ii) investment proceeds, being amounts
received at any time by the District or the Fiscal Agent, such
as interest and dividends, resulting from the investment of
proceeds of the Bonds, including profits and less losses
received on such investment; (iii) transferred proceeds (as
defined in Section 1.103-14(e)(2)(ii) of the Regulations) of
the 1985 Bonds; (iv) amounts, other than original proceeds and
investment proceeds, held in any fund or account and reasonably
expected to be used to pay principal of or interest on the
Bonds; (v) securities or obligations pledged as security for
the payment of the Bonds by an ultimate obligor (or a related
person) or the District; (vi) amounts used to pay principal or
interest With respect to the Bonds; and (vii) amounts received
as a result of investing the amounts listed in clauses (i)
through (vi).
"Independent Financial Consultant" means a financial
consultant or firm of such consultants generally recognized to
be well qualified in the financial consulting field, appointed
and paid by the District and satisfactory to and approved by
the Fiscal Agent (which shall be under no liability by reason
of such approval) and who, or each of whom:
(1) is in fact independent and not under the
domination of the District;
(2) does not have any substantial interest, direct or
indirect, with the District; and
(3) is not connected with the District as a member,
officer or employee of the District, but who may be
regularly retained to make annual or other reports to the
District.
"Interest Payment Date" means each February 2 and August 2,
commencing August 2, 1987 and, if any such day.is not a
business day, the business day next succeeding such date.
"Investment Property" means any security (as said term is
defined in Section 165(g)(2)(A) or (B) of the Code),
obligation, annuity or investment-type property, excluding,
03/07/87
4979k/2468-03 -3-
however, obligations the interest on which is excluded from
gross income for federal income tax purposes under Section 103
of the Code.
"1985 Bonds" means the District's $30,000,000 SPecial Tax
Bonds Series 1985 issued pursuant to Resolution No. 85-109.
"Maximum Annual Debt Service" shall be the maximum sum
obtained for any Bond Year prior to the final maturity on the
Bonds by totaling the following for each Bond Year:
(1) the principal amount of all outstanding Bonds and
any Parity Bonds payable in such Bond Year either at
maturity or pursuant to a Sinking Fund Payment; and
(2) the interest payable on the aggregate principal
amount of the Bonds and any Parity Bonds outstanding in
such Bond Year if the Bonds and any Parity Bonds are
retired as scheduled.
"Net Taxes" means the amount of all Special Taxes received
by the District from the Treasurer-Tax Collector of the County
of San Diego, together with the proceeds collected from the
sale of property pursuant to the foreclosure provisions of this
Resolution for the delinquency of such Special Taxes and, when
and if received, the $820,000 to be paid to the District by the
Poway Redevelopment Agency pursuant to the terms of the Owner
Participation Agreement between the Poway Redevelopment Agency
and CF Poway, Ltd. dated December 30, 1985.
"Nonpurpose Obligation" means any security or obligation
(other than an obligation on which interest is excludable from
gross income for federal income tax purposes under Section 103
of the Code) in which Gross Proceeds are invested and which is
not acquired to carry out the governmental purpose of the Bonds.
"Ordinance" means Ordinance No. 182 adopted by the
legislative body providing for the levying of the Special Tax.
"Outstanding Bonds" means all Bonds theretofore issued by
the District, except:
(1) Bonds theretofore cancelled or surrendered for
cancellation in accordance with Section 9.01 hereof; and
(2) Bonds for payment or redemption.of which monies
shall have been theretofore deposited in trust (whether
upon or prior to the maturity or the redemption date of
such Bonds), provided that, if such Bonds are to be
redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in this
Resolution or any applicable Parity Bond resolution.
03/07/87
4979k/2468-03 -4-
"Parity Bonds" means all bonds, notes or other similar
evidences of indebtedness hereafter issued, payable out of. the
Net Taxes and which, as provided in this Resolution or any
Supplemental Resolution, rank on a parity with the Bonds.
"Project" means certain real and other tangible property
with an estimated useful life of five years or longer, which is
to be acquired or constructed within and without the District,
for street and road improvements and a bridge, as more
particularly described in the Acquisition Agreement.
"Project Costs" means the amounts necessary to finance the
Project, to create and replenish any necessary reserve funds,
to pay the annual costs associated with the Bonds or any Parity
Bonds, including, but not limited to, remarketing, credit
enhancement, Fiscal Agent and other fees and to pay any
"incidental expenses" of the District, as such term is defined
in the Act.
"Purchase Price", for the purpose of computation of the
Yield of the Bonds, has the same meaning as the term "issue
price" in Sections 1273(b) and 1274 of the Code, and, in
general, means the initial offering price to the public (not
including bond houses and brokers, or similar persons or
organizations acting in the capacity of underwriters or
wholesalers) at which price a substantial amount of the Bonds
are sold or, if the Bonds are privately placed, the price paid
by the original purchaser or the acquisition cost of the
original purchaser. The term "Purchase Price", for the purpose
of computation of the Yield of Nonpurpose Obligations, means
the fair market value of the Nonpurpose Obligations on the date
of use of Gross Proceeds for acquisition thereof, or, if later,
on the date that Investment Property constituting a Nonpurpose
Obligation becomes a Nonpurpose Obligation of the Bonds.
"Record Date" means the fifteenth day of the month
preceding an Interest Payment Date or, if such day is not a
business day, the business day next preceding such date of any
year in which any of the Bonds are outstanding.
"Regulations" means regulations adopted by the Department
of Treasury from time to time with respect to obligations
issued pursuant to Section 103 of the Code.
"Reserve Requirement" means, as of any date of calculation,
an amount equal to $3,000,000.
"Resolution" means Resolution No. 87-026 of the District,
together with this Supplement to Resolution, as amended or
supplemented pursuant to the terms hereof.
03/07/87
4979k/2468-03 -5-
"Resolution of Formation" means Resolution No. 85-093
adopted by the legislative body of the District on November 26,
1985, pursuant to which the City formed the District.
"Sinking Fund Payment" means the annual payment to be
deposited in the Redemption Fund to redeem a portion of the
Term Bonds in accordance with the schedule set forth in Section
4.01(b) hereof.
"Special Taxes" means the taxes authorized to be levied by
the District and in accordance with the Ordinance, the
Resolution of Formation, the Act and the voter approval
obtained at the November 26, 1985 and the March 3, 1987
elections in the District.
"Supplemental Resolution" means any resolution authorizing
the issuance of any Parity Bonds.
"Term Bonds" means the Bonds maturing on February 2, 2011.
"Treasurer" means the Treasurer of the City acting on
behalf of the District.
"Underwriter" means Drexel Burnham Lambert Incorporated.
"Yield" means that Yield which, when used in computing the
present worth of all payments of principal and interest (or
other payments in the case of Nonpurpose Obligations which
require payments in a form not characterized as principal and
interest) on a Nonpurpose Obligation or on the Bonds produces
an amount equal to the Purchase Price of such Nonpurpose
Obligation or the Bonds, as the case may be, all computed as
prescribed in the applicable Regulations.
ARTICLE~II
GENERAL AUTHORIZATION AND BOND TERMS
Section 2.01. Amount, Issuance, Purpose and Nature of
Bonds. Under and pursuant to the Act, the Bonds in the amount
of $32,800,000, together with any Parity Bonds, shall be issued
for the purposes of refunding the 1985 Bonds, provided that the
aggregate principal amount .of the Bonds and any Parity Bonds
shall not exceed the total indebtedness approved by the
qualified electors of the District in accordance with the Act.
The Bonds shall be and are limited obligations of the District
and shall be payable as to the principal thereof and interest
thereon and any premiums upon the redemption thereof solely
from, the Net Taxes, the amounts in the funds created hereunder
and earnings thereon.
03/07/87
4979k/2468-03 -6-
Section 2.02. Payment of 1985 Bonds.
In connection With the refunding of the 1985 Bonds:
(a) Section 3.02 hereof provides for the deposit of a
portion of the proceeds of the sale of the Bonds and certain
other available moneys in the 1985 Bonds Escrow Fund
established by the Escrow Bank in a sufficient sum to
accomplish the refunding of the 1985 Bonds. Upon delivery of
the Bonds hereunder, such sums are to be deposited with the
Escrow. Bank and to be used as provided in the Escrow Agreement.
(b) The Agency and/or the Escrow Bank, as the case may be,
shall take all action necessary to pay and retire the 1985
Bonds as set forth in (c) below, including, without limitation,
all actions required by this Resolution.
(c) The Agency hereby directs the Escrow Bank to transfer
to the Fiscal Agent for the 1985 Bonds, from time to time, the
amounts available in the 1985 Bonds Escrow Fund to pay the
principal of, premium and interest on the 1985 Bonds as the
same shall become due on or prior to March 2, 1996 and upon the
call and redemption of the 1985 Bonds remaining outstanding on
March 2, 1996 at a price of par plus a premium of 3%.
Section 2.03. Type and Nature of Bond. The Bonds and
interest thereon, together with any premium paid thereon upon
redemption, are not obligations of the City, but are limited
obligations of the District secured by and payable from an
irrevocable first lien on the Net Taxes. Except with respect
to the Special Tax, neither the faith and credit nor the taxing
power of the District or the City is pledged for the payment of
the Bonds or the interest thereon, and no Owner of the Bonds
may compel the exercise of the taxing power by the District or
the City or the forfeiture of any of their property. The
principal of and interest on the Bonds and premiums upon the
redemption thereof, if any, are not a debt of the District, the
City, the State of California or any of its political
subdivisions within the meaning of any constitutional or
statutory limitation or restriction. The Bonds are not a legal
or equitable pledge, charge, lien, or encumbrance, upon any of
the District's property, or upon any of its income, receipts,
or revenues, except the Net Taxes which are, under the terms of
this Resolution and the Act, set aside for the payment of the --~
Bonds and interest thereon and neither the members of the
legislative body of the District or the City Council of the
City nor any persons executing the Bonds are liable personally
on the Bonds by reason of their issuance.
Notwithstanding anything contained in this Resolution, the
District shall not be required to advance any money derived
from any source of income other than the Net Taxes for the
03/07/87
4979k/2468-03 -7-
payment of the interest on or the principal of the Bonds or for
the performance of any covenants herein contained. The
District may, however, advance funds for any such purpose,
provided that such funds are derived from a source legally
available for such purpose.
Section 2.04. Equality of Bonds, Pledge of Net Taxes.
Pursuant to the Act and this Resolution, the Bonds and any
Parity Bonds shall be equally payable from the Net Taxes
without priority for number, date of the Bonds, date of sale,
date of execution, or date of delivery, and the payment of the
interest on and principal of the Bonds and any Parity Bonds and
any premiums upon the redemption thereof, shall be exclusively
paid from the Net Taxes which are hereby set aside for the
payment of the Bonds-and any Parity Bonds. The Net Taxes and
any interest earned on the Net Taxes shall constitute a trust
fund held for the benefit of the Owners to be applied to the
payment of the interest on and principal of the Bonds .and any
Parity Bonds and so long as any of the Bonds and any Parity
Bonds or interest thereon remain Outstanding shall not be used
for any other purpose, except as permitted by this Resolution
or any Supplemental Resolution.
Nothing in this Resolution or any Supplemental Resolution
shall preclude: (a) the redemption prior to maturity of any
Bonds subject to call and redemption and payment of said Bonds
from proceeds of refunding bonds issued under the Act as the
same now exists or as hereafter amended, or under any other law
of the State of California; or (b) the issuance, subject to the
limitations contained herein, of Parity Bonds which shall be
payable from Net Taxes.
Section 2.05. Description of Bonds; Interest Rates. The
Bonds shall be issued in fully registered form in denominations
of $5,000 or any integral multiple .thereof within a single
maturity and shall be numbered as desired by the Fiscal Agent.
The Bonds shall be designated "SOUTH POWAY COMMUNITY FACILITIES
DISTRICT NO. 1 (POMERADO BUSINESS PARK PROJECT) 1987 SPECIAL
TAX REFUNDING BONDS". The Bonds shall be dated as of February
2, 1987 and shall mature and be payable on February 2 and
August 2 in the years and in the aggregate principal amounts
and shall be subject to and shall bear interest at the rates
set forth in the table below:
Date
Principal Amount Interest Rate
February 2, 1989 $ 100,000.00 5.000%
August 2, 1989 200,000.00 5.000%
February 2, 1990 200,000.00 5.500%
August 2, 1990 205,000.00 5.500%
February 2, 1991 200,000.00 5.750%
August 2, 1991 200,000.00 5.750%
03/07/87
4979k/2468-03 -8-
February 2, 1992
August 2, 1992
February 2, 1993
August 2, 1993
February 2, 1994
August 2, 1994
February 2, 1995
August 2, 1995
February 2, 1996
August 2, 1996
February 2, 1997
February 2, 2011
210 000.00
215 OOO O0
255 000 00
265 000 00
310 000 00
320 000 00
370 000 00
380 000 O0
435 000.00
450 000.00
505000.00
27,980,000.00
6.000%
6.ooo%
6.200%
6.200%
6.400%
6.400%
6.600%
6.600%
6.750%
6.750%
6.800%
7.125%
Interest shall be payable with respect to each Bond on each
Interest Payment Date until the principal sum of that Bond has
been paid; provided, however, that if at the maturity date of
any Bond (or if the same is redeemable and shall be duly called
for redemption, then at the date fixed for redemption) funds
are available for the payment or redemption thereof, in full
accordance with terms of this Resolution, such Bonds shall then
cease to bear interest. Interest due on the Bonds shall be
calculated on the basis of a 360-day year comprised of twelve
30-day months.
Section 2.06. Place and Form of Payment. The Bonds shall
be payable both as to principal and interest, and as to any
premiums upon the redemption thereof, in lawful money of the
United States of America. The principal of the Bonds and any
premiums due upon the redemption thereof shall be payable upon
presentation thereof at the corporate trust office of the
Fiscal Agent in Los Angeles, California. Interest on any Bond
shall be payable from the Interest Payment Date next preceding
the date of authentication of that Bond, unless (i) such date
of authentication is an Interest Payment Date in which event
interest shall be payable from such date of authentication,
(ii) the date of authentication is after a Record Date but
prior to the immediately succeeding Interest Payment Date, in
which event interest shall be payable from the Interest Payment
Date immediately succeeding the date of authentication or (iii)
the date of authentication is prior to the close of business on
the first Record Date in which event interest shall be payable
from February 2, 1987; provided, however, that if at the time
of authentication of such Bond, interest is in default,
interest on that Bond shall be payable from the last Interest
Payment Date to which the interest has been paid or made
available for payment. Interest on any Bond shall be paid to
the person whose name shall appear in the Bond Register as the
Owner of such Bond as of the close of business on the Record
Date. Such interest shall be paid by check of the Fiscal Agent
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mailed by first class mail, postage prepaid, to such Bondowner
at his or her address as it appears on the Bond Register.
Section 2.07. Form of Bonds; Temporary Bonds. The
definitive Bonds shall be printed from steel engraved or
lithographic plates, and the Bonds and the certificate of
authentication shall be substantially in the form attached
hereto as Exhibit A, which form is hereby approved and adopted
as the form of the Bonds and of the certificate of
authentication.
Until.definitive Bonds shall be prepared, the District may
cause to be executed and delivered in lieu of such definitive
Bonds temporary bonds in typed, printed, lithographed or
engraved form and in fully registered form,.subject to the same
provisions, limitations and conditions as are applicable in the
case of definitive Bonds, except that they may be in any
denominations authorized by the District. Until exchanged for
definitive Bonds, any temporary bond shall be entitled and
subject to the same benefits and provisions of this Resolution
as definitive Bonds. If the District issues temporary Bonds,
it will execute and furnish definitive Bonds without
unnecessary delay and thereupon any temporary Bond may be
surrendered to the Fiscal Agent at its office, without expense
to the Owner, in exchange for a definitive Bond of the same
maturity, interest rate and principal amount in any authorized
denomination. All temporary Bonds so surrendered shall be
cancelled by the Fiscal Agent and shall not be reissued.
Section 2.08. Execution and Authentication. The Bonds
shall be signed on behalf of the District by the manual or
facsimile signature of the Mayor of the City and by the manual
or facsimile signature of the City Clerk, or any duly appointed
deputy clerk, in their capacity as officers of the District,
and the seal of the District (or a facsimile thereof) shall be
impressed, imprinted, engraved or otherwise reproduced thereon,
and attested by the signature of the City Clerk. In case any
one or more of the officers who shall have signed or sealed any
of the Bonds shall cease to be such officer before the Bonds so
signed and sealed have been authenticated and delivered by the
Fiscal Agent (including new Bonds delivered pursuant to the
provisions hereof with reference to the transfer and exchange
of Bonds or to lost, stolen, destroyed or mutilated Bonds),
such Bonds shall nevertheless be valid and may be authenticated
and delivered as herein provided, and may be issued as if the
person who signed or sealed such Bonds had not ceased to hold
such office.
Only such Bonds as shall bear thereon such certificate of
authentication in the form set forth in Exhibit A hereto shall
be entitled to any right or benefit under this Resolution, and
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no Bond shall be valid or obligatory for any purpose until such ·
certificate of authentication shall have been duly executed by
the Fiscal Agent.
Section 2.09. Bond Register. The Fiscal Agent will keep
or cause to be kept, at its corporate trust office, sufficient
books for the registration and transfer of the Bonds which
shall be open to inspection by the District during all regular
business hours, and, upon presentation for such purpose, the
Fiscal Agent shall, under such reasonable regulations as it may
prescribe, register or transfer or cause to be transferred on
said Bond Register, Bonds as herein provided.
The District and the Fiscal Agent may treat the Owner of
the Bond whose name appears on the Bond Register as the
absolute Owner of the Bond for any and all purposes, and the
District and the Fiscal Agent shall not be affected by any
notice to the contrary. The District and the Fiscal Agent may
rely on the address of the Bondowner as it appears in the Bond
Register for any and all purposes. It shall be the duty of the
Bondowner to give written notice to the Fiscal Agent of any
change in the Bondowner's address so that the Bond Register may
be revised accordingly.
Section 2.10. Registration of Exchange or Transfer. The
registration of any Bond may, in accordance with its terms, be
transferred upon the Bond Register by the person in whose name
it is registered, in person or by his or her duly authorized
attorney, upon surrender of such Bond for cancellation at the
corporate trust office of the Fiscal Agent, accompanied by
delivery of written instrument of transfer in a form approved
by the Fiscal Agent and duly executed by the Bondowner or his
or her duly authorized attorney.
Bonds may be exchanged at the corporate trust office of the
Fiscal Agent for a like aggregate principal amount of Bonds of
other authorized denominations of the same maturity. The
Fiscal Agent will not charge the Owner for any new Bond issued
upon any exchange, but shall require the Bondowner requesting
such exchange to pay any tax or other governmental charge
required to be paid with respect to such exchange. Whenever
any Bond or Bonds shall be surrendered for registration of
transfer or exchange, the District shall execute and the Fiscal
Agent shall authenticate and deliver a new Bond or Bonds of-the-
same maturity, for a like aggregate principal amount; provided
that the Fiscal Agent shall not be required to register
transfers or make exchanges of (i) Bonds for a'period of 15
days next preceding any selection of the Bonds to be redeemed,
or (ii) any Bonds chosen for redemption.
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Section 2.11. Mutilated, Lost, Destroyed or Stolen Bonds.
If any Bond shall become mutilated, the District shall execute,
and the Fiscal Agent shall authenticate and deliver, a new Bond
of like tenor, date and maturity in exchange and substitution
for the Bond so mutilated, but only upon surrender to the
Fiscal Agent of the Bond so mutilated. Every mutilated Bond so
surrendered to the Fiscal Agent shall be cancelled by the
Fiscal Agent pursuant to Section 10.01. If any Bond shall be
lost, destroyed or stolen, evidence of such loss, destruction
or theft may be submitted to the Fiscal Agent and, if such
evidence is satisfactory to the Fiscal Agent and, if any
indemnity, satisfactory to the District and the Fiscal Agent
shall be given, the District, at the expense of the Bondowner,
shall execute and the Fiscal Agent shall authenticate and
deliver, a new Bond of like.tenor and maturity, numbered and
dated as such Fiscal Agent shall determine in lieu of and in
substitution for the Bond so lost, destroyed or stolen. Any
Bond issued in lieu of any Bond alleged to be mutiliated, lost,
destroyed or stolen, shall be equally and proportionately
entitled to the benefits hereof with all other Bonds issued
hereunder. The Fiscal Agent shall not treat both the original
Bond and any replacement Bond as being outstanding for the
purpose of determining the principal amount of Bonds which may
be executed, authenticated and delivered hereunder or for the
purpose of determining any percentage of Bonds outstanding
hereunder, but both the original and replacement Bond shall be
treated as one and the same. Notwithstanding any other
provision of this Section, in lieu of delivering a new Bond
which has been mutilated, lost, destroyed or stolen, and which
has matured, the Fiscal Agent may make payment with respect to
such Bonds.
Section 2.12. Validity of Bonds. The validity of the
authorization and issuance of the Bonds shall not be affected
in any way by any proceedings taken by the District for the
financing of the Project, or by any contracts made by the
District in connection therewith, and shall not be dependent
upon the completion of the financing of the Project or upon the
performance by any person of his obligation with respect to the
Project, and the recital contained in the Bonds that the same
are issued pursuant to the Act and other applicable laws of the
State shall be conclusive evidence of their validity and of the
regularity of their issuance.
ARTICLE III
CREATION OF FUNDS AND APPLICATION OF PROCEEDS AND NET TAXES
Section 3.01. Creation of Funds. There is hereby created
and established and shall be maintained by the Fiscal Agent of
the District the following funds:
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(1) The South Poway Community Facilities
District No. 1 1987 Costs of Issuance Fund (the "Costs
of Issuance Fund").
(2) The South Poway Community Facilities
District No. 1 1987 Special Tax Fund (the "Special Tax
Fund") in which there shall be established and created
an Interest Account and a Principal Account.
(3) The South Poway Community Facilities
District No. 1 1987 Redemption Fund (the "Redemption
Fund").
(4) The South Poway Community Facilities
District No. 1 1987 Reserve Fund (the "Reserve Fund").
(5) The South Poway Community Facilities
District No. 1 1987 Excess Investment Earnings Fund
(the "Excess Investment Earnings Fund").
(6) The South Poway Community Facilities
District No. 1 1987 Administrative Fund (the
"Administrative Fund").
(7) The South Poway Community Facilities
District No. t 1987 Acquisition Fund (the "Acquisition
Fund" ) .
Section 3.02. Disposition of Bond Proceeds and the 1985
Bond Proceeds. The proceeds of the sale of the Bonds and the
1985 Bond proceeds shall be received by the Fiscal Agent on
behalf of the District and deposited as follows:
(1) The amount representing the accrued interest
equal to $242,301.46 on the Bonds shall be deposited in the
Interest Account of the Special Tax Fund from Bond
proceeds, and such amount shall be applied to the payment
of interest on August 2, 1987;
(2) $137,829.08 shall be deposited in the Costs of
Issuance Fund from Bond proceeds;
(3) $3,000,000 shall be placed in the Reserve Fund
from Bond proceeds;
(4) $2,200,353.86 on deposit in the 1985 Bonds
Reserve Fund, $2,740,760.57 on deposit in the 1985 Bonds
Special Tax Fund, $968,562.06 on deposit in the 1985 Bonds
Bond Fund and $28,782,095.92 of Bond proceeds, shall be
deposited in the 1985 Bonds Escrow Fund established with
the Escrow Bank and be applied in accordance with the
Escrow Agreement to discharge the 1985 Bonds;
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(5) After making the transfers required by (4) above,
all remaining ·amounts on deposit in the 1985 Bonds Special
Tax Fund, including any interest earnings on any 1985 Bonds
funds and accounts, shall be transferred to the Special Tax
Fund; and
(6) Ail amounts on deposit in the 1985 Bonds
Acquisition Fund shall be transferred to the Acquisition
Fund.
Section 3.03. Deposits to and Disbursements from Special
Tax Fund; Costs of Issuance Fund. The Treasurer shall, on each
date on which the Special Taxes have been collected by the
District from the Treasurer-Tax Collector of the County of San
Diego and in no event later than seven days prior to the
Interest Payment Date on which such Special. Taxes will be
needed to pay amounts due in accordance with the terms of this
Resolution, transfer the Special Taxes to the Fiscal Agent for
deposit in the Special Tax Fund, to be held in trust and
transferred on the dates and in the amounts set forth in the
following Sections, in the following order of priority, to:
(1) The Interest Account;
(2) The Principal Account;
(3) The Redemption Fund;
(4) The Reserve Fund;
(5) The Excess Investment Earnings Fund; and
(6) The Administrative Fund.
Notwithstanding anything herei~ to the contrary, moneys
transferred to the Special Tax Fund from the Acquisition Fund
in accordance with Section 3.09(b) hereof shall, unless in the
opinion of Bond Counsel another use of such funds will not
impair the exclusion from gross income of interest on the
Bonds, be held in a separate account within the Special Tax
Fund known as the "Purchase Account" which the Fiscal Agent is
directed to establish when and if such transfer is required to
be made and moneys in such separate account shall be invested
in tax-exempt Authorized Investments or in Authorized
Investments at a Yield not in excess of the Yield on the Bonds
and shall be applied only (i) to the purchase of Bonds by the
District in the open market, at a price not to exceed the
principal amount thereof plus accrued interest, which Bonds
shall thereupon be cancelled, (ii) to make interest payments on
the Bonds, or (iii) to redeem Bonds at the earliest redemption
date permitted by this Resolution, without premium.
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Moneys deposited in the Costs of Issuance Fund shall be
applied by the Fiscal Agent to the payment of Costs of Issuance
upon receipt of a Certificate of the City Manager authorizing
disbursement by the Fiscal Agent. Any moneys remaining in the
Costs of Issuance Fund on August 1, 1987 shall be transferred
by the Fiscal Agent to the Interest Account.
Section 3.04. Special Tax Fund. The principal and
interest due on the Bonds until maturity, otherwise than by
redemption, shall be paid by the Fiscal Agent from the Special
Tax Fund. At the maturity of the Bonds and, after all
principal, and interest then due on the Bonds then outstanding
has been paid or provided for, moneys in the Special Tax Fund
shall be transferred to the District.
For the purpose of assuring that the payment of principal
and interest on the Bonds will be made when due, on or prior to
each February 1 and August 1, the Fiscal Agent shall make the
following transfers first to the Interest Account and then to
the Principal Account; provided, however, that to the extent
that deposits have been made in the Interest Account or the
Principal Account from the proceeds of the sale of the Bonds or
otherwise, the transfer from the Special Tax Fund need not be
made:
(a) To the Interest Account, an amount such that the
balance in the Interest Account one (1) day prior to each
Interest Payment Date shall be equal to the installment of
interest due on the Bonds on said Interest Payment Date.
Moneys in the Interest Account shall be used for the
payment of interest on the Bonds as the same become due.
(b) To the Principal Account, an amount such that the
balance in the Principal Account one (1) day prior to
February 2 and August 2 of each year commencing with 1989
shall equal the principal payment due on the Bonds maturing
on the next succeeding February 2 and August 2,
respectively. Moneys in the Principal Account shall be
used for the payment of the principal of such Bonds as the
same become due at maturity.
Section 3.05. Redemption Fund.
(a) Commencing on August 1, 1997 and on each February 1
and August 1 thereafter, after the deposits have been made to
the Interest Account and the Principal Account as required by
the preceding section, the Fiscal Agent shall next transfer
into the Redemption Fund from the Special Tax Fund the amount
needed to make the balance in the Redemption Fund equal to the
Sinking Fund Payment due on the outstanding Term Bonds on the
next succeeding February 2 or August 2. Moneys so deposited in
the Redemption Fund shall be used and applied by the Fiscal
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Agent to call and redeem the largest principal amount of
outstanding Term Bonds which can be called with the moneys
available and any such call and redemption shall be made in
accordance with the provisions and according to the Sinking
Fund Payment schedule set forth in Section 4.01(b) hereof.
(b) After making the deposits to the Interest Account and
the Principal Account pursuant to Section 3.04 above and to the
Redemption Fund for Sinking Fund Payments then due pursuant to
subparagraph (a) of this section, and in accordance with the
District's election to call Bonds for optional redemption as
set forth-in Section 4.01(a), the Fiscal Agent shall transfer
from the Special Tax Fund and deposit in the Redemption Fund
moneys available for the purpose and sufficient to pay the
principal and the premiums payable as provided in Section
4.01(a) on the Bonds called for optional redemption.
Moneys set aside in the Redemption Fund shall be used
solely for the purpose of redeeming Bonds and shall be applied
on or after the redemption date to the payment of principal and
premium on the Bonds to be redeemed upon presentation and
surrender of such Bonds; provided, however, in lieu or
partially in lieu of such call and redemption, moneys deposited
in the Redemption Fund as set forth above may be used to
purchase outstanding Bonds in the manner hereinafter provided.
Purchases of outstanding Bonds may be made by the District at
public or private sale as and when and at such prices as the
District may in its discretion determine but only at prices
(including brokerage or other expenses) not more than par plus
accrued interest, or, in the case of purchases to be made from
funds to be applied to a redemption pursuant to Section
4.01(a), par plus accrued interest, plus the premium applicable
at the next following call date according to the premium
schedule established pursuant to Section 4.01(a) hereof. Any
accrued interest payable upon the purchase of Bonds may be paid
from the amount reserved in the Interest Account for the
payment of interest on the next following Interest Payment Date.
If, after all of the Bonds have been redeemed and
cancelled or paid and cancelled, there are moneys remaining in
the Redemption Fund, said moneys shall be transferred to the
Special Tax Fund; provided, that if said moneys are part of the
proceeds of refunding bonds said moneys shall be transferred to
the fund or account created for the payment of principal of and
interest on such refunding bonds.
Section 3.06. Reserve Fund. There shall be maintained in
the Reserve Fund an amount equal to the Reserve Requirement.
Moneys in the Reserve Fund shall be used solely for the
purpose of paying the principal of, including Sinking Fund
Payments, and interest on the Bonds when due in the event that
the moneys in the Special Tax Fund are insufficient therefor or
03/07/87
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moneys in the Redemption Fund are insufficient to make a
mandatory redemption in accordance with the provisions of
Section 4.01(b). ~f the amounts in the Special Tax Fund are
insufficient for such purpose, the Fiscal Agent shall withdraw
from the Reserve Fund for deposit in the Interest Account or
the Principal Account or the Redemption Fund moneys necessary
for such purpose. On each date that the Fiscal Agent makes a
transfer from the Reserve Fund to the Interest Account, the
Principal Account or the Redemption Fund, the Fiscal Agent
shall notify the Treasurer, in writing, as to the date and
amount~of such transfer. The District shall then take the
steps necessary to cause to be deposited to the Special Tax
Fund the amount needed to replenish the Reserve Fund to the
Reserve Requirement either through including such amount in the
next annual Special Tax levy, or otherwise.
Notwithstanding anything herein to the contrary, whenever
moneys are withdrawn from the Reserve Fund, after making the
required transfers to the Interest Account, the Principal
Account and the Redemption Fund, the Fiscal Agent shall
transfer to the Reserve Fund the amount needed to restore the
amount of such fund to the Reserve Requirement. The Fiscal
Agent shall make such transfer from the available moneys in the
Special Tax Fund. Moneys in the Special Tax Fund shall be
deemed available for transfer to the Reserve Fund only if the
Fiscal Agent determines that such amounts will'not be needed to
make the deposits required to be made to the Interest Account,
the Principal Account and the Redemption Fund.
Notwithstanding any provision herein to the contrary,
moneys in the Reserve Fund in excess of the Reserve Requirement
shall be withdrawn from the Reserve Fund by the Fiscal Agent on
each February 2 and August 2 and transferred to the Special Tax
Fund.
Section 3.07. Excess Investment Earnings Fund.
(a) The District shall calculate Excess Investment
Earnings in accordance with paragraph (b) and shall pay Excess
Investment Earnings to the United States government in
accordance with paragraph (c). The term "Excess Investment
Earnings" means an amount equal to the sum of:
(i) the excess of:
(A) the aggregate amount earned from the Delivery
Date on all Nonpurpose Obligations in which Gross Proceeds
of the Bonds are invested (other than amounts attributable
to an excess described in this subparagraph (i)), over
(B) the amount that would have been earned if the
yield on such Nonpurpose Obligations (other than amounts
03/07/87
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attributable to an excess described in this subparagraph
(i)) had been equal to the Yield on the Bonds,
plus
(ii) any income attributable to the excess described
in paragraph (i).
(b) On each December 1 during which the Bonds are
outstanding, the Fiscal Agent shall mail a notice to the
District setting forth the District's obligation to make the
calculation of Excess Investment Earnings for the current
Computation Year. The Fiscal Agent shall not be liable to the
District, the Owners of the Bonds or any other party for (1)
its failure to so notify the District and (2) the failure of
the District to act upon any such notice provided by the Fiscal
Agent. The Fiscal Agent shall have no responsibility to ensure
the obligation of the District to make the calculation of the
Excess Investment Earnings. At or prior to the last day of the
first Computation Year, the District shall calculate the Excess
Investment Earnings referenced in subparagraph (i) of paragraph
(a) and shall deposit the same into the Excess Investment
Earnings Fund to the extent funds are available first from the
Special Tax Fund and then from any legally available funds.
Thereafter, prior to the last day of each Computation Year and
on the date of the retirement of the Bonds, the District shall
calculate the amount of Excess Investment Earnings referenced
in subparagraphs (i) and (ii) of paragraph (a) and direct
corresponding transfers into the Excess Investment Earnings
Fund. The calculations shall be made by a nationally
recognized bond counsel, an independent Certified Public
Accountant or another organization whose calculations of rebate
under Section 148(f) of the Code have been accepted by other
public agencies in the State retained by the District in
accordance with the following:
(1) Except as provided in (2), in determining the
amount described in subparagraph (i)(A) of paragraph (a),
the aggregate amount earned on Nonpurpose Obligations shall
include (i) all income realized under federal income tax
accounting principles (whether or not the person earning
such income is subject to federal income tax) with respect
to such Nonpurpose Obligation and with respect to the
reinvestment of investment receipts from such Nonpurpose
Obligations (without regard to the transaction costs
incurred in acquiring, carrying, selling or redeeming such
Nonpurpose Obligations), including, but not limited to,
gain or loss realized on the disposition of such Nonpurpose
Obligations (without regard to when such gains are taken
into account under Section 453 of the Code relating to the
taxable year of inclusion of gross income), and income under
Section 1272 of the Code (relating to original issue
03/07/87
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discount) and (ii) any unrealized gain or loss as of the
date of retirement of the Bonds if any Nonpurpose Obligation is
retained after such date.
(2) In determining the amount described in
subparagraph (i) of paragraph (a), an obligation or security
shall be treated.as acquired for its fair market value at
the time it becomes a Nonpurpose Obligation, so that gain or
loss on the disposition of such an obligation or security
shall be computed with reference to such fair market value
as its adjusted basis.
(3) In determining the amount described in
subparagraph (i)(B) of paragraph (a), the Yield on the Bonds
shall be determined based on the actual Yield of the Bonds
during the period between the Delivery Date and the date the
computation is made (with adjustments for discount or
premium).
(4) In determining the amount described in
subparagraph (ii) of paragraph (a), all income attributable
to the excess described in subparagraph (i) of paragraph (a)
must be taken into account, whether or not that income
exceeds the Yield on the Bonds, and no amount may be treated
as "negative arbitrage."
(5) In determining the amount described in subsection
(a) of this Section, there shall be excluded any amount
earned on any fund or account which is used primarily to
achieve a proper matching of revenues and annual debt
service on the Bonds during each Bond Year and which is
depleted at least once a year except for a reasonable
carryover amount not in excess of the greater of one year's
earnings on such fund or account or one-twelfth (1/12) of
annual debt service on the Bonds, as well as amounts earned
on said earnings if the gross earnings on all such funds and
accounts for the Computation Year are less than $100,000.
(c) Upon written direction of the District, the Fiscal
Agent shall pay Excess Investment Earnings to the United States
government in installments with the first payment to be made not
later than thirty (30) days after the end of the fifth
Computation Year and with subsequent payments to be made not
later than five (5) years after the preceding payment was due.
The District shall assure that each installment is in an amount
equal to at least 90 percent of the Excess Investment Earnings
with respect to the Bonds as of the close of the computation
period. Upon the direction of the District, which direction
shall be given before thirty (30) days after the retirement of
the Bonds, the Fiscal Agent shall pay from the Excess Investment
03/07/87
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Earnings Fund, or the District shall pay directly, 100 percent
of the theretofore unpaid Excess Investment Earnings of the
Bonds. The Fiscal Agent or the District shall remit such
payments to the United States government at the address and in
the manner directed by the District prescribed by the
Regulations as the same may be in time to time in effect,
together with such reports and statements prepared by District
as may be prescribed by such Regulations. If the Fiscal Agent
follows the written instructions as supplied by the District, it
shall be deemed to have complied with this subsection and shall
have no responsibility to calculate Excess Investment Earnings
or to take action in the absence of instructions from the
District.
(d) In order to assure that Excess Investment Earnings are
paid to the United States rather than to a third party,
investments by the District in certificates of deposit and in
investment agreements shall be made only in accordance with the
Regulations therefor as from time to time in effect.
(e) The District shall keep and retain for a period of six
(6) years following the retirement of the Bonds records of the
determinations made pursuant to this Section. The Fiscal Agent
shall keep a record of all investments made with moneys on
deposit in any Fund or Account held by it hereunder and shall
provide such records to the District at least quarterly. Such
records shall contain a reference to the date of purchase, the
date of sale, the purchase price, the sales price, the principal
amount and coupon rate of each obligation purchased or sold.
(f) Payments pursuant to this Section shall be made to the
maximum extent possible from moneys on deposit in the Excess
Investment Earnings Fund and, to the extent of any deficiency
therein for such purpose, shall be.made from the Special Tax
Fund. In the event of any remaining deficiency in available
moneys for the purposes of such transfer, such deficiency shall
be paid by the District from any available funds.
(g) Notwithstanding the foregoing, the foregoing method of
computing Excess Investment Earnings may be modified, in whole
or in part, without the consent of the Owners of the Bonds upon
receipt by the District of an opinion of Bond Counsel to the
effect that such modification will not adversely affect the
exclusion from gross income of interest on the Bonds.
Section 3.08. Administrative Expense Fund. After making
the transfers required by Sections 3.04, 3.05,'3.06 and 3.07,
the Fiscal Agent shall withdraw from the Special Tax Fund and
place in the Administrative Expense Fund an amount necessary to
pay all Administrative Expenses. Moneys in the Administrative
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Expense Fund may be invested in any Authorized Investments,
provided that the maturity or maturities thereof shall not
exceed 30 days from the date of purchase.
Section 3.09. Acquisition Fund.
(a) The moneys in the Acquisition Fund shall be applied
exclusively to pay the Project Costs. Amounts for Project Costs
shall be disbursed by the Fiscal Agent only upon receipt of a
sequentially numbered written requisition, substantially in the
form attached hereto as Exhibit B, from the City Manager, or his
designee, or such other person as is designated in writing to
the Fiscal Agent by the legislative body of the District,
stating that (1) the conditions to the release of such funds
stated in the Acquisition Agreement have been satisfied, (2) the
name of the person to whom payment is due, (3) the amount to be
paid, (4) the purpose for which the obligation to be paid was
incurred, (5) there has not been filed with or served upon the
District notice of any lien, right to lien or attachment upon,
stop notice or claim affecting the right to receive payment of,
any of the moneys payable to any of the persons named in such
certificate or written requisition, which has not been released
or will not be released simultaneously with the payment of such
obligation, other than materialmen's or mechanic's liens
accruing by mere operation of law, and (6) sufficient money
remains in the Acquisition Fund to pay all remaining costs of
acquisition, construction and financing of the Project. Each
requisition shall be accompanied by the invoices which are being
paid or by other evidence of payment of such amounts by the
District. The Fiscal Agent shall have no liability for
disbursing funds in accordance with the provisions of this
Section 3.09(a).
(b) Upon receipt of a Certificate of the City Manager, or
his designee, that all Project Costs have been paid, the Fiscal
Agent shall transfer moneys on deposit in the Acquisition Fund
to the Special Tax Fund.
(c) Notwithstanding anything herein to the contrary, on
March 2, 1988, 1.3~ of the balance on deposit in the Acquisition
Fund and on December 1, 1988 any funds remaining on deposit in
the Acquisition Fund shall be invested by the District only in
tax-exempt Authorized Investments or in Authorized Investments
at a Yield not in excess of the Yield on the Bonds (as set forth
in the Non-Arbitrage Certificate of the District), unless in the
opinion of Bond Counsel such restriction is not necessary to
prevent interest on the Bonds from being included in gross
income for federal income tax purposes.
Section 3.10. Investments. Moneys held in any of the Funds
and Accounts under this Resolution shall be invested only in
Authorized Investments which shall be deemed at all times to be
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a part of such Funds and Accounts. Any income realized or loss
resulting from such Authorized Investments shall be credited or
charged to the Fund or Account from which such investment was
made; provided, however, (i) investment earnings on all amounts
deposited in the Acquisition Fund prior to August 2, 1988 shall
be deposited (1) in the Acquisition Fund until the Project is
completed, and (2) thereafter, in the Special Tax Fund, (ii)
investment earnings on all amounts in the Excess Investment
Earnings Fund shall be deposited therein, and (iii) all other
investment earnings shall be deposited in the Special Tax Fund.
Moneys in the Funds and Accounts held under this Resolution may
be from time to time invested by the Fiscal Agent at the
direction of the Treasurer subject to the following restrictions:
(a) Moneys in the Acquisition Fund shall be invested in
Authorized Investments which will by their terms mature as close
as practicable to the date the District estimates the moneys
represented by the particular investment will be needed for
withdrawal from the Acquisition Fund.
(b) Moneys in the Redemption Fund shall be invested only in
Authorized Investments which will by their terms mature on such
dates so as to ensure the payment of principal and interest on
the Bonds as the same become due.
(c) The moneys in the Reserve Fund may be invested
initially only in Authorized Investments which mature not later
than February 2, 1992 and thereafter shall be invested in
Authorized Investments which mature not more than six months
from the date of purchase by the Fiscal Agent, provided that no
such Authorized Investment shall mature later than the final
maturity of the Bonds; and, provided, further, that prior to
March 2, 1996 amounts on deposit in the Reserve Fund shall not
be invested at a Yield in excess of the Yield on the Bonds.
The Fiscal Agent shall sell at the best price obtainable or
present for redemption any obligations so purchased whenever it
may be necessary to do so in order to provide moneys to meet any
payment or transfer for such Funds and Accounts or from such
Funds and Accounts. For the purpose of determining at any given
time the balance in any such funds, any such investments
constituting a part of such funds and accounts shall be valued
at their cost. Notwithstanding anything herein to the contrary,
neither the Fiscal Agent nor the Treasurer shall be responsible
for any loss from investments, sale or transfer authorized
pursuant to this Resolution.
The Fiscal Agent shall provide the District with monthly
reports relating to the investments made in all Funds and
Accounts and the investment earnings, income or loss posted to
each Fund or Account.
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ARTICLE IV
REDEMPTION OF BONDS
Section 4.01. Redemption of Bonds.
(a) Optional Redemption. The Bonds maturing on or before
February 2, 1997 are not subject to call and redemption prior to
maturity. The Term Bonds maturing on February 2, 2011 may be
redeemed, at the option of the District on February 2, 1997, or
on any. Interest Payment Date thereafter, prior to maturity in
whole or in part, by lot, 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.
Redemption Dates
Redemption Prices
February 2, 1997
February 2, 1998
February 2, 1999
February 2, 2000
and August 2, 1997
and August 2, 1998
and August 2, 1999
and thereafter
103%
102%
101%
lO0%
In the event the District shall elect to redeem Bonds as
provided in this Section 4.01(a), the District shall give
written notice to the Fiscal Agent of its election so to
redeem, the redemption date and the principal amount of the
Bonds to be redeemed. The notice to the Fiscal Agent shall be
given at least 60 but no more than 90 days prior to the
redemption date or such shorter period as shall be acceptable
to the Fiscal Agent.
(b) Mandatory Sinking Fund Redemption.
(i) The outstanding Term Bonds maturing on February
2, 2011 will be called before maturity and redeemed, from the
Sinking Fund Payments that have been deposited into the
Redemption Fund, on August 2, 1997, and on each February 2 and
August 2 thereafter prior to maturity, in accordance with the
schedule of Sinking Fund Payments set forth below. The Term
Bonds so called for redemption shall be redeemed at a
redemption price for each redeemed Bond equal to the principal
amount thereof, plus accrued interest to the redemption date
without premium as follows: -
Date
Principal Amount
August 2, 1997
February 2, 1998
August 2, 1998
February 2, 1999
August 2, 1999
520,000.00
580,000.00
6O5,O0O.OO
670,000.00
695,000.00
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February 2, 2000
August 2, 2000
February 2, 2001
August 2, 2001
February 2, 2002
August 2, 2002
February 2, 2003
August 2, 2003
February 2, 2004
August 2, 2004
February 2, 2005
August 2, 2005
February 2, 2006
August 2, 2006
February 2, 2007
August 2, 2007
February 2, 2008
August 2, 2008
February 2, 2009
August 2, 2009
February 2, 2010
August 2, 2010
February 2, 2011(maturity)
720,000.00
745,000.00
770,000.00
795,000.00
825,000.00
855,000.00
885,000.00
915,000.00
950,000.00
985,000.00
1,020,000.00
1,055,000.00
1,090,000.00
1,130,000 00
1,170,000 O0
1,215,000 00
1,255,000 00
1,300,000 00
1,345,000 00
1,395,000 00
1,445,000 00
1,495,000 O0
1,550,000.00
Section 4.02. Selection of Bonds for Redemption. If less
than all of the Outstanding Bonds are to be redeemed, the
Fiscal Agent shall select the Bonds to be redeemed by lot in
any manner which the Fiscal Agent deems fair; provided,
however, that the portion of any Bond of a denomination of more
than $5,000 to be redeemed shall be in the principal amount of
$5,000 or a multiple thereof, and that, in selecting portions
of such Bonds for redemption, the Fiscal Agent shall treat each
such Bond as representing that number of Bonds of $5,000
denomination which is obtained by dividing the principal amount
of such Bond to be redeemed in part by $5,000. The Fiscal
Agent shall promptly notify the District in writing of the
Bonds, or portions thereof, selected for redemption.
Section 4.03. Notice of Redemption. When Bonds are due
for redemption under Section 4.01(b) above and when the Fiscal
Agent receives notice from the District of its election to
redeem Bonds under Section 4.01(a) above, the Fiscal Agent
shall give notice, in the name of the District, of the
redemption of such Bonds. Such notice of redemption shall (a)
specify the CUSIP numbers, the serial numbers and the maturity
date or dates of the Bonds selected for redemption, except that
where all the Bonds subject to redemption, or'all the Bonds of
one maturity, are to be redeemed, the serial numbers thereof
need not be specified; (b) state the date fixed for redemption
and surrender of the Bonds to be redeemed; (c) state the
redemption price; (d) state the place or places where the Bonds
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are to be redeemed; and (e) in the case of Bonds to be redeemed
only in part, state the portion of such Bond which is to be
redeemed. Such notice shall further state that on the date
fixed for redemption, there shall become due and payable on
each Bond or portion thereof called for redemption, the
principal thereof, together with any premium, and interest
accrued to the redemption date, and that from and after such
date, interest thereon shall cease to accrue and be payable.
At least 30 days but no more than 60 days prior to the
redemption date, the Fiscal Agent shall mail a copy of such
notice, by first class mail, postage prepaid, to the respective
Owners thereof at their addresses appearing on the Bond
Register and shall publish such notice in a financial newspaper
circulated in the City of Los Angeles. The actual receipt by
the Owner of any Bond of notice of such redemption shall not be
a condition precedent thereto, and failure to receive such
notice shall not affect the validity of the proceedings for the
redemption of such Bonds, or the cessation of interest on the
redemption date. A certificate by the Fiscal Agent that notice
of such redemption has been given as herein provided shall be
conclusive as against all parties and the Owner shall be
entitled to show that he or she failed to receive notice of
such redemption.
Section 4.04. Partial Redemption of Bonds. Upon surrender
of any Bond to be redeemed in part only, the District shall
execute and the Fiscal Agent shall authenticate and deliver to
the Bondowner, at the expense of the District, a new Bond or
Bonds of authorized denominations equal in aggregate principal
amount to the unredeemed portion of the Bonds surrendered, with
the same interest rate and the same maturity.
Section 4.05. Effect of Notice and Availability of
Redemption Money. Notice of redemption having been duly given,
as provided in Section 4.03, and the amount necessary for the
redemption having been made available for that purpose and
being available therefor on the date fixed for such redemption:
(a) The Bonds, or portions thereof, designated for
redemption shall, on the date fixed for redemption, become
due and payable at the redemption price thereof as provided
in this Resolution, anything in this Resolution or in the
Bonds to the contrary notwithstanding;
(b) Upon presentation and surrender thereof at the
corporate trust office of the Fiscal Agent~ the redemption
price of such Bonds shall be paid to the Owner thereof;
(c) After the redemption date the Bonds or portions
thereof so designated for redemption shall be deemed to be
no longer Outstanding and such Bonds or portions thereof
shall cease to bear further interest; and
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(d) After the date fixed for redemption no Owner of
any of the Bonds or portions thereof so designated for
redemption shall be entitled to any of the benefits of this
Resolution, or to any other rights, except with respect to
payment of the redemption price and interest accrued to the
redemption date from the amounts so made available.
ARTICLE V
COVENANTS AND WARRANTY
Section 5.01. Warranty. The District shall preserve and
protect the security of the Bonds against all claims and
demands of all persons.
Section 5.02. Covenants. So long as any of the Bonds
issued hereunder are Outstanding and unpaid, the District makes
the following covenants with the Bondowners under the
provisions of.the Act and this Resolution (to be performed by
the District or its proper officers, agents or employees),
which covenants are necessary, convenient and desirable to
secure the Bonds and tend to make them more marketable;
provided, however, that said covenants do not require the
District to expend any funds or moneys other than the Special
Taxes:
(a) Punctual Payment; Against Encumbrances. The District
covenants that it will receive all Net Taxes in trust and will
immediately deposit the Net Taxes with the Fiscal Agent and the
District shall have no beneficial right or interest in the
amounts so deposited except as provided by this Resolution.
All such Net Taxes, whether received by the District in trust
or deposited with the Fiscal Agent as trustee, all as herein
provided, shall nevertheless be disbursed, allocated and
applied solely to the uses and purposes herein or therein set
forth, and shall be accounted for separately and apart from all
other money, funds, accounts or other resources of the District.
The District covenants that it will duly and
punctually pay or cause to be paid the principal of and
interest on every Bond issued hereunder, together with the
premium, if any, thereon on the date, at the place and in the
manner set forth in the Bonds and in accordance with this
Resolution to the extent Special Taxes are available therefor,
and that the payments into the Funds and Accounts created
hereunder will be made, all in strict conformity with the terms
of the Bonds and this Resolution, and that it will faithfully
observe and perform all of the conditions, covenants and
requirements of this Resolution and all Supplemental
Resolutions and of the Bonds issued hereunder.
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The District will not mortgage or otherwise encumber,
pledge or place any charge upon any of the Net Taxes, except as
provided in the Resolution, and will not issue any obligation
or security superior to or on a parity with the Bonds payable
in whole or in part from the Net Taxes, other than Parity Bonds.
(b) Levy of Special Tax. The legislative body of the
District shall cause the Treasurer to levy the Special Tax in
an amount sufficient to pay the principal of and interest on
the Bonds, any Parity Bonds and the Administrative Expenses and
any amounts required to maintain the Reserve Fund at the
Reserve Requirement so long as any Bonds issued under this
Resolution are outstanding.
(c) Commence Foreclosure Proceedings. The District
covenants for the benefit of the Owners of the Bonds that it
will commence appropriate foreclosure proceedings within the
earlier of 150 days of notice of a delinquency in the aggregate
Special Tax collections or 150 days from receipt of Special
Taxes from the County of San Diego in an amount which is less
than the Special Tax levied, and diligently pursue to
completion such foreclosure proceedings in the event any
Special Tax installment becomes delinquent.
(d) Payment of Claims. The District will pay and
discharge any and all lawful claims for labor, materials or
supplies which, if unpaid, might become a lien or charge upon
any portion of the Project owned by the District or upon the
Net Taxes or any part thereof, or upon any funds in the hands
of the Fiscal Agent, or which might impair the security of the
Bonds; provided that nothing herein contained shall require the
District to make any such payments so long as the District in
good faith shall contest the validity of any such claims.
(e) Books and Accounts. The District will keep proper
books of records and accounts, separate from all other records
and accounts of the District, in which complete and correct
entries shall be made of all transactions relating to the
Project, the levy of the Special Tax and the deposits to the
Special Tax Fund. Such books of record and accounts shall at
all times during business hours be subject to the inspection of
the Fiscal Agent or of the Owners of not less than ten percent
(10X) of the principal amount of the Bonds then outstanding or
their representatives authorized in writing.
(f) Tax Covenants. In order to preserve.the exclusion
from gross income of interest on the Bonds for federal income
tax purposes, the District covenants to comply with all
applicable requirements of the Code, together with any
amendments thereto or regulations promulgated thereunder
necessary to preserve such exclusion from gross income and
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specifically covenants, without limiting the generality of the
foregoing, that:
(1) it will make no use of the proceeds of the Bonds
at any time which will cause the Bonds to be "arbitrage
bonds" within the meaning of Section 148 of the Code and
applicable Regulations adopted thereunder by the Internal
Revenue Service;
(2) it will not use in excess of 5% of the proceeds of
the Bonds to make or finance loans to any person other than
a governmental unit (other than loans which are used to
acquire or carry Nonpurpose Investments or are for the
purpose of enabling the borrower to finance any governmental
tax or assessment of general application for a specific
essential governmental function, all as set forth in Section
141(c) of the Code);
(3) it will neither use nor permit the use of more than
10% of the proceeds of the Bonds for any private business
use, or enter into an arrangement such that more than l0x of
the proceeds of the Bonds is, directly or indirectly,
secured by any interest in (i) property used or to be used
for a private business use or (ii) payments in respect of
such property or to be derived from payments in respect of
property, or borrowed money, used or to be used for a
private business use, all as set forth in Section 141(b) of
the Code, or take any other action which would cause the
Bonds to be "private activity bonds" within the meaning of
Section 141(a) of the Code;
(4) it will ensure that the payment of principal of and
interest on the Bonds shall not be directly or indirectly
guaranteed (in whole or in part) by the United States (or
any agency or instrumentality thereof) and no portion of the
moneys contained in any of the Funds or Accounts created
herein shall be (i) used in making loans guaranteed by the
United States (or any agency or instrumentality thereof);
(ii) invested directly or indirectly in deposits or accounts
insured by the Federal Deposit Insurance Corporation,
Federal Savings and Loan Insurance Corporation, National
Credit Union Administration or any other similar federally
chartered corporation; (iii) otherwise invested directly or
indirectly in obligations guaranteed (in whole or in part)
by the United States (or any agency or instrumentality
thereof); except (1) during the initial Period following
issuance of the Bonds and ending on the final expenditure of
the Bond proceeds; (2) for amounts held in the Reserve Fund,
or other reserve funds satisfying Section 148(d) of the
Code; (3) for amounts held in the Special Tax Fund and other
bona fide debt service funds; (4) for investments in
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obligations issued by the United States Treasury; (5) for
investments in obligations guaranteed by the Federal
National Mortgage Association, Government National Mortgage
Association or Federal Home Loan Mortgage Corporation, or
(6) for investments permitted under Regulations issued
pursuant to Section 149(b)(3)(B) of the Code; and
(5) (i) it shall keep a detailed accounting of all
transactions contemplated under this Resolution or in any
way relating to the receipt or disbursement of any of the
Gross Proceeds of the Bonds for a period of six years after
the later of the date of payment of all Excess Investment
Earnings to the United States or the date the District
disburses the last of the Gross Proceeds of the Bonds; (ii)
except for the investment of moneys in tax-exempt bonds or
Gross Proceeds invested during an applicable temporary
period permitted under the Regulations, it will not allow
Gross Proceeds of the Bonds to be invested at any time in
Nonpurpose Obligations with a Yield in excess of the Yield
on the Bonds; (iii) it will neither invest Gross Proceeds
nor cause Gross Proceeds to be invested in Nonpurpose
Obligations if the yield on such Nonpurpose Obligations
would be less than the yield that would have resulted in an
arm's-length transaction; and (iv) it will not sell or
otherwise dispose of or cause to be sold or otherwise
disposed of Nonpurpose Obligations, if such sale or
disposition would result in a smaller profit or larger loss
than would have resulted from a sale at fair market value
arrived at in an arm's-length transaction.
(g) Completion of Project. The District will diligently
carry out and continue to completion with all practical dispatch
the acquisition of the Project in accordance with the Act and
the proceedings for the formation of the District and in a sound
and economical manner. The Project to be acquired or
constructed may be amended as provided in the Act, but no
amendment may be made which would substantially impair the
security of the Bonds or the rights of the Owners. Once
acquired, the District will maintain the Project, or cause it to
be maintained, in accordance with the customary and reasonable
maintenance and repair practices for such facilities.
ARTICLE VI
AMENDMENTS TO RESOLUTION
Section 6.01. Supplemental Resolutions or Orders Not
Requiring Bondowner Consent. The District may from time to
time, and at any time, without notice to or consent of any of
the Bondowners, adopt resolutions or orders supplemental hereto
for any of the following purposes:
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(a) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other
provision herein, or to make any other provision with respect to
matters or questions arising under this Resolution or in any
additional resolution or order, provided that such action is not
materially adverse to the interest of the Bondowners;
(b) to add to the covenants-and agreements of and the
limitations and the restrictions upon the District contained in
this Resolution, other covenants, agreements, limitations and
restrictions to be observed by the District which are not
contrary to or inconsistent with this Resolution as theretofore
in effect;
(c) to provide for the issuance of any Parity Bonds, and to
provide the terms and conditions under which such Parity Bonds
may be issued, subject to and in accordance with the provisions
of this Resolution;
(d) to modify, amend or supplement this Resolution in such
manner as to permit the qualification hereof under the Trust
Indenture Act of 1939, as amended, or any similar federal
statute hereafter in effect, and to add such other terms,
conditions and provisions as may be permitted by said act or
similar federal statute, and which shall not materially
adversely affect the interests of the Owners of the Bonds; or
(e) to modify, alter, amend or supplement this Resolution
in any other respect which is not materially adverse to the
Bondowners.
Section 6.02. Supplemental Resolutions or Orders Requiring
Bondowner Consent. Exclusive of the resolutions or orders
supplemental hereto set forth in Section 6.01, the Owners of not
less than 60~ in aggregate principal amount of the Bonds then
Outstanding shall have the right to consent to and approve the
adoption by the District of such resolutions or orders
supplemental hereto as shall be deemed necessary or desirable by
the District for the purpose of waiving, modifying, alternate,
amending, adding to or rescinding, in any particular, any of the
terms or provisions contained in this Resolution; provided,
however, that nothing herein shall permit, or be construed as
permitting, (a) an extension of the maturity date of the
principal, or the payment date of interest on, any Bond (b) a
reduction in the principal amount of, or redemption premium on,
any Bond or the rate of interest thereon, (c) a preference or
priority of any Bond or Bonds over any other Bond or Bonds, or
(d) a reduction in the aggregate principal amount of the Bonds
the Owners of which are required to consent to such resolution
or order, without the consent of the Owners of all Bonds then
outstanding.
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If at any time the District shall desire to adopt a
resolution or order supplemental hereto, which pursuant to the
terms of this section shall require the consent of the
Bondowners, the District shall so notify the Fiscal Agent and
shall deliver to the Fiscal Agent a copy of the proposed
resolution or order. The Fiscal Agent shall, at the expense of
the District, cause notice of the proposed resolution or order
to be mailed, by first class mail postage prepaid, to all
Bondowners at their addresses as they appear in the Bond
Register. Such notice shall briefly set forth the nature of the
proposed resolution or order and shall state that a copy thereof
is on file at the office of the Treasurer for inspection by all
Bondowners. The failure of any Bondowners to receive such
notice shall not affect the validity of such resolution or order
when consented to and approved by the Owners of not less than
60~ in aggregate principal amount of the Bonds then outstanding
as required by this section. Whenever at any time within one
year after the date of the first mailing of such notice, the
Fiscal Agent shall receive an instrument or instruments
purporting to be executed by the Owners of not less than 60~ in
aggregate principal amount of the Bonds then outstanding, which
instrument or instruments shall refer to the proposed resolution
or order described in such notice, and shall specifically
consent to and approve the adoption thereof by the District
substantially in the form of the copy referred to in such notice
as on file with the Treasurer, such proposed resolution or
order, when duly adopted by the District, shall thereafter
become a part of the proceedings for the issuance of the Bonds.
In determining whether the Owners of 60~ of the aggregate
principal amount of the Bonds have consented to the adoption of
any supplemental resolution or order, Bonds which are owned by
the District or by any person directly or indirectly controlling
or controlled by or under the direct or indirect common control
with the District, shall be disregarded and shall be treated as
though they were not outstanding for the purpose of any such
determination.
Upon the adoption of any resolution or order supplemental
hereto and the receipt of consent to any such resolution or
order from the Owners of not less than 60~ in aggregate
principal amount of Bonds outstanding in instances where such
consent is required pursuant to the provisions of this section,
this Resolution shall be, and shall be deemed to be, modified
and amended in accordance therewith, and the respective rights,
duties and obligations under this Resolution of the District and
all Owners of Bonds then outstanding shall thereafter be
determined, exercised and enforced hereunder, subject to all
respects to such modifications and amendments.
Section 6.03. Notation of Bonds; Delivery of Amended
Bonds. After the effective date of any action taken as
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hereinabove provided, the District may determine that the Bonds
may bear a notation, by endorsement in form approved by the
District, as to such action, and in that case upon demand of the
Owner of any Bond Outstanding at such effective date and
presentation of his Bond for the purpose at the office of the
Fiscal Agent or at such additional offices as the Fiscal Agent
may select and designate for that purpose, a suitable notation
as to such action shall be made on such Bonds. If the District
shall so determine, new Bonds so modified as, in the opinion of
the District, shall be necessary to conform to such action shall
be prepared and executed, and in that case upon demand of the
Owner of any Bond outstanding at such effective date such new
Bonds shall be exchanged at the office of the Fiscal Agent or at
such additional offices as the Fiscal Agent may select and
designate for that purpose, without cost to each Owner, for
Bonds then Outstanding, upon surrender of such Outstanding Bonds.
ARTICLE VII
FISCAL AGENT
Section 7.01. Fiscal Agent. Security Pacific National
Bank, having a corporate trust office in Los Angeles,
California, is hereby appointed Fiscal Agent for the District
for the purpose of receiving all money which the District is
required to deposit with the Fiscal Agent hereunder and to
allocate, use and apply the same as provided in the Resolution.
The Fiscal Agent is hereby authorized to and shall mail by
first class mail, postage prepaid, interest payments to the
Bondowners, select Bonds for redemption, and maintain the Bond
Register. The Fiscal Agent is hereby authorized to pay the
principal of and premium, if any, on the Bonds when the same are
duly presented to it for payment at maturity or on call and
redemption, to provide for the registration of transfer and
exchange of Bonds presented to it for such purposes, to provide
for the cancellation of Bonds all as provided in this
Resolution, and to provide for the authentication of Bonds, and
shall perform all other duties assigned to or imposed on it as
provided in this Resolution. The Fiscal Agent shall keep
accurate records of all funds administered by it and all Bond
paid and discharged by it.
The Fiscal Agent is hereby authorized to redeem the Bonds
when duly presented for payment at maturity, or on redemption
prior to maturity. The Fiscal Agent shall cancel all Bonds upon
payment thereof in accordance with the provisions of Section
10.01 hereof. The Fiscal Agent shall keep accurate records of
all Bonds paid and discharged and cancelled by it.
The District shall from time to time, subject to any
agreement between the District and the Fiscal Agent then in
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force, pay to the Fiscal Agent compensation for its services,
reimburse the Fiscal Agent for all its advances and
expenditures, including, but not limited to, advances to and
fees and expenses of independent accountants, counsel and
engineers or other experts employed by it in the exercise and
performance of its powers and duties hereunder, and indemnify
and save the Fiscal Agent harmless against expenses and
liabilities not arising from its own negligence or willful
misconduct which it may incur in the exercise and performance of
its powers and duties hereunder.
Section 7.02. Removal of Fiscal Agent. The District may at
any time at its sole discretion remove the Fiscal Agent
initially appointed, and any successor thereto, by delivering to
the Fiscal Agent a written notice of its decision to remove the
Fiscal Agent and may appoint a successor or successors thereto;
provided that any such successor shall be a bank or trust
company doing business and having a principal office in
California, having a combined capital (exclusive of borrowed
capital) and surplus of at least fifty million dollars
($50,000,000), and subject to supervision or examination by
federal or state authority. Any removal shall become effective
only upon acceptance of appointment by the successor Fiscal
Agent. 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 purposes 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.
Section 7.03. Resignation of Fiscal Agent. The Fiscal
Agent may at any time resign by giving written notice to the
District and by giving to the Owners notice of such resignation,
which notice shall be mailed to the Owners at their addresses
appearing in the registration books in the office of the Fiscal
Agent. Upon receiving such notice of resignation, the District
shall promptly appoint a successor Fiscal Agent by an instrument
in writing. Any resignation or removal of the Fiscal Agent and
appointment of a successor Fiscal Agent shall become effective
only upon acceptance of appointment by the successor Fiscal
Agent.
Section 7.04. Liability of Fiscal Agent. The recitals of
fact and all promises, covenants and agreements contained herein
and in the Bonds shall be taken as statements, promises,
covenants and agreements of the District, and 'the Fiscal Agent
assumes no responsibility for the correctness of the same and
makes no representations as to the validity or sufficiency of
this Resolution or of the Bonds, and shall incur no
responsibility in respect thereof, other than in connection with
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its duties or obligations specifically set forth herein or in
the Bonds or in the certificate of authentication assigned to or
imposed upon the Fiscal Agent. The Fiscal Agent shall be under
no responsibility or duty with respect to the issuance of the
Bonds for value. The Fiscal Agent shall not be liable in
connection with the performance of its duties hereunder, except
for its own negligence or willful misconduct.
The Fiscal Agent shall be protected in acting upon any
notice, resolution, request, consent, order, certificate,
report, 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. The Fiscal Agent may consult with counsel, who may
be counsel to the District, 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 hereunder in good faith and in accordance therewith.
The Fiscal Agent shall not be bound to recognize any person
as the Owner of a Bond unless and until such Bond is submitted
for inspection, if required, and his title thereto
satisfactorily established, if disputed.
Whenever in the administration of its duties under the
Resolution the Fiscal Agent shall deem it necessary or desirable
that a matter be proved or established prior to taking or
suffering any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed)
may, in the absence of bad faith on the part of the Fiscal
Agent, be deemed to be conclusively proved and established by a
written certificate of the District, and such certificate shall
be full warrant to the Fiscal Agent for any action taken or
suffered under the provisions of the Resolution upon the faith
thereof, but in its discretion the Fiscal Agent may, in lieu
thereof, accept other evidence of such matter or may require
such additional evidence as to it may seem reasonable.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.01. Events of Default. Any one or more of the
following events shall constitute an "event of default":
(a) Default in the due and punctual payment of the
principal of or redemption premium, if any, on any Bond when
and as the same shall become due and payable, whether at
maturity as therein expressed, by declaration or otherwise;
(b) Default in the due and punctual payment of the
interest on any Bond when and as the same shall become due
and payable; or
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(c) Default shall be made by the District in the
observance of any of the agreements, conditions or covenants
on its part in the Resolution or in the Bonds contained, and
such default shall have continued for a period of thirty
(30) days after the District shall have been given notice in
writing of such default by the Fiscal Agent.
Section 8.02. Remedies of Owners. Following the occurrence
of an event of default, any Owner shall have the right for the
equal benefit and protection of all Owners similarly situated:
(a) By mandamus or other suit or proceeding at law or
in equity to enforce his rights against the District and any
of the members, officers and employees of the District, and
to compel the District or any such members, officers or
employees to perform and carry out their duties under the
Act and their agreements with the Owners as provided in the
Resolution;
(b) By suit in equity to enjoin any actions or things
which are unlawful or violate the rights of the Owners; or
(c) Upon the happening of an event of default (as
defined in Section 8.01), by a suit in equity to require the
District and its members, officers and employees to account
as the trustee of an express trust.
Nothing in this article or in any other provision of the
Resolution, or in the Bonds, shall affect or impair the
obligation of the District, which is absolute and unconditional,
to pay the interest on and principal of the Bonds to the
respective Owners of the Bonds at the respective dates of
maturity, as herein provided, out of the Net Taxes pledged for
such payment, or affect or impair the right of action, which is
also absolute and unconditional, of such Owners to institute
suit to enforce such payment by virtue of the contract embodied
in the Bonds and in the Resolution.
A waiver of any default or breach of duty or contract by any
Owner shall not affect any subsequent default or breach of duty
or contract, or impair any rights or remedies on any such
subsequent default or breach. No delay or omission by any Owner
to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a
waiver of any such default or an acquiescence therein, and every
power and remedy conferred upon the Owners by the Act or by this
article may be enforced and exercised from time to time and as
often as shall be deemed expedient by the Owners.
If any suit, action or proceeding to enforce any right or
exercise any remedy is abandoned or determined adversely to the
Owners, the District and the Owners shall be restored to their
former positions, rights and remedies as if such suit, action or
proceeding had not been brought or taken.
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No remedy herein conferred upon or reserved to the Owners is
intended to be exclusive of any other remedy. Every such remedy
shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing, at law or
in equity or by statute or otherwise, and may be exercised
without exhausting and without regard to any other remedy
conferred by the Act or any other law.
In case the moneys held by the Fiscal Agent after an event
of default pursuant to Section 8.01(a) or (b) shall be
insufficient to pay in full the whole amount so owing and unpaid
upon the Bonds, then all available amounts shall be applied 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.
Section 8.03. Actions by Fiscal Agent as Attorney-in-
Fact. Any suit, action or proceeding which any Owner shall have
the right to bring to enforce any right or remedy hereunder may
be brought by the Fiscal Agent for the equal benefit and
protection of all Owners, and the Fiscal Agent is hereby
appointed (and the successive respective Owners of the Bonds and
interest coupons 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 Owners for the purpose
of bringing any such suit, action or proceeding and to do and
perform any and all acts and things for and on behalf of the
Owners as a class or classes, as may be necessary or advisable
in the opinion of the Fiscal Agent as such attorney-in-fact;
provided, however, that the Fiscal Agent shall not be required
to take any action hereunder unless it is provided with
indemnity satisfactory to it.
ARTICLE IX
DEFEASANCE AND PARITY BONDS
Section 9.01. Defeasance. If the District shall pay or
cause to be paid, or there shall otherwise be paid, to the
Owners of all outstanding Bonds the interest due thereon and the
principal thereof, at the times and in the manner stipulated
therein and in the Resolution, then the Owners of such Bonds
shall cease to be entitled to the pledge of Net Taxes, and all
covenants, agreements and other obligations of the District to
the Owners of such Bonds under the Resolution shall thereupon
cease, terminate and become void and be discharged and
satisfied. In such event, the Fiscal Agent shall execute and
deliver to the District all such instruments as may be desirable
to evidence such discharge and satisfaction, and the Fiscal
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Agent shall pay over or deliver to the District all money or
securities held by them pursuant to the Resolution which are not
required for the payment of the interest~ due on and the
principal of such Bonds. Any outstanding Bond shall be deemed
to have been paid within the meaning expressed in the first
paragraph of this section if the Bonds are paid in any one or
more of the following ways:
(a) by paying or causing to be paid the principal of,
premium, if any, and interest with respect to all Bonds
outstanding, as and when the same become due and payable;
(b) by depositing with the Fiscal Agent, in trust, at
or before maturity, money which, together with the amounts
then on deposit in the Special Tax Fund, the Costs of
Issuance Fund and the Redemption Fund, is fully sufficient
to pay the principal of, premium, if any, and interest on
all Bonds outstanding as and when the same shall become due
and payable; or
(c) by depositing with the Fiscal Agent, in trust,
direct noncallable obligations of, or noncallable
obligations guaranteed by, the United States of America, in
which the District may lawfully invest its money, in such
amount as the Fiscal Agent shall determine will, together
with the interest to accrue thereon and moneys then on
deposit in the Special Tax Fund, the Costs of Issuance Fund
and the Redemption Fund, together with the interest to
accrue thereon, be fully sufficient to pay and discharge the
principal of, premium, if any, and interest on all Bonds
outstanding as and when the same shall become due and
payable; then, at the election of the District, and
notwithstanding that any Bonds shall not have been
surrendered for payment, all obligations of the District
under this Resolu- tion with respect to all outstanding
Bonds shall cease and terminate, except for the obligation
of the Fiscal Agent to pay or cause to be paid to the Owners
of the Bonds not so surrendered and paid, all sums due
thereon. Notice of such election shall be filed with the
Fiscal Agent not less than thirty (30) days prior to the
proposed defeasance date. On or prior to the defeasance
date, there shall be provided to the Fiscal Agent a
certificate of a certified public accountant stating its
opinion as to the sufficiency of the moneys or securities--
deposited with the Fiscal Agent to pay and discharge the
principal of and interest on all Bonds outstanding as and
when the same shall become due and payable, and an opinion
of Bond Counsel (which may rely upon the opinion of the
certified public accountant) to the effect that the Bonds
have been legally defeased in accordance with this
Resolution. Upon being provided with the required report of
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a certified public account and opinion of Bond Counsel, the
Fiscal Agent, upon request of the District, shall release
the rights of the Bondowners under this Resolution and
execute and deliver to the District all such instruments as
may be desirable to evidence such release, discharge and
satisfaction, and the Fiscal Agent shall pay over or deliver
to the District any funds held by the Fiscal Agent at the
time of a defeasance, which are not required for the purpose
of paying and discharging the principal of or interest on
the Bonds when due. The Fiscal Agent shall, at the written
direction of the District, mail, first class, postage
prepaid, a notice to the Bondowners, in the form directed by
the District, stating that the defeasance has occurred.
Section 9.02. Conditions for the Issuance of Parity Bonds
and Other Additional Indebtedness. The District may at any time
after the issuance and delivery of the Bonds hereunder issue
Parity Bonds payable from the Net Taxes and secured by a lien
and charge upon the Net Taxes equal to the lien and charge
securing the Outstanding Bonds theretofore issued hereunder, but
only subject to the following specific conditions, which are
hereby made conditions precedent to the issuance of any such
Parity Bonds:
(a) The District shall be in compliance with all
covenants set forth in this Resolution and a certificate of the
District to that effect shall have been filed with the Fiscal
Agent.
(b) The issuance of such Parity Bonds shall have been
duly authorized pursuant to the Act and all applicable laws, and
the issuance of such Parity Bonds shall have been provided for
by a Supplemental Resolution duly adopted by the District which
shall specify the following:
(1) The purpose for which such Parity Bonds are
to be issued and the fund or funds into which the proceeds
thereof are to be deposited, including a provision requiring
the proceeds of such Parity Bonds to be applied solely for
(i) the purpose of aiding in financing the Project,
including payment of all costs incidental to or connected
with such financing, and/or (ii) the purpose of refunding
any Bonds, including payment of all costs incidental to or
connected with such refunding;
(2) The authorized principal amount of such
Parity Bonds;
(3) The date and the maturity date or dates of
such Parity Bonds; provided that (i) each maturity date
shall fall upon the same date as is the maturity date for
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the Bonds or a maturity date after the maturity of the Term
Bonds, (ii) all such Parity Bonds of like maturity shall be
identical in all respects, except as to number, and (iii)
fixed serial maturities or mandatory sinking account
payments, or any combination thereof, shall be established
to provide for the retirement of all such Parity Bonds on or
before their respective maturity dates;
(4) The interest payment dates for such Parity
Bonds; provided that interest payment dates shall be on the
same semiannual dates as the Interest Payment Dates for the
Bonds;
(5) The denomination and method of numbering of
such Parity Bonds;
(6) The redemption premiums, if any, and the
redemption terms, if any, for such Parity Bonds; provided
that, in the event that less than all of such Parity Bonds
are to be redeemed at any one time, the Fiscal Agent shall
redeem that amount of Bonds issued prior to the issuance of
such Parity Bonds and that amount of such Parity Bonds in
the proportion which the then outstanding principal amount
of Bonds issued prior to the issuance of such Parity Bonds
bears to the then outstanding principal amount of such
Parity Bonds;.
(7) The amount and due date of each mandatory
sinking fund account payment, if any, for such Parity Bonds;
(8) The amount, if any, to be deposited from the
proceeds of such Parity Bonds in any interest account;
(9) The amount, if any, to be deposited from the
proceeds of such Parity Bonds in any reserve account;
provided that such reserve account shall be increased at or
prior to the time such Parity Bonds become outstanding to an
amount at least equal to the lesser of 9~ of the then
outstanding Bonds and Parity Bonds or Maximum Annual Debt
Service on all then outstanding Bonds and Parity Bonds, and
that an amount at least equal to the lesser of 9~ of the
then outstanding Bonds and Parity Bonds or Maximum Annual
Debt Service on all outstanding Bonds shall be maintained
thereafter in such reserve account; -
(10) The form of such Parity Bonds; and
(11) Such other provisions as are necessary or
appropriate and not inconsistent with the Resolution.
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(c) The Fiscal Agent shall have received the following
documents or money or securities, all of such documents dated or
certified, as the case may be, as of the date of delivery of
such Parity Bonds by the Fiscal Agent (unless the Fiscal Agent
shall accept any of such documents bearing a prior date):
(1) A certified copy of the Supplemental
Resolution authorizing the issuance of such Parity Bonds;
(2) A written request of the District as to the
delivery of such Parity Bonds;
(3) An opinion of Bond Counsel to the effect that
(a) the District has the right and power under the Act to
adopt the Resolution and all Supplemental Resolutions
thereto, and the Resolution and all such Supplemental
Resolutions have been duly and lawfully adopted by the
District, are in full force and effect and are valid and
binding upon the District and enforceable in accordance with
their terms (except as enforcement may be limited by
bankruptcy, insolvency, reorganization and other similar
laws relating to the enforcement of creditors' rights), and
no other authorization for the Resolution or such
Supplemental Resolutions is required; (b) the Resolution
creates the valid pledge which it purports to create of the
Net Taxes as provided in the Resolution, subject to the
application thereof to the purposes and on the conditions
permitted by the Resolution; (c) such Parity Bonds are valid
and binding limited obligations of the District, enforceable
in accordance with their terms (except as enforcement may be
limited by bankruptcy, insolvency, reorganization and other
similar laws relating to the enforcement of creditors'
rights) and the terms of the Resolution and all Supplemental
Resolutions thereto and entitled to the benefits of the
Resolution and all such Supplemental Resolutions and the
Act, and such Parity Bonds have been duly and validly
authorized and issued in accordance with the Act (or other
applicable laws) and the Resolution and all such
Supplemental Resolutions; and (d) the issuance of the Parity
Bonds will not adversely affect the exclusion from gross
income for federal income tax purposes of interest on the
Bonds or the exemption from State of California personal
income taxation of interest on the Bonds;
(4) A certificate of the District containing such
statements as may be reasonably necessary to show compliance
with the requirements of the Resolution;
(5) A certificate of an Independent Financial
Consultant certifying that the maximum Special Tax that may
be levied by the District pursuant to the Act and the
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applicable resolutions and ordinances of the District is at
least 1.15 times the amount required to pay debt service on
all Outstanding Bonds and Parity Bonds; and
(6) Such further documents, money and securities
as are required by the provisions of the Resolution and the
Supplemental Resolution providing for the issuance of such
Parity Bonds.
The District covenants not to issue additional
indebtedness secured by a tax or assessment lien on the land
within the District if the indebtedness would result in publicly
financed indebtedness on the land within the boundaries of the
District in excess of $32,800,000, exclusive of indebtedness
existing prior to the Delivery Date, without obtaining an
appraisal of a qualified MAI appraiser demonstrating that the
value of the land within the boundaries of the District,
including existing improvements plus proposed improvements to be
financed through the additional indebtedness, is such that such
total indebtedness, including the proposed additional
indebtedness, is not more than thirty-three percent (33%) of the
total value of the land within the boundaries of the District.
ARTICLE X
MISCELLANEOUS
Section 10.01. Cancellation of Bonds. Ail Bonds
surrendered to the Fiscal Agent for payment upon maturity or for
redemption shall upon payment therefor and any Bond purchased by
the District as authorized herein shall be cancelled forthwith
and shall not be reissued. The Fiscal Agent shall destroy such
Bonds, as provided by law, and furnish to the District a
certificate of such destruction.
Section 10.02. Execution of Documents and Proof of
Ownership. Any request, direction, consent, revocation of
consent, or other instrument in writing required or permitted by
this Resolution to be signed or executed by Bondowners may be in
any number of concurrent instruments of similar tenor may be
signed or executed by such Owners in person or by their
attorneys appointed by an instrument in writing for that
purpose, or by the bank, trust Company or other depository for
such Bonds. Proof of the execution of any such instrument,-or-
of any instrument appointing any such attorney, and of the
ownership of Bonds shall be sufficient for the purposes of this
Resolution (except as otherwise herein provided), if made in the
following manner:
(a) The fact and date of the execution by any Owner or his
or her attorney of any such instrument and of any instrument
appointing any such attorney, may be proved by a signature
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guarantee of any bank or trust company located within the United
States of America. Where any such instrument is executed by an
officer of a corporation or association or a member of a
partnership on behalf of such corporation, association or
partnership, such signature guarantee shall also constitute
sufficient proof of his authority.
(b) As to any Bond, the person in whose name the same shall
be registered i~ the Bond Register shall be deemed and regarded
as the absolute Owner thereof for all purposes, and payment of
or on account of the principal of any such Bond, and the
interest thereon, shall be made only to or upon the order of the
registered Owner thereof or his or her legal representative.
All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Bond and the interest thereon
to the extent of the sum or 'sums to be paid, The Fiscal Agent
shall not be affected by any notice to the contrary.
Nothing contained in this Resolution shall be construed as
limiting the Fiscal Agent to such proof, it being intended that
the Fiscal Agent may accept any other evidence of the matters
herein stated which the Fiscal Agent may deem sufficient. Any
request or consent of the Owner of any Bond shall bind every
future Owner of the same Bond in respect of anything done or
suffered to be done by the Fiscal Agent in pursuance of such
request or consent.
Section 10.03. Unclaimed Moneys. Anything in the
Resolution to the contrary notwithstanding, any money held by
the Fiscal Agent in trust for the payment and discharge of any
of the Bonds which remain unclaimed for five (5) years after the
date when such Bonds have become due and payable, if such money
was held by the Fiscal Agent at such date, or for five (5) years
after the date of deposit of such money if deposited with the
Fiscal Agent after the said date when such Bonds become due and
payable, shall, at the written request of the District, be
repaid by the Fiscal Agent to the District, as its absolute
property and free from trust, and the Fiscal Agent shall
thereupon be released and discharged with respect thereto and
the Owners shall look only to the District for the payment of
such Bonds; provided, however, that, before being required to
make any such payment to the District, the Fiscal Agent Shall,
at the expense of the District, cause to be mailed to the
registered Owners of such Bonds at their addresses as they
appear on the registration books of the Fiscal Agent a notice
that said money remains unclaimed and that, after a date named
in said notice, which date shall not be less than thirty (30)
days after the date of the mailing of such notice, the balance
of such money then unclaimed will be returned to the District.
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Section 10.04. Provisions Constitute Contract. The
provisions of this Resolution shall constitute a contract
between the District and the Bondowners and the provisions
hereof shall be construed in accordance with the laws of the
State of California.
In case any suit, action or proceeding to enforce any right
or exercise any remedy shall be brought or taken and the
Bondowner or the Fiscal Agent shall prevail, the Bondowner or
the Fiscal Agent shall be entitled to receive from the Special
Tax Fund reimbursement for reasonable costs, expense, outlays
and attorney's fees and should said suit, action or proceeding
be abandoned, or be determined adversely to the Bondowners or
the Fiscal Agent, then the District, the Fiscal Agent and the
Bondowners shall be restored to their former positions, rights
and remedies as if such suit, action or proceeding had not been
brought or taken.
After the issuance and delivery of the Bonds this Resolution
shall be irrepealable, but shall be subject to modifications to
the extent and in the manner provided in this Resolution, but to
no greater extent and in no other manner.
Section 10.05. Future Contracts. Subject to the provisions
of Section 9.02, nothing herein contained shall be deemed to
restrict or prohibit the District from making contracts or
creating bonded or other indebtedness payable from the general
fund of the District or from taxes or any source other than the
Net Taxes as defined herein, and, from and after the sale of the
Bonds, the general fund of the District shall not include the
Net Taxes and no contract or other obligations payable from the
general fund of the District shall be payable from the Net
Taxes, except as provided herein.
Section 10.06. Further Assurances. The District will
adopt, make, execute and deliver any and all such further
resolutions, instruments and assurances as may be reasonable
necessary or proper to carry out the intention or to facilitate
the performance of the Resolution, and for the better assuring
and confirming unto the Owners of the Bonds of the rights and
benefits provided in the Resolution.
Section 10.07. Severability. If any covenant, agreement or
provision, or any portion thereof, contained in this Resolution,
or the application thereof to any person or circumstance, is
held to be unconstitutional, invalid or unenforceable, the
remainder of this Resolution and the application of any such
covenant, agreement or provision, or portion thereof, to other
persons or circumstances, shall be deemed severable and shall
not be affected thereby, and this Resolution and the Bonds
issued pursuant hereto shall remain valid and the Bondowners
shall retain all valid rights and benefits accorded to them
under the laws of the State of California.
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Section 10.08. Notices. Any notices required to be given
to the District with respect to the Bonds or this Resolution
shall be mailed, first class, or personally delivered to the
City Manager and the City Clerk at 13325 Civic Center Drive,
Poway, California 92064, and all notices to the Fiscal Agent
shall be mailed, first class, or personally delivered to the
Fiscal Agent at 333 South Beaudry Avenue, 24th Floor, Los
Angeles, California 90017, Attention: Corporate Trust Division
(W24-30), Reference No. 11-7-07440-0. 6.
SIGNED AND APPROVED this 10th day of March, 1987 by
the City Manager of the City of Poway acting on behalf of the
South Poway Community Facilities District No. 1 (Pomerado
Business Park Project).
Cit~{~ger- / -
03/07/87
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EXHIBIT "1"
NO.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
SOUTH POWAY COMMUNITY FACILITIES DISTRICT NO. 1
(POMERADO BUSINESS PARK PROJECT)
1987 SPECIAL TAX REFUNDING BOND
INTEREST RATE
MATURITY DATE
DATED DATE CUSIP NUMBER
REGISTERED OWNER:
PRINCIPAL AMOUNT
THE SOUTH POWAY COMMUNITY FACILITIES DISTRICT NO. 1 (the
"District") situated in the City of Poway, State of California
(the "City"), FOR VALUE RECEIVED, hereby promises to pay solely
from Special Taxes (as hereinafter defined) to be collected in
the District, to the Registered Owner named above, or
registered assigns, on the Maturity Date set forth above,
unless redeemed prior thereto as hereinafter provided, the
Principal Amount set forth above, and to pay interest on such
Principal Amount from the Interest Payment Date (as hereinafter
defined) next preceding the date of registration hereof, unless
such date of registration is after a Record Date (as
hereinafter defined) but on or prior to an Interest Payment
Date, in which event interest will be payable from such
Interest Payment Date, or unless such date of registration is
prior to the first Record Date, in which event interest will be
payable from February 2, 1987 semiannually on February 2 and
August 2 (each an "Interest Payment Date"), commencing August
2, 1987 at the Interest Rate set forth above, until the
Principal Amount hereof is paid or made available for payment.
The principal of and premium, if any, on this Bond are
payable to the Registered Owner hereof in lawful money of the
United States of America upon presentation and surrender of
this Bond at the corporate trust office of Security Pacific
National Bank (the "Fiscal Agent") in Los Angeles, California.
Interest on this Bond shall be paid by check of the Fiscal
Agent mailed, by first class mail, postage prepaid, to the
Registered Owner hereof as of the close of business on the 15th
day of the month preceding the month in which the Interest
Payment Date occurs or, if such day is not a business day, on
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the next succeeding business day (the "Record Date") at such
Registered Owner's address as it appears on the registration
books maintained by the Fiscal Agent.
This Bond is one of a duly authorized issue of "South Poway
Community Facilities District No. 1 (Pomerado Business Park
Project) 1987 Special Tax Refunding Bonds" (the "Bonds") issued
in the aggregate principal amount of $32,800,000 pursuant to
the Mello-Roos Community Facilities Act of 1982, as amended,
being Sections 53311, et seq., of the California Government
Code (the "Act"), and Article 11 of Chapter 3 of Division 2 of
Title 5 of the California Government Code, for the purpose of
refunding the District's Special Tax Bonds Series 1985, paying
certain costs related to the issuance of the Bonds and
establishing a reserve fund. The issuance of the Bonds and the
terms and conditions thereof are provided for by a resolution
adopted by the City Council of the City of Poway acting in its
capacity as the legislative body of the District (the
"Legislative Body") on March 3, 1987 (the "Resolution"), and
this reference incorporates the Resolution herein, and by
acceptance hereof the Registered Owner of this Bond assents to
said terms and conditions. The Resolution is adopted under and
this Bond is issued under, and both are to be construed in
accordance with, the laws of the State of California.
Pursuant to the Act and the Resolution, the principal of,
premium, if any, and interest on this Bond are payable solely
from the annual special taxes authorized under the Act to be
collected within the District (the "Special Taxes"). Any tax
for the payment hereof shall be limited to the Special Taxes
collected, except to the extent that provision for payment has
been made by the Legislative Body, as may be permitted by law.
Additional bonds payable from the Special Taxes may be issued
which will rank equally as to security with the Bonds, but only
in accordance with the terms and conditions set forth in the
Resolution.
The Bonds maturing on February 2, 2011 (the "Term Bonds")
may be redeemed at the option of the District on February 2,
1997, or on any Interest Payment Date thereafter prior to
maturity, in whole or in part, by lot, at the following
redemption prices, expressed as a percentage of the principal
amount thereof, together with accrued interest to the date of
redemption:
Redemption Dates
Redemption Prices
February 2, 1997 and August 2, 1997
February 2, 1998 and August 2, 1998
February 2, 1999 and August 2, 1999
February 2, 2000 and thereafter
103%
102%
101%
100%
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In addition, the Term Bonds shall be subject to mandatory
sinking fund redemption prior to maturity, in part, by lot,
from Sinking Fund Payments (as defined in the Resolution) at a
price equal to the principal amount thereof, together with
accrued interest to the date of redemption, to the extent, in
the manner and subject to the terms of the Resolution.
Notice of redemption with respect to the Bonds to be
redeemed shall be mailed to the Registered Owners thereof not
less than 30 nor more than 60 days prior to the redemption date
by first class mail, postage prepaid, to the address set forth
in the registration books. A failure of the Registered Owner
hereof to receive such notice will not affect the validity of
the proceedings for redemption. All Bonds or portions thereof
so called for redemption will cease to accrue interest on the
specified redemption date; provided that funds for the
redemption are on deposit with the Fiscal Agent on the
redemption date. Thereafter, the registered owners of such
Bonds shall have no rights except to receive payment of the
redemption price upon the surrender of the Bonds.
This Bond shall be registered in the name of the Registered
Owner hereof, as to both principal and interest, and the
District and the Fiscal Agent may treat the Registered Owner
hereof as the absolute owner for all purposes and shall not be
affected by any notice to the contrary.
The Bonds are issuable only in fully registered form in the
denomination of $5,000 or any integral multiple of $5,000 and
may be exchanged for a like aggregate principal amount of Bonds
of other authorized denominations of the same issue and
maturity, all as more fully set forth in the Resolution. This
Bond is transferable by the Registered Owner hereof, in person
or by his attorney duly authorized in writing, at the corporate
trust office of the Fiscal Agent in Los Angeles, California,
but only in the manner, subject to the limitations and upon
payment of the charges provided in the Resolution, upon
surrender and cancellation of this Bond. Upon such transfer, a
new registered Bond of authorized denomination or denominations
for the same aggregate principal amount of the same issue and
maturity will be issued to the transferee in exchange therefor.
The rights and obligations of the District and of the
registered owners of the Bonds may be amended at any time, and
in certain cases without the consent of the registered owners -
to the extent and upon the terms provided in the Resolution.
THE BONDS DO NOT CONSTITUTE OBLIGATIONS oF THE CITY OF
POWAY OR THE DISTRICT FOR WHICH THE CITY OF POWAY OR THE
DISTRICT IS OBLIGATED TO LEVY OR PLEDGE, OR HAS LEVIED OR
PLEDGED, GENERAL OR SPECIAL TAXATION, OTHER THAN THE SPECIAL
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TAXES. THE BONDS ARE NOT A DEBT OF THE DISTRICT, THE CITY, THE
STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN
THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OR
RESTRICTION. THE DISTRICT HAS COVENANTED FOR THE BENEFIT OF
THE OWNERS OF THE BONDS THAT IT WILL COMMENCE WITHIN 150 DAYS
AND DILIGENTLY PURSUE TO COMPLETION APPROPRIATE FORECLOSURE
ACTIONS IN THE EVENT OF DELINQUENCIES OF ANY SPECIAL TAX
INSTALLMENTS LEVIED FOR PAYMENT OF PRINCIPAL AND INTEREST.
This Bond shall not become valid or obligatory for any
purpose until the certificate of authentication and
registration hereon endorsed shall have been dated and signed
by the Fiscal Agent.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required by law to exist, happen and be
performed precedent to and in the issuance of this Bond have
existed, happened and been performed in due time, form and
manner as required by law, and that the amount of this Bond,
together with all other indebtedness of the District, does not
exceed any debt limit prescribed by the laws or Constitution of
the State of California.
IN WITNESS WHEREOF, South Poway Community Facilities
District No. 1 has caused this Bond to be dated as of February
2, 1987, to be signed by the Mayor of the City of Poway by his
facsimile signature and attested by the facsimile signature of
the City Clerk and has caused its seal to be reproduced hereon.
Mayor of the City of Poway,
sitting as the legislative body of
South Poway Community Facilities
District No. 1
ATTEST:
City Clerk of the City of Poway,
sitting as the legislative body of
South Poway Community Facilities
District No. 1
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FORM OF FISCAL AGENT'S CERTIFICATE
OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described in the within defined
Resolution.
Dated:
By: SECURITY PACIFIC NATIONAL
BANK, as Fiscal Agent
By:
Authorized Signatory
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign
and transfer unto the within-mentioned
registered Bond and hereby irrevocably constitute(s) and
appoint(s) attorney, to transfer the
same on the books of the Fiscal Agent with full power of
substitution in the premises.
Dated:
Signature Guaranteed
Note: Signature(s) must be
guaranteed by a member firm
of the New York Stock
Exchange or a commercial
bank or trust company.
Notice: The signature on this
assignment must correspond
with the name(s) as written on
the face of the within Bond in
every particular without ---
alteration or enlargement, or
any change.whatsoever.
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EXHIBIT "B"
REQUISITION FOR DISBURSEMENT OF PROJECT COSTS
The undersigned, a duly authorized representative of
South Poway Community Facilities District No. 1, hereby
certifies to Security Pacific National Bank, Fiscal Agent, for
purposes of disbursing funds from the Acquisition Fund to pay
Project Costs that:
(1) The Fiscal Agent is to pay to the payees set forth on
Exhibit 1 hereto the amount set forth next to each payee's name
for the item described on Exhibit 1;
(2) The conditions to the release of these amounts from
the Acquisition Fund have been satisfied;
(3) There has not been filed with or served upon the
District notice of any lien, right to lien or attachment upon,
stop notice or claim affecting the right to receive payment of,
any of the moneys payable to any of the payees named on Exhibit
1 hereto which has not been released or will not be released
simultaneously with the payment of such amounts, other than
materialmen's or mechanic's liens accruing by mere operation of
law; and
(4) Sufficient money remains in the Acquisition Fund to
pay all remaining costs of acquisition, construction and
financing of the Project.
Dated:
SOUTH POWAY COMMUNITY FACILITIES
DISTRICT NO. 1
By:
Authorized Officer
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EXHIBIT 1
Payee
Amount Due
Purpose of
Expenditure
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