Res 89-037 NO. 89-037' '
RESOLUTION
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY ACTING AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 88-1 OF THE h~]~;.
CITY OF POWAY (PARKWAY BUSINESS CENTER)
AUTHORIZING THE ISSUANCE OF ITS SERIES 1989
SPECIAL TAX BONDS IN A PRINCIPAL AMOUNT NOT
TO EXCEED THIRTY MILLION DOLLARS
($30,000,000), AND APPROVING CERTAIN
DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
March 28 , 1989
WHEREAS, the City Council of the City of Poway,
located in San Diego County, California (hereinafter sometimes
referred to as the "legislative body of the District"), has
heretofore undertaken proceedings and declared the necessity to
issue bonds on behalf of the Community Facilities District
No. 88-1 of the City of Poway (Parkway Business Center) (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 Nos. 88-122 and 88-123
adopted by the legislative body of the District on the 18th day
of October, 1988, the bond propositions attached as Exhibit A
hereto and incorporated herein by reference were submitted to
the qualified electors within the District, and were
unanimously approved at an election held on November 1, 1988;
and
WHEREAS, based upon Resolution Nos. 88-122 and 88-123
and the election, the District is now authorized to issue bonds
in one or more series, pursuant to the Act, in an aggregate
principal amount not to exceed $45,000,000; and
WHEREAS, the legislative body of the District hereby
desires to proceed to issue its first series of bonds in an
aggregate principal amount not to exceed $30,000,000 designated
as the "Community Facilities District No. 88-1 of the City of
Poway (Parkway Business Center), Series 1989 Special Tax 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
Resolution No. 89-037
Page 2
Incorporated and Smith Barney, Harris Upham & Co. Inc.
(collectively, the "Underwriters") in accordance with the terms
of the Bond Purchase Contract approved as to form by this
legislative body herein 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 Community Facilities District
No. 88-1 of the City of Poway (Parkway Business Center) DOES
HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS:
SECTION 1. Each of the above recitals is true and
correct.
SECTION 2. The City, by its Resolution No. 88-127,
adopted on November 1, 1988, has declared that Proposition A
and Proposition B presented to the qualified electors of the
District on November 1, 1988, copies of which are attached as
Exhibit A, have received a unanimous vote of the qualified
electors 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 not to exceed $30,000,000 is hereby authorized pursuant
to the Act with the exact principal amount to be determined by
the officer signing the Bond Purchase Contract in accordance
with Section 7 below. The Bonds shall mature on the dates and
pay interest at the rates set forth in the Bond Purchase
Contract to be executed on behalf of the District in accordance
with Section 7 hereof and otherwise 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, or his written designee, which 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 officers executing the same, with such approval to be
conclusively evidenced by the execution and delivery of the
Supplement to Resolution. Capitalized terms used in this
Resolution which are not defined herein have the meaning
ascribed to them in the form of the Supplement to Resolution
attached hereto as Exhibit B.
2643n/2468/004 -2-
Resoluticn No. 89-037
Page 3
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. The District hereby
adopts as its seal the form of seal set forth in Exhibit C
hereto.
SECTION 5. The proceeds of the Bonds and the Special
Taxes may be invested in an Investment Agreement satisfying the
criteria set forth in Exhibit B. The City Council hereby
determines that entering into such an Investment Agreement will
reduce the risk of interest rate fluctuations on investments
and reduce the overall cost of borrowing for the District.
SECTION 6. The covenants set forth in the Supplement
to Resolution to be executed in accordance with Section 3 above
are hereby approved, shall be deemed to be covenants of the
City Council in its capacity as the legislative body of the
District and shall be complied with by the District and its
officers. The Supplement to Resolution shall constitute a
contract between the District and the Owners of the Bonds.
SECTION 7. Security Pacific National Bank is hereby
appointed to act as Fiscal Agent, Registrar and Transfer Agent
for the Bonds and the City Manager, or his written designee, is
hereby authorized to enter into an agreement with the Fiscal
Agent to provide such services to the District. The forms of
the Construction Management Agreement, the Bond Purchase
Contract and the Preliminary Official Statement presented at
this meeting are hereby approved and the Mayor and the City
Manager are hereby authorized and directed to execute the Bond
Purchase Contract, the Construction Management Agreement and a
final Official Statement 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 officers executing the same, with such approval to be
conclusively evidenced by the execution and delivery of such
documents; provided, however, that the Bond Purchase Contract
shall be signed only if the net interest cost on the Bonds does
not exceed 9.25% per annum and the Underwriters' discount does
not exceed 2.0% of the principal amount of the Bonds. The
Underwriters are hereby authorized to distribute the
Preliminary Official Statement to prospective purchasers, and
the City Manager, or his written designee, shall approve the
form of the final Official Statement to be delivered with the
Bonds to the purchasers thereof.
2643n/2468/004 -3-
Resolution No. 89-037
Page 4
SECTION 8. The City Manager, or his written designee,
is authorized to contract for all services necessary to effect
the issuance of the Bonds. Such services shall include, but
not be limited to, printing the Bonds, the Preliminary Official
Statement and the final Official Statement, obtaining legal
services, paying agent services and any other services deemed
appropriate as set forth in a certificate of the City Manager,
or his written designee. The City Manager, or his written
designee, is authorized to pay for the cost of such services,
together with other Costs of Issuance, with Bond proceeds
deposited to the Construction Fund established pursuant to the
Supplement to Resolution. Without further approval of the
legislative body of the District, the total amount disbursed by
the City Manager for such Costs of Issuance shall not exceed 3%
of the principal amount of the Bonds.
SECTION 9. Ail actions heretofore taken by officers
and agents of the District and the City with respect to the
sale and issuance of the Bonds are hereby approved, confirmed
and ratified, and the Mayor and City Manager and the other
officers of the City and the District responsible for the
fiscal affairs of the District 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 and the fulfillment of the purposes of the
Bonds as described in the Supplement to Resolution. In the
event that the Mayor is unavailable to sign any document
authorized for execution herein, any other member of the City
Council or the City Manager, or his written designee, may sign
such document. Any document authorized herein to be signed by
the City Clerk may be signed by a duly appointed deputy clerk.
2643n/2468/004 -4-
Resolution No. 89-037
Page 5
PASSED, ADOPTED AND APPROVED, by the City Council of the City
of Poway, California, at a regular meeting thereof this 28th day
of March, 1989.
C~a~l R Kru~e, Mayor
ATTEST:
Marjorie~K. Wahlsten, City Clerk
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN DIEGO )
I, Marjorie K. Wahlsten, City Clerk of the City of Poway, do
hereby certify under~Renalty of perjury that the foregoing
Resolution No. 89-0J/ was duly adopted by the City Council
acting in its capacity as the legislative body of Community
Facilities District No. 88-1 of the City of Poway (Parkway
Business Center) at a meeting of said City Council held on the
28th day of March, 1989, and that it was so adopted by the
following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
BRANNON, EMERY, GOLDSMITH, HIGGINSON, KRUSE
NONE
NONE
NONE
MarjorielK. Wahlsten, City Clerk
City o~oway
-5-
6/A/CFD. 15
Resolution No. 89-037
Page 6
EXHIBIT A
OFFICIAL BALLOT
COMMUNITY FACILITIES DISTRICT NO. 88-1
OF
THE CITY OF POWAY
(PARKWAY BUSINESS CENTER)
SPECIAL BOND AND SPECIAL TAX ELECTION
November 1, 1988
This ballot represents
votes.
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 City Clerk and obtain another.
PROPOSITION NO. A: Shall
Community Facilities District No. 88-1
of the City of Poway (Parkway Business
Center) incur an indebtedness and
issue bonds in the maximum aggregate
principal amount of $45,000,000, with
interest at a rate or rates not to exceed
the greater of twelve percent (12%) per
annum or the maximum interest rate then
permitted by law, the proceeds of
which will be used to design, acquire,
construct, lease, modify or rehabilitate
certain public facilities, consisting
of roadway improvements, storm drains,
a fire station and equipment, sewer,
water and public utility improvements
(the 'Facilities'), as provided in Reso-
lution No. 88-122 (the "Resolution of
Formation") of the City Council of the
City of Poway, and shall a special tax
with a rate and method of apportionment
as provided in the Resolution of Forma-
tion be levied to pay for the Facilities
described in the Resolution of Formation,
for the creation or replenishment of any
necessary reserve funds, for any
incidental expenses of the District
associated with the Facilities or the
bonds and for the principal of, premium,
if any, and interest on such bonds?
YES
NO
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Resolution No. 89-037
Page 7
PROPOSITION NO. B: Shall
the appropriations limit, as defined
by subdivision (h) of Section 8 of
Article XIII B of the California Consti-
tution, for Community Facilities District
No. 88-1 of the City of Poway
(Parkway Business Center) be an amount
equal to $45,000,000?
YES
NO
2643n/2468/004
Resolution No. 89-037
Page 8
SUPPLEMENT TO RESOLUTION NO. 89-
GOVERNING TERMS OF THE
COMMUNITY FACILITIES DISTRICT NO. 88-1
(PARKWAY BUSINESS CENTER)
OF THE CITY OF POWAY
SERIES 1989 SPECIAL TAX BONDS
Resolution No. 89-037
Page 9
SUPPLEMENT TO RESOLUTION NO.
GOVERNING TERMS OF THE
COMMUNITY FACILITIES DISTRICT NO.
(PARKWAY BUSINESS CENTER)
OF THE CITY OF POWAY
SERIES 1989 SPECIAL TAX BONDS
89- ~3~
88-1
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 3.01
Section 3.02
Section 3.03
Section 3.04
Section 3.05
Section 3.06
Section 3.07
Article I
Definitions
Definitions .............................
Article II
General Authorization and Bond Terms
Amount, Issuance, Purpose and Nature
of Bonds and Parity Bonds ...............
Type and Nature of Bonds and Parity
Bonds ...................................
Equality of Bonds and Parity 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 and Parity Bonds ......
Article III
Creation of Funds and Application of
Proceeds and Net Taxes
Creation of Funds .......................
Disposition of Bond Proceeds ............
Deposit and Disbursement of Special
Tax Revenues ............................
Administrative Expense Account of the
Special Tax Fund ........................
Interest Account and Principal Account
of the Special Tax Fund .................
Redemption Fund of the Special Tax Fund.
Reserve Account of the Special Tax Fund.
Page
8
9
10
11
11
12
12
13
13
14
14
15
16
16
17
19
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Resolution No. 89-037
Page 10
Section 3.08
Section 3.09
Section 3.10
Section 3.11
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
Excess Investment Earnings Fund .........
Special Reserve Fund ....................
Construction Fund .......................
Investments .............................
Article IV
Redemption of Bonds
Redemption of Bonds .....................
Selection of Bonds and Parity Bonds
for Redemption ..........................
Notice of Redemption ....................
Partial Redemption of Bonds or Parity
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 or Parity Bonds;
Delivery of Amended Bonds or Parity
Bonds ...................................
Article VII
Paying Agent
Paying Agent ............................
Removal of Paying Agent .................
Resignation of Paying Agent .............
Liability of Paying Agent ...............
Article VIII
Events of Default; Remedies
Events of Default .......................
Remedies of Owners ......................
Actions by Fiscal Agent as Attorney-
in-Fact .................................
Page
20
23
24
25
27
29
29
32
32
32
33
37
37
39
39
40
41
41
42
42
44
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Resolution No. 89-037
Page 11
Article IX
Defeasance and Parity Bonds
Section 9.01
Section 9.02
Defeasance ..............................
Conditions for the Issuance of
Parity Bonds and Other Additional
Indebtedness ............................
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 .............................................
Attachment 1
Attachment 2
Form of Special Tax Bond
Requisition for Disbursement of
Project Costs
Page
44
46
49
49
5O
51
51
51
52
52
52
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Resolution No. 89-037
Page 12
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 that certain Acquisition,
Funding and Disclosure Agreement between the District and ADI
Properties dated as of , 1989 setting forth the
conditions to the construction and acquisition of the Project
and the expenditure of Bond proceeds.
"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.
"Authorized Investments" means, subject to applicable law,
(1) 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); (2) 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; (3) an Investment Agreement; (4) 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 or by
repurchase agreements having a term of one year or less and
collateralized by such obligations which the Seller will
repurchase on or before a specified date and for a specified
amount and which the Seller will deliver to the District or the
Fiscal Agent by book entry, physical deliver or by third-party
custodial agreement; (5) tax-exempt obligations, including
tax-exempt money market funds, rated in one of the two highest
rating categories by either Standard & Poor's Corporation or
Moody's Investors Service; and (6) any other investment in
Resolution No. 89-037
Page 13
which funds of the District may be legally invested pursuant Go
Government Code Section 53635; provided that moneys invested by
the Fiscal Agent shall remain in the name and credit of the
Fiscal Agent.
"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 or Parity Bond is registered.
"Bonds" means the Community Facilities District No. 88-1 of
the City of Poway (Parkway Business Center) Series 1989 Special
Tax Bonds.
"Bond Year" means the twelve (12) month period commencing
on August 15 of each year and ending on August 14 of the
following year.
"Business Day" means a day on which the Fiscal Agent is
open for business.
"Certificate of the City Manager" means a written
certificate executed by the City Manager, or his written
designee.
"Code" means the Internal Revenue Code of 1986, together
with any amendments thereto.
"Computation Year" means the twelve (12) .month period
commencing on of each year and ending on
of the following year.
"Costs of Issuance" means the costs and expenses incurred
in connection with the formation of the District and the
issuance and sale of the Bonds or any Parity Bonds, including
the acceptance and initial annual fees and expenses of the
Fiscal Agent, legal fees and expenses, costs of printing the
Bonds and the preliminary and final Official Statements, fees
of financial consultants and other fees and expenses set forth
in a Certificate of the City Manager, or his designee.
"City" means the City of Poway, California.
3/23/89
2642n/2468/04 -2-
Resolution No. 89-037
Page 14
"Delivery Date" means the date on which the Bonds were
issued and delivered to the Underwriter.
"District" means the Community Facilities District No. 88-1
of the City of Poway (Parkway Business Center) established
pursuant to the Act and the Resolution of Formation.
"Fiscal Agent" means Security Pacific National Bank, and
any successor thereto.
"Fiscal Year" means the period beginning on July 1 of each
year 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 or Parity Bonds (after payment
of all expenses of issuing the Bonds or Parity 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 or
Parity 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), if any; (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 or Parity Bonds;
(v) securities or obligations pledged as security for the
payment of the Bonds or Parity 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 or Parity
Bonds; and (vii) amounts received as a result of investing the
amounts listed in clauses (i) through (vi).
"Gross Taxes" means the amount of all Special Taxes
received by the District from the Treasurer, 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.
"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, 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, in the District; and
3/23/89
2642n/2468/04 -3-
Resolution No. 89-037
Page 15
(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 15 and August
15, commencing August 15, 1989; provided, however, that, if any
such day is not a Business Day, interest up to the Interest
Payment Date will be paid on the Business Day next succeeding
such date.
"Investment Agreement" means one or more agreements to be
entered into between the District and an entity or entities
whose long-term debt is rated in either of the two highest
categories (without regard to gradations of plus and minus
within such categories) by Standard & Poor's Corporation or
Moody's Investors Service, Inc. or an agreement between the
District and an entity which is rated in either of the two
highest categories (without regard to gradations of plus and
minus within such categories) by Standard & Poor's Corporation
or Moody's Investors Service.
"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.
"Maximum Annual Debt Service" means the maximum sum
obtained for any Bond Year prior to the final maturity on the
Bonds and any Parity Bonds.by adding 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 Gross Taxes minus amounts applied to pay
Administrative Expenses.
"Nonpurpose Obligation" means any s~curity or obligation
(other than an obligation the interest on which 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 tt~e governmental purpose of the
Bonds or any Parity Bonds.
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Resolution No. 89-037
Page 16
"OPA" means that certain Owner Participation Agreement
between Poway Redevelopment Agency and Parkway Partners, a
California general partnership dated November 15, 1988 setting
forth certain public improvements to effectuate the
Redevelopment Plan for the Paquay Redevelopment Project.
"OPA Improvements" means those certain public improvements
set forth in Exhibit A to the OPA.
"Ordinance" means Ordinance No.
legislative body of the District on --
for the levying of the Special Tax.
adopted by the
· 1989· providing
"Outstanding" or "Outstanding Bonds and Parity Bonds" means
all Bonds or Parity Bonds theretofore issued by the District,
except:
(1) Bonds or Parity Bonds theretofore cancelled or
surrendered for cancellation in accordance with Section
10.01 hereof; and
(2) Bonds or Parity 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 or Parity Bonds), provided
that, if such Bonds or Parity 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 Supplemental Resolution for Parity Bonds.
"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 those public facilities described in the
Resolution of Formation which are to be acquired or constructed
within and outside of the District, including all engineering,
planning and design services and other incidental expenses
related to such facilities and other facilities, if any,
authorized by qualified electors within the District from time
to time.
"Project Costs" means the amounts necessary to finance the
Project, to create and replenish any necessary reserve funds,
to pay the initial and annual costs associated with the Bonds
or any Parity Bonds· including, but not limited to,
remarketing, credit enhancement, Fiscal Agent and other fees
and expenses relating to the issuance of the Bonds and the
formation of the District, and to pay any other "incidental
expenses" of the District, as such term is defined in the Act.
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Resolution No. 89-037
Page 17
"Purchase Price", for the purpose of computation of the
Yield of the Bonds or Parity 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
or Parity Bonds are sold or, if the Bonds or Parity 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 or Parity Bonds, as the case
may be.
"Record Date" means the first day of the month in which any
Interest Payment Date occurs, regardless of whether such day is
a Business Day.
"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 the lowest of (1) ten percent (10%) of the
original proceeds of the Bonds and any Parity Bonds, or (2)
Maximum Annual Debt Service, or (3) one hundred twenty-five
percent (125~) of the average annual debt service of the
Outstanding Bonds and Parity Bonds.
"Resolution" means this Supplement to Resolution, together
with Resolution No. 89-__ of the District, approving this
Supplement to Resolution, and any Supplemental Resolution
approved pursuant to Article VI hereof.
"Resolution of Formation" means Resolution No. 88-122
adopted by the City Council of the City on October 18, 1988,
pursuant to which the City formed the District.
"SDG&E Facilities" means any facilities within the District
intended for acquisition by the San Diego Gas & Electric
Company.
"Sinking Fund Payment" means the annual payment to be
deposited in the Redemption Account to redeem a portion of the
Term Bonds in accordance with the schedule set forth in Section
4.01(b) hereof and any annual sinking fund payment to retire
any Parity Bonds.
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Resolution No. 89-037
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"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 1, 1988 election in the District.
"Supplemental Resolution" means any resolution authorizing
the issuance of any Parity Bonds.
"Term Bonds" means the Bonds maturing on August 15, 2014.
"Tax Collector/Treasurer" means the Tax Collector/Treasurer
of the County of San Diego acting on behalf of the District.
"Treasurer" means the Treasurer of the City acting in his
capacity as the Treasurer of the District.
"Underwriter" means Drexel Burnham Lambert Incorporated and
Smith Barney, Harris Upham & Co. Inc.
"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 and Parity Bonds. Under and pursuant to the Act, the
Bonds in the amount of $30,000,000, together with any Parity
Bonds authorized by the legislative body in accordance with
Section 9.02 hereof, shall be issued for the purposes of paying
Project Costs, provided that the aggregate principal amount of
the Bonds and any Parity Bonds shall not exceed the total
indebtedness presently approved or subsequently approved by the
qualified electors of the District in accordance with the Act.
The Bonds and any Parity 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 and the
amounts in the funds created hereunder, other than amounts in
the Administrative Expense Account of the Special Tax Fund, the
Construction Fund, the Excess Investment Earnings Fund and the
Special Reserve Fund.
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Resolution No. 89-037
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Section 2.02. Type and Nature of Bonds and Parity Bonds.
Neither the faith and credit nor the taxing power of the City,
the State of California or any political subdivision thereof is
pledged to the payment of the Bonds and any Parity Bonds.
Except for the Special Taxes, no other taxes are pledged to the
payment of the Bonds or any Parity Bonds. The Bonds and any
Parity Bonds are not general or special obligations of the City
nor general obligations of the District, but are limited
obligations of the District payable solely from certain amounts
deposited by the District in the Special Tax Fund as more fully
described herein. No Owner of the Bonds or any Parity 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 any Parity Bonds and
premiums upon the redemption thereof, if any, are not a debt of
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 and any Parity
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 and
other amounts in the Special Tax Fund (exclusive of the
Administrative Expense Account) which are, under the terms of
this Resolution and the Act, set aside for the payment of the
Bonds, any Parity 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, or any
Parity Bonds, are liable personally on the Bonds, or any Parity
Bonds, by reason of their issuance.
Notwithstanding anything to the contrary 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 payment of the interest on or the principal of
the Bonds, any Parity Bonds, or for the performance of any
covenants contained herein. 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 2.03. Equality of Bonds and Parity 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 or
Parity 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 and other amounts in the Special Tax Fund (exclusive of
the Administrative Expense Account), 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
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Resolution No. 89-037
Page 20
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. Notwithstanding any
provision contained in this Resolution to the contrary, Net
Taxes deposited in the Special Reserve Fund, the Administrative
Expense Account and the Excess Investment Earnings Fund shall
no longer be considered to be pledged to the Bonds or any
Parity Bonds, and none of the Special Reserve Fund, the Excess
Investment Earnings Fund nor the Administrative Expense Account
shall be construed as a trust fund held for the benefit of the
Owners.
Nothing in this Resolution or any Supplemental Resolution
shall preclude: (a) the redemption prior to maturity of any
Bonds or Parity Bonds subject to call and redemption and
payment of said Bonds or Parity Bonds from proceeds of 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 2.04. Description of Bonds; Interest Rates. The
Bonds and any Parity 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
"COMMUNITY FACILITIES DISTRICT NO. 88-1 OF THE CITY OF POWAY
(PARKWAY BUSINESS CENTER), SERIES 1989 SPECIAL TAX BONDS". The
Bonds shall be dated as of February 1, 1989 and shall mature
and be payable on August 15 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:
Maturity Date
(August 15)
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2014
Principal Amount
Interest Rate
$ %
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Resolution No. 89-037
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Interest shall be payable with respect to each Bond and Parity
Bond on each Interest Payment Date until the principal sum of
that Bond and Parity Bond has been paid; provided, however,
that if at the maturity date of any Bond or Parity 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, in accordance with
the terms of this Resolution, such Bonds and Parity Bonds shall
then cease to bear interest. Interest due on the Bonds and
Parity Bonds shall be calculated on the basis of a 360-day year
comprised of twelve 30-day months.
Section 2.05. Place and Form of Payment. The Bonds and
Parity 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 Parity Bonds and any premiums due upon the
redemption thereof shall be payable upon presentation and
surrender thereof at the corporate trust office of the Fiscal
Agent in Los Angeles, California. Interest on any Bond or
Parity Bond shall be payable from the Interest Payment Date
next preceding the date of authentication of that Bond or
Parity 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 the dated date of such Bond or Parity Bond, as applicable;
provided, however, that if at the time of authentication of
such Bond or Parity Bond, interest is in default, interest on
that Bond or Parity 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 or Parity
Bond shall be paid to the person whose name shall appear in the
Bond Register as the Owner of such Bond or Parity 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, to such Bondowner at his or her address
as it appears on the Bond Register or, upon request in writing
received by the Fiscal Agent on or before the applicable Record
Date from a Bondowner of $1,000,000 or more in principal amount
of Bonds, payment shall be made on the Interest Payment Date by
wire transfer in immediately available funds to an account
designated by such Bondowner.
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Section 2.06. 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 Attachment 1, 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 shall 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 2.07. Execution and Authentication. The Bonds
shall be signed on behalf of the District by the manual or
facsimile signature of the Mayor 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 Attachment 1 hereto
shall be entitled to any right or benefit under this
Resolution, and no Bond shall be valid or obligatory for any
purpose until such certificate of authentication shall have
been duly executed by the Fiscal Agent.
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Resolution No. 89-037
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Section 2.08. 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 and any
Parity Bonds which shall be open to inspection upon reasonable
prior notice 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 and any Parity Bonds as herein provided.
The District and the Fiscal Agent may treat the Owner of
any Bond or Parity Bond whose name appears on the Bond Register
as the absolute Owner of that Bond or Parity 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 2.09. Registration of Exchange or Transfer. The
registration of any Bond or Parity 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 or Parity 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 or Parity Bonds may be exchanged at the corporate
trust office of the Fiscal Agent for a like aggregate principal
amount of Bonds or Parity Bonds, as applicable, of o%her
authorized denominations of the same maturity. The Fiscal
Agent shall not collect from the Owner any charge for any new
Bond or Parity Bond issued upon any exchange or transfer, but
shall require the Bondowner requesting such exchange or
transfer to pay any tax or other governmental charge required
to be paid with respect to such exchange or transfer. Whenever
any Bonds or Parity 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 or,
in the case of a surrender of a Parity Bond, a new Parity Bond
or Parity 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
or Parity Bonds for a period of 15 days next preceding any
selection of the Bonds or Parity Bonds to be redeemed, or (ii)
any Bonds or Parity Bonds chosen for redemption.
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Resolution No. 89-037
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Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds
or Parity Bonds. If any Bond or Parity Bond shall become
mutilated, the District shall execute, and the Fiscal Agent
shall authenticate and deliver, a new Bond or Parity Bond of
like tenor, date and maturity in exchange and substitution for
the Bond or Parity Bond so mutilated at the expense of the
Bondowner, but only upon surrender to the Fiscal Agent of the
Bond or Parity Bond so mutilated. Every mutilated Bond or
Parity Bond so surrendered to the Fiscal Agent shall be
cancelled by the Fiscal Agent pursuant to Section 10.01. If
any Bond or Parity 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 or in the case of a
Parity Bond, a new Parity Bond, of like tenor and maturity,
numbered and dated as such Fiscal Agent shall determine in lieu
of and in substitution for the Bond or Parity Bond so lost,
destroyed or stolen. Any Bond or Parity Bond issued in lieu of
any Bond or Parity Bond alleged to be mutilated, lost,
destroyed or stolen, shall be equally and proportionately
entitled to the benefits hereof with all other Bonds or Parity
Bonds issued hereunder. The Fiscal Agent shall not treat both
the original Bond or Parity Bond and any replacement Bond or
Parity Bond as being Outstanding for the purpose of determining
the principal amount of Bonds or Parity Bonds which may be
executed, authenticated and delivered hereunder or for the
purpose of determining any percentage of Bonds or Parity Bonds
Outstanding hereunder, but both the original and replacement
Bond or Parity Bond shall be treated as one and the same.
Notwithstanding any other provision of this Section, in lieu of
delivering a new Bond or Parity Bond which has been mutilated,
lost, destroyed or stolen, and which has matured, the Fiscal
Agent may make payment with respect to such Bonds or Parity
Bonds.
Section 2.11. Validity of Bonds and Parity Bonds. The
validity of the authorization and issuance of the Bonds and any
Parity Bonds shall not be affected in any way by any defect in
any proceedings taken by the District for the financing of the
Project, or by the invalidity, in whole or in part, of 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 or any Parity 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.
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Resolution No. 89-037
Page 25
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 the
following funds and accounts:
(1) The Community Facilities District No. 88-1,
Special Tax Fund (the "Special Tax Fund") in which
there shall be established and created an Interest
Account (in which there shall be established and
created a Capitalized Interest Subaccount), a
Principal Account, a Redemption Account, a Reserve
Account, an Administrative Expense Account and a
Purchase Account.
(2) The Community Facilities District No. 88-1,
Excess Investment Earnings Fund (the "Excess
Investment Earnings Fund").
(3) The Community Facilities District No. 88-1
Special Reserve Fund (the "Special Reserve Fund").
(4) The Community Facilities District No. 88-1,
Construction Fund in which there shall be established
and created a Costs of Issuance Account (the
"Construction Fund").
The amounts on deposit in the foregoing funds shall be held
by the Fiscal Agent and the Fiscal Agent shall invest the
amounts in such funds and disburse investment earnings in
accordance with the provisions of Section 3.11 hereof.
In connection with the issuance of any Parity Bonds, the
Fiscal Agent may create additional funds, or accounts within
any of the foregoing funds for the purpose of accounting for
the proceeds of the Bonds or any Parity Bonds.
Section 3.02. Disposition of Bond Proceeds. The proceeds
of the sale of the Bonds shall be received by the Fiscal Agent
on behalf of the District and deposited as follows:
(1) The amount representing the accrued interest on
the Bonds shall be deposited in the Interest Account of the
Special Tax Fund, and such amount shall be applied to the
payment of interest on August 15, 1989;
(2) $ in capitalized interest on the Bonds
shall be deposited in the Interest Account of the Special
Tax Fund, with $ of such amount being deposited
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Resolution No. 89-037
Page 26
and credited to the Capitalized Interest Subaccount, and~
such amount shall be used to pay interest on the Bonds on
August 15, 1989, February 15, 1990, August 15, 1990 and
February 15, 1991;
(3) $ shall be deposited in the Reserve
Account of the Special Tax Fund;
(4) $ shall be deposited in the
Administrative Expense Account of the Special Tax Fund;
(5) $ shall be deposited in the Cost of
Issuance Account of the Construction Fund; and
(6) After making the deposits required above, all
remaining amounts of Bond proceeds shall be deposited in
the Construction Fund.
Section 3.03. Deposits to and Disbursements from Special
Tax Fund.
The Treasurer of the City of Poway shall, on each date on
which the Special Taxes have been collected by the District
from the Tax Collector/Treasurer 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. The Fiscal Agent will then transfer the Special
Taxes on the dates and in the amounts set forth in the
following Sections, in the following order of priority, to:
(1) The Administrative Expense Account of the Special
Tax Fund;
(2) The Interest Account of the Special Tax Fund;
(3) The Principal Account of the Special Tax Fund;
(4) The Redemption Account of the Special Tax Fund;
(5) The Reserve Account of the Special Tax Fund;
(6) The Excess Investment Earnings Fund; and
(7) The Special Reserve Fund.
Notwithstanding anything herein to the contrary, moneys
transferred to the Purchase Account of the Special Tax Fund
from the Construction Fund in accordance with Section 3.10(b)
hereof shall, unless in the opinion of Bond Counsel another use
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Resolution No. 89-037
Page 27
of such funds will not impair the exclusion from gross incom~
for federal income tax purposes of interest on the Bonds or any
Parity Bonds, be invested and applied only in accordance with
the provisions of this paragraph. Moneys held in the Purchase
Account shall be invested at the written direction of the
District only in Authorized Investments the interest on which
is excludable from gross income under Section 103 of the Code
(other than bonds the interest on which is a tax preference
item for purposes of computing the alternative minimum tax of
individuals and corporations under the Code) or in Authorized
Investments at a Yield not in excess of the lowest Yield on the
Bonds or any Parity 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 principal payments on the Bonds, or (iii) to redeem Bonds
at the earliest redemption date permitted by this Resolution.
Notwithstanding the foregoing, amounts on deposit in the
Purchase Account may be invested at a Yield higher than that
permitted by the preceding sentence upon receipt of an opinion
of Bond Counsel that investment of such amounts at such higher
Yield will not adversely affect the exclusion from gross income
of interest on the Bonds or any Parity Bonds. Absent the
receipt of the foregoing opinion of Bond Counsel, the Fiscal
Agent shall not invest amounts in the Purchase Account in
Authorized Investments at a Yield in excess of the Yield on the
Bonds.
At the maturity of the Bonds and any Parity Bonds and,
after all principal and interest then due on the Bonds and any
Parity Bonds then Outstanding has been paid or provided for,
moneys in the Special Tax Fund and any accounts therein may be
used by the District for any lawful purpose.
Section 3.04. Administrative Expense Account of the
Special Tax Fund. The Fiscal Agent shall withdraw from the
Special Tax Fund and place in the Administrative Expense
Account of the Special Tax Fund from time to time, as needed to
make timely payment of Administrative Expenses, an amount
specified to the Fiscal Agent by the District at the time the
District makes the transfer pursuant to Section 3.03 hereof
necessary to pay Administrative Expenses. Moneys in the
Administrative Expense Account of the Special Tax 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 or such longer maturity as the District
advises the Fiscal Agent in writing is acceptable to it.
Section 3.05. Interest Account and Principal Account of
the Special Tax Fund. The principal and interest due on the
Bonds and any Parity Bonds until maturity, otherwise than by
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Resolution No. 89-037
Page 28
redemption, shall be paid by the Fiscal Agent from amounts from
the Interest Account and the Principal Account of the Special
Tax Fund. For the purpose of assuring that the payment of
principal of and interest on the Bonds and any Parity Bonds
will be made when due, after making the transfer required by
Section 3.04, at least one Business Day prior to each February
15 and August 15, 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,
any Parity Bonds, or otherwise, or to the extent that a
transfer will be made from the Reserve Account to the Interest
Account in accordance with the last paragraph of Section 3.07
hereof, 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) Business Day prior
to each Interest Payment Date shall be equal to the
installment of interest due on the Bonds and any Parity
Bonds on said Interest Payment Date. Moneys in the
Interest Account shall be used for the payment of interest
on the Bonds and any Parity Bonds as the same become due.
(b) To the Principal Account, an amount such that the
balance in the Principal Account one (1) Business Day prior
to August 15 of each year commencing August 15, 1991 shall
equal the principal payment due on the Bonds and any Parity
Bonds maturing on such August 15. Moneys in the Principal
Account shall be used for the payment of the principal of
such Bonds and any Parity Bonds as the same become due at
maturity.
The Bond proceeds deposited to the Interest Account shall
be applied only to pay interest on the Bonds, and the Fiscal
Agent shall first disburse the amount deposited to the Interest
Account and once such amounts have been fully expended shall
then disburse all Bond proceeds deposited to the Capitalized
Interest Subaccount before applying any Special Tax proceeds to
the payment of interest on the Bonds.
Section 3.06. Redemption Account of the Special Tax Fund.
(a) Commencing on August 15, 2002 and on each August 15
thereafter, after the deposits have been made to the
Administrative Expense Account of the Special Tax Fund and the
Interest Account and the Principal Account of the Special Tax
Fund as required by Sections 3.04 and 3.05, the Fiscal Agent
shall next transfer into the Redemption Account of the Special
Tax Fund from the Special Tax Fund the amount needed to make
the balance in the Redemption Account equal to the Sinking Fund
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Resolution No. 89-037
Page 29
Payment due on any Outstanding Bonds or Parity Bonds on such
August 15. Moneys so deposited in the Redemption Account shall
be used and applied by the Fiscal Agent to call and redeem Term
Bonds in accordance with the Sinking Fund Payment schedule set
forth in Section 4.01(b) hereof and to redeem Parity Bonds in
accordance with any Sinking Fund Payment schedule in the
Supplemental Resolution for such Parity Bonds.
(b) After making the deposits to the Administrative
Expense Account of the Special Tax Fund and the Interest
Account and the Principal Account of the Special Tax Fund
pursuant to Sections 3.04 and 3.05 above and to the Redemption
Account for Sinking Fund Payments then due pursuant to
subparagraph (a) of this Section, then in accordance with the
District's election to call Bonds for optional redemption as
set forth in Section 4.01(a) hereof or as set forth in any
Supplemental Resolution for Parity Bonds, the Fiscal Agent
shall transfer from the Special Tax Fund and deposit in the
Redemption Account moneys available for the purpose and
sufficient to pay the principal and the premiums payable as
provided in Section 4.01(a) hereof on the Bonds or Parity Bonds
called for optional redemption.
(c) Moneys set aside in the Redemption Account 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 of and premium on the Bonds or Parity Bonds to be
redeemed upon presentation and surrender of such Bonds or
Parity Bonds; provided, however, in lieu or partially in lieu
of such call and redemption, moneys deposited in the Redemption
Account as set forth above may be used to purchase Outstanding
Bonds or Parity Bonds in the manner hereinafter provided.
Purchases of Outstanding Bonds or Parity 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 or the corresponding redemption provisions of any
Supplemental Resolution for Parity Bonds, par plus accrued
interest, plus, in the case of moneys set aside for an optional
redemption, the premium applicable at the next following call
date according to the premium schedule established pursuant to
Section 4.01(a) hereof, or in the case of Parity Bonds the
premium established in any Supplemental Resolution. Any
accrued interest payable upon the purchase of Bonds or Parity
Bonds may be paid from the amount reserved in the Interest
Account of the Special Tax Fund for the payment of interest on
the next following Interest Payment Date.
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Resolution No. 89-037
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Section 3.07. Reserve Account of the Special Tax Fund.
There shall be maintained in the Reserve Account of the Speci'al
Tax Fund an amount equal to the Reserve Requirement.
Moneys in the Reserve Account shall be used solely for the
purpose of paying the principal of, including Sinking Fund
Payments, and interest on the Bonds and any Parity Bonds when
due in the event that the moneys in the Interest Account and
the Principal Account of the Special Tax Fund are insufficient
therefor or moneys in the Redemption Account of the Special Tax
Fund are insufficient to make a Sinking Fund Payment when due
and for the purpose of making any required transfer to the
Excess Investment Earnings Fund pursuant to Section 3.08 upon
written direction from the District; provided, however, amounts
in the Reserve Account may be applied to pay the principal and
interest due on any Bonds or Parity Bonds in the final Bond
Year in which any Bonds or Parity Bonds are Outstanding. If
the amounts in the Interest Account, the Principal Account or
the Redemption Account of the Special Tax Fund are insufficient
to pay the principal of, including Sinking Fund Payments, or
interest on the Bonds or any Parity Bonds when due or such
amounts are insufficient to make transfers to the Excess
Investment Earnings Fund when required, the Fiscal Agent shall
withdraw from the Reserve Account for deposit in the Interest
Account, the Principal Account or the Redemption Account of the
Special Tax Fund, or in the Excess Investment Earnings Fund, as
applicable, moneys necessary for such purpose. Following any
transfer to the Interest Account, the Principal Account or the
Redemption Account of the Special Tax Fund or to the Excess
Investment Earnings Fund as described above, the District shall
then take the steps necessary to cause to be deposited to the
Reserve Account the amount needed to replenish the Reserve
Account to the Reserve Requirement by transferring such amount
from the Special Reserve Fund or, if the District so elects, by
including such amount in the next annual Special Tax levy to
the extent of the permitted maximum Special Tax rates.
Notwithstanding anything herein to the contrary, whenever
moneys are withdrawn from the Reserve Account, after making the
required transfers to Sections 3.04, 3.05 and 3.06 above, the
Treasurer shall transfer to the Reserve Account from available
moneys in the Special Tax Fund the amount needed to restore the
amount of such account to the Reserve Requirement. Moneys in
the Special Tax Fund shall be deemed available for transfer to
the Reserve Account only if such amounts will not be needed to
make the deposits required to be made to the Administrative
Expense Account, the Interest Account, the Principal Account or
the Redemption Account of the Special Tax Fund for the next
Interest Payment Date.
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Notwithstanding any provision herein to the contrary,
moneys in the Reserve Account in excess of the Reserve
Requirement shall be withdrawn from the Reserve Account on
the Business Day before each February 15 and August 15 and
transferred at the option of the District to the Redemption
Fund to be applied to the redemption of Bonds or Parity Bonds
on the next August 15 or to the Principal Account of the
Special Tax Fund to the extent required to make any principal
payment on the next succeeding August 15, with any excess being
transferred to the Purchase Account of the Special Tax Fund.
Section 3.08. 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
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 from any legally available
funds, including the Reserve Account of the Special Tax Fund.
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 the Fiscal
Agent shall make corresponding transfers into the Excess
Investment Earnings Fund from the sources specified in the
preceding sentence. The calculations shall be made in
accordance with the following:
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Resolution No. 89-037
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(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.
(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.
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Resolution No. 89-037
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(c) Upon written direction of the District, the Fiscal
Agent shall pay Excess Investment Earnings to the United Sta~es
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 not later than 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 from funds legally available for such purpose, 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 established 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 legally available funds.
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(g) The District shall compute Excess Investment Earnings
on any Parity Bonds in accordance with the provisions of this
Section 3.08 and may make a joint computation for the Bonds and
any Parity Bonds with an opinion of Bond Counsel to the effect
that a joint computation will not adversely affect the
exclusion from gross income for federal income tax purposes of
interest on the Bonds or any Parity Bonds then Outstanding.
(h) 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 or
any Parity 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 for federal
income tax purposes of interest on the Bonds or any Parity
Bonds then Outstanding.
Section 3.09. Special Reserve Fund. After making the
transfers required by Sections 3.04, 3.05, 3.06, 3.07 and 3.08,
on the first Business Day after each August 15, the Fiscal
Agent shall transfer all remaining amounts in the Special Tax
Fund to the Special Reserve Fund. Moneys deposited in the
Special Reserve Fund may be transferred by the Fiscal Agent
only upon written direction of the District (i) to the Interest
Account, the Principal Account or the Redemption Account of the
Special Tax Fund to pay the principal of, including Sinking
Fund Payments, and interest on the Bonds and any Parity Bonds
when due in the event that moneys in the Special Tax Fund and
the Reserve Account of the Special Tax Fund are insufficient
therefor, (ii) to the Reserve Account in order to replenish the
Reserve Account to the Reserve Requirement, (iii) to the
Administrative Expense Account of the Special Tax Fund to pay
Administrative Expenses to the extent that the amounts on
deposit in the Administrative Expense Account of the Special
Tax Fund are insufficient to pay Administrative Expenses, or
(iv) to the Construction Fund to pay Project Costs.
The amounts in the Special Reserve Fund are not pledged to
the repayment of the Bonds or the Parity Bonds and may be used
by the District for any lawful purpose. In the event that the
District reasonably expects to use any portion of the moneys in
the Special Reserve Fund to pay debt service on the Bonds or
any Outstanding Parity Bonds, the District will immediately
instruct the Fiscal Agent, in writing, to segregate such amount
into a separate subaccount and the moneys on deposit in such
subaccount of the Special Reserve Fund shall at the District's
written direction be invested only in Authorized Investments
the interest on which is excludable from gross income under
Section 103 of the Code (other than bonds the interest on which
is a tax preference item for purposes of computing the
alternative minimum tax of individuals and corporations under
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Resolution No. 89-037
Page 35
the Code) or in Authorized Investments at a Yield not in excess
of the Yield on the Bonds or, if lower, the Yield on any Parity
Bonds, unless, in the opinion of Bond Counsel, investment at a
higher Yield will not adversely affect the exclusion from gross
income for federal income tax purposes of interest on the Bonds
or any Parity Bonds then Outstanding.
Section 3.10. Construction Fund.
(a) The moneys in the Construction Fund shall be applied
exclusively to pay the Project Costs and any Costs of Issuance
for the Bonds and any Parity Bonds. 'Amounts for Costs of
Issuance shall be disbursed by the Fiscal Agent from the Cost
of Issuance Account upon receipt of a Certificate of the City
Manager, or such other person designated in writing by the City
Manager, stating the amount due, the nature of the services
rendered and the name of the payee. Amounts for Project Costs
shall be disbursed by the Fiscal Agent only upon receipt of a
Certificate of the City Manager, or such other person
designated in writing by the City Manager, stating (1) that
private financing sufficient for the construction, improvement
and acquisition of all OPA Improvements has been obtained and
that proof of such financing has been verified by such officer
of the District as is satisfactory to the City Manager, (2)
that a completion bond, as set forth in Section 14 of Amendment
No. 3 to the OPA and as is satisfactory to the Poway
Redevelopment Agency and the City Manager, is executed, and
upon receipt of a sequentially numbered written requisition,
substantially in the form attached hereto as Attachment 2, from
the City Manager, or such other person designated in writing by
the City Manager, 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 (or in the case
of Parity Bonds any subsequent acquisition agreement, if any)
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, and (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. The Fiscal Agent shall have no liability for
disbursing funds in accordance with the provisions of this
Section 3.10(a).
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Resolution No. 89-037
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Notwithstanding the foregoing, the Fiscal Agent shall
not disburse any proceeds for SDG&E Facilities unless and until
the Fiscal Agent receives a Certificate of City Manager
certifying that a reimbursement agreement satisfying the
requirements of Government Code Section 53313.5(e) has been
entered into with SDG&E with respect to such Facilities.
(b) Upon receipt of a Certificate of the City Manager, or
such other person designated in writing by the City Manager,
that all or a specified portion of the amount remaining in the
Construction Fund is no longer needed to pay Project Costs or
Costs of Issuance, the Fiscal Agent shall transfer all or such
specified portion of the moneys remaining on deposit in the
Construction Fund to the Purchase Account of the Special Tax
Fund.
(c) Upon the earlier of the payment of all Project Costs
or July 1, 1992, the Fiscal Agent shall transfer any amounts
remaining in the Construction Fund (other than amounts
necessary to pay Project Costs incurred but not then due and
payable as certified by the District) into the Redemption
Account of the Special Tax Fund, for redemption of Bonds as
provided in Section 4.01(b) hereof. Any amounts remaining in
the Construction Fund subsequent to , 1992 shall be
invested in accordance with the limitations set forth in
Section 3.11(a) hereof.
Section 3.11. Investments. Moneys held in any of the
Funds and Accounts under this Resolution shall be invested at
the direction of the Fiscal Agent in accordance with the
limitations set forth below 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 Construction Fund shall be deposited in the Construction
Fund until the amounts therein are fully expended, (ii)
investment earnings on all amounts in the Excess Investment
Earnings Fund and the Special Reserve Fund shall be deposited
in those respective Funds, and (iii) all other investment
earnings shall be deposited in the Interest Account of the
Special Tax Fund; provided, however, that earnings on amounts
in the Capitalized Interest Subaccount of the Interest Account
shall be deposited in such Subaccount. Notwithstanding the
foregoing, in the event that amounts in the Reserve Account are
invested in Nonpurpose Obligations at a Yield in excess of the
Yield on the Bonds, investment earnings on the Reserve Account
shall not be transferred to the Interest Account until the
District has computed Excess Investment Earnings for such
Computation Year pursuant to Section 3.08 hereof. Moneys in
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Resolution No. 89-037
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the Funds and Accounts held under this Resolution shall, at the
written investment direction of the District, be invested by
the Fiscal Agent, from time to time, in Authorized Investments
subject to the following restrictions:
(a) Moneys in the Construction Fund shall be invested in
Authorized Investments which will by their terms mature, or in
the case of an Investment Agreement are available without
penalty, as close as practicable to the date the District
estimates the moneys represented by the particular investment
will be needed for withdrawal from the Construction Fund.
Notwithstanding anything herein to the contrary, the proceeds
of any Bonds or Parity Bonds remaining on deposit in the
Construction Fund on the date which is three years following
the date of issuance of the Bonds, in the case of Bond
proceeds, and the Parity Bonds, in the case of Parity Bond
proceeds, shall be invested by the District only in Authorized
Investments the interest on which is excluded from gross income
under Section 103 of the Code (other than bonds the interest on
which is a tax preference item for purposes of computing the
alternative minimum tax of individuals and corporations under
the Code) or in Authorized Investments at a Yield not in excess
of the lesser of the Yield on the Bonds or any Parity Bonds,
unless in the opinion of Bond Counsel such restriction is not
necessary to prevent interest on the Bonds or any Parity Bonds
from being included in gross income for federal income tax
purposes.
(b) Moneys in the Interest Account, the Principal Account
and the Redemption Account of the Special Tax Fund shall be
invested only in Authorized Investments which will by their
terms mature, or in the case of an Investment Agreement are
available for withdrawal without penalty, on such dates so as
to ensure the payment of principal of, premium, if any, and
interest on the Bonds or any Parity Bonds as the same become
due.
(c) One-half of the amount in the Reserve Account of the
Special Tax Fund may be invested only in Authorized Investments
which mature not later than two years from their date of
purchase by the Fiscal Agent and one-half of such amount shall
be invested in Authorized Investments which mature not more
than three years from the date of purchase; provided that such
amounts may be invested in an Investment Agreement to the later
of the final maturity of the Bonds or any Parity Bonds so long
as such amounts may be withdrawn at any time, without penalty,
for application in accordance with Section 3.07 hereof; and
provided that no such Authorized Investment shall mature later
than the final maturity of the Bonds or, with respect to the
portion of the amount on deposit in Reserve Account
attributable to any Parity Bonds, later than the final maturity
of such Parity Bonds.
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(d) Moneys in the Excess Investment Earnings Fund shall be
invested only in Authorized Investments of the type described
in clause (1) of the definition thereof which by their terms
will mature on the dates such amounts are needed to be paid to
the United States Government pursuant to Section 3.08 hereof.
The Fiscal Agent, at the written direction of the District,
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 to 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, the Treasurer and the Fiscal Agent shall not be
responsible for any loss from investments, sales or transfers
undertaken in accordance with the provisions of 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.
In the absence of written investment direction and except
for the Excess Investment Earnings Fund and Purchase Account
and any subaccount of the Special Reserve Fund, the Fiscal
Agent shall invest solely in Authorized Investments set forth
in (4) of the definition thereof.
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01. Redemption of Bonds.
(a) Optional Redemption. The Bonds maturing on or before
August 15, 1999 are not subject to call and redemption prior to
maturity. The Bonds maturing on or after August 15, 2000 may
be redeemed, at the option of the District on August 15, 1999,
or on any Interest Payment Date thereafter, prior to maturity
in whole or in part, by lot within a maturity, at the following
redemption prices, expressed as a percentage of the principal
amount to be redeemed, together with accrued interest to the
date of redemption:
Redemption Dates
Redemption Prices
August 15, 1999 and February 15, 2000
August 15, 2000 and February 15, 2001
August 15, 2001 and thereafter
102%
lOl%
00%
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Resolution No. 89-037
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In the event the District shall elect to redeem Bonds or -
Parity Bonds as provided in this Section 4.01(a) or in any
Supplemental Resolition in the case of Parity Bonds, 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 or Parity 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. In the event of a
partial optional redemption of the Term Bonds maturing on
August 15, 2014, each of the remaining Sinking Fund Payments
for such Term Bonds, as described below, will be reduced, as
nearly as practicable, on a pro rata basis.
(b) Mandatory Redemption
The Bonds are subject to mandatory redemption before
maturity on August 15, 1992, in whole or in part, as nearly as
practicable on a pro rata basis from each maturity and by lot
within a maturity, from amounts transferred to the Redemption
Account of the Special Tax Fund from the Construction Fund
pursuant to Section 3.10 hereof on July 1, 1992 (rounded to the
highest closest integral multiple of $5,000) after the payment
of all costs of acquiring the Project (as defined herein). The
Bonds so called for redemption will be redeemed at a redemption
price equal to the principal amount thereof, plus accrued
interest to the redemption date, without premium.
(c) Mandatory Sinking Fund Redemption.
The outstanding Bonds maturing on August 15, 2014
shall be called before maturity and redeemed, from the Sinking
Fund Payments that have been deposited into the Redemption
Account, on August 15, 2002, and on each August 15 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 selected by the Fiscal Agent by lot and
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:
TERM BONDS MATURING AUGUST 15, 2014
Redemption Date
(August 15)
Principal Amount
2002
2003
2004
2005
2006
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2007
2008
2009
2010
2011
2012
2013
2014(maturity)
If during the six month period immediately preceding
one of the redemption dates specified in (b)(i) or (ii) above
the District purchases the applicable Term Bonds, at least 45
days prior to the redemption date the District shall notify the
Fiscal Agent as to the principal amount purchased and the
amount of Term Bonds so purchased shall be credited at the time
of purchase, to the extent of the full principal amount
thereof, to reduce such upcoming Sinking Fund Payment. All
Bonds purchased pursuant to this subsection shall be cancelled.
Section 4.02. Selection of Bonds and Parity Bonds for
Redemption. If less than all of the Bonds or Parity Bonds
Outstanding are to be redeemed, the portion of any Bond or
Parity Bond of a denomination of more than $5,000 to be
redeemed shall be in the principal amount of $5,000 or an
integral multiple thereof, and that, in selecting portions of
such Bonds and Parity Bonds for redemption, the Fiscal Agent
shall treat each such Bond or Parity Bond as representing that
number of Bonds or Parity Bonds of $5,000 denominations which
is obtained by dividing the principal amount of such Bond or
Parity Bond to be redeemed in part by $5,000. The Fiscal Agent
shall promptly notify the District in writing of the Bonds or
Parity Bonds, or portions thereof, selected for redemption.
Section 4.03. Notice of Redemption. When Bonds or Parity
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 or under
another redemption provision set forth in a Supplemental
Resolution relating to any Parity Bonds, the Fiscal Agent shall
give notice, in the name of the District, of the redemption of
such Bonds or Parity Bonds. Such notice of redemption shall
(a) specify the CUSIP numbers, the serial numbers and the
maturity date or dates of the Bonds or Parity Bonds selected
for redemption, except that where all the Bonds or Parity Bonds
are subject to redemption, or all the Bonds or Parity 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 or Parity Bonds to be redeemed; (c)
state the redemption price; (d) state the place or places where
the Bonds or Parity Bonds are to be redeemed; (e) in the case
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of Bonds or Parity Bonds to be redeemed only in part, state the
portion of such Bond or Parity Bond which is to be redeemed;
(f) state the date of issue of the Bonds or Parity Bonds as
originally issued; (g) state the rate of interest borne by each
Bond or Parity Bond being redeemed; and (h) state any other
descriptive information needed to identify accurately the Bonds
or Parity Bonds being redeemed as shall be specified by the
District. Such notice shall further state that on the date
fixed for redemption, there shall become due and payable on
each Bond, Parity 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 or Parity Bond of notice of such
redemption shall not be a condition precedent thereto, and
neither the failure to receive nor any defect in such notice
shall affect the validity of the proceedings for the redemption
of such Bonds or Parity 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
not be entitled to show that he or she failed to receive notice
of such redemption.
In addition to the foregoing notice, further notice shall
be given by the Fiscal Agent as set out below, but no defect in
said further notice nor any failure to give all or any portion
of such further notice shall in any manner defeat the
effectiveness of a call for redemption if notice thereof is
given as above prescribed.
Each further notice of redemption shall be sent at least 2
days before notice of redemption is mailed to the Bondowners
pursuant to the first paragraph of this Section by registered
or certified mail or overnight delivery service to the three
registered securities depositories listed below and to any
other registered securities depositories then in the business
of holding substantial amounts of obligations of types
comprising the Bonds and Parity Bonds as shall be specified to
the Fiscal Agent by the District to the national information
services listed below that disseminate notice of redemption of
obligations as the Bonds and Parity Bonds.
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Resolution No. 89-037
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Registered Securities Depositories
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530
Attention: Diana Difiglia
Telecopy: (516) 227-4039 or 4190
Midwest Securities Trust Company
Capital Structures-Call Notification
440 South LaSalle Street
Chicago, Illinois 60605
Telecopy: (312) 663-2343
Philadelphia Depository Trust Company
Reorganization Division
1900 Market Street
Philadelphia, Pennsylvania 19103
Attention: Bond Department
Telecopy: (215) 496-5058
National Information Services
Financial Information, Inc.'s Financial Daily Called
Bond Service
30 Montgomery Street, 10th Floor
Jersey City, New Jersey 07302
Attention: Editor
Kenny Information Service's Called Bond Service
55 Broad Street, 29th Floor
New York, New York 10004
Moody's Municipal and Government
99 Church Street, 8th Floor
New York, New York 10007
Attention: Municipal News Report
Standard and Poor's Called Bond Record
25 Broadway, 3rd Floor
New York, New York 10004
Upon the payment of the redemption price of any Bonds and
Parity Bonds being redeemed, each check or other transfer of
funds issued for such purpose shall bear the CUSIP number
identifying, by issue and maturity, the Bonds and Parity Bonds
being redeemed with the proceeds of such check or other
transfer.
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Resolution No. 89-037
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Section 4.04. Partial Redemption of Bonds or Parity
Bonds. Upon surrender of any Bond or Parity 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 or a new
Parity Bond or Parity 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 or, in the case of surrender of a Parity Bond, a new
Parity Bond or Parity Bonds subject to the foregoing
limitations.
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 and Parity 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 or the Parity 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 and Parity Bonds shall be paid to the
Owner thereof;
(c) As of the redemption date the Bonds or the Parity
Bonds, or portions thereof so designated for redemption
shall be deemed to be no longer Outstanding and such Bonds
or Parity Bonds, or portions thereof, shall cease to bear
further interest; and
(d) As of the date fixed for redemption no Owner of
any of the Bonds, Parity Bonds, or portions thereof so
designated for redemption shall be entitled to any of the
benefits of this Resolution or any Supplemental 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 pledged hereunder to the Bonds and any
Parity Bonds against all claims and demands of all persons;
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provided, however, that such warranty does not require the
District to expend any funds or moneys other than Special Taxes.
Section 5.02. Covenants. So long as any of the Bonds or
Parity 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 and desirable to
secure the Bonds and Parity 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 shall be disbursed, allocated and applied
solely to the uses and purposes set forth herein, 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 or Parity 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 the Parity
Bonds and in accordance with this Resolution to the extent Net
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, any Parity
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 and any Parity 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 having a lien or charge upon the Net Taxes superior
to or on a parity with the Bonds, other than Parity Bonds~
Nothing herein shall prevent the District from issuing or
incurring indebtedness which is payable from a pledge of Net
Taxes which is subordinate in all respects to the pledge of Net
Taxes to repay the Bonds and the Parity Bonds.
(b) Levy of Special Tax. The legislative body of the
District shall cause the Tax Collector/Treasurer to levy the
Special Tax in an amount sufficient to pay the principal of and
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interest on the Bonds when due, any Parity Bonds and the
Administrative Expenses and any amounts required to maintain
the Reserve Account of the Special Tax Fund at the Reserve
Requirement so long as any Bonds or Parity Bonds issued under
this Resolution are Outstanding.
(c) Commence Foreclosure Proceedings. The District
covenants for the benefit of the Owners of the Bonds and any
Parity Bonds that it will commence judicial foreclosure
proceedings under the Act within the earlier of 150 days of
notice of any delinquency in the aggregate Special Tax
collections or 150 days from the receipt of Special Taxes from
the County 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 acquired 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 or any Parity Bonds then Outstanding; 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 or the Owners of not
less than ten percent (10X) of any issue of Parity 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 and any Parity 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:
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(1) it will make no use of the proceeds of the Bonda
or Parity Bonds at any time which will cause the Bonds or
Parity 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 or Parity 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) or to finance the
construction of SDG&E Facilties;
(3) it will neither use nor permit the use of more
than l0x of the proceeds of the Bonds or Parity Bonds for
any private business use, or enter into an arrangement such
that more than l0x of the proceeds of the Bonds or Parity
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 or Parity 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 or Parity 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 or
Parity Bonds and ending on the final expenditure of the
Bond or Parity Bond proceeds; (2) for amounts held in the
Reserve Account of the Special Tax Fund, or other reserve
funds satisfying Section 148(d) of the Code; (3) for
amounts held in the Interest Account, the Principal Account
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and the Redemption Account of the Special Tax 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 any
Supplemental Resolution or in any way relating to the
receipt or disbursement of any of the Gross Proceeds of the
Bonds or Parity 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 or
Parity Bonds; (ii) except for the investment of moneys in
tax-exempt bonds (other than bonds the interest on which is
a tax preference item for purposes of computing the
alternative minimum tax of individuals and corporations
under the Code) or Gross Proceeds invested during an
applicable temporary period permitted under the
Regulations, it will not allow Gross Proceeds of the Bonds
or Parity Bonds to be invested at any time in Nonpurpose
Obligations with a Yield in excess of the lesser of the
Yield on the Bonds or the Parity Bonds without an opinion
of Bond Counsel to the effect that investment at a higher
Yield will not adversely affect the exclusion from gross
income of interest on the Bonds or any Parity Bonds for
federal income tax purposes; (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 or 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 any Parity
Bonds or the rights of the Owners. Once acquired or
constructed, the District will maintain the Project, or cause
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it to be maintained by another public entity, 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
Reguiring 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
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 any
Parity Bonds then Outstanding; 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 Requirinq
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 and
Parity Bonds Outstanding shall have the right to consent to and
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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,
altering, 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
or Parity Bond, (b) a reduction in the principal amount of, or
redemption premium on, any Bond or Parity Bond or the rate of
interest thereon, (c) a preference or priority of any Bond or
Parity Bond over any other Bond or Parity Bond, or (d) a
reduction in the aggregate principal amount of the Bonds and
Parity Bonds the Owners of which are required to consent to such
resolution or order, without the consent of the Owners of all
Bonds and Parity Bonds then Outstanding.
If at any time the District desires 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 of the City 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 and Parity Bonds
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 and Parity
Bonds 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 of the
City, 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 and any Parity Bonds. In
determining whether the Owners of 60~ of the aggregate principal
amount of the Bonds and Parity Bonds have consented to the
adoption of any supplemental resolution or order, Bonds or
Parity Bonds which are owned by the District or by any person
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Resolution No. 89-037
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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 the Outstanding Bonds and Parity Bonds 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 Outstanding Bonds
and Parity Bonds shall thereafter be determined, exercised and
enforced hereunder, subject in all respects to such
modifications and amendments.
Section 6.03. Notation of Bonds or Parity Bonds; Delivery
of Amended Bonds or Parity Bonds. After the effective date of
any action taken as hereinabove provided, the District may
determine that the Bonds or any Parity 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
Outstanding Bond or Parity Bond at such effective date and
presentation of his Bond or Parity Bond for the purpose at the
office of the Fiscal Agent or at such additional offices as the
City Manager may select and designate for that purpose, a
suitable notation as to such action shall be made on such Bonds
or Parity Bonds. If the District shall so determine, new Bonds
or Parity 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
Outstanding Bond or Parity Bond at such effective date such new
Bonds or Parity Bonds shall be exchanged at the corporate trust
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 of Outstanding Bonds or Parity Bonds, upon
surrender of such Outstanding Bonds or Parity 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 this Resolution.
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The Fiscal Agent is hereby authorized to and shall mail by
first class mail, postage prepaid, interest payments to the
Bondowners, to select Bonds and Parity Bonds for redemption, and
to maintain the Bond Register. The Fiscal Agent is hereby
authorized to pay the principal of and premium, if any, on the
Bonds and Parity 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 and
Parity Bonds presented to it for such purposes, to provide for
the cancellation of Bonds and Parity Bonds all as provided in
this Resolution, and to provide for the authentication of Bonds
and Parity 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 Bonds and Parity Bonds paid, discharged and cancelled
by it.
The Fiscal Agent is hereby authorized to redeem the Bonds
and Parity Bonds when duly presented for payment at maturity, or
on redemption prior to maturity. The Fiscal Agent shall cancel
all Bonds and Parity Bonds upon payment thereof in accordance
with the provisions of Section 10.01 hereof.
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
fees and expenses of independent accountants or counsel 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. In the absence of
an Event of Default, the District may, in 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, other than the Treasurer, shall be a bank or trust
company 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 or the Treasurer. If any bank or trust company appointed
as a successor publishes a report of condition at least
annually, pursuant to law or to the requirements of any
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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 and any Parity 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, in the Bonds and any Parity 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, Parity 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 or Parity Bond unless and until such Bond
or Parity Bond is submitted for inspection, if required, and his
title thereto satisfactorily established, if disputed.
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Whenever in the administration of its duties under this
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 this 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 or
Parity 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 or Parity Bond when and as the same
shall become due and payable; or
(c) Except as described in (a) or (b), default shall
be made by the District in the observance of any of the
agreements, conditions or covenants on its part contained in
this Resolution, the Bonds or any Parity Bonds, 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 or the Owners of
twenty-five percent (25~) of the Outstanding Bonds and
Parity Bonds; provided, however, the District shall be given
an extension of time to cure such default if such default is
such that it cannot be corrected within thirty (30) days and
corrective action is instituted by the District within that
period and is being diligently pursued.
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 this
Resolution;
(b) By suit in equity to enjoin any actions or things
which are unlawful or violate the rights of the Owners; or
(c) 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 this
Resolution, the Bonds or any Parity 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
and any Parity Bonds to the respective Owners thereof 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 or any Parity Bonds and in this
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 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.
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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 or any Parity 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 ~he 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 bf 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 and Parity Bonds the interest
due thereon and the principal thereof, at the times and in the
manner stipulated, in this Resolution or any Supplemental
Resolution, then the Owners of such Bonds and Parity 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 and Parity Bonds under this Resolution
and any Supplemental Resolution relating to such Parity Bonds
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's
general fund all money or securities held by it pursuant to this
Resolution which are not required for the payment of the
interest due on and the principal of such Bonds and Parity
Bonds. Any Outstanding Bond and Parity Bond shall be deemed to
have been paid within the meaning expressed in the first
paragraph of this section if the Bonds and Parity Bonds are paid
in any one or more of the following ways:
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(a) by paying or causing to be paid the principal of,
premium, if any, and interest on all Outstanding Bonds and
Parity Bonds, 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 (exclusive of the
Administrative Expense Account thereon), is fully sufficient
to pay the principal of, premium, if any, and interest on
all Outstanding Bonds and Parity Bonds, as and when the same
shall become due and payable; or
(c) by depositing with the Fiscal Agent, in trust,
direct, noncallable Authorized Investments, of the type
defined in clause (1) thereof, in which the District may
lawfully invest its money, in such amount as an Independent
Financial Consultant shall determine will be sufficient,
together with the interest to accrue thereon and moneys then
on deposit in the Special Tax Fund (exclusive of the
Administrative Expense Account therein), together with the
interest to accrue thereon, to pay and discharge the
principal of, premium, if any, and interest on all
Outstanding Bonds and Parity Bonds, as and when the same
shall become due and payable;
then, at the election of the District, and notwithstanding that
any Outstanding Bonds and Parity Bonds shall not have been
surrendered for payment, all obligations of the District under
this Resolution and any Supplemental Resolution with respect to
all Outstanding Bonds and Parity 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 Outstanding Bonds and
Parity Bonds not so surrendered and paid, all sums due thereon
and except for the covenants of the District contained in
Section 5.02(f) or any covenants in a Supplemental Resolution
relating to compliance with the Code. 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
def6asance 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 Outstanding Bonds and Parity Bonds 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 Outstanding Bonds and Parity
Bonds have been legally defeased in accordance with this
Resolution. Upon being provided with the required report of a
certified public accountant and opinion of Bond Counsel, the
Fiscal Agent, upon request of the District, shall release the
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rights of the Bondowners under this Resolution and any
Supplemental 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 or Parity Bonds when due or for the
purpose of paying any amounts due the Fiscal Agent hereunder.
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 and any other Parity Bonds
theretofore issued hereunder or under any Supplemental
Resolution, 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 any Supplemental
Resolution and a certificate of the District to that effect
shall have been filed with the Treasurer of the City; provided,
however, that Parity Bonds may be issued notwithstanding that
the District is not in compliance with all such covenants so
long as immediately following the issuance of such Parity Bonds
the District will be in compliance with all such covenants.
(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 Outstanding Bonds and Parity Bonds, including payment of
all costs incidental to or connected with such refunding;
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(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 on an August 15, (ii) all such Parity Bonds of
like maturity shall be identical in all respects, except as
to number, and (iii) fixed serial maturities or Sinking Fund
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 description of the Parity Bonds, the
place of payment thereof and the procedure for execution and
authentication;
(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 Outstanding Bonds and Parity Bonds
issued prior to the issuance of such Parity Bonds and that
amount of such Parity Bonds in the proportion which the
principal amount of Outstanding Bonds and Parity 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 Payment, if any, for such Parity Bonds;
(8) The amount, if any,.to be deposited from the
proceeds of such Parity Bonds in the Reserve Account of the
Special Tax Fund to increase the amount therein to the
Reserve Requirement;
(9) The form of such Parity Bonds; and
(10) Such other provisions as are necessary or
appropriate and not inconsistent with this 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;
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(2) A written request of the District as to the
delivery of such Parity Bonds;
(3) An opinion of Bond Counsel and/or City
Counsel to the effect that (a) the District has the right
and power under the Act to adopt this Resolution and the
Supplemental Resolutions relating to such Parity Bonds, and
this 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); (b) this Resolution
creates the valid pledge which it purports to create of the
Net Taxes as provided in this Resolution, subject to the
application thereof to the purposes and on the conditions
permitted by this Resolution; and (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 this
Resolution and all Supplemental Resolutions thereto and
entitled to the benefits of this Resolution and all such
Supplemental Resolutions, and such Parity Bonds have been
duly and validly authorized and issued in accordance with
the Act (or other applicable laws) and this Resolution and
all such Supplemental Resolutions; and a further opinion of
Bond Counsel to the effect that, assuming compliance by the
District with certain tax covenants, the issuance of the
Parity Bonds will not adversely affect the exclusion from
gross income for federal income tax purposes of interest on
any Outstanding Bonds and Parity Bonds theretofore issued or
the exemption from State of California personal income
taxation of interest on any Outstanding Bonds and Parity
Bonds theretofore issued;
(4) A certificate of the District containing such
statements as may be reasonably necessary to show compliance
with the requirements of this Resolution;
(5) A certificate from one or more Independent
Financial Consultants which when taken together certify that
(i) the amount of maximum Special Taxes 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 Maximum Annual Debt Service on all Outstanding Bonds
and Parity Bonds theretofore issued and the Parity Bonds
proposed to be issued, and (ii) the fair market value of the
land and then existing improvements in the District, as
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determined by an appraisal performed on a basis consistent
with the appraisal provided to the District in connection
with the issuance of the Bonds, is at least 2 times the sum
of (A) the aggregate principal amount of all Bonds and
Parity Bonds then Outstanding, plus (B) the aggregate
principal amount of the additional Parity Bonds proposed to
be issued, plus (C) the aggregate principal amount of all
assessment district bonds then outstanding and payable from
assessments to be levied on parcels of land within the
District, plus (D) a portion of the aggregate principal
amount of other community facilities district or general
obligation bonds then outstanding and payable at least
partially from taxes to be levied on parcels of land within
the District (the "Other Bonds") equal to the aggregate
principal amount of the Other Bonds multiplied by a
fraction, the numerator of which is the amount of taxes
levied for the Other Bonds on parcels within the District,
and the denominator of which is the total amount of taxes
levied for the Other Bonds on all parcels of land, based
upon information from the most recent available fiscal
year. For purposes of making the certifications required by
this paragraph (c), the Independent Financial Consultants
may rely on reports or certificates of such other persons as
may be acceptable to the District, the City, Bond Counsel
and the initial purchasers of the proposed Parity Bonds; and
(6) Such further documents, money and securities
as are required by the provisions of this Resolution and the
Supplemental Resolution providing for the issuance of such
Parity Bonds.
ARTICLE X
MISCELLANEOUS
Section 10.01. Cancellation of Bonds and Parity Bonds. Ail
Bonds and Parity Bonds surrendered to the Fiscal Agent for
payment upon maturity or for redemption shall upon payment
therefor and any Bond or Parity Bond purchased by the District
as authorized herein and delivered to the Fiscal Agent for
cancellation shall be cancelled forthwith and shall not be
reissued. The Fiscal Agent shall destroy such Bonds and Parity
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
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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 or Parity 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 or Parity 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 or Parity 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 or Parity Bond shall
bind every future Owner of the same Bond or Parity 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 this
Resolution to the contrary notwithstanding, any money held by
the Fiscal Agent in trust for the payment and discharge of any
of the Outstanding Bonds and Parity Bonds which remain unclaimed
for five (5) years after the date when such Outstanding Bonds
and Parity 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 Outstanding Bonds and
Parity Bonds become due and payable, shall, at the written
request of the District, be repaid by the Fiscal Agent to the
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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 Outstanding Bonds or Parity 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 Outstanding Bonds or Parity 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, 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
a pledge of the Net Taxes which are subordinate to the pledge
hereunder, the general fund of the District or from taxes or any
source other than the Net Taxes as defined 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 reasonably
necessary or proper to carry out the intention or to facilitate
the performance of this Resolution, and for the better assuring
and confirming unto the Owners of the Bonds or any Parity Bonds
the rights and benefits provided in this Resolution.
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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, the Bonds and any
Parity 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 of the City of Poway, 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, Ref. No.
SIGNED AND APPROVED this th day of , 1989 by
the Mayor of the City of Poway acting on behalf of the
Community Facilities District No. 88-1 of the City of Poway
(Parkway Business Center).
Mayor of the City of Poway
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No.
ATTACHMENT "1"
UNITED STATES OF AMERICA STATE OF CALIFORNIA
COMMUNITY FACILITIES DISTRICT NO. 88-1
OF THE CITY OF POWAY
(PARKWAY BUSINESS CENTER)
SERIES 1989 SPECIAL TAX BONDS
INTEREST RATE
FDITURITY DATE-
DATED DATE
April 1, 1989
REGISTERED OWNER:
PRINCIPAL AMOUNT
CUSIP NI/MBER
COMMUNITY FACILITIES DISTRICT NO. 88-1 OF THE CITY OF
POWAY (PARKWAY BUSINESS CENTER) (the "District") situated in
the City of Poway, State of California (the "City"), FOR VALUE
RECEIVED, hereby promises to pay, solely from amounts held
under the Resolution (as hereinafter defined), 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 A~nount set forth above, and
to pay interest on such Principal Amount from the Interest
Payment Date (as hereinafter defined) next preceding the date
of authentication hereof, unless (i) the 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 (as hereinafter defined)
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 April 1, 1989; provided, however, that if at
the time of authentication of this Bond, interest is in
default, interest on this Bond shall be payable from the last
Interest Payment Date to which the interest has been paid or
made available for payment or, if no interest has been paid or
made available for payment, interest on this Bond shall be
payable from April 1, 1989. Interest will be paid semiannually
on February 15 and August 15 (each an "Interest Payment Date"),
commencing August 15, 1989, at the Interest Rate set forth
above, until the Principal Amount hereof is paid or made
available for payment.
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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
first day of the month in which the Interest Payment Date
occurs (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
"Community Facilities District No. 88-1 of the City of Poway
(Parkway Business Center), Series 1989 Special Tax Bonds" (the
"Bonds") issued in the aggregate principal amount of
$30,000,000 pursuant to the Mello-Roos Community Facilities Act
of 1982, as amended, being Sections 53311, et seq., of the
California Government Code (the "Act"), for the purpose of
paying the cost of constructing and acquiring certain public
facilities, 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 28, 1989 and a Supplement to
Resolution executed in connection therewith (collectively, 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 portion of the annual special taxes authorized
under the Act to be levied and collected within the District
and pledged to the repayment of the Bonds (the "Special Taxes")
and certain other amounts held in the funds and accounts
established pursuant to the Resolution. Any amounts for the
payment hereof shall be limited to the Special Taxes pledged
and collected or foreclosure proceeds received following a
default in payment of the Special Taxes, except to the extent
that other provision for payment has been made by the
Legislative Body, as may be permitted by law. The District has
covenanted for the benefit of the owners of the Bonds that
under certain circumstances it will commence and diligently
pursue to completion appropriate foreclosure proceedings in the
event of delinquencies of Special Tax installments levied for
payment of principal and interest on the Bonds. The District
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is currently authorized to issue up to $15,000,000 in
additional bonds payable from the Special Taxes which will rank
equally as to security with the Bonds, but only upon
satisfaction of certain terms and conditions set forth in the
Resolution.
The Bonds are subject to mandatory redemption before
maturity on August 15, 1992, in whole or in part, as nearly as
practicable on a pro rata basis from each maturity and by lot
within a maturity, from amounts transferred to the Redemption
Account of the Special Tax Fund from the Construction Fund on
July 1, 1992 (rounded to the highest closest integral multiple
of $5,000). The Bonds so called for redemption will be
redeemed at a redemption price equal to the principal amount
thereof, plus accrued interest t.o the redemption date, without
premium. _
Bonds maturing on or prior to August 15, 1999 shall
not be subject to redemption prior to maturity. The Bonds
maturing on August 15, 2000 or thereafter may be redeemed, at
the option of the District on August 15, 1999, or on any
Interest Payment Date thereafter prior to maturity, in whole or
in part, in inverse order of maturity and by lot within a
maturity, 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
August 15, 1999 and February 15, 2000
August 15, 2000 and February 15, 2001
August 15, 2001 and thereafter
102%
101%
100%
In addition, the Term Bonds maturing on August 15, 2014 are
subject to mandatory sinking fund redemption prior to maturity
commencing on August 15, 2002 in part, by lot, from Sinking
Fund Payments (as defined in the Resolution) at a price equal
to the principal amount thereof, without premium, 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 no
less than 30 nor more than 60 days prior to the redemption date
by first class mail, postage prepaid, to the addresses set
forth in the registration books. Neither the failure of the
Registered Owner hereof to receive nor any defect in such
notice will 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
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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 under the Resolution except the right 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 Fiscal Agent shall not be required to register
transfers or make exchanges of (i) any Bonds for a period of 15
days next preceding any selection of the Bonds to be redeemed,
or (ii) any Bonds chosen for redemption.
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 notice to or 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 OF COMMUNITY FACILITIES DISTRICT NO. 88-1 OF THE CITY
OF POWAY (PARKWAY BUSINESS CENTER) FOR WHICH THE CITY OF POWAY
OR THE DISTRICT IS OBLIGATED TO LEVY OR PLEDGE, OR HAS LEVIED
OR PLEDGED, ANY TAXES, OTHER THAN THE SPECIAL TAXES REFERENCED
HEREIN. THE BONDS ARE LIMITED OBLIGATIONS OF THE DISTRICT
PAYABLE FROM THE SPECIAL TAXES BUT ARE NOT A DEBT OF THE CITY
OF POWAY, THE STATE OF CALIFORNIA OR ANY OTHER POLITICAL
SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR
STATUTORY LIMITATION OR RESTRICTION.
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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 do
exist, have happened and have 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, Community Facilities District No. 88-1
of the City of Poway (Parkway Business Center) has caused this
Bond to be dated as of , 1989, to be signed on behalf
of the District 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.
ATTEST:
Mayor of the City of Poway, on
behalf of Community Facilities
District No. 88-1 of the City of
Poway (Parkway Business Center)
City Clerk of the City of Poway,
on behalf of Community Facilities
District No. 88-1 of the City of
Poway (Parkway Business Center)
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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:
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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ATTACHMENT "2"
REQUISITION FOR DISBURSEMENT OF PROJECT COSTS
Requisition No.
The undersigned, a duly authorized representative of
Community Facilities District No. 88-1 of the City of Poway
(Parkway Business Center), hereby certifies to the Fiscal Agent
for purposes of disbursing funds from the Construction Fund to
pay Project Costs that:
(1) The Fiscal Agent is to pay to the payees set forth on
Attachment 1 hereto the amount set forth next to each Payee's
name for the item described on Exhibit A hereto;
(2) The conditions to the release of these amounts from
the Construction Fund have been satisfied; and
(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
A 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.
Add: Purpose for which obligation incurred [See
Section 3.10(a).]
Dated:
COMMUNITY FACILITIES DISTRICT
NO. 88-1 OF THE CITY OF POWAY
(PARKWAY BUSINESS CENTER)
By:
Authorized Officer
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EXHIBIT A
Payee
Amount Due
Purpose of
Expenditure
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