HomeMy WebLinkAbout2016-09-13 - AGENDA REPORTS - SA TAX ALLOCATION REFUNDING (2)Agenda Item• 11
CITY OF SANTA CLARITA
Q) AGENDA REPORT
NEW BUSINESS
��jj i , /J
CITY MANAGER APPROVAL: 41 ,)Sl. ' )
DATE: September 13, 2016
SUBJECT: SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF
THE CITY OF SANTA CLARITA TAX ALLOCATION REFUNDING
BONDS SERIES 2016
DEPARTMENT: Administrative Services
PRESENTER: Carmen Magana
RECOMMENDED ACTION
Successor Agency adopt a resolution authorizing the issuance of its Tax Allocation Refunding
Bonds, Series 2016, approving the execution and delivery of an Indenture of Trust, Escrow
Agreement, and Continuing Disclosure Certificate and providing for other matters relating
thereto.
BACKGROUND
On June 3, 2008, the Redevelopment Agency of the City of Santa Clarita (RDA) issued its
$29,860,000 Tax Allocation Bonds, Series 2008 (Newhall Redevelopment Project Area) and its
$8,850,000 Housing Set -Aside Tax Allocation Bonds, Series 2008, bearing interest rates ranging
from 4.0 to 5.0 percent and maturing on October 1, 2042. The proceeds of the 2008 Bonds were
used to finance certain redevelopment projects and housing programs. With the election of the
City of Santa Clarita (City) to serve as Successor Agency to the Redevelopment Agency of the
City of Santa Clarita (Successor Agency), the Successor Agency has paid all current and future
bond obligations with Redevelopment Property Tax Trust Fund (RPTTF) distributions to service
enforceable obligations.
Pursuant to Assembly Bill X1 26 (enacted in 2011), the Successor Agency was constituted to
wind -down the financial obligations of the RDA. Assembly Bill 1484 (enacted in 2012)
amended and supplemented Assembly Bill XI 26 and added, among other provisions, Section
34177.5 of the California Health and Safety (H&S) Code. Pursuant to Section 34177.5, the
Successor Agency is authorized to issue refunding bonds to pay off outstanding indebtedness of
the RDA.
When the former RDA was dissolved as a result of Assembly Bill XI 26, the RDA had the
Page 1
PacketP9.112
following bond issues outstanding:
$2998609000 City of Santa Clarita Redevelopment Agency Tax Allocation Bonds, Series
2008 (Newhall Redevelopment Project Area) (2008 Non housing Bonds)
$898509000 City of Santa Clarita Redevelopment Agency Housing Set -Aside Tax
Allocation Bonds, Series 2008 (2008 Housing Bonds)
Staff has determined, in consultation with the City's Financial Advisor that current bond market
conditions allow for the issuance of refunding bonds to advance refinance all of the outstanding
2008 Bonds. The outstanding par amount of the 2008 Non -housing Bonds to be refunded is
$26,155,000. The outstanding par amount of the 2008 Housing Bonds to be refunded is
$7,755,000. The final maturity of the 2008 Bonds is October 1, 2042. All of the outstanding
2008 Bonds are callable at par or 100% on or after October 1, 2018. The market for post AB
1484 tax allocation bonds is very favorable. Based on current bond market conditions, a
refunding could reduce true interest costs to 3.23%, inclusive of underwriting costs.
The average interest cost of the Series 2008 Bonds is 4.88%. Savings are estimated to be
approximately 10%, or $3.297 million in present value dollars and $4.462 million in total dollars.
The estimated average annual debt service savings is anticipated to be approximately $247,000
per year. The annual savings do not reflect possible interest earnings on the $1.165 million in
2008 bond reserve funds being used to reduce the borrowing. Current interest earnings are
minimal.
As of June 30, 2016, the loan outstanding to the City from the Successor Agency is $15,687,058.
Based on projected tax revenues and debt service savings, it is estimated the bond refunding will
result in the Successor Agency loan being repaid approximately one year sooner, in Fiscal Year
2048-2049. Until such a time as the Successor Agency has repaid the City loan, 50% of the
savings, estimated at $123,500, can be claimed on the annual Recognized Obligation Payment
Schedule (ROPS) for loan repayment, which is subject to the Department of Finance (DOF)
approval. The remaining 50% of the savings would then be distributed to all taxing entities as
Residual RPTTF. The City receives approximately 11.31% of these property tax revenues;
thereby, the savings could generate approximately $13,968 of additional property tax revenues to
the City per year from residual funds in the RPTTF Funds. The remaining 88.69% or estimated
$109,532 would be allocated to the County of Los Angeles, Special Districts, Schools, Colleges,
and Educational Revenue Augmentation Fund (ERAF) according to the H&S Code Section
34183(a)(4). Total annual additional property tax revenues to the City will depend on bond
market conditions at time of sale, but estimated to total $137,468.
Under the dissolution legislation, refunding prior tax allocation issues is encouraged by the State,
Counties, and School Districts. The costs of undertaking this refunding will be funded entirely
by the proposed bond issue and the savings discussed are net of costs. If the bonds are not sold,
the City will not be liable for any costs, and law provides the ability to place any unpaid cost on
the next ROPS. The City is also allowed to be reimbursed an administrative fee from the bond
proceeds to cover the staff time required to process the refunding.
The proposed Refunding Bonds are expected to be rated by Standard and Poor's Corporation and
Pagc 2
Packet Pg. 113
most likely insured and sold with "AA" Bond Ratings. The Refunding Bonds are proposed to be
sold through a negotiated sale in mid-November. The current bond rating on both issues to be
refunded is "BBB+."
The action today by the Successor Agency approves the issuance of the Refunding Bonds, along
with the related bond documents, and requests approval of the issuance of the Refunding Bonds
from the Oversight Board. It is anticipated that the refunding will take approximately three
months to complete.
Pursuant to H&S Code Section 34177.5(f) and 34180(b), the issuance of the Refunding Bonds by
the Successor Agency is subject to Oversight Board and DOF approval. The DOF will notify the
Successor Agency within five business days as to whether the DOF will undertake a review. If
the DOF decides to undertake this review, the DOF may take up to 60 days for the review.
It is appropriate at this meeting to consider for adoption the resolution authorizing the issuance
of the Refunding Bonds. A resolution for the Successor Agency is attached which would
authorize the issuance of not to exceed $38,000,000 of Refunding Bonds. Final sizing will be
determined at time of bond sale. The Refunding Bonds will be sold on a negotiated basis. The
resolution also approves the various documents in connection with the issuance of the Refunding
Bonds.
General Summary of Security: The Refunding Bonds are secured by the RPTTF. Potential
investors will look closely at the assessed value within the Newhall Redevelopment Project Area
and the estimated future RPTTF Funds.
Indenture: Key legal document that lays out the legal structure and terms of the financing of the
Refunding Bonds. It specifies payment dates, maturity dates of the Refunding Bonds; revenues
and accounts specifically pledged to the repayment of the Refunding Bonds; flow of funds,
default and remedy provisions; defeasance provisions in the event the Refunding Bonds are
prepaid; and covenants of the issuer. It is drafted by Bond Counsel and executed by the
Successor Agency and The Bank of New York Mellon, as trustee.
Escrow Agreement: Document governing the defeasance of the 2008 Bonds and their early
redemption. The document is drafted by Bond Counsel and executed by the Successor Agency
and Trustee.
Continuing Disclosure Certificate: This undertaking outlines the updated information related to
the security that the Successor Agency will agree to provide to the bond markets. Disclosure is
required annually and on an exceptional basis for any major "material' event. This document is
drafted by Bond Counsel and executed by the Successor Agency.
More specific details of the financing can be found in the drafts of the documents referenced
above. The documents being recommended for approval are available in the office of the
Secretary of the Successor Agency (City Clerk).
Adoption
of the
attached resolution approves
the refinancing of the
2008 Bonds and approval of
the issuance by
the Successor Agency of the
Refunding Bonds, and
authorizes the Successor
Pagc 3
Packet Pg. 114
Agency to enter into certain related documents. The resolution also requests the Oversight
Board to make certain determinations and findings and approve the issuance of the Refunding
Bonds by the Successor Agency. The resolution also approves the appointment of a) C.M. de
Crinis & Co., Inc., as Financial Advisor, b) HdL Coren & Cone, as Fiscal Consultant, and c)
Norton Rose Fulbright US LLP, as Bond and Disclosure Counsel. Following a formal Request
for Proposal ("RFP") process, an underwriter will be proposed.
Any fiscal impact from the refunding of the 2008 Bonds will benefit the cash flow of the
Successor Agency. Under current bond market conditions, refunding the 2008 Bonds is expected
to produce present value savings of approximately $3.297 million and total savings of
approximately $4.462 million over the remaining life of the debt obligations. Final savings may
be higher or lower depending on bond markets conditions at time of sale and the final structure
used. The reduction in debt service would cause additional RPTTF to be available for
distribution as described in the body of the Agenda Report.
ALTERNATIVE ACTION
Other action as determined by the Successor Agency.
FISCAL IMPACT
Savings to the Successor Agency's obligations will result in an annual increase of approximately
$123,500 in residual RPTTF available for distribution to the taxing entities. In addition,
approximately $123,500 will be available annually for loan repayment, of which 20 percent is
allocated to the Successor Housing Agency.
ATTACHMENTS
Resolution
Bond Refunding Financing Plan
Form of hidenture (available in City Clerk's Reading File)
Form of Escrow Agreement (available in City Clerk's Reading File)
Form of Continuing Disclosure Certificate (available in City Clerk's Reading File)
Pagc 4
Packet Pg. 115
RESOLUTION NO.
A RESOLUTION OF THE GOVERNING BOARD OF THE SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA, CALIFORNIA,
AUTHORIZING THE ISSUANCE OF ITS TAX ALLOCATION REFUNDING BONDS, SERIES
2016, APPROVING THE EXECUTION AND DELIVERY OF AN INDENTURE OF TRUST,
ESCROW AGREEMENT, AND CONTINUING DISCLOSURE CERTIFICATE AND
PROVIDING FOR OTHER MATTERS RELATING THERETO
WHEREAS, the Redevelopment Agency of the City of Santa Clarita (the "Former
Redevelopment Agency") was a public body, corporate and politic, duly created in 1989,
established and authorized to transact business and exercise its powers under and pursuant to the
provisions of the Community Redevelopment Law (Part 1 of Division 24, commencing with
Section 33000) (the "Redevelopment Law"), of the Health and Safety Code of the State of
California (the "Health and Safety Code"); and
WHEREAS, the Former Redevelopment Agency issued its $29,860,000 City of
Santa Clarita Redevelopment Agency Tax Allocation Bonds, Series 2008 (Newhall Redevelopment
Project Area) (the "2008 Nonhousing Bonds") and its $8,850,000 City of Santa Clarita
Redevelopment Agency Housing Set -Aside Tax Allocation Bonds, Series 2008 (the "2008 Housing
Bonds," and, together with the 2008 Nonhousing Bonds, the "Prior Bonds"), secured by a pledge of
certain tax increment revenues from the Newhall Redevelopment Project Area for the purpose of
financing the redevelopment activities and housing programs of the Former Redevelopment
Agency; and
WHEREAS, Assembly Bill X1 26, effective June 29, 2011, together with AB 1484
("AB 1484"), effective June 27, 2012, resulted in the dissolution of the Former Redevelopment
Agency as of February 1, 2012, and the vesting in this Successor Agency to the Redevelopment
Agency of the City of Santa Clarita (the "Successor Agency") of all of the authority, rights, powers,
duties, and obligations of the Former Redevelopment Agency; and
WHEREAS, AB 1484, among other things, amended the Redevelopment Law to
authorize the Successor Agency to issue bonds pursuant to Article 11 (commencing with Section
53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code (the "Refunding
Law") for the purpose of achieving debt service savings within the parameters set forth in Section
34177.5 of the Health and Safety Code (the "Savings Parameters"); and
WHEREAS, the Successor Agency has determined, based on current municipal
market conditions, that it will achieve debt service savings in compliance with the Savings
Parameters as evidenced by the analysis of its Financial Advisor, C.M. de Crinis & Co., Inc.,
describing potential savings that will accrue to applicable taxing agencies as a result of the
refunding of the Prior Bonds (the "Bond Refunding Financing Plan"); and
WHEREAS, to provide funds to refund the Prior Bonds, the Successor Agency
intends to authorize pursuant to the Redevelopment Law and the Refunding Law the issuance of its
PacketP9.116
Tax Allocation Refunding Bonds, Series 2016 (the "2016 Bonds"), in the aggregate principal
amount not to exceed $38,000,000; and
WHEREAS, the Successor Agency, with the aid of its staff, has reviewed the
Indenture of Trust and other documents related to the proposed issuance of the 2016 Bonds, and
desires to approve said documents and the refunding of the Prior Bonds by the issuance, sale, and
delivery of the 2016 Bonds.
NOW, THEREFORE, the Governing Board of the Successor Agency to
Redevelopment Agency of the City of Santa Clarita (the "Board"), does hereby resolve as follows:
SECTION 1. Findings. The Board hereby finds and determines that the recitals
hereto are true and correct.
SECTION 2. Determination of Savings. The Successor Agency has determined that
there are significant potential savings to applicable taxing entities in compliance with the Savings
Parameters by the issuance of the Successor Agency of the 2016 Bonds to provide funds to refund
the Prior Bonds, as evidenced by the Bond Refunding Financing Plan on file with the Secretary of
the Successor Agency, which Bond Refunding Financing Plan is hereby approved.
SECTION 3. Refunding Approved. The Successor Agency hereby approves the
issuance of the 2016 Bonds in the aggregate principal amount not to exceed $38,000,000, which
2016 Bonds shall be issued in one or more series pursuant to the provisions of Section
34177.5(a)(1) of the Health and Safety Code in that: a) the total interest cost to maturity on the
2016 Bonds plus the principal amount of the 2016 Bonds shall not exceed the total remaining
interest cost to maturity on the Prior Bonds, plus the remaining principal of the Prior Bonds; and b)
the principal amount of the 2016 Bonds shall not exceed the amount required to defease the Prior
Bonds, to establish customary debt service reserves and pay related costs of issuance.
SECTION 4. Indenture. To prescribe the terms and conditions upon which the 2016
Bonds are to be issued, secured, executed, authenticated, and held, an indenture of trust (the
"Indenture") is proposed to be executed and delivered by the Successor Agency and The Bank of
New York Mellon Trust Company, N.A. (the "Trustee"), in the form on file with the Secretary, a
copy of which has been made available to the Board. The Indenture in said form is hereby
approved and any of the Chairperson, Vice -Chairperson, or Executive Director, and their respective
designees (each an "Authorized Representative") is hereby authorized and directed, for and in the
name and on behalf of the Successor Agency, to execute, and the Secretary is authorized to attest
and deliver the Indenture to the Trustee in such form, together with such changes (including,
without limitation, changes relating to the issuance of a municipal bond insurance policy and/or a
surety bond for a debt service reserve fund or such changes as may be requested by a rating agency
providing a rating on the 2016 Bonds) as may be approved by the Authorized Representative
executing the Indenture, acting on behalf of the Successor Agency, subject to advice of Bond
Counsel and counsel to the Successor Agency, such execution thereof to constitute conclusive
evidence of the approval of the Successor Agency of all changes from the form of the Indenture
presented to this meeting.
SECTION 5. Continuing Disclosure Certificate. The form of Continuing Disclosure
Certificate proposed to be executed and entered into by the Successor Agency in connection with
PacketP9.117
the 2016 Bonds, in the form on file with the Secretary, a copy of which has been made available to
the Board, is hereby approved, and any Authorized Representative is hereby authorized and
directed, for and in the name and on behalf of the Successor Agency, to execute and deliver the
Continuing Disclosure Agreement in such form, together with such changes as may be approved by
the Authorized Representative executing the Continuing Disclosure Certificate, acting on behalf of
the Successor Agency, subject to advice of Disclosure Counsel and counsel to the Successor
Agency, such execution thereof to constitute conclusive evidence of the approval of the Successor
Agency of all changes from the form of the Continuing Disclosure Certificate presented to this
meeting.
SECTION 6. Escrow Agreement. The form of Escrow Agreement proposed to be
executed and entered into by and between the Successor Agency and the Trustee, as escrow bank, in
the forms on file with the Secretary, a copy of which has been made available to the Board, is
hereby approved, and any Authorized Representative is hereby authorized and directed, for and in
the name and on behalf of the Successor Agency, to execute and deliver the Escrow Agreement in
such form, together with such changes as may be approved by the Authorized Representative
executing the Escrow Agreement, acting on behalf of the Successor Agency, subject to advice of
Bond Counsel and counsel to the Successor Agency, such execution thereof to constitute conclusive
evidence of the approval of the Successor Agency of all changes from the form of the Escrow
Agreement presented to this meeting.
SECTION 7. Bond Purchase Agreement. The Executive Director or his designee, is
hereby authorized, with the assistance of the Financial Advisor, to select an underwriter for the
2016 Bonds through a request for proposal process. The Successor Agency hereby directs the
preparation of a form of a bond purchase agreement to be entered into by and between the
Successor Agency and the underwriter, which form will subsequently be submitted to the Successor
Agency for approval.
SECTION 8. Preliminary Official Statement. The Successor Agency hereby directs
the preparation of a form of an Official Statement describing the 2016 Bonds and containing
material information relating to the 2016 Bonds, the preliminary form of which will be submitted to
the Successor Agency for approval for distribution by the Underwriter to persons and institutions
interested in purchasing the 2016 Bonds.
SECTION 9. Oversight Approval of 2016 Bonds. The Successor Agency requests
that the Oversight Board approve the issuance, sale, and delivery of the 2016 Bonds pursuant to this
Resolution and the Indenture.
SECTION 10. Filing of this Resolution. The Secretary is hereby authorized and
directed to file a certified copy of this Resolution with the Oversight Board, along with the Bond
Refunding Financing Plan, and, as provided in Section 341800) of the Health and Safety Code, with
the Los Angeles County Administrative Officer, the Los Angeles County Auditor -Controller and
the California Department of Finance.
SECTION 11. Determinations by the Oversight Board. The Successor Agency
requests that the Oversight Board make the following determinations upon which the Successor
Agency will rely in undertaking the refunding proceedings and the issuance, sale, and delivery of
the 2016 Bonds:
PacketP9.118
(a) The Successor Agency is authorized, as provided in the Health and Safety
Code Section 34177.5(f), to recover its costs related to the issuance of the 2016 Bonds from
the proceeds of the 2016 Bonds, including the cost of reimbursing the City of Santa Clarita
for administrative staff time spent with respect to the authorization, issuance, sale and
delivery of the 2016 Bonds;
(b) The application of proceeds of the 2016 Bonds by the Successor Agency to
the refunding and defeasance of the Prior Bonds, as well as to the payment by the Successor
Agency of all costs of issuance of the 2016 Bonds and refunding the Prior Bonds, as
provided in the Health and Safety Code Section 34177.5(a), shall be implemented by the
Successor Agency promptly upon sale and delivery of the 2016 Bonds, and, notwithstanding
the Health and Safety Code Section 34177.3 or any other provision of law to the contrary,
once the Oversight Board has adopted its resolution and the California Department of
Finance has approved (or within time allotted took no action), no further approval of the
Oversight Board, the California Department of Finance, the Los Angeles County Auditor -
Controller or any other person or entity other than the Successor Agency shall be required;
(c) The Successor Agency shall be entitled to receive its full "Administrative
Cost Allowance" as defined and described under the Health and Safety Code Section
34181(a)(3) without any deductions with respect to continuing costs related to the 2016
Bonds, such as trustee's fees, auditing and fiscal consultant fees and continuing disclosure
and rating agency costs (collectively, "Continuing Costs of Issuance"), and such Continuing
Costs of Issuance shall be payable from property tax revenues pursuant to the Health and
Safety Code Section 34183. hi addition and as provided by Section 34177.5(f), if the
Successor Agency is unable to complete the issuance of the 2016 Bonds for any reason, the
Successor Agency shall, nevertheless, be entitled to recover its costs incurred with respect to
the refunding proceedings from such property tax revenues pursuant to the Health and
Safety Code Section 34183 without reduction in its Administrative Cost Allowance.
SECTION 12. Approval of Certain Financing Team Members. The Successor
Agency hereby approves the appointment of a) C.M. de Crinis & Co., Inc., as Financial Advisor, b)
HdL Coren & Cone, as Fiscal Consultant, and c) Norton Rose Fulbright US LLP, as Bond and
Disclosure Counsel, each in accordance with separate letter agreements with the Successor Agency.
SECTION 13. General Authorization. All actions heretofore taken by the officers
and agents of the Successor Agency with respect to the issuance of the 2016 Bonds are hereby
approved, confirmed, and ratified. Each Authorized Representative and any other officer of the
Successor Agency are hereby authorized and directed, for and in the name and on behalf of the
Successor Agency, to do any and all things and take any and all actions, including procurement of
bond insurance or a reserve surety, execution and delivery of any and all assignments, certificates,
requisitions, including requisitions for the payment of costs of issuance of the Bonds, agreements,
including agreements in customary form providing for the investment of the proceeds of the Bonds,
notices, consents, and other documents, which they, or any of them, may deem necessary or
advisable in order to consummate the sale, issuance and delivery of the 2016 Bonds and the
refunding of the Prior Bonds, including the purchase of federal securities acceptable to Bond
Counsel and authorized as an investment for the defeasance of the Prior Bonds, and all actions to
obtain the necessary approvals from the Oversight Board and the California Department of Finance.
The Successor Agency hereby confirms that the Mayor of the City is Chairperson of the Successor
PacketP9.119
Agency Board, the City Manager of the City is the Executive Director of the Successor Agency, the
City Clerk of the City is the Secretary of the Successor Agency, and the City Attorney is Agency
Counsel to the Successor Agency.
SECTION 14. Effective Date. This Resolution shall take effect immediately upon
its adoption.
PASSED, APPROVED, AND ADOPTED this day of September, 2016.
CHAIR
ATTEST:
SECRETARY
DATE:
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
I, Mary Cusick, Secretary of the Successor Agency to the Redevelopment Agency of the
City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the
Governing Board of the Successor Agency to the Redevelopment Agency of the City of Santa
Clarita at the regular meeting thereof, held on the day of September, 2016, by the following
vote:
AYES: BOARD MEMBERS:
NOES: BOARD MEMBERS:
ABSENT: BOARD MEMBERS:
SECRETARY
Packet Pg. 120
Financial Advisors, Public Finance
Serving California and Hawaii
C.M. de CRINIS (SCO., INC.
MEMORANDUM
To: Successor Agency to the Redevelopment Agency of the City of Santa Clarita
Date: September 1, 2016
From: Curt de Crinis
C.M. de Crinis & Co., Inc.
Financial Advisor to the Successor Agency to the Redevelopment Agency of
the City of Santa Clarita
RE: Bond Refunding Financing Plan
Introduction
As a result of ABxl 26 and the related California Supreme Court decision upholding the
law, all redevelopment agencies in the State were dissolved as of February 1, 2012,
including the Redevelopment Agency of the City of Santa Clarita whose functions were
assumed by the City of Santa Clarita (the "City"), and successor agencies were designated
to the former redevelopment agencies to expeditiously wind down the affairs of the
former redevelopment agencies. The City of Santa Clarita (the "Cityl acts as successor
agency (the "Successor Agency'.
The primary provisions enacted by ABx1 26 relating to the dissolution and wind
down of former redevelopment agency affairs are codified in Parts 1.8 (commencing
with Section 34161) and 1.85 (commencing with Section 34170) of Division 24 of the
Health and Safety Code of the State, as amended on June 27, 2012 by Assembly Bill No.
1484 ("AB 1484'x, enacted as Chapter 26, Statutes of 2012 (as amended from time to
time, the "Dissolution Act's.
Under the Dissolution Act - Section 34177.5 of the Health & Safety Code, which
was added to the Dissolution Act by AB 1484, the Successor Agency is authorized
to issue bonds for the purpose of refunding outstanding tax allocation bonds of the
100 N. Brand Blvd., Suite 605, Glendale, CA 91203 Tel: (818) 385-4900
Packet Pg. 121
Redevelopment Agency or the Successor Agency to provide debt service savings
provided that (A) the total interest cost to maturity on the refunding bonds plus the
principal amount of the refunding bonds does not exceed the total remaining interest
cost to maturity on the bonds to be refunded plus the remaining principal of the
bonds to be refunded, and (B) the principal amount of the refunding bonds does not exceed
the amount required to defease the refunded bonds, to establish customary debt
service reserves, and to pay related costs of issuance. If the foregoing conditions are
satisfied, the initial principal amount of the refunding bonds may be greater than the
outstanding principal amount of the bonds to be refunded.
Section 34177.5(h) of the Dissolution Act requires that the Successor Agency make
diligent efforts to ensure that the lowest long-term cost financing is obtained, and
requires that the Successor Agency make use of an independent financial advisor in
developing financing proposals and make the work product of the financial advisor available
to the California Department of Finance at its request.
This report is written by C.M. de Crinis & Co. Inc, which has been engaged as the
independent financial advisor to the Successor Agency, to analyze the possible refunding of
the Successor Agency's outstanding bonds. The bonds that are candidates for refunding are
listed herein.
Overview of Bond Refunding Plan
The Successor Agency has identified $33,910,000 in Series 2008 Bond refunding candidates
(the "Bonds").
The Successor Agency plans to redeem and refund all of the Bonds that produce acceptable
net present value savings. Section 34177.5(8) provides that any refunding bonds shall be
secured by a pledge of, and lien on, and shall be repaid from moneys deposited from time to
time in the Successor Agency's Redevelopment Property Tax Trust Fund ("RPTTF'�
The Successor Agency has two series of bonds outstanding. Both are refunding candidates.
They include $26,155,000 in Series 2008 Tax Allocation Bonds, $7,755,000 in Series 2008
Housing Set -Aside Tax Allocation Bonds. Both Series 2008 bonds are currently rated
"BBB+" by Standard & Poor's. The Successor Agency intends to consolidate the refinancing
of the Series 2008 Bonds by removing the housing set-aside pledge and securing all bonds
with an RPTTF pledge. It is expected that a bond debt service reserve policy is obtainable
from Assured Guarantee, National Public Finance Guarantee or Build America Mutual.
The Refunding Bonds will be underwritten by negotiated sale provided that savings are
determined to be sufficient by the Successor Agency. If savings are insufficient, the
Successor Agency may forgo or delay the refinancing. Successor Agency staff has
determined a minimum net present value target of 4% of the principal bonds refunded and
in any event savings will be as required to satisfy the provisions of section (34177.5(a)(1) of
the Dissolution Act. The 2008 Bonds can be called any time after October 1, 2018 upon 30
days noticed. The 2008 Bond refunding will be treated as an advance refunding under
Federal Tax Law.
100 N. Brand Blvd., Suite 605, Glendale, CA 91203 Tel: (818) 385-490 Packet Pg. 122
Page 3
Detail of the Refunding Candidates and Savings
Set forth below is a summary of the annual debt service and other bond statistics with
respect to the proposed Refunding Bond debt service and the resulting savings that meet
the conditions set forth in Section 34177.5 of the Dissolution Act. Actual savings will
depend on market conditions at time of sale of the Refunding Bonds and the Refunding
Bonds will only be sold if the requirements of the Dissolution Act are satisfied.
Series 2016
Refunding Tax
Series 2016 Tax Allocation
Allocation Bonds Housing Bonds Total
Dated Date
12/16/2016
12/16/2016
12/16/2016
Delivery Date
12/16/2016
12/16/2016
12/16/2016
Arbitrage Yield
3.02%
3.02%
3.02%
Escrow Yield
0.68%
0.72%
0.69%
Value of Negative Arbitrage
$510,451
$148,900
$659,351
Bond ParAmount
$25,565,000
$7,670,000
$33,235,000
True Interest Cost
3.23%
3.23%
3.23%
Net Interest Cost
3.38%
3.38.0
3.38%
Average Coupon
3.99%
3.99%
3.99%
Average Life
15.68
15.86
15.68
Paramountofrefunded bonds
$26,155,000
$7,755,000
$33,9101000
Average coupon of refunded bonds
4.87%
4.94%
4.88%
Average life of refunded bonds
15.82
15.87
15.83
PV of prior debt
$32,172,425
$9,618,925
$41,791,350
Net PV Savings
$2,562,980
$734,941
$3,297,921
Percentage savings of refunded bonds
9.79%
9.47%
9.72%
100 N. Brand Blvd., Suite 605, Glendale, CA 91203 Tel: (818) 385-490 Packet Pg. 123
SUMMARY TABLE- AGGREGATE SAVINGS
Savings
$ 246,356
245;654
245;604
246;054
246;054
250,566
244,725
244,131
247;856
245, 569
248,406
250;356
247,119
248;919
250,819
247,844
250;231
251;363
242;563
244,331
246,175
248, 200
245;800
250,550
247,150
255,450
$
6;437;844
�M
Present Value to
12/16/2016
$ 246, 298
234;216
227,292
221,023
214;533
212,024
201,026
194,650
1910790
184;439
181;065
177,101
169,677
165,869
162;203
155;572
152,436
148,606
139,213
136;090
133,070
130,068
1240874
123;369
117,954
118,144
$ 41462,602
1. Debt service is on a gross basis and does not reflect impact of bond reserve fund earnings.
100 N. Brand Blvd., Suite 605, Glendale, CA 91203 Tel: (818) 385-490 Packet Pg. 124
Series 2016
Series 2008
Estimated
Housing and Non
Refunding Debt
Date
Housing Bonds
Service
10/1/2017
$ 21323,704
$ 2,077,348
10/1/2018
2,330,304
2,084,650
10/1/2019
2, 3250 504
21079; 900
10/1/2020
2, 3240 704
20 078, 650
10/1/2021
2, 3260 704
2, 080, 650
10/1/2022
2;321;216
2, 070, 650
10/1/2023
21323,875
2,079,150
10/1/2024
2, 3240 281
21080; 150
10/1/2025
2,326,756
2,078,900
10/1/2026
2,325,969
2,080,400
10/1/2027
2,322,806
2,074,400
10/1/2028
21326; 506
2, 076,150
10/1/2029
2, 3270 269
21080; 150
10/1/2030
2,325,069
2,076,150
10/1/2031
2,330,219
2,079,400
10/1/2032
2,327,244
2,079,400
10/1/2033
21326;381
2, 076,150
10/1/2034
2,326,013
2,074,650
10/1/2035
2,322,213
2,079,650
10/1/2036
2,324,981
2,080,650
10/1/2037
21328,825
2,082,650
10/1/2038
21328; 500
2, 080, 300
10/1/2039
2,327,250
20081,450
10/1/2040
2;321;500
2, 070, 950
10/1/2041
2,326,250
2,079,100
10/1/2042
21325,750
2,070,300
TOTAL
$ 60;4690791
$ 540031;948
Savings
$ 246,356
245;654
245;604
246;054
246;054
250,566
244,725
244,131
247;856
245, 569
248,406
250;356
247,119
248;919
250,819
247,844
250;231
251;363
242;563
244,331
246,175
248, 200
245;800
250,550
247,150
255,450
$
6;437;844
�M
Present Value to
12/16/2016
$ 246, 298
234;216
227,292
221,023
214;533
212,024
201,026
194,650
1910790
184;439
181;065
177,101
169,677
165,869
162;203
155;572
152,436
148,606
139,213
136;090
133,070
130,068
1240874
123;369
117,954
118,144
$ 41462,602
1. Debt service is on a gross basis and does not reflect impact of bond reserve fund earnings.
100 N. Brand Blvd., Suite 605, Glendale, CA 91203 Tel: (818) 385-490 Packet Pg. 124
Page 5
SOURCES AND USES
BO N D SO U ROES
Bond Proceeds
Bond Proceeds
Other Sources of Funds
Other Sources of Funds
BOND USES
Refunding Escrow Deposits
Refunding Escrow Deposits
Delivery Date Expenses
Delivery Date Expenses
Delivery Date Expenses
Delivery Date Expenses
Other Uses of Funds
ParAmount
$ 33,235,000
Net Premium
3,398,891
Non Housing DSR
896,537
Housing DSR
268,878
TOTAL SOURCES
$ 37,799,306
Cash Deposit
$ 673
Open Market Purchases
36,909,898
Cost of Issuance
280,000
Underwriter's Discount
199,410
Bond Insurance
351,207
DSR Surety Bond
57,382
Additional Proceeds
736
TOTAL USES
$ 37,799,306
Bond Structure and Credit Considerations
The Refunding Bonds will refund $33,910,000 in outstanding Bonds. The term and payment
dates of the Refunding Bonds will be identical to the term and payment dates of the
outstanding Bonds being refunded. Savings will be proportional in each year. The Refunding
Bonds will be issued under a new indenture and will be secured by the RPTTF.
It is expected that the 2008 Refunding Bonds will receive a rating from Standard & Poor's of
"BBB+" based on the project area characteristics, the estimated RPTTF revenues available
to be pledged to pay the Refunding Bonds and the corresponding increased debt service
coverage and term. The original rating was "A-." The rating downgrade was based on certain
property owner delinquencies and administrative actions and in may be possible to restore
the "A-" rating. It is also expected that bond insurance will be available from Assured
Guaranty Insurance, National Public Finance Guarantee or Build America Mutual increasing
the rating to the "AA" category. An application for a Moody's or Fitch Rating will not be
submitted. An application for a Bond Reserve Fund Surety Policy for the Refunding Bonds
will be completed.
Process and Timing
It is expected
that the Oversight Board
and State
Department
of Finance's review and
approval of
the Successor Agency's
refinancing
will follow
approval by the Successor
100 N. Brand Blvd., Suite 605, Glendale, CA 91203 Tel: (818) 385-490 Packet Pg. 125
Agency at its September 13, 2016 meeting. Assuming timely approvals from all agencies
including the State Department of Finance, the Successor Agency anticipates issuing the
Refunding Bonds in December 2016.
Allocation of Savincrs
Savings will be distributed as residual payments to impacted taking entities including the
City. Given the certain City/Agency loans outstanding, the residual paid to taxing entities
may be reduced by as much as 50% until such a time as the loans are repaid, subject to
Department of Finance approval. Based on information provided by HdL on Los Angeles
County residual payments for 2014/15, future savings, net of DOF approved loan payments
to City, might be distributed as follows:
Share of 1 % 11.31% 37.14% 7.32% 18.95% 3.29% 21.12% 0.37%
TOTAL $ 364,060 $ 1,195,508 $ 235,625 $ 609,986 $ 105,903 $ 679,836 $ 11,910 $3,202,827
100 N. Brand Blvd., Suite 605, Glendale, CA 91203 Tel: (818) 385-490 Packet Pg. 126
Special
Schools
Comm
Cnty Off
Date
gly
LA County
Districts
State
College
ERAF
of ED
TOTAL
10/1/2017
$ 13,931
$ 45,748
$ 9,017
$ 23,342
$ 4,053
$ 26,015
$ 456
$ 122,562
10/1/2018
13,892
45,618
8,991
23,276
4,041
25,941
454
122,213
10/1/2019
13,889
45,609
8,989
23,271
4,040
25,936
454
122,188
10/1/2020
13,914
45,692
9,006
23,314
4,048
25,983
455
122,412
10/1/2021
13,914
45,692
9,006
23,314
4,048
25,983
455
122,412
10/1/2022
14,170
46,530
9,171
23,741
4,122
26,460
464
124,657
10/1/2023
13,839
45,445
8,957
23,188
4,026
25,843
453
121,751
10/1/2024
13,806
45,335
8,935
23,131
4,016
25,780
452
121,455
10/1/2025
14,016
46,027
9,072
23,484
4,077
26,174
459
123,308
10/1/2026
13,887
45,602
8,988
23,268
4,040
25,932
454
122,170
10/1/2027
14,047
46,129
9,092
23,536
4,086
26,232
460
123,582
10/1/2028
14,158
46,491
9,163
23,721
4,118
26,438
463
124,552
10/1/2029
13,975
45,890
9,045
23,415
4,065
26,096
457
122,942
10/1/2030
14,076
46,224
9,110
23,585
4,095
26,286
460
123,837
10/1/2031
14,184
46,577
9,180
23,765
4,126
26,486
464
124,782
10/1/2032
14,016
46,025
9,071
23,483
4,077
26,172
459
123,302
10/1/2033
14,151
46,468
9,158
23,709
4,116
26,424
463
124,490
10/1/2034
14,215
46,678
9,200
23,817
4,135
26,544
465
125,053
10/1/2035
13,717
45,044
8,878
22,983
3,990
25,615
449
120,675
10/1/2036
13,817
45,372
8,943
23,150
4,019
25,801
452
121,555
10/1/2037
13,921
45,715
9,010
23,325
4,050
25,996
455
122,472
10/1/2038
14,036
46,091
9,084
23,517
4,083
26,210
459
123,480
10/1/2039
13,900
45,645
8,996
23,290
4,043
25,956
455
122,286
10/1/2040
14,169
46,527
9,170
23,740
4,122
26,458
464
124,649
10/1/2041
13,976
45,896
9,046
23,417
4,066
26,099
457
122,957
10/1/2042
$ 14,446
$ 47,437
$ 9,349
$ 24,204
$ 4,202
$ 26,976
$ 473
$ 127,086
TOTAL $ 364,060 $ 1,195,508 $ 235,625 $ 609,986 $ 105,903 $ 679,836 $ 11,910 $3,202,827
100 N. Brand Blvd., Suite 605, Glendale, CA 91203 Tel: (818) 385-490 Packet Pg. 126
INDENTURE OF TRUST
Dated as of December 1, 2016
by and between the
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA
MI
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Trustee
Relating to
$[principal amount]
Successor Agency to the
Redevelopment Agency of the City of Santa Clarita
Tax Allocation Refunding Bonds, Series 2016
TABLE OF CONTENTS
ARTICLE I DETERMINATIONS; DEFINITIONS.................................................................2
Section 1.1 Findings and Determinations...........................................................................2
Section1.2 Definitions.......................................................................................................2
Section 1.3 Rules of Construction.................................................................................... 11
ARTICLE II AUTHORIZATION AND TERMS.....................................................................12
Section
2.1
Authorization of Bonds.........................................................................
Section2.2
Section
Term of Bonds.......................................................................................
Section
2.3
Redemption of Bonds............................................................................
Section2.4
Costs of Issuance Fund..................................................................................20
Form of Bonds.......................................................................................
Section
2.5
Execution of Bonds...............................................................................
Section
2.6
3.5
Transfer of Bonds..................................................................................
Section2.7
Exchange of Bonds................................................................................
Section
2.8
Registration Books................................................................................
Section2.9
Temporary Bonds..................................................................................
Section
2.10
Bonds Mutilated, Lost, Destroyed or Stolen .........................................
Section
2.11
Book -Entry Only System......................................................................
Section
2.12
Successor Securities Depository; Transfers Outside Book -Entry Only
System...................................................................................................
12
13
14
16
16
17
17
17
17
17
18
W
ARTICLE III DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS; PARITY
DEBT...................................................................................................................19
Section
3.1
Issuance of Bonds..........................................................................................19
Section
3.2
Application of Proceeds of Bonds.................................................................19
Section
3.3
Costs of Issuance Fund..................................................................................20
Section
3.4
Issuance of Parity Bonds...............................................................................20
Section
3.5
Validity of Bonds..........................................................................................21
ARTICLE IV SECURITY OF BONDS; FLOW OF
1
Section 4.1 Security of Bonds; Equal Security................................................................21
Section 4.2 Redevelopment Obligation Retirement Fund, Debt Service Fund,
Deposit of Pledged Tax Revenues.................................................................21
Section 4.3 Transfer of Amounts by the Trustee..............................................................22
ARTICLE V
Section 5.1
ARTICLE VI
Section 6.1
Section 6.2
Section 6.3
Section 6.4
Section 6.5
Section 6.6
Section 6.7
Section 6.8
Section 6.9
OTHER COVENANTS OF THE SUCCESSOR AGENCY..............................24
Covenants of the Successor Agency..............................................................24
THE TRUSTEE
1
Duties, Immunities and Liabilities of Trustee...............................................31
Mergeror Consolidation................................................................................33
Liabilityof Trustee........................................................................................33
Right to Rely on Documents.........................................................................34
Preservation and Inspection of Documents...................................................35
Compensation and Indemnification...............................................................35
Investment of Moneys in Funds and Accounts.............................................35
Accounting Records and Financial Statements.............................................36
Appointment of Co -Trustee or Agent............................................................36
i
TABLE OF CONTENTS
(Continued)
L,
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE .......................37
Section
7.1
Amendment Without Consent of Owners.....................................................37
Section
7.2
Amendment With Consent of Owners..........................................................38
Section
7.3
Effect of Supplemental Indenture..................................................................38
Section
7.4
Endorsement or Replacement of Bonds After Amendment ..........................38
Section
7.5
Amendment by Mutual Consent....................................................................38
Section
7.6
Opinion of Counsel........................................................................................38
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS..............................39
Section
8.1
Events of Default and Acceleration of Maturities.........................................39
Section
8.2
Application of Funds Upon Acceleration......................................................40
Section
8.3
Power of Trustee to Control Proceedings......................................................41
Section
8.4
Limitation on Owner's Right to Sue.............................................................41
Section8.5
Non-waiver....................................................................................................41
Section
8.6
Actions by Trustee as Attorney-in-Fact........................................................42
Section
8.7
Remedies Not Exclusive................................................................................42
ARTICLE IX
BOND INSURANCE..........................................................................................42
Section
9.1
Provisions Relating to Bond Insurance.........................................................42
ARTICLE X
RESERVE POLICY PROVISIONS....................................................................47
Section
10.1
Draws Against the Reserve Policy................................................................47
ARTICLE XI
MISCELLANEOUS
............................................................................................49
Section
11.1
Benefits Limited to Parties............................................................................49
Section
11.2
Successor is Deemed Included in All References to Predecessor.................49
Section
11.3
Discharge of Indenture..................................................................................49
Section
11.4
Execution of Documents and Proof of Ownership by Owners .....................50
Section
11.5
Disqualified Bonds ........................................................................................50
Section
11.6
Waiver of Personal Liability.........................................................................50
Section
11.7
Destruction of Canceled Bonds.....................................................................51
Section11.8
Notices...........................................................................................................51
Section
11.9
Partial Invalidity............................................................................................51
Section
11.10
Unclaimed Moneys........................................................................................51
Section
11.11
Execution in Counterparts.............................................................................52
Section
11.12
Governing Law..............................................................................................52
Section
11.13
Payments Due on Other Than a Business Day..............................................52
EXHIBIT A BOND
ii
1
INDENTURE OF TRUST
THIS INDENTURE OF TRUST (this "Indenture") is dated as of December 1, 2016, by and
between the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF
SANTA CLARITA, a public body corporate and politic, duly organized and existing under the laws
of the State of California (the "Successor Agency"), and THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., a national banking association organized and existing under the laws of
the United States of America, as trustee (the "Trustee");
WITNESSETH:
WHEREAS, the Redevelopment Agency of the City of Santa Clarita (the "Prior Agency")
was a public body, corporate and politic, duly created, established and authorized to transact business
and exercise its powers under and pursuant to the provisions of the Community Redevelopment Law
(Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of the State
of California) (the "Law"), and the powers of the Prior Agency included the power to issue bonds for
any of its corporate purposes; and
WHEREAS, a Redevelopment Plan for a redevelopment project known and designated as the
"Newhall Redevelopment Project" has been adopted and approved by Ordinance No. 97-12 of the
City of Santa Clarita on July 8, 1997, and all requirements of law for and precedent to the adoption
and approval of the Redevelopment Plan have been duly complied with; and
WHEREAS, on June 28, 2011, the California Legislature adopted ABxl 26 (the "Dissolution
Act') and ABxl 27 (the "Opt -in Bill"); and
WHEREAS, the California Supreme Court subsequently upheld the provisions of the
Dissolution Act and invalidated the Opt -in Bill resulting in the Prior Agency being dissolved as of
February 1, 2012; and
WHEREAS, the powers, assets and obligations of the Prior Agency were transferred on
February 1, 2012 to the Successor Agency to the Redevelopment Agency of the City of Santa Clarita
(the "Successor Agency"); and
WHEREAS, on or about June 27, 2012, AB 1484 was adopted as a trailer bill in connection
with the 2012-13 California Budget; and
WHEREAS, AB 1484 specifically authorizes the issuance of refunding bonds by the
Successor Agency to refund the bonds or other indebtedness of the Commission to provide savings to
the Successor Agency, provided that (A) the total interest cost to maturity on the refunding bonds
plus the principal amount of the refunding bonds shall not exceed the total remaining interest cost to
maturity on the bonds to be refunded plus the remaining principal of the bonds to be refunded, and
(B) the principal amount of the refunding bonds shall not exceed the amount required to defease the
refunded bonds, to establish customary debt service reserves, and to pay related costs of issuance;
and
WHEREAS, the Prior Agency has previously issued its $29,860,000 Tax Allocation Bonds,
Series 2008 (Newhall Redevelopment Project Area) (the "2008 Nonhousing Bonds") and its
$8,850,000 Housing Set -Aside Tax Allocation Bonds, Series 2008 (the "2008 Housing Bonds," and
together with the 2008 Nonhousing Bonds, the "Prior Bonds") secured by certain tax increment
revenues from the Newhall Redevelopment Project Area for the purpose of financing redevelopment
activities and housing programs of the Prior Agency; and
WHEREAS, the Successor Agency desires to issue its Tax Allocation Refunding Bonds,
Series 2016 (the "Bonds") for the purpose of refunding all of the currently outstanding 2008 Bonds,
obtaining a reserve fund surety and paying costs of issuance of the Bonds; and
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish
and declare the terms and conditions upon which the Bonds are to be issued and secured and to
secure the payment of the principal thereof and interest and redemption premium (if any) thereon, the
Successor Agency and the Trustee have duly authorized the execution and delivery of this Indenture;
and
WHEREAS, the Successor Agency hereby certifies that all acts and proceedings required by
law necessary to make the Bonds, when executed by the Successor Agency, and authenticated and
delivered by the Trustee, the valid, binding and legal special obligations of the Successor Agency,
and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set
forth in accordance with its terms, have been done or taken.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of and the interest and redemption premium (if any) on all the Bonds issued
and Outstanding under this Indenture, according to their tenor, and to secure the performance and
observance of all the covenants and conditions therein and herein set forth, and to declare the terms
and conditions upon and subject to which the Bonds are to be issued and received, and in
consideration of the premises and of the mutual covenants herein contained and of the purchase and
acceptance of the Bonds by the Owners thereof, and for other valuable considerations, the receipt of
which is hereby acknowledged, the Successor Agency and the Trustee do hereby covenant and agree
with one another, for the benefit of the respective Owners from time to time of the Bonds, as follows:
ARTICLE I
DETERMINATIONS; DEFINITIONS
Section 1.1 Findings and Determinations. The Successor Agency has reviewed all
proceedings heretofore taken and has found, as a result of such review, and hereby finds and
determines that all things, conditions and acts required by law to exist, happen or be performed
precedent to and in connection with the issuance of the Bonds do exist, have happened and have been
performed in due time, form and manner as required by law, and the Successor Agency is now duly
empowered, pursuant to each and every requirement of law, to issue the Bonds in the manner and
form provided in this Indenture.
Section 1.2 Definitions. Unless the context otherwise requires, the terms defined in this
Section 1.2 shall, for all purposes of this Indenture, of any Supplemental Indenture, and of any
certificate, opinion or other document herein mentioned, have the meanings herein specified.
"Act" means Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of
Division 2 of Title 5 of the California Government Code.
2
"Adverse Change in State Law" means a change in State law, including any judicial decision, that
adversely affects the ability of the Successor Agency to comply with or perform Section 5.1 Covenant 3
of this Indenture.
"Annual Debt Service" means, for any Bond Year, the principal and interest payable on the
Outstanding Bonds in such Bond Year.
"Bond Counsel" means Norton Rose Fulbright US LLP, an attorney or firm of attorneys
acceptable to the Successor Agency of nationally recognized standing in matters pertaining to the
federal tax exemption of interest on bonds issued by states and political subdivisions.
"Bond" or "Bonds" means the Successor Agency to the Redevelopment Agency of the City
of Santa Clarita Tax Allocation Refunding Bonds, Series 2016, authorized by and at any time
Outstanding pursuant to this Indenture.
"Bond Year" means the twelve (12) month period commencing on October 2 of each year,
provided that the first Bond Year shall extend from the Delivery Date to October 1, 2017.
"Bondowner" or "Owner", or any similar term, means any person who shall be the registered
owner or his duly authorized attorney, trustee or representative of any Outstanding Bond.
"Business Day" means any day other than (i) a Saturday or Sunday or legal holiday or a day
on which banking institutions in the city in which the corporate trust office of the Trustee is located
are authorized to close, or (ii) a day on which the New York Stock Exchange is closed.
"Certificate" or "Certificate of the Successor Agency" means a Written Certificate of the
Successor Agency.
"Chairman" means the chairman of the Successor Agency or other duly appointed officer of
the Successor Agency authorized by the Successor Agency by resolution or bylaw to perform the
functions of the chairman in the event of the chairman's absence or disqualification.
"City" means the City of Santa Clarita, State of California.
"Code" means the Internal Revenue Code of 1986, as amended, and any regulations, rulings,
judicial decisions, and notices, announcements, and other releases of the United States Treasury
Department or Internal Revenue Service interpreting and construing it.
"Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate
executed by the Successor Agency and accepted by Digital Assurance Certification, L.L.C., dated
December _, 2016, as originally executed and as it may be amended from time to time in
accordance with the terms thereof.
"Corporate Trust Office" means the corporate trust office of the Trustee at the address set
forth in Section 11.8 of this Indenture, except for exchange, surrender and payment of the Bonds, in
which case "Corporate Trust Office" shall refer to the office or agency of the Trustee at which, at any
particular time, its corporate trust agency business shall be conducted, or such other or additional
offices as may be specified to the Successor Agency by the Trustee in writing.
"Costs of Issuance" means the costs and expenses incurred in connection with the issuance
and sale of the Bonds including the initial fees and expenses of the Trustee, rating agency fees, legal
fees and expenses, costs of printing the Bonds and Official Statement, fees of financial consultants
and other fees and expenses set forth in a Written Certificate of the Successor Agency.
"Costs of Issuance Fund" means the trust fund established in Section 3.3 of this Indenture.
"County' means the County of Los Angeles, California.
"Debt Service Coverage' means, for each Bond Year, Pledged Tax Revenues divided by Annual
Debt Service.
"Debt Service Fund" means that trust fund established in Section 4.2 of this Indenture.
"Defeasance Securities" means (1) cash, (2) non -callable direct obligations of the United
States of America ("Treasuries"), (3) evidences of ownership of proportionate interests in future
interest and principal payments on Treasuries held by a bank or trust company as custodian, under
which the owner of the investment is the real party in interest and has the right to proceed directly
and individually against the obligor and the underlying Treasuries are not available to any person
claiming through the custodian or to whom the custodian may be obligated, (4) subject to the prior
written consent of the Insurer, pre -refunded municipal obligations rated "AAA" and "Aaa" by S&P
and Moody's, respectively, or (5) subject to the prior written consent of the Insurer, securities
eligible for "AAA" defeasance under then existing criteria of S & P or any combination, unless the
Insurer otherwise approves.
"Delivery Date' means the date on which the Bonds are delivered to the initial purchaser
thereof.
"Dissolution Act" means Parts 1.8 (commencing with Section 34161) and 1.85 (commencing
with Section 34170) of Division 24 of the Health and Safety Code of the State of California.
"DOF" means the California Department of Finance.
"DTC" means The Depository Trust Company, New York, New York, and its successors and
assigns.
"Escrow Agreement" means the Escrow Agreement between the Successor Agency and the
Escrow Bank.
"Escrow Bank" means The Bank of New York Mellon Trust Company, N.A., a national
banking association, as escrow bank under the Escrow Agreement.
"Escrow Fund" means the escrow fund established under the Escrow Agreement.
"Fiscal Year" means any twelve (12) month period beginning on July 1st and ending on the
next following June 30th.
"Fund or Account" means any of the funds or accounts referred to herein.
"Indenture" means this Indenture of Trust dated as of December 1, 2016, between the
Successor Agency and The Bank of New York Mellon Trust Company, N.A., authorizing the
issuance of the Bonds.
"Independent Financial Consultant" "Independent Engineer" "Independent Certified Public
Accountant" or "Independent Redevelopment Consultant" means any individual or firm engaged in
the profession involved, appointed by the Successor Agency, and who, or each of whom, has a
favorable reputation in the field in which his/her opinion or certificate will be given, and:
(1) is in fact independent and not under domination of the Successor Agency;
(2) does not have any substantial interest, direct or indirect, with the Successor Agency,
other than as original purchaser of the Bonds; and
(3) is not connected with the Successor Agency as an officer or employee of the
Successor Agency, but who may be regularly retained to make reports to the
Successor Agency.
"Information Services" means the Electronic Municipal Market Access System (referred to
as "EMMA"), a facility of the Municipal Securities Rulemaking Board, at http:Hemma.msrb.org;
provided, however, in accordance with then current guidelines of the Securities and Exchange
Commission, Information Services shall mean such other organizations providing information with
respect to called Bonds as the Successor Agency may designate in writing to the Trustee.
"Insurance Policy" means the insurance policy issued by the Insurer guaranteeing the
scheduled payment of principal of and interest on the Insured Bonds when due.
"Insurer" or "Bond Insurer" means or any successor thereto or
assignee thereof.
"Interest Account" means the account by that name referenced in Section 4.3 of this
Indenture.
"Interest Payment Date" means April 1 and October 1, commencing April 1, 2017 so long as
any of the Bonds remain Outstanding hereunder.
"Law" means the Community Redevelopment Law of the State of California as cited in the
recitals hereof.
"Maximum Annual Debt Service" means the largest of the sums obtained for any Bond Year
after the computation is made, by totaling the following for each such Bond Year:
(1) The principal amount of all Outstanding Bonds and the amount of any sinking
account payments payable in such Bond Year; and
(2) The interest which would be due during such Bond Year on the aggregate
principal amount of Outstanding Bonds if the Outstanding Bonds on the date of such computation
were to mature or be redeemed in accordance with the maturity schedules for the Outstanding Bonds.
At the time and for the purpose of making such computation, the amount of term Outstanding Bonds
5
already retired in advance of the above-mentioned schedules shall be deducted pro rata from the
remaining amounts thereon.
"Opinion of Counsel" means a written opinion of an attorney or firm of attorneys of
favorable reputation in the field of municipal bond law. Any opinion of such counsel may be based
upon, insofar as it is related to factual matters, information which is in the possession of the
Successor Agency as shown by a certificate or opinion of, or representation by, an officer or officers
of the Successor Agency, unless such counsel knows, or in the exercise of reasonable care should
have known, that the certificate, opinion or representation with respect to the matters upon which his
or her opinion may be based, as aforesaid, is erroneous.
"Outstanding" means, when used as of any particular time with reference to the Bonds and
Parity Bonds, subject to the provisions of this Indenture, all Bonds theretofore issued and
authenticated under this Indenture, and, to the extent applicable, Parity Bonds permitted under this
Indenture, except:
cancellation;
(a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for
(b) Bonds paid or deemed to have been paid; and
(c)
Bonds in
lieu of or in
substitution for which other Bonds shall have been
authorized, executed,
issued and
authenticated
pursuant to this Indenture.
"Oversight Board" means the oversight board duly constituted from time to time pursuant to
Section 34179 of the Dissolution Act.
"Parity Bonds" means any additional tax allocation bonds (including, without limitation,
bonds, notes, interim certificates, debentures or other obligations) issued by the Successor Agency as
permitted by Section 3.4 of this Indenture.
"Pass -Through Agreements" means those certain tax -sharing agreements entered into with
certain taxing agencies to alleviate any financial burden on such taxing agencies which could result
from the reallocation of taxes under Section 33670 of the Law.
"Paving Agent" means any paying agent appointed by the Successor Agency pursuant to this
Indenture, and the Trustee shall be the initial Paying Agent.
"Permitted Investments" means:
(a) For all purposes, including defeasance investments in refunding escrow accounts.
(1) Defeasance Securities
(b) For all purposes other than defeasance investments in refunding escrow accounts.
(1) Obligations
of any of the following
federal agencies which
obligations
represent the
full faith and credit of the
United States of America,
including:
Export -Import Bank
0
Rural Economic Community Development Administration
U.S. Maritime Administration
Small Business Administration
U.S. Department of Housing & Urban Development (PHAs)
Federal Housing Administration -Federal Financing Bank
(2) Direct obligations of any of the following federal agencies which obligations
are not fully guaranteed by the full faith and credit of the United States of
America:
— Senior debt obligations issued by the Federal National Mortgage
Association (FNMA) or Federal Home Loan Mortgage Corporation
(FHLMC).
— Obligations of the Resolution Funding Corporation (REFCORP)
— Senior debt obligations of the Federal Home Loan Bank System
— Senior debt obligations of other Government Sponsored Agencies
(3) U.S. dollar denominated deposit accounts, federal funds and bankers'
acceptances with domestic commercial banks, which may include the Trustee,
its parent holding company, if any, and their affiliates, which have a rating on
their short term certificates of deposit on the date of purchase of "P-1" by
Moody's and "A-1" or "A-1+" by S&P and maturing not more than 360
calendar days after the date of purchase. (Ratings on holding companies are
not considered as the rating of the bank);
(4) Commercial paper which is rated at the time of purchase in the single highest
classification, "P-1" by Moody's and "A-1" by S&P and which matures not
more than 270 calendar days after the date of purchase;
(5) Investments in a money market fund, including those of an affiliate of the
Trustee or for which the Trustee provides shareholder services rated
"AAAm" or "AAAm-G" or better by S&P;
(6) Pre -refunded Municipal Obligations defined as follows: any bonds or other
obligations of any state of the United States of America or of any agency,
instrumentality or local governmental unit of any such state which are not
callable at the option of the obligor prior to maturity or as to which
irrevocable instructions have been given by the obligor to call on the date
specified in the notice; and
(A) which are rated, based on an irrevocable escrow account or fund (the
"escrow"), in the highest rating category of Moody's or S&P or any
successors thereto; or
(B) (i) which
are fully secured as to
principal
and interest and
redemption
premium,
if any, by an escrow
consisting
only of cash or
obligations
7
described in paragraph (2) of the definition of Defeasance Securities,
which escrow may be applied only to the payment of such principal of
and interest and redemption premium, if any, on such bonds or other
obligations on the maturity date or dates thereof or the specified
redemption date or dates pursuant to such irrevocable instructions, as
appropriate, and (ii) which escrow is sufficient, as verified by a
nationally recognized independent certified public accountant, to pay
principal of and interest and redemption premium, if any, on the
bonds or other obligations described in this paragraph on the maturity
date or dates specified in the irrevocable instructions referred to
above, as appropriate.
(7) Municipal Obligations rated "Aaa/AAA" or general obligations of States with
a rating of "AVA" or higher by both Moody's and S&P.
(8) Subject to the prior written consent of the Insurer, Investment Agreements
with an entity rated "A" or higher by S&P; and;
(9) The Local Agency Investment Fund of the State or any state administered
pooled investment fund in which the Successor Agency is statutorily
permitted or required to invest will be deemed a permitted investment.
(c) The value of the above investments shall be determined as follows:
(1) For the purpose of determining the amount in any fund, all Permitted
Investments credited to such fund shall be valued at fair market value. The
Trustee shall determine the fair market value based on accepted industry
standards and from accepted industry providers. Accepted industry providers
shall include but are not limited to pricing services provided by Financial
Times Interactive Data Corporation, and Bank of America Merrill Lynch.
(2) As to certificates of deposit and bankers' acceptances: the face amount
thereof, plus accrued interest thereon; and
(3) As to any investment not specified above: the value thereof established by
prior agreement among the Successor Agency and the Trustee.
"Pledged Tax Revenues" means all Tax Revenues less (i) amounts payable by the State to the
Successor Agency under and pursuant to Chapter 1.5 of Part 1 of Division 4 of Title 2 (commencing
with section 16110) of the California Government Code, and (ii) Statutory Pass -Through Payments,
but only to the extent such amounts are not subordinated to payment of debt service on the Bonds.
"Principal Account" means the account by that name referenced in Section 4.3 of this
Indenture.
"Prior Agency" means the Redevelopment Agency of the City of Santa Clarita.
"Prior Bonds" means the 2008 Nonhousing Bonds and the 2008 Housing Bonds.
0
"Prior Housing Indenture" means the Indenture dated as of June 1, 2008, by and between the
Prior Agency and The Bank of New York Mellon Trust Company, N.A., as trustee, providing for the
issuance of the 2008 Housing Bonds.
"Prior Law" means the Community Redevelopment Law of the State of California
(commencing with Health and Safety Code Section 33000) as it existed on or before June 29, 2011.
"Prior Nonhousing Indenture' means the Indenture dated as of June 1, 2008, by and between
the Prior Agency and The Bank of New York Mellon Trust Company, N.A., as trustee, providing for
the issuance of the 2008 Nonhousing Bonds.
"Qualified Reserve Fund Credit Instrument" means (i) with respect to the Bonds, an
irrevocable standby or direct pay letter of credit or surety bond issued by a financial institution or
insurance company and deposited with the Trustee, provided that all of the following requirements
are met at the time of acceptance thereof by the Trustee: (a) the financial institution or insurance
company having, at the time of such delivery, unsecured debt obligations rated in at least the second
highest rating category (without respect to any modifier) of S&P or Moody's, and, if rated by A.M.
Best & Company, rated in the three highest rating categories by A.M. Best & Company; (b) such
letter of credit or surety bond has a term of at least 12 months; (c) such letter of credit or surety bond
has a stated amount at least equal to the portion of the Reserve Requirement with respect to which
funds are proposed to be released; and (d) the Trustee is authorized pursuant to the terms of such
letter of credit or surety bond to draw thereunder an amount equal to any deficiencies which may
exist from time to time in the Interest Account, the Principal Account and the Sinking Account for
the purpose of making payments required pursuant to this Indenture and (b) with respect to any
Parity Bonds, such instrument as is set forth in the Supplemental Indenture or authorizing document
relating to such Parity Bonds.
"Recognized Obligation Payment Schedule" means a Recognized Obligation Payment
Schedule, each prepared and approved from time to time pursuant to subdivision (1) of Section 34177
of the Dissolution Act.
"Redemption Account" means the account by that name established in Section 4.3 of this
Indenture.
"Redevelopment Obligation Retirement Fund" means the fund by that name established
pursuant to Health & Safety Code Section 34170.5 (b) and administered by the Successor Agency.
"Redevelopment Plan" means the Redevelopment Plan originally adopted and approved by
Ordinance No. 97-12 of the City on July 8, 1997, together with any amendments thereof hereafter
duly enacted pursuant to the Law.
"Redevelopment Project Area," "Redevelopment Project' or "Project Area' means, the
Newhall Redevelopment Project Area described in the Redevelopment Plan.
"Redevelopment Property Tax Trust Fund" or "RPTTF" means the fund by that name
established pursuant to Health & Safety Code Section 34170.5(a) and administered by the County
auditor -controller.
"Registration Books" means the records maintained by the Trustee pursuant to Section 2.8
for the registration and transfer of ownership of the Bonds.
"Regular Record Date" means the fifteenth (15`h) calendar day of the month preceding any
Interest Payment Date whether or not such day is a Business Day.
"Report' means a document in writing signed by an Independent Financial Consultant and
including:
(a) A statement that the person or firm making or giving such Report has read the
pertinent provisions of the Indenture to which such Report relates;
(b) A brief statement as to the nature and scope of the examination or
investigation upon which the Report is based; and
(c) A statement that, in the opinion of such person or firm, sufficient examination
or investigation was made as is necessary to enable said consultant to express an informed opinion
with respect to the subject matter referred to in the Report.
"Reserve Fund" means the fund by that name referenced in Section 4.3 hereof.
"Reserve Policy" means the Municipal Bond Debt Service Reserve Insurance Policy issued
by the Insurer and deposited into the Reserve Fund. As of the Delivery Date, the Reserve Policy is a
Qualified Reserve Fund Credit Instrument.
"Reserve Requirement" means, as of the date of computation, an amount equal to the lesser
of (i) 10% of the issue price (within the meaning of section 148 of the Code) of the Bonds, (ii) 125%
of the average Annual Debt Service for that and every subsequent Bond Year, or (iii) the Maximum
Annual Debt Service.
"Securities Depositories" means The Depository Trust Company, New York, New York and
its successors and assigns or if (i) the then Securities Depository resigns from its functions as
depository of the Bonds or (ii) the Successor Agency discontinues use of the then Securities
Depository pursuant to Section 2.12, any other securities depository which agrees to follow the
procedures required to be followed by a securities depository in connection with the Bonds and
which is selected by the Successor Agency.
"Sinking Account" means the account by that name in the Debt Service Fund held by the
Trustee pursuant to Section 4.3.
"Sinking Account Installment" means the amount of money required by this Indenture to be
paid by the Successor Agency on any single date toward the retirement of any particular term bonds
on or prior to their respective stated maturity dates.
"Sinking Account Payment Date" means any date on which Sinking Account Installments are
scheduled to be paid with respect to the Bonds.
"State" means the State of California, United States of America.
10
"Statutory Pass -Through Amounts' means amounts paid to affected taxing agencies, if any,
pursuant to Sections 33607.5 and/or 33607.7 of the Law and Section 34183 of the Dissolution Act.
"Supplemental Indenture" means any indenture then in full force and effect which has been
duly adopted by the Successor Agency under the Dissolution Act, or any act supplementary thereto
or amendatory thereof, at a meeting of the Successor Agency duly convened and held, of which a
quorum was present and acted thereon, amendatory of or supplemental to this Indenture or any
indebtedness entered into in connection with the issuance of Parity Bonds; but only if and to the
extent that such Supplemental Indenture is specifically authorized hereunder.
"Tax Certificate" means that certain Tax Certificate executed by the Successor Agency with
respect to the Bonds.
"Tax Revenues" means the monies deposited from time to time in the Redevelopment
Property Tax Trust Fund established pursuant to subdivision (c) of Section 34172 of the Dissolution
Act, as provided in paragraph (2) of subdivision (a) of Section 34183 of the Dissolution Act that are
equal to that portion of taxes levied upon taxable property in the Project Area eligible for allocation
to the Successor Agency on or after the date of issue of the Bonds, pursuant to Article 6 of Chapter 6
of the Prior Law and Section 16 of Article XVI of the Constitution of the State. If, and to the extent,
that the provisions of Section 34172 or paragraph (2) of subdivision (a) of Section 34183 are
invalidated by a final judicial decision, then Tax Revenues shall include all tax revenues allocated to
the payment of indebtedness pursuant to Health & Safety Code Section 33670 or such other section
as may be in effect at the time providing for the allocation of tax increment revenues in accordance
with Article XVI, Section 16 of the California Constitution.
"Trustee" means The Bank of New York Mellon Trust Company, N.A., a national banking
association, its successors and assigns, and any other corporation or association which may at any
time be substituted in its place, as provided in this Indenture.
"Written Request of the Successor Agency' or "Written Certificate of the Successor Agency'
means a request or certificate, in writing signed by the Executive Director, Secretary or Finance
Officer of the Successor Agency or by any other officer of the Successor Agency duly authorized by
the Successor Agency for that purpose.
"2008 Housing Bonds' means the $8,850,000 City of Santa Clarita Redevelopment Agency
Housing Set -Aside Tax Allocation Bonds, Series 2008.
"2008 Nonhousing Bonds' means the $29,860,000 City of Santa Clarita Redevelopment
Agency Tax Allocation Bonds, Series 2008 (Newhall Redevelopment Project Area).
Section 1.3 Rules of Construction. All references herein to "Articles," "Sections" and
other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture, and
the words "herein," "hereof," "hereunder" and other words of similar import refer to this Indenture as
a whole and not to any particular Article, Section or subdivision hereof.
11
ARTICLE II
AUTHORIZATION AND TERMS
Section 2.1 Authorization of Bonds. (a) Bonds in the aggregate principal amount of
($[principal amount]) are hereby authorized to be
issued by the Successor Agency under and subject to the terms of this Indenture and the Act. This
Indenture constitutes a continuing agreement with the Trustee for the benefit of the Owners of all of
the Bonds issued or to be issued hereunder and then Outstanding to secure the full and final payment
of principal and redemption premiums (if any) and the interest on all Bonds which may from time to
time be executed and delivered hereunder, subject to the covenants, agreements, provisions and
conditions herein contained. The Bonds shall be designated the "Successor Agency to the
Redevelopment Agency of the City of Santa Clarita Tax Allocation Refunding Bonds, Series 2016"
(b) The Bonds shall be and are special obligations of the Successor Agency and
are secured by an irrevocable pledge of, and are payable as to principal, interest and premium, if any,
from Pledged Tax Revenues and other funds as hereinafter provided. The Bonds, interest and
premium, if any, thereon are not a debt of the City, the State or any of its political subdivisions
(except the Successor Agency), and none of the City, the State nor any of its political subdivisions
(except the Successor Agency) is liable on them. In no event shall the Bonds, interest thereon and
premium, if any, be payable out of any funds or properties other than those of the Successor Agency
as set forth in this Indenture. The Bonds do not constitute an indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction. Neither the members of the Successor
Agency nor any persons executing the Bonds are liable personally on the Bonds by reason of their
issuance.
The Bonds shall be and are equally secured together with any Parity Bonds, by an irrevocable
pledge of the Pledged Tax Revenues and other funds as hereinafter provided, without priority for
number, maturity, date of sale, date of execution or date of delivery, except as expressly provided
herein.
Nothing in this Indenture shall preclude: (a) the payment of the Bonds from the proceeds of
refunding bonds issued pursuant to the Law, or (b) the payment of the Bonds from any legally
available funds. Nothing in this Indenture shall prevent the Successor Agency from making
advances of its own funds, however derived, to any of the uses and purposes mentioned in this
Indenture.
The Successor Agency shall have the right to defease the Bonds and be discharged from the
lien of this Indenture in accordance with the provision of Section 11.3 hereof. If the Successor
Agency shall cause to be paid, or shall have made provision to pay upon maturity or upon
redemption prior to maturity, to the Bondowners the principal of, premium, if any, and interest to
become due on the Bonds, through setting aside trust funds or setting apart in a reserve fund or
special trust account created pursuant to this Indenture or otherwise, or through the irrevocable
segregation for that purpose in some sinking fund or other fund or trust account with an escrow agent
or otherwise, moneys sufficient therefor, including, but not limited to, interest earned or to be earned
on the investment of such funds, then the lien of this Indenture, including, without limitation, the
pledge of the Pledged Tax Revenues, and all other rights granted hereby, shall cease, terminate and
become void and be discharged and satisfied, and the principal of, premium, if any, and interest on
the Bonds shall no longer be deemed to be outstanding and unpaid; provided, however, that nothing
12
in this Indenture shall require the deposit of more than such amount as may be sufficient, taking into
account both the principal amount of such funds and the interest to become due on the investment
thereof, to implement any refunding of the Bonds.
Section 2.2
Term
of
Bonds.
The Bonds
shall be issued in fully registered form without
coupons in denominations of
$5,000 or
any integral
multiple thereof and the Bonds shall mature on
October 1, in the years and in
the amounts and shall bear interest at the rate per annum as follows:
Maturity Date
October 1 Principal Amount
Interest Rate
Interest on the Bonds shall be payable on each Interest Payment Date to the person whose
name appears on the Registration Books as the Owner thereof as of the Regular Record Date
immediately preceding each such Interest Payment Date, such interest to be paid by check or draft of
the Trustee mailed on the Interest Payment Date by first class mail to such Owner at the address of
such Owner as it appears on the Registration Books; provided, however, that upon the written request
of any Owner of at least $1,000,000 in principal amount of Bonds received by the Trustee at least
fifteen (15) days prior to such Regular Record Date, payment shall be made by wire transfer in
immediately available funds to an account in the United States designated by such Owner. Principal
of and redemption premium (if any) on any Bond shall be paid upon presentation and surrender
thereof, at maturity or redemption, at the Corporate Trust Office. Both the principal of and interest
and premium (if any) on the Bonds shall be payable in lawful money of the United States of America
Interest shall be calculated based upon a 360 -day year of twelve thirty -day months.
Each Bond shall be initially dated as of the Delivery Date and shall bear interest from the
Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated
after a Regular Record Date and on or before the following Interest Payment Date, in which event it
shall bear interest from such Interest Payment Date; or (b) a Bond is authenticated on or before
March 15, 2017, in which event it shall bear interest from the Delivery Date; provided, however, that
if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear
interest from the Interest Payment Date to which interest has previously been paid or made available
for payment thereon.
13
Section 2.3 Redemption of Bonds.
(a) Optional Redemption. The Bonds maturing on or after October 1, 2027, shall
be subject to redemption, at the option of the Successor Agency on any date on or after October 1,
2026, as a whole or in part, in any order deemed reasonable by the Successor Agency (and, in lieu of
such determination, pro rata among maturities), and by lot within a maturity, from any available
source of funds, at a redemption price equal to the principal amount thereof to be redeemed, together
with accrued but unpaid interest to the date fixed for redemption, without premium.
(b) Mandatory Sinking Fund Redemption. The Bonds maturing on September 1,
(the " Term Bonds"), shall be subject to mandatory redemption, in part by lot, from
Sinking Account Installments set forth in the following schedule on October 1, 20, and on each
October 1 thereafter to maturity, at a redemption price equal to the principal amount thereof to be
redeemed, together with interest accrued thereon to the date fixed for redemption, without premium;
provided, however, that if some but not all of the 20_ Term Bonds have been optionally redeemed,
the total amount of Sinking Account Installments to be made subsequent to such redemption shall be
reduced in an amount equal to the principal amount of the 20_ Term Bonds so redeemed by
reducing each such future Sinking Account Installments on a pro rata basis (as nearly as practicable)
in integral multiples of $5,000, as shall be designated pursuant to written notice filed by the
Successor Agency with the Trustee.
Term Bonds Maturing October 1, 20_
Sinking Account Principal Amount to be Sinking Account Principal Amount to be
Payment Date Redeemed or Payment Date Redeemed or
(October 1) Purchased (October 1) Purchased
*Maturity
The Bonds maturing on October 1, 20_ (the "20 Term Bonds"), shall be subject to
mandatory redemption, in part by lot, from Sinking Account Installments set forth in the following
schedule on October 1, 20_, and on each October 1 thereafter to maturity, at a redemption price
equal to the principal amount thereof to be redeemed, together with interest accrued thereon to the
date fixed for redemption, without premium; provided, however, that if some but not all of the 20_
Term Bonds have been optionally redeemed, the total amount of Sinking Account Installments to be
made subsequent to such redemption shall be reduced in an amount equal to the principal amount of
the 20_ Term Bonds so redeemed by reducing each such future Sinking Account Installments on a
pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be designated
pursuant to written notice filed by the Successor Agency with the Trustee.
14
Sinking Account
Payment Date
(October 1)
*Maturity
Term Bonds Maturing October 1, 20
Principal Amount to be
Redeemed or
Purchased
Sinking Account
Payment Date
(October 1)
Principal Amount to be
Redeemed or
Purchased
(c) Partial Redemption of Bonds. If only a portion of any Bond is called for
redemption, then upon surrender of such Bond the Successor Agency shall execute and the Trustee
shall authenticate and deliver to the Owner thereof, at the expense of the Successor Agency, a new
Bond or Bonds of the same interest rate and maturity, of authorized denominations in an aggregate
principal amount equal to the unredeemed portion of the Bond to be redeemed.
(d) Effect of Redemption. From and after the date fixed for redemption, if funds
available for the payment of the redemption price of and interest on the Bonds so called for
redemption shall have been duly deposited with the Trustee, such Bonds so called such cease to be
entitled to any benefit under this Indenture other than the right to receive payment of the redemption
price and accrued interest to the redemption date, and no interest shall accrue thereon from and after
the redemption date specified in such notice.
(e) Manner of Redemption. Whenever any Bonds or portions thereof are to be
selected for redemption by lot, the Trustee shall make such selection, in such manner as the Trustee
shall deem appropriate, and shall assign to each Bond then Outstanding a distinctive number for each
$5,000 of the principal amount of each such Bond. The Bonds to be redeemed shall be the Bonds to
which were assigned numbers so selected, but only so much of the principal amount of each such
Bond so selected. All Bonds redeemed or purchased pursuant to this Section 2.3 shall be canceled
and destroyed by the Trustee.
(f) Notice of Redemption. The Successor Agency shall be required to give the
Trustee written notice of its intention to redeem Bonds under subsection (a) at least 30 days prior to
the date fixed for such redemption, and shall transfer to the Trustee for deposit in the Redemption
Account all amounts required for such redemption at least five (5) Business Days prior to the date
fixed for such redemption; provided, the Trustee may waive such requirements in its sole discretion
upon written request of the Successor Agency.
The Trustee on behalf and at the expense of the Successor Agency shall mail (by first class
mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at
their respective addresses appearing on the Registration Books, to the Securities Depositories and to
one or more Information Services, at least 30 but not more than 60 days prior to the date fixed for
redemption; provided, however, that neither failure to receive any such notice so mailed nor any
defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the
cessation of the accrual of interest thereon. Such notice shall state the date of the notice, the
redemption date, the redemption place and the redemption price and shall designate the CUSIP
numbers, the Bond numbers and the maturity or maturities (in the event of redemption of all of the
Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that
15
such Bonds be then surrendered at the Corporate Trust Office for redemption at the redemption price,
giving notice also that further interest on such Bonds will not accrue from and after the redemption
date. Neither the Successor Agency nor the Trustee shall have any responsibility for any defect in
the CUSIP number that appears on any Bond or in any redemption notice with respect thereto, and
any such redemption notice may contain a statement to the effect that CUSIP numbers have been
assigned by an independent service for convenience of reference and that neither the Successor
Agency nor the Trustee shall be liable for any inaccuracy in such numbers.
If at the time of mailing of any notice of optional redemption there shall not have been
deposited with the Trustee in the Redemption Account moneys sufficient to redeem all the Bonds
called for redemption, such notice shall state that it is subject to the deposit of the redemption
moneys with the Trustee in the Redemption Account not later than the opening of business on the
redemption date and will be of no effect unless such moneys are so deposited.
The Successor Agency shall have the right to rescind any notice of optional redemption by
written notice to the Trustee on or prior to the date fixed for redemption. Any notice of such
redemption shall be cancelled and annulled if for any reason funds will not be or are not available on
the date fixed for redemption for the payment in full of the Bonds then called for redemption, and
such cancellation shall not constitute an Event of Default under the Indenture. The Successor
Agency and the Trustee shall have no liability to the Owners or any other party related to or arising
from such rescission of redemption. The Trustee shall mail notice of such rescission of redemption
in the same manner as the original notice of redemption was sent.
Section 2.4 Form of Bonds. The Bonds, the form of Trustee's certificate of
authentication, and the form of assignment to appear thereon, shall be substantially in the form set
forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or
appropriate variations, omissions and insertions, as permitted or required by this Indenture.
Section 2.5 Execution of Bonds. The Bonds shall be executed on behalf of the Successor
Agency by the signature of its Chairman or Executive Director and the signature of its Secretary who
are in office on the date of execution and delivery of this Indenture or at any time thereafter. Either
or both of such signatures may be made manually or may be affixed by facsimile thereof. If any
officer whose signature appears on any Bond ceases to be such officer before delivery of the Bonds
to the purchaser, such signature shall nevertheless be as effective as if the officer had remained in
office until the delivery of the Bonds to the purchaser. Any Bond may be signed and attested on
behalf of the Successor Agency by such persons as at the actual date of the execution of such Bond
shall be the proper officers of the Successor Agency although on the date of such Bond any such
person shall not have been such officer of the Successor Agency.
Only such of the Bonds as shall bear thereon a certificate of authentication in the form set
forth in Exhibit A hereto, manually executed and dated by and in the name of the Trustee by the
Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and
such certificate of the Trustee shall be conclusive evidence that such Bonds have been duly
authenticated and delivered hereunder and are entitled to the benefits of this Indenture. In the event
temporary Bonds are issued pursuant to Section 2.9 hereof, the temporary Bonds shall bear thereon a
certificate of authentication manually executed and dated by the Trustee, shall be initially registered
by the Trustee, and, until so exchanged as provided under Section 2.9 hereof, the temporary Bonds
shall be entitled to the same benefits pursuant to this Indenture as definitive Bonds authenticated and
delivered hereunder.
16
Section 2.6 Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred, upon the Registration Books, by the person in whose name it is registered, in person or
by a duly authorized attorney of such person, upon surrender of such Bond to the Trustee at its
Corporate Trust Office for cancellation, accompanied by delivery of a written instrument of transfer
in a form acceptable to the Trustee, duly executed. Whenever any Bond or Bonds shall be
surrendered for registration of transfer, the Successor Agency shall execute and the Trustee shall
authenticate and deliver a new Bond or Bonds, of like series, interest rate, maturity and principal
amount of authorized denominations. The Trustee shall collect any tax or other governmental charge
on the transfer of any Bonds pursuant to this Section 2.6. The cost of printing any Bonds and any
services rendered or any expenses incurred by the Trustee in connection with any exchange or
transfer shall be paid by the Successor Agency.
The Trustee may refuse to transfer, under the provisions of this Section 2.6, either (a) any
Bonds during the period established by the Trustee for the selection of Bonds for redemption, or
(b) any Bonds selected by the Trustee for redemption pursuant to the provisions of Section 2.3.
Section 2.7 Exchange of Bonds. Bonds may be exchanged at the Corporate Trust Office
for a like aggregate principal amount of Bonds of other authorized denominations of the same series,
interest rate and maturity. The Trustee shall collect any tax or other governmental charge on the
exchange of any Bonds pursuant to this Section 2.7. The cost of printing any Bonds and any services
rendered or any expenses incurred by the Trustee in connection with any exchange or transfer shall
be paid by the Successor Agency.
The Trustee may refuse to exchange, under the provisions of this Section 2.7, either (a) any
Bonds during the period established by the Trustee for the selection of Bonds for redemption or
(b) any Bonds selected by the Trustee for redemption pursuant to the provisions of Section 2.3.
Section 2.8 Registration Books. The Trustee will keep or cause to be kept, at its
Corporate Trust Office, sufficient records for the registration and registration of transfer of the
Bonds, which shall at all times during normal business hours be open to inspection by the Successor
Agency with reasonable prior notice; and, upon presentation for such purpose, the Trustee shall,
under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred, on the Registration Books, Bonds as hereinbefore provided.
Section 2.9 Temporary Bonds. The Bonds may be initially issued in temporary form
exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed,
lithographed or typewritten, shall be of such denominations as may be determined by the Successor
Agency, and may contain such reference to any of the provisions of this Indenture as may be
appropriate. Every temporary Bond shall be executed by the Successor Agency upon the same
conditions and in substantially the same manner as the definitive Bonds. If the Successor Agency
issues temporary Bonds it will execute and furnish definitive Bonds without delay, and thereupon the
temporary Bonds shall be surrendered, for cancellation, in exchange therefor at the Corporate Trust
Office, and the Trustee shall deliver in exchange for such temporary Bonds an equal aggregate
principal amount of definitive Bonds of authorized denominations. Until so exchanged, the
temporary Bonds shall be entitled to the same benefits pursuant to this Indenture as definitive Bonds
authenticated and delivered hereunder.
Section 2.10 Bonds
Mutilated,
Lost,
Destroyed
or
Stolen.
If any Bond shall
become
mutilated, the Successor Agency, at the
expense of the
Owner
of such
Bond, shall execute,
and the
17
Trustee shall thereupon deliver, a new Bond of like amount and maturity in exchange and
substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so
mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it. If any Bond
shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the
Successor Agency and the Trustee and, if such evidence is satisfactory to both and indemnity
satisfactory to them shall be given, the Successor Agency, at the expense of the Owner, shall execute,
and the Trustee shall thereupon authenticate and deliver, a new Bond of like amount and maturity in
lieu of and in substitution for the Bond so lost, destroyed or stolen. The Successor Agency may
require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this
Section 2.10 and of the expenses which may be incurred by the Successor Agency and the Trustee in
the premises. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be
lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of
the Successor Agency whether or not the Bond so alleged to be lost, destroyed or stolen shall be at
any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of
this Indenture with all other Bonds issued pursuant to this Indenture.
Section 2.11 Book -Entry Only System. It is intended that the Bonds, be registered so as to
participate in a securities depository system with DTC (the "DTC System"), as set forth herein. The
Bonds shall be initially issued in the form of a separate single fully registered Bond for each of the
maturities of the Bonds in the name of Cede & Co., as nominee of DTC. The Successor Agency is
authorized to execute and deliver such letters to or agreements with DTC as shall be necessary to
effectuate the DTC System, including a representation letter in the form required by DTC (the
"Representation Letter"). In the event of any conflict between the terms of any such letter or
agreement, including the Representation Letter, and the terms of this Indenture, the terms of this
Indenture shall control. DTC may exercise the rights of a Bondholder only in accordance with the
terms hereof applicable to the exercise of such rights.
With respect to the Bonds registered in the books of the Trustee in the name of Cede & Co.,
as nominee of DTC, the Successor Agency and the Trustee, shall have no responsibility or obligation
to any broker-dealer, bank or other financial institution for which DTC holds Bonds from time to
time as securities depository (each such broker-dealer, bank or other financial institution being
referred to herein as a "DTC Participant") or to any person on behalf of whom such a DTC
Participant directly or indirectly holds an interest in the Bonds (each such person being herein
referred to as an "Indirect Participant'). Without limiting the immediately preceding sentence,
Successor Agency and the Trustee shall have no responsibility or obligation with respect to (a) the
accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership
interest in the Bonds, (b) the delivery to any DTC Participant or any Indirect Participant or any other
person, other than a Bondholder, as shown in the Register, of any notice with respect to the Bonds,
including any notice of redemption, (c) the payment to any DTC Participant or Indirect Participant or
any other Person, other than a Bondholder, as shown in the Register, of any amount with respect to
principal of, premium, if any, or interest on, the Bonds or (d) any consent given by DTC as registered
owner. So long as certificates for the Bonds are not issued pursuant to Section 2.12 and the Bonds
are registered to DTC, the Successor Agency, and the Trustee shall treat DTC or any successor
securities depository as, and deem DTC or any successor securities depository to be, the absolute
owner of the Bonds for all purposes whatsoever, including without limitation (i) the payment of
principal and interest on the Bonds, (ii) giving notice of redemption and other matters with respect to
the Bonds, (iii) registering transfers with respect to the Bonds and (iv) the selection of Bonds for
redemption. While in the DTC System, no person other than Cede & Co., or any successor thereto,
as nominee for DTC, shall receive a Bond certificate with respect to any Bond. Notwithstanding any
IE
other provision of this Indenture to
the contrary, so long
as any of the Bonds are
registered in the
name of Cede & Co., as nominee of
and interest on such Bonds and all
DTC, all payments with
notices with respect
respect to principal of,
to such Bonds shall be
premium, if any,
made and given,
respectively, in the manner provided
in the Representation
Letter.
Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined
to substitute a new nominee in place of Cede & Co., and subject to the provisions in this Indenture
with respect to interest checks being mailed to the registered owner at the close of business on the
Record Date applicable to any Interest Payment Date, the name "Cede & Co." in this Indenture shall
refer to such new nominee of DTC.
Section 2.12 Successor Securities Depository; Transfers Outside Book -Entry Only System.
DTC may determine to discontinue providing its services with respect to the Bonds at any time by
giving written notice to the Successor Agency and the Trustee and discharging its responsibilities
with respect thereto under applicable law. The Successor Agency, without the consent of any other
person, but following written notice to the Successor Agency and the Trustee, may terminate the
services of DTC with respect to the Bonds. Upon the discontinuance or termination of the services
of DTC with respect to the Bonds pursuant to the foregoing provisions, unless a substitute securities
depository is appointed to undertake the functions of DTC hereunder, the Successor Agency, at the
expense of the Successor Agency, is obligated to deliver Bond certificates to the beneficial owners of
the Bonds, as described in this Indenture, and the Bonds shall no longer be restricted to being
registered in the books of the Trustee in the name of Cede & Co. as nominee of DTC, but may be
registered in whatever name or name Bondowner transferring or exchanging Bonds shall designate to
the Trustee in writing, in accordance with the provisions of this Indenture. The Successor Agency
may determine that the Bonds shall be registered in the name of and deposited with a successor
depository operating a securities depository system, qualified to act as such under Section 17(a) of
the Securities Exchange Act of 1934, as amended, as may be acceptable to the Successor Agency, or
such depository's agent or designee.
ARTICLE III
DEPOSIT AND APPLICATION OF PROCEEDS
OF BONDS; PARITY DEBT
Section 3.1 Issuance of Bonds. Upon the execution and delivery of this Indenture and
receipt by the Successor Agency of evidence satisfactory to it of satisfaction of the conditions
precedent to issuance of the Bonds, the Successor Agency shall execute and deliver Bonds in the
aggregate principal amount of Dollars ($[principal amount]) to the
Trustee and the Trustee shall authenticate and deliver the Bonds upon the Written Request of the
Successor Agency.
Section 3.2 Application of Proceeds of Bonds. On the Delivery Date the proceeds of sale
of the Bonds in the amount of $ (representing the principal amount of the
Bonds of $[principal amount].00, less an Underwriter's discount of $ , plus/less a net
original issue premium/discount of $ , less $ for the premium for the
Insurance Policy, which shall be wired directly to the Insurer by the underwriter on the Delivery Date
and less $ for the premium for the Reserve Policy, which shall be wired directly to the
Insurer by the underwriter on the Delivery Date), shall be paid to the Trustee and said amount
19
together with moneys transferred from the Funds and Accounts held in connection with the 2008
Bonds shall be applied as follows:
(i) The Trustee shall transfer
the amount
of
$
to
the Escrow Bank for
the following constraints apply to the size of the
deposit in the Escrow Fund
pursuant to
the
Escrow
Agreement;
and
(ii) The Trustee shall deposit the amount of $ from Bond proceeds into
the Costs of Issuance Fund.
The Trustee shall deposit the Reserve Policy in the Reserve Fund. The Trustee may establish
a temporary fund or account in its records to facilitate and record such deposits and transfers.
Section 3.3 Costs of Issuance Fund. There is hereby established a separate fund to be
known as the "Costs of Issuance Fund," which shall be held by the Trustee in trust. The moneys in
the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay the
Costs of Issuance upon submission of a Written Request of the Successor Agency stating the person
to whom payment is to be made, the amount to be paid, the purpose for which the obligation was
incurred and that such payment is a proper charge against said Fund. On the date which is three (3)
months following the Delivery Date, or upon the earlier Written Request of the Successor Agency,
all amounts (if any) remaining in the Costs of Issuance Fund shall be withdrawn therefrom by the
Trustee and transferred to the Debt Service Fund and the Trustee shall close the Costs of Issuance
Fund.
Section 3.4 Issuance of Parity Bonds. In addition to the Bonds, subject to the
requirements of this Indenture, the Dissolution Act and the Law, the Successor Agency may issue or
incur Parity Bonds in such principal amount as shall be determined by the Successor Agency,
pursuant to a separate or Supplemental Indenture adopted or entered into by the Successor Agency
and Trustee solely for the purpose of refunding the Bonds, as permitted under the Dissolution Act,
including without limitation Section 34177.5 thereof, the Law or the Refunding Law. The Successor
Agency may issue or incur such Parity Bonds subject to the following specific conditions precedent:
(a) The Successor Agency must be in compliance with all covenants set forth in
this Indenture;
(b) The Parity Bonds will be on such terms and conditions as may be set forth in
a separate or Supplemental Indenture, which will provide for (i) bonds substantially in accordance
with this Indenture, and (ii) the deposit of moneys into an account of the Reserve Fund or separate
reserve account securing such Parity Bonds in an amount equal to the reserve requirement provided
for in the Supplemental Indenture or authorizing document relating to such Parity Bonds to the extent
permitted pursuant to the Code;
(c) The Parity Bonds must mature on and interest must be payable on the same
dates as the Bonds (except the first interest payment may be from the date of the Parity Bonds until
the next succeeding April 1 or October 1) provided, however, nothing herein shall preclude the
Successor Agency from issuing and selling Parity Bonds which do not pay current interest;
20
(d) When bonds are issued to
provide savings to the Successor Agency
pursuant
to Section
34177.5(a)(1) of the Dissolution Act,
the following constraints apply to the size of the
financing:
(A) the total interest cost to maturity
on the refunding bonds or indebtedness
plus the
20
principal amount of the refunding bonds or other indebtedness may not exceed the total remaining
interest cost to maturity on the bonds or other indebtedness to be refunded plus the remaining
principal of the bonds or other indebtedness to be refunded, (B) the principal amount of the refunding
bonds or the indebtedness will not exceed the amount required to defease the refunded bonds or other
indebtedness, to establish customary debt service reserves, and to pay related costs of issuance and
(C) the resulting aggregate Annual Debt Service for the remaining Outstanding Bonds and Parity
Bonds must be reduced in each succeeding Bond Year. If the foregoing conditions are satisfied, the
initial principal amount of the refunding bonds or indebtedness may be greater than the outstanding
principal amount of the bonds or other indebtedness to be refunded.
Section 3.5
Validity
of
Bonds.
The validity
of the authorization
and issuance of the
Bonds shall not be
dependent upon the completion of
the Redevelopment
Project or upon the
performance by any
person of his obligation with respect to the Redevelopment
Project.
ARTICLE IV
SECURITY OF BONDS; FLOW OF FUNDS
Section 4.1 Security of Bonds; Equal Security. Except as provided in Sections 4.2 and
6.6, the Bonds shall be equally secured by a pledge and lien on all of the moneys in the
Redevelopment Obligation Retirement Fund. The Bonds shall be equally secured by a pledge of,
security interest in and a first and exclusive lien on all of the Pledged Tax Revenues, whether held in
the Redevelopment Property Tax Trust Fund or by the Successor Agency or the Trustee, and a first
and exclusive pledge of, security interest in and lien upon all of the moneys in the Debt Service Fund
(including the Interest Account, the Principal Account, the Sinking Account and the Redemption
Account and all subaccounts in the foregoing) and in the Reserve Fund to the Trustee for the benefit
of the Owners of the Bonds, on a parity with the first pledge of and lien thereon of the Parity Bonds
without preference or priority for series, issue, number, dated date, sale date, date of execution or
date of delivery. Except for the Pledged Tax Revenues and such moneys, no funds or properties of
the Successor Agency shall be pledged to, or otherwise liable for, the payment of principal of or
interest or redemption premium (if any) on the Bonds.
In consideration of the acceptance of the Bonds by those who shall own the same from time
to time, this Indenture shall be deemed to be and shall constitute a contract between the Successor
Agency and the Trustee for the benefit of the Owners from time to time of the Bonds, and the
covenants and agreements herein set forth to be performed on behalf of the Successor Agency shall
be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without
preference, priority or distinction as to security or otherwise of any of the Bonds over any of the
others by reason of the number or date thereof or the time of sale, execution and delivery thereof, or
otherwise for any cause whatsoever, except as expressly provided therein or herein.
Section 4.2 Redevelopment Obligation Retirement Fund, Debt Service Fund, Reserve
Fund, Deposit of Pledged Tax Revenues. There has been established a special trust fund known as
the "Redevelopment Obligation Retirement Fund," which shall be held by the Successor Agency
pursuant to Section 34170.5(b) of the Dissolution Act. There are hereby established special trust
funds known as the "Debt Service Fund," and the accounts therein referred to below, and the
"Reserve Fund," which shall be held by the Trustee in accordance with this Indenture. The
Successor Agency shall deposit all of the Tax Revenues received in any Bond Year from the RPTTF
in accordance with the Dissolution Act in the Redevelopment Obligation Retirement Fund promptly
21
upon receipt thereof by the Successor Agency, and promptly thereafter shall transfer amounts therein
to the Trustee for deposit in the Debt Service Fund and Reserve Fund, if necessary, until such time
that the aggregate amounts on deposit in such Debt Service Fund and Reserve Fund equal the
aggregate amounts required to be deposited into the Interest Account, the Principal Account, Sinking
Account and Redemption Account and the Reserve Fund in such Bond Year pursuant to this
Indenture, for amounts, if any, due and owing to the Bond Insurer under the Insurance Policy and the
Reserve Policy, and for deposit in such Bond Year in the funds and accounts (including any reserve
account) established with respect to Parity Bonds, as provided in any Supplemental Indenture.
Section 4.3 Transfer of Amounts by the Trustee. There are hereby created accounts
within the Debt Service Fund as set forth below, to be known respectively as the Interest Account,
the Principal Account, Sinking Account and the Redemption Account. Moneys in the Debt Service
Fund will be transferred by the Trustee in the following amounts at the following times, for deposit
in the following respective accounts within the Debt Service Fund and the Reserve Fund, which are
hereby established with the Trustee, in the following order of priority:
(a) Interest Account. On or before the fifth (5`h) Business Day preceding each
Interest Payment Date, the Trustee will withdraw from the Debt Service Fund and transfer to the
Interest Account an amount which, when added to the amount contained in the Interest Account on
that date, will be equal to the aggregate amount of the interest becoming due and payable on the
Outstanding Bonds on such Interest Payment Date. No such transfer and deposit need be made to the
Interest Account if the amount contained therein is at least equal to the interest to become due on the
next succeeding Interest Payment Date upon all of the Outstanding Bonds. Subject to this Indenture,
all moneys in the Interest Account will be used and withdrawn by the Trustee solely for the purpose
of paying the interest on the Bonds as it becomes due and payable (including accrued interest on any
Bonds redeemed prior to maturity pursuant to this Indenture).
(b) Principal Account and Sinking Account. On or before the fifth (5th) Business
Day preceding each Interest Payment Date on which principal on the Bonds is due, beginning
October 1, 2017 the Trustee will withdraw from the Debt Service Fund and transfer to the Principal
Account an amount equal to the principal payments becoming due and payable on Outstanding
Bonds on such October 1, to the extent monies on deposit in the Redevelopment Obligation
Retirement Fund are available therefor. No such transfer and deposit need be made to the Principal
Account if the amount contained therein is at least equal to the principal payments to become due on
such October 1 on all Outstanding Bonds. Subject to this Indenture, all moneys in the Principal
Account will be used and withdrawn by the Trustee solely for the purpose of paying the principal
payments of the Bonds as it becomes due and payable.
On or before each Sinking Account Payment Date, the Trustee shall set aside from the Debt
Service Fund and deposit in the Sinking Account an amount of money equal to the Sinking Account
Installment, if any, payable on the Sinking Account Payment Date in such Bond Year. The Trustee
shall use moneys in the Sinking Account to redeem Bonds pursuant to Section 2.3.
(c) Reserve Fund. In the event the moneys on deposit in the Debt Service Fund
five (5) Business Days before any Interest Payment Date are less than the full amount of the interest,
principal and sinking account payments required to be deposited, the Trustee will, five (5) Business
Days before such Interest Payment Date, withdraw from the Reserve Fund an amount equal to any
such deficiency and will notify the Successor Agency of any such withdrawal.
22
Promptly upon receipt of any such notice, the Successor Agency will withdraw from the
Redevelopment Obligation Retirement Fund and transfer to the Trustee for deposit in the Reserve
Fund an amount necessary to increase the amount in the Reserve Fund (and any reserve account for
any Parity Bonds) to the amount of the then Reserve Requirement. If there is not sufficient moneys
in the Redevelopment Obligation Retirement Fund to make any such transfer, the Successor Agency
will have an obligation to continue making transfers of Pledged Tax Revenues into the Debt Service
Fund, as such revenues become available, and thereafter, as moneys become available in the Debt
Service Fund, the Trustee will make transfers to the Reserve Fund and any reserve account for any
Parity Bonds until there is an amount sufficient to maintain the Reserve Requirement on deposit in
the Reserve Fund and any reserve account for any Parity Bonds. No such transfer and deposit need
be made to the Reserve Fund so long as there is on deposit therein a sum at least equal to the Reserve
Requirement for the Bonds.
Subject to this Indenture all money in the Reserve Fund will be used and withdrawn by the
Trustee solely for the purpose of making transfers to the Interest Account, the Principal Account and
the Sinking Account, in such order of priority, in the event of any deficiency at any time in any of
such accounts or for the retirement of all the Bonds then Outstanding, except that so long as the
Successor Agency is not in default hereunder, any amount in the Reserve Fund in excess of the
Reserve Requirement will be withdrawn from the Reserve Fund semiannually on or before the 5th
Business Day preceding April 1 and October 1 by the Trustee and deposited in the Interest Account.
All amounts in the Reserve Fund on the 5th Business Day preceding the final Interest Payment Date
will be withdrawn from the Reserve Fund and will be transferred either (i) to the Interest Account,
the Principal Account, and Sinking Account in such order, to the extent required to make the deposits
then required to be made or, (ii) if the Successor Agency shall have caused to be deposited with the
Trustee an amount sufficient to make the deposits required by this Indenture, then at the Written
Request of the Successor Agency such amount shall be transferred as directed by the Successor
Agency. The prior written consent of the Insurer shall be a condition precedent to the deposit of any
credit instrument provided in lieu of a cash deposit into the Reserve Fund, if any. Notwithstanding
anything to the contrary set forth in this Indenture, amounts on deposit in the Reserve Fund shall be
applied solely to the payment of debt service due on the Bonds. With respect to the Bonds, the
Reserve Requirement is satisfied by the deposit of the Reserve Policy in the Reserve Fund.
The Successor Agency, with the consent of the Bond Insurer, if any, and with prior written
notification to S&P or Moody's, may cause to be delivered a Qualified Reserve Fund Credit
Instrument in lieu of cash funding all or a part of the Reserve Requirement. Upon the substitution or
expiration of any Qualified Reserve Fund Credit Instrument, the Successor Agency shall (i) replace
such Qualified Reserve Fund Credit Instrument with a new Qualified Reserve Fund Credit
Instrument, or (ii) deposit or cause to be deposited with the Trustee an amount of funds equal to the
Reserve Requirement, to be derived from the first available Pledged Tax Revenues. If the Reserve
Requirement is being maintained partially in cash and partially with a Qualified Reserve Fund Credit
Instrument, the cash shall be first used to meet any deficiency. If the Reserve Requirement is being
maintained with two or more Qualified Reserve Fund Credit Instruments, any draw to meet a
deficiency shall be pro -rata with respect to each such instrument.
(d) Redemption Account. On or before the 5th Business Day preceding any date
on which Bonds are to be redeemed, the Successor Agency will deliver or cause to be delivered
funds to the Trustee for deposit in the Redemption Account an amount required to pay the principal
of, interest and premium, if any, on the Bonds (other than Bonds redeemed from Sinking Account
Installment) to be redeemed on such date. Subject to this Indenture, all moneys in the Redemption
23
Account will be used and withdrawn
by
the Trustee
solely for
the purpose of paying the
principal of
and interest or redemption premium
(if
any) on the
Bonds to
be redeemed on the date
set for such
redemption.
(e) Equal Rights. It is the intention of the Successor Agency that the Bonds and
Parity Bonds shall be secured by and payable from all Pledged Tax Revenues deposited in the
Redevelopment Obligation Payment Fund on an equal basis. To the extent that moneys constituting
Pledged Tax Revenues deposited in the Redevelopment Obligation Payment Fund are insufficient to
pay debt service on the Bonds and Parity Bonds as it becomes due, the Bonds and Parity Bonds shall
be payable on a pro -rata basis from all available Pledged Tax Revenues deposited in the
Redevelopment Obligation Payment Fund.
ARTICLE V
OTHER COVENANTS OF THE SUCCESSOR AGENCY
Section 5.1 Covenants of the Successor Agency. As long as the Bonds are outstanding
and unpaid, the Successor Agency shall (through its proper members, officers, agents or employees)
faithfully perform and abide by all of the covenants, undertakings and provisions contained in this
Indenture or in any Bond issued hereunder, including the following covenants and agreements for the
benefit of the Bondowners which are necessary, convenient and desirable to secure the Bonds and
will tend to make them more marketable; provided, however, that the covenants do not require the
Successor Agency to expend any funds other than the Pledged Tax Revenues:
Covenant 1. Use of Proceeds: Management and Operation of Properties. The Successor
Agency covenants and agrees that the proceeds of the sale of the Bonds shall be deposited and used
as provided in this Indenture and that it shall manage and operate all properties owned by it
comprising any part of the Project Area in a sound and businesslike manner.
Covenant 2. No Priority. The Successor Agency covenants and agrees that it shall not
issue any obligations payable, either as to principal or interest, from the Pledged Tax Revenues
which have any lien upon the Pledged Tax Revenues prior or superior to the lien of the Bonds.
Except for Parity Bonds issued to refund all or a portion of the Outstanding Bonds as permitted by
Section 3.4 hereof, it shall not issue any obligations, payable as to principal or interest, from the
Pledged Tax Revenues, which have any lien upon the Pledged Tax Revenues on a parity with the
Bonds authorized herein. Notwithstanding the foregoing, nothing in this Indenture shall prevent the
Successor Agency (i) from issuing and selling obligations which have, or purport to have, any lien
upon the Pledged Tax Revenues which is junior to the Bonds or (ii) from issuing and selling bonds or
other obligations which are payable in whole or in part from sources other than the Pledged Tax
Revenues. As used herein "obligations" includes, without limitation, bonds, notes, interim
certificates, debentures or other obligations.
Covenant 3. Punctual Payment. The Successor Agency covenants and agrees that it will
duly and punctually pay or cause to be paid the principal of and interest on each of the Bonds on the
date, at the place and in the manner provided in the Bonds. Further, it will take all actions required
under the Dissolution Act to include on the Recognized Obligation Payment Schedules for each six-
month period of a calendar year, beginning with the first six-month period arising after the Delivery
Date for which no Recognized Obligation Payment Schedule has been submitted, all payments to the
Trustee to satisfy the requirements of this Indenture, including any amounts required under this
24
Indenture to replenish the Reserve Fund to the full amount of the Reserve Requirement, and amounts,
if any, due and owing to the Insurer under the Insurance Policy or the Reserve Policy. These actions
will include, without limitation, placing on the periodic Recognized Obligation Payment Schedule
for approval by the Oversight Board and DOF, to the extent necessary, the amounts to be held by the
Successor Agency as a reserve until the next six-month period, as contemplated by paragraph (1)(A)
of subdivision (d) of Section 34171 of the Dissolution Act, that are necessary to provide for the
payment of principal and interest under this Indenture when the next property tax allocation is
projected to be insufficient to pay all obligations due under this Indenture for the next payment due in
the following six-month period. For the avoidance of doubt, the Successor Agency agrees that it will
take all actions required under the Dissolution Act to include in the Recognized Obligation Payment
Schedule relating to the January 2 payment date commencing January 2, 2017, the annual scheduled
debt service on the Bonds and any Parity Bonds coming due in that same calendar year.
Covenant 4. Payment of Taxes and Other Charges. The Successor Agency covenants and
agrees that it shall from time to time pay and discharge, or cause to be paid and discharged, all
payments in lieu of taxes, service charges, assessments or other governmental charges which may
lawfully be imposed upon the Successor Agency or any of the properties then owned by it in the
Project Area, or upon the revenues and income therefrom, and shall pay all lawful claims for labor,
materials and supplies which if unpaid might become a lien or charge upon any of the properties,
revenues or income or which might impair the security of the Bonds or the use of Pledged Tax
Revenues or other legally available funds to pay the principal of and interest on the Bonds, all to the
end that the priority and security of the Bonds shall be preserved; provided, however, that nothing in
this covenant shall require the Successor Agency to make any such payment so long as the Successor
Agency in good faith shall contest the validity of the payment.
Covenant 5. Books and Accounts; Financial Statements. The Successor Agency
covenants and agrees that it shall at all times keep, or cause to be kept, proper and current books and
accounts (separate from all other records and accounts) in which complete and accurate entries shall
be made of all transactions relating to the Redevelopment Project Area and the Tax Revenues and
other funds relating to the Redevelopment Project Area. The Successor Agency shall prepare within
one hundred eighty (180) days after the close of each of its Fiscal Years a complete financial
statement or statements for such year, in reasonable detail covering the Tax Revenues and other
funds, accompanied by an opinion of an Independent Certified Public Accountant appointed by the
Successor Agency, and shall furnish a copy of the statement or statements to the Trustee and any
rating agency which maintains a rating on the Bonds and, upon written request, to any Bondowner.
The Trustee shall have no duty to review the Successor Agency's financial statements. The
Successor Agency's financial statements may be included as part of the City's Comprehensive
Annual Financial Report.
Covenant 6. Eminent Domain Proceeds. The Successor Agency covenants and agrees that
if all or any part of the Redevelopment Project Area should be taken from it without its consent, by
eminent domain proceedings or other proceedings authorized by law, for any public or other use
under which the property will be tax exempt, it shall take all steps necessary to adjust accordingly the
base year property tax roll of the Redevelopment Project Area.
Covenant 7. Disposition of Property. The Successor Agency covenants and agrees that it
shall not dispose of more than ten percent (10%) of the land area in the Redevelopment Project Area
(except property shown in the Redevelopment Plan in effect on the date this Indenture is adopted as
planned for public use, or property to be used for public streets, public offstreet parking, sewage
25
facilities, parks, easements or right-of-way for public utilities, or other similar uses) to public bodies
or other persons or entities whose property is tax exempt, unless such disposition will not result in
Pledged Tax Revenues to be less than the amount required for the issuance of Parity Bonds as
provided in Section 3.4, based upon the certificate or opinion of an Independent Financial Consultant
appointed by the Successor Agency.
Covenant 8. Protection of Security and Rights of Bondowners. The Successor Agency
covenants and agrees to preserve and protect the security of the Bonds and the rights of the
Bondowners and to contest by court action or otherwise (a) the assertion by any officer of any
government unit or any other person whatsoever against the Successor Agency that (i) the Law is
unconstitutional or (ii) that the Pledged Tax Revenues pledged under this Indenture cannot be paid to
the Successor Agency for the debt service on the Bonds or (b) any other action affecting the validity
of the Bonds or diluting the security therefor, including, with respect to the Pledged Tax Revenues,
the senior lien position of the Bonds to the Pass -Through Agreements.
Covenant 9. Tax Covenants Relating to Bonds.
(a) Special Definitions. When used in this Section, the following terms have the
following meanings:
(i) "Code" means the Internal Revenue Code of 1986.
(ii) "Computation Date" has the meaning set forth in section 1.148-1(b)
of the Tax Regulations.
(iii) "Gross Proceeds" means any proceeds as defined in
section 1.148-1(b) of the Tax Regulations (referring to sales, investment and transferred
proceeds), and any replacement proceeds as defined in section 1.148-1(c) of the Tax
Regulations, of the Bonds.
(iv) "Investment' has the meaning set forth in section 1.148-1(b) of the
Tax Regulations.
(v) "Nonpurpose Investment' means any investment property, as defined
in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and that is
not acquired to carry out the governmental purposes of that series of Bonds.
(vi) "Prior Bonds" means the prior bonds refunded by the Bonds.
(vii) "Rebate Amount' has the meaning set forth in section 1.148-1(b) of
the Tax Regulations.
(viii) "Tax Regulations" means the United States Treasury Regulations
promulgated pursuant to sections 103 and 141 through 150 of the Code, or section 103 of the
1954 Code, as applicable.
(ix) "Yield" of any Investment has the meaning set forth in
section 1.148-5 of the Tax Regulations; and of any issue of governmental obligations has the
meaning set forth in section 1.148-4 of the Tax Regulations.
26
(b) Not to Cause Interest to Become Taxable. The Successor Agency covenants
that it shall not use, and shall not permit the use of, and shall not omit to use Gross Proceeds or any
other amounts (or any property the acquisition, construction or improvement of which is to be
financed directly or indirectly with Gross Proceeds) in a manner that if made or omitted, respectively,
could cause the interest on any Bond to fail to be excluded pursuant to Section 103(a) of the Code
from the gross income, of the owner thereof for federal income tax purposes. Without limiting the
generality of the foregoing, unless and until the Trustee receives a written opinion of Bond Counsel
to the effect that failure to comply with such covenant will not adversely affect such exclusion of the
interest on any Bond from the gross income of the owner thereof for federal income tax purposes, the
Successor Agency shall comply with each of the specific covenants in this Covenant 9.
(c) Private Use and Private Payments. Except as would not cause any Bond to
become a "private activity bond" within the meaning of section 141 of the Code and the Tax
Regulations, the Successor Agency shall take all actions necessary to assure that the Successor
Agency or other public agency at all times prior to the final cancellation of the last of the Bonds to be
retired:
(i) exclusively owns, operates and possesses all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or indirectly
with Gross Proceeds of the Bonds and not use or permit the use of such Gross Proceeds
(including through any contractual arrangement with terms different than those applicable to
the general public) or any property acquired, constructed or improved with such Gross
Proceeds in any activity carried on by any person or entity (including the United States or any
agency, department and instrumentality thereof) other than a state or local government,
unless such use is solely as a member of the general public; and
(ii) does not directly or indirectly impose or accept any charge or other
payment by any person or entity (other than a state or local government) who is treated as
using any Gross Proceeds of the Bonds or any property the acquisition, construction or
improvement of which is to be financed or refinanced directly or indirectly with such Gross
Proceeds.
(d) No Private Loan. Except as would not cause any Bond to become a "private
activity bond" within the meaning of section 141 of the Code and the Tax Regulations and rulings
thereunder, the Successor Agency shall not use or permit the use of Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state or local government. For purposes of
the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if:
(i) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such
person or entity in a transaction that creates a debt for federal income tax purposes; (ii) capacity in or
service from such property is committed to such person or entity under a take -or -pay, output or
similar contract or arrangement; or (iii) indirect benefits of such Gross Proceeds, or burdens and
benefits of ownership of any property acquired, constructed or improved with such Gross Proceeds,
are otherwise transferred in a transaction that is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except as would not cause the Bonds to
become "arbitrage bonds" within the meaning of section 148 of the Code and the Tax Regulations
and rulings thereunder, the Successor Agency shall not (and shall not permit any person to), at any
time prior to the final cancellation of the last Bond to be retired, directly or indirectly invest Gross
Proceeds in any Investment, if as a result of such investment the Yield of any Investment acquired
27
with Gross Proceeds, whether then held or previously disposed of, would materially exceed the Yield
of the Bonds within the meaning of said section 148.
(f) Not Federally -Guaranteed. Except to the extent permitted by section 149(b)
of the Code and the Tax Regulations and rulings thereunder, the Successor Agency shall not take or
omit to take (and shall not permit any person to take or omit to take) any action that would cause any
Bond to be "federally guaranteed" within the meaning of section 149(b) of the Code and the Tax
Regulations and rulings thereunder.
(g) Information Report. The Successor Agency shall timely file any information
required by section 149(e) of the Code with respect to Bonds with the Secretary of the Treasury on
Form 8038-G or such other form and in such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in
section 148(f) of the Code and the Tax Regulations:
(i) The Successor Agency shall account for all Gross Proceeds (including
all receipts, expenditures and investments thereof) on its books of account separately and
apart from all other funds (and receipts, expenditures and investments thereof) and shall
retain all records of accounting for at least six years after the day on which the last Bond is
discharged. However, to the extent permitted by law, the Successor Agency may commingle
Gross Proceeds of Bonds with its other moneys, provided that it separately accounts for each
receipt and expenditure of Gross Proceeds and the obligations acquired therewith.
(ii) Not less frequently than each Computation Date, the Successor
Agency shall calculate the Rebate Amount in accordance with rules set forth in section 148(f)
of the Code and the Tax Regulations and rulings thereunder. The Successor Agency shall
maintain a copy of the calculation with its official transcript of proceedings relating to the
issuance of the Bonds until six years after the final Computation Date.
(iii) In order to assure the excludability pursuant to section 103(a) of the
Code of the interest on the Bonds from the gross income of the owners thereof for federal
income tax purposes, the Successor Agency shall pay to the United States the amount that
when added to the future value of previous rebate payments made for the Bonds equals (i) in
the case of the Final Computation Date as defined in section 1.148-3(e)(2) of the Tax
Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the
case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such
date. In all cases, such rebate payments shall be made by the Successor Agency at the times
and in the amounts as are or may be required by section 148(f) of the Code and the Tax
Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other
forms and information as is or may be required by section 148(f) of the Code and the Tax
Regulations and rulings thereunder for execution and filing by the Successor Agency.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148
of the Code and the Tax Regulations and rulings thereunder, the Successor Agency shall not and
shall not permit any person to, at any time prior to the final cancellation of the last of the Bonds to be
retired, enter into any transaction that reduces the amount required to be paid to the United States
pursuant to paragraph (h) of this Section because such transaction results in a smaller profit or a
M
larger loss
than would have
resulted if the transaction
had been at arm's length and had the Yields on
the Bonds
not been relevant
to either party.
0) Bonds Not Hedge Bonds.
(i) The Successor Agency represents that none of the Prior Bonds or the
Bonds will become a "hedge bond" within the meaning of section 149(g) of the Code.
(ii) Without limitation of paragraph (i) above: the Successor Agency
believes (upon appropriate investigation) (A) that on the date of issuance of the Prior Bonds,
the Successor Agency reasonably expected that at least 85% of the spendable proceeds of the
Prior Bonds would be expended within the three-year period commencing on such date of
issuance, and (B) no more than 50% of the proceeds of the Prior Bonds were invested in
Nonpurpose Investments having a substantially guaranteed yield for a period of four years or
more.
(k) Elections. The Successor Agency hereby directs and authorizes any officer of
the Successor Agency to make elections permitted or required pursuant to the provisions of the Code
or the Tax Regulations, as such Representative (after consultation with Bond Counsel) deems
necessary or appropriate in connection with the Bonds, in the Tax Certificate as to Arbitrage and the
Provisions of Sections 103 and 141-150 of the Internal Revenue Code of 1986, or similar or other
appropriate certificate, form or document.
(1) Closine Certificate. The Successor Agency agrees to execute and deliver in
connection with the issuance of the Bonds a Tax Certificate as to Arbitrage and the Provisions of
Sections 103 and 141-150 of the Internal Revenue Code of 1986, or similar document containing
additional representations and covenants pertaining to the exclusion of interest on the Bonds from the
gross income of the owners thereof for federal income tax purposes, which representations and
covenants are incorporated as though expressly set forth herein.
Covenant 10. Independent Redevelopment Consultant. The Successor Agency covenants
that it shall retain an Independent Redevelopment Consultant and, as long as any Bonds are
Outstanding, cause the Independent Redevelopment Consultant to prepare an annual report for the
Successor Agency and the dissemination agent named in the Continuing Disclosure Certificate, not
later than December 31 of each year (commencing December 31, 201[6]), that includes the
following:
(a) Project Area taxable assessed valuation for the Fiscal Year ending June 30 of
the next ensuing calendar year;
(b) Project Area base year assessed valuation;
(c) The taxable assessed valuation for each of the ten largest taxpayers in the
Project Area for the Fiscal Year ending June 30 of the next ensuing calendar year;
(d) The total amount of Tax Revenues, including Pledged Tax Revenues,
deposited into the Redevelopment Property Tax Trust Fund by the County Auditor -Controller since
the previous report;
29
(e) The amount of Tax Revenues, including Pledged Tax Revenues, remitted by
the County Auditor -Controller to the Trustee on each of January 2 and June 1 of the then -current
calendar year;
(f) The balance in the Reserve Fund as of the immediately preceding October 1;
and
Covenant 11. Compliance with Dissolution Act. The Successor Agency covenants that in
addition to complying with the requirements of Covenant 3, it will comply with all other
requirements of the Dissolution Act. Without limiting the generality of the foregoing, the Successor
Agency covenants and agrees to file all required statements and hold all public hearings required
under the Dissolution Act to assure compliance by the Successor Agency with its covenants
hereunder. Further, it will take all actions required under the Dissolution Act to include scheduled
debt service on the Parity Bonds and the Bonds, as well as any amount required under this Indenture
to replenish the Reserve Fund, and any amounts due and owing to the Insurer under this Indenture, in
Recognized Obligation Payment Schedules for each six-month period so as to enable the County
Auditor -Controller to distribute from the Redevelopment Property Tax Trust Fund to the Successor
Agency's Redevelopment Obligation Retirement Fund on each January 2 and June 1 amounts
required for the Successor Agency to pay principal of, and interest on, the Parity Bonds and the
Bonds and such other amounts coming due in the respective six-month period. These actions will
include, without limitation, placing on the periodic Recognized Obligation Payment Schedule for
approval by the Oversight Board and State Department of Finance, to the extent necessary, the
amounts to be held by the Successor Agency as a reserve until the next six-month period, as
contemplated by paragraph (1)(A) of subdivision (d) of Section 34171 of the Dissolution Act, that
are necessary to provide for the payment of principal and interest under this Indenture when the next
property tax allocation is projected to be insufficient to pay all obligations due under this Indenture
for the next payment due thereunder and hereunder in the following six-month period.
Notwithstanding the foregoing, with respect to the Parity Bonds and the Bonds, the Successor
Agency will take all actions required under the Dissolution Act to include in the Recognized
Obligation Payment Schedule relating to the January 2 payment date, the annual scheduled debt
service on the such Parity Bonds and the Bonds coming due in that same calendar year.
Covenant 12. Limitation on Indebtedness. The Successor Agency covenants and agrees
that it has not and will not incur any loans, obligations or indebtedness repayable from Tax Revenues
such that the total aggregate debt service on said loans, obligations or indebtedness incurred from and
after the date of adoption of the Redevelopment Plan, when added to the total aggregate debt service
on the Parity Bonds and the Bonds, will exceed the maximum amount of Tax Revenues to be divided
and allocated to the Successor Agency pursuant to the Redevelopment Plan. The Successor Agency
shall file annually with the Trustee on or prior to August 1 of each year a Written Certificate of the
Successor Agency certifying that Tax Revenues received by the Successor Agency through the date
of the certificate combined with the amount remaining to be paid on all outstanding obligations of the
Successor Agency will not exceed the Plan Limit. To the extent it does, all Tax Revenues will be
deposited in an escrow account and applied to the payment of such outstanding obligations.
Covenant 13.
(g)
The Debt Service Coverage
for the Bond Year ending
on the immediately
preceding
October 1.
If, due to an
Adverse Change in State Law,
the Successor Agency
Covenant 11. Compliance with Dissolution Act. The Successor Agency covenants that in
addition to complying with the requirements of Covenant 3, it will comply with all other
requirements of the Dissolution Act. Without limiting the generality of the foregoing, the Successor
Agency covenants and agrees to file all required statements and hold all public hearings required
under the Dissolution Act to assure compliance by the Successor Agency with its covenants
hereunder. Further, it will take all actions required under the Dissolution Act to include scheduled
debt service on the Parity Bonds and the Bonds, as well as any amount required under this Indenture
to replenish the Reserve Fund, and any amounts due and owing to the Insurer under this Indenture, in
Recognized Obligation Payment Schedules for each six-month period so as to enable the County
Auditor -Controller to distribute from the Redevelopment Property Tax Trust Fund to the Successor
Agency's Redevelopment Obligation Retirement Fund on each January 2 and June 1 amounts
required for the Successor Agency to pay principal of, and interest on, the Parity Bonds and the
Bonds and such other amounts coming due in the respective six-month period. These actions will
include, without limitation, placing on the periodic Recognized Obligation Payment Schedule for
approval by the Oversight Board and State Department of Finance, to the extent necessary, the
amounts to be held by the Successor Agency as a reserve until the next six-month period, as
contemplated by paragraph (1)(A) of subdivision (d) of Section 34171 of the Dissolution Act, that
are necessary to provide for the payment of principal and interest under this Indenture when the next
property tax allocation is projected to be insufficient to pay all obligations due under this Indenture
for the next payment due thereunder and hereunder in the following six-month period.
Notwithstanding the foregoing, with respect to the Parity Bonds and the Bonds, the Successor
Agency will take all actions required under the Dissolution Act to include in the Recognized
Obligation Payment Schedule relating to the January 2 payment date, the annual scheduled debt
service on the such Parity Bonds and the Bonds coming due in that same calendar year.
Covenant 12. Limitation on Indebtedness. The Successor Agency covenants and agrees
that it has not and will not incur any loans, obligations or indebtedness repayable from Tax Revenues
such that the total aggregate debt service on said loans, obligations or indebtedness incurred from and
after the date of adoption of the Redevelopment Plan, when added to the total aggregate debt service
on the Parity Bonds and the Bonds, will exceed the maximum amount of Tax Revenues to be divided
and allocated to the Successor Agency pursuant to the Redevelopment Plan. The Successor Agency
shall file annually with the Trustee on or prior to August 1 of each year a Written Certificate of the
Successor Agency certifying that Tax Revenues received by the Successor Agency through the date
of the certificate combined with the amount remaining to be paid on all outstanding obligations of the
Successor Agency will not exceed the Plan Limit. To the extent it does, all Tax Revenues will be
deposited in an escrow account and applied to the payment of such outstanding obligations.
Covenant 13.
Adverse
Chanee
in State
Law.
If, due to an
Adverse Change in State Law,
the Successor Agency
determines that
it
cannot comply
with Section
5.1 Covenant 3 herein, then the
30
Successor Agency shall immediately notify the Trustee in writing of such determination. The
Successor Agency shall immediately seek a declaratory judgment or take other appropriate action in
a court of competent jurisdiction to determine the duties of all parties to the Indenture with regard to
the performance of Section 5.1 Covenant 3 by the Successor Agency. The Trustee may, but shall not
be obligated to, participate in the process of seeking any such declaratory judgment. Any fees and
expenses incurred by the Trustee (including, without limitation, legal fees and expenses) in
connection with such participation shall be borne by the Successor Agency.
Covenant 14. Further Assurances. The Successor Agency covenants and agrees to 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
Indenture, and for the better assuring and confirming unto the Owners of the rights and benefits
provided in this Indenture.
Covenant 15. Continuing Disclosure. The Successor Agency hereby covenants and agrees
that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Indenture, failure of the Successor Agency to comply
with the Continuing Disclosure Certificate shall not be considered an Event of Default; however, any
participating underwriter, holder or beneficial owner of the Bonds may take such actions as may be
necessary and appropriate to compel performance, including seeking mandate or specific
performance by court order.
ARTICLE VI
THE TRUSTEE
Section 6.1 Duties, Immunities and Liabilities of Trustee.
(a) The Trustee shall, prior to the occurrence of an Event of Default, and after the
curing or waiver of all Events of Default which may have occurred, perform such duties and only
such duties as are specifically set forth in this Indenture and no implied covenants shall be read into
this Indenture against the Trustee. The Trustee shall, during the existence of any Event of Default
(which has not been cured or waived), exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) The Successor Agency may remove the Trustee at any time, unless an Event
of Default shall have occurred and then be continuing, and shall remove the Trustee (i) if at any time
requested to do so by an instrument or concurrent instruments in writing signed by the Owners of not
less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys
duly authorized in writing) or (ii) if at any time the Successor Agency has knowledge that the Trustee
has ceased to be eligible in accordance with subsection (e) of this Section, or has become incapable
of acting, or has been adjudged as bankrupt or insolvent, or a receiver of the Trustee or its property
has been appointed, or any public officer shall have taken control or charge of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or liquidation. In each case such
removal shall be accomplished by the giving of written notice of such removal by the Successor
Agency to the Trustee, whereupon the Successor Agency shall appoint a successor Trustee by an
instrument in writing.
31
(c) The Trustee may at any time resign by giving prior written notice of such
resignation to the Successor Agency, and by giving the Owners notice of such resignation by first
class mail, postage prepaid, at their respective addresses shown on the Registration Books. Upon
receiving such notice of resignation, the Successor Agency shall promptly appoint a successor
Trustee by an instrument in writing.
(d) Any removal or resignation of the Trustee and appointment of a successor
Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no
successor Trustee shall have been appointed and have accepted appointment within 45 days of giving
notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Owner (on behalf
of such Owner and all other Owners) may petition any court of competent jurisdiction for the
appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it
may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this
Indenture shall signify its acceptance of such appointment by executing and delivering to the
Successor Agency and to its predecessor Trustee a written acceptance thereof, and thereupon such
successor Trustee, without any further act, deed or conveyance, shall become vested with all the
moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee,
with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the
Successor Agency or the request of the successor Trustee, such predecessor Trustee shall execute and
deliver any and all instruments of conveyance or further assurance and do such other things as may
reasonably be required for more fully and certainly vesting in and confirming to such successor
Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it
under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any
money or other property subject to the trusts and conditions herein set forth. Upon request of the
successor Trustee, the Successor Agency shall execute and deliver any and all instruments as may be
reasonably required for more fully and certainly vesting in and confirming to such successor Trustee
all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance
of appointment by a successor Trustee as provided in this subsection, the Successor Agency shall
mail, with a copy to the Successor Trustee, a notice of the succession of such Trustee to the trusts
hereunder to each rating agency which then has a current rating on the Bonds and to the Owners at
their respective addresses shown on the Registration Books. If the Successor Agency fails to mail
such notice within 15 days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of the Successor Agency.
Notwithstanding any other provisions of this Indenture, no removal, resignation or termination of the
Trustee shall take effect until a successor shall be appointed.
(e) Every successor Trustee appointed under the provisions of this Indenture
shall be a trust company or bank in good standing authorized to exercise trust powers or having the
powers of a trust company and duly authorized to exercise trust powers within the State having a
combined capital and surplus of at least $75,000,000, and subject to supervision or examination by
federal or state authority. If such bank or trust company publishes a report of condition at least
annually, pursuant to law or to the requirements of any supervising or examining authority above
referred to, then for the purpose of this subsection the combined capital and surplus of such bank or
trust company shall be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this subsection (e), the Trustee shall resign immediately in the
manner and with the effect specified in this Section.
32
(f) The Trustee shall have no responsibility or liability with respect to any
information, statement or recital in any offering memorandum or other disclosure material prepared
or distributed with respect to the issuance of these Bonds.
(g) Before taking any action under Article VIII or this Section 6.1 at the request
or direction of the Owners, the Trustee may require that an indemnity bond satisfactory to the Trustee
be furnished by the Owners for the reimbursement of all expenses to which it may be put and to
protect it against all liability, except liability which is adjudicated to have resulted from its
negligence or its willful misconduct in connection with any action so taken.
Section 6.2 Merger or Consolidation. Any bank or trust company into which the Trustee
may be merged or converted or with which either of them may be consolidated or any bank or trust
company resulting from any merger, conversion or consolidation to which it shall be a party or any
bank or trust company to which the Trustee may sell or transfer all or substantially all of its corporate
trust business, provided such bank or trust company shall be eligible under subsection (e) of
Section 6.1, shall be the successor to such Trustee without the execution or filing of any paper or any
further act, anything herein to the contrary notwithstanding.
Section 6.3 Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as
statements of the Successor Agency, and the Trustee shall not assume responsibility for the
correctness of the same, nor make any representations as to the validity or sufficiency of this
Indenture or of the Bonds nor shall incur any responsibility in respect thereof, other than as expressly
stated herein. The Trustee shall, however, be responsible for its representations contained in its
certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the
performance of its duties hereunder, except for its own negligence or willful misconduct. The
Trustee may become the Owner of any Bonds with the same rights it would have if they were not
Trustee and, to the extent permitted by law, may act as depository for and permit any of its officers or
directors to act as a member of, or in any other capacity with respect to, any committee formed to
protect the rights of the Owners, whether or not such committee shall represent the Owners of a
majority in principal amount of the Bonds then Outstanding.
(b) The Trustee shall not be liable for any error of judgment made in good faith
by a responsible officer, unless the Trustee shall have been negligent in ascertaining the pertinent
facts.
(c) The Trustee shall not be liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the direction of the Owners of not less than a majority
in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee under this Indenture.
(d) The Trustee shall not be liable for any action taken by it in good faith and
believed by it to be authorized or within the discretion or rights or powers conferred upon it by this
Indenture, except for actions arising from the negligence or willful misconduct of the Trustee. The
permissive right of the Trustee to do things enumerated hereunder shall not be construed as a
mandatory duty.
33
(e) The Trustee shall not be deemed to have knowledge of any Event of Default
hereunder unless and until it shall have actual knowledge thereof, or shall have received written
notice thereof at its Corporate Trust Office. Except as otherwise expressly provided herein, the
Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the
terms, conditions, covenants or agreements herein or of any of the documents executed in connection
with the Bonds, or as to the existence of an Event of Default thereunder. The Trustee shall not be
responsible for the validity or effectiveness of any collateral given to or held by it. Without limiting
the generality of the foregoing, the Trustee shall not be responsible for reviewing the contents of any
financial statements furnished to the Trustee pursuant to Section 5.1 and may rely conclusively on
the certificates accompanying such financial statements to establish the Successor Agency's
compliance with its financial covenants hereunder, including, without limitation, its covenants
regarding the deposit of Pledged Tax Revenues into the Redevelopment Obligation Retirement Fund
and the investment and application of moneys on deposit in the Redevelopment Obligation
Retirement Fund (other than its covenants to transfer such moneys to the Trustee when due
hereunder).
(f) No provision in this Indenture shall require the Trustee to risk or expend its
own funds or otherwise incur any financial liability hereunder.
(g) The Trustee may execute any of the trust or powers hereof and perform any
of its duties through attorneys, agents and receivers and shall not be answerable for the conduct of
the same if appointed by it with reasonable care.
(h) The permissive right of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty.
(i) The immunities extended to the Trustee also extend to its directors, officers,
employees and agents.
Section 6.4 Richt to Rely on Documents. The Trustee shall be protected in acting upon
any notice, resolution, request, consent, order, certificate, report, opinion or other paper or document
believed by it to be genuine and to have been signed or presented by the proper party or parties, in
the absence of negligence or willful misconduct by the Trustee. The Trustee may consult with
counsel, including, without limitation, counsel of or to the Successor Agency, with regard to legal
questions, and, in the absence of negligence or willful misconduct by the Trustee, the opinion of such
counsel shall be full and complete authorization and protection in respect of any action taken or
suffered by the Trustee hereunder in accordance therewith.
The Trustee shall not be bound to recognize any person as the Owner of a Bond unless and
until such Bond is submitted for inspection, if required, and his title thereto is established to the
satisfaction of the Trustee.
Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering
any action hereunder, such matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the
Successor Agency, which shall be full warrant to the Trustee for any action taken or suffered in good
faith under the provisions of this Indenture in reliance upon such Written Certificate, but in its
discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such
34
additional evidence as to it may deem reasonable. The Trustee may conclusively rely on any
certificate of report of any Independent Accountant or Independent Redevelopment Consultant
appointed by the Successor Agency.
Section 6.5 Preservation and Inspection of Documents. All documents received by the
Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject
at all reasonable times during regular business hours upon reasonable notice to the inspection of the
Successor Agency and any Owner, and their agents and representatives duly authorized in writing, at
reasonable hours and under reasonable conditions.
Section 6.6 Compensation and Indemnification. The Successor Agency shall pay to the
Trustee from time to time reasonable compensation for all services rendered under this Indenture and
also all reasonable expenses, charges, legal and consulting fees and other disbursements and those of
its attorneys, agents and employees, incurred in and about the performance of its powers and duties
under this Indenture. Upon the occurrence of an Event of Default, the Trustee shall have a first lien
on the Pledged Tax Revenues and all funds and accounts held by the Trustee hereunder to secure the
payment to the Trustee of all fees, costs and expenses, including reasonable compensation to its
experts, attorneys and counsel incurred in declaring such Event of Default and in exercising the
rights and remedies set forth in Article VIII hereof.
The Successor Agency further covenants and agrees to indemnify and save the Trustee and
its officers, directors, agents and employees, harmless against any loss, expense, and liabilities which
it may incur arising out of or in the exercise and performance of its powers and duties hereunder,
including the costs and expenses and those of its attorneys and advisors of defending against any
claim of liability, but excluding any and all losses, expenses and liabilities which are due to the
negligence or willful misconduct of the Trustee, its officers, directors, agents or employees. The
obligations of the Successor Agency under this section shall survive resignation or removal of the
Trustee under this Indenture and payment of the Bonds and discharge of this Indenture.
Section 6.7 Investment of Moneys in Funds and Accounts. Subject to the provisions of
Article V hereof, all moneys held by the Trustee in the Debt Service Fund, the Reserve Fund and the
Costs of Issuance Fund, shall, at the written direction of the Successor Agency, be invested only in
Permitted Investments. If the Trustee receives no written directions from the Successor Agency as to
the investment of moneys held in any Fund or Account, the Trustee shall request such written
direction from the Successor Agency and, pending receipt of instructions, shall invest such moneys
solely in Permitted Investments described in subsection (b)(5) of the definition thereof.
(a) Moneys in the Redevelopment Obligation Retirement Fund shall be invested
by the Successor Agency only in obligations permitted by the Law which will by their terms mature
not later than the date the Successor Agency estimates the moneys represented by the particular
investment will be needed for withdrawal from the Redevelopment Obligation Retirement Fund.
(b) Moneys in the Interest Account, the Principal Account, the Sinking Account
and Redemption Account of the Debt Service Fund shall be invested only in obligations which will
by their terms mature on such dates as to ensure that before each interest, principal, sinking account
or redemption payment date, there will be in such account, from matured obligations and other
moneys already in such account, cash equal to the interest and principal payable on such payment
date.
35
(c) Moneys in the Reserve Fund shall be invested in (i) obligations which will by
their terms mature on or before the date of the final maturity of the Bonds or five (5) years from the
date of investment, whichever is earlier or (ii) an investment agreement which permits withdrawals
or deposits without penalty at such time as such moneys will be needed or in order to replenish the
Reserve Fund.
Obligations purchased as an investment of moneys in any of the Funds or Accounts shall be
deemed at all times to be a part of such respective Fund or Account and the interest accruing thereon
and any gain realized from an investment shall be credited to such Fund or Account and any loss
resulting from any authorized investment shall be charged to such Fund or Account without liability
to the Trustee. The Successor Agency or the Trustee, as the case may be, shall sell or present for
redemption any obligation purchased whenever it shall be necessary to do so in order to provide
moneys to meet any payment or transfer from such Fund or Account as required by this Indenture
and shall incur no liability for any loss realized upon such a sale. All interest earnings received on
any monies invested in the Interest Account, Principal Account, Sinking Account, Redemption
Account or Reserve Fund, to the extent they exceed the amount required to be in such Account, shall
be transferred prior to each Interest Payment Date to the Debt Service Fund. The Trustee may
purchase or sell to itself or any affiliate, as principal or agent, investments authorized by this
Section 6.7. The Trustee shall not be responsible or liable for any loss suffered in connection with
any investment of funds made by it in accordance with Section 6.7 hereof. The Trustee shall furnish
the Successor Agency periodic cash transaction statements which include detail for all investment
transactions effected by the Trustee or brokers selected by the Successor Agency. Upon the
Successor Agency's election, such statements will be delivered via the Trustee's online service and
upon electing such service, paper statements will be provided only upon request. The Successor
Agency waives the right to receive brokerage confirmations of security transactions effected by the
Trustee as they occur, to the extent permitted by law. The Successor Agency further understands that
trade confirmations for securities transactions effected by the Trustee will be available upon request
and at no additional cost and other trade confirmations may be obtained from the applicable broker.
The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with
any investments made by the Trustee hereunder.
Section 6.8 Accountin¢ Records and Financial Statements. The Trustee shall at all times
keep, or cause to be kept, proper books of record and account, prepared in accordance with industry
standards, in which accurate entries shall be made of all transactions made by it relating to the
proceeds of the Bonds and all funds and accounts held by it established pursuant to this Indenture.
Such books of record and account shall be available for inspection by the Successor Agency at
reasonable hours and under reasonable circumstances with reasonable prior notice. The Trustee shall
furnish to the Successor Agency, at least quarterly, an accounting of all transactions made by the
Trustee in the form of its regular account statements relating to the proceeds of the Bonds and all
funds and accounts held by the Trustee pursuant to this Indenture.
Section 6.9 Appointment of Co -Trustee or Aeent. It is the purpose of this Indenture that
there shall be no violation of any law of any jurisdiction (including particularly the law of the State)
denying or restricting the right of banking corporations or associations to transact business as Trustee
in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in
particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee
deems that by reason of any present or future law of any jurisdiction it may not exercise any of the
powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as
36
herein granted, or take any other action which may be desirable or necessary in connection therewith,
it may be necessary that the Trustee or Successor Agency appoint an additional individual or
institution as a separate co -trustee. The following provisions of this Section 6.9 are adopted to these
ends.
In the event that the Trustee or Successor Agency appoint an additional individual or
institution as a separate or co -trustee, each and every remedy, power, right, claim, demand, cause of
action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be
exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and
vest in such separate or co -trustee to exercise such powers, rights and remedies, and every covenant
an obligation necessary to the exercise thereof by such separate or co -trustee shall run to and be
enforceable by either of them.
Should any instrument in writing from the Successor Agency be required by the separate
trustee or co -trustee so appointed by the Trustee or Successor Agency for more fully and certainly
vesting in and confirming to it such properties, rights, powers, trusts, duties and obligations, any and
all such instruments in writing shall, on request, be executed, acknowledged and delivered by the
Successor Agency. In case any separate trustee or co -trustee, or a successor to either, shall become
incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and
obligations of such separate trustee or co -trustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee
or co -trustee.
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 7.1 Amendment Without Consent of Owners. This Indenture and the rights and
obligations of the Successor Agency and of the Owners may be modified or amended at any time by
a Supplemental Indenture which shall become binding upon adoption, without consent of any
Owners, to the extent permitted by law and any for any one or more of the following purposes:
(a) to add to the covenants and agreements of the Successor Agency in this
Indenture contained, other covenants and agreements thereafter to be observed or to limit or
surrender any rights or power herein reserved to or conferred upon the Successor Agency; or
(b) to make such provisions for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provision contained in this Indenture, or in any
other respect whatsoever as the Successor Agency may deem necessary or desirable, provided under
any circumstances that such modifications or amendments shall not materially adversely affect the
interests of the Owners; or
(c) to provide for the issuance of Parity Bonds pursuant to Section 3.4, and to
provide the terms and conditions under which such Parity Bonds may be issued, including but not
limited to the establishment of Redevelopment Obligation Retirement Funds and accounts relating
thereto and any other provisions relating solely thereto, subject to and in accordance with the
provisions of Section 3.4; or
37
(d) to amend any provision hereof relating to the requirements of or compliance
with the Code, to any extent whatsoever but only if and to the extent such amendment will not
adversely affect the exclusion from gross income for purposes of federal income taxation of interest
on any of the Bonds, in the opinion of nationally -recognized bond counsel.
Section 7.2 Amendment With Consent of Owners. Except as set forth in Section 7. 1, this
Indenture and the rights and obligations of the Successor Agency and of the Owners may be
modified or amended at any time by a Supplemental Indenture which shall become binding when the
written consent of the Owners of a majority in aggregate principal amount of the Bonds then
Outstanding are filed with the Trustee. No such modification or amendment shall (a) extend the
maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the
Successor Agency to pay the principal, interest or redemption premiums (if any) at the time and place
and at the rate and in the currency provided therein of any Bond without the express written consent
of the Owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to
any such amendment or modification, or (c) without its written consent thereto, modify any of the
rights or obligations of the Trustee. In determining whether any amendment, consent, waiver or
other action to be taken, or any failure to take action, under this Indenture would adversely affect the
security for the Bonds or the rights of the Owners, the Trustee will consider the effect of any such
amendment, consent, waiver, action or inaction as if there were no Insurance Policy.
No contract shall be entered into or any action taken by which the rights of the Insurer or
security for or sources of payment of the Insured Bonds may be impaired or prejudiced in any
material respect except upon obtaining the prior written consent of the Insurer.
Section 7.3 Effect of Supplemental Indenture. From and after the time any Supplemental
Indenture becomes effective pursuant to this Article VII, this Indenture shall be deemed to be
modified and amended in accordance therewith, the respective rights, duties and obligations of the
parties hereto or thereto and all Owners, as the case may be, shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modification and amendment, and all the terms
and conditions of any Supplemental Indenture shall be deemed to be part of the terms and conditions
of this Indenture for any and all purposes.
Section 7.4 Endorsement or Replacement of Bonds After Amendment. After the
effective date of any amendment or modification hereof pursuant to this Article VII, the Successor
Agency may determine that any or all of the Bonds shall bear a notation, by endorsement in form
approved by the Successor Agency, as to such amendment or modification and in that case upon
demand of the Successor Agency, the Owners of such Bonds shall present such Bonds for that
purpose at the Corporate Trust Office, and thereupon a suitable notation as to such action shall be
made on such Bonds. In lieu of such notation, the Successor Agency may determine that new Bonds
shall be prepared and executed in exchange for any or all of the Bonds and, in that case upon demand
of the Successor Agency, the Owners of the Bonds shall present such Bonds for exchange at the
Corporate Trust Office, without cost to such Owners.
Section 7.5 Amendment by Mutual Consent. The provisions of this Article VII shall not
prevent any Owner from accepting any amendment as to the particular Bond held by such Owner,
provided that due notation thereof is made on such Bond.
Section 7.6 Opinion of Counsel. The Trustee shall be provided an opinion of counsel that
any such Amendment or Supplemental Indenture entered into by the Successor Agency and the
961
Trustee complies with the provisions of this Article VII and the Trustee may conclusively rely upon
such opinion.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
Section 8.1 Events of Default and Acceleration of Maturities. The following events shall
constitute Events of Default hereunder:
(a) if default shall be made in the due and punctual payment of the principal of or
interest or redemption premium (if any) on any Bond when and as the same shall become due and
payable, whether at maturity as therein expressed, by declaration or otherwise;
(b) if default shall be made by the Successor Agency in the observance of any of
the covenants, agreements (including default by the obligor on any underlying agreement) or
conditions on its part in this Indenture or in the Bonds contained, other than a default described in the
preceding clause (a), and such default shall have continued for a period of 30 days following receipt
by the Successor Agency of written notice from the Trustee or any Owner of the occurrence of such
default; or
(c) if the Successor Agency shall commence a voluntary action under Title 11 of
the United States Code or any substitute or successor statute.
If an Event of Default has occurred and is continuing, the Trustee may, or if requested in
writing by the Owners of the majority in aggregate principal amount of the Bonds then Outstanding,
the Trustee shall, by written notice to the Successor Agency, (a) declare the principal of the Bonds,
together with the accrued interest thereon, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable, and (b) upon receipt of indemnity
to its satisfaction exercise any other remedies available to the Trustee and the Owners in law or at
equity.
Upon becoming aware of the occurrence of an Event of Default, the Trustee shall give notice
of such Event of Default to the Successor Agency and the Insurer by telephone confirmed in writing.
Such notice shall also state whether the principal of the Bonds shall have been declared to be or have
immediately become due and payable. With respect to any Event of Default described in clauses
(a) or (c) above the Trustee shall, and with respect to any Event of Default described in clause
(b) above the Trustee in its sole discretion may, also give such notice to the Successor Agency, the
Insurer and the Owners in the same manner as provided herein for notices of redemption of the
Bonds, which shall include the statement that interest on the Bonds shall cease to accrue from and
after the date, if any, on which the Trustee shall have declared the Bonds to become due and payable
pursuant to the preceding paragraph (but only to the extent that principal and any accrued, but unpaid
interest on the Bonds is actually paid on such date.)
This provision, however, is subject to the condition that if, at any time after the principal of
the Bonds shall have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered, the Successor Agency shall deposit
with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration
and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue
39
installments of principal and interest (to the extent permitted by law) at the net effective rate then
borne by the Outstanding Bonds, and the reasonable fees and expenses of the Trustee, including but
not limited to attorneys' fees, and any and all other defaults known to the Trustee (other than in the
payment of principal of and interest on the Bonds due and payable solely by reason of such
declaration) shall have been made good or cured to the satisfaction of the Trustee or provision
deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case,
the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, by
written notice to the Successor Agency and to the Trustee, may, on behalf of the Owners of all of the
Bonds, rescind and annul such declaration and its consequences. However, no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right
or power consequent thereon.
Upon the occurrence of an event of default, the Trustee may, with the consent of a majority
of the Holders, by written notice to the Successor Agency, declare the principal of the Bonds and
Parity Bonds to be immediately due and payable, whereupon that portion of the principal of the
Bonds thereby coming due and the interest thereon accrued to the date of payment shall, without
further action, become and be immediately due and payable, anything in this Indenture or in the
Bonds to the contrary notwithstanding.
Notwithstanding the foregoing, the maturity of Insured Bonds shall not be accelerated
without the consent of the Insurer and in the event the maturity of the Insured Bonds is accelerated,
the Insurer may elect, in its sole discretion, to pay accelerated principal and interest accrued, on such
principal to the date of acceleration (to the extent unpaid by the Successor Agency) and the Trustee
shall be required to accept such amounts. Upon payment of such accelerated principal and interest
accrued to the acceleration date as provided above, the Insurer's obligations under the Insurance
Policy with respect to such Insured Bonds shall be fully discharged.
Section 8.2 Application of Funds Upon Acceleration. All of the Tax Revenues, and all
sums in the funds and accounts established and held by the Trustee hereunder upon the date of the
declaration of acceleration as provided in Section 8.1, and all sums thereafter received by the Trustee
hereunder, shall be applied by the Trustee in the order following, upon presentation of the several
Bonds, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof
if fully paid:
First, to the payment of the fees, costs and expenses of the Trustee in declaring such
Event of Default and in exercising the rights and remedies set forth in this Article VIII,
including reasonable compensation to its agents, attorneys and counsel including all sums
owed the Trustee pursuant to Section 6.6 herein; and
Second, to the payment of the whole amount then owing and unpaid upon the Bonds
and Parity Bonds for principal and interest, with interest on the overdue principal and
installments of interest at the net effective rate then borne by the Outstanding Bonds and
Parity Bonds (to the extent that such interest on overdue installments of principal and interest
shall have been collected), and amounts, if any, due and owing to the Insurer under the
Insurance Policy or the Reserve Policy pursuant to this Indenture, and in case such moneys
shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds and
Parity Bonds, then to the payment of such principal and interest and such amounts due and
owing to the Insurer, without preference or priority of principal over interest, or interest over
principal, or of any installment of interest over any other installment of interest, ratably to the
IM
aggregate of such principal and interest or any Bond or Parity Bonds over any other Bond or
Parity Bonds.
Section 8.3 Power of Trustee to Control Proceedings. In the event that the Trustee, upon
the happening of an Event of Default, shall have taken any action, by judicial proceedings or
otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of
the Owners of a majority in principal amount of the Bonds then Outstanding, it shall have full power,
in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the
continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action;
provided, however, that the Trustee shall not, unless there no longer continues an Event of Default,
discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or
in equity, if at the time there has been filed with it a written request signed by the Owners of a
majority in principal amount of the Outstanding Bonds hereunder opposing such discontinuance,
withdrawal, compromise, settlement or other disposal of such litigation.
Section 8.4 Limitation on Owner's Right to Sue. No Owner of any Bond issued
hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any
remedy under or upon this Indenture, unless (a)such Owner shall have previously given to the
Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in
aggregate principal amount of all the Bonds then Outstanding shall have made written request upon
the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding,
including a writ of mandamus in its own name; (c) said Owners shall have tendered to the Trustee
indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to
comply with such request for a period of 60 days after such written request shall have been received
by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby declared,
in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder; it
being understood and intended that no one or more Owners shall have any right in any manner
whatever by his or their action to enforce any right under this Indenture, except in the manner herein
provided, and that all proceedings at law or in equity to enforce any provisions of this Indenture shall
be instituted, had and maintained in the manner herein provided and for the equal benefit of all
Owners of the Outstanding Bonds.
The right of any Owner of any Bond to receive payment of the principal of (and premium, if
any) and interest on such Bond as herein provided, shall not be impaired or affected without the
written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other
provision of this Indenture.
Section 8.5 Non -waiver. Nothing in this Article VIII or in any other provision of this
Indenture or in the Bonds, shall affect or impair the obligation of the Successor Agency, which is
absolute and unconditional, to pay from the Pledged Tax Revenues and other amounts pledged
hereunder, the principal of and interest and redemption premium (if any) on the Bonds to the
respective Owners on the respective Interest Payment Dates, as herein provided, or affect or impair
the right of action, which is also absolute and unconditional, of the Owners to institute suit to enforce
such payment by virtue of the contract embodied in the Bonds.
41
A waiver of any default by any Owner shall not affect any subsequent default or impair any
rights or remedies on the subsequent default. No delay or omission of 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 Dissolution Act or by this Article VIII may be enforced and exercised from
time to time and as often as shall be deemed expedient by the Owners.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned
or determined adversely to the Owners, the Successor Agency 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.
Section 8.6 Actions by Trustee 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 Trustee for the equal benefit and protection of all Owners similarly situated and the Trustee is
hereby appointed (and the successive respective Owners by taking and holding the Bonds or Parity
Bonds, as applicable, shall be conclusively deemed so to have appointed it) the true and lawful
attorney-in-fact of the respective 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 respective
Owners as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such
attorney-in-fact, provided the Trustee shall have no duty or obligation to enforce any such right or
remedy if it has not been indemnified to its satisfaction from loss, liability or any expense including,
but not limited to reasonable fees and expenses of its attorneys.
Section 8.7 Remedies Not Exclusive. 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 by statute or otherwise, and may be exercised without exhausting and without regard to any
other remedy conferred by the Law or any other law.
ARTICLE IX
BONDINSURANCE
Section
9.1
Provisions Relating
to
Bond
Insurance. Notwithstanding anything herein to
the contrary, so
long
as the Insurance Policy is
in effect, the following provisions shall govern:
(a) The prior written consent of the Insurer shall be a condition precedent to the
deposit of any credit instrument provided in lieu of a cash deposit into the Reserve Fund.
Notwithstanding anything to the contrary set forth in the Indenture, amounts on deposit in the
Reserve Fund shall be applied solely to the payment of debt service due on the Bonds.
(b) The Insurer shall be deemed to be the sole Owner of the Insured Bonds for
the purpose of exercising any voting right or privilege or giving any consent or direction or taking
any other action that the Owners of the Insured Bonds are entitled to take pursuant to this Indenture
pertaining to (i) defaults and remedies and (ii) the duties and obligations of the Trustee. In
furtherance thereof and as a term of this Indenture and each Insured Bond, the Trustee and each
Owner of Insured Bonds appoint the Insurer as their agent and attorney-in-fact with respect to the
Insured Bonds and agree that the Insurer may at any time during the continuation of any proceeding
42
by or against the Successor Agency under the United States Bankruptcy Code or any other applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding")
direct all matters relating to such Insolvency Proceeding, including without limitation, (A) all matters
relating to any claim or enforcement proceeding in connection with an Insolvency Proceeding (a
"Claim"), (B) the direction of any appeal of any order relating to any Claim, (C) the posting of any
surety, supersedeas or performance bond pending any such appeal, and (D) the right to vote to accept
or reject any plan of adjustment. In addition, the Trustee and each Owner of Insured Bonds delegate
and assign to the Insurer, to the fullest extent permitted by law, the rights with respect to the Insured
Bonds of the Trustee and each Owner of Insured Bonds in the conduct of any Insolvency Proceeding,
including, without limitation, all rights of any party to an adversary proceeding or action with respect
to any court order issued in connection with any such Insolvency Proceeding. Remedies granted to
the Owners shall expressly include mandamus.
(c) No grace period for a covenant default shall exceed 30 days or be extended
for more than 60 days, without the prior written consent of the Insurer. No grace period shall be
permitted for payment defaults.
(d) The Insurer is a third party beneficiary to this Indenture.
(e) Upon the occurrence of an extraordinary optional, special or extraordinary
mandatory redemption in part, the selection of Insured Bonds to be redeemed shall be subject to the
approval of the Insurer. The exercise of any provision of the Indenture which permits the purchase of
Insured Bonds in lieu of redemption shall require the prior written approval of the Insurer if any
Insured Bond so purchased is not cancelled upon purchase.
(f) Any amendment, supplement, modification to, or waiver of, the Indenture or
any other transaction document, including any underlying security agreement (each a "Related
Document"), that requires the consent of Owners of the Insured Bonds or adversely affects the rights
and interests of the Insurer shall be subject to the prior written consent of the Insurer.
(g) The rights granted to the Insurer under the Indenture or any other Related
Document to request, consent to or direct any action are rights granted to the Insurer in consideration
of its issuance of the Insurance Policy. Any exercise by the Insurer of such rights is merely an
exercise of the Insurer's contractual rights and shall not be construed or deemed to be taken for the
benefit, or on behalf, of the Owners of the Insured Bonds and such action does not evidence any
position of the Insurer, affirmative or negative, as to whether the consent of the Owners of the
Insured Bonds or any other person is required in addition to the consent of the Insurer.
(h) Amounts paid by the Insurer under the Insurance Policy shall not be deemed
paid for purposes of the Indenture and the Insured Bonds relating to such payments shall remain
Outstanding and continue to be due and owing until paid by the Successor Agency in accordance
with the Indenture. The Indenture shall not be discharged unless all amounts due or to become due to
the Insurer have been paid in full or duly provided for.
(i) Each of the Successor Agency and the Trustee covenant and agree to take
such action (including, as applicable, filing of UCC financing statements and continuations thereof)
as is necessary from time to time to preserve the priority of the pledge of the Pledged Tax Revenues
under applicable law.
43
0) Claims Upon the Insurance Policy and Payments by and to the Insurer.
If, on the third Business Day prior to the related scheduled interest payment date or principal
payment date ("Payment Date") there is not on deposit with the Trustee, after making all transfers
and deposits required under the Indenture, moneys sufficient to pay the principal of and interest on
the Insured Bonds due on such Payment Date, the Trustee shall give notice to the Insurer and to its
designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or telecopy of the amount of
such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the second
Business Day prior to the related Payment Date, there continues to be a deficiency in the amount
available to pay the principal of and interest on the Insured Bonds due on such Payment Date, the
Trustee shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer's
Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such
deficiency between the amount required to pay interest on the Insured Bonds and the amount
required to pay principal of the Insured Bonds, confirmed in writing to the Insurer and the Insurer's
Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling in the
form of Notice of Claim and Certificate delivered with the Insurance Policy.
The Trustee shall designate any portion of payment of principal on Insured Bonds paid by the
Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of
maturity, on its books as a reduction in the principal amount of Insured Bonds registered to the then
current Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Insured
Bond to the Insurer, registered in the name of Assured Guaranty Municipal Corp., in a principal
amount equal to the amount of principal so paid (without regard to authorized denominations);
provided that the Trustee's failure to so designate any payment or issue any replacement Insured
Bond shall have no effect on the amount of principal or interest payable by the Successor Agency on
any Insured Bond or the subrogation rights of the Insurer.
The Trustee shall keep a complete and accurate record of all funds deposited by the Insurer
into the Policy Payments Account (defined below) and the allocation of such funds to payment of
interest on and principal of any Insured Bond. The Insurer shall have the right to inspect such
records at reasonable times upon reasonable notice to the Trustee.
Upon payment of a claim under the Insurance Policy, the Trustee shall establish a separate
special purpose trust account for the benefit of Owners of the Insured Bonds referred to herein as the
"Policy Payments Account" and over which the Trustee shall have exclusive control and sole right of
withdrawal. The Trustee shall receive any amount paid under the Insurance Policy in trust on behalf
of Owners of the Insured Bonds and shall deposit any such amount in the Policy Payments Account
and distribute such amount only for purposes of making the payments for which a claim was made.
Such amounts shall be disbursed by the Trustee to the Owners of the Insured Bonds in the same
manner as principal and interest payments are to be made with respect to the Insured Bonds under the
sections hereof regarding payment of Bonds. It shall not be necessary for such payments to be made
by checks or wire transfers separate from the check or wire transfer used to pay debt service with
other funds available to make such payments. Notwithstanding anything herein to the contrary, the
Successor Agency agrees to pay to the Insurer (i) a sum equal to the total of all amounts paid by the
Insurer under the Insurance Policy (the "Insurer Advances"); and (ii) interest on such Insurer
Advances from the date paid by the Insurer until payment thereof in full, payable to the Insurer at the
Late Payment Rate per annum (collectively, the "Insurer Reimbursement Amounts"). "Late Payment
Rate" means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced
from time to time by JPMorgan Chase Bank at its principal office in The City of New York, as its
A
prime or base lending rate (any change in such rate of interest to be effective on the date such change
is announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest
on the Insured Bonds and (b) the maximum rate permissible under applicable usury or similar laws
limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number
of days elapsed over a year of 360 days. The Successor Agency hereby covenants and agrees that the
Insurer Reimbursement Amounts are secured by a lien on and pledge of the Pledged Tax Revenues
and payable from such Pledged Tax Revenues on a parity with debt service due on the Bonds. The
Successor Agency hereby agrees to include any Insurer Reimbursement Amounts due and owing to
the Insurer in the Recognized Obligation Payment Schedules to be prepared and submitted in
accordance with Section 5.1.
Funds held in the Policy Payments Account shall not be invested by the Trustee and may not
be applied to satisfy any costs, expenses or liabilities of the Trustee. Any funds remaining in the
Policy Payments Account following a Bond payment date shall promptly be remitted to the Insurer.
(k) The Insurer shall, to the extent it makes any payment of principal of or
interest on the Insured Bonds, become subrogated to the rights of the recipients of such payments in
accordance with the terms of the Insurance Policy, which subrogation rights shall also include the
rights of any such recipients in connection with any Insolvency Proceeding. Each obligation of the
Successor Agency to the Insurer under the Related Documents shall survive discharge or termination
of such Related Documents.
(1) The Successor Agency shall pay or reimburse the Insurer any and all charges,
fees, costs and expenses that the Insurer may reasonably pay or incur in connection with (i) the
administration, enforcement, defense or preservation of any rights or security in any Related
Document; (ii) the pursuit of any remedies under the Indenture or any other Related Document or
otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or
related to, the Indenture or any other Related Document whether or not executed or completed, or
(iv) any litigation or other dispute in connection with the Indenture or any other Related Document or
the transactions contemplated thereby, other than costs resulting from the failure of the Insurer to
honor its obligations under the Insurance Policy. The Insurer reserves the right to charge a
reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of
the Indenture or any other Related Document.
(m) After payment of reasonable expenses of the Trustee, the application of funds
realized upon default shall be applied to the payment of expenses of the Successor Agency or rebate
only after the payment of past due and current debt service on the Bonds and amounts required to
restore the Reserve Fund to the Reserve Requirement.
(n) The Insurer shall be entitled to pay principal or interest on the Insured Bonds
that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Successor
Agency (as such terms are defined in the Insurance Policy) and any amounts due on the Insured
Bonds as a result of acceleration of the maturity thereof in accordance with the Indenture, whether or
not the Insurer has received a Notice of Nonpayment (as such terms are defined in the Insurance
Policy) or a claim upon the Insurance Policy.
(o) The Insurer shall be provided with the following information by the
Successor Agency or Trustee, as the case may be:
45
W Annual audited financial statements within 210 days after the end of
the Successor Agency's fiscal year (together with a certification of the Successor Agency that
it is not aware of any default or Event of Default under the Related Documents), and the
Successor Agency's annual budget within 30 days after the approval thereof together with
such other information, data or reports as the Insurer shall reasonably request from time to
time;
(ii) Notice of any draw upon the Reserve Fund within two Business Days
after knowledge thereof other than (i) withdrawals of amounts in excess of the Reserve
Requirement and (ii) withdrawals in connection with a refunding of Bonds;
(iii) Notice of any default known to the Trustee or the Successor Agency
within five Business Days after knowledge thereof;
(iv) Prior notice of the advance refunding or redemption of any of the
Insured Bonds, including the principal amount, maturities and CUSIP numbers thereof,
(v) Notice of the resignation or removal of the Trustee and the
appointment of, and acceptance of duties by, any successor thereto;
(vi) Notice of the commencement of any proceeding by or against the
Successor Agency commenced under the United States Bankruptcy Code or any other
applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency
Proceeding");
(vii) Notice of the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or
interest on, the Insured Bonds;
(viii) A full original transcript of all proceedings relating to the execution
of any amendment, supplement, or waiver to the Related Documents; and
(ix) All reports, notices and correspondence to be delivered to the Owners
under the terms of the Related Documents.
In addition, to the extent that the Successor Agency has entered into a Continuing Disclosure
Certificate, covenant or undertaking with respect to the Bonds, all information furnished pursuant to
such agreements shall also be provided to the Insurer, simultaneously with the furnishing of such
information.
(p) The Insurer shall have the right to receive such additional information as it
may reasonably request.
(q) The Successor Agency will permit the Insurer to discuss the affairs, finances
and accounts of the Successor Agency or any information the Insurer may reasonably request
regarding the security for the Bonds with appropriate officers of the Successor Agency and will use
commercially reasonable efforts to enable the Insurer to have access to the facilities, books and
records of the Successor Agency on any business day upon reasonable prior notice.
M
(r) The Trustee shall notify the Insurer of any failure of the Successor Agency to
provide notices, certificates and other information to the Trustee as required under the Indenture.
(s) Notwithstanding satisfaction of the other conditions to the issuance of Parity
Bonds set forth in the Indenture, no such issuance may occur (1) if an Event of Default (or any event
which, once all notice or grace periods have passed, would constitute an Event of Default) exists
unless such default shall be cured upon such issuance and (2) unless the Reserve Fund is fully funded
at the Reserve Requirement (including the proposed issue) upon the issuance of such Parity Bonds, in
either case unless otherwise permitted by the Insurer.
(t) In determining whether any amendment, consent, waiver or other action to be
taken, or any failure to take action, under the Indenture would adversely affect the security for the
Bonds or the rights of the Owners, the Trustee shall consider the effect of any such amendment,
consent, waiver, action or inaction as if there were no Insurance Policy.
(u) No contract shall be entered into or any action taken by which the rights of
the Insurer or security for or sources of payment of the Bonds may be impaired or prejudiced in any
material respect except upon obtaining the prior written consent of the Insurer.
ARTICLE X
RESERVE POLICY PROVISIONS
Section 10.1 Draws Against the Reserve Policy. Notwithstanding anything herein to the
contrary, so long as the Reserve Policy is in effect, the following provisions shall govern:
(a) The Successor Agency shall repay any draws under the Reserve Policy and
pay all related reasonable expenses incurred by Insurer and shall pay interest thereon from the date of
payment by Insurer at the Late Payment Rate. "Late Payment Rate" means the lesser of (x) the
greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan
Chase Bank at its principal office in the City of New York, as its prime or base lending rate ("Prime
Rate") (any change in such Prime Rate to be effective on the date such change is announced by
JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Bonds and
(y) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The
Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year
of 360 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate publicly, Prime
Rate shall be the publicly announced prime or base lending rate of such national bank as Insurer shall
specify. If the interest provisions of this subparagraph (a) shall result in an effective rate of interest
which, for any period, exceeds the limit of the usury or any other laws applicable to the indebtedness
created herein, then all sums in excess of those lawfully collectible as interest for the period in
question shall, without further agreement or notice between or by any party hereto, be applied as
additional interest for any later periods of time when amounts are outstanding hereunder to the extent
that interest otherwise due hereunder for such periods plus such additional interest would not exceed
the limit of the usury or such other laws, and any excess shall be applied upon principal immediately
upon receipt of such moneys by Insurer, with the same force and effect as if the Successor Agency
had specifically designated such extra sums to be so applied and Insurer had agreed to accept such
extra payment(s) as additional interest for such later periods. In no event shall any agreed -to or
actual exaction as consideration for the indebtedness created herein exceed the limits imposed or
47
provided by the law applicable to this transaction for the use or detention of money or for
forbearance in seeking its collection.
Repayment of draws and payment of expenses and accrued interest thereon at the Late
Payment Rate (collectively, "Policy Costs") shall commence in the first month following each draw,
and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate of
Policy Costs related to such draw. The Successor Agency shall take all actions required by the
Dissolution Act to ensure that Policy Costs are paid to Insurer when due, including the submission of
Recognized Obligation Payment Schedules providing for the payment of such Policy Costs when
due.
Amounts in respect of Policy Costs paid to Insurer shall be credited first to interest due, then
to the expenses due and then to principal due. As and to the extent that payments are made to Insurer
on account of principal due, the coverage under the Reserve Policy will be increased by a like
amount, subject to the terms of the Reserve Policy. The obligation to pay Policy Costs shall be
secured by a valid lien on all revenues and other collateral pledged as security for the Bonds (subject
only to the priority of payment provisions set forth under this Indenture).
All cash and investments in the Reserve Fund shall be transferred to the debt service fund for
payment of debt service on Bonds before any drawing may be made on the Reserve Policy or any
other credit facility credited to the Reserve Fund in lieu of cash ("Credit Facility"). Payment of any
Policy Costs shall be made prior to replenishment of any such cash amounts. Draws on all Credit
Facilities (including the Reserve Policy) on which there is available coverage shall be made on a pro -
rata basis (calculated by reference to the coverage then available thereunder) after applying all
available cash and investments in the Reserve Fund. Payment of Policy Costs and reimbursement of
amounts with respect to other Credit Facilities shall be made on a pro -rata basis prior to
replenishment of any cash drawn from the Reserve Fund. For the avoidance of doubt, "available
coverage" means the coverage then available for disbursement pursuant to the terms of the applicable
alternative credit instrument without regard to the legal or financial ability or willingness of the
provider of such instrument to honor a claim or draw thereon or the failure of such provider to honor
any such claim or draw.
(b) If the Successor Agency shall fail to pay any Policy Costs in accordance with
the requirements of subparagraph (a) hereof, Insurer shall be entitled to exercise any and all legal and
equitable remedies available to it, including those provided under this Indenture other than (i)
acceleration of the maturity of the Bonds or (ii) remedies which would adversely affect owners of the
Bonds.
(c) This Indenture shall not be discharged until all Policy Costs owing to Insurer
shall have been paid in full. The Successor Agency's obligation to pay such amounts shall expressly
survive payment in full of the Bonds.
(d) The Successor Agency shall include any Policy Costs then due and owing
Insurer in the calculation of the Parity Bonds test in this Indenture.
(e) The Trustee to ascertain the necessity for a claim upon the Reserve Policy in
accordance with the provisions of subparagraph (a) hereof and to provide notice to Insurer in
accordance with the terms of the Reserve Policy at least five Business Days prior to each date upon
which interest or principal is due on the Bonds.
961
ARTICLE XI
MISCELLANEOUS
Section 11.1 Benefits Limited to Parties. Nothing in this Indenture expressed or implied is
intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than
the Successor Agency, the Trustee, and the registered Owners of the Bonds, any right, remedy or
claim under or by reason of this Indenture or any covenant, condition or stipulation hereof, and all
covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the
Successor Agency shall be for the sole and exclusive benefit of the Successor Agency, the Trustee,
and the registered Owners of the Bonds. Notwithstanding the foregoing, the Insurer shall be included
as a third party beneficiary to this Indenture.
Section 11.2 Successor is Deemed Included in All References to Predecessor. Whenever
in this Indenture or any Supplemental Indenture either the Successor Agency or the Trustee is named
or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the
covenants and agreements in this Indenture contained by or on behalf of the Successor Agency or the
Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so
expressed or not.
Section 11.3
Discharge
of
Indenture.
If the Successor Agency shall pay and discharge the
entire indebtedness on
all Bonds
or any portion
thereof in any one or more of the following ways:
(i) by well and truly paying or causing to be paid the principal of and
interest and premium (if any) on all Outstanding Bonds, including all principal, interest and
redemption premiums, (if any), or;
(ii) by irrevocably depositing with the Trustee, in trust, at or before
maturity, money which, together with the available amounts then on deposit in the funds and
accounts established pursuant to this Indenture, is fully sufficient to pay all Outstanding
Bonds, including all principal, interest and redemption premiums (if any), or,
(iii) by irrevocably depositing with the Trustee, in trust, Defeasance
Securities in such amount as an Independent Certified Public Accountant shall determine
will, together with the interest to accrue thereon and available moneys then on deposit in the
funds and accounts established pursuant to this Indenture, be fully sufficient to pay and
discharge the indebtedness on all Bonds (including all principal, interest and redemption
premiums, if any) at or before maturity and notwithstanding that any Bonds shall not have
been surrendered for payment, the pledge of the Pledged Tax Revenues and other funds
provided for in this Indenture and all other obligations of the Trustee and the Successor
Agency under this Indenture with respect to all Outstanding Bonds shall cease and terminate,
except only (a) the obligation of the Trustee to transfer and exchange Bonds hereunder and
(b) the obligation of the Successor Agency to pay or cause to be paid to the Owners, from the
amounts so deposited with the Trustee, all sums due thereon and to pay the Trustee all fees,
expenses and costs of the Trustee. Notice of such election shall be filed with the Trustee.
Any funds thereafter held by the Trustee, which are not required for said purpose, shall be
paid over to the Successor Agency.
Me
(iv) To accomplish defeasance of the Insured Bonds, the Successor
Agency shall cause to be delivered (i) a report of an independent firm of nationally
recognized certified public accountants or such other accountant as shall be acceptable to the
Insurer ("Accountant") verifying the sufficiency of the escrow established to pay the Insured
Bonds in full on the maturity or redemption date ("Verification"), (ii) an Escrow Deposit
Agreement (which shall be acceptable in form and substance to the Insurer), (iii) an opinion
of nationally recognized bond counsel to the effect that the Insured Bonds are no longer
"Outstanding" under the Indenture and (iv) a certificate of discharge of the Trustee with
respect to the Insured Bonds; each Verification and defeasance opinion shall be acceptable in
form and substance, and addressed, to the Successor Agency, Trustee and Insurer. The
Insurer shall be provided with final drafts of the above -referenced documentation not less
than five Business Days prior to the funding of the escrow.
Bonds shall be deemed "Outstanding" under the Indenture unless and until they are in fact
paid and retired or the above criteria are met.
Section 11.4 Execution of Documents and Proof of Ownership by Owners. Any request,
declaration or other instrument which this Indenture may require or permit to be executed by any
Owner may be in one or more instruments of similar tenor, and shall be executed by such Owner in
person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by any
Owner or his attorney of such request, declaration or other instrument, or of such writing appointing
such attorney, may be proved by the certificate of any notary public or other officer authorized to
take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person
signing such request, declaration or other instrument or writing acknowledged to him the execution
thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or
other officer.
The ownership of Bonds and the amount, maturity, number and date of ownership thereof
shall be provided by the Registration Books.
Any request, declaration or other instrument or writing of the Owner of any Bond shall bind
all future Owners of such Bond in respect of anything done or suffered to be done by the Successor
Agency or the Trustee in good faith and in accordance therewith.
Section 11.5 Disqualified Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or
waiver under this Indenture, Bonds which are owned or held by or for the account of the Successor
Agency or the City (but excluding Bonds held in any employees' retirement fund) shall be
disregarded and deemed not to be Outstanding for the purpose of any such determination, provided,
however, that for the purpose of determining whether the Trustee shall be protected in relying on any
such demand, request, direction, consent or waiver, only Bonds which the Trustee knows to be so
owned or held shall be disregarded.
Section 11.6 Waiver of Personal Liability. No member, office, agent or employee of the
Successor Agency shall be individually or personal liable for the payment of the principal of or
interest or any premium on the Bonds; but nothing herein contained shall relieve any such member,
officer, agent or employee from the performance of any official duty provided by law.
50
Section 11.7 Destruction of Canceled Bonds. Whenever in this Indenture provision is
made for the surrender to the Trustee of any Bonds which have been paid or canceled pursuant to the
provisions of this Indenture, the Trustee shall destroy such Bonds and provide the Successor Agency
a certificate of destruction. The Successor Agency shall be entitled to rely upon any statement of fact
contained in any certificate with respect to the destruction of any such Bonds therein referred to.
Section 11.8
Unclaimed
Notices.
Any notice, request, demand, communication or other paper shall be
sufficiently given
and shall be deemed
given when delivered or mailed
by first class mail, postage
prepaid, overnight
mail, electronic mail,
or sent by telegram or facsimile,
addressed as follows:
If to the Successor Agency: Successor Agency to the Redevelopment Agency of the City of
Santa Clarita
23920 Valencia Boulevard
Santa Clarita, California 91355
Attention: Executive Director
If to the Trustee: The Bank of New York Mellon Trust Company, N.A.
700 South Flower, 5th Floor
Los Angeles, California 90017-4104
Attention: Corporate Trust Department
Reference: City of Santa Clarita Redevelopment Agency
TABS Series 2016
If to the Insurer:
In each case in which notice or other communication refers to an Event of Default, then a
copy of such notice or other communication shall also be sent to the attention of the General Counsel
and shall be marked to indicate "URGENT MATERIAL ENCLOSED."
Section 11.9 Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this
Indenture shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect
the validity of the remaining portions of this Indenture. The Successor Agency hereby declares that
it would have adopted this Indenture and each and every other section, paragraph, sentence, clause or
phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any
one or more sections, paragraphs, sentences, clauses, or phrases of this Indenture may be held illegal,
invalid or unenforceable. If, by reason of the judgment of any court, the Trustee is rendered unable
to perform its duties hereunder, all such duties and all of the rights and powers of the Trustee
hereunder shall, pending appointment of a successor Trustee in accordance with the provisions of
Section 6.1 hereof, be assumed by and vest in the Finance Officer of the Successor Agency in trust
for the benefit of the Owners that the Finance Officer in such case shall be vested with all of the
rights and powers of the Trustee hereunder, and shall assume all of the responsibilities and perform
all of the duties of the Trustee hereunder, in trust for the benefit of the Bondowners, pending
appointment of a successor Trustee in accordance with the provisions of Section 6.1 hereof.
Section 11.10
Unclaimed
Moneys.
Anything
contained herein to
the contrary
notwithstanding, any money held by the Trustee
in trust for
the payment and discharge
of the interest
or premium (if any) on
or principal of the Bonds
which remains
unclaimed for two (2)
years after the
51
date when the payments of such interest, premium (if any) and principal have become payable, if
such money was held by the Trustee at such date, or for two (2) years after the date of deposit of such
money if deposited with the Trustee after the date when the interest and premium (if any) on and
principal of such Bonds have become payable, shall be repaid by the Trustee to the Successor
Agency as its absolute property free from trust, and the Trustee shall thereupon be released and
discharged with respect thereto and the Bond Owners shall look only to the Successor Agency for the
payment of the principal of and interest and redemption premium (if any) on such Bonds.
Section 11.11 Execution in Counterparts. This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
Section 11.12 Governing Law. This Indenture shall be construed and governed in
accordance with the Laws of the State.
Section 11.13
Payments
Due on Other
Than
a
Business
Day. If the date
for making
any
payment or the last
date for performance of any act or the
exercising of any right, as
provided in
this
Indenture, is not a
Business Day, such payment, with no
interest accruing for the
period from
and
after such nominal
date, may be made or act performed
or right exercised on the
next succeeding
Business Day with
the same force and effect as if done on
the nominal date provided
therefore in
this
Indenture.
52
IN WITNESS WHEREOF, the SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF SANTA CLARITA, has caused this Indenture to be signed in its name
by the Mayor of the City of Santa Clarita, acting on behalf of the Successor Agency as its
Chairperson, and attested by the City Clerk of the City of Santa Clarita, acting on behalf of the
Successor Agency as its Secretary, and THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., in token of its acceptance of the trusts created hereunder, has caused this
Indenture to be signed in its corporate name by its officer hereunto duly authorized, all as of the day
and year first above written.
ATTEST:
By:
Mary Cusick, City Clerk
City of Santa Clarita
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY
OF SANTA CLARITA
By:
Bob Kellar, Mayor
City of Santa Clarita
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:
Its:
Authorized Officer
No. R --
EXHIBIT A
(FORM OF BOND)
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
(COUNTY OF LOS ANGELES)
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA
TAX ALLOCATION REFUNDING BOND, SERIES 2016
Interest Rate Maturity Date Dated Date CUSIP
October 1, 20_ 72016
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM:
DOLLARS
The SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF
SANTA CLARITA, a public body, corporate and politic, duly organized and existing under and by
virtue of the laws of the State of California (the "Successor Agency"), for value received hereby
promises to pay to the Registered Owner stated above, or registered assigns, on the Maturity Date
stated above (subject to any right of prior redemption hereinafter provided for), the Principal Sum
stated above, in lawful money of the United States of America, and to pay interest thereon in like
lawful money from the interest payment date next preceding the date of authentication of this Bond,
unless (i) this Bond is authenticated on an interest payment date, in which event it shall bear interest
from such date of authentication, or (ii) this Bond is authenticated prior to an interest payment date
and after the close of business on the fifteenth calendar day of the month preceding such interest
payment date (a "Record Date"), in which event it shall bear interest from such interest payment
date, or (iii) this Bond is authenticated on or before April 15, 2017, in which event it shall bear
interest from the Dated Date stated above; provided, however, that if at the time of authentication of
this Bond, interest is in default on this Bond, this Bond shall bear interest from the interest payment
date to which interest has previously been paid or made available for payment on this Bond, until
payment of such Principal Sum in full, at the rate per annum stated above, payable semiannually on
April 1 and October 1 in each year (each an "interest payment date"), commencing April 1, 2017,
calculated on the basis of a 360 -day year composed of twelve 30 -day months. Principal hereof and
premium, if any, upon early redemption hereof are payable upon presentation and surrender of this
Bond at the corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee
(the "Trustee"). Interest hereon (including the final interest payment upon maturity or earlier
redemption) is payable by check of the Trustee mailed on the interest payment date by first class mail
to the Registered Owner hereof at the Registered Owner's address as it appears on the registration
books maintained by the Trustee at the close of business on the Record Date next preceding such
interest payment date; provided, however, that upon the written request of any Registered Owner of
FAN
at least $1,000,000 in principal amount of Bonds received by the Trustee at least fifteen (15) days
prior to such Record Date, payment shall be made by wire transfer in immediately available funds to
an account in the United States designated by such Owner.
This Bond is one of a duly authorized issue of Bonds of the Successor Agency designated as
"Successor Agency to the Redevelopment Agency of the City of Santa Clarita Tax Allocation
Refunding Bonds, Series 2016" (the "Bonds"), in an aggregate principal amount of
Dollars ($[principal amount]), all of like tenor and date (except for such
variation, if any, as may be required to designate varying series, numbers, maturities, interest rates or
redemption and other provisions) and all issued pursuant to the provisions of the Refunding Bond
Act, being Article II (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5
of the Government Code of the State of California (the "Act'), and pursuant to a resolution of the
Successor Agency adopted on September 13, 2016, and a resolution adopted by the Oversight Board
(as defined in the Indenture) on September 15, 2016, and an Indenture of Trust, dated as of
December 1, 2016, entered into by and between the Successor Agency and the Trustee (the
"Indenture"), authorizing the issuance of the Bonds. Additional bonds, notes or other obligations
may be issued on a parity with the Bonds, but only subject to the terms of the Indenture. Reference
is hereby made to the Indenture (copies of which are on file at the office of the Successor Agency)
and all indentures supplemental thereto and to the Law for a description of the terms on which the
Bonds are issued, the provisions with regard to the nature and extent of the Pledged Tax Revenues, as
that term is defined in the Indenture, and the rights thereunder of the registered owners of the Bonds
and the rights, duties and immunities of the Trustee and the rights and obligations of the Successor
Agency thereunder, to all of the provisions of which Indenture the Registered Owner of this Bond, by
acceptance hereof, assents and agrees.
The Bonds
are special
obligations of the Successor Agency
and are payable from, and are
secured by a pledge
of and lien
on the Pledged Tax Revenues derived
by the Successor Agency from
the Project
Area (as
that term is
defined in the Indenture).
or
There has been created and will be maintained by the Successor Agency the Redevelopment
Obligation Retirement Fund (as defined in the Indenture) into which Pledged Tax Revenues shall be
deposited and transferred to the Trustee for deposit into the Debt Service Fund (as defined in the
Indenture) from which the Trustee shall pay the principal of and the interest and redemption
premium, if any, on the Bonds when due. As and to the extent set forth in the Indenture, all such
Pledged Tax Revenues are exclusively and irrevocably pledged to and constitute a trust fund for, in
accordance with the terms hereof and the provisions of the Indenture and the Law, the security and
payment or redemption of, including any premium upon early redemption, and for the security and
payment of interest on, the Bonds, any additional bonds, notes or other obligations, authorized by the
Indenture to be issued on a parity therewith. In addition, the Bonds (and, if the indenture authorizing
any loans, advances or indebtedness issued on a parity with the Bonds shall so provide, any such
loan, advance or indebtedness) shall be additionally secured at all times by a first and exclusive
pledge of and lien upon all of the moneys in the Debt Service Fund, the Interest Account, the
Principal Account, the Sinking Account, the Redemption Account and the Reserve Fund (as such
terms are defined in the Indenture). Except for the Pledged Tax Revenues and such moneys, no
funds or properties of the Successor Agency shall be pledged to, or otherwise liable for, the payment
of principal of or interest or redemption premium, if any, on the Bonds.
The Bonds
maturing
on or after
October 1, 2027 shall
be
subject to redemption
prior to
their
respective maturity
dates as
a whole or
in part on any date on
or
after October 1, 2026,
in any
order
deemed reasonable by the Successor Agency, and by lot within a maturity, from any available source
of funds at the option of the Successor Agency, at a redemption price equal to the principal amount
of the Bonds to be redeemed, plus accrued but unpaid interest to the date fixed for redemption,
without premium.
(a) The Bonds maturing on October 1, 20_ (the "20_ Term Bonds"), shall be
subject to mandatory redemption, in part by lot, from Sinking Account Installments set forth in the
following schedule on October 1, 20_, and on each October 1 thereafter to maturity, at a redemption
price equal to the principal amount thereof to be redeemed, together with interest accrued thereon to
the date fixed for redemption, without premium; provided, however, that if some but not all of the
20_ Term Bonds have been optionally redeemed, the total amount of Sinking Account Installments
to be made subsequent to such redemption shall be reduced in an amount equal to the principal
amount of the 20_ Term Bonds so redeemed by reducing each such future Sinking Account
Installments on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be
designated pursuant to written notice filed by the Successor Agency with the Trustee.
Sinking Account
Payment Date
(October 1)
*Maturity
Term Bonds Maturing October 1, 20_
Principal Amount to be
Redeemed or
Purchased
Sinking Account
Payment Date
(October 1)
Principal Amount to be
Redeemed or
Purchased
The Bonds maturing on October 1, 20 (the "20— Term Bonds"), shall be subject to
mandatory redemption, in part by lot, from Sinking Account Installments set forth in the following
schedule on October 1, 20_, and on each October 1 thereafter to maturity, at a redemption price
equal to the principal amount thereof to be redeemed, together with interest accrued thereon to the
date fixed for redemption, without premium; provided, however, that if some but not all of the 20_
Term Bonds have been optionally redeemed, the total amount of Sinking Account Installments to be
made subsequent to such redemption shall be reduced in an amount equal to the principal amount of
the 20_ Term Bonds so redeemed by reducing each such future Sinking Account Installments on a
pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be designated
pursuant to written notice filed by the Successor Agency with the Trustee.
Term Bonds Maturing October 1, 20_
Sinking Account
Principal Amount to be
Sinking Account
Principal Amount to be
Payment Date
Redeemed or
Payment Date
Redeemed or
(October 1)
Purchased
(October 1)
Purchased
*Maturity
A-3
If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds may
be declared due and payable upon the conditions, in the manner and with the effect provided in the
Indenture, but such declaration and its consequences may be rescinded and annulled as further
provided in the Indenture.
The Bonds are issuable as fully registered Bonds without coupons in denominations of
$5,000 each and any integral multiple thereof. Subject to the limitations and conditions and upon
payment of the charges, if any, as provided in the Indenture, Bonds may be exchanged for a like
aggregate principal amount of Bonds of other authorized denominations and of the same maturity.
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 Trustee, but only in the manner and subject
to the limitations provided in the Indenture, and upon surrender and cancellation of this Bond. Upon
registration of such transfer a new fully registered Bond or Bonds, of authorized denomination or
denominations, for the same aggregate principal amount and of the same maturity will be issued to
the transferee in exchange herefor.
The Successor Agency and the Trustee may treat the Registered Owner hereof as the absolute
owner hereof for all purposes, and the Successor Agency and the Trustee shall not be affected by any
notice to the contrary.
The rights and obligations of the Successor Agency and the registered owners of the Bonds
may be modified or amended at any time in the manner, to the extent and upon the terms provided in
the Indenture, but no such modification or amendment shall extend the maturity of or reduce the
interest rate on any Bond or otherwise alter or impair the obligation of the Successor Agency to pay
the principal, interest or redemption premiums (if any) at the time and place and at the rate and in the
currency provided herein of any Bond without the express written consent of the registered owner of
such Bond, reduce the percentage of Bonds required for the written consent to any such amendment
or modification or, without its written consent thereto, modify any of the rights or obligations of the
Trustee.
This Bond is not a debt of the City of Santa Clarita, the State of California, or any of its
political subdivisions (except the Successor Agency), and none of said City, said State, nor any of its
political subdivisions (except the Successor Agency) is liable hereon, nor in any event shall this
Bond be payable out of any funds or properties other than those of the Successor Agency as set forth
in the Indenture. The Bonds do not constitute an indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction.
It is hereby certified that all of the things, conditions and acts required to exist, to have
happened or to have been performed precedent to and in the issuance of this Bond do exist, have
happened or have been performed in due and regular time and manner as required by the Law and the
laws of the State of California, and that the amount of this Bond, together with all other indebtedness
of the Successor Agency, does not exceed any limit prescribed by the Law or any laws of the State of
California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond shall not be entitled to any benefit under the Indenture or become valid or
obligatory for any purpose until the Trustee's Certificate of Authentication hereon shall have been
manually signed by the Trustee.
W
IN WITNESS WHEREOF, the Successor Agency to the Redevelopment Agency of the City
of Santa Clarita has caused this Bond to be executed in its name and on its behalf with the manual
signatures of the Mayor and the City Clerk of the City of Santa Clarita, acting on behalf of the
Successor Agency as its Chairperson and its Secretary, respectively, all as of the Dated Date.
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY
OF SANTA CLARITA
By:
Chairperson
By:
Secretary
ME
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within -mentioned Indenture.
Authentication Date:
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.,
as Trustee
By:
Authorized Officer
STATEMENT OF INSURANCE
Assured Guaranty Municipal Corp. ("AGM"), New York, New York, has delivered its
municipal bond insurance policy (the "Policy") with respect to the scheduled payments due of
principal of and interest on the Bonds, to The Bank of New York Mellon Trust Company, N.A., or its
successor, as paying agent for the Bonds (the "Paying Agent"). Said Policy is on file and available
for inspection at the principal office of the Paying Agent and a copy thereof may be obtained from
AGM or the Paying Agent. All payments required to be made under the Policy shall be made in
accordance with the provisions thereof. The owner of this Insured Bond acknowledges and consents
to the subrogation rights of AGM as more fully set forth in the Policy.
A-7
(FORM OF ASSIGNMENT)
For value received the undersigned hereby sells, assigns and transfers unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within -registered Bond and hereby irrevocably constitute(s) and appoint(s)
attorney, to transfer the same on the
bond register of the Trustee with full power of substitution in the premises.
Dated:
Signature Guaranteed:
Note: Signature(s) must be guaranteed by
an "eligible guarantor institution."
Note: The
signature(s) 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.
BE
ESCROW AGREEMENT
by and between
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA
CLARITA
M1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
Dated as of December 1, 2016
Pertaining to the Defeasance of
All of the Currently Outstanding
$29,8601000
City of Santa Clarita Redevelopment Agency
Tax Allocation Bonds, Series 2008
(Newhall Redevelopment Project Area)
W1
$8,850,000
City of Santa Clarita Redevelopment Agency
Housing Set -Aside Tax Allocation Bonds, Series 2008
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement'), made and entered into as of
December 1, 2016, by and between the SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF SANTA CLARTTA, a public body corporate and politic, duly
organized and existing under the laws of the State of California (the "Successor Agency"), and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking
association organized and existing under the laws of the United States of America, as Escrow
Bank and as Prior Trustee (the "Escrow Bank");
WITNESSETH:
WHEREAS, the Redevelopment Agency of the City of Santa Clarita (the "Prior
Agency") was a public body, corporate and politic, duly created, established and authorized to
transact business and exercise its powers under and pursuant to the provisions of the Community
Redevelopment Law (Part 1 of Division 24 (commencing with Section 33000) of the Health and
Safety Code of the State of California) (the "Law"), and the powers of the Prior Agency included
the power to issue bonds for any of its corporate purposes; and; and
WHEREAS, pursuant to an Indenture of Trust, dated as of June 1, 2008 (the
"2008 Nonhousing Indenture"), by and between the Prior Agency and The Bank of New York
Mellon Trust Company, N.A., formerly known as The Bank of New York Trust Company, N.A.
(the "Prior Trustee"), the Prior Agency previously issued its $29,860,000 Tax Allocation Bonds,
Series 2008 (Newhall Redevelopment Project Area) (the "2008 Nonhouisng Bonds"), payable
from certain tax increment from the Newhall Redevelopment Project Area for the purpose of
financing redevelopment activities of the Prior Agency; and
WHEREAS, pursuant to an Indenture of Trust, dated as of June 1, 2008 (the
"2008 Housing Indenture"), by and between the Prior Agency and the Prior Trustee, the Prior
Agency previously issued its $8,850,000 Housing Set -Aside Tax Allocation Bonds, Series 2008
(the "2008 Housing Bonds," and together with the 2008 Nonhousing Bonds, the "Prior Bonds")
payable from certain tax increment from the Newhall Redevelopment Project Area for the
purpose of financing housing programs of the Prior Agency; and
WHEREAS, the powers, assets and obligations of the Prior Agency were
transferred on February 1, 2012 to the Successor Agency to the Redevelopment Agency of the
City of Santa Clarita (the "Successor Agency"); and
WHEREAS, the Successor Agency and the Oversight Board have approved the
issuance by the Successor Agency of its Tax Allocation Refunding Bonds, Series 2016, in the
aggregate principal amount of $ (the "Bonds"), pursuant to an Indenture of
Trust, dated as of December 1, 2016 (the "Indenture"), between the Successor Agency and The
Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), a portion of the
proceeds of which are to be used, together with other available funds, to refund and defease all of
the Prior Bonds;
NOW, THEREFORE, in consideration of the mutual premises contained herein
and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
SECTION 1. As used herein, the following terms shall have the following
meanings:
"Escrow Bank" means The Bank of New York Mellon Trust Company, N.A., and
its successors and assigns, and any other corporation or institution that may at any time be
substituted in its place as provided in Section 13 hereof.
"Escrow Deposit" means $ , an amount sufficient, together with
investment proceeds, (i) to pay the principal of and interest on the Prior Bonds coming due on
and prior to the Redemption Date and (ii) to redeem on the Redemption Date the principal of the
Prior Bonds at a redemption price equal to 100% of the principal of the Prior Bonds to be
redeemed on the Redemption Date, without premium.
"Escrow Funds" means the Nonhousing Escrow Fund and the Housing Escrow
Fund established and held by the Escrow Bank pursuant to Section 3 hereof.
"Escrow Securities" means Defeasance Obligations as defined in Section 1.01 of
the 2008 Nonhousing Indenture and 2008 Housing Indenture and deposited in the Escrow Funds
pursuant to Section 5 hereof.
"Prior Indentures" mean, collectively, the 2008 Nonhousing Indenture and the
2008 Housing Indenture.
"Redemption Date" means October 1, 2018.
"Verification Agent" means Causey Demgen & Moore P.C.
"Verification Report" means the report prepared by the Verification Agent and
attached hereto as Exhibit A.
SECTION 2. The Successor Agency hereby appoints The Bank of New York
Mellon Trust Company, N.A. as Escrow Bank under this Escrow Agreement for the benefit of
the holders of the Prior Bonds. The Escrow Bank hereby accepts the duties and obligations of
Escrow Bank under this Escrow Agreement and agrees that the irrevocable instructions to the
Escrow Bank herein provided are in a form satisfactory to it. Reference herein to, or citation
herein of, any provisions of the Prior Indentures shall be deemed to incorporate the same as a
part hereof in the same manner and with the same effect as if the same were fully set forth
herein.
SECTION 3. There is created and established with the Escrow Bank a special
and irrevocable trust fund designated the "Nonhousing Escrow Fund" (the "Nonhousing Escrow
Fund"), and the "Housing Escrow Fund" (the "Housing Escrow Fund," and together with the
Nonhousing Escrow Fund, the "Escrow Funds"), to be held by the Escrow Bank separate and
2
apart from all other funds and accounts, and used only for the purposes and in the manner
provided in this Escrow Agreement.
SECTION 4. The Successor Agency shall deposit, or cause to be deposited, with
the Escrow Bank into the Nonhousing Escrow Fund, to be held in irrevocable trust by the
Escrow Bank and to be applied solely as provided in this Agreement and the 2008 Nonhousing
Indenture, the sum of $ from the proceeds of the Bonds, $ from
the Reserve Fund held under the 2008 Nonhousing Indenture, for a total of $
The Successor Agency shall deposit, or cause to be deposited, with the Escrow
Bank into the Housing Escrow Fund, to be held in irrevocable trust by the Escrow Bank and to
be applied solely as provided in this Agreement and the 2008 Housing Indenture, the sum of
$ from the proceeds of the Bonds, $ from the Reserve Fund held
under the 2008 Housing Indenture, for a total of $
SECTION 5. The Escrow Bank acknowledges receipt of the moneys described
in Section 4. The Escrow Bank agrees immediately to invest $ of such amounts in the
Escrow Securities set forth in Exhibit C-1 hereto, and to deposit such Escrow Securities in the
Nonhousing Escrow Fund and to retain the amount of $ in cash in the Nonhousing Escrow
Fund.
The Escrow Bank acknowledges receipt of the moneys described in Section 4.
The Escrow Bank agrees immediately to invest $ of such amounts in the Escrow
Securities set forth in Exhibit C-2 hereto, and to deposit such Escrow Securities in the Housing
Escrow Fund and to retain the amount of $ in cash in the Housing Escrow Fund.
The Escrow Bank shall not have the power to sell, transfer, request the
redemption of or otherwise dispose of some or all of the Escrow Securities in the Escrow Funds
or to substitute other Escrow Securities therefor.
SECTION 6. As the principal of the Escrow Securities shall mature and be paid,
and the investment income and earnings thereon are paid, the Escrow Bank shall not reinvest
such moneys, except as may be required pursuant to the Verification Report. Such amounts shall
be applied by the Escrow Bank to the payment of the Escrow Requirements for the equal and
ratable benefit of the holders of the Prior Bonds, in accordance with the terms of the 2008
Nonhousing Indenture and the 2008 Housing Indenture.
SECTION 7. The Successor Agency has caused schedules to be prepared
relating to the sufficiency of the anticipated receipts from the Escrow Securities listed in Exhibit
B to pay the Escrow Requirements.
SECTION 8. The Successor Agency hereby directs and the Escrow Bank hereby
agrees that the Escrow Bank will take all the actions required to be taken by it hereunder, in
order to effectuate this Escrow Agreement. The liability of the Escrow Bank for the payment of
the Escrow Requirements shall be limited to the application, in accordance with this Escrow
Agreement, of the principal amount of the Escrow Securities and the interest earnings thereon
available for such purposes in the Escrow Fund.
3
SECTION 9. The Successor Agency irrevocably instructs the Escrow Bank to
pay to the Prior Trustee, on the Redemption Date, from amounts held in the 2008 Nonhousing
Escrow Fund, the amount equal to the redemption price on the 2008 Nonhousing Bonds called
for redemption on the Redemption Date, plus the interest accrued thereon, if any, to the
Redemption Date, as well as the regularly scheduled debt service payments on the 2008
Nonhousing Bonds through October 1, 2018 in the amounts set forth in Exhibit B-1. The
Successor Agency hereby instructs the Escrow Bank to mail a notice of defeasance of the 2008
Nonhousing Bonds to The Depository Trust Company, the Insurer, if any, Information Services
and the Owners of the 2008 Nonhousing Bonds in the manner provided in the 2008 Nonhousing
Indenture in the form attached hereto as Exhibit D-1. The Successor Agency hereby further
instructs the Escrow Bank to mail notice of redemption of the 2008 Nonhousing Bonds to The
Depository Trust Company, the Insurer, if any, Information Services and the Owners of the 2008
Nonhousing Bonds in the manner provided in the 2008 Nonhousing Indenture substantially in
the form attached hereto as Exhibit E-1 at least 30 but not more than 60 days prior to the
Redemption Date.
The Successor Agency irrevocably instructs the Escrow Bank to pay to the Prior
Trustee, on the Redemption Date, from amounts held in the 2008 Housing Escrow Fund, the
amount equal to the redemption price on the 2008 Housing Bonds called for redemption on the
Redemption Date, plus the interest accrued thereon, if any, to the Redemption Date, as well as
the regularly scheduled debt service payments on the 2008 Housing Bonds through October 1,
2018 in the amounts set forth in Exhibit B-2. The Successor Agency hereby instructs the Escrow
Bank to mail a notice of defeasance of the 2008 Housing Bonds to The Depository Trust
Company, the Insurer, if any, Information Services and the Owners of the 2008 Housing Bonds
in the manner provided in the 2008 Housing Indenture in the form attached hereto as Exhibit D-
2. The Successor Agency hereby further instructs the Escrow Bank to mail notice of redemption
of the 2008 Housing Bonds to The Depository Trust Company, the Insurer, if any, Information
Services and the Owners of the 2008 Housing Bonds in the manner provided in the 2008
Housing Indenture substantially in the form attached hereto as Exhibit E-2 at least 30 but not
more than 60 days prior to the Redemption Date.
SECTION 10. The trust hereby created shall be irrevocable and the holders of
the 2008 Nonhousing Bonds shall have an express lien limited to all moneys and Escrow
Securities in the 2008 Nonhousing Escrow Fund, including the interest earnings thereon, until
paid out, used and applied in accordance with this Escrow Agreement.
The trust hereby created shall be irrevocable and the holders of the 2008 Housing
Bonds shall have an express lien limited to all moneys and Escrow Securities in the 2008
Housing Escrow Fund, including the interest earnings thereon, until paid out, used and applied in
accordance with this Escrow Agreement.
SECTION 11. This Agreement is made pursuant to and in furtherance of the
Prior Indentures and for the benefit of the Successor Agency and the holders from time to time of
the Prior Bonds and it shall not be repealed, revoked, altered, amended or supplemented without
the written consent of all such holders and the written consent of the Escrow Bank, and the
Successor Agency; provided, however, that the Successor Agency and the Escrow Bank may,
without the consent of, or notice to, such holders enter into such amendments or supplements as
0
shall not be inconsistent with the terms and provisions of this Escrow Agreement, for any one or
more of the following purposes:
(a) to cure an ambiguity or formal defect or omission in this Escrow
Agreement;
(b) to grant to, or confer upon, the Escrow Bank for the benefit of the holders
of the Prior Bonds, any additional rights, remedies, powers or authority that may lawfully be
granted to, or conferred upon, such holders or the Escrow Bank; and
(c) to transfer to the Escrow Bank and make subject to this Escrow
Agreement additional funds, securities or properties.
The Escrow Bank and Prior Trustee shall be entitled to conclusively rely upon the
Verification Report, and upon an unqualified opinion of nationally recognized bond counsel with
respect to compliance with this Section, including the extent, if any, to which any change,
modification or addition affects the rights of the holders of the Prior Bonds, or that any
instrument executed hereunder complies with the conditions and provisions of this Section.
SECTION 12. In consideration of the services rendered by the Escrow Bank
under this Escrow Agreement, the Successor Agency agrees to and shall pay to the Escrow Bank
its fees, plus expenses, including all reasonable expenses, charges, counsel fees and expenses and
other disbursements incurred by it or by its attorneys, agents and employees in and about the
performance of their powers and duties hereunder, and the Escrow Bank shall have no lien
whatsoever upon any of the moneys or Escrow Securities in the Escrow Fund for the payment of
such proper fees and expenses.
SECTION 13. The Escrow Bank at the time acting hereunder may at any time
resign and be discharged from the trusts hereby created by giving not less than 60 days' written
notice to the Successor Agency and the Prior Trustee, specifying the date when such resignation
will take effect in the same manner as a notice is to be mailed pursuant to Section 9 hereof, but
no such resignation shall take effect unless a successor Escrow Bank shall have been appointed
by the holders of the Prior Bonds or by the Successor Agency as hereinafter provided and such
successor Escrow Bank shall have accepted such appointment, in which event such resignation
shall take effect immediately upon the appointment and acceptance of a successor Escrow Bank.
The Escrow Bank may be removed at any time by an instrument or concurrent
instruments in writing, delivered to the Escrow Bank and to the Successor Agency and the Prior
Trustee and signed by the holders of a majority in principal amount of the Prior Bonds.
In the event the Escrow Bank hereunder shall resign or be removed, or be
dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable
of acting hereunder, or in the case the Escrow Bank shall be taken under the control of any
public officer or officers, or of a receiver appointed by a court, a successor Escrow Bank may be
appointed by the holders of a majority in principal amount of the Prior Bonds, by an instrument
or concurrent instruments in writing, signed by such holders, or by their attorneys in fact, duly
authorized in writing; provided, nevertheless, that in any such event, the Successor Agency shall
appoint a temporary Escrow Bank to fill such vacancy until a successor Escrow Bank shall be
E
appointed by the holders of a majority in principal amount of the Prior Bonds, and any such
temporary Escrow Bank so appointed by the Successor Agency shall immediately and without
further act be superseded by the Escrow Bank so appointed by such holders.
In the event that no appointment of a successor Escrow Bank or a temporary
successor Escrow Bank shall have been made by such holders or the Successor Agency pursuant
to the foregoing provisions of this Section within 60 days after written notice of the removal or
resignation of the Escrow Bank has been given to the Successor Agency, the holder of any of the
Prior Bonds or any retiring Escrow Bank may apply to any court of competent jurisdiction for
the appointment of a successor Escrow Bank, and such court may thereupon, after such notice, if
any, as it shall deem proper, appoint a successor Escrow Bank.
No successor Escrow Bank shall be appointed unless such successor Escrow Bank
shall be a corporation or institution with trust powers organized under the laws of the United
States or any state, and shall have at the time of appointment capital and surplus of not less than
$50,000,000. For purpose of this Section 13, a corporation or institution with trust powers
organized under the laws of the United States or any state shall be deemed to have combined
capital and surplus of at least $50,000,000 if it has a combined capital surplus of at least
$20,000,000 and is a wholly owned subsidiary of a corporation having a combined capital and
surplus of at least $50,000,000.
Every successor Escrow Bank appointed hereunder shall execute, acknowledge
and deliver to its predecessor and to the Successor Agency and the District, an instrument in
writing accepting such appointment hereunder and thereupon such successor Escrow Bank
without any further act, deed or conveyance, shall become fully vested with all the rights,
immunities, powers, trust, duties and obligations of its predecessor; but such predecessor shall,
nevertheless, on the written request of such successor Escrow Bank or the Successor Agency
execute and deliver an instrument transferring to such successor Escrow Bank all the estates,
properties, rights, powers and trusts of such predecessor hereunder; and every predecessor
Escrow Bank shall deliver all securities and moneys held by it to its successor. Should any
transfer, assignment or instrument in writing from the Successor Agency be required by any
successor Escrow Bank for more fully and certainly vesting in such successor Escrow Bank the
estates, rights, powers and duties hereby vested or intended to be vested in the predecessor
Escrow Bank, any such transfer, assignment and instrument in writing shall, on request, be
executed, acknowledged and delivered by the Successor Agency.
Any corporation or association into which the Escrow Bank, or any successor to it
in the trusts created by this Escrow Agreement, may be merged or converted or with which it or
any successor to it may be consolidated, or any corporation or association resulting from any
merger, conversion, consolidation or reorganization to which the Escrow Bank or any successor
to it shall be a party or any successor to a substantial portion of the Escrow Bank's corporate
trust business, shall, if it meets the qualifications set forth in the fifth paragraph of this Section,
be the successor Escrow Bank under this Escrow Agreement without the execution or filing of
any paper or any other act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The liability of the Escrow Bank to make payments required in the Agreement
shall be limited to the moneys and Escrow Securities in the Escrow Fund.
0
SECTION 14. The Escrow Bank shall have no power or duty to invest any funds
held under this Escrow Agreement except as provided in Sections 5 and 6 hereof. The Escrow
Bank shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder
except as provided in this Escrow Agreement.
SECTION 15. To the extent permitted by law, the Successor Agency hereby
assumes liability for, and hereby agrees (whether or not any of the transactions contemplated
hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Bank and its
successors, assigns, officers, directors, agents, employees and servants, from and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and
disbursements (including reasonable legal fees and disbursements) of whatsoever kind and
nature which may be imposed on, incurred by, or asserted against, the Escrow Bank at any time
(whether or not also indemnified against the same by the Successor Agency or any other person
under any other agreement or instrument, but without double indemnity) in any way relating to
or arising out of the execution, delivery and performance of this Escrow Agreement, the
establishment hereunder of the Escrow Funds, the acceptance of the funds and securities
deposited therein, the purchase of any securities to be purchased pursuant thereto, the retention
of such securities or the proceeds thereof and any payment, transfer or other application of
moneys or securities by the Escrow Bank in accordance with the provisions of this Escrow
Agreement. The Successor Agency shall not be required to indemnify the Escrow Bank against
the Escrow Bank's own negligence or willful misconduct or the negligence or willful misconduct
of the Escrow Bank's successors, assigns, agents and employees or the material breach by the
Escrow Bank of the terms of this Escrow Agreement. In no event shall the Successor Agency,
the Successor Agency or the Escrow Bank be liable to any person by reason of the transactions
contemplated hereby other than to each other as set forth in this Section. The indemnities
contained in this Section shall survive the termination of this Escrow Agreement and the
resignation or removal of the Escrow Bank.
SECTION 16. The recitals of fact contained in the "Whereas" clauses herein
shall be taken as the statements of the Successor Agency, and the Escrow Bank assumes no
responsibility for the correctness thereof. The Escrow Bank makes no representation as to the
sufficiency of the securities to be purchased pursuant hereto and any uninvested moneys to
accomplish the defeasance of the Prior Bonds pursuant to the Prior Indentures or to the validity
of this Escrow Agreement as to the Successor Agency and, except as otherwise provided herein,
the Escrow Bank shall incur no liability in respect thereof. The Escrow Bank shall not be liable
in connection with the performance of its duties under this Escrow Agreement except for its own
negligence or willful misconduct, and the duties and obligations of the Escrow Bank shall be
determined by the express provisions of this Escrow Agreement. The Escrow Bank may consult
with counsel, who may or may not be counsel to the Successor Agency, and in reliance upon the
written opinion of such counsel shall have full and complete authorization and protection in
respect of any action taken, suffered or omitted by it in good faith in accordance therewith.
Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or
established prior to taking, suffering, or omitting any action under this Escrow Agreement, such
matter (except the matters set forth herein as specifically requiring a certificate of a nationally
recognized firm of independent certified public accountants or an opinion of nationally
recognized bond counsel) may be deemed to be conclusively established by a written
certification of the Successor Agency. Whenever the Escrow Bank shall deem it necessary or
7
desirable that a matter specifically requiring a certificate of a nationally recognized firm of
independent certified public accountants or an opinion of nationally recognized bond counsel be
proved or established prior to taking, suffering, or omitting any such action, such matter may be
established only by such a certificate or such an opinion. The Escrow Bank shall incur no
liability for losses arising from any investment made pursuant to this Escrow Agreement.
In the event the Escrow Bank receives an instruction or direction from the
Successor Agency which is, in the Escrow Bank's opinion, ambiguous or in conflict with this
Escrow Agreement, the Escrow Bank may request clarification from the Successor Agency and
in the event such request causes a delay in the performance by the Escrow Bank of its duties
hereunder, such delay shall not constitute negligence or willful misconduct by the Escrow Bank.
The Escrow Bank may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval 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 Escrow Bank may
execute any of the trusts or powers hereunder or perform any duties hereunder either directly or
by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be
responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian
or nominee so appointed. Anything in this Escrow Agreement to the contrary notwithstanding,
in no event shall the Escrow Bank be liable for special, indirect, punitive or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow
Bank has been advised of the likelihood of such loss or damage and regardless of the form of
action.
No provision of this Escrow Agreement shall require the Escrow Bank to expend
or risk its own funds or otherwise incur any financial liability in the performance or exercise of
any of its duties hereunder, or in the exercise of its rights or powers.
The Successor Agency acknowledges that to the extent regulations of the
Comptroller of the Currency or other applicable regulatory entity grant the Successor Agency the
right to receive brokerage confirmations of security transactions as they occur, the Successor
Agency specifically waive receipt of such confirmations to the extent permitted by law. The
Escrow Bank will furnish the Successor Agency periodic cash transaction statements which
include detail for all investment transactions made by the Prior Trustee hereunder.
The Escrow Bank shall have the right to accept and act upon instructions,
including funds transfer instructions ("Instructions") given pursuant to this Escrow Agreement
and delivered using Electronic Means ("Electronic Means" shall mean the following
communications methods: e-mail, facsimile transmission, secure electronic transmission
containing applicable authorization codes, passwords and/or authentication keys issued by the
Escrow Bank, or another method or system specified by the Escrow Bank as available for use in
connection with its services hereunder); provided, however, that the Successor Agency shall
provide to the Escrow Bank an incumbency certificate listing officers with the authority to
provide such Instructions ("Authorized Officers") and containing specimen signatures of such
Authorized Officers, which incumbency certificate shall be amended by the Successor Agency
whenever a person is to be added or deleted from the listing. If the Successor Agency elects to
E
give the Escrow Bank Instructions using Electronic Means and the Escrow Bank in its discretion
elects to act upon such Instructions, the Escrow Bank's understanding of such Instructions shall
be deemed controlling. The Successor Agency understands and agrees that the Escrow Bank
cannot determine the identity of the actual sender of such Instructions and that the Escrow Bank
shall conclusively presume that directions that purport to have been sent by an Authorized
Officer listed on the incumbency certificate provided to the Escrow Bank have been sent by such
Authorized Officer. The Successor Agency shall be responsible for ensuring that only
Authorized Officers transmit such Instructions to the Escrow Bank and that the Successor
Agency and all Authorized Officers are solely responsible to safeguard the use and
confidentiality of applicable user and authorization codes, passwords and/or authentication keys
upon receipt by the Successor Agency. The Escrow Bank shall not be liable for any losses, costs
or expenses arising directly or indirectly from the Escrow Bank's reliance upon and compliance
with such Instructions notwithstanding such directions conflict or are inconsistent with a
subsequent written instruction. The Successor Agency agrees: (i) to assume all risks arising out
of the use of Electronic Means to submit Instructions to the Escrow Bank, including without
limitation the risk of the Escrow Bank acting on unauthorized Instructions, and the risk of
interception and misuse by third parties; (ii) that it is fully informed of the protections and risks
associated with the various methods of transmitting Instructions to the Escrow Bank and that
there may be more secure methods of transmitting Instructions than the method(s) selected by the
Successor Agency; (iii) that the security procedures (if any) to be followed in connection with its
transmission of Instructions provide to it a commercially reasonable degree of protection in light
of its particular needs and circumstances; and (iv) to notify the Escrow Bank immediately upon
learning of any compromise or unauthorized use of the security procedures.
SECTION 17. This Escrow Agreement shall terminate upon redemption of all
Prior Bonds on the Redemption Date. Upon such termination, all moneys remaining in the
Escrow Funds after payment of all fees and expenses of the Escrow Bank shall be released to the
Successor Agency.
SECTION 18. This Escrow Agreement is made in the State of California under
the Constitution and laws of the State of California and is to so be construed.
SECTION 19. If any one or more of the covenants or agreements provided in
this Escrow Agreement on the part of the Successor Agency or the Escrow Bank to be performed
should be determined by a court of competent jurisdiction to be contrary to law, such covenant or
agreement shall be deemed and construed to be severable from the remaining covenants and
agreements herein contained and shall in no way affect the validity of the remaining provisions
of this Escrow Agreement.
All
the covenants, promises and
agreements in this Escrow Agreement contained
by or on behalf of
the Successor Agency or by
or on behalf
of the Escrow Bank shall bind and
inure to the benefit
of their respective successors and assigns,
whether so expressed or not.
SECTION 20. This Escrow Agreement may be executed in several counterparts,
all or any of which shall be regarded for all purposes as one original and shall constitute and be
but one and the same instrument.
0
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement
to be executed by their duly authorized officers as of the date first -above written.
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY
OF SANTA CLARITA
LOZ
Chair
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Escrow Bank and
as Prior Trustee
Laz
Authorized Officer
10
Exhibit A
Verification Report
A-1
Exhibit B-1
2008 Nonhousing Bonds Escrow Schedule
Date Principal Interest Amount Amount
Amount Amount Redeemed Payable
B-1
Exhibit B-2
2008 Housing Bonds Escrow Schedule
Date Principal Interest Amount Amount
Amount Amount Redeemed Payable
B-2
Exhibit C-1
2008 Nonhousing Schedule of Escrow Securities
Principal Amount Security Maturity Date
C-1
Coupon
Total
Purchase Price
Exhibit C-2
2008 Housing Schedule of Escrow Securities
Principal Amount Security Maturity Date
C-2
Coupon
Total
Purchase Price
Exhibit D-1
Form of Notice of Defeasance
NOTICE OF DEFEASANCE TO THE OWNERS OF
THE CITY OF SANTA CLARITA REDEVELOPMENT AGENCY
TAX ALLOCATION BONDS, SERIES 2008
(NEWALL REDEVELOPMENT PROJECT AREA)
NOTICE IS HEREBY GIVEN to the owners of the above -captioned bonds that with respect to such
bonds as specified in the table below (the "Bonds") of the City of Santa Clarita Redevelopment Agency
(the "Prior Agency"), the Successor Agency to the Redevelopment Agency of the City of Santa Clarita
(the "Successor Agency") has deposited with The Bank of New York Mellon Trust Company, N.A., as
Escrow Bank (the "Escrow Bank") for the Bonds, cash and/or direct non -callable obligations of the
United States of America, securities fully and unconditionally guaranteed as to the timely payment of
principal and interest by the United States of America, to which direct obligation or guarantee of the full
faith and credit of the United States of America has been pledged, Refcorp interest strips, CATS, TIGRS,
STRPS and/or defeased municipal bonds rated AAA by S&P or Aaa by Moody's, satisfying the criteria
set forth in the Indenture of Trust, dated as of June 1, 2008 (the "Indenture"), by and between the
Successor Agency and The Bank of New York Trust Company, N.A., predecessor -in -interest to The Bank
of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), pursuant to which the Bonds were
issued, the principal of and interest thereon which when due, together with amounts held as cash, will
provide moneys sufficient (i) to pay principal of and interest on the Bonds through October 1, 2018 and
(ii) to pay on October 1, 2018 the redemption price (i.e., 100% of the principal amount thereof) of the
Bonds maturing on and after October 1, 2018, together with accrued interest thereon to such redemption
date. In accordance with the Indenture, all obligations of the Successor Agency and the Trustee with
respect to the Bonds shall cease and terminate, except only the obligation of the Trustee to pay or cause to
be paid all payments of interest on and principal of the Bonds from moneys on deposit with the Escrow
Bank and available as aforesaid.
Maturity
Date Principal
(October 1) Amount
DATED: December _, 2016
Maturity
CUSIPt Number Date Principal
(Base No: ) (October 1) Amount
CUSIPt Number
(Base No: )
SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF SANTA CLARITA
By: THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Escrow Bank
D-1
Exhibit D-2
Form of Notice of Defeasance
NOTICE OF DEFEASANCE TO THE OWNERS OF
THE CITY OF SANTA CLARITA REDEVELOPMENT AGENCY
HOUSING SET-ASIDE TAX ALLOCATION BONDS, SERIES 2008
NOTICE IS HEREBY GIVEN to the owners of the above -captioned bonds that with respect to such
bonds as specified in the table below (the "Bonds") of the City of Santa Clarita Redevelopment Agency
(the "Prior Agency"), the Successor Agency to the Redevelopment Agency of the City of Santa Clarita
(the "Successor Agency") has deposited with The Bank of New York Mellon Trust Company, N.A., as
Escrow Bank (the "Escrow Bank") for the Bonds, cash and/or direct non -callable obligations of the
United States of America, securities fully and unconditionally guaranteed as to the timely payment of
principal and interest by the United States of America, to which direct obligation or guarantee of the full
faith and credit of the United States of America has been pledged, Refcorp interest strips, CATS, TIGRS,
STRPS and/or defeased municipal bonds rated AAA by S&P or Aaa by Moody's, satisfying the criteria
set forth in the Indenture of Trust, dated as of June 1, 2008 (the "Indenture"), by and between the
Successor Agency and The Bank of New York Trust Company, N.A., predecessor -in -interest to The Bank
of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), pursuant to which the Bonds were
issued, the principal of and interest thereon which when due, together with amounts held as cash, will
provide moneys sufficient (i) to pay principal of and interest on the Bonds through October 1, 2018 and
(ii) to pay on October 1, 2018 the redemption price (i.e., 100% of the principal amount thereof) of the
Bonds maturing on and after October 1, 2018, together with accrued interest thereon to such redemption
date. In accordance with the Indenture, all obligations of the Successor Agency and the Trustee with
respect to the Bonds shall cease and terminate, except only the obligation of the Trustee to pay or cause to
be paid all payments of interest on and principal of the Bonds from moneys on deposit with the Escrow
Bank and available as aforesaid.
Maturity
Date Principal
(October 1) Amount
DATED: December _, 2016
Maturity
CUSIPt Number Date Principal
(Base No: ) (October 1) Amount
CUSIPt Number
(Base No: )
SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF SANTA CLARITA
By: THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Escrow Bank
D-2
Exhibit E-1
Form of Notice of Optional Redemption
CITY OF SANTA CLARITA REDEVELOPMENT AGENCY
TAX ALLOCATION BONDS, SERIES 2008
(NEWHALL REDEVELOPMENT PROJECT AREA)
NOTICE IS HEREBY GIVEN to the owners of the above -captioned bonds that
the bonds listed below (the "Bonds"), executed and delivered pursuant to the Indenture of Trust,
dated as of June 1, 2008 (the "Indenture"), by and between the City of Santa Clarita
Redevelopment Agency (the "Prior Agency"), and The Bank of New York Trust Company,
N.A., predecessor -in -interest to The Bank of New York Mellon Trust Company, N.A., as trustee
(the "Trustee"), have been called for redemption on October 1, 2018 (the "Redemption Date"),
pursuant to the provisions of the Indenture.
The
Bonds called
for redemption have the maturity date,
principal amount,
CUSIP Number and
redemption price as set forth below:
Maturity
CUSIPt
Maturity
CUSIPt
Date Principal
SBase No:
Redemption Date Principal
(Base No: Redemption
(October 1) Amount
.1
Price (October 1) Amount
2
Price
Owners of the Bonds should surrender said Bonds on the Redemption Date at the
following address:
By Mail, Hand or Overnight:
if by First Class/Registered/Certified: if by Express Delivery: if by Hand
The Bank of New York Mellon The Bank of New York Mellon The Bank of New York Mellon
Global Corporate Trust Global Corporate Trust Global Corporate Trust
P.O. Box 396 111 Sanders Creek Parkway Corporate Trust Window
East Syracuse, New York 13057 East Syracuse, New York 13057 101 Barclay Street 1st Floor East
New York, New York 10286
E-1-1
Any questions may be directed to:
The Bank of New York Mellon Trust Company, N.A.
400 S. Hope Street, Suite 500
Los Angeles, California 90071
Corporate Trust Department
Telephone: (213) 630-6465
IMPORTANT NOTICE. Under the provisions of the Economic Growth and Tax
Relief Reconciliation Act of 2001 (the "Act'), the Trustee may be obligated to withhold 30% of
the redemption price from any Bond holder who has failed to furnish the Trustee with a valid
taxpayer identification number and a certification that such Bond holder is not subject to backup
withholding under the Act. Bond holders who wish to avoid the application of these provisions
should submit a completed Form W-9 when presenting their Bonds. If you have any questions,
please call The Bank of New York at 1-800-548-5075.
Neither the Successor Agency or the Trustee shall be held responsible for the
selection or use of the CUSIP number, nor is any representation made as to its corrections
indicated in this Notice of Optional Redemption. It is included solely for convenience of the
owners of the Bonds.
Failure to receive this Notice of Optional Redemption or any immaterial defect
contained herein shall not affect the sufficiency of the redemption proceedings as provided in the
Indenture.
DATED:
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
as Trustee
E-1-2
Exhibit E-2
Form of Notice of Optional Redemption
CITY OF SANTA CLARITA REDEVELOPMENT AGENCY
HOUSING SET-ASIDE TAX ALLOCATION BONDS, SERIES 2008
NOTICE IS HEREBY GIVEN to the owners of the above -captioned bonds that
the bonds listed below (the "Bonds"), executed and delivered pursuant to the Indenture of Trust,
dated as of June 1, 2008 (the "Indenture"), by and between the City of Santa Clarita
Redevelopment Agency (the "Prior Agency"), and The Bank of New York Trust Company,
N.A., predecessor -in -interest to The Bank of New York Mellon Trust Company, N.A., as trustee
(the "Trustee"), have been called for redemption on October 1, 2018 (the "Redemption Date"),
pursuant to the provisions of the Indenture.
The
Bonds called
for redemption have the maturity date,
principal amount,
CUSIP Number and
redemption price as set forth below:
Maturity
CUSIPt
Maturity
CUSIPt
Date Principal
jBase No:
Redemption Date Principal
jBase No: Redemption
(October 1) Amount
.1
Price (October 1) Amount
2 Price
Owners of the Bonds should surrender said Bonds on the Redemption Date at the
following address:
By Mail, Hand or Overnight:
if by First Class/Registered/Certified: if by Express Delivery: if by Hand
The Bank of New York Mellon The Bank of New York Mellon The Bank of New York Mellon
Global Corporate Trust Global Corporate Trust Global Corporate Trust
P.O. Box 396 111 Sanders Creek Parkway Corporate Trust Window
East Syracuse, New York 13057 East Syracuse, New York 13057 101 Barclay Street 1st Floor East
New York, New York 10286
E-2-1
Any questions may be directed to:
The Bank of New York Mellon Trust Company, N.A.
400 S. Hope Street, Suite 500
Los Angeles, California 90071
Corporate Trust Department
Telephone: (213) 630-6465
IMPORTANT NOTICE. Under the provisions of the Economic Growth and Tax
Relief Reconciliation Act of 2001 (the "Act'), the Trustee may be obligated to withhold 30% of
the redemption price from any Bond holder who has failed to furnish the Trustee with a valid
taxpayer identification number and a certification that such Bond holder is not subject to backup
withholding under the Act. Bond holders who wish to avoid the application of these provisions
should submit a completed Form W-9 when presenting their Bonds. If you have any questions,
please call The Bank of New York at 1-800-548-5075.
Neither the Successor Agency or the Trustee shall be held responsible for the
selection or use of the CUSIP number, nor is any representation made as to its corrections
indicated in this Notice of Optional Redemption. It is included solely for convenience of the
owners of the Bonds.
Failure to receive this Notice of Optional Redemption or any immaterial defect
contained herein shall not affect the sufficiency of the redemption proceedings as provided in the
Indenture.
DATED:
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
as Trustee
E-2-2
$[principal amount]
Successor Agency to the Redevelopment Agency of the City of Santa Clarita
Tax Allocation Refunding Bonds
Series 2016
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (this "Disclosure Certificate"), dated December _, 2016,
is executed and delivered by the Successor Agency to the Redevelopment Agency of the City of Santa
Clarita (the "Successor Agency"), for the benefit of the Holders (hereinafter defined) of the Bonds
(hereinafter defined) in order to provide certain continuing disclosure with respect to the Bonds in
accordance with Rule 15c2-12 of the United States Securities and Exchange Commission under the
Securities Exchange Act of 1934, as the same may be amended from time to time (the "Rule").
SECTION I. Definitions. Capitalized terms not otherwise defined in this Disclosure
Certificate shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in
the Official Statement (hereinafter defined). The capitalized terms shall have the following meanings:
"Annual Report" means an Annual Report described in and consistent with Section 3 of this
Disclosure Certificate.
"Annual Filing Date" means the date, set in Section 2(a) and Section 2(f), by which the Annual
Report is to be filed with the MSRB.
"Annual Financial Information" means annual financial information as such term is used in
paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure Certificate.
"Audited Financial Statements" means the financial statements (if any) of the City for the prior
fiscal year, certified by an independent auditor as prepared in accordance with generally accepted
accounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and
specified in Section 3(b) of this Disclosure Certificate.
"Bonds" means $[principal amount] Successor Agency to the Redevelopment Agency of the City
of Santa Clarita Tax Allocation Refunding Bonds, Series 2016.
"Certification" means a written certification of compliance signed by the Disclosure
Representative stating that the Annual Report, Audited Financial Statements, Notice Event notice,
or Failure to File Event notice delivered to the Disclosure Dissemination Agent is the Annual
Report, Audited Financial Statements, Notice Event notice, or Failure to File Event notice,
required to be submitted to the MSRB under this Disclosure Certificate. A Certification shall
accompany each such document submitted to the Disclosure Dissemination Agent by the City and
include the full name of the Bonds and the 9 -digit CUSIP numbers for all Bonds to which the
document applies.
"Disclosure Representative" means the Treasurer of the Successor Agency or his or her designee,
or such other person as the Successor Agency shall designate in writing to the Disclosure
Dissemination Agent from time to time as the person responsible for providing Information to the
Disclosure Dissemination Agent.
"Disclosure Dissemination Agent" shall mean Digital Assurance Certification LLC, or any
successor Dissemination Agent designated in writing by the District and which has filed with the
District a written acceptance of such designation.
"Failure to File Event" means the Successor Agency's failure to file an Annual Report on or
before the Annual Filing Date.
"Force Majeure Event" means: (i) acts of God, war, or terrorist action; (ii) failure or shut -down of
the Electronic Municipal Market Access system maintained by the MSRB; or (iii) to the extent
beyond the Disclosure Dissemination Agent's reasonable control, interruptions in
telecommunications or utilities services, failure, malfunction or error of any telecommunications,
computer or other electrical, mechanical or technological application, service or system, computer
virus, interruptions in Internet service or telephone service (including due to a virus, electrical
delivery problem or similar occurrence) that affect Internet users generally, or in the local area in
which the Disclosure Dissemination Agent or the MSRB is located, or acts of any government,
regulatory or any other competent authority the effect of which is to prohibit the Disclosure
Dissemination Agent from performance of its obligations under this Disclosure Certificate.
"Holder" means any person (i) having the power, directly or indirectly, to vote or consent with
respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through
nominees, depositories or other intermediaries) or (ii) treated as the owner of any Bonds for
federal income tax purposes.
"Information" means, collectively, the Annual Reports, the Audited Financial Statements (if any),
the Notice Event notices, and the Failure to File Event notices.
"MSRB" means the Municipal Securities Rulemaking Board established pursuant to
Section 1513(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or
authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule.
Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings
with the MSRB are to be made through the Electronic Municipal Marketplace Access (EMMA)
website of the MSRB, currently located at http://emma.msrb.org.
"Notice Event" means any of the events enumerated in paragraph (b)(5)(i)(C) of the Rule and
listed in Section 4(a) of this Disclosure Certificate.
"Obligated Person" means any person, including the Successor Agency, who is either generally
or through an enterprise, fund, or account of such person committed by contract or other
arrangement to support payment of all, or part of the obligations on the Bonds (other than
providers of municipal bond insurance, letters of credit, or other liquidity facilities). With respect
to the Bonds, only the Successor Agency constitutes the Obligated Person.
"Official Statement" means that Official Statement, dated November _, 2016, prepared by the
Successor Agency in connection with the Bonds.
"Trustee" means The Bank of New York Mellon Trust Company, N.A., as trustee under the
Indenture, dated as of December 1, 2016, by and between the Successor Agency and the Trustee,
as amended and supplemented, providing for the issuance of the Bonds.
SECTION 2. Provision of Annual Reports and Other Disclosures.
(a) The Successor Agency shall provide, annually, an electronic copy of the Annual Report
and Certification to the Disclosure Dissemination Agent, together with a copy for the Trustee, not later
than the Annual Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and the
Certification, the Disclosure Dissemination Agent shall provide an Annual Report to the MSRB no later
than March 1 following the end of each fiscal year, commencing with the report for Fiscal Year 2016-17.
Such date and each anniversary thereof is the Annual Filing Date. The Annual Report may be submitted
as a single document or as separate documents comprising a package, and may cross-reference other
information as provided in Section 3 of this Disclosure Certificate.
(b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure
Dissemination Agent has not received a copy of the Annual Report and Certification, the Disclosure
Dissemination Agent shall contact the Disclosure Representative by telephone and in writing (which may
be by e-mail) to remind the Successor Agency of its undertaking to provide the Annual Report pursuant to
Section 2(a). Upon such reminder, the Disclosure Representative shall either (i) provide the Disclosure
Dissemination Agent with an electronic copy of the Annual Report and the Certification no later than two
(2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in
writing that the Successor Agency will not be able to file the Annual Report within the time required
under this Disclosure Certificate, state the date by which the Annual Report for such year will be provided
and instruct the Disclosure Dissemination Agent that a Failure to File Event has occurred and to
immediately send a notice to the MSRB in substantially the form attached as Exhibit A.
(c) If the Disclosure Dissemination Agent has not received an Annual Report and
Certification by 6:00 p.m. Eastern time on the Annual Filing Date (or, if such Annual Filing Date falls on
a Saturday, Sunday or holiday, then the first business day thereafter) for the Annual Report, a Failure to
File Event shall have occurred and the Successor Agency irrevocably directs the Disclosure
Dissemination Agent to immediately send a notice to the MSRB in substantially the form attached as
Exhibit A without reference to the anticipated filing date for the Annual Report.
(d) If Audited Financial Statements of the Successor Agency are prepared but not available
prior to the Annual Filing Date, the Successor Agency shall, when the Audited Financial Statements are
available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent,
accompanied by a Certification, together with a copy for the Trustee, for filing with the MSRB.
(e) The Disclosure Dissemination Agent shall:
(i) verify the filing specifications of the MSRB each year prior to the Annual Filing
Date;
(ii) upon receipt, promptly file each Annual Report received under Sections 2(a) and
2(b) with the MSRB;
(iii) upon receipt, promptly file each Audited Financial Statement received under
Section 2(d) with the MSRB;
(iv) upon receipt, promptly file the text of each Notice Event received under Sections
4(a) and 4(b)(ii) with the MSRB, identifying the Notice Event as instructed by
the Successor Agency pursuant to Section 4(a) or 4(b)(ii) (being any of the
categories set forth below) when filing pursuant to Section 4(c) of this Disclosure
Certificate:
1. "Principal and interest payment delinquencies;"
2. "Non -Payment related defaults, if material;"
3. "Unscheduled draws on debt service reserves reflecting financial
difficulties;"
4. "Unscheduled draws on credit enhancements reflecting financial
difficulties;"
5. "Substitution of credit or liquidity providers, or their failure to perform;"
6. "Adverse tax opinions, IRS notices or events affecting the tax status of
the security;"
7. "Modifications to rights of securities holders, if material;"
8. "Bond calls, if material;"
9. "Defeasances;"
10. "Release, substitution, or sale of property securing repayment of the
securities, if material;"
it. "Rating changes;"
12. "Tender offers;"
13. "Bankruptcy, insolvency, receivership or similar event of the obligated
person;"
14. "Merger, consolidation, or acquisition of the obligated person, if
material;" and
15. "Appointment of a successor or additional trustee, or the change of name
of a trustee, if material;"
(v) upon receipt (or irrevocable direction pursuant to Section 2(c) of this Disclosure
Certificate, as applicable), promptly file a completed copy of Exhibit A to this
Disclosure Certificate with the MSRB, identifying the filing as "Failure to
provide annual financial information as required" when filing pursuant to Section
2(b)(ii) or Section 2(c) of this Disclosure Certificate;
(f) The Successor Agency may adjust the Annual Filing Date upon change of its fiscal year
by providing written notice of such change and the new Annual Filing Date to the Disclosure
Dissemination Agent, Trustee (if any) and the MSRB, provided that the period between the existing
Annual Filing Date and new Annual Filing Date shall not exceed one year.
(g) Any Information received by the Disclosure Dissemination Agent before 6:00 p.m.
Eastern time on any business day that it is required to file with the MSRB pursuant to the terms of this
Disclosure Certificate and that is accompanied by a Certification and all other information required by the
terms of this Disclosure Certificate will be filed by the Disclosure Dissemination Agent with the MSRB
El
no later than 11:59 p.m. Eastern time on the same business day; provided, however, the Disclosure
Dissemination Agent shall have no liability for any delay in filing with the MSRB if such delay is caused
by a Force Majeure Event provided that the Disclosure Dissemination Agent uses reasonable efforts to
make any such filing as soon as possible.
SECTION 3. Content of Annual Reports.
(a) Each Annual Report shall contain an update of the following information with respect to
the Successor Agency's preceding Fiscal Year (to the extent not included in the audited financial
statements described in paragraph (b) below):
(i) An update for the last fiscal year of the financial information in "Table 4 — Ten
Largest Property Taxpayers," and "Table 5 — Historical Tax Increment Receipts"
located in the Official Statement; and
(ii) an update on "THE REDEVELOPMENT PROJECT AREA- Assessment
Appeals" (to the extent based on actual appeal information and not estimates)
located in the Official Statement.
(b) Audited Financial Statements prepared in accordance with generally accepted accounting
principles ("GAAP") as described in the Official Statement will also be included in the Annual Report. If
audited financial statements are not available, then, unaudited financial statements, prepared in
accordance with GAAP as described in the Official Statement will be included in the Annual Report.
Audited Financial Statements (if any) will be provided pursuant to Section 2(d).
Any or all of the items listed above may be included by specific reference to other documents,
including official statements of debt issues with respect to which the Successor Agency is an Obligated
Person, which have been previously filed with the Securities and Exchange Commission or available to
the public on the MSRB Internet website. If the document incorporated by reference is a final official
statement, it must be available from the MSRB. The Successor Agency will clearly identify each such
document so incorporated by reference.
Any Annual Financial Information containing modified operating data or financial information is
required to explain, in narrative form, the reasons for the modification and the impact of the change in the
type of operating data or financial information being provided.
SECTION 4. Reporting of Notice Events.
(a) The occurrence of any of the following events with respect to the Bonds constitutes a
Notice Event:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
TEB) or other material notices or determinations with respect to the tax status of
the Bonds, or other material events affecting the tax status of the Bonds;
7. Modifications to rights of Bond holders, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds, if
material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the Obligated Person;
Note to subsection (a)(12) of this Section 4: For the purposes of the event
described in subsection (a)(12) of this Section 4, the event is considered to occur
when any of the following occur: the appointment of a receiver, fiscal agent or
similar officer for an Obligated Person in a proceeding under the U.S.
Bankruptcy Code or in any other proceeding under state or federal law in which a
court or governmental authority has assumed jurisdiction over substantially all of
the assets or business of the Obligated Person, or if such jurisdiction has been
assumed by leaving the existing governing body and officials or officers in
possession but subject to the supervision and orders of a court or governmental
authority, or the entry of an order confirming a plan of reorganization,
arrangement or liquidation by a court or governmental authority having
supervision or jurisdiction over substantially all of the assets or business of the
Obligated Person.
13. The consummation of a merger, consolidation, or acquisition involving an
Obligated Person or the sale of all or substantially all of the assets of the
Obligated Person, other than in the ordinary course of business, the entry into a
definitive Certificate to undertake such an action or the termination of a
definitive Certificate relating to any such actions, other than pursuant to its terms,
if material; and
14. Appointment of a successor or additional trustee or the change of name of a
trustee, if material.
The Successor Agency shall, in a timely manner not in excess of ten business days after its
occurrence, notify the Disclosure Dissemination Agent in writing of the occurrence of a Notice Event.
Such notice shall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to
subsection (c) and shall be accompanied by a Certification. Such notice or Certification shall identify the
Notice Event that has occurred (which shall be any of the categories set forth in Section 2(e)(iv) of this
Disclosure Certificate), include the text of the disclosure that the Successor Agency desires to make,
contain the written authorization of the Successor Agency for the Disclosure Dissemination Agent to
disseminate such information, and identify the date the Successor Agency desires for the Disclosure
0
Dissemination Agent to disseminate the information (provided that such date is not later than the tenth
business day after the occurrence of the Notice Event).
(b) The Disclosure Dissemination Agent is under no obligation to notify the Successor
Agency or the Disclosure Representative of an event that may constitute a Notice Event. In the event the
Disclosure Dissemination Agent so notifies the Disclosure Representative, the Disclosure Representative
will within two business days of receipt of such notice (but in any event not later than the tenth business
day after the occurrence of the Notice Event, if the Successor Agency determines that a Notice Event has
occurred), instruct the Disclosure Dissemination Agent that (i) a Notice Event has not occurred and no
filing is to be made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to
report the occurrence pursuant to subsection (c) of this Section 4, together with a Certification. Such
Certification shall identify the Notice Event that has occurred (which shall be any of the categories set
forth in Section 2(e)(iv) of this Disclosure Certificate), include the text of the disclosure that the
Successor Agency desires to make, contain the written authorization of the Successor Agency for the
Disclosure Dissemination Agent to disseminate such information, and identify the date the Successor
Agency desires for the Disclosure Dissemination Agent to disseminate the information (provided that
such date is not later than the tenth business day after the occurrence of the Notice Event).
(c) If the Disclosure Dissemination Agent has been instructed by the Successor Agency as
prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, the
Disclosure Dissemination Agent shall promptly file a notice of such occurrence with the MSRB in
accordance with Section 2(e)(iv) hereof.
SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure
Dissemination Agent, including but not limited to Annual Reports, documents incorporated by reference
to the Annual Reports, Audited Financial Statements, Notice Event notices, and Failure to File Event
notices, the Successor Agency shall indicate the full name of the Bonds and the 9 -digit CUSIP numbers
for the Bonds as to which the provided information relates.
SECTION 6. Additional Disclosure Obligations. The Successor Agency acknowledges and
understands that other state and federal laws, including but not limited to the Securities Act of 1933 and
Rule lOb-5 promulgated under the Securities Exchange Act of 1934, may apply to the Successor Agency,
and that the failure of the Disclosure Dissemination Agent to so advise the Successor Agency shall not
constitute a breach by the Disclosure Dissemination Agent of any of its duties and responsibilities under
this Disclosure Certificate. The Successor Agency acknowledges and understands that the duties of the
Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating
information as described in this Disclosure Certificate.
SECTION 7. Voluntary Filings. Nothing in this Disclosure Certificate shall be deemed to
prevent the Successor Agency from disseminating any other information through the Disclosure
Dissemination Agent using the means of dissemination set forth in this Disclosure Certificate or including
any other information in any Annual Report, Audited Financial Statements, Notice Event notice, or
Failure to File Event notice, in addition to that required by this Disclosure Certificate. If the Successor
Agency chooses to include any information in any Annual Report, Audited Financial Statements, Notice
Event notice, or Failure to File Event notice in addition to that which is specifically required by this
Disclosure Certificate, the Successor Agency shall have no obligation under this Disclosure Certificate to
update such information or include it in any future Annual Report, Audited Financial Statements, Notice
Event notice, or Failure to File Event notice.
SECTION
8. Termination of
Reporting Obligation.
The obligations
of the Successor Agency
and the Disclosure
Dissemination Agent under this Disclosure
Certificate shall
terminate with respect to
7
the Bonds upon the legal defeasance, prior redemption or payment in full of all of the Bonds, when the
Successor Agency is no longer an Obligated Person with respect to such Bonds, or upon delivery by the
Disclosure Representative to the Disclosure Dissemination Agent of an opinion of nationally recognized
bond counsel to the effect that continuing disclosure is no longer required with respect to such Bonds.
SECTION 9. Disclosure Dissemination Agent. Digital Assurance Certification LLC will serve
as the initial Disclosure Dissemination Agent under this Disclosure Certificate. The Successor Agency
may, upon thirty days written notice to the Disclosure Dissemination Agent and the Trustee, replace or
appoint a successor Disclosure Dissemination Agent. Upon termination of the Disclosure Dissemination
Agent, whether by notice of the Successor Agency or the Disclosure Dissemination Agent, the Successor
Agency agrees to appoint a successor Disclosure Dissemination Agent or, alternately, agrees to assume all
responsibilities of Disclosure Dissemination Agent under this Disclosure Certificate for the benefit of the
Holders of the Bonds. Notwithstanding any replacement or appointment of a successor, the Successor
Agency shall remain liable, until payment in full, for any and all sums owed and payable to the Disclosure
Dissemination Agent. The Disclosure Dissemination Agent may resign at any time by providing thirty
days' prior written notice to the Successor Agency.
SECTION 10. Remedies in Event of Default. In the event of a failure of the Successor Agency
or the Disclosure Dissemination Agent to comply with any provision of this Disclosure Certificate, the
Holders' rights to enforce the provisions of this Disclosure Certificate shall be limited solely to a right, by
action in mandamus or for specific performance, to compel performance of the parties' obligation under
this Disclosure Certificate. Any failure by a party to perform in accordance with this Disclosure
Certificate shall not constitute a default on the Bonds or under any other document relating to the Bonds,
and all rights and remedies shall be limited to those expressly stated herein.
SECTION 11. Duties, Immunities and Liabilities of Disclosure Dissemination Agent.
(a) Article VI of the Indenture is hereby made applicable to this Disclosure Certificate as if
this Disclosure Certificate were (solely for this purpose) contained in the Indenture. The Disclosure
Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the
Trustee thereunder. The Disclosure Dissemination Agent shall have only such duties as are specifically
set forth in this Disclosure Certificate. and the Successor Agency agrees to indemnify and save the
Disclosure Dissemination Agent, the Trustee, their officers, directors, employees and agents, harmless
against any loss, expense and liabilities which it may incur arising out of the disclosure of information
pursuant to this Disclosure Certificate or arising out of or in the exercise or performance of its powers and
duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any
claim of liability, but excluding liabilities due to the Disclosure Dissemination Agent's negligence or
willful misconduct. The Disclosure Dissemination Agent's obligation to deliver the information at the
times and with the contents described herein shall be limited to the extent the Successor Agency has
provided such information to the Disclosure Dissemination Agent as required by this Disclosure
Certificate. The Disclosure Dissemination Agent shall have no duty with respect to the content of any
disclosures or notice made pursuant to the terms hereof. The Disclosure Dissemination Agent shall have
no duty or obligation to review or verify any Information or any other information, disclosures or notices
provided to it by the Successor Agency and shall not be deemed to be acting in any fiduciary capacity for
the Successor Agency, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent
shall have no responsibility for the Successor Agency's failure to report to the Disclosure Dissemination
Agent a Notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent
shall have no duty to determine, or liability for failing to determine, whether the Successor Agency has
complied with this Disclosure Certificate. The Disclosure Dissemination Agent may conclusively rely
upon certifications of the Successor Agency at all times.
11
The obligations of the Successor Agency under this Section shall survive resignation or removal
of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds.
(b) The Disclosure Dissemination Agent may, from time to time, consult with legal counsel
(either in-house or external) of its own choosing in the event of any disagreement or controversy, or
question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder,
and shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such
legal counsel. The reasonable fees and expenses of such counsel shall be payable by the Successor
Agency.
(c) All documents, reports, notices, statements, information and other materials provided to
the MSRB under this Disclosure Certificate shall be provided in an electronic format and accompanied by
identifying information as prescribed by the MSRB.
SECTION 12. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Successor Agency and the Disclosure Dissemination Agent may amend this Disclosure
Certificate and any provision of this Disclosure Certificate may be waived, if such amendment or waiver
is supported by an opinion of counsel expert in federal securities laws acceptable to both the Successor
Agency and the Disclosure Dissemination Agent to the effect that such amendment or waiver does not
materially impair the interests of Holders of the Bonds and would not, in and of itself, cause the
undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof
but taking into account any subsequent change in or official interpretation of the Rule; provided neither
the Successor Agency nor the Disclosure Dissemination Agent shall be obligated to agree to any
amendment modifying their respective duties or obligations without their consent thereto.
Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the
right but not the duty to adopt amendments to this Disclosure Certificate necessary to comply with
modifications to and interpretations of the provisions of the Rule as announced by the Securities and
Exchange Commission from time to time by giving not less than 20 days prior written notice of the intent
to do so together with a copy of the proposed amendment to the Successor Agency. No such amendment
shall become effective if the Successor Agency shall, within 10 days following the giving of such notice,
send a notice to the Disclosure Dissemination Agent in writing that it objects to such amendment.
SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the
Successor Agency, the Trustee of the Bonds, the Disclosure Dissemination Agent, the participating
underwriters (as defined in the Rule), and the Holders from time to time of the Bonds, and shall create no
rights in any other person or entity.
SECTION 14. Governing Law. This Disclosure Certificate shall be governed by the laws of the
State of California (other than with respect to conflicts of laws).
E
The Successor Agency has caused this Disclosure Certificate to be executed, on the date first
written above.
AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF
SANTA CLARITA
By:
ACCEPTED AND AGREED TO:
Kenneth W. Striplin, Executive Director
DIGITAL ASSURANCE CERTIFICATION LLC,
as Disclosure Dissemination Agent
Name:
10
EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Issuer:
Obligated Person:
Name of Bond Issue:
Date of Issuance:
Successor Agency to the Redevelopment Agency of the City of Santa
Clarita
City of Santa Clarita, California
$[principal amount] Successor Agency to the Redevelopment Agency of
the City of Santa Clarita Tax Allocation Refunding Bonds, Series 2016
December _, 2016
NOTICE IS HEREBY GIVEN that the Successor Agency to the Redevelopment Agency of the
City of Santa Clarita (the "Successor Agency") has not provided an Annual Report with respect to the
above-named Bonds as required by the Disclosure Certificate of the Successor Agency. The Successor
Agency anticipates that the Annual Report will be filed by
Dated: 20_
Digital Assurance Certification LLC, as Disclosure
Dissemination Agent
A-1