HomeMy WebLinkAbout_Oversight Board Agenda PacketOversight Board
City of Lake Elsinore
Special Meeting Agenda
CITY HALL
CONFERENCE ROOM A
130 S. MAIN STREET
LAKE ELSINORE, CA
LAKE-ELSINORE.ORG
(951) 674-3124 PHONE
GENIE KELLEY, CHAIR
BRIAN TISDALE, VICE-CHAIR
PHIL WILLIAMS, BOARD MEMBER
MICHAEL WILLIAMS, BOARD MEMBER
KEVIN JEFFRIES, BOARD MEMBER
NANCY LASSEY, BOARD MEMBER
ARLEEN SANCHEZ, BOARD MEMBER
City Hall - Conference Room A4:00 PMMonday, October 23, 2017
The agenda is posted 72 hours prior to each meeting outside of the Lake Elsinore City Hall located at
130 South Main Street and is available at each meeting. The agenda and related reports are also
available at the Lake Elsinore City Clerk's Department on the Friday prior to the Oversight Board
meeting and are available on the City's website at www .lake-elsinore.org . Any writing distributed within
72 hours of the meeting will be made available to the public at the time it is distributed to the Oversight
Board. In compliance with the Americans with Disabilities Act, any person with a disability who requires
a modification or accommodation in order to participate in a meeting should contact the Community
Development Department at (951) 674 -3124, ext. 289, at least 48 hours before the meeting to make
reasonable arrangements to ensure accessibility.
CALL TO ORDER - 4:00 P.M.
PLEDGE OF ALLEGIANCE
ROLL CALL
PRESENTATIONS
PUBLIC COMMENTS - NON AGENDIZED ITEMS - 3 MINUTES
(Please read & complete a form Request to address the Oversight Board prior to the
start of the Oversight Board meeting and submit it to the Clerk. The Chairperson or
Clerk will call on you to speak when your item is called.)
CONSENT CALENDAR ITEM(S)
BUSINESS ITEM(S)
Page 1 City of Lake Elsinore Printed on 10/19/2017
October 23, 2017Oversight Board Special Meeting Agenda
1)Issuance and Sale of Third Lien Tax Allocation Bonds and Related
Documents, Civic Partners, LLC and McMillin Summerly LLC
Recommendation:adopt A RESOLUTION OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY
OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, APPROVING THE ISSUANCE AND SALE OF THIRD LIEN TAX
ALLOCATION BONDS BY THE SUCCESSOR AGENCY OF THE REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH
Summerly Bonds - SR
Summerly Bonds - Exhibit A Resolution
Summerly Bonds - Exhibit B Indenture
Summerly Bonds - Exhibit C Bond Purchase Agreement
Summerly Bonds - Exhibit C Continuing Disclosure
Summerly Bonds - Exhibit D Summerly/Civic Request to Issue Bonds w/Exhibits
Summerly Bonds - Exhibit E Public Uninsured Scenario (9-29-2017)
Attachments:
STAFF COMMENTS
BOARD MEMBER COMMENTS
ADJOURNMENT
The next regular Oversight Board meeting will be held on January 29, 2018, at the Cultural Center, 183
N. Main Street, Lake Elsinore, CA 92530.
AFFIDAVIT OF POSTING
I, Susan M. Domen, MMC, Clerk of the Oversight Board, do hereby affirm that a copy of the foregoing
agenda was posted at City Hall, 72 hours in advance of this meeting.
_________________________________________
Susan M. Domen, MMC
Clerk of the Oversight Board
Page 2 City of Lake Elsinore Printed on 10/19/2017
Oversight Board Special Meeting Agenda October 23,2017
1) Issuance and Sale of Third Lien Tax Allocation Bonds and Related
Documents, Civic Partners,LLC and McMillin_Summerly LLC
Recommendation: adopt A RESOLUTION OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY
OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE,
CALIFORNIA,APPROVING THE ISSUANCE AND SALE OF THIRD LIEN TAX
ALLOCATION BONDS BY THE SUCCESSOR AGENCY OF THE REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH
Attachments: Summerly Bonds-SR
Summerly Bonds-Exhibit A Resolution
Summerly Bonds-Exhibit B Indenture
Summerly Bonds-Exhibit C Bond Purchase Agreement
Summerly Bonds-Exhibit C Continuing Disclosure
Summerly Bonds-Exhibit D Summerly/Civic Request to Issue Bonds w/ExhibitE
Summerly Bonds-Exhibit E Public Uninsured Scenario(9-29-2017)
STAFF COMMENTS
BOARD MEMBER COMMENTS
ADJOURNMENT
The next regular Oversight Board meeting will be held on January 29, 2018, at the Cultural Center, 183
N. Main Street, Lake Elsinore, CA 92530.
AFFIDAVIT OF POSTING
I, Susan M. Domen, MMC, Clerk of the Oversight Board, do hereby affirm that a copy of the foregoing
agenda was posted at City Hall, 72 hours in advance of this meeting.
{-Dusan fVl. Domen, MMC
Clerk of the Oversight Board
City of Lake Elsinore Page 2 Printed on 10/19/2017
Text File
City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
www.lake-elsinore.org
File Number: OB 2014-001
Agenda Date: 10/23/2017 Status: BusinessVersion: 2
File Type: OB ResolutionIn Control: Oversight Board
Agenda Number: 1)
Page 1 City of Lake Elsinore Printed on 10/19/2017
OVERSIGHT BOARD TO THE
SUCCESSOR AGENCY OF THE REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE
To:Chairperson Kelley and Members of the Oversight Board
From:Grant Yates, Executive Director
Prepared by: Jason Simpson, Assistant Executive Director
Date:October 23, 2017
Subject: Issuance and Sale of Third Lien Tax Allocation Bonds and Related
Documents, Civic Partners, LLC and McMillin Summerly LLC
Recommendation
It is recommended that the Oversight Board approve and adopt:
Resolution No. OB-2017-00 A RESOLUTION OF THE OVERSIGHT BOARD TO THE
SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE
ELSINORE APPROVING THE ISSUANCE AND SALE OF THIRD LIEN TAX ALLOCATION
BONDS BY THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
Background
In 2002, the Redevelopment Agency of the City of Lake Elsinore (Former Agency) entered into
a Disposition and Development Agreement (DDA) with Civic Partners-Elsinore LLC (Civic
Partners) and Laing-CP Lake Elsinore LLC relating to the acquisition and development of
certain property located within the East Lake Specific Plan commonly known as ‘Summerly’.
The DDA was amended and restated in 2011 by and among the Former Agency, the Civic
Partners and McMillin Summerly, LLC (McMillin Summerly) as the successor in interest to Laing
following McMillin Summerly’s acquisition of the property and entitlements for the Summerly
project.
Since the dissolution of the Former Agency, the irrevocable pledge of property tax increment in
the DDA has been listed on the Successor Agency’s Recognized Obligation Payments
Schedule (ROPS) and recognized as an enforceable obligation. In 2015, the Department of
Finance (DOF) issued a final and conclusive determination regarding the DDA, finding the
ROPS items to be enforceable obligations.
On January 23, 2017, the Successor Agency and the Oversight Board approved an
Implementation Agreement that confirms the Successor Agency’s commitment to the Civic
Partners and McMillin Summerly to consider the issuance of bonds secured by the pledge of
property tax increment as defined in the DDA and in accordance with Health & Safety Code
Section 34177.5(a)(4). DOF subsequently approved the Implementation Agreement on January
31, 2017.
Tax Allocation Bonds
October 23, 2017
Page 2 of 4
The Successor Agency is now being asked to authorize the issuance of tax allocation bonds to
finance payments to Civic Partners and McMillin Summerly under the DDA (see Exhibit E). To
accomplish this, the Successor Agency proposes to issue its Third Lien Tax Allocation Bonds,
Series 2017A and Series 2017B (Federally Taxable) (together, the “2017 Bonds”). The
financing team, with assistance from staff, has produced the form of certain legal documents
which were approved by the Successor Agency at its regularly scheduled meeting of October
10, 2017. The proposed financing is now subject to approval by both the Oversight Board and
DOF (up to a 65-day review process). Assuming both the Oversight Board and DOF approve
the financing, a Preliminary Official Statement will be prepared for the Successor Agency’s
consideration and approval prior to pricing the 2017 Bonds (currently estimated to be sometime
in November, depending on the timing of DOF approval).
Discussion
The DDA requires the Successor Agency to pay tax increment revenues generated by certain
properties within the Summerly area to McMillin Summerly, and certain tax increment revenues
generated by other properties within the Summerly area to Civic Partners. These site-specific
tax increment revenues are referred to in this report as the “McMillin Revenues” and the “Civic
Revenues,” respectively. Now that the McMillin Revenues and Civic Revenues have been
“earned” by McMillin Summerly and Civic Partners under the DDA, the DDA requires the
Successor Agency to cooperate with McMillin Summerly and Civic Partners to issue the 2017
Bonds to finance the Agency’s obligation under the DDA to make these payments to McMillin
Summerly and Civic Partners. Pursuant to the DDA, the 2017 Bonds will be secured by tax
increment revenues from Project Area No. II and Project Area No. III, net of amounts due under
senior obligations (specifically, the Agency’s 2010 Series B Bonds, 2010 Series C Bonds, 2015
Bonds, the obligation under the DDA to pay certain “Pledged Housing Funds” to Civic Partners,
and pass-through payments).
The DDA requires the 2017 Bonds to be sized to generate proceeds in an amount equal to the
cumulative amount of the payments the Agency’s independent financial consultant estimates
will be paid to McMillin Summerly and Civic Partners, respectively, under the DDA, i.e. the
cumulative amount of the McMillin Revenues and the Civic Revenues through the termination of
the DDA. Thus, the 2017 Bonds will be structured to produce net proceeds in the amount of the
McMillin Revenues and the Civic Revenues that are projected by HdL Coren & Cone, the
Successor Agency’s Fiscal Consultant, to be generated during the term of the DDA. In order to
protect the Successor Agency and to ensure that the debt service on the 2017 Bonds does not
exceed the amounts of the McMillin Revenues and the Civic Revenues actually generated in
future years (taking into account potential reductions in assessed values of property within the
Summerly area), debt service on the 2017 Bonds will be structured to equal 0.75% of the
projected amounts of the McMillin Revenues and Civic Revenues over the term of the financing.
Additionally, the 2017 Bonds will be structured so that debt service is paid in arrears, consistent
with the payments to McMillin Summerly and Civic Partners under the DDA. The DDA provides
that McMillin Summerly and Civic Partners are paid each February 1 from revenues generated
during the prior fiscal year (e.g. revenues constituting the McMillin Revenues and Civic
Revenues that were generated during Fiscal Year 2016-17 will be due to McMillin Summerly
and Civic Partners on February 1, 2018). Similarly, the Indenture of Trust pursuant to which the
2017 Bonds will be issued will require that Redevelopment Property Trust Fund moneys
distributed to the Successor Agency on each June 1 will be used to pay debt service coming
due during the following calendar year.
Tax Allocation Bonds
October 23, 2017
Page 3 of 4
The attached resolution approves the issuance of the 2017 Bonds, subject to the compliance of
certain criteria, including that: (i) the aggregate principal amount of the 2017 Bonds does not
exceed $10.5 million ($10,500,000); and (ii) the Underwriter’s Discount does not exceed 1.25%
of the aggregate principal amount of the 2017 Bonds. Preliminary pricing/cash flow schedules
are attached (Exhibit F).
As an alternative to the sale of the 2017 Bonds through a proposed public offering (offer of
securities to the general public), the resolution allows for the 2017 Bonds to be sold on a private
placement basis (direct placement to one or a limited number of investors), if the private
placement produces lower interest rates and is advisable by the financial advisor and agreed to
by Successor Agency staff. The determination of whether to issue the 2017 Bonds pursuant to a
public sale or private placement will be subject to prevailing market conditions at the time of the
decision. If Successor Agency staff determines that a private placement is more beneficial to
the Successor Agency, no further approvals by the Successor Agency Board will be required.
Forms of the following documents are included in the agenda package and the Successor
Agency would be authorized to prepare, approve and execute these and such other documents
as necessary pursuant to the attached resolution should the Oversight Board determine to move
forward with the approval of the 2017 Bonds. The forms of these documents will be finalized
upon the pricing and sale of the 2017 Bonds.
Indenture of Trust: This document is a contract entered into between the Successor Agency
and Wilmington Trust, National Association, the appointed Trustee of the 2017 Bonds. This
document contains terms of the 2017 Bonds including, but not limited to, the payment and
redemption provisions, definition and pledge of revenues to pay the refunding bonds, rights and
duties of the Trustee, remedies upon a default in the payment of the 2017 Bonds, and other
related matters.
Bond Purchase Contract: Under this contract, the Successor Agency agrees to sell the 2017
Bonds to the underwriter and the underwriter agrees to purchase the 2017 Bonds, subject to
typical closing conditions. Successor Agency staff, the financial advisor, and bond counsel will
approve the final pricing prior to the execution of the Bond Purchase Contract.
Continuing Disclosure Certificate: Executed for the benefit of bondholders, the Continuing
Disclosure Certificate obligates the Successor Agency to file an annual report which includes,
among other things, the most recent audited financial statements of the City and financial data
of the Successor Agency. The Successor Agency is also required to report certain events which
are significant to bondholders if and when they occur.
The proposed resolution also appoints the financing team that includes a Financial Advisor
(Urban Futures, Inc.), Fiscal Consultant (HdL), Bond and Disclosure Counsel (Stradling Yocca
Carlson & Rauth, a Professional Corporation), Trustee (Wilmington Trust, National Association)
and the Underwriter or Private Placement Agent (Stifel, Nicolaus & Company, Incorporated).
Assuming the 2017 Bonds are approved by both the Successor Agency and the Oversight
Board, during the 65-day DOF review period the financing team and Successor Agency staff will
work to prepare a Preliminary Official Statement (POS) for the 2017 Bonds. The POS is the
offering document with respect to the 2017 Bonds and, if the 2017 Bonds will be sold by public
offering, the POS must contain all material information to enable investors to determine whether
Tax Allocation Bonds
October 23, 2017
Page 4 of 4
to purchase 2017 Bonds. If the 2017 Bonds will be sold by public offering, the POS will likely be
presented for approval by the Successor Agency Board sometime in November 2017. If
Successor Agency approval is given at that time, the 2017 Bonds could be issued a few weeks
afterwards.
Fiscal Impact
As previously mentioned, the 2017 Bonds will be structured to produce net proceeds equivalent
to 0.75% of the amount of the McMillin Revenues and Civic Revenues protected to be
generated during the term of the DDA. This conservative approach is intended to ensure that
the debt service on the 2017 Bonds will be payable entirely from the McMillin Revenues and
Civic Revenues actually generated in future years. All other aspects of the DDA have been
incorporated into the bond sizing.
There is no payment to be made from the City’s General Fund for debt service payments or any
costs associated with the issuance of the 2017 Bonds.
The pledge of tax increment revenues from Project Area No. II and Project Area No. III in favor
of the 2017 Bonds will be subordinate to the Successor Agency’s (i) pledge of specific tax
increment revenues to the repayment of the 2010B Bonds and the 2010 C Bonds, (ii) the pledge
of all Redevelopment Property Tax Trust Fund moneys in favor of the 2015 Bonds, (iii) the
payment of Pledged Housing Funds to Civic pursuant to the DDA, and (iv) payments to taxing
agencies under the Pass-Through Agreements and the Statutory Pass-Through Amounts.
Exhibits
A-Resolution Approving Bonds
B-Indenture of Trust
C-Bond Purchase Agreement
D-Continuing Disclosure Certificate
E-Letter Requesting Bonds Pursuant to DDA
F-Preliminary Pricing/Cash Flows
RESOLUTION NO. ____
RESOLUTION OF THE OVERSIGHT BOARD TO THE SUCCESSOR
AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE APPROVING THE ISSUANCE AND SALE OF THIRD
LIEN TAX ALLOCATION BONDS BY THE SUCCESSOR AGENCY OF
THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION
THEREWITH
WHEREAS, the Redevelopment Agency of the City of Lake Elsinore (the “Former
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 Former
Agency included the power to issue Bonds for any of its corporate purposes; and
WHEREAS, pursuant to California Assembly Bill X1 26, which amended provisions of
the Law, and the California Supreme Court’s decision in California Redevelopment Association
v. Matosantos, the Former Agency was dissolved on February 1, 2012 in accordance with
California Assembly Bill X1 26 approved by the Governor of the State of California on June 28,
2011 (as amended, the “Dissolution Act”), and on February 1, 2012, the Successor Agency of
the Redevelopment Agency of the City of Lake Elsinore (the “Successor Agency”), in
accordance with and pursuant to the Dissolution Act, assumed the duties and obligations of the
Former Agency as provided in the Dissolution Act, including, without limitation, the obligations of
the Former Agency under the Summerly DDA, the Existing Bonds (as defined in the Indenture)
and the related documents to which the Former Agency was a party; and
WHEREAS, the Former Agency previously entered into that certain Amended and
Restated Disposition and Development Agreement by and among the Former Agency, McMillin
Summerly LLC (the “Developer”), and Civic Partners-Elsinore LLC (the “Master Developer”)
dated as of March 8, 2011 (the “Amended and Restated DDA”), and the Successor Agency
subsequently entered into that certain Second Implementation Agreement dated as of
January 24, 2017, by and among the Successor Agency, the Developer and the Master
Developer (the “Implementation Agreement”; and, together with the Amended and Restated
DDA, the “Summerly DDA”); and
WHEREAS, the Summerly DDA, specifically Sections 602.2, 604.2 and 605 of the
Amended and Restated DDA, requires the Successor Agency to make certain payments to the
Developer and the Master Developer, subject to various conditions precedent set forth in the
Summerly DDA and based on calculations described in the Summerly DDA (the “DDA Payment
Obligation”); and
WHEREAS, the DDA Payment Obligation was confirmed by the Successor Agency, the
Developer and the Master Developer in the Implementation Agreement; and
WHEREAS, the Implementation Agreement also confirms the Successor Agency’s
obligation to issue bonds to finance the DDA Payment Obligation; and
2
WHEREAS, the Implementation Agreement was approved by the Oversight Board and
by the Department of Finance; and
WHEREAS, at the request of the Successor Agency, pursuant to Health and Safety
Code Section 34177.5(i), the Department of Finance issued a Final and Conclusive
Determination dated November 19, 2017 with respect to the DDA Payment Obligation; and
WHEREAS, Section 34177.5 of the California Health and Safety Code authorizes the
Successor Agency to undertake proceedings for the issuance of bonds and other indebtedness
obligations, 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”), subject to the conditions
and restrictions contained in said Section 34177.5; and
WHEREAS, said Section 34177.5(a)(4) of the California Health and Safety Code
expressly authorizes the Successor Agency to issue bonds to make payments under
enforceable obligations, such as the Summerly DDA, when the enforceable obligations include
the irrevocable pledge of property tax increment and the obligation to issue bonds secured by
that pledge; and
WHEREAS, pursuant to Section 34177.5(a)(4) of the California Health and Safety Code,
the Successor Agency may pledge to the bonds issued to finance an enforceable obligation the
property tax revenues and other funds described in the enforceable obligation, and that pledge,
when made in connection with the issuance of the bonds, shall be valid, binding, and
enforceable in accordance with its terms; and
WHEREAS, Section 606 of the Amended and Restated DDA sets forth an express
pledge of certain tax increment revenues from the Project Areas to secure the Successor
Agency’s DDA Payment Obligation; and
WHEREAS, Section 607 of the Amended and Restated DDA requires the Successor
Agency to use reasonable efforts to issue bonds upon the written request of the Developer
and/or the Master Developer to finance the DDA Payment Obligation; and
WHEREAS, as required by Section 607 of the Amended and Restated DDA, following
receipt of written requests by the Developer and Master Developer, the Successor Agency
prepared and submitted to Developer and Master Developer a proposal to issue bonds to
finance the Successor Agency’s DDA Payment Obligation and the Developer and Master
Developer expressly approved the Successor Agency’s financing proposal in writing; and
WHEREAS, in order to provide moneys to finance the Successor Agency’s DDA
Payment Obligation, the Successor Agency desires to issue its Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore (Rancho Laguna Redevelopment Project
Areas No. II and No. III) Third Lien Tax Allocation Bonds, Series 2017A (the “2017A Bonds”)
and its Successor Agency of the Redevelopment Agency of the City of Lake Elsinore (Rancho
Laguna Redevelopment Project Areas No. II and No. III) Third Lien Tax Allocation Bonds,
Series 2017B (Federally Taxable) (the “2017B Bonds”; and, together with the 2017A Bonds, the
“2017 Bonds”); and
WHEREAS, the 2017 Bonds will be issued pursuant to and in accordance with the
provisions of Section 34177.5(a)(4) of the California Health and Safety Code, the Law, the
Dissolution Act and the Refunding Law; and
3
WHEREAS, the 2017 Bonds, and any additional Parity Debt (defined in the Indenture),
will be payable from Pledged Tax Revenues (as defined in the Indenture), and the pledge of
Pledged Tax Revenues to the payment of the principal of and interest on the 2017 Bonds will,
as applicable, be on a basis subordinate to the Successor Agency’s pledge of specific tax
increment revenues to the repayment of the Existing Bonds that remain outstanding after the
issuance of the 2017 Bonds, as well as payments required under the Pass-Through
Agreements and the Statutory Pass-Through Amounts; and
WHEREAS, the Successor Agency has previously approved all matters relating to the
issuance and sale of the 2017 Bonds; and
WHEREAS, the Oversight Board desires to approve all matters relating to the issuance
and sale of the 2017 Bonds as required by Sections 34177.5(f) and 34180 of the Health and
Safety Code of the State of California.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE
OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY OF THE REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE, AS FOLLOWS:
Section 1.Each of the foregoing recitals is true and correct.
Section 2.The issuance by the Successor Agency of the Redevelopment Agency of
the City of Lake Elsinore of the 2017 Bonds in an aggregate principal amount not to exceed
$13,000,000 for the purpose of financing the DDA Payment Obligation in accordance with
Health & Safety Code Section 34177.5(a)(4) and the pledge of property tax revenues to the
2017 Bonds pursuant to the Indenture approved by Section 2 of the Successor Agency
Resolution (as authorized by California Health and Safety Code Section 34177.5(a)(4)) are
hereby approved as provided for in the Indenture. The 2017 Bonds may be issued as a single
issue, or from time to time in separate series, as the Successor Agency shall determine. The
approval of the issuance of the 2017 Bonds by the Successor Agency and the Oversight Board
shall constitute the approval of each and every separate series of 2017 Bonds, without the need
for any further approval from the Oversight Board. The Successor Agency may change the
official name of the 2017 Bonds to reflect the year in which the 2017 Bonds are actually issued.
Section 3.The Successor Agency is authorized and directed to prepare, approve
and execute such other documents, including, as necessary, a Bond Purchase Agreement, an
Official Statement, a Continuing Disclosure Certificate and any additional agreements as may
be required to carry out the purposes hereof without the need for any further approval from the
Oversight Board.
Section 4.The Chairman of the Oversight Board and the other officers and members
of staff having responsibility for the affairs of the Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore are hereby authorized to execute such documents and
certificates necessary to assist the Successor Agency in the issuance of the Bonds.
Section 5.Pursuant to the provisions of California Health and Safety Code Section
34177.5(f), the Successor Agency is expressly authorized to recover its related costs in
connection with the transaction approved hereby, irrespective of whether the 2017 Bonds are
issued.
Section 6.This Resolution shall take effect immediately upon its adoption.
4
PASSED, APPROVED AND ADOPTED this ____ day of __________, 2017.
Chair of the Oversight Board for the Successor
Agency of the Redevelopment Agency of the City of
Lake Elsinore
ATTEST:
Secretary of the Oversight Board for the
Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore
STATE OF CALIFORNIA )SECRETARY’S CERTIFICATE
COUNTY OF RIVERSIDE ) ss.RE ADOPTION OF RESOLUTION
CITY OF LAKE ELSINORE )
I, Virginia Bloom, of the Secretary of the Oversight Board for the Successor Agency of
the Redevelopment Agency of the City of Lake Elsinore, DO HEREBY CERTIFY that the
foregoing Resolution was duly adopted by the Oversight Board at a special meeting of the City
held on the ____ day of __________, 2017, and that the same was passed and adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
STATE OF CALIFORNIA )SECRETARY’S CERTIFICATE
COUNTY OF RIVERSIDE ) ss.OF AUTHENTICATION
CITY OF LAKE ELSINORE )
I,________________________, Secretary of the Oversight Board for the Successor
Agency of the Redevelopment Agency of the City of Lake Elsinore, DO HEREBY CERTIFY that
the above and foregoing is a full, true and correct copy of Resolution No. _____ of the Oversight
Board for the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore and
that said Resolution was adopted at the time and by the vote stated on the above certificate,
and has not been amended or repealed.
Secretary of the Oversight Board for the Successor
Agency of the Redevelopment Agency of the City of
Lake Elsinore
INDENTURE OF TRUST
Dated as of __________, 2017
by and between the
SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY
OF THE CITY OF LAKE ELSINORE
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
Relating to
$__________
Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore
(Rancho Laguna Redevelopment Project
Areas No. II and No. III)
Third Lien Tax Allocation Bonds,
Series 2017A
$__________
Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore
(Rancho Laguna Redevelopment Project
Areas No. II and No. III)
Third Lien Tax Allocation Bonds,
Series 2017B (Federally Taxable)
i
TABLE OF CONTENTS
Page
ARTICLE I
DETERMINATIONS; DEFINITIONS
Section 1.01 Findings and Determinations.....................................................................................4
Section 1.02 Definitions.................................................................................................................4
Section 1.03 Rules of Construction..............................................................................................17
ARTICLE II
AUTHORIZATION AND TERMS
Section 2.01 Authorization of 2017 Bonds...................................................................................17
Section 2.02 Terms of 2017 Bonds...............................................................................................17
Section 2.03 Redemption of 2017 Bonds.....................................................................................20
Section 2.04 Form of 2017 Bonds................................................................................................23
Section 2.05 Execution of Bonds..................................................................................................23
Section 2.06 Transfer of Bonds....................................................................................................23
Section 2.07 Exchange of Bonds..................................................................................................24
Section 2.08 Registration of Bonds..............................................................................................24
Section 2.09 Temporary Bonds....................................................................................................24
Section 2.10 Bonds Mutilated, Lost, Destroyed or Stolen ...........................................................24
Section 2.11 Book-Entry System..................................................................................................25
Section 2.12 Applicability of Provisions to Additional Bonds.....................................................26
ARTICLE III
DEPOSIT AND APPLICATION; ADDITIONAL DEBT
Section 3.01 Issuance of Bonds....................................................................................................26
Section 3.02 Application of Proceeds of Sale and Certain Other Amounts.................................27
Section 3.03 Costs of Issuance Fund............................................................................................27
Section 3.04 Project Fund.............................................................................................................27
Section 3.05 Issuance of Parity Debt............................................................................................28
Section 3.06 Issuance of Senior Obligations to Refund Existing Bonds......................................30
Section 3.07 Issuance of Subordinate Debt..................................................................................30
ARTICLE IV
SECURITY OF BONDS; FLOW OF FUNDS
Section 4.01 Security of Bonds; Equal Security...........................................................................30
Section 4.02 Special Fund; Deposit of Pledged Tax Revenues....................................................31
Section 4.03 Deposit of Amounts by Trustee...............................................................................31
Section 4.04 Rebate Fund.............................................................................................................34
Section 4.05 [Provisions Relating to 2017 Insurance Policy........................................................35
Section 4.06 [Provisions Relating to 2017 Reserve Policy ..........................................................35
ARTICLE V
OTHER COVENANTS OF THE SUCCESSOR AGENCY
Section 5.01 Punctual Payment....................................................................................................36
Section 5.02 Limitation on Additional Indebtedness; Against Encumbrances ............................36
Section 5.03 Extension of Payment..............................................................................................36
Section 5.04 Payment of Claims...................................................................................................36
Section 5.05 Books and Accounts; Financial Statements.............................................................36
Section 5.06 Protection of Security and Rights of Owners..........................................................37
Section 5.07 Payments of Taxes and Other Charges....................................................................37
Section 5.08 Taxation of Leased Property....................................................................................37
Section 5.09 Disposition of Property............................................................................................37
Section 5.10 Maintenance of Pledged Tax Revenues...................................................................38
Section 5.11 Tax Covenants.........................................................................................................38
Section 5.12 Continuing Disclosure.............................................................................................39
Section 5.13 Compliance with the Dissolution Act......................................................................39
Section 5.14 Further Assurances..................................................................................................40
ARTICLE VI
THE TRUSTEE
Section 6.01 Duties, Immunities and Liabilities of Trustee .........................................................40
Section 6.02 Merger or Consolidation..........................................................................................42
Section 6.03 Liability of Trustee..................................................................................................42
Section 6.04 Right to Rely on Documents and Opinions.............................................................44
Section 6.05 Preservation and Inspection of Documents .............................................................45
Section 6.06 Compensation and Indemnification.........................................................................45
Section 6.07 Deposit and Investment of Moneys in Funds..........................................................45
Section 6.08 Accounting Records and Financial Statements .......................................................47
Section 6.09 Other Transactions with Agency.............................................................................47
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 7.01 Amendment With And Without Consent of Owners...............................................47
Section 7.02 Effect of Supplemental Indenture............................................................................48
Section 7.03 Endorsement or Replacement of Bonds After Amendment....................................48
Section 7.04 Amendment by Mutual Consent..............................................................................48
Section 7.05 Opinion of Counsel..................................................................................................49
Section 7.06 Copy of Supplemental Indenture to S&P and Moody’s..........................................49
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
Section 8.01 Events of Default and Acceleration of Maturities...................................................49
Section 8.02 Application of Funds Upon Acceleration................................................................50
Section 8.03 Power of Trustee to Control Proceedings................................................................51
Section 8.04 Limitation on Owner’s Right to Sue........................................................................51
Section 8.05 Non-Waiver.............................................................................................................52
Section 8.06 Actions by Trustee as Attorney-in-Fact...................................................................52
Section 8.07 Remedies Not Exclusive..........................................................................................52
Section 8.08 Determination of Percentage of Bondowners..........................................................52
Section 8.09 [Provisions Benefiting 2017 Insurer........................................................................53
ARTICLE IX
MISCELLANEOUS
Section 9.01 Benefits Limited to Parties......................................................................................53
Section 9.02 Successor is Deemed Included in All References to Predecessor...........................53
Section 9.03 Discharge of Indenture ............................................................................................53
Section 9.04 Execution of Documents and Proof of Ownership by Owners................................55
Section 9.05 Disqualified Bonds..................................................................................................55
Section 9.06 Waiver of Personal Liability....................................................................................55
Section 9.07 Destruction of Cancelled Bonds..............................................................................56
Section 9.08 Notices.....................................................................................................................56
Section 9.09 Partial Invalidity......................................................................................................56
Section 9.10 Unclaimed Moneys..................................................................................................56
Section 9.11 Execution in Counterparts.......................................................................................57
Section 9.12 Governing Law........................................................................................................57
EXHIBIT A FORM OF 2017A BOND......................................................................................A-1
EXHIBIT B FORM OF 2017B BOND......................................................................................B-1
EXHIBIT C FORM OF REQUISITION FOR DISBURSEMENT FROM PROJECT
FUND.....................................................................................................................C-1
INDENTURE OF TRUST
THIS INDENTURE OF TRUST (this “Indenture”) is made and entered into and dated as of
__________, 2017, by and between the SUCCESSOR AGENCY OF THE REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE, a public entity duly existing under the laws of the
State of California (the “Successor Agency” or “Agency”), as Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore (the “Former Agency”) and WILMINGTON
TRUST, NATIONAL ASSOCIATION, a national banking association organized and existing under
the laws of the United States of America, as trustee (the “Trustee”);
WITNESSETH:
WHEREAS, prior to its dissolution (as described below), the Former Agency was a public
body, corporate and politic, duly established and authorized to transact business and exercise powers
under and pursuant to the provisions of the Community Redevelopment Law of the State of
California, constituting Part 1 of Division 24 of the Health and Safety Code of the State (as amended,
the “Law”), including the power to issue bonds and incur debt for any of its corporate purposes;
WHEREAS, a Redevelopment Plan for the Rancho Laguna Redevelopment Project Area
No. I (the “Project Area I”) of the Former Agency was adopted on September 30, 1980, pursuant to
Ordinance No. 607, as subsequently amended in compliance with all requirements of the Law, and
all requirements of law for and precedent to the adoption and approval of the Redevelopment Plan, as
amended, have been duly complied with;
WHEREAS, a Redevelopment Plan for the Rancho Laguna Redevelopment Project Area
No. II (the “Project Area II”) of the Former Agency was adopted on July 11, 1983, pursuant to
Ordinance No. 671, as subsequently amended in compliance with all requirements of the Law, and
all requirements of law for and precedent to the adoption and approval of the Redevelopment Plan, as
amended, have been duly complied with;
WHEREAS, a Redevelopment Plan for the Rancho Laguna Redevelopment Project Area
No. III (the “Project Area III”; and, together with Project Area II, the “Project Areas”) of the Former
Agency was adopted on September 8, 1987, pursuant to Ordinance No. 815, as subsequently
amended in compliance with all requirements of the Law, and all requirements of law for and
precedent to the adoption and approval of the Redevelopment Plan, as amended, have been duly
complied with;
WHEREAS, pursuant to California Assembly Bill X1 26, which amended provisions of the
Law, and the California Supreme Court’s decision in California Redevelopment Association v.
Matosantos, the Former Agency was dissolved on February 1, 2012 in accordance with California
Assembly Bill X1 26 approved by the Governor of the State of California on June 28, 2011 (as
amended, the “Dissolution Act”), and on February 1, 2012, the Successor Agency, in accordance
with and pursuant to the Dissolution Act, assumed the duties and obligations of the Former Agency
as provided in the Dissolution Act, including, without limitation, the obligations of the Former
Agency under the Summerly DDA (defined below), the Existing Bonds (defined below) and the
related documents to which the Former Agency was a party;
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WHEREAS, the Former Agency previously entered into that certain Amended and Restated
Disposition and Development Agreement by and among the Former Agency, McMillin Summerly
LLC (the “Developer”), and Civic Partners-Elsinore LLC (the “Master Developer”) dated as of
March 8, 2011 (the “Amended and Restated DDA”), and the Successor Agency subsequently entered
into that certain Second Implementation Agreement dated as of January 24, 2017, by and among the
Successor Agency, the Developer and the Master Developer (the “Implementation Agreement”; and,
together with the Amended and Restated DDA, the “Summerly DDA”);
WHEREAS, the Summerly DDA, specifically Sections 602.2, 604.2 and 605 of the
Amended and Restated DDA, requires the Successor Agency to make certain payments to the
Developer and the Master Developer, subject to various conditions precedent set forth in the
Summerly DDA and based on calculations described in the Summerly DDA (the “DDA Payment
Obligation”);
WHEREAS, the DDA Payment Obligation was confirmed by the Successor Agency, the
Developer and the Master Developer in the Implementation Agreement; and
WHEREAS, the Implementation Agreement also confirms the Successor Agency’s
obligation to issue bonds to finance the DDA Payment Obligation; and
WHEREAS, the Implementation Agreement was approved by the Oversight Board and by
the Department of Finance; and
WHEREAS, at the request of the Successor Agency, pursuant to Health and Safety Code
Section 34177.5(i), the Department of Finance issued a Final and Conclusive Determination dated
November 19, 2015 with respect to the DDA Payment Obligation;
WHEREAS, Section 34177.5 of the California Health and Safety Code authorizes the
Successor Agency to undertake proceedings for the issuance of bonds and other indebtedness
obligations, 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”), subject to the conditions and
restrictions contained in said Section 34177.5;
WHEREAS, said Section 34177.5(a)(4) of the California Health and Safety Code expressly
authorizes the Successor Agency to issue bonds to make payments under enforceable obligations,
such as the Summerly DDA, when the enforceable obligations include the irrevocable pledge of
property tax increment and the obligation to issue bonds secured by that pledge;
WHEREAS, pursuant to Section 34177.5(a)(4) of the California Health and Safety Code, the
Successor Agency may pledge to the bonds issued to finance an enforceable obligation the property
tax revenues and other funds described in the enforceable obligation, and that pledge, when made in
connection with the issuance of the bonds, shall be valid, binding, and enforceable in accordance
with its terms;
WHEREAS, Section 606 of the Amended and Restated DDA sets forth an express pledge of
certain tax increment revenues from the Project Areas to secure the Successor Agency’s DDA
Payment Obligation;
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WHEREAS, Section 607 of the Amended and Restated DDA requires the Successor Agency
to use reasonable efforts to issue bonds upon the written request of the Developer and/or the Master
Developer to finance the DDA Payment Obligation;
WHEREAS, as required by Section 607 of the Amended and Restated DDA, following
receipt of written requests by the Developer and Master Developer, the Successor Agency prepared
and submitted to Developer and Master Developer a proposal to issue bonds to finance the Successor
Agency’s DDA Payment Obligation and the Developer and Master Developer expressly approved
the Successor Agency’s financing proposal in writing;
WHEREAS, in order to provide moneys to finance the Successor Agency’s DDA Payment
Obligation, the Successor Agency has determined to issue its Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore (Rancho Laguna Redevelopment Project Areas
No. II and No. III) Third Lien Tax Allocation Bonds, Series 2017A (the “2017A Bonds”) and its
Successor Agency of the Redevelopment Agency of the City of Lake Elsinore (Rancho Laguna
Redevelopment Project Areas No. II and No. III) Third Lien Tax Allocation Bonds, Series 2017B
(Federally Taxable) (the “2017B Bonds”; and, together with the 2017A Bonds, the “2017 Bonds”);
WHEREAS, the Developer and the Master Developer have each certified to the Successor
Agency that all conditions to the Successor Agency’s delivery to Developer and Master Developer,
respectively, of the payments required by Sections 602.2, 604.2 and 605, as applicable, of the
Amended and Restated DDA, have been satisfied, and that under the terms of the Summerly DDA,
Developer and Master Developer are entitled to receive the proceeds of the 2017 Bonds in the
amounts set forth in Section 3.04 of this Indenture;
WHEREAS, the 2017 Bonds will be issued pursuant to and in accordance with the
provisions of Section 34177.5(a)(4) of the California Health and Safety Code, the Law, the
Dissolution Act and the Refunding Law;
WHEREAS, the 2017 Bonds, and any additional Parity Debt, will be payable from Pledged
Tax Revenues (as defined herein), and the pledge of Pledged Tax Revenues to the payment of the
principal of and interest on the 2017 Bonds will, as applicable, be on a basis subordinate to the
Successor Agency’s pledge of specific tax increment revenues to the repayment of the Existing
Bonds that remain outstanding after the issuance of the 2017 Bonds, as well as payments required
under the Pass-Through Agreements and the Statutory Pass-Through Amounts;
WHEREAS, in order to provide for the authentication and delivery of the 2017 Bonds, to
establish and declare the terms and conditions upon which the 2017 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 has determined that all acts and proceedings required by
law necessary to make the 2017 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 legal, valid and binding agreement for the uses and
purposes herein set forth in accordance with its terms, have been done or taken;
4
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,
including the 2017 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, including the
2017 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, including the 2017
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, including the 2017
Bonds, as follows:
ARTICLE I
DETERMINATIONS; DEFINITIONS
Section 1.01 Findings and Determinations. The Successor Agency has reviewed all
proceedings heretofore taken and, as a result of such review, 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 2017 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 2017 Bonds in the manner and form
provided in this Indenture.
Section 1.02 Definitions. Unless the context otherwise requires, the terms defined in this
Section 1.02 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.
“Additional Allowance” means, as the date of calculation, the amount of Pledged Tax
Revenues which, as shown in the Report of an Independent Redevelopment Consultant, are estimated
to be receivable by the Successor Agency as a result of increases in the assessed valuation of taxable
property in the Project Areas due to construction which has been completed but not yet reflected on
the tax rolls. For purposes of this definition, the term “increases in the assessed valuation” means the
amount by which the assessed valuation of taxable property in the Project Areas in any Fiscal Year is
estimated to exceed the assessed valuation of taxable property in the Project Areas (as reported by
the County Auditor-Controller) in the Fiscal Year in which such calculation is made.
“Amended and Restated DDA” means that certain Amended and Restated Disposition and
Development Agreement by and among the Former Agency, the Developer, and the Master
Developer, dated as of March 8, 2011, as heretofore or hereafter amended from time to time.
“Authority” means the Lake Elsinore Public Financing Authority, a joint powers agency
formed pursuant to California Government Code Sections 6500 et seq., in which the City and
Successor Agency are members.
“Bonds” means the 2017 Bonds and any Parity Debt issued as bonds pursuant to a
Supplemental Indenture.
5
“Bond Counsel” means (a) Stradling Yocca Carlson & Rauth, a Professional Corporation, or
(b) any other attorney or firm of attorneys appointed by or acceptable to the Successor Agency, of
nationally-recognized experience in the issuance of obligations the interest on which is excludable
from gross income for federal income tax purposes under the Code.
“Bond Year” means each twelve (12) month period extending from March 2 in one calendar
year to March 1 of the succeeding calendar year, both dates inclusive; provided that the first Bond
Year with respect to the Bonds shall commence on the Closing Date and end on March 1, 2018.
“Business Day” means any day, other than a Saturday or Sunday or a day on which
commercial banks in New York, New York, or any other city or cities where the Principal Corporate
Trust Office of the Trustee is located are required or authorized by law to close or a day on which the
Federal Reserve System is closed.
“City” means the City of Lake Elsinore.
“Closing Date” means the date on which a series of Bonds is delivered by the Successor
Agency to the original purchaser thereof. The Closing Date with respect to the 2017 Bonds is
_________, 2017.
“Code” means the Internal Revenue Code of 1986 as in effect on the date of issuance of the
2017A Bonds or (except as otherwise referenced herein) as it may be amended to apply to
obligations issued on the date of issuance of the 2017A Bonds, together with applicable proposed,
temporary and final regulations promulgated, and applicable official public guidance published,
under the Code.
“Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate,
with respect to the 2017 Bonds, executed by the Successor Agency, as originally executed and as it
may be amended from time to time in accordance with the terms thereof.
“Costs of Issuance” means all items of expense directly or indirectly payable by or
reimbursable to the Successor Agency relating to the authorization, issuance, sale and delivery of the
Bonds, including but not limited to printing expenses, bond insurance and surety bond premiums, if
any, rating agency fees, filing and recording fees, initial fees and charges and first annual
administrative fee of the Trustee and fees and expenses of its counsel, fees, charges and
disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals,
fees and charges for preparation, execution and safekeeping of the Bonds, administrative costs of the
Successor Agency and the City incurred in connection with the issuance of the Bonds, expenses of
the underwriters of the Bonds, the fees and expenses of counsel to the underwriters of the Bonds, and
any other cost, charge or fee in connection with the original issuance of the Bonds.
“Costs of Issuance Fund” means the fund by that name established and held by the Trustee
pursuant to Section 3.03.
“County” means the County of Riverside.
“County Auditor-Controller” means the Auditor-Controller of the County.
6
“Debt Service Fund” means the fund by that name established and held by the Trustee
pursuant to Section 4.03.
“Defeasance Obligations” means any of the following which, at the time of investment, are
legal investments under the laws of the State for the moneys proposed to be invested therein and are
in compliance with the Successor Agency’s investment policies then in effect (provided that the
Trustee shall be entitled to rely upon any investment direction from the Successor Agency as
conclusive certification to the Trustee that investments described therein are legal and are in
compliance with the Successor Agency’s investment policies then in effect), but only to the extent
the same are acquired at Fair Market Value:
(a)Cash;
(b)non-callable, direct obligations of the United States of America;
(c)securities fully and unconditionally guaranteed as to the timely payment of
principal and interest by the United States of America; and
(d)other investments approved by the 2017 Insurer.
“Department of Finance” means the Department of Finance of the State of California.
“Depository” means (a) initially, DTC, and (b) any other Securities Depository acting as
Depository pursuant to Section 2.11.
“Depository System Participant” means any participant in the Depository’s book-entry
system.
“Developer” means McMillin Summerly LLC.
“Dissolution Act” means California Assembly Bill X1 26 approved by the Governor of the
State of California on June 28, 2011, as it has heretofore been amended and as it may hereafter be
amended.
“DTC” means The Depository Trust Company, New York, New York, and its successors and
assigns.
“Event of Default” means any of the events described in Section 8.01.
“Existing Bonds” means each of the following:
(i)Authority’s $15,435,000 Lake Elsinore Public Financing Authority Tax
Allocation Revenue Bonds (1999 Series C Refunding), 2010 Series A, currently outstanding in the
aggregate principal amount of $12,475,000, with a scheduled final maturity date of September 1,
2033, the proceeds of which were used to make four loans to the Former Agency, the repayment of
which was secured by tax increment revenues derived from each of the Project Areas and the
Housing Fund, respectively, as follows:
(A)A loan in the original principal amount of $3,055,000, secured by tax
increment revenues from Project Area I;
7
(B)A loan in the original principal amount of $5,505,000, secured by tax
increment revenues from Project Area II;
(C)A loan in the original principal amount of $2,075,000, secured by tax
increment revenues from Project Area III; and
(D)A loan in the original principal amount of $4,800,000, secured by tax
increment revenues required to be deposited into the Former Agency’s Low and Moderate Income
Housing Fund.
(ii)Authority’s $10,855,000 Lake Elsinore Public Financing Authority Tax
Allocation Revenue Bonds (1995 Series A Refunding), 2010 Series B, currently outstanding in the
aggregate principal amount of $6,185,000, with a scheduled final maturity date of September 1,
2025, the proceeds of which were used to make a loan to the Former Agency in the original principal
amount of $10,855,000, the repayment of which was secured by tax increment revenues derived from
the Housing Fund.
(iii)Authority’s $29,435,000 Lake Elsinore Public Financing Authority Tax
Allocation Revenue Bonds (1999 Series A Refunding), 2010 Series C, currently outstanding in the
aggregate principal amount of $21,565,000, with a scheduled final maturity date of September 1,
2030, the proceeds of which were used to make two loans to the Former Agency, the repayment of
which was secured by tax increment revenues derived from Project Area I and Project Area II,
respectively, as follows:
(A)A loan in the original principal amount of $16,220,000, secured by
tax increment revenues from Project Area I; and
(B)A loan in the original principal amount of $13,215,000, secured by
tax increment revenues from Project Area II.
(iv)Successor Agency’s $8,065,000 Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore Subordinated Tax Allocation Refunding Bonds, Series 2015,
currently outstanding in the aggregate principal amount of $6,605,000, with a scheduled final
maturity date of September 1, 2038.
“Fair Market Value” means the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm’s length transaction (determined as of the date
the contract to purchase or sell the investment becomes binding) if the investment is traded on an
established securities market (within the meaning of Section 1273 of the Code) and, otherwise, the
term “Fair Market Value” means the acquisition price in a bona fide arm’s length transaction (as
referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with
applicable regulations under the Code, (ii) the investment is an agreement with specifically
negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for
example, a guaranteed investment contract, a forward supply contract or other investment agreement)
that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a
United States Treasury Security--State and Local Government Series that is acquired in accordance
with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled
investment fund in which the Successor Agency and related parties do not own more than a ten
8
percent (10%) beneficial interest therein if the return paid by the fund is without regard to the source
of the investment.
“Federal Securities” means any direct, noncallable general obligations of the United States
of America (including obligations issued or held in book-entry form on the books of the Department
of the Treasury of the United States of America and CATS and TGRS), or obligations the payment of
principal of and interest on which are directly or indirectly guaranteed by the United States of
America.
“Fiscal Year” means any twelve-month period beginning on July 1 in any year and
extending to the next succeeding June 30, both dates inclusive, or any other twelve month period
selected and designated by the Successor Agency to the Trustee in writing as its official fiscal year
period.
“Former Agency” means the now dissolved Redevelopment Agency of the City of Lake
Elsinore.
“Implementation Agreement” means that certain Second Implementation Agreement
relating to the Amended and Restated DDA, dated as of January 24, 2017, by and among the
Successor Agency, the Developer and the Master Developer, as heretofore or hereafter amended
from time to time.
“Indenture” means this Indenture of Trust by and between the Successor Agency and the
Trustee, as originally entered into or as it may be amended or supplemented by any Supplemental
Indenture entered into pursuant to the provisions hereof.
“Independent Accountant” means any accountant or firm of such accountants duly licensed
or registered or entitled to practice as such under the laws of the State, appointed by the Successor
Agency, and who, or each of whom:
(a)is in fact independent and not under domination of the Successor Agency or
the City;
(b)does not have any substantial interest, direct or indirect, with the Successor
Agency or the City; and
(c)is not connected with the Successor Agency or the City as an officer or
employee of the Successor Agency or the City, but who may be regularly retained to make reports to
the Successor Agency or the City.
“Independent Redevelopment Consultant” means any consultant or firm of such
consultants appointed by the Successor Agency, and who, or each of whom:
(a)is judged by the Successor Agency to have experience in matters relating to
the collection of Pledged Tax Revenues or otherwise with respect to the financing of redevelopment
projects;
(b)is in fact independent and not under domination of the Successor Agency or
the City;
9
(c)does not have any substantial interest, direct or indirect, with the Successor
Agency or the City; and
(d)is not connected with the Successor Agency or the City as an officer or
employee of the Successor Agency or the City, but who may be regularly retained to make reports to
the Successor Agency or the City.
“Information Services” means, in accordance with then current guidelines of the Securities
and Exchange Commission, such services providing information with respect to the redemption of
bonds as the Successor Agency may designate in a Written Request of the Successor Agency filed
with the Trustee.
“Insurer” means the 2017 Insurer and, as applicable, the provider of a municipal bond or
financial guaranty insurance policy with respect to Parity Debt.
“Interest Account” means the account by that name established and held by the Trustee
pursuant to Section 4.03(a).
“Interest Payment Date” means each March 1 and September 1, commencing [March 1,
2018], for so long as any of the Bonds remain Outstanding hereunder.
[“Late Payment Rate” means, for purposes of the 2017 Insurance Policy and the rights of
the 2017 Insurer hereunder, the lesser of (a) the greater of (i) the per annum rate of interest, publicly
announced from time to time by JPMorgan Chase Bank, N.A., at its principal office in The City of
New York, 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, N.A.) plus 3%,
and (ii) the then applicable highest rate of interest on the 2017 Bonds and (b) the maximum rate
permissible under applicable usury or similar laws limiting interest rates. In the event JPMorgan
Chase Bank, N.A., ceases to announce its Prime Rate, the PrimeRate shall be the prime or base
lending rate of such other bank, banking association or trust company as the 2017 Insurer, in its sole
and absolute discretion, shall designate. Interest at the Late Payment Rate on any amount owing to
the 2017 Insurer shall be computed on the basis of the actual number of days elapsed in a year of
360 days.]
“Law” means the Community Redevelopment Law of the State, constituting Part 1 of
Division 24 of the Health and Safety Code of the State, and the acts amendatory thereof and
supplemental thereto (including the Dissolution Act).
“Master Developer” means Civic Partners-Elsinore LLC.
“Maximum Annual Debt Service” means, as of the date of calculation, the largest amount
for the current or any future Bond Year payable on the 2017 Bonds or any Parity Debt in such Bond
Year. For purposes of such calculation, the amount of interest on any Bonds or other Parity Debt that
is payable from the proceeds of such Bonds or Parity Debt that is set aside solely for such purpose
shall not be included in the calculation of Maximum Annual Debt Service, and there also shall be
excluded payments with respect to the 2017 Bonds or any Parity Debt to the extent that amounts due
with respect to the 2017 Bonds or such Parity Debt are prepaid or otherwise discharged in
accordance with this Indenture or the relevant Parity Debt Instrument.
10
“Moody’s” means Moody’s Investors Service and its successors.
“Nominee” means (a) initially, Cede & Co., as nominee of DTC, and (b) any other nominee
of the Depository designated pursuant to Section 2.11(a).
“Outstanding” when used as of any particular time with reference to Bonds, means (subject
to the provisions of Section 9.05) all Bonds except:
(a)Bonds theretofore canceled by the Trustee or surrendered to the Trustee for
cancellation;
(b)Bonds paid or deemed to have been paid within the meaning of Section 9.03;
and
(c)Bonds in lieu of or in substitution for which other Bonds shall have been
authorized, executed, issued and delivered by the Successor Agency pursuant hereto.
“Oversight Board” means the Oversight Board of the Successor Agency established
pursuant to the Section 34179 of the Dissolution Act.
“Owner” or “Bondowner” means, with respect to any Bond, the person in whose name the
ownership of such Bond shall be registered on the Registration Books.
“Parity Debt” means any additional bonds, loans, advances or indebtedness issued or
incurred by the Successor Agency on a parity with the 2017 Bonds pursuant to Section 3.05.
“Parity Debt Instrument” means resolution, indenture of trust, supplemental indenture of
trust, loan agreement, trust agreement or other instrument authorizing the issuance of any Parity
Debt.
“Participating Underwriter” has the meaning ascribed thereto in the Continuing Disclosure
Certificate.
“Pass-Through Agreements” means the following agreements entered into between the
Former Agency and various taxing agencies with respect to the allocation and transfer of certain
Revenues from Project Area II and Project Area III:
(i)the December 27, 1983, Amended Agreement by and among the City, the
Successor Agency and the Elsinore Valley Municipal Water District for Project Areas I and II;
(ii)the January 10, 1984, Cooperative agreement by and among the City, the
Successor Agency and the Riverside County Flood Control and Water Conservation District for
Project Areas I and II;
(iii)the February 28, 1984, Agreement by and among the City, the Successor
Agency and the Elsinore Water District for Project Area II;
(iv)the February 28, 1984, Cooperation Agreement by and among the City, the
Successor Agency and the County of Riverside for Project Area II;
11
(v)the April 11, 1984, Cooperation Agreement by and among the City, the
Successor Agency and the Elsinore Valley Cemetery District for Project Area II;
(vi)the June 14, 1987, Cooperation Agreement by and among the City, the
Successor Agency and the Mt. San Jacinto Community College District for Project Area III;
(vii)the June 14, 1987, Cooperation Agreement by and among the City, the
Successor Agency and the Elsinore Union High School District for Project Area III;
(viii)the June 14, 1987, Cooperation Agreement by and among the City, the
Successor Agency and the Lake Elsinore School District for Project Area III;
(ix)the June 14, 1987, Cooperation Agreement by and among the City, the
Successor Agency and the Riverside County Office of Education for Project Area III;
(x)the June 14, 1988, Amended Cooperation Agreement by and among the City,
the Successor Agency and the Elsinore Valley Municipal Water District for Project Area III;
(xi)the June 14, 1988, Cooperation Agreement by and among the City, the
Successor Agency and the Elsinore Water District for Project Area III;
(xii)the June 27, 1989, Cooperation Agreement by and among the City, the
Successor Agency and the Riverside County Flood Control and Water Conservation District for
Project Area III; and
(xiii)the January 23, 1990, Cooperation Agreement by and among the City, the
Successor Agency and the County of Riverside for Project Area III, as said agreement was amended
on or about February 8, 1994.
“Permitted Investments” means any of the following which, at the time of investment, are
legal investments under the laws of the State for the moneys proposed to be invested therein and are
in compliance with the Successor Agency’s investment policies then in effect (provided that the
Trustee shall be entitled to rely upon any investment direction from the Successor Agency as
conclusive certification to the Trustee that investments described therein are legal and are in
compliance with the Successor Agency’s investment policies then in effect), but only to the extent
the same are acquired at Fair Market Value:
(a)Federal Securities;
(b)Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such obligations are backed by the
full faith and credit of the United States of America (stripped securities are only permitted if they
have been stripped by the agency itself): (i) direct obligations or fully guaranteed certificates of
beneficial ownership of the U.S. Export-Import Bank; (ii) certificates of beneficial ownership of the
Farmers Home Administration; (iii) Federal Housing Administration debentures; (iv) participation
certificates of the General Services Administration; (v) Federal Financing Bank bonds and
debentures; (vi) guaranteed mortgage-backed bonds or guaranteed pass-through obligations of Ginnie
Mae (formerly known as the Government National Mortgage Association); (vii) guaranteed Title XI
financings of the U.S. Maritime Administration; and (viii) project notes, local authority bonds, new
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communities debentures and U.S. public housing notes and bonds of the U.S. Department of Housing
and Urban Development;
(c)Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit U.S. government agencies (stripped
securities only as stripped by the agency itself): (i) senior debt obligations of the Federal Home Loan
Bank System; (ii) participation certificates and senior debt obligations of the Federal Home Loan
Mortgage Corporation; (iii) mortgaged-backed securities and senior debt obligations of Fannie Mae;
(iv) senior debt obligations of Sallie Mae (formerly known as the Student Loan Marketing
Association); (v) obligations of the Resolution Funding Corporation; and (vi) consolidated system-
wide bonds and notes of the Farm Credit System;
(d)Money market funds registered under the Federal Investment Company Act
of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by
S&P of at least AAAm-G, AAAm or AAm, and a rating by Moody’s of Aaa, Aa1 or Aa2, including
such funds for which the Trustee, its affiliates or subsidiaries provide investment advisory or other
management services or for which the Trustee or an affiliate of the Trustee serves as investment
administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (i) the
Trustee or an affiliate of the Trustee receives fees from funds for services rendered, (ii) the Trustee
collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees
received from such funds, and (iii) services performed for such funds and pursuant to this Indenture may
at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee;
(e)Certificates of deposit (including those of the Trustee, its parent and its
affiliates) secured at all times by collateral described in (a) or (b) above or by collateral that may be
used by a national bank for purposes of satisfying its obligations to collateralize pursuant to federal
law, which have a maturity not greater than one year from the date of investment and which are
issued by commercial banks, savings and loan associations or mutual savings banks;
(f)Certificates of deposit, savings accounts, deposit accounts or money market
deposits (including those of the Trustee and its affiliates), but only to the extent that the amount
being invested in such certificates of deposit, savings accounts, deposit accounts or money market
deposits are fully insured by FDIC, including BIF and SAIF, secured at all times by collateral
described in (a) or (b) above or by collateral that may be used by a national bank for purposes of
satisfying its obligations to collateralize pursuant to federal law;
(g)Investment agreements, including guaranteed investment contracts, forward
purchase agreements, reserve fund put agreements and collateralized investment agreements with an
entity rated “Aa” or better by Moody’s and “AA” or better by S&P, or unconditionally guaranteed by
an entity rated “Aa” or better by Moody’s and “AA” or better by S&P;
(h)Commercial paper rated, at the time of purchase, “Prime-1” by Moody’s and
“A-1+” or better by S&P;
(i)Bonds or notes issued by any state or municipality which are rated by
Moody’s and S&P in one of the two highest rating categories assigned by such agencies;
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(j)Federal funds or bankers acceptances with a maximum term of one year of
any bank which has an unsecured, uninsured and unguaranteed obligation rating of “Prime-1” or
“A3” or better by Moody’s, and “A-1+” by S&P; and
(k)The Local Agency Investment Fund that is administered by the California
Treasurer for the investment of funds belonging to local agencies within the State of California,
provided that for investment of funds held by the Trustee, the Trustee is entitled to make investments
and withdrawals in its own name as Trustee.
“Pledged Tax Revenues” means all taxes that were eligible for allocation to the Former
Agency with respect to the Project Areas and are allocated to the Successor Agency pursuant to
Article 6 of Chapter 6 (commencing with Section 33670) of the Law and Section 16 of Article XVI
of the Constitution of the State, or pursuant to other applicable State laws and that are deposited or
available for deposit in the Redevelopment Property Tax Trust Fund, excluding (i) the portion of
such taxes required to pay debt service on the Existing Bonds, but only to the extent that such taxes
were pledged to the payment of debt service on the Existing Bonds, (ii) payment of “Pledged
Housing Funds” (defined in in the Summerly DDA) to the Master Developer, as required by the
Summerly DDA, (iii) payments required pursuant to the Pass-Through Agreements, and (iv) all
Statutory Pass-Through Amounts unless such payments are subordinated to payments on the 2017
Bonds or any additional Bonds or to the payments owed under any Parity Debt Instrument pursuant
to Section 33607.5(e) of the Law or 34177.5(c) of the Dissolution Act.
“Principal Account” means the account by that name established and held by the Trustee
pursuant to Section 4.03(b).
“Principal Corporate Trust Office” means the corporate trust office of the Trustee in Costa
Mesa, California, or such other or additional offices as the Trustee may designate in writing to the
Successor Agency from time to time as the corporate trust office for purposes of the Indenture;
except that with respect to presentation of Bonds for payment or for registration of transfer and
exchange, such term means the office or agency of the Trustee at which, at any particular time, its
corporate trust agency business is conducted.
“Project Areas” means Project Area II and Project Area III, as described in the
Redevelopment Plans.
“Qualified Reserve Account Credit Instrument” means (i) the 2017 Reserve Policy, and
(ii) an irrevocable standby or direct-pay letter of credit, insurance policy, or surety bond issued by a
commercial bank 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) S&P or
Moody’s have assigned a long-term credit rating at the time of issuance of such Qualified Reserve
Account Credit Instrument to such bank or insurance company of “A” (without regard to modifier) or
higher; (b) such letter of credit, insurance policy or surety bond has a term of at least 12 months;
(c) such letter of credit, insurance policy 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, insurance policy or surety
bond to draw thereunder an amount equal to any deficiencies which may exist from time to time in
the Interest Account or the Principal Account for the purpose of making payments required pursuant
to Sections 4.03(a), 4.03(b) or 4.03(c) of this Indenture.
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“Rebate Fund” means the fund by that name referenced in Section 4.04 of this Indenture.
“Rebate Regulations” means the final Treasury Regulations issued under Section 148(f) of
the Code.
“Recognized Obligation Payment Schedule” means a Recognized Obligation Payment
Schedule, each prepared and approved from time to time pursuant to subdivision (o) of
Section 34177 of the California Health and Safety Code or any similar or successor statute.
“Record Date” means, with respect to any Interest Payment Date, the close of business on
the fifteenth (15th) calendar day of the month preceding such Interest Payment Date, whether or not
such fifteenth (15th) calendar day is a Business Day.
“Redemption Account” means the account by that name established and held by the Trustee
pursuant to Section 4.03(d).
“Redevelopment Obligation Retirement Fund” means the fund by that name established
pursuant to California Health and Safety Code Section 34170.5(a) and administered by the Successor
Agency.
“Redevelopment Plans” means, collectively, the redevelopment plans for Project Area II
and Project Area III, as applicable, as heretofore amended and as may hereafter be amended in
accordance with the law.
“Redevelopment Projects” means the undertaking of the Successor Agency pursuant to the
Redevelopment Plans and the Law for the redevelopment of the Project Areas.
“Redevelopment Property Tax Trust Fund” means the fund by that name established
pursuant to California Health & Safety Code Sections 34170.5(b) and 34172(c) and administered by
the County Auditor-Controller.
“Refunding Law” means Article 11 (commencing with Section 53580) of Chapter 3 of
Part 1 of Division 2 of Title 5 of the Government Code of the State, and the acts amendatory thereof
and supplemented thereto.
“Registration Books” means the records maintained by the Trustee pursuant to Section 2.08
for the registration and transfer of ownership of the Bonds.
“Report” means a document in writing signed by an Independent Redevelopment Consultant
and including:
(a)a statement that the person or firm making or giving such Report has read the
pertinent provisions of this Indenture to which such Report relates;
(b)a brief statement as to the nature and scope of the examination or
investigation upon which the Report is based; and
(c)a statement that, in the opinion of such person or firm, sufficient examination
or investigation was made as is necessary to enable said consultant to express an informed opinion
with respect to the subject matter referred to in the Report.
15
“Reserve Account” means the account by that name established and held by the Trustee
pursuant to Section 4.03(c).
“Reserve Requirement” means, subject to Section 4.03(c) of this Indenture, with respect to
the 2017 Bonds, and each series of Parity Debt issued in the form of Bonds, the lesser of
(i)125% of the average Annual Debt Service with respect to that series of the
Bonds,
(ii)Maximum Annual Debt Service with respect to that series of the Bonds, or
(iii)with respect to an individual series of Bonds, 10% of the original principal
amount of a series of Bonds (or, if such series of Bonds has more than a de minimis amount of
original issue discount or premium, 10% of the issue price of such series of Bonds);
provided, that in no event shall the Successor Agency, in connection with the issuance of Parity Debt
in the form of Bonds pursuant to a Supplemental Indenture be obligated to deposit an amount in the
Reserve Account which is in excess of the amount permitted by the applicable provisions of the Code
to be so deposited from the proceeds of tax-exempt bonds without having to restrict the yield of any
investment purchased with any portion of such deposit and, in the event the amount of any such
deposit into the Reserve Account is so limited, the Reserve Requirement shall, in connection with the
issuance of such Parity Debt issued in the form of Bonds, be increased only by the amount of such
deposit as permitted by the Code; and, provided further that the Successor Agency may meet all or a
portion of the Reserve Requirement by depositing a Qualified Reserve Account Credit Instrument
meeting the requirements of Section 4.03(c) hereof. If the Reserve Requirement with respect to a
particular series of Bonds is secured by a Qualified Reserve Account Credit Instrument that relates
only to such series of Bonds, the calculation of Reserve Requirement for such series of Bonds shall
be calculated on a stand-alone basis.
“ROPS Period” means each annual period beginning on July 1 of any calendar year and
ending on June 30 of the next such calendar year, or such other period as provided in the Dissolution
Act.
“S&P”means S&P Global Ratings, LLC, a Standard & Poor’s Financial Services LLC
business, and its successors.
“Securities Depositories” means The Depository Trust Company, New York, New York
10041-0099, Fax-(212) 855-7232; or, in accordance with then current guidelines of the Securities and
Exchange Commission, such other addresses and/or such other securities depositories as the
Successor Agency may designate in a Written Request of the Successor Agency delivered to the
Trustee.
“Semiannual Period” means (a) each six-month period beginning on January 1 of any
calendar year and ending on June 30 of such calendar year, and (b) each six-month period beginning
on July 1 of any calendar year and ending on December 31 of such calendar year.
“Serial Bonds” means all Bonds other than Term Bonds.
16
“Special Fund” means the fund held by the Successor Agency established pursuant to
Section 4.02.
“State” means the State of California.
“Statutory Pass-Through Amounts” means amounts required to be paid to taxing agencies
pursuant to Sections 33607.5 and 33607.7 of the Law.
“Subordinate Debt” means any loans, advances or indebtedness issued or incurred by the
Successor Agency pursuant to Section 3.07, which are either: (a) payable from, but not secured by a
pledge of or lien upon, the Pledged Tax Revenues; or (b) secured by a pledge of or lien upon the
Pledged Tax Revenues which is expressly subordinate to the pledge of and lien upon the Pledged Tax
Revenues hereunder for the security of the 2017 Bonds, the Existing Bonds and any Parity Debt.
“Subordinate Debt Instrument” means any instrument providing for the issuance of
Subordinate Debt.
“Summerly DDA” means, collectively, the Amended and Restated DDA and the
Implementation Agreement.
“Supplemental Indenture” means any resolution, agreement or other instrument which has
been duly adopted or entered into by the Successor Agency, 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 2017A Bonds.
“Term Bonds” means (i) the 2017A Bonds maturing on March 1, 20__, (ii) the 2017B
Bonds maturing on March 1, 20__, and (iii) that portion of any other Bonds payable from mandatory
sinking account payments.
“Trustee” means Wilmington Trust, National Association, as trustee hereunder, or any
successor thereto appointed as trustee hereunder in accordance with the provisions of Article VI.
“Written Request of the Successor Agency” or “Written Certificate of the Successor
Agency” means a request or certificate, in writing signed by the Administrator or Treasurer of the
Successor Agency, or the designee of either, or by any other officer of the Successor Agency or the
City duly authorized by the Successor Agency for that purpose.
“2017 Bonds” means the 2017A Bonds and the 2017B Bonds.
“2017A Bonds” means the $___________ Successor Agency of the Redevelopment Agency
of the City of Lake Elsinore (Rancho Laguna Redevelopment Project Areas No. II and No. III) Third
Lien Tax Allocation Bonds, Series 2017A.
“2017A Bonds Account” means the account by that name established within the Project
Fund.
17
“2017B Bonds” means the $___________ Successor Agency of the Redevelopment Agency
of the City of Lake Elsinore (Rancho Laguna Redevelopment Project Areas No. II and No. III) Third
Lien Tax Allocation Bonds, Series 2017B (Federally Taxable).
“2017B Bonds Account” means the account by that name established within the Project
Fund.
[“2017 Insurance Policy” means the Municipal Bond Insurance Policy issued by the 2017
Insurer that guarantees the scheduled payment of principal of and interest on the 2017 Bonds when
due.]
[“2017 Insurer” means __________, or any successor thereto.]
[“2017 Reserve Policy” means the Municipal Bond Debt Service Reserve Insurance Policy
issued by the 2017 Insurer for the 2017 Bonds.]
Section 1.03 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.
ARTICLE II
AUTHORIZATION AND TERMS
Section 2.01 Authorization of 2017 Bonds. Two initial issues of Bonds are hereby
authorized to be issued by the Successor Agency under and subject to the terms of this Indenture, the
Refunding Law, the Dissolution Act and the Law. This Indenture constitutes a continuing agreement
with 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. Such initial issues of Bonds shall be
designated (i) “Successor Agency of the Redevelopment Agency of the City of Lake Elsinore
(Rancho Laguna Redevelopment Project Areas No. II and No. III) Third Lien Tax Allocation Bonds,
Series 2017A” (the “2017A Bonds”) and (ii) “Successor Agency of the Redevelopment Agency of
the City of Lake Elsinore (Rancho Laguna Redevelopment Project Areas No. II and No. III) Third
Lien Tax Allocation Bonds, Series 2017B (Federally Taxable)” (the “2017B Bonds”). The 2017A
Bonds shall be issued in the initial aggregate principal amount of $__________, and the 2017B
Bonds shall be issued in the initial aggregate principal amount of $__________.
Section 2.02 Terms of 2017 Bonds. The 2017 Bonds shall be issued in fully registered
form without coupons. The 2017 Bonds shall be issued in denominations of $5,000 or any integral
multiple thereof, so long as no 2017 Bond shall have more than one maturity date. The 2017 Bonds
shall be dated as of their Closing Date. The 2017 Bonds shall be lettered and numbered as the
Trustee shall prescribe.
18
The 2017 Bonds shall mature and shall bear interest (calculated on the basis of a 360-day
year comprised of twelve 30-day months) at the rate per annum as follows:
2017A BONDS
Maturity Date
(March 1)
Principal
Amount
Interest
Rate
$%
*
*Term Bond.
19
2017B BONDS
Maturity Date
(March 1)
Principal
Amount
Interest
Rate
$%
*
*Term Bond.
Each 2017 Bond shall bear interest from the Interest Payment Date next preceding the date of
authentication thereof, unless (a) it is authenticated after a 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) it is authenticated on or before [February 15, 2018], in which event it shall bear interest
from its Closing Date; provided, however, that if, as of the date of authentication of any 2017 Bond,
interest thereon is in default, such 2017 Bond shall bear interest from the Interest Payment Date to
which interest has previously been paid or made available for payment thereon.
Interest on the 2017 Bonds (including the final interest payment upon maturity or
redemption) is payable when due by check or draft of the Trustee mailed on the Interest Payment
Date to the Owner thereof at such Owner’s address as it appears on the Registration Books at the
close of business on the preceding Record Date; provided that at the written request of the Owner of
at least $1,000,000 aggregate principal amount of either the 2017A Bonds or the 2017B Bonds,
which written request is on file with the Trustee as of any Record Date, interest on such 2017A
Bonds or such 2017B Bonds shall be paid on the succeeding Interest Payment Date to such account
in the United States as shall be specified in such written request. The principal of the 2017 Bonds
and any premium upon redemption, are payable in lawful money of the United States of America
upon presentation and surrender thereof at the Principal Corporate Trust Office of the Trustee.
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Section 2.03 Redemption of 2017 Bonds.
(a)Optional Redemption.
(i)The 2017A Bonds maturing on or prior to March 1, 20__ are not
subject to optional redemption. The 2017A Bonds maturing on or after March 1, 20__, are subject to
optional redemption prior to their respective maturity dates as a whole, or in part by lot, on any date
on or after March 1, 20__, by such maturity or maturities as shall be directed by the Successor
Agency (or in absence of such direction, pro rata by maturity and by lot within a maturity), from any
source of available funds. Such optional redemption shall be at a redemption price equal to 100% of
the principal amount to be redeemed, plus accrued but unpaid interest to the date fixed for
redemption, without premium.
(ii)The 2017B Bonds maturing on or prior to March 1, 20__ are not
subject to optional redemption. The 2017B Bonds maturing on or after March 1, 20__, are subject to
optional redemption prior to their respective maturity dates as a whole, or in part by lot, on any date
on or after March 1, 20__, by such maturity or maturities as shall be directed by the Successor
Agency (or in absence of such direction, pro rata by maturity and by lot within a maturity), from any
source of available funds. Such optional redemption shall be at a redemption price equal to 100% of
the principal amount to be redeemed, plus accrued but unpaid interest to the date fixed for
redemption, without premium.
The Successor Agency shall be required to give the Trustee written notice of its
intention to redeem 2017 Bonds under this subsection (a) with a designation of the principal amount
and maturities to be redeemed at least forty five (45) days prior to the date fixed for such redemption
(or such later date as shall be acceptable to the Trustee in the sole determination of the Trustee), and
shall transfer to the Trustee for deposit in the Debt Service Fund all amounts required for such
redemption not later than the date fixed for such redemption.
(b)Mandatory Sinking Fund Redemption.
(i)The 2017A Bonds that are Term Bonds maturing March 1, 20__ shall
also be subject to mandatory redemption in whole, or in part by lot, on March 1 in each year,
commencing March 1, 20__, as set forth below, from sinking fund payments made by the Successor
Agency to the Principal Account pursuant to Section 4.03(b), at a redemption price equal to the
principal amount thereof to be redeemed, without premium, in the aggregate respective principal
amounts and on March 1 in the respective years as set forth in the following table; provided however,
that (y) in lieu of redemption thereof such Series 2017A Term Bonds may be purchased by the
Successor Agency pursuant to Section 2.03(g) hereof, and (z) if some but not all of such Series
2017A Term Bonds have been redeemed pursuant to subsection (a) above, the total amount of all
future sinking fund payments shall be reduced by the aggregate principal amount of such Series
2017A Term Bonds so redeemed, to be allocated among such sinking fund payments in integral
multiples of $5,000 as determined by the Successor Agency (notice of which determination shall be
given by the Successor Agency to the Trustee).
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Series 2017A Term Bonds of 20__
March 1 Principal Amount
†
†Final Maturity.
(ii)The 2017B Bonds that are Term Bonds maturing March 1, 20__ shall
also be subject to mandatory redemption in whole, or in part by lot, on March 1 in each year,
commencing March 1, 20__, as set forth below, from sinking fund payments made by the Successor
Agency to the Principal Account pursuant to Section 4.03(b), at a redemption price equal to the
principal amount thereof to be redeemed, without premium, in the aggregate respective principal
amounts and on March 1 in the respective years as set forth in the following table; provided however,
that (y) in lieu of redemption thereof such Series 2017B Term Bonds may be purchased by the
Successor Agency pursuant to Section 2.03(g) hereof, and (z) if some but not all of such Series
2017B Term Bonds have been redeemed pursuant to subsection (a) above, the total amount of all
future sinking fund payments shall be reduced by the aggregate principal amount of such Series
2017B Term Bonds so redeemed, to be allocated among such sinking fund payments in integral
multiples of $5,000 as determined by the Successor Agency (notice of which determination shall be
given by the Successor Agency to the Trustee).
Series 2017B Term Bonds of 20__
March 1 Principal Amount
†
†Final Maturity.
(c)Notice of Redemption; Rescission. The Trustee on behalf and at the expense
of the Successor Agency shall mail (by first class mail, postage prepaid) notice of any redemption at
least twenty (20) (or such longer period, up to thirty (30) days, as may be required by the Depository)
but not more than sixty (60) days prior to the redemption date, (i) to any Insurer and to the Owners of
any Bonds designated for redemption at their respective addresses appearing on the Registration
Books, and (ii) to the Securities Depositories and one or more Information Services designated in a
Written Request of the Successor Agency filed with the Trustee; but such mailing shall not be a
condition precedent to such redemption and neither failure to receive any such notice 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 redemption date and the redemption
price, shall state, in the case of a redemption pursuant to (a) above, that such redemption is
conditioned upon the timely delivery of the redemption price by the Successor Agency to the Trustee
22
for deposit in the Redemption Account, shall designate the CUSIP number of the Bonds to be
redeemed, shall state the individual number of each Bond to be redeemed or shall state that all Bonds
between two stated numbers (both inclusive) or all of the Bonds Outstanding are to be redeemed, and
shall require that such Bonds be then surrendered at the Principal Corporate Trust Office of the
Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds
will not accrue from and after the redemption date.
The Successor Agency shall have the right to rescind any optional redemption by
written notice to the Trustee on or prior to the date fixed for redemption. Any such notice of optional
redemption shall be canceled 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 this 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 and to the same recipients as the original notice of redemption was sent;
provided, however, the notice of rescission shall not be required to be mailed within the time period
required for the notice of redemption.
Upon the payment of the redemption price of Bonds being redeemed, each check or
other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP
number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such
check or other transfer.
(d)Partial Redemption of Bonds. In the event 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
aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed.
(e)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 shall 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.
(f)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 notify the Successor Agency thereof to the extent Bonds are no
longer held in book-entry form. In the event of redemption by lot of Bonds, the Trustee 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 of a denomination of more
than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected.
All Bonds redeemed or purchased pursuant to this Section 2.03 shall be cancelled and destroyed.
(g)Purchase in Lieu of Redemption. In lieu of redemption of the Term Bonds
pursuant to the subsection (b) above or pursuant to a Supplemental Indenture, amounts on deposit in
the Special Fund or in the Principal Account may also be used and withdrawn by the Successor
23
Agency and the Trustee, respectively, at any time, upon the Written Request of the Successor
Agency, for the purchase of the Term Bonds at public or private sale as and when and at such prices
(including brokerage and other charges, but excluding accrued interest, which is payable from the
Interest Account) as the Successor Agency may in its discretion determine. The par amount of any
Term Bonds so purchased by the Successor Agency in any twelve-month period ending on July 1 in
any year shall be credited towards and shall reduce the par amount of the Term Bonds required to be
redeemed pursuant to subsection (d) on March 1 in each year; provided that evidence satisfactory to
the Trustee of such purchase has been delivered to the Trustee by said July 1.
Section 2.04 Form of 2017 Bonds. The 2017A 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, which is attached hereto and by this reference incorporated herein, with necessary
or appropriate variations, omissions and insertions, as permitted or required by this Indenture. The
2017B 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 B, which is attached hereto and
by this reference incorporated herein, with necessary or appropriate variations, omissions and
insertions, as permitted or required by this Indenture.
Section 2.05 Execution of Bonds. The Bonds shall be executed on behalf of the
Successor Agency by the signature of the Chair, Executive Director or Treasurer or the written
designee of any of them and the signature of the Secretary of the Successor Agency 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
hereinbefore set forth, manually executed and dated by the Trustee, shall be valid or obligatory for
any purpose or entitled to the benefits of this Indenture, and such Certificate 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 2.09
hereof, the temporary Bonds may bear thereon a Certificate of Authentication executed and dated by
the Trustee, may be initially registered by the Trustee, and, until so exchanged as provided under
Section 2.09 hereof, the temporary Bonds shall be entitled to the same benefits pursuant to this
Indenture as definitive Bonds authenticated and delivered hereunder.
Section 2.06 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
Principal 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 shall be surrendered
for transfer, the Successor Agency shall execute and the Trustee shall thereupon authenticate and
deliver to the transferee a new Bond or Bonds of like tenor, maturity and aggregate principal amount
of authorized denominations. The Trustee shall require the payment by the Owner of any tax or
other governmental charge on the transfer of any Bonds pursuant to this Section 2.06. The cost of
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printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any
transfer shall be paid by the Successor Agency.
The Trustee may refuse to transfer, under the provisions of this Section 2.06, either (a) any
Bonds during the period fifteen (15) days prior to the date established by the Trustee for the selection
of Bonds for redemption, or (b) any Bonds selected by the Trustee for redemption.
Section 2.07 Exchange of Bonds. Bonds may be exchanged at the Principal Corporate
Trust Office of the Trustee for Bonds of the same tenor and maturity and of other authorized
denominations. The Trustee shall require the payment by the Owner of any tax or other
governmental charge on the exchange of any Bonds pursuant to this Section 2.07. The cost of
printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any
exchange shall be paid by the Successor Agency.
The Trustee may refuse to exchange, under the provisions of this Section 2.07, either (a) any
Bonds during the fifteen (15) days prior to the date established by the Trustee for the selection of
Bonds for redemption or (b) any Bonds selected by the Trustee for redemption.
Section 2.08 Registration of Bonds. The Trustee will keep or cause to be kept, at its
Principal 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 and copying
by the Successor Agency, upon reasonable prior notice to the Trustee; 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 2.09 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 Principal
Corporate Trust Office of the Trustee, and the Trustee shall authenticate and deliver in exchange for
such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized
denominations, interest rates and like maturities. 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
Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and amount 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
Trustee and, if such evidence be satisfactory to it and indemnity satisfactory to it 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 tenor and amount in lieu of and in substitution for the
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Bond so lost, destroyed or stolen (or if any such Bond has matured or has been called for redemption,
instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof upon
receipt of indemnity satisfactory to the Trustee and the Successor Agency). The Successor Agency
may require payment by the Owner 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 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 System.
(a)Original Delivery. The Bonds shall be initially delivered in the form of a
separate single fully registered Bond without coupons (which may be typewritten) for each maturity
of the Bonds. Upon initial delivery, the ownership of each such Bond shall be registered on the
Registration Books in the name of the Nominee. Except as provided in subsection (c), the ownership
of all of the Outstanding Bonds shall be registered in the name of the Nominee on the Registration
Books.
With respect to Bonds the ownership of which shall be registered in the name of the
Nominee, neither the Successor Agency nor the Trustee shall have any responsibility or obligation to
any Depository System Participant or to any person on behalf of which the Depository System
Participant holds an interest in the Bonds. Without limiting the generality of the immediately
preceding sentence, neither the Successor Agency nor the Trustee shall have any responsibility or
obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any
Depository System Participant with respect to any ownership interest in the Bonds, (ii) the delivery
to any Depository System Participant or any other person, other than a Bondowner as shown in the
Registration Books, of any notice with respect to the Bonds, including any notice of redemption,
(iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed in the
event the Successor Agency elects to redeem the Bonds in part, (iv) the payment to any Depository
System Participant or any other person, other than a Bondowner as shown in the Registration Books,
of any amount with respect to principal, premium, if any, or interest on the Bonds or (v) any consent
given or other action taken by the Depository as Owner of the Bonds. The Successor Agency and the
Trustee may treat and consider the person in whose name each Bond is registered as the absolute
owner of such Bond for the purpose of payment of principal, premium and interest on such Bond, for
the purpose of giving notices of redemption and other matters with respect to such Bond, for the
purpose of registering transfers of ownership of such Bond, and for all other purposes whatsoever.
The Trustee shall pay the principal of and interest and premium, if any, on the Bonds only to the
respective Owners or their respective attorneys duly authorized in writing, and all such payments
shall be valid and effective to fully satisfy and discharge all obligations with respect to payment of
principal of and interest and premium, if any, on the Bonds to the extent of the sum or sums so paid.
No person other than a Bondowner shall receive a Bond evidencing the obligation of the Successor
Agency to make payments of principal, interest and premium, if any, pursuant to this Indenture.
Upon delivery by the Depository to the Nominee of written notice to the effect that the Depository
has determined to substitute a new nominee in its place, and subject to the provisions herein with
respect to Record Dates, such new nominee shall become the Nominee hereunder for all purposes;
and upon receipt of such a notice the Successor Agency shall promptly deliver a copy of the same to
the Trustee.
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(b)Representation Letter. In order to qualify the Bonds for the Depository’s
book-entry system, the Successor Agency and the Trustee shall execute and deliver to such
Depository a letter representing such matters as shall be necessary to so qualify the Bonds. The
execution and delivery of such letter shall not in any way limit the provisions of subsection (a) above
or in any other way impose upon the Successor Agency or the Trustee any obligation whatsoever
with respect to persons having interests in the Bonds other than the Bondowners. The Trustee agrees
to comply with all provisions in such letter with respect to the giving of notices thereunder by the
Trustee. In addition to the execution and delivery of such letter, upon written request of the
Depository or the Trustee, the Successor Agency may take any other actions, not inconsistent with
this Indenture, to qualify the Bonds for the Depository’s book-entry program.
(c)Transfers Outside Book-Entry System. In the event that either (i) the
Depository determines not to continue to act as Depository for the Bonds, or (ii) the Successor
Agency determines to terminate the Depository as such, then the Successor Agency shall thereupon
discontinue the book-entry system with such Depository. In such event, the Depository shall
cooperate with the Successor Agency and the Trustee in the issuance of replacement Bonds by
providing the Trustee with a list showing the interests of the Depository System Participants in the
Bonds, and by surrendering the Bonds, registered in the name of the Nominee, to the Trustee on or
before the date such replacement Bonds are to be issued. The Depository, by accepting delivery of
the Bonds, agrees to be bound by the provisions of this subsection (c). If, prior to the termination of
the Depository acting as such, the Successor Agency fails to identify another Securities Depository to
replace the Depository, then the Bonds shall no longer be required to be registered in the Registration
Books in the name of the Nominee, but shall be registered in whatever name or names the Owners
transferring or exchanging Bonds shall designate, in accordance with the provisions of this Article II.
Prior to its termination, the Depository shall furnish the Trustee with the names and addresses of the
Depository System Participants and respective ownership interests thereof.
(d)Payments to the Nominee. Notwithstanding any other provision of this
Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments
with respect to principal of and interest and premium, if any, on such Bond and all notices with
respect to such Bond shall be made and given, respectively, as provided in the letter described in
subsection (b) of this Section or as otherwise instructed by the Depository.
Section 2.12 Applicability of Provisions to Additional Bonds. Unless otherwise
provided in a Supplemental Indenture, the provisions of Sections 2.03(c) through (g) and 2.05
through 2.11 shall apply to additional Bonds.
ARTICLE III
DEPOSIT AND APPLICATION; ADDITIONAL DEBT
Section 3.01 Issuance of Bonds. Upon the execution and delivery of this Indenture, the
Successor Agency shall execute and deliver to the Trustee the 2017A Bonds in the aggregate
principal amount of $__________ and the 2017B Bonds in the aggregate principal amount of
$__________, and the Trustee shall authenticate and deliver the 2017A Bonds and the 2017B Bonds
upon the Written Request of the Successor Agency.
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Section 3.02 Application of Proceeds of Sale and Certain Other Amounts.
(a)On the Closing Date with respect to the 2017A Bonds, the net proceeds of
sale of the 2017A Bonds, being $__________ (calculated as the par amount thereof, [plus/less net
original issue premium/discount] in the amount of $__________, less the discount of the original
purchaser thereof in the amount of $__________, [less the portion of the premiums for the 2017
Insurance Policy and the 2017 Reserve Policy allocable to the 2017A Bonds in the amount of
$__________ paid directly to the 2017 Insurer]), shall be paid to the Trustee and applied as follows:
(i)The Trustee shall deposit the amount of $__________ in the Costs of
Issuance Fund.
(ii)[The Trustee shall deposit $______________, being the remaining
amount of proceeds of the 2017A Bonds, in the 2017 Bonds Account of the Project Fund.]
(b)On the Closing Date with respect to the 2017B Bonds, the net proceeds of
sale of the 2017B Bonds, being $__________ (calculated as the par amount thereof, [plus/less net
original issue premium/discount] in the amount of $__________, less the discount of the original
purchaser thereof in the amount of $_________, and [less the portion of the premiums for the 2017
Insurance Policy and the 2017 Reserve Policy allocable to the 2017B Bonds in the amount of
$__________ paid directly to the 2017 Insurer]), shall be paid to the Trustee and applied as follows:
(i)The Trustee shall deposit the amount of $__________ in the Costs of
Issuance Fund.
(ii)[The Trustee shall deposit $______________, being the remaining
amount of proceeds of the 2017B Bonds, in the 2017B Bonds Account of the Project Fund.]
Section 3.03 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 with respect to the 2017 Bonds 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 six (6) months following the Closing Date with respect to the 2017
Bonds, 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
Interest Account within the Debt Service Fund, with __% of such amount used to pay debt service on
the 2017A Bonds, and __% of such amount used to pay debt service on the 2017B Bonds, and the
Costs of Issuance Fund shall be closed.
Section 3.04 Project Fund.
(a)There shall be established a separate and segregated fund to be known as the
“2017 Project Fund” (the “Project Fund”), together with a “2017A Bonds Account” and a “2017B
Bonds Account” therein.
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(b)On the Closing Date with respect to the 2017 Bonds, the Trustee shall
disburse the $______________ on deposit in the Series 2017A Bonds Account to the Developer to
reimburse the Developer for Extraordinary Infrastructure Costs under the Summerly DDA.
(c)On the Closing Date with respect to the 2017 Bonds, the Trustee shall
disburse the $__________ on deposit in the Series 2017B Bonds Account as follows:
(i)$__________ shall be transferred to the Developer as payment of the
Unrestricted Portion of the Developer’s Share of the Developer Property Tax Revenues payable to
Developer pursuant to the Summerly DDA, less the City’s Share of the Unrestricted Portion of the
Developer’s Share of the Developer Property Tax Revenues.
(ii)$__________ shall be transferred to the Master Developer as payment
of the Unrestricted Portion of the Master Developer’s Share of the Master Developer Property Tax
Revenues payable to Master Developer pursuant to the Summerly DDA, less the City’s Share of the
Unrestricted Portion of the Master Developer’s Share of the Master Developer Property Tax
Revenues.
(d)[The moneys remaining in the Project Fund following the transfers described
in subdivisions (b) and (c) of this Section 3.04 shall be used and withdrawn by the Trustee from time
to time to make payments to the Developer and Master Developer, as applicable, as required by the
Summerly DDA, as shall be directed in a Written Request of the Successor Agency in substantially
the form of Exhibit C attached hereto. Upon receipt of each such Requisition, the Trustee will pay
the amount set forth in such Requisition as directed by the Successor Agency in such certificate. The
Trustee shall maintain the Project Fund until amounts in the Project Fund and each account therein
have been exhausted pursuant to Requisitions of the Successor Agency for the disbursement of such
amounts, or upon termination of the Successor Agency’s obligations under this Indenture pursuant to
Article X hereof, at which time the Trustee shall return any remaining balance in the Series 2017A
Account and the Series 2017B Account of the Project Fund to the Successor Agency for deposit to
the Special Fund and close the Project Fund.]
Section 3.05 Issuance of Parity Debt. In addition to the 2017 Bonds, the Successor
Agency may issue additional bonds (including pursuant to a Supplemental Indenture) or incur other
loans, advances or indebtedness payable from Pledged Tax Revenues on a parity with the 2017
Bonds as provided in this Section 3.05.
(a)The Successor Agency may issue and deliver any such Parity Debt to refund
outstanding Bonds or Parity Debt in such principal amount as shall be determined by the Successor
Agency subject to the following specific conditions all of which are hereby made conditions
precedent to the issuance and delivery of such Parity Debt:
(i)No event of default under the Indenture or under any Parity Debt
Instrument shall have occurred and be continuing unless such event of default shall be cured by the
issuance of such Parity Debt;
(ii)The issuance of the Parity Debt shall comply with the requirements of
Section 34177.5(a)(1) of the Dissolution Act;
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(iii)In the event the Successor Agency issues additional Bonds pursuant
to a Supplemental Indenture:
(A)interest on such Parity Debt shall be payable on September 1
and March 1 in each year of the term of such Parity Debt except the first twelve-month period, during
which interest may be payable on any September 1 or March 1,
(B)principal of such Parity Debt shall be payable on March 1 in
any year in which principal is payable, and
(C)the Successor Agency shall cause the amount on deposit in
the Reserve Account to equal the Reserve Requirement; and
(iv)The Successor Agency shall deliver to the Trustee a Written
Certificate of the Successor Agency certifying that the conditions precedent to the issuance of such
Parity Debt set forth above in this subsection (a) have been satisfied.
(b)The Successor Agency may also issue and deliver Parity Debt for the purpose
of financing additional DDA Payment Obligations under the Summerly DDA, subject to the
following specific conditions all of which are hereby made conditions precedent to the issuance and
delivery of such Parity Debt:
(i)No event of default under the Indenture or under any Parity Debt
Instrument shall have occurred and be continuing unless such event of default shall be cured by the
issuance of such Parity Debt;
(ii)The issuance of the Parity Debt pursuant to Section 34177.5(a)(4) of
the Dissolution Act shall have been approved by the Department of Finance;
(iii)In the event the Successor Agency issues additional Bonds pursuant
to a Supplemental Indenture:
(A)interest on such Parity Debt shall be payable on September 1
and March 1 in each year of the term of such Parity Debt except the first twelve-month period, during
which interest may be payable on any September 1 or March 1,
(B)principal of such Parity Debt shall be payable on March 1 in
any year in which principal is payable, and
(C)the Successor Agency shall cause the amount on deposit in
the Reserve Account to equal the Reserve Requirement; and
(iv)The Pledged Tax Revenues for the then current Fiscal Year plus, at
the option of the Successor Agency, the Additional Allowance as set forth in a Written Certificate of
the Successor Agency filed with the Trustee, shall be equal to one hundred twenty-five percent
(125%) of Maximum Annual Debt Service on all Bonds and all Parity Debt which will be
Outstanding following the issuance of such Parity Debt. For purposes of the foregoing sentence,
Pledged Tax Revenues shall be calculated by first allocating tax revenues generated from Project
Area I during the current Fiscal Year to the payment of debt service on all Existing Bonds that are
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payable from and secured by Project Area I tax revenues, such that only Existing Bonds to which
Pledged Tax Revenues are pledged and that cannot be paid using Project Area I tax revenues shall be
included in the coverage calculation set forth in this paragraph.
(v)[The Successor Agency shall promptly notify 2017 Insurer of any
request to the Oversight Board or Department of Finance for approval of the issuance of Parity Debt
for the purpose of satisfying its obligations under the Summerly DDA accompanied by evidence that
the issuance will comply with the conditions set forth in this Indenture.]
(vi)The Successor Agency will deliver to the Trustee a Written
Certificate of the Successor Agency certifying that the conditions precedent to the issuance of such
Parity Debt set forth above in this subsection (b) have been satisfied.
Section 3.06 Issuance of Senior Obligations to Refund Existing Bonds. The Successor
Agency may issue bonds secured by Pledged Tax Revenues or any part thereof, on a senior basis to
the Bonds and Parity Debt to refund all or any portion of the Existing Bonds or other obligations
payable on a senior basis to the Bonds, so long as the Successor Agency satisfies the requirements of
Section 34177.5(a)(1) of the Dissolution Act in connection with such refunding.
Section 3.07 Issuance of Subordinate Debt. The Successor Agency may issue or incur
Subordinate Debt in such principal amount as shall be determined by the Successor Agency. Such
Subordinate Debt may be payable from any assets or property of the Successor Agency, including
Pledged Tax Revenues, on a subordinate basis to the payment of debt service on the Bonds. Any
principal and interest payments on such Subordinate Debt shall be payable on the same dates as the
2017 Bonds and shall be subordinate and junior to the replenishment of the Reserve Account [and
reimbursement of all amounts due to the 2017 Insurer relating to the 2017 Insurance Policy or the
2017 Reserve Policy.]
ARTICLE IV
SECURITY OF BONDS; FLOW OF FUNDS
Section 4.01 Security of Bonds; Equal Security. Except as may otherwise be provided in
Section 4.02, Section 5.13 and Section 6.06, the 2017 Bonds and any Parity Debt shall be equally
secured by a pledge of, security interest in and lien on all of the Pledged Tax Revenues and the
moneys in the Special Fund, and the 2017 Bonds and any additional Bonds shall also be secured by a
first and exclusive pledge of, security interest in and lien upon all of the moneys in the Debt Service
Fund, the Interest Account, the Principal Account, the Redemption Account and the Reserve Account
(including any subaccounts therein) 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, which
constitute the amounts deposited in the Redevelopment Property Tax Trust Fund that are not pledged
to other obligations of the Former Agency or the Successor Agency, 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 hold the same from time
to time, this Indenture shall be deemed to be and shall constitute a contract between the Successor
Agency and 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
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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 4.02 Special Fund; Deposit of Pledged Tax Revenues. There is hereby
established a special fund to be known as the “Third Lien Bonds Special Fund” which is to be held
by the Successor Agency within the Redevelopment Obligation Retirement Fund and which shall
also be known as the “Special Fund.” The Redevelopment Obligation Retirement Fund, including
the Third Lien Bonds Special Fund therein, shall be held by the Successor Agency separate and apart
from other funds of the Successor Agency.
After the Successor Agency has made provision for all payments due with respect to Existing
Bonds, Pass-Through Agreements and Statutory Pass-Through Amounts for the applicable Bond
Year, the Successor Agency shall deposit all of the Pledged Tax Revenues received with respect to
any ROPS Period in accordance with Section 5.13 hereof into the Special Fund promptly upon
receipt thereof by the Successor Agency. After the Successor Agency has (a) delivered all amounts
to the Trustee required to make the payments described in Section 4.03, subsections (a), (b) and (if
applicable) (c), for the applicable Bond Year, and (b) paid all amounts due to the 2017 Insurer
hereunder and to any Insurer of Parity Debt pursuant to a Parity Debt Instrument, then all additional
Pledged Tax Revenues received by the Successor Agency in such Bond Year shall be released from
the pledge and lien hereunder and shall be applied in accordance with the Law, including but not
limited to the payment of debt service on any Subordinate Debt or to make payments to the
Developer or Master Developer under the Summerly DDA. Prior to the payment in full of the
principal of and interest and redemption premium (if any) on the Bonds and the payment in full of all
other amounts payable hereunder and under any Supplemental Indentures or other Parity Debt
Instrument, the Successor Agency shall not have any beneficial right or interest in the moneys on
deposit in the Special Fund, except as may be provided in this Indenture and in any Supplemental
Indenture or other Parity Debt Instrument.
Section 4.03 Deposit of Amounts by Trustee. There is hereby established a trust fund to
be known as the Debt Service Fund, which shall be held by the Trustee hereunder in trust. Moneys
in the Special Fund shall be transferred by the Successor Agency to the Trustee promptly upon
receipt thereof by the Successor Agency in the following amounts, at the following times, and
deposited by the Trustee in the following respective special accounts, which are hereby established in
the Debt Service Fund, and in the following order of priority (provided further that, if on the fifth
(5th) Business Day prior to the date the Successor Agency is required to transfer amounts on deposit
in the Special Fund to the Trustee there are not amounts on deposit therein sufficient to make the
following deposits, taking into accounts amounts required to be transferred with respect to Parity
Debt other than Bonds, the Successor Agency shall immediately notify the Trustee of the amount of
any such insufficiency):
(a)Interest Account. Promptly upon receipt of Pledged Tax Revenues by the
Successor Agency and not later than the fifth (5th) Business Day preceding each Interest Payment
Date, commencing with the Interest Payment Date of [March 1, 2018] (with respect to the 2017
Bonds), the Successor Agency shall withdraw from the Special Fund and transfer to the Trustee, for
deposit in 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
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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. All
moneys in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of
paying the interest on the Bonds as it shall become due and payable (including accrued interest on
any Bonds redeemed prior to maturity pursuant to this Indenture).
(b)Principal Account. Promptly upon receipt of Pledged Tax Revenues by the
Successor Agency and not later than the fifth (5th) Business Day preceding March 1 in each year
beginning [March 1, 2019] (with respect to the 2017 Bonds), the Successor Agency shall withdraw
from the Special Fund and transfer to the Trustee for deposit in the Principal Account an amount
which, when added to the amount then contained in the Principal Account, will be equal to the
principal becoming due and payable on the Outstanding Serial Bonds and Outstanding Term Bonds,
including pursuant to mandatory sinking account redemption, on the next March 1. No such transfer
and deposit need be made to the Principal Account if the amount contained therein is at least equal to
the principal to become due on the next March 1 on all of the Outstanding Serial Bonds and Term
Bonds. All moneys in the Principal Account shall be used and withdrawn by the Trustee solely for
the purpose of paying the principal of the Serial Bonds and the Term Bonds, including by mandatory
sinking account redemption, as the same shall become due and payable.
(c)Reserve Account. There is hereby established in the Debt Service Fund a
separate account known as the “Reserve Account” solely as security for payments payable by the
Successor Agency pursuant to this Section 4.03 and pursuant to any Supplemental Indenture or other
Parity Debt Instrument, which shall be held by the Trustee in trust for the benefit of the Owners of
the Bonds and any Parity Debt. [The Reserve Requirement for the 2017 Bonds will be satisfied by
the delivery of the 2017 Reserve Policy by the 2017 Insurer on the Closing Date with respect to the
2017 Bonds. The Successor Agency will have no obligation to replace the 2017 Reserve Policy or to
fund the Reserve Account with cash if, at any time that the 2017 Bonds are Outstanding, any rating
assigned to the 2017 Insurer is downgraded, suspended or withdrawn or amounts are not available
under the 2017 Reserve Policy other than in connection with a draw on the 2017 Reserve Policy.]
Except as provided in the preceding paragraph and as may be provided in a
Supplemental Indenture or Parity Debt Instrument, in the event that the amount on deposit in the
Reserve Account at any time becomes less than the Reserve Requirement, the Trustee shall promptly
notify the Successor Agency of such fact. Upon receipt of any such notice and as promptly as is
permitted by the Law, the Successor Agency shall transfer to the Trustee an amount sufficient to
maintain the Reserve Requirement on deposit in the Reserve Account.
[The amounts available under the 2017 Reserve Policy shall be used and withdrawn
by the Trustee solely for the purpose of making transfers to the Interest Account and the Principal
Account in such order of priority, in the event of any deficiency at any time in any of such accounts
with respect to the payment of debt service on the 2017 Bonds.]
Except as provided above, the amount on deposit in the Reserve Account shall be
maintained at the Reserve Requirement at all times prior to the payment of the Bonds and any Parity
Debt in full. If there shall then not be sufficient Pledged Tax Revenues to transfer an amount
sufficient to maintain the Reserve Requirement on deposit in the Reserve Account, the Successor
Agency shall be obligated to continue making transfers as Pledged Tax Revenues become available
until there is an amount sufficient to maintain the Reserve Requirement on deposit in the Reserve
Account. No such transfer and deposit need be made to the Reserve Account so long as there shall
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be on deposit therein a sum at least equal to the Reserve Requirement. All money in the Reserve
Account shall be used and withdrawn by the Trustee solely for the purpose of making transfers
hereunder to the Interest Account and the Principal Account, 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 Account in
excess of the Reserve Requirement shall be withdrawn from the Reserve Account semiannually on or
before two (2) Business Days preceding each September 1 and March 1 by the Trustee and deposited
in the Interest Account. All amounts in the Reserve Account on the Business Day preceding the final
Interest Payment Date shall be withdrawn from the Reserve Account and shall be transferred to the
Interest Account and the Principal Account, in such order, to the extent required to make the deposits
then required to be made pursuant to this Section 4.03.
The Successor Agency shall have the right at any time to direct the Trustee to release
funds from the Reserve Account, in whole or in part, by tendering to the Trustee: (i) a Qualified
Reserve Account Credit Instrument, and (ii) an opinion of Bond Counsel stating that neither the
release of such funds nor the acceptance of such Qualified Reserve Account Credit Instrument will
cause interest on the Bonds or any Parity Debt the interest on which is excluded from gross income
of the owners thereof for federal income tax purposes to become includable in gross income for
purposes of federal income taxation. Upon tender of such items to the Trustee, and upon delivery by
the Successor Agency to the Trustee of written calculation of the amount permitted to be released
from the Reserve Account (upon which calculation the Trustee may conclusively rely), the Trustee
shall transfer such funds from the Reserve Account to the Successor Agency to be applied in
accordance with the Law. The Trustee shall comply with all documentation relating to a Qualified
Reserve Account Credit Instrument as shall be required to maintain such Qualified Reserve Account
Credit Instrument in full force and effect and as shall be required to receive payments thereunder in
the event and to the extent required to make any payment when and as required under this paragraph
(d). Upon the expiration of any Qualified Reserve Account Credit Instrument, the Successor Agency
shall either (i) replace such Qualified Reserve Account Credit Instrument with a new Qualified
Reserve Account 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 legally available
Pledged Tax Revenues. If the Reserve Requirement is being maintained partially in cash and partially
with a Qualified Reserve Account Credit Instrument, the cash shall be first used to meet any
deficiency which may exist from time to time in the Interest Account or the Principal Account for the
purpose of making payments required pursuant to Sections 4.03(a) or 4.03(b) of this Indenture. If the
Reserve Requirement is being maintained with two or more Qualified Reserve Account Credit
Instruments, any draw to meet a deficiency which may exist from time to time in the Interest
Account or the Principal Account for the purpose of making payments required pursuant to
Sections 4.03(a), 4.03(b) or 4.03(c) of this Indenture shall be pro-rata with respect to each such
instrument.
The Reserve Account may be maintained in the form of one or more separate sub-
accounts which are established for the purpose of holding the proceeds of separate issues of the
Bonds and any Parity Debt in conformity with applicable provisions of the Code to the extent
directed by the Successor Agency in writing to the Trustee. Unless otherwise provided pursuant to a
Supplemental Indenture or Parity Debt Instrument, a subaccount established in the Reserve Account
shall secure only the series of Bonds to which it relates.
(d)Redemption Account. On or before the Business Day preceding any date on
which Bonds are to be redeemed pursuant to Section 2.03(a), the Trustee shall withdraw from the
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Debt Service Fund any amount transferred by the Successor Agency pursuant to Section 2.03(a) for
deposit in the Redemption Account, such amount being the amount required to pay the principal of
and premium, if any, on the 2017A Bonds, 2017B Bonds and on other Bonds to be redeemed on such
date pursuant to Section 2.03(a) or a similar provision of a Supplemental Indenture. All moneys in
the Redemption Account shall be used and withdrawn by the Trustee solely for the purpose of paying
the principal of and premium, if any, on the 2017A Bonds, 2017B Bonds and on such other Bonds to
be redeemed pursuant to Section 2.03(a) or a similar provision of a Supplemental Indenture on the
date set for such redemption. Interest due on the 2017A Bonds, 2017B Bonds or such other Bonds to
be redeemed on the date set for redemption shall, if applicable, be paid from funds available therefor
in the Interest Account. Notwithstanding the foregoing, at any time prior to giving notice of
redemption of any such 2017A Bonds, such 2017B Bonds or such other Bonds, the Trustee may, at
the direction of the Successor Agency, apply amounts deposited or otherwise to be deposited in the
Redemption Account to the purchase of the 2017A Bonds, 2017B Bonds or such other Bonds at
public or private sale, as and when and at such prices (including brokerage and other charges, but
excluding accrued interest on such 2017A Bonds, such 2017B Bonds or such other Bonds, which is
payable from the Interest Account) as shall be directed by the Successor Agency.
Section 4.04 Rebate Fund. When needed, the Trustee shall establish a separate fund for
the 2017A Bonds designated the “Rebate Fund.” Absent an opinion of Bond Counsel that the
exclusion from gross income for federal income tax purposes of interest on the 2017A Bonds will not
be adversely affected, the Successor Agency shall cause to be deposited in the Rebate Fund such
amounts as are required to be deposited therein pursuant to this Section and the Tax Certificate. All
money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, for payment to
the United States Treasury. All amounts on deposit in the Rebate Fund for the 2017A Bonds shall be
governed by this Section and the Tax Certificate, unless the Successor Agency obtains and delivers
to the Trustee an opinion of Bond Counsel that the exclusion from gross income of interest on the
2017A Bonds will not be adversely affected for federal income tax purposes if such requirements are
not satisfied.
(a)Excess Investment Earnings.
(i)Computation. Within 55 days of the end of each fifth Computation
Year with respect to the 2017A Bonds, the Successor Agency shall calculate or cause to be calculated
the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and
Section 1.148-3 of the Rebate Regulations (taking into account any applicable exceptions with
respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate
(e.g., the temporary investments exception of Section 148(f)(4)(B) and the construction expenditure
exception of Section 148(f)(4)(C) of the Code), for this purpose treating the last day of the applicable
Computation Year as a computation date, within the meaning of Section 1.148-1(b) of the Rebate
Regulations (the “Rebatable Arbitrage”). The Successor Agency shall obtain expert advice as to the
amount of the Rebatable Arbitrage to comply with this Section.
(ii)Transfer. Within 55 days of the end of each fifth Computation Year
with respect to the 2017A Bonds, upon the Finance Officer’s written direction, an amount shall be
deposited to the Rebate Fund by the Trustee from any legally available funds, including the other
funds and accounts established herein, so that the balance in the Rebate Fund shall equal the amount
of Rebatable Arbitrage so calculated in accordance with clause (i) of this Section 4.04(a). In the
event that immediately following the transfer required by the previous sentence, the amount then on
deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon
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written instructions from the Finance Officer, the Trustee shall withdraw the excess from the Rebate
Fund and then credit the excess to the Debt Service Fund.
(iii)Payment to the Treasury. The Successor Agency shall direct the
Trustee in writing to pay to the United States Treasury, out of amounts in the Rebate Fund.
(X)Not later than 60 days after the end of (A) the fifth
Computation Year with respect to the 2017A Bonds, and (B) each applicable fifth Computation Year
thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of
such Computation Year; and
(Y)Not later than 60 days after the payment of all the 2017A
Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such
applicable Computation Year, and any income attributable to the Rebatable Arbitrage, computed in
accordance with Section 148(f) of the Code.
In the event that, prior to the time of any payment required to be made from the
Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such
payment is due, the Successor Agency shall calculate or cause to be calculated the amount of such
deficiency and deposit an amount received from any legally available source, including the other
funds and accounts established herein, equal to such deficiency in the Rebate Fund prior to the time
such payment is due. Each payment required to be made pursuant to this Subsection 4.04(a)(iii) shall
be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which
such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T prepared
by the Successor Agency, or shall be made in such other manner as provided under the Code.
(b)Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund
after redemption and payment of the 2017A Bonds and the payments described in
Section 4.04(a)(iii), shall be transferred by the Trustee to the Successor Agency at the written
direction of the Successor Agency for deposit to the Special Fund and applied by the Successor
Agency in accordance with the Law.
(c)Survival of Defeasance. Notwithstanding anything in this Section 4.04 or this
Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive
the defeasance of the 2017A Bonds and any Parity Bonds.
(d)Trustee Responsible. The Trustee shall have no obligations or responsibilities
under this Section other than to follow the written directions of the Successor Agency. The Trustee
shall have no responsibility to make any calculations of rebate or to independently review or verify
such calculations.
Section 4.05 [Provisions Relating to 2017 Insurance Policy. The following provisions
shall apply while any 2017 Bonds are Outstanding:] [to come]
Section 4.06 [Provisions Relating to 2017 Reserve Policy. Notwithstanding anything to
the contrary set forth in the Indenture, the Successor Agency and the Trustee agree to comply with
the following provisions while any 2017 Bonds are Outstanding:] [to come]
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ARTICLE V
OTHER COVENANTS OF THE SUCCESSOR AGENCY
Section 5.01 Punctual Payment. The Successor Agency shall punctually pay or cause to
be paid the principal and interest to become due in respect of all the Bonds together with the
premium thereon, if any, in strict conformity with the terms of the Bonds and of this Indenture. The
Successor Agency shall faithfully observe and perform all of the conditions, covenants and
requirements of this Indenture, all Supplemental Indentures and the Bonds. Nothing herein contained
shall prevent the Successor Agency from making advances of its own moneys howsoever derived to
any of the uses or purposes referred to herein.
Section 5.02 Limitation on Additional Indebtedness; Against Encumbrances. The
Successor Agency hereby covenants that, so long as the Bonds are Outstanding, the Successor
Agency shall not issue any bonds, notes or other obligations, enter into any agreement or otherwise
incur any indebtedness, which is in any case payable from all or any part of the Pledged Tax
Revenues except for obligations issued in accordance with Sections 3.05, 3.06 or 3.07 hereof. The
Successor Agency will not otherwise encumber, pledge or place any charge or lien upon any of the
Pledged Tax Revenues or other amounts pledged to the Bonds superior or equal to the pledge and
lien herein created for the benefit of the Bonds.
Section 5.03 Extension of Payment. The Successor Agency will not, directly or
indirectly, extend or consent to the extension of the time for the payment of any Bond or claim for
interest on any of the Bonds and will not, directly or indirectly, be a party to or approve any such
arrangement by purchasing or funding the Bonds or claims for interest in any other manner. In case
the maturity of any such Bond or claim for interest shall be extended or funded, whether or not with
the consent of the Successor Agency, such Bond or claim for interest so extended or funded shall not
be entitled, in case of default hereunder, to the benefits of this Indenture, except subject to the prior
payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest
which shall not have been so extended or funded.
Section 5.04 Payment of Claims. The Successor Agency shall promptly pay and
discharge, or cause to be paid and discharged, any and all lawful claims for labor, materials or
supplies which, if unpaid, might become a lien or charge upon the properties owned by the Successor
Agency or upon the Pledged Tax Revenues or other amounts pledged to the payment of the Bonds, or
any part thereof, or upon any funds in the hands of the Trustee, or which might impair the security of
the Bonds. Nothing herein contained shall require the Successor Agency to make any such payment
so long as the Successor Agency in good faith shall contest the validity of said claims.
Section 5.05 Books and Accounts; Financial Statements. The Successor Agency shall
keep, or cause to be kept, proper books of record and accounts, separate from all other records and
accounts of the Successor Agency and the City, in which complete and correct entries shall be made
of all transactions relating to the Project Areas, the Pledged Tax Revenues and the Special Fund.
Such books of record and accounts shall at all times during business hours be subject to the
inspection of [the 2017 Insurer, any other] Insurer and the Owners of not less than ten percent (10%)
in aggregate principal amount of the Bonds then Outstanding, or their representatives authorized in
writing.
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The Successor Agency will cause to be prepared, within two hundred and seventy (270) days
after the close of each Fiscal Year so long as the Bonds are Outstanding, complete audited financial
statements with respect to such Fiscal Year showing the Pledged Tax Revenues, all disbursements of
Pledged Tax Revenues and the financial condition of the Redevelopment Projects, including the
balances in all funds and accounts relating to the Redevelopment Projects, as of the end of such
Fiscal Year. The Successor Agency shall promptly furnish a copy of such financial statements to the
Trustee, the 2017 Insurer and any other Insurer at no expense and to any Owner upon reasonable
request and at the expense of such Owner. In addition, the Successor Agency shall deliver to the
Trustee, the 2017 Insurer and any other Insurer, on or about February 1 of each year, a Written
Certificate of the Successor Agency stating that the Successor Agency is in compliance with its
obligations hereunder. The Trustee shall have no obligation to review any financial statements
provided to it by the Successor Agency.
The Successor Agency agrees, consents and will cooperate in good faith to provide
information reasonably requested by the 2017 Insurer and will further provide appropriately
designated individuals and officers to discuss the affairs, finances and accounts of the Successor
Agency or any other matter as the 2017 Insurer may reasonably request.
Section 5.06 Protection of Security and Rights of Owners. The Successor Agency will
preserve and protect the security of the Bonds and the rights of the Owners. From and after the
Closing Date with respect to the 2017 Bonds, the 2017 Bonds shall be incontestable by the Successor
Agency.
Section 5.07 Payments of Taxes and Other Charges. Except as otherwise provided
herein, the Successor Agency will pay and discharge, or cause to be paid and discharged, all taxes,
service charges, assessments and other governmental charges which may hereafter be lawfully
imposed upon the Successor Agency or the properties then owned by the Successor Agency in the
Redevelopment Projects, or upon the revenues therefrom when the same shall become due. Nothing
herein contained shall require the Successor Agency to make any such payment so long as the
Successor Agency in good faith shall contest the validity of said taxes, assessments or charges. The
Successor Agency will duly observe and conform with all valid requirements of any governmental
authority relative to the Redevelopment Projects or any part thereof.
Section 5.08 Taxation of Leased Property. All amounts derived by the Successor
Agency pursuant to Section 33673 of the Law with respect to the lease of property for redevelopment
shall be treated as Pledged Tax Revenues for all purposes of this Indenture.
Section 5.09 Disposition of Property. The Successor Agency will not participate in the
disposition of any land or real property in a Project Area to anyone which will result in such property
becoming exempt from taxation because of public ownership or use or otherwise (except property
dedicated for public right-of-way and except property planned for public ownership or use by a
Redevelopment Plan in effect on the date of issuance of the 2017 Bonds) so that such disposition
shall, when taken together with other such dispositions, aggregate more than ten percent (10%) of the
land area in the applicable Project Area unless such disposition is permitted as hereinafter provided
in this Section 5.09. If the Successor Agency proposes to participate in such a disposition, it shall
thereupon appoint an Independent Redevelopment Consultant to report on the effect of said proposed
disposition. If the Report of the Independent Redevelopment Consultant concludes that the security
of the Bonds, or the rights of the Successor Agency, the Bondowners and the Trustee hereunder will
not be materially impaired by said proposed disposition, the Successor Agency may thereafter make
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such disposition. If said Report concludes that such security will be materially impaired by said
proposed disposition, the Successor Agency shall disapprove said proposed disposition.
Section 5.10 Maintenance of Pledged Tax Revenues. The Successor Agency shall
comply with all requirements of the Law and the Dissolution Act to ensure the allocation and
payment to it of the Pledged Tax Revenues. The Successor Agency shall not undertake proceedings
for amendment of any of the Redevelopment Plans if such amendment shall result in payments to one
or more taxing entities pursuant to Sections 33607.5 and 33607.7 of the Law unless the Successor
Agency shall first obtain a written opinion of an Independent Redevelopment Consultant that such
payments will not adversely impair the Successor Agency’s ability to pay debt service on the Bonds.
Section 5.11 Tax Covenants. In connection with the 2017A Bonds, the Successor Agency
covenants and agrees to contest by court action or otherwise any assertion by the United States of
America or any departments or agency thereof that the interest received by the Bondowners is
includable in gross income of the recipient under federal income tax laws on the date of issuance of
the 2017A Bonds. Notwithstanding any other provision of this Indenture, absent an opinion of Bond
Counsel that the exclusion from gross income of interest with respect to the 2017A Bonds and any
Parity Bonds will not be adversely affected for federal income tax purposes, the Successor Agency
covenants to comply with all applicable requirements of the Code necessary to preserve such
exclusion from gross income and specifically covenants, without limiting the generality of the
foregoing, as follows:
(a)Private Activity. The Successor Agency will take no action or refrain from
taking any action or make any use of the proceeds of the 2017A Bonds or Parity Bonds issued as tax
exempt bonds or of any other monies or property which would cause the 2017A Bonds or Parity
Bonds issued as tax exempt bonds to be “private activity bonds” within the meaning of Section 141
of the Code;
(b)Arbitrage. The Successor Agency will make no use of the proceeds of the
2017A Bonds or Parity Bonds issued as tax exempt bonds or of any other amounts or property,
regardless of the source, or take any action or refrain from taking any action which will cause the
2017A Bonds or Parity Bonds issued as tax exempt bonds to be “arbitrage bonds” within the
meaning of Section 148 of the Code;
(c)Federal Guaranty. The Successor Agency will make no use of the proceeds
of the 2017A Bonds or Parity Bonds issued as tax exempt bonds or take or omit to take any action
that would cause the 2017A Bonds or Parity Bonds issued as tax exempt bonds to be “federally
guaranteed” within the meaning of Section 149(b) of the Code;
(d)Information Reporting. The Successor Agency will take or cause to be taken
all necessary action to comply with the informational reporting requirement of Section 149(e) of the
Code;
(e)Hedge Bonds. The Successor Agency will make no use of the proceeds of the
2017A Bonds or any Parity Bonds issued as tax exempt bonds or any other amounts or property,
regardless of the source, or take any action or refrain from taking any action that would cause either
any 2017A Bonds or any Parity Bonds to be considered “hedge bonds” within the meaning of
Section 149(g) of the Code unless the Successor Agency takes all necessary action to assure
compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross
39
income of interest on the 2017A Bonds or any Parity Bonds issued as tax exempt bonds for federal
income tax purposes; and
(f)Miscellaneous. The Successor Agency will take no action or refrain from
taking any action inconsistent with its expectations stated in that certain Tax Certificate executed by
the Successor Agency in connection with each issuance of 2017A Bonds and Parity Bonds issued as
tax exempt bonds and will comply with the covenants and requirements stated therein and
incorporated by reference herein.
Section 5.12 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
Owner 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.
Section 5.13 Compliance with the Dissolution Act. The Successor Agency shall comply
with all of the requirements of the Law and 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, the Successor Agency will take all actions required under the Dissolution Act to
include
(i)scheduled debt service on the Existing Bonds and any amounts
required to replenish any of the reserve accounts established with respect to Existing Bonds,
(ii)scheduled debt service on the 2017 Bonds and any Parity Debt and
any amount required under this Indenture or any Parity Debt Instrument to replenish the Reserve
Account established hereunder or the reserve account established under any Parity Debt Instrument,
and
(iii)amounts due to any Insurer under an insurance or surety bond
agreement,
in Recognized Obligation Payment Schedules for each ROPS 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 Bonds coming due in the
respective ROPS Period and the Bond Year commencing in such ROPS period and to pay amounts
owed to any Insurer, as well as the other amounts set forth above.
In order to ensure that amounts are available for the Trustee to pay debt service on all
Outstanding Bonds and all amounts due and owing to the 2017 Insurer hereunder or to any other
insurer of the Existing Bonds or any Parity Debt on a timely basis, on or before each February 1
following the Closing Date (or at such other time as may be required by the Dissolution Act), for so
long as any Bonds are outstanding, the Successor Agency shall submit an Oversight Board-approved
Recognized Obligation Payment Schedule to the State Department of Finance and to the County
40
Auditor-Controller that shall include (after making provision for payments with respect to all
Existing Bonds in accordance with the Successor Agency’s obligations under the indentures or
agreements providing for such payments), from the Pledged Tax Revenues to be distributed to the
Successor Agency on each June 1, (i) an amount sufficient to pay the interest payment coming due
on all Outstanding Bonds on the following September 1 after taking into account moneys already
held by the Trustee in the Debt Service Fund, (ii) an amount sufficient to pay all principal and
interest payments coming due on all Outstanding Bonds during the following calendar year, (iii) all
amounts due and owing to the 2017 Insurer hereunder or to any other Insurer, and (iv) any amount
required to cure any deficiency in the Reserve Account pursuant to this Indenture (including any
amounts required due to a draw on the Qualified Reserve Account Credit Instrument). The
Successor Agency intends by this covenant to use the Pledged Tax Revenues distributed to the
Successor Agency on each June 1 to pay debt service coming due on the Bonds on March 1 and
September 1 of the following calendar year. The interest payments coming due on the 2017 Bonds
on [March 1, 2018 and] September 1, 2018 will be paid using moneys [transferred to the Trustee on
the Closing Date].
In the event the provisions set forth in the Dissolution Act as of the Closing Date of the 2017
Bonds that relate to the filing of Recognized Obligation Payment Schedules are amended or modified
in any manner, the Successor Agency agrees to take all such actions as are necessary to comply with
such amended or modified provisions so as to ensure the timely payment of debt service on the
Bonds and, if the timing of distributions of the Redevelopment Property Tax Trust Fund is changed,
the Successor Agency shall deposit the first Pledged Tax Revenues distributed to the Successor
Agency in each Bond Year, up to the full amount of debt service coming due on the next three
Interest Payment Dates (taking into accounts moneys already held by the Trustee in the Debt Service
Fund), in the Special Fund and thereafter transfer such amounts to the Trustee in accordance with
Sections 4.02 and 4.03.
Section 5.14 Further Assurances. The Successor Agency will adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and
for the better assuring and confirming unto the Owners of the Bonds the rights and benefits provided
in this Indenture.
ARTICLE VI
THE TRUSTEE
Section 6.01 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, duties or
obligations 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
41
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
shall cease to be eligible in accordance with subsection (f) of this Section, or shall become incapable
of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property
shall be appointed, or any public officer shall take control or charge of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation. In each case such removal
shall be accomplished by the giving of written notice of such removal by the Successor Agency to
the Trustee, with a copy to any Insurer, whereupon the Successor Agency shall appoint a successor
Trustee by an instrument in writing.
(c)The Trustee may at any time resign by giving written notice of such
resignation to the Successor Agency and by giving the Owners and any Insurer 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, with notice of such appointment to be
furnished to any Insurer.
(d)Any removal or resignation of the Trustee and appointment of a successor
Trustee shall become effective only upon acceptance of appointment by the successor Trustee (and,
while any 2017 Bonds are Outstanding, the approval of the 2017 Insurer). If no successor Trustee
shall have been appointed and have accepted appointment within forty-five (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 at the expense of
the Successor Agency for the appointment of a successor Trustee, and such court may thereupon,
after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor
Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing,
acknowledging 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 cause either the predecessor
Trustee or the successor Trustee to mail 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.
(e)If an Event of Default hereunder occurs with respect to any Bonds of which
the Trustee has been given or is deemed to have notice, as provided in Section 6.03(d) hereof, then
the Trustee shall immediately give written notice thereof, by first-class mail to any Insurer and the
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Owner of each such Bond, unless such Event of Default shall have been cured before the giving of
such notice; provided, however, that unless such Event of Default consists of the failure by the
Successor Agency to make any payment when due, the Trustee shall, within thirty (30) days of the
Trustee’s knowledge thereof, give such notice to any Insurer, and the Trustee, with the consent of
any Insurer may elect not to give such notice if and so long as the Trustee in good faith determines
that it is in the best interests of the Bondowners not to give such notice.
(f)The Successor Agency agrees that, so long as any Bonds or any Parity Debt
are Outstanding, the Trustee shall be a financial institution having a trust office in the State, having
(or in the case of a corporation or trust company included in a bank holding company system, the
related bank holding company shall have) a combined capital and surplus of at least $75,000,000,
and subject to supervision or examination by federal or state authority. If such financial institution
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 financial institution 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 (f), the Trustee
shall resign immediately in the manner and with the effect specified in this Section.
(g)Provisions Benefiting 2017 Insurer. Notwithstanding anything to the
contrary set forth in this Indenture, the following provisions shall apply while any 2017 Bonds are
Outstanding:
(i)The 2017 Insurer shall receive prior written notice of any name
change, resignation, removal or substitution of the Trustee.
(ii)The Trustee must be (A) a national banking association that is
supervised by the Office of the Comptroller of the Currency and has at least $250 million of assets,
(B) a state-chartered commercial bank that is a member of the Federal Reserve System and has at
least $1 billion of assets, or (C) otherwise approved by the 2017 Insurer in writing.
(iii)The 2017 Insurer shall have the right to direct the replacement of the
Trustee upon the occurrence of an event of a default on the 2017 Bonds and any event of default
under any Existing Bonds or Subordinate Debt to the extent the 2017 Insurer determines in its sole
discretion that there exists or could exist a conflict of interest.
Section 6.02 Merger or Consolidation. Any company into which the Trustee may be
merged or converted or with which it may be consolidated or any company resulting from any
merger, conversion or consolidation to which it shall be a party or any company to which the Trustee
may sell or transfer all or substantially all of its corporate trust business, provided such company
shall be eligible under subsection (f) of Section 6.01, 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 6.03 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
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Indenture or of the security for the Bonds or the tax status of interest thereon 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 misconduct. The Trustee shall not be liable for the acts of any agents of the
Trustee selected by it with due care. The Trustee and its officers and employees 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 with respect to any action taken or omitted to
be taken by it 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.
(c)The Trustee shall not be liable for any action taken by it 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 misconduct of the Trustee. Where the Trustee is given the
permissive right to do things enumerated in this Indenture, such right shall not be construed as a
mandatory duty.
(d)The Trustee shall not be deemed to have knowledge of any Event of Default
hereunder unless and until a responsible officer shall have actual knowledge thereof, or shall have
received written notice thereof from the Successor Agency at its Principal Corporate Trust Office. In
the absence of such actual knowledge or notice, the Trustee may conclusively assume that no Event
of Default has occurred and is continuing under this Indenture. Except as otherwise expressly
provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or
observance by any other party 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 may
rely conclusively on the Successor Agency’s certificates 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 Special Fund and the investment and
application of moneys on deposit in the Special Fund (other than its covenants to transfer such
moneys to the Trustee when due hereunder).
(e)The Trustee shall have no liability or obligation to the Bondowners with
respect to the payment of debt service on the Bonds by the Successor Agency or with respect to the
observance or performance by the Successor Agency of the other conditions, covenants and terms
contained in this Indenture, or with respect to the investment of any moneys in any fund or account
established, held or maintained by the Successor Agency pursuant to this Indenture or otherwise.
(f)No provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any of its duties hereunder,
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or in the exercise of any of its rights or powers. The Trustee shall be entitled to interest on all
amounts advanced by it at the maximum rate permitted by law.
(g)The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, attorneys or receivers and the Trustee
shall not be responsible for any intentional misconduct or negligence on the part of any agent,
attorney or receiver appointed with due care by it hereunder.
(h)The Trustee shall have no responsibility, opinion, or liability with respect to
any information, statements or recital in any offering memorandum or other disclosure material
prepared or distributed with respect to the issuance of the Bonds.
(i)Before taking any action under Article VIII or this Article at the request of
the Owners or any Insurer, the Trustee may require that a satisfactory indemnity bond be furnished
by the Owners or any Insurer 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 willful misconduct in connection with any action so taken.
(j)The Trustee agrees to accept and act upon instructions or directions pursuant to
this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic
methods, provided, however, that, the Trustee shall have received an incumbency certificate listing
persons designated to give such instructions or directions and containing specimen signatures of such
designated persons, which such incumbency certificate shall be amended and replaced whenever a person
is to be added or deleted from the listing. If the Successor Agency elects to give the Trustee e-mail or
facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion
elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed
controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly
from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions
conflict or are inconsistent with a subsequent written instruction. The Successor Agency agrees to
assume all risks arising out of the use of such electronic methods to submit instructions and directions to
the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and
the risk of interception and misuse by third parties.
(k)The Trustee shall not be liable to the parties hereto or deemed in breach or
default hereunder if and to the extent its performance hereunder is prevented by reason of force
majeure. The term “force majeure” means an occurrence that is beyond the control of the Trustee
and could not have been avoided by exercising due care. Force majeure shall include but not be
limited to acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other
similar occurrences.
(l)The Trustee shall not be responsible for or accountable to anyone for the
subsequent use or application of any moneys which shall be released or withdrawn in accordance
with the provisions hereof.
Section 6.04 Right to Rely on Documents and Opinions. The Trustee shall have no
liability in acting upon any notice, resolution, request, consent, order, certificate, report, opinion,
facsimile transmission, electronic mail, or other paper or document reasonably believed by it to be
genuine and to have been signed or prescribed by the proper party or parties, and shall not be
required to make any investigation into the facts or matters contained thereon. The Trustee may
consult with counsel, including, without limitation, counsel of or to the Successor Agency, with
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regard to legal questions, and, in the absence of negligence or intentional 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 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 additional
evidence as it may deem reasonable. The Trustee may conclusively rely on any certificate or report
of any Independent Accountant or Independent Redevelopment Consultant appointed by the
Successor Agency.
Section 6.05 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 upon reasonable notice to the inspection of and copying by the Successor
Agency and any Insurer and any Owner, and their agents and representatives duly authorized in
writing, during regular business hours and under reasonable conditions.
Section 6.06 Compensation and Indemnification. The Successor Agency shall pay to
the Trustee from time to time reasonable compensation for all services rendered under this Indenture
in accordance with the letter proposal from the Trustee approved by the Successor Agency and also
all reasonable expenses, charges, legal and consulting fees and other disbursements and those of its
attorneys (including the allocated costs and disbursement of in-house counsel to the extent such
services are not redundant with those provided by outside counsel), agents and employees, incurred
in and about the performance of its powers and duties under this Indenture. The Trustee shall have a
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 (including the allocated costs and disbursement of in-house counsel to
the extent such services are not redundant with those provided by outside counsel).
The Successor Agency further covenants and agrees to indemnify, defend and save the
Trustee and its officers, directors, agents and employees, harmless against any loss, expense and
liabilities including legal fees and expenses which it may incur to the extent arising out of or in
connection with the exercise and performance of its powers and duties hereunder, including the costs
and expenses of defending against any claim of liability, but excluding any and all losses, expenses
and liabilities which are due to the negligence or misconduct of the Trustee, its officers, directors,
agents or employees. The obligations of the Successor Agency and the rights of the Trustee under
this Section 6.06 shall survive resignation or removal of the Trustee under this Indenture and
payment of the Bonds and discharge of this Indenture.
Section 6.07 Deposit and Investment of Moneys in Funds. Moneys in the Debt Service
Fund, the Interest Account, the Principal Account, the Reserve Account, the Redemption Account
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and the Costs of Issuance Fund shall be invested by the Trustee in Permitted Investments as directed
by the Successor Agency in the Written Request of the Successor Agency filed with the Trustee,
except that moneys in the Reserve Account shall not be invested in Permitted Investments having a
maturity of more than five (5) years, unless any such Permitted Investment is described in clause (g)
of the definition thereof. In the absence of any such Written Request of the Successor Agency, the
Trustee shall invest any such moneys in Permitted Investments described in clause (d) of the
definition thereof, which by their terms mature prior to the date on which such moneys are required
to be paid out hereunder; provided, however, that any such investment shall be made by the Trustee only
if, prior to the date on which such investment is to be made, the Trustee shall have received a Written
Request of the Successor Agency specifying a specific money market fund and, if no such Written
Request of the Successor Agency is so received, the Trustee shall hold such moneys uninvested. The
Trustee shall be entitled to rely conclusively upon the written instructions of the Successor Agency
directing investments in Permitted Investments as to the fact that each such investment is permitted
by the laws of the State, and shall not be required to make further investigation with respect thereto.
With respect to any restrictions set forth in the above list which embody legal conclusions (e.g., the
existence, validity and perfection of security interests in collateral), the Trustee shall be entitled to
rely conclusively on an opinion of counsel or upon a representation of the provider of such Permitted
Investment obtained at the Successor Agency’s expense. Moneys in the Special Fund may be
invested by the Successor Agency in any obligations in which the Successor Agency is legally
authorized to invest its funds. Obligations purchased as an investment of moneys in any fund shall
be deemed to be part of such fund or account. All interest or gain derived from the investment of
amounts in any of the funds or accounts held by the Trustee hereunder shall be deposited in the
Interest Account; provided, however, that all interest or gain from the investment of amounts in the
Reserve Account shall be deposited by the Trustee in the Interest Account only to the extent not
required to cause the balance in the Reserve Account to equal the Reserve Requirement. The Trustee
may act as principal or agent in the acquisition or disposition of any investment and may impose its
customary charges therefor. The Trustee shall incur no liability for losses arising from any
investments made at the direction of the Successor Agency or otherwise made in accordance with
this Section. For investment purposes only, the Trustee may commingle the funds and accounts
established hereunder, but shall account for each separately.
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 effected by the Trustee as they occur, the Successor
Agency specifically waives receipt of such confirmations 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 will furnish the Successor Agency monthly
cash transaction statements which shall include detail for all investment transactions made by the
Trustee hereunder. 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.
All moneys held by the Trustee shall be held in trust, but need not be segregated from other
funds unless specifically required by this Indenture. Except as specifically provided in this
Indenture, the Trustee shall not be liable to pay interest on any moneys received by it, but shall be
liable only to account to the Successor Agency for earnings derived from funds that have been
invested.
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The Successor Agency covenants that all investments of amounts deposited in any fund or
account created by or pursuant to this Indenture, or otherwise containing gross proceeds of the Bonds
(within the meaning of Section 148 of the Code) shall be acquired, disposed of, and valued (as of the
date that valuation is required by this Indenture or the Code) at Fair Market Value.
Investments in funds or accounts (or portions thereof) that are subject to a yield restriction
under applicable provisions of the Code shall be valued by the Successor Agency at their present
value (within the meaning of Section 148 of the Code). Investments on deposit in the Reserve
Account shall be valued on June 30 of each year at their market value.
Section 6.08 Accounting Records and Financial Statements. The Successor Agency
and the Trustee shall at all times keep, or cause to be kept, proper books of record and account,
prepared in accordance with corporate trust industry standards, in which complete and accurate
entries shall be made of all transactions relating to the proceeds of the Bonds made by it and all funds
and accounts held by the Successor Agency and the Trustee, respectively, established pursuant to this
Indenture. Such books of record and account maintained by the Trustee shall be available for
inspection by the Successor Agency upon reasonable prior notice, at reasonable hours and under
reasonable circumstances. Such books of record and account relating the 2017 Bonds shall at all
times during normal business hours and upon reasonable notice be subject to inspection by the 2017
Insurer or its agents or representatives who have been duly authorized in writing. The Trustee shall
furnish to the Successor Agency, on at least a monthly basis, an accounting of all transactions in the
form of its customary statements relating to the proceeds of the Bonds and all funds and accounts
held by the Trustee pursuant to this Indenture.
Section 6.09 Other Transactions with Agency. The Trustee, either as principal or agent,
may engage in or be interested in any financial or other transaction with the Successor Agency.
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 7.01 Amendment With And 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 the
consent of any Owners (and without the consent of any Insurer), to the extent permitted by law, but
only 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, including any
covenant or agreement that provides for additional security for the Bonds, or to limit or surrender any
rights or powers 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, in the reasonable determination
of the Successor Agency, materially adversely affect the interests of the Owners; or
(c)to provide for the issuance of Parity Debt in accordance with Section 3.05; or
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(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 exemption from federal income taxation of interest on any of the Bonds, in the
opinion of Bond Counsel; or
(e)to comply with additional requirements of a provider of a Qualified Reserve
Account Credit Instrument; provided that such amendment does not have an adverse impact on the
2017 Insurer’s rights under the Indenture or the availability of Pledged Tax Revenues for the 2017
Bonds.
Except as set forth in the preceding paragraph, 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 any Insurer (but
only with respect to any Bonds insured by such Insurer) and 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 any Insurer or the Owner of such Bond, or (b) reduce the
percentage of Bonds required for the written consent to any such amendment or modification. In no
event shall any Supplemental Indenture modify any of the rights or obligations of the Trustee without
its prior written consent. In no event shall any Supplemental Indenture modify any of the rights or
obligations of any Insurer without its prior written consent.
Section 7.02 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 7.03 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, with the prior written consent of any Insurer, 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 Principal Corporate Trust Office of the
Trustee, 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 at the expense
of the Successor Agency 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 Principal Corporate Trust Office of the Trustee, without cost to such Owners.
Section 7.04 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 and, provided further that written consent to
such amendment shall first be obtained from any Insurer.
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Section 7.05 Opinion of Counsel. Prior to executing any Supplemental Indenture, the
Trustee shall be furnished an opinion of counsel, upon which it may conclusively rely to the effect
that all conditions precedent to the execution of such Supplemental Indenture under this Indenture
have been satisfied and such Supplemental Indenture is authorized and permitted under this Indenture
and does not adversely affect the exclusion of interest on the Bonds issued as tax-exempt bonds from
gross income for federal income tax purposes or adversely affect the exemption of interest on the
Bonds from personal income taxation by the State.
Section 7.06 Copy of Supplemental Indenture to S&P and Moody’s. The Successor
Agency shall provide to S&P and Moody’s, for so long as S&P and Moody’s, as the case may be,
maintain a rating on any of the Bonds (without regard to any municipal bond or financial guaranty
insurance), a copy of any Supplemental Indenture at least fifteen (15) days prior to its proposed
effective date.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
Section 8.01 Events of Default and Acceleration of Maturities. The following events
shall constitute Events of Default hereunder:
(a)if default shall be made by the Successor Agency 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 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 thirty (30) days following receipt by the Successor Agency of written notice from the
Trustee or any Insurer or written notice from any Owner (with a copy of said notice delivered to the
Trustee and any Insurer) of the occurrence of such default, provided that if in the reasonable opinion
of the Successor Agency the failure stated in the notice can be corrected, but not within such thirty
(30) day period, such failure will not constitute an event of default if corrective action is instituted by
the Successor Agency (with the prior written consent of any Insurer) within such thirty (30) day
period and the Successor Agency thereafter diligently and in good faith cures such failure in a
reasonable period of time as approved by any Insurer; or
(c)If the Successor Agency files a petition seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the United States of
America, or if a court of competent jurisdiction will approve a petition by the Successor Agency
seeking reorganization under the federal bankruptcy laws or any other applicable law of the United
States of America, or, if under the provisions of any other law for the relief or aid of debtors, any
court of competent jurisdiction will approve a petition by the Successor Agency, seeking
reorganization under the federal bankruptcy laws or any other applicable law of the United States of
America, or, if under the provisions of any other law for the relief or aid of debtors, any court of
competent jurisdiction will assume custody or control of the Successor Agency or of the whole or
any substantial part of its property.
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In determining whether an Event of Default has occurred under (a) above, no effect shall be
given to payments made under any municipal bond insurance policy, financial guaranty insurance
policy or Qualified Reserve Account Credit Instrument.
If an Event of Default has occurred under this Section and is continuing, the Trustee, may,
and, if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds
then Outstanding the Trustee shall, (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, anything in this Indenture or in the Bonds to the contrary
notwithstanding, and (b) subject to the provisions of Section 8.06, exercise any other remedies
available to the Trustee and the Bondowners in law or at equity. The 2017 Insurer’s prior written
consent is required as a condition precedent to and in all instances of acceleration with respect to the
2017 Bonds.
Immediately upon receiving notice or actual knowledge of the occurrence of an Event of
Default, the Trustee shall give notice of such Event of Default to any Insurer and to the Successor
Agency 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 subsections (a) or (c) above the Trustee shall, and with respect to any Event of
Default described in subsection (b) above the Trustee in its sole discretion may, also give such notice
to the Owners by mail, 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, with the
written consent of a majority in aggregate principal amount of the Owners of the Bonds then
Outstanding, 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 installments of principal and interest (to the extent permitted by law), and the
reasonable fees and expenses of the Trustee, (including the allocated costs and disbursements of its
in-house counsel to the extent such services are not redundant with those provided by outside
counsel) 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 Trustee shall promptly give
written notice of the foregoing to any Insurer and the Owners of all Bonds then Outstanding, and
with the prior written approval of 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 then Outstanding, 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.
Section 8.02 Application of Funds Upon Acceleration. All amounts received by the
Trustee pursuant to any right given or action taken by the Trustee under the provisions of this
Indenture (including the Trustee’s share of any Pledged Tax Revenues) and all sums in the funds and
accounts established and held by the Trustee hereunder upon the date of the declaration of
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acceleration as provided in Section 8.01, and all sums thereafter received by the Trustee hereunder,
shall be applied by the Trustee in the following order upon presentation of the 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 (including the allocated costs and disbursements of its in-house
counsel to the extent such services are not redundant with those provided by outside counsel) and
counsel and any outstanding fees and expenses of the Trustee; and
Second, to the payment of the whole amount then owing and unpaid upon the Bonds for
principal and interest, as applicable, with interest on the overdue principal, and installments of
interest at the net effective rate then borne by the Outstanding Bonds (to the extent that such interest
on overdue installments of principal and interest shall have been collected), and in case such moneys
shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the
payment of such principal and interest without preference or priority, ratably to the aggregate of such
principal and interest.
Section 8.03 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 8.04 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
Successor Agency, the Trustee and any Insurer 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 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 sixty (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 provision 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.
52
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 8.05 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 or the Trustee to institute
suit to enforce such payment by virtue of the contract embodied in the Bonds.
A waiver of any default by any Owner or the Trustee 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 and the Trustee by the Law 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
and the Trustee.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned
or determined adversely to the Owners or the Trustee, the Successor Agency, the Trustee 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 8.06 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 Debt 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, however, the Trustee shall have no duty or obligation to exercise any such right or remedy
unless it has been indemnified to its satisfaction from any loss, liability or expense (including fees
and expenses of its outside counsel and the allocated costs and disbursements of its in-house counsel
to the extent such services are not redundant with those provided by outside counsel).
Section 8.07 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 or 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.
Section 8.08 Determination of Percentage of Bondowners. Whenever in this Indenture
the consent, direction or other action is required or permitted to be given or taken by a percentage of
the Owners of an aggregate principal amount of Outstanding Bonds (including by the Owners of a
majority in aggregate principal amount of the Outstanding Bonds), such percentage shall be
53
calculated on the basis of the principal amount of the Outstanding Bonds determined as of the next
succeeding Interest Payment Date.
Section 8.09 [Provisions Benefiting 2017 Insurer. Notwithstanding anything to the
contrary set forth in this Indenture, the following provisions shall apply while any 2017 Bonds are
Outstanding:] [to come]
ARTICLE IX
MISCELLANEOUS
Section 9.01 Benefits Limited to Parties. Nothing in this Indenture, expressed or
implied, is intended to give to any person other than the Successor Agency, any Insurer, the Trustee
and the Owners, any right, remedy or claim under or by reason of this Indenture. Any covenants,
stipulations, promises or agreements in this Indenture contained by and on behalf of the Successor
Agency shall be for the sole and exclusive benefit of the Trustee, any Insurer and the Owners. To the
extent that this Indenture confers upon or gives any Insurer any right, remedy or claim under or by
reason of this Indenture, such Insurer is hereby explicitly recognized as being third-party
beneficiaries hereunder and may enforce any such right remedy or claim conferred, given or granted
hereunder.
Section 9.02 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 9.03 Discharge of Indenture.
(a)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 or the applicable portion of Outstanding Bonds, as and when the
same become due and payable;
(ii)by irrevocably depositing with the Trustee or an escrow agent, 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 or the
applicable portion of Outstanding Bonds, including all principal, interest and redemption premiums,
or;
(iii)by irrevocably depositing with the Trustee or an escrow agent, in
trust, Defeasance Obligations in such amount as an Independent 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 or the applicable portion thereof (including all principal, interest and
redemption premiums) at or before maturity;
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and, if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given pursuant to Section 2.03(c) or provision satisfactory to the Trustee shall have been
made for the giving of such notice, then, at the election of the Successor Agency, 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 shall cease and terminate with respect to all
Outstanding Bonds or, if applicable, with respect to that portion of the Bonds which has been paid
and discharged, except only (A) the covenants of the Successor Agency hereunder with respect to the
Code, (B) the obligation of the Trustee to transfer and exchange Bonds hereunder, (C) the obligations
of the Successor Agency under Section 6.06 hereof, and (D) the obligation of the Successor Agency
to pay or cause to be paid to the Owners (or any Insurer), from the amounts so deposited with the
Trustee, all sums due thereon and to pay the Trustee and any Insurer all fees, expenses and costs of
the Trustee and any Insurer. In the event the Successor Agency shall, pursuant to the foregoing
provision, pay and discharge any portion or all of the Bonds then Outstanding, the Trustee shall be
authorized to take such actions and execute and deliver to the Successor Agency all such instruments
as may be necessary or desirable to evidence such discharge, including, without limitation, selection
by lot of Bonds of any maturity of the Bonds that the Successor Agency has determined to pay and
discharge in part.
In the case of a defeasance or payment of all of the Bonds Outstanding, any funds
thereafter held by the Trustee which are not required for said purpose or for payment of amounts due
the Trustee pursuant to Section 6.06 shall be paid over to the Successor Agency for deposit to the
Special Fund and applied by the Successor Agency in accordance with the Law.
(b)[At least 3 Business Days prior to any defeasance with respect to the 2017
Bonds, the Successor Agency shall deliver to the 2017 Insurer draft copies of an escrow agreement,
an opinion of bond counsel regarding the validity and enforceability of the escrow agreement and the
defeasance of the 2017 Bonds, a verification report (a “Verification Report”) prepared by an
Independent Accountant regarding the sufficiency of the escrow fund. Such opinion and Verification
Report shall be addressed to the 2017 Insurer and shall be in form and substance satisfactory to the
2017 Insurer. In addition, the escrow agreement shall provide that:
(i)Any substitution of securities following the execution and delivery of
an escrow agreement relating to the defeasance of 2017 Bonds shall require the delivery of a
Verification Report, an opinion of bond counsel that such substitution will not adversely affect the
exclusion (if interest on the 2017 Bonds is excludable) from gross income of the holders of the 2017
Bonds of the interest on the 2017 Bonds for federal income tax purposes and the prior written
consent of the 2017 Insurer, which consent will not be unreasonably withheld.
(ii)The Successor Agency will not exercise any prior optional
redemption of 2017 Bonds secured by the escrow agreement or any other redemption other than
mandatory sinking fund redemptions unless (i) the right to make any such redemption has been
expressly reserved in the escrow agreement and such reservation has been disclosed in detail in the
official statement for the refunding bonds, and (ii) as a condition to any such redemption there shall
be provided to the 2017 Insurer a Verification Report as to the sufficiency of escrow receipts without
reinvestment to meet the escrow requirements remaining following any such redemption.
(iii)The Successor Agency shall not amend an escrow agreement relating
to the defeasance of 2017 Bonds or enter into a forward purchase agreement or other agreement with
55
respect to rights in such escrow without written notice to and the prior written consent of the 2017
Insurer.]
(c)Notwithstanding anything herein to the contrary, in the event that the
principal and/or interest due of the Bonds is paid by any Insurer pursuant to its municipal bond or
financial guaranty insurance policy, such Bonds shall remain Outstanding for all purposes, not be
defeased or otherwise satisfied and not be considered paid by the Successor Agency, and the
assignment and pledge of the Pledged Tax Revenues and other assets hereunder and all covenants,
agreements and other obligations of the Successor Agency to the Bondowners so paid shall continue
to exist and shall run to the benefit of such Insurer, and such Insurer shall be subrogated to the rights
of such Bondowners, as applicable.
Section 9.04 Execution of Documents and Proof of Ownership by Owners. Any
request, consent, 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 such Owner’s 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 proved by the Registration Books.
Any demand, request, direction, consent, 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 and in accordance therewith, provided, however,
that the Trustee shall not be deemed to have knowledge that any Bond is owned by or for the account
of the Successor Agency unless the Successor Agency is the registered Owner or the Trustee has
received written notice that any other registered Owner is such an affiliate.
Section 9.05 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. Upon
request of the Trustee, the Successor Agency and the City shall specify in a Written Certificate to the
Trustee those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such
Certificate.
Section 9.06 Waiver of Personal Liability. No member, officer, agent or employee of the
Successor Agency shall be individually or personally liable for the payment of the principal 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.
56
Section 9.07 Destruction of Cancelled Bonds. Whenever in this Indenture provision is
made for the surrender to the Trustee of any Bonds which have been paid or cancelled 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 9.08 Notices. Any notice, request, demand, communication or other paper shall be
sufficiently given and shall be deemed given when delivered or upon receipt when mailed by first
class, registered or certified mail, postage prepaid, or sent by facsimile, addressed as follows:
If to the Successor Agency:Successor Agency of the Redevelopment Agency of the
City of Lake Elsinore
130 South Main Street
Lake Elsinore, California 95965
Attention: Executive Director
If to the Trustee:Wilmington Trust, National Association
650 Town Center Drive, Suite 600
Costa Mesa, California 92626
Attention: Corporate Trust Department
Fax No.: (714) 384-4151
If to the 2017 Insurer:[to come]
The Successor Agency, the Trustee [and the 2017 Insurer] may designate any further or
different addresses to which subsequent notices, certificates or other communications shall be sent.
Section 9.09 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 6.01 hereof, be assumed by and vest in the Treasurer of the Successor Agency
in trust for the benefit of the Owners. The Successor Agency covenants for the direct benefit of the
Owners that its Treasurer 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 Bonds, pending appointment of a successor Trustee in
accordance with the provisions of Section 6.01 hereof.
Section 9.10 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
date when the payments of such interest, premium and principal have become payable, if such money
57
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 Bondowners shall look only to the Successor Agency for the payment of the
principal of and interest and redemption premium (if any) on of such Bonds.
Section 9.11 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 9.12 Governing Law. This Indenture shall be construed and governed in
accordance with the laws of the State.
S-1
IN WITNESS WHEREOF, the SUCCESSOR AGENCY OF THE REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE has caused this Indenture to be signed in its name
by its Administrator, and WILMINGTON TRUST, NATIONAL ASSOCIATION, in token of its
acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate
name by its officer thereunto duly authorized, all as of the day and year first above written.
SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE
By:
Executive Director
WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
By:
Authorized Officer
A-1
EXHIBIT A
(FORM OF 2017A BOND)
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE TRUSTEE FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY
PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
R-___$____________
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
(RANCHO LAGUNA REDEVELOPMENT PROJECT
AREAS NO. II AND NO. III)
THIRD LIEN TAX ALLOCATION BONDS, SERIES 2017A
INTEREST RATE:MATURITY DATE:DATED DATE:CUSIP:
February 1, ______
REGISTERED OWNER:CEDE & CO.
PRINCIPAL SUM:_______________________ DOLLARS
The SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE, a public entity duly 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 (the “Registered Owner”), 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 (as hereinafter defined) next preceding the date of
authentication of this Bond, unless (i) this Bond is authenticated on or before an Interest Payment
Date and after the close of business on the fifteenth (15th) day of the month immediately preceding
an Interest Payment Date (the “Record Date”), in which event it shall bear interest from such Interest
Payment Date, or (ii) this Bond is authenticated on or before ____________, 2018, in which event it
shall bear interest from the Dated Date 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 Interest Rate per annum stated above,
A-2
payable semiannually on March 1 and September 1 in each year, commencing [__________ 1, 20__]
(each an “Interest Payment Date”), calculated on the basis of 360-day year comprised of twelve 30-
day months. Principal hereof and premium, if any, upon early redemption hereof are payable upon
surrender of this Bond at the corporate trust office of Wilmington Trust, National Association, as
trustee (the “Trustee”), in Costa Mesa, California or at such other place designated by the Trustee
(the “Principal Corporate Trust Office”). Interest hereon (including the final interest payment upon
maturity or earlier redemption) is payable by check of the Trustee mailed by first class mail, postage
prepaid, on the Interest Payment Date to the Registered Owner hereof at the Registered Owner’s
address as it appears on the registration books maintained by the Trustee as of the Record Date for
such Interest Payment Date; provided however, that payment of interest may be by wire transfer to an
account in the United States of America to any registered owner of Bonds in the aggregate principal
amount of $1,000,000 or more upon written instructions of any such registered owner filed with the
Trustee for that purpose prior to the Record Date preceding the applicable Interest Payment Date.
This Bond is one of a duly authorized issue of bonds of the Successor Agency designated as
“Successor Agency of the Redevelopment Agency of the City of Lake Elsinore (Rancho Laguna
Redevelopment Project Areas No. II and No. III) Third Lien Tax Allocation Bonds, Series 2017A”
(the “Bonds”), of an aggregate principal amount of $__________, 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
Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the
Government Code of the State (the “Refunding Law”), the Dissolution Act (as such term is defined
in the Indenture), and the California Community Redevelopment Law, constituting Part 1 of
Division 24 of the California Health and Safety Code (the “Law”), and pursuant to an Indenture of
Trust, dated as of __________, 2017, entered into by and between the Successor Agency and the
Trustee (the “Indenture”), providing for the issuance of the Bonds. The Bonds are being issued in the
form of registered Bonds without coupons. Simultaneously with the issuance of the Bonds, the
Successor Agency is also issuing bonds designated as “Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore (Rancho Laguna Redevelopment Project Areas No. II and No.
III) Third Lien Tax Allocation Bonds, Series 2017B (Federally Taxable)” (the “2017B Bonds”) that
are payable from Pledged Tax Revenues on a parity with the Bonds. Additional bonds or other
obligations may be issued on a parity with the Bonds and the 2017B 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, to the Dissolution Act, to
the Refunding Law and to the Law for a description of the terms on which the Bonds and the 2017B
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. Capitalized terms not otherwise defined herein
shall have the meanings given them in the Indenture.
The Bonds are limited obligations of the Successor Agency and this Bond and the interest
hereon and on all other Bonds and the interest thereon (to the extent set forth in the Indenture), are
payable from, and are secured by a pledge of, security interest in and lien on the Pledged Tax
Revenues derived by the Successor Agency from the Project Areas.
There has been created the Special Fund (as defined in the Indenture), which will be
maintained by the Successor Agency, into which Pledged Tax Revenues shall be deposited and from
A-3
which the Successor Agency shall transfer amounts to the Trustee for payment, when due, of the
principal of and the interest and redemption premium, if any, on the Bonds and any additional Parity
Debt as defined in the Indenture. As and to the extent set forth in the Indenture, all such Pledged Tax
Revenues and the moneys in the Special Fund (as such terms are defined in the Indenture) are
exclusively and irrevocably pledged to and constitute a trust fund, in accordance with the terms
hereof and the provisions of the Indenture, the Dissolution Act, the Refunding Law and the Law, for
the security and payment or redemption of, including any premium upon early redemption, and for
the security and payment of interest on, the Bonds, the 2017B Bonds and any additional Parity Debt
(as defined in the Indenture). In addition and to the extent set forth in the Indenture, the Bonds shall
be additionally secured at all times by a first and exclusive pledge of, security interest in and lien
upon all of the moneys in the Debt Service Fund, the Interest Account, the Principal Account, the
applicable subaccount within the Reserve Account and the Redemption Account (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 and the 2017B Bonds.
[The Bonds are subject to redemption prior to maturity as provided in the Indenture.]
As provided in the Indenture, notice of redemption shall be given by first class mail no less
than twenty (20) (or such longer period, up to thirty (30) days, as may be required by the Depository)
nor more than sixty (60) days prior to the redemption date to the respective registered owners of any
Bonds designated for redemption at their addresses appearing on the Bond registration books
maintained by the Trustee, but neither failure to receive such notice nor any defect in the notice so
mailed shall affect the sufficiency of the proceedings for redemption.
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 redemption
shall be canceled 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 and to the same recipients as the original notice of redemption was sent.
If this Bond is called for redemption and payment is duly provided therefor as specified in the
Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption.
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 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 Principal Corporate Trust Office of the Trustee, but only in the manner
A-4
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 any 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 Trustee may refuse to transfer or exchange
(a) any Bond during the fifteen (15) days prior to the date established for the selection of Bonds for
redemption, or (b) any Bond selected for redemption.
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 (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 any Insurer or 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.
This Bond is not a debt, liability or obligation of the City of Lake Elsinore, the State of
California, or any of its political subdivisions except the Successor Agency, and neither 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 pledged by the
Successor Agency under 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 as amended by the
Dissolution Act or any other 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.
A-5
IN WITNESS WHEREOF, the Successor Agency of the Redevelopment Agency of the City
of Lake Elsinore has caused this Bond to be executed in its name and on its behalf with the facsimile
signature of its Executive Director and attested by the facsimile signature of its Secretary, all as of
the Dated Date set forth above.
SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE
By:
Executive Director
ATTEST:
Secretary
A-6
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture.
Authentication Date: _______________
WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
By:
Authorized Signatory
A-7
STATEMENT OF INSURANCE
A-8
(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 appoints(s)
attorney,
to transfer the same on the registration books of the Trustee with full power of substitution in the
premises.
Dated: __________________________
Signatures Guaranteed:
Note:Signature(s) must be guaranteed by an
eligible guarantor.
Note:The signatures(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.
B-1
EXHIBIT B
(FORM OF 2017B BOND)
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE TRUSTEE FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY
PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
R-___$____________
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
(RANCHO LAGUNA REDEVELOPMENT PROJECT
AREAS NO. II AND NO. III)
THIRD LIEN TAX ALLOCATION BONDS,
SERIES 2017B (FEDERALLY TAXABLE
INTEREST RATE:MATURITY DATE:DATED DATE:CUSIP:
February 1, ______
REGISTERED OWNER:CEDE & CO.
PRINCIPAL SUM:_____________________ DOLLARS
The SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE, a public entity duly 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 (the “Registered Owner”), 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 (as hereinafter defined) next preceding the date of
authentication of this Bond, unless (i) this Bond is authenticated on or before an Interest Payment
Date and after the close of business on the fifteenth (15th) day of the month immediately preceding
an Interest Payment Date (the “Record Date”), in which event it shall bear interest from such Interest
Payment Date, or (ii) this Bond is authenticated on or before ____________, 2018, in which event it
shall bear interest from the Dated Date 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
B-2
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 Interest Rate per annum stated above,
payable semiannually on March 1 and September 1 in each year, commencing [__________ 1, 20__]
(each an “Interest Payment Date”), calculated on the basis of 360-day year comprised of twelve 30-
day months. Principal hereof and premium, if any, upon early redemption hereof are payable upon
surrender of this Bond at the corporate trust office of Wilmington Trust, National Association, as
trustee (the “Trustee”), in Costa Mesa, California or at such other place designated by the Trustee
(the “Principal Corporate Trust Office”). Interest hereon (including the final interest payment upon
maturity or earlier redemption) is payable by check of the Trustee mailed by first class mail, postage
prepaid, on the Interest Payment Date to the Registered Owner hereof at the Registered Owner’s
address as it appears on the registration books maintained by the Trustee as of the Record Date for
such Interest Payment Date; provided however, that payment of interest may be by wire transfer to an
account in the United States of America to any registered owner of Bonds in the aggregate principal
amount of $1,000,000 or more upon written instructions of any such registered owner filed with the
Trustee for that purpose prior to the Record Date preceding the applicable Interest Payment Date.
This Bond is one of a duly authorized issue of bonds of the Successor Agency designated as
“Successor Agency of the Redevelopment Agency of the City of Lake Elsinore (Rancho Laguna
Redevelopment Project Areas No. II and No. III) Third Lien Tax Allocation Bonds, Series 2017B
(Federally Taxable)” (the “Bonds”), of an aggregate principal amount of $__________, 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 Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of
Title 5 of the Government Code of the State (the “Refunding Law”), the Dissolution Act (as such
term is defined in the Indenture), and the California Community Redevelopment Law, constituting
Part 1 of Division 24 of the California Health and Safety Code (the “Law”), and pursuant to an
Indenture of Trust, dated as of __________, 2017, entered into by and between the Successor
Agency and the Trustee (the “Indenture”), providing for the issuance of the Bonds. The Bonds are
being issued in the form of registered Bonds without coupons. Simultaneously with the issuance of
the Bonds, the Successor Agency is also issuing bonds designated as “Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore (Rancho Laguna Redevelopment Project Areas
No. II and No. III) Third Lien Tax Allocation Bonds, Series 2017A” (the “2017A Bonds”) that are
payable from Pledged Tax Revenues on a parity with the Bonds. Additional bonds or other
obligations may be issued on a parity with the Bonds and the 2017A 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, to the Dissolution Act, to
the Refunding Law and to the Law for a description of the terms on which the Bonds and the 2017A
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. Capitalized terms not otherwise defined herein
shall have the meanings given them in the Indenture.
The Bonds are limited obligations of the Successor Agency and this Bond and the interest
hereon and on all other Bonds and the interest thereon (to the extent set forth in the Indenture), are
payable from, and are secured by a pledge of, security interest in and lien on the Pledged Tax
Revenues derived by the Successor Agency from the Project Areas.
B-3
There has been created the Special Fund (as defined in the Indenture), which will be
maintained by the Successor Agency, into which Pledged Tax Revenues shall be deposited and from
which the Successor Agency shall transfer amounts to the Trustee for payment, when due, of the
principal of and the interest and redemption premium, if any, on the Bonds and any additional Parity
Debt as defined in the Indenture. As and to the extent set forth in the Indenture, all such Pledged Tax
Revenues and the moneys in the Special Fund (as such terms are defined in the Indenture) are
exclusively and irrevocably pledged to and constitute a trust fund, in accordance with the terms
hereof and the provisions of the Indenture, the Dissolution Act, the Refunding Law and the Law, for
the security and payment or redemption of, including any premium upon early redemption, and for
the security and payment of interest on, the Bonds, the 2017A Bonds and any additional Parity Debt
(as defined in the Indenture). In addition and to the extent set forth in the Indenture, the Bonds shall
be additionally secured at all times by a first and exclusive pledge of, security interest in and lien
upon all of the moneys in the Debt Service Fund, the Interest Account, the Principal Account, the
applicable subaccount within the Reserve Account and the Redemption Account (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 and the 2017A Bonds.
[The Bonds are subject to redemption prior to maturity as provided in the Indenture.]
As provided in the Indenture, notice of redemption shall be given by first class mail no less
than twenty (20) days (or such longer period, up to thirty (30) days, as may be required by the
Depository) nor more than sixty (60) days prior to the redemption date to the respective registered
owners of any Bonds designated for redemption at their addresses appearing on the Bond registration
books maintained by the Trustee, but neither failure to receive such notice nor any defect in the
notice so mailed shall affect the sufficiency of the proceedings for redemption.
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 redemption
shall be canceled 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 and to the same recipients as the original notice of redemption was sent.
If this Bond is called for redemption and payment is duly provided therefor as specified in the
Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption.
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 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.
B-4
This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly
authorized in writing, at the Principal 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 any 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 Trustee may refuse to transfer or exchange
(a) any Bond during the fifteen (15) days prior to the date established for the selection of Bonds for
redemption, or (b) any Bond selected for redemption.
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 (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 any Insurer or 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.
This Bond is not a debt, liability or obligation of the City of Lake Elsinore, the State of
California, or any of its political subdivisions except the Successor Agency, and neither 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 pledged by the
Successor Agency under 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 as amended by the
Dissolution Act or any other 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.
B-5
IN WITNESS WHEREOF, the Successor Agency of the Redevelopment Agency of the City
of Lake Elsinore has caused this Bond to be executed in its name and on its behalf with the facsimile
signature of its Executive Director and attested by the facsimile signature of its Secretary, all as of
the Dated Date set forth above.
SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE
By:
Executive Director
ATTEST:
Secretary
B-6
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture.
Authentication Date: _______________
WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
By:
Authorized Signatory
B-7
STATEMENT OF INSURANCE
B-8
(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 appoints(s)
attorney,
to transfer the same on the registration books of the Trustee with full power of substitution in the
premises.
Dated: __________________________
Signatures Guaranteed:
Note:Signature(s) must be guaranteed by an
eligible guarantor.
Note:The signatures(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.
C-1
EXHIBIT C
FORM OF REQUISITION FOR DISBURSEMENT FROM PROJECT FUND
$__________
Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore
(Rancho Laguna Redevelopment Project
Areas No. II and No. III)
Third Lien Tax Allocation Bonds,
Series 2017A
$__________
Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore
(Rancho Laguna Redevelopment Project
Areas No. II and No. III)
Third Lien Tax Allocation Bonds,
Series 2017B (Federally Taxable)
REQUISITION NO. ___ FOR
DISBURSEMENT FROM PROJECT FUND
SERIES [2017A][2017B] ACCOUNT
The undersigned hereby states and certifies:
(i)that the undersigned is a duly authorized representative of the Successor Agency of
the Redevelopment Agency of the City of Lake Elsinore (the “Successor Agency”), and as such, is
familiar with the facts herein certified and is authorized to certify the same;
(ii)that, pursuant to Section 3.04 of that certain Indenture of Trust, dated as of
________ 1, 2017 (the “Indenture”), by and between the Successor Agency and Wilmington Trust,
National Association, as trustee (the “Trustee”), the undersigned hereby requests the Trustee to
disburse this date the following amounts from the Series [2017A][2017B] Account of the Project
Fund established under the Indenture relating to the above-captioned obligations, to the payees
designated on the attached Exhibit A;
(iii)that each obligation mentioned herein is an obligation to the payee stated in Exhibit A
that has been incurred by the Successor Agency pursuant to the Summerly DDA, and as such is a
proper charge against the Project Fund; and
(iv)that any approval required under the California Environmental Quality Act, as
amended (Division 13 of the California Public Resources Code), prior to the expenditure of such
amount for the purpose set forth on the attached Exhibit A has been received and is final.
Dated: , 20__
SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE
By:
Authorized Officer
C-2
EXHIBIT A
PROJECT FUND DISBURSEMENTS
Series [2017A][2017B] Account
Item
Number Payee Name and Address Purpose of Obligation Amount
$________
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE
(RANCHO LAGUNA REDEVELOPMENT
PROJECT AREAS NO. II AND NO. III)
THIRD LIEN TAX ALLOCATION BONDS
SERIES 2017A
$________
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE
(RANCHO LAGUNA REDEVELOPMENT
PROJECT AREAS NO. II AND NO. III)
THIRD LIEN TAX ALLOCATION BONDS
SERIES 2017B (FEDERALLY TAXABLE)
BOND PURCHASE AGREEMENT
__________, 2017
Successor Agency to the
Redevelopment Agency of the City of Lake Elsinore
130 South Main Street
Lake Elsinore, California 95965
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) offers to enter into this
Bond Purchase Agreement (the “Bond Purchase Agreement”) with the Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore (the “Successor Agency”), which will be
binding upon the Successor Agency and the Underwriter upon the acceptance hereof by the
Successor Agency. This offer is made subject to its acceptance by the Successor Agency by
execution of this Bond Purchase Agreement and its delivery to the Underwriter on or before
11:59 P.M., California time, on the date hereof.
The Successor Agency acknowledges and agrees that: (i) the purchase and sale of the
above-captioned Bonds (and defined below) pursuant to this Bond Purchase Agreement is an
arm’s-length commercial transaction between the Successor Agency and the Underwriter; (ii) in
connection with such transaction, including the process leading thereto, the Underwriter is acting
solely as a principal and not as an agent or a fiduciary of the Successor Agency; (iii) the
Underwriter has neither assumed an advisory or fiduciary responsibility in favor of the Successor
Agency with respect to the offering of the Bonds or the process leading thereto (whether or not
the Underwriter, or any affiliate of the Underwriter, has advised or is currently advising the
Successor Agency on other matters) nor has it assumed any other obligation to the Successor
Agency except the obligations expressly set forth in this Bond Purchase Agreement; (iv) the
2
Underwriter has financial and other interests that differ from those of the Successor Agency; and
(v) the Successor Agency has consulted with its own legal and financial advisors to the extent it
deemed appropriate in connection with the offering of the Bonds.
The Successor Agency hereby acknowledges receipt from the Underwriter of disclosures
required by the Municipal Securities Rulemaking Board (“MSRB”) Rule G-17 (as set forth in
MSRB Notice 2012-25 (May 7, 2012), relating to disclosures concerning the Underwriter’s role
in the transaction, disclosures concerning the Underwriter’s compensation, conflict disclosures,
if any, and disclosures concerning complex municipal securities financing, if any. The Successor
Agency acknowledges that it has engaged Urban Futures, Inc. (the “Municipal Advisor”), as its
municipal advisor (as defined in Securities and Exchange Commission Rule 15Ba1), and for
financial advice purposes, will rely only on the advice of the Municipal Advisor.
Capitalized terms used and not otherwise defined in this Bond Purchase Agreement shall
have the same meanings given them in that certain Indenture of Trust, dated as of ______ 1,
2017 (the “Indenture”), by and between the Successor Agency and Wilmington Trust, National
Association, as trustee (the “Trustee”), pursuant to which the Bonds are being issued.
1.Purchase and Sale; Use of Proceeds.
(a)Upon the terms and conditions and in reliance upon the representations,
warranties and covenants herein, the Successor Agency hereby agrees to sell to the Underwriter
and the Underwriter hereby agrees to purchase from the Successor Agency for offering to the
public, all (but not less than all) of the (i) $________ City of Lake Elsinore (Rancho Laguna
Redevelopment Project Areas No. II and No. III) Third Lien Tax Allocation Bonds, Series
2017A (the “Series A Bonds”), at the purchase price of $_________ (the “Series A Purchase
Price”) (being the principal amount of the Series A Bonds of $_______, less an Underwriter’s
discount of $_______, and plus a net original issue premium of $_______) and the (ii)
$________ Successor Agency of the Redevelopment Agency of the City of Lake Elsinore
(Rancho Laguna Redevelopment Project Areas No. II and No. III) Third Lien Tax Allocation
Bonds, Series 2017B (Federally Taxable) (the “Series B Bonds,” and together with the Series A
Bonds, the “Bonds”), at the purchase price of $______ (the “Series B Purchase Price,” and
together with the Series A Purchase Price, the “Purchase Price”) (being the principal amount of
the Series B Bonds of $_______, less an Underwriter’s discount of $_______, and less an
original issue discount of $______). The Purchase Price will be delivered to the Trustee on
behalf of the Successor Agency.
The Purchase Price is to be paid on the Closing Date (as defined in Section 6 below). The
Bonds shall be dated the Closing Date, and shall bear interest at the rates, shall mature on the
dates and in the principal amounts, all as set forth in the attached Exhibit A.
As an accommodation to the Successor Agency, the Underwriter will pay, from the
Purchase Price, the sum of $_________ to _________ (the “Insurer”) as the premium for the
portion of its municipal bond insurance policy issued for the Bonds (the “Municipal Bond
Insurance Policy”) and allocable to the Bonds and the sum of $_______ to the Insurer as the
premium for its reserve account municipal bond insurance policy issued for the Bonds (the
3
“Reserve Account Insurance Policy”) and allocable to the Bonds. Such amounts shall be credited
against the Purchase Price to be remitted by the Underwriter to the Trustee pursuant to the
foregoing paragraph.
(b)The Bonds are being issued for the purpose of (a) providing funds to
finance the Successor Agency’s DDA Payment Obligation pursuant to an Amended and Restated
Disposition and Development Agreement by and among the Redevelopment Agency of the City
of Lake Elsinore (the “Former Agency”), McMillin Summerly LLC (the “Developer”), and Civic
Partners-Elsinore LLC (the “Master Developer”) dated as of March 8, 2011 (the “Amended and
Restated DDA”), and that certain Second Implementation Agreement dated as of January 24,
2017, by and among the Successor Agency, the Developer and the Master Developer (the
“Implementation Agreement”; and, together with the Amended and Restated DDA, the
“Summerly DDA”); (b) purchasing the Municipal Bond Insurance Policy for the Bonds; (c)
purchasing the Reserve Account Insurance Policy for the Bonds, and (d) paying the costs of
issuing the Bonds.
The Bonds are special obligations of the Successor Agency, payable from, and secured
by a lien on Pledged Tax Revenues.
The payment of principal of and interest on the Bonds, when due, will be insured by the
Municipal Bond Insurance Policy issued by the Insurer concurrently with the delivery of the
Bonds.
(c)Issuance of the Bonds was authorized by a resolution of the Successor
Agency, adopted on _______, 2017 (the “Successor Agency Resolution”), and Resolution No.
OB-_____ of the Oversight Board of the Successor Agency to the Redevelopment Agency of the
City of Lake Elsinore, adopted on ________, 2017 (the “Oversight Board Resolution”).
2.Bona Fide Public Offering. The Underwriter agrees to make a bona fide public
offering of all of the Bonds, at prices not in excess of the initial public offering yields or prices
set forth in Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than
such initial public offering prices.
3.Official Statement. The Successor Agency shall deliver or cause to be delivered to
the Underwriter promptly after acceptance of this Bond Purchase Agreement copies of the
Official Statement relating to the Bonds, dated the date hereof (which, together with all exhibits
and appendices included therein or attached thereto and with such amendments or supplements
thereto which shall be approved by the Underwriter, the “Official Statement”). The Successor
Agency authorizes the Official Statement, including the cover page and Appendices thereto and
the information contained therein, to be used in connection with the sale of the Bonds and
ratifies, confirms and approves the use and distribution by the Underwriter for such purpose,
prior to the date hereof, of the Preliminary Official Statement dated ______, 2017 relating to the
Bonds (the “Preliminary Official Statement”). The Successor Agency deems the Preliminary
Official Statement final as of its date for purposes of Rule 15c2-12 under the Securities
Exchange Act of 1934, as amended (“Rule 15c2-12”), except for information allowed to be
omitted by Rule 15c2-12.
4
The Successor Agency also agrees to deliver to the Underwriter, at the Successor
Agency’s sole cost and at such address as the Underwriter shall specify, as many copies of the
Official Statement as the Underwriter shall reasonably request as necessary to comply with
paragraph (b)(4) of Rule 15c2-12, with Rule G-32 and all other applicable rules of the Municipal
Securities Rulemaking Board. At least one copy of the Official Statement shall be in word
searchable portable document format (PDF). The Successor Agency agrees to deliver such
copies of the Official Statement within seven (7) business days after the date hereof, but in any
event no later than the Closing Date. The Official Statement shall contain all information
previously permitted to be omitted from the Preliminary Official Statement by Rule 15c2-12.
The Underwriter agrees to deliver or cause to be delivered to each purchaser of the Bonds
from it, upon request, a copy of the Official Statement, for the time period required under Rule
15c2-12. The Underwriter also agrees to promptly file a copy of the final Official Statement,
including any supplements prepared by the Successor Agency and delivered to the Underwriter,
with a nationally recognized municipal securities information repository (currently, the
Electronic Municipal Market Access System (referred to as “EMMA”), a facility of the
Municipal Securities Rulemaking Board, at www.emma.msrb.org), and to take any and all other
actions necessary to comply with applicable Securities and Exchange Commission rules and
Municipal Securities Rulemaking Board rules governing the use of the Official Statement in
connection with offering, sale and delivery of the Bonds to the ultimate purchasers thereof.
4.Representations, Warranties and Agreements of the Successor Agency. The
Successor Agency represents and warrants to the Underwriter that, as of the Closing Date:
(a)The Successor Agency is a public entity existing under the laws of the
State, including the Dissolution Act, and is authorized, among other things, (i) to issue
the Bonds, and (ii) to secure the Bonds in the manner contemplated by the Indenture.
(b)The Successor Agency has the full right, power and authority (i) to enter
into the Indenture, the Continuing Disclosure Certificate, and this Bond Purchase
Agreement (collectively, the “Successor Agency Documents”), (ii) to issue, sell and
deliver the Bonds to the Underwriter as provided herein, and (iii) to carry out and
consummate all other transactions on its part contemplated by each of the aforesaid
documents, and the Successor Agency has complied with all provisions of applicable law
in all matters relating to such transactions.
(c)The Successor Agency has duly authorized (i) the execution and delivery
of the Bonds and the execution, delivery and due performance by the Successor Agency
of the Successor Agency Documents, (ii) the distribution and use of the “deemed final”
Preliminary Official Statement and the execution, delivery and distribution of the final
Official Statement, and (iii) the taking of any and all such action as may be required on
the part of the Successor Agency to carry out, give effect to and consummate the
transactions on its part contemplated by such instruments. All consents or approvals
necessary to be obtained by the Successor Agency in connection with the foregoing have
been received, and the consents or approvals so received are still in full force and effect.
5
(d)The information contained in the Preliminary Official Statement
(excluding therefrom for any information relating to the Insurer, the Municipal Bond
Insurance Policy, the Reserve Account Insurance Policy, The Depository Trust Company
(“DTC”) and its book-entry system included therein and the information therein under the
caption “CONCLUDING INFORMATION - Underwriting”) is true and correct in all
material respects, and the Preliminary Official Statement did not as of its date contain any
untrue or misleading statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(e)The information contained in the Official Statement (excluding therefrom
for any information relating to the Insurer, the Municipal Bond Insurance Policy, the
Reserve Account Insurance Policy, DTC and its book-entry system included therein and
the information therein under the caption “CONCLUDING INFORMATION -
Underwriting”) is true and correct in all material respects, and the Official Statement does
not contain any untrue or misleading statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(f)Neither the execution and delivery by the Successor Agency of the
Successor Agency Documents and of the Bonds nor the consummation of the transactions
on the part of the Successor Agency contemplated herein or therein or the compliance
with the provisions hereof or thereof will conflict with, or constitute on the part of the
Successor Agency a violation of, or a breach of or default under, (i) any statute,
indenture, mortgage, note or other agreement or instrument to which the Successor
Agency is a party or by which it is bound, (ii) any provision of the State Constitution, or
(iii) any existing law, rule, regulation, ordinance, judgment, order or decree to which the
Successor Agency (or the Board members of the Successor Agency or any of its officers
in their respective capacities as such) is subject.
(g)The Successor Agency has never been in default at any time, as to
principal of or interest on any obligation which it has issued except as otherwise
specifically disclosed in the Official Statement; and the Successor Agency has not
entered into any contract or arrangement of any kind which might give rise to any lien or
encumbrance on the Tax Revenues (senior to or on a parity with the pledge thereof under
the Indenture), except as is specifically disclosed in the Preliminary Official Statement
and the Official Statement.
(h)Except as will be specifically disclosed in the Official Statement, there is
no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, which has been served on the Successor Agency or, to the
knowledge of the Successor Agency, threatened, which in any way questions the powers
of the Successor Agency referred to in paragraph (b) above, or the validity of any
proceeding taken by the Successor Agency in connection with the issuance of the Bonds,
or wherein an unfavorable decision, ruling or finding could materially adversely affect
the transactions contemplated by the Successor Agency Documents, or which, in any
way, could adversely affect the validity or enforceability of the Successor Agency
6
Documents or the Bonds or, to the knowledge of the Successor Agency, which in any
way questions the exclusion from gross income of the recipients thereof the interest on
the Series A Bonds for federal income tax purposes or in any other way questions the
status of the Series A Bonds under federal or state tax laws or regulations or which in any
way could materially adversely affect the availability of Pledged Tax Revenues to pay the
debt service on the Bonds.
(i)Any written certificate signed by any official of the Successor Agency and
delivered to the Underwriter in connection with the offer or sale of the Bonds shall be
deemed a representation and warranty by the Successor Agency to the Underwriter as to
the truth of the statements therein contained.
(j)The Successor Agency has not been notified of any listing or proposed
listing by the Internal Revenue Service to the effect that it is a bond issuer whose
arbitrage certifications may not be relied upon.
(k)The Successor Agency will furnish such information, execute such
instruments and take such other action in cooperation with the Underwriter and at the
expense of the Underwriter as the Underwriter may reasonably request in order (i) to
qualify the Bonds for offer and sale under the Blue Sky or other securities laws and
regulations of such states and other jurisdictions of the United States as the Underwriter
may designate and (ii) to determine the eligibility of the Bonds for investment under the
laws of such states and other jurisdictions, and will use its best efforts to continue such
qualifications in effect so long as required for the distribution of the Bonds; provided,
however, that the Successor Agency will not be required to execute a special or general
consent to service of process or qualify as a foreign corporation in connection with any
such qualification or determination in any jurisdiction.
(l)All authorizations, approvals, licenses, permits, consents, elections, and
orders of or filings with any governmental authority, legislative body, board, agency or
commission having jurisdiction in the matters which are required by the Closing Date for
the due authorization of, which would constitute a condition precedent to or the absence
of which would adversely affect the due performance by the Successor Agency of, its
obligations under the Indenture and the Escrow Agreements have been duly obtained or
made and are in full force and effect.
(m)Between the date of this Bond Purchase Agreement and the Closing Date,
the Successor Agency will not offer or issue any bonds, notes or other obligations for
borrowed money not previously disclosed in writing to the Underwriter.
(n)The Successor Agency will apply the proceeds of the Bonds in accordance
with the Indenture, the Summerly DDA, and as described in the Preliminary Official
Statement and the Official Statement.
(o)Except as otherwise described in the Official Statement, as of the Closing
Date, the Successor Agency will not have outstanding any indebtedness which
7
indebtedness is secured by a lien on the Pledged Tax Revenues on a parity with or senior
to the lien provided for in the Indenture on the Pledged Tax Revenues.
(p)Except as described in the Preliminary Official Statement and the Official
Statement and based upon a review of their previous undertakings, neither the Former
Agency nor the Successor Agency has failed, within the last five years, to comply in all
material respects with any undertaking of the Successor Agency or the Former Agency,
respectively, pursuant to Rule 15c2-12.
(q)If between the date hereof and the date which is 25 days after the End of
the Underwriting Period for the Bonds, an event occurs which would cause the
information contained in the Official Statement, as then supplemented or amended, to
contain an untrue statement of a material fact or to omit to state a material fact required to
be stated therein or necessary to make the information therein, in the light of the
circumstances under which it was presented, not misleading, the Successor Agency will
notify the Underwriter, and, if in the opinion of the Underwriter or the Successor Agency,
or their respective counsel, such event requires the preparation and publication of a
supplement or amendment to the Official Statement, the Successor Agency will cooperate
in the preparation of an amendment or supplement to the Official Statement in a form and
manner approved by the Underwriter, and shall pay all expenses thereby incurred. For the
purposes of this subsection, between the date hereof and the date which is 25 days after
the End of the Underwriting Period for the Bonds, the Successor Agency will furnish
such information with respect to itself as the Underwriter may from time to time
reasonably request. As used herein, the term “End of the Underwriting Period” means the
later of such time as: (i) the Successor Agency delivers the Bonds to the Underwriter; or
(ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate,
an unsold balance of the Bonds for sale to the public. Notwithstanding the foregoing,
unless the Underwriter gives notice to the contrary, the Successor Agency may assume
that the “End of the Underwriting Period” is the Closing Date.
(r)If the information contained in the Official Statement is amended or
supplemented pursuant to paragraph (q) hereof, at the time of each supplement or
amendment thereto and (unless subsequently again supplemented or amended pursuant to
such subparagraph) at all times subsequent thereto up to and including the date which is
25 days after the End of the Underwriting Period for the Bonds, the portions of the
Official Statement so supplemented or amended (including any financial and statistical
data contained therein) will not contain any untrue statement of a material fact required to
be stated therein or necessary to make the information therein in the light of the
circumstances under which it was presented, not misleading.
(s)The Oversight Board has duly adopted the Oversight Board Resolution
and no further Oversight Board approval or consent is required for the issuance of the
Bonds or the consummation of the transactions described in the Official Statement.
(t)The Department of Finance of the State (the “Department of Finance”) has
issued a letter, dated ________, 2017, approving the issuance of the Bonds. No further
Department of Finance approval or consent is required for the issuance of the Bonds or
8
the consummation of the transactions described in the Official Statement. The Successor
Agency has received its Finding of Completion from the Department of Finance pursuant
to section 34179.7 of the Dissolution Act. Except as disclosed in the Official Statement,
the Successor Agency is not aware of the Department of Finance directing or having any
basis to direct the County Auditor-Controller to deduct unpaid unencumbered funds from
future allocations to the Successor Agency pursuant to Section 34183 of the Dissolution
Act.
(u)As of the time of acceptance hereof and as of the Closing Date, the
Successor Agency has complied with the filing requirements of the Law, including,
without limitation, the filing of all Recognized Obligation Payment Schedules as required
by law, as well as sections 33080 to 33080.6 of the Law.
5.Covenants of the Successor Agency. The Successor Agency covenants with the
Underwriter as of the Closing Date as follows:
(a)The Successor Agency covenants and agrees that it will execute a
continuing disclosure certificate, constituting an undertaking to provide ongoing
disclosure about the Successor Agency, for the benefit of the owners of the Bonds as
required by Section (b)(5)(i) of Rule 15c2-12, substantially in the form attached to the
Official Statement (the “Continuing Disclosure Certificate”).
(b)The Successor Agency agrees to cooperate with the Underwriter in the
preparation of any supplement or amendment to the Official Statement deemed necessary
by the Underwriter to comply with Rule 15c2-12 and any applicable rule of the MSRB.
(c)If at any time prior to the Closing Date, any event occurs with respect to
the Successor Agency as a result of which the Official Statement, as then amended or
supplemented, might include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, the Successor Agency shall promptly notify the
Underwriter in writing of such event. Any information supplied by the Successor Agency
for inclusion in any amendments or supplements to the Official Statement will not
contain any untrue or misleading statement of a material fact or omit to state any such
fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d)The Successor Agency will not knowingly take or omit to take any action,
which action or omission will in any way cause the proceeds from the sale of the Bonds
to be applied in a manner other than as provided in the Indenture or which would cause
the interest on the Series A Bonds to be includable in gross income of the owners of the
Series A Bonds for federal income tax purposes.
6.Closing. On ______, 2017, or at such other date and times as shall have been
mutually agreed upon by the Successor Agency and the Underwriter (the “Closing Date”), the
Successor Agency will deliver or cause to be delivered the Bonds to the Underwriter, and the
Successor Agency shall deliver or cause to be delivered to the Underwriter the certificates,
9
opinions and documents hereinafter mentioned, each of which shall be dated as of the Closing
Date. The activities relating to the execution and delivery of the Bonds, opinions and other
instruments as described in Section 8 of this Bond Purchase Agreement shall occur on the
Closing Date, unless otherwise specified herein. The delivery of the certificates, opinions and
documents as described herein shall be made at the offices Stradling Yocca Carlson & Rauth, in
Newport Beach, California (“Bond Counsel”), or at such other place as shall have been mutually
agreed upon by the Successor Agency and the Underwriter. Such delivery is herein called the
“Closing.”
The Bonds will be prepared and physically delivered to the Trustee on the Closing Date
in the form of a separate single fully registered bond for each of the maturities of the Bonds. The
Bonds shall be registered in the name of the Cede & Co., as registered owner and nominee for
DTC, New York, New York. The Bonds will be authenticated by the Trustee in accordance with
the terms and provisions of the Indenture and shall be delivered to DTC prior to the Closing Date
as required by DTC to assure delivery of the Bonds on the Closing Date. It is anticipated that
CUSIP identification numbers will be printed on the Bonds, but neither the failure to print such
number on any Bond nor any error with respect thereto shall constitute cause for a failure or
refusal by the Underwriter to accept delivery of and pay for the Bonds in accordance with the
terms of this Bond Purchase Agreement.
At or before 8:00 a.m., Pacific Standard time, on the Closing Date, the Successor Agency
will deliver, or cause to be delivered, the Bonds to DTC, in definitive form duly executed and
authenticated by the Trustee, and the Underwriter will pay the Purchase Price of the Bonds by
delivering to the Trustee, for the account of the Successor Agency a wire transfer in federal
funds of the Purchase Price payable to the order of the Trustee, less the amounts remitted by the
Underwriter to the Insurer as described in the third paragraph of Section 1(a).
7.Establishment of Issue Price.
(a)The Underwriter agrees to assist the Successor Agency in establishing the
issue price of the Series A Bonds and shall execute and deliver to the Successor Agency at
Closing an “issue price” or similar certificate, together with the supporting pricing wires or
equivalent communications, substantially in the form attached hereto as Exhibit B, with such
modifications as may be appropriate or necessary, in the reasonable judgment of the
Underwriter, the Successor Agency and Bond Counsel (as defined herein), to accurately reflect,
as applicable, the sales price or prices or the initial offering price or prices to the public of the
Series A Bonds. All actions to be taken by the Successor Agency under this section to establish
the issue price of the Series A Bonds may be taken on behalf of the Successor Agency by the
Municipal Advisor and any notice or report to be provided to the Successor Agency may be
provided to the Successor Agency’s Municipal Advisor.
(b)Except as otherwise set forth in Exhibit A attached hereto, the Successor
Agency will treat the first (meaning single) price at which 10% of each maturity of the Series A
Bonds (the “10% test”) is sold to the public as the issue price of that maturity (if different interest
rates apply within a maturity, each separate CUSIP number within that maturity will be subject
to the 10% test). At or promptly after the execution of this Bond Purchase Agreement, the
Underwriter shall report to the Successor Agency the price or prices at which it has sold to the
10
public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any
maturity of the Series A Bonds, the Underwriter agrees to promptly report to the Successor
Agency the prices at which it sells the unsold Series A Bonds of that maturity to the public. That
reporting obligation shall continue, whether or not the Closing Date (as defined herein) has
occurred, until the 10% test has been satisfied as to the Series A Bonds of that maturity or until
all Series A Bonds of that maturity have been sold to the public.
(c)The Underwriter confirms that it has offered the Series A Bonds to the
public on or before the date of this Bond Purchase Agreement at the offering price or prices (the
“initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached
hereto, except as otherwise set forth therein. Exhibit A also sets forth, as of the date of this
Bond Purchase Agreement, the maturities, if any, of the Series A Bonds for which the
Underwriter represents that (i) the 10% test has been satisfied (assuming orders are confirmed
immediately after the execution of this Bond Purchase Agreement) and (ii) the 10% test has not
been satisfied and for which the Successor Agency and the Underwriter agree that the restrictions
set forth in the next sentence shall apply, which will allow the Successor Agency to treat the
initial offering price to the public of each such maturity as of the sale date as the issue price of
that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule
remains applicable to any maturity of the Series A Bonds, the Underwriter will neither offer nor
sell unsold Series A Bonds of that maturity to any person at a price that is higher than the initial
offering price to the public during the period starting on the sale date and ending on the earlier of
the following:
(1)the close of the fifth (5th) business day after the sale date; or
(2)the date on which the Underwriter has sold at least 10% of that maturity of
the Series A Bonds to the public at a price that is no higher than the initial
offering price to the public.
The Underwriter shall promptly advise the Successor Agency when it has sold 10% of
that maturity of the Series A Bonds to the public at a price that is no higher than the initial
offering price to the public, if that occurs prior to the close of the fifth (5th) business day after
the sale date.
(d)The Underwriter confirms that any selling group agreement and any retail
distribution agreement relating to the initial sale of the Series A Bonds to the public, together
with the related pricing wires, contains or will contain language obligating each dealer who is a
member of the selling group and each broker-dealer that is a party to such retail distribution
agreement, as applicable, to (A) report the prices at which it sells to the public the unsold Series
A Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10%
test has been satisfied as to the Series A Bonds of that maturity or all Series A Bonds of that
maturity have been sold to the public and (B) comply with the hold-the-offering-price rule, if
applicable, in each case if and for so long as directed by the Underwriter. The Successor Agency
acknowledges that, in making the representation set forth in this subsection, the Underwriter will
rely on (i) in the event a selling group has been created in connection with the initial sale of the
Series A Bonds to the public, the agreement of each dealer who is a member of the selling group
to comply with the hold-the-offering-price rule, if applicable, as set forth in a selling group
11
agreement and the related pricing wires, and (ii) in the event that a retail distribution agreement
was employed in connection with the initial sale of the Series A Bonds to the public, the
agreement of each broker-dealer that is a party to such agreement to comply with the hold-the-
offering-price rule, if applicable, as set forth in the retail distribution agreement and the related
pricing wires.
(e)The Underwriter acknowledges that sales of any Series A Bonds to any
person that is a related party to the Underwriter shall not constitute sales to the public for
purposes of this section. Further, for purposes of this section:
(1)“public” means any person other than an underwriter or a related party;
(2)“underwriter” means (A) any person that agrees pursuant to a written
contract with the Successor Agency (or with the lead underwriter to form an
underwriting syndicate) to participate in the initial sale of the Series A Bonds to
the public and (B) any person that agrees pursuant to a written contract directly or
indirectly with a person described in clause (A) to participate in the initial sale of
the Series A Bonds to the public (including a member of a selling group or a party
to a retail distribution agreement participating in the initial sale of the Series A
Bonds to the public);
(3)a purchaser of any of the Series A Bonds is a “related party” to an
underwriter if the underwriter and the purchaser are subject, directly or indirectly,
to (i) at least 50% common ownership of the voting power or the total value of
their stock, if both entities are corporations (including direct ownership by one
corporation of another), (ii) more than 50% common ownership of their capital
interests or profits interests, if both entities are partnerships (including direct
ownership by one partnership of another), or (iii) more than 50% common
ownership of the value of the outstanding stock of the corporation or the capital
interests or profit interests of the partnership, as applicable, if one entity is a
corporation and the other entity is a partnership (including direct ownership of the
applicable stock or interests by one entity of the other); and
(4)“sale date” means the date of execution of this Bond Purchase Agreement
by all parties.
8.Closing Conditions. The obligations of the Underwriter hereunder shall be subject
to the performance by the Successor Agency of its obligations hereunder at or prior to the
Closing Date and are also subject to the following conditions:
(a)the representations, warranties and covenants of the Successor Agency
contained herein shall be true and correct in all material respects as of the Closing Date;
(b)as of the Closing Date, there shall have been no material adverse change in
the financial condition of the Successor Agency since June 30, 2016;
12
(c)as of the Closing Date, all official action of the Successor Agency relating
to this Bond Purchase Agreement, the Continuing Disclosure Certificate, and the
Indenture shall be in full force and effect;
(d)as of the Closing Date, the Underwriter shall receive the following
certificates, opinions and documents, in each case satisfactory in form and substance to
the Underwriter:
(i)a copy of the Indenture, as duly executed and delivered by the
Successor Agency and the Trustee;
(ii)a copy of the Continuing Disclosure Certificate, as duly executed
and delivered by the Successor Agency;
(iii)an executed copy of the Summerly DDA;
(iv)the opinions of Bond Counsel, dated the Closing Date and
addressed to the Underwriter, in the form attached as Appendix C to the Official
Statement and reliance letters, dated the Closing Date and addressed to the
Underwriter which shall include a statement that the opinions substantially in the
form attached as Appendix C to the Official Statement may be relied upon by the
Underwriter to the same extent as if such opinions was addressed to them;
(v)a certificate, dated the Closing Date, of the Successor Agency
executed by its Executive Director (or other duly appointed officer of the
Successor Agency authorized by the Successor Agency by resolution of the
Successor Agency) to the effect that (A) there is no action, suit, proceeding or
investigation at law or in equity before or by any court, public board or body
which has been served on the Successor Agency or, to the knowledge of the
Executive Director, threatened against or affecting the Successor Agency to
restrain or enjoin the Successor Agency’s participation in, or in any way
contesting the existence of the Successor Agency or the powers of the Successor
Agency with respect to, the transactions contemplated by the Escrow Agreements,
this Bond Purchase Agreement, the Continuing Disclosure Certificate or the
Indenture, and consummation of such transactions; (B) the representations and
warranties of the Successor Agency contained in this Bond Purchase Agreement
are true and correct in all material respects, and the Successor Agency has
complied with all agreements and covenants and satisfied all conditions to be
satisfied at or prior to the Closing Date as contemplated by the Indenture and this
Bond Purchase Agreement; (C) no event affecting the Successor Agency has
occurred since the date of the Official Statement which has not been disclosed
therein or in any supplement or amendment thereto which event should be
disclosed in the Official Statement in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and (D)
no further consent is required to be obtained for the inclusion of the Audited
Financial Statements of the City of Lake Elsinore for the Fiscal Year End June 30,
2016, as Appendix E to the Official Statement;
13
(vi)an opinion of the City Attorney, as counsel to the Successor
Agency, dated the Closing Date and addressed to the Successor Agency and the
Underwriter to the effect that:
(A) the Successor Agency is a public body, duly organized and
existing under the laws of the State;
(B) the Successor Agency has full legal power and lawful authority
to enter into the Indenture, and this Bond Purchase Agreement;
(C) the Successor Agency Resolution has been duly adopted at a
meeting of the governing board of the Successor Agency, which was
called and held pursuant to the law and with all public notice required by
law and at which a quorum was present and acting throughout and the
Successor Agency Resolution is in full force and effect and has not been
modified, amended or rescinded;
(D) the Indenture, the Disclosure Certificate and this Bond
Purchase Agreement have been duly authorized, executed and delivered
by the Successor Agency and, assuming due authorization, execution and
delivery by the other parties thereof, constitute valid, legal and binding
agreements of the Successor Agency enforceable in accordance with their
terms;
(E) Except as otherwise disclosed in the Official Statement, there
is no litigation, action, suit, proceeding or investigation at law or in equity
before or by any court, governmental agency or body, pending by way of a
summons served against the Successor Agency or, to our knowledge,
threatened against the Successor Agency (nor to our knowledge is there
any basis therefore), challenging the creation, organization or existence of
the Successor Agency, or the validity of the Indenture, the Disclosure
Certificate or this Bond Purchase Agreement or seeking to restrain or
enjoin any of the transactions referred to therein or contemplated hereby
or thereby or contesting the authority of the Successor Agency to enter
into or perform its obligations under the Indenture, the Disclosure
Certificate or this Bond Purchase Agreement, or under which a
determination adverse to the Successor Agency would have a material
adverse effect upon the availability of Tax Revenues to pay the debt
service on the Bonds, or which, in any manner, questions the right of the
Successor Agency to enter into, and perform its obligations under, the
Indenture, the Disclosure Certificate or this Bond Purchase Agreement;
(vii)an opinion of counsel to the Trustee, dated the Closing Date and
addressed to the Successor Agency and the Underwriter, to the effect that:
14
(A)The Trustee is a national banking association organized and
existing under the laws of the United States of America, having full power
to enter into, accept and administer the trust created under the Indenture;
(B)The Indenture has been duly authorized, executed and
delivered by the Trustee and the Indenture constitutes a legal, valid and
binding obligation of the Trustee enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
or other laws affecting the enforcement of creditors’ rights generally and
by the application of equitable principles, if equitable remedies are sought;
and
(C)No consent, approval, authorization or other action by any
governmental or regulatory authority having jurisdiction over the Trustee
that has not been obtained is or will be required for the execution and
delivery by the Trustee of the Indenture or the consummation of the
transactions on the part of the Trustee contemplated by the Indenture;
(viii) a certificate, dated the Closing Date, of the Trustee, signed by a
duly authorized officer of the Trustee, to the effect that (A) the Trustee is duly
organized and validly existing as a national banking association, with full
corporate power to undertake the obligations of the Indenture; (B) the Trustee has
duly authorized, executed and delivered the Indenture and by all proper corporate
action has authorized the acceptance of the trust of the Indenture; and (C) there is
no action, suit, proceeding or investigation at law or in equity before or by any
court, public board or body which has been served on the Trustee (either in state
or federal courts), or to the knowledge of the Trustee threatened against the
Trustee which would restrain or enjoin the execution or delivery of the Indenture,
or which would affect the validity or enforceability of the Indenture, or the
Trustee’s participation in, or in any way contesting the powers or the authority of
the Trustee with respect to, the transactions contemplated by the Indenture, or any
other agreement, document or certificate related to such transactions;
(ix)a supplemental opinion of Bond Counsel, dated the Closing Date
and addressed to the Successor Agency and the Underwriter, to the effect that:
(A) this Bond Purchase Agreement has been duly authorized,
executed and delivered by the Successor Agency, and assuming the valid
execution and delivery by the other parties thereto, is valid and binding
upon the Successor Agency, subject to the laws relating to bankruptcy,
insolvency, reorganization of creditors’ rights generally and to the
application of equitable principles;
(B) the Bonds are exempt from registration pursuant to Section
3(a)(2) of the Securities Act of 1933, as amended, and the Indenture is
exempt from qualification pursuant to the Trust Indenture Act of 1939, as
amended; and
15
(C) the statements contained in the Official Statement under the
captions “THE 2017 BONDS,” “SECURITY FOR THE 2017 BONDS,”
“TAX MATTERS” and “APPENDIX B—SUMMARY OF THE
INDENTURE” thereto are accurate insofar as such statements purport to
expressly summarize certain provisions of the Bonds, the Indenture and
Bond Counsel’s opinion concerning federal tax matters relating to the
Bonds;
(x)the opinion of Underwriter’s counsel satisfactory to Underwriter;
(xi)a Tax Certificate in the form satisfactory to Bond Counsel;
(xii)the final Official Statement executed by an authorized officer of
the Successor Agency;
(xiii) certified copies of the Successor Agency Resolution and the
Oversight Board Resolution;
(xiv)specimen Bonds;
(xv)evidence that the federal tax information form 8038-G with respect
to the Series A Bonds has been prepared by Bond Counsel for filing;
(xvi)a copy of the Municipal Bond Insurance Policy;
(xvii) a copy of the Reserve Account Insurance Policy;
(xviii) an opinion of counsel to the Insurer, addressed to the Successor
Agency and the Underwriter to the effect that:
(A)the descriptions of the Insurer, the Municipal Bond
Insurance Policy and the Reserve Account Insurance Policy included in
the Official Statement are accurate;
(B)the Municipal Bond Insurance Policy and the Reserve
Account Insurance Policy constitute legal, valid and binding obligations of
the Insurer, enforceable in accordance with their respective terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating
to or limiting creditor’s rights generally and by the application of equitable
principles if equitable remedies are sought, and
(C)as to such other matters as the Successor Agency or the
Underwriter may reasonably request;
(xix)a certificate of the Insurer, signed by an authorized officer of the
Insurer, to the effect that:
16
(A)the information contained in the Official Statement relating
to the Insurer, the Municipal Bond Insurance Policy and the Reserve
Account Insurance Policy is true and accurate and
(B)as to such other matters as the Successor Agency or the
Underwriter may reasonably request;
(xx)satisfactory evidence that the Bonds have been assigned the ratings
as set forth in the Official Statement;
(xxi)a certificate of an officer of HdL Coren & Cone, (the “Fiscal
Consultant”), dated the Closing Date, addressed to the Successor Agency and the
Underwriter, to the effect that, to the best of its knowledge, the assessed
valuations and other fiscal information contained in the Official Statement,
including such firm’s Fiscal Consultant’s Report attached thereto as APPENDIX
A, are presented fairly and accurately, and consenting to the use of their report as
APPENDIX A to the Preliminary Official Statement and the Official Statement;
(xxii) evidence of required filings with the California Debt and
Investment Advisory Commission;
(xxiii) a letter of Stradling Yocca Carlson & Rauth, A Professional
Corporation, Newport Beach, California, as disclosure counsel to the Successor
Agency, dated the Closing Date and addressed to the Successor Agency and the
Underwriter stating that based upon its participation in the preparation of the
Official Statement and without having undertaken to determine independently the
fairness, accuracy or completeness of the statements contained in the Official
Statement, such counsel has no reason to believe that, as of the Closing Date, the
Official Statement (excluding therefrom any information relating to the Insurer,
the Municipal Bond Insurance Policy, the Reserve Fund Municipal Bond
Insurance Policy, DTC and its book-entry system included therein, and the
information therein under the caption “CONCLUDING INFORMATION -
Underwriting” and the reports, financial and statistical data and forecasts therein,
and the information included in the appendices thereto, as to which no opinion
need be expressed) contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made,
not misleading; and
(xxiv) [Developer and Master Developer Certificates and Opinions?]
(xxv) such additional legal opinions, certificates, instruments and other
documents as the Underwriter may reasonably deem necessary to evidence the
truth and accuracy as of the time of the Closing Date of the representations and
warranties of the Successor Agency contained in this Bond Purchase Agreement
and the due performance or satisfaction by the Successor Agency at or prior to
17
such time of all agreements then to be performed and all conditions then to be
satisfied by the Successor Agency pursuant to this Bond Purchase Agreement.
9.Termination.The Underwriter shall have the right to cancel its obligations to
purchase the Bonds if between the date hereof and the Closing Date:
(a)a decision with respect to legislation shall be reached by a committee of
the House of Representatives or the Senate of the Congress of the United States, or
legislation shall be favorably reported by such a committee or be introduced, by
amendment or otherwise, in or be passed by the House of Representatives or the Senate,
or recommended to the Congress of the United States for passage by the President of the
United States, or be enacted or a decision by a federal court of the United States or the
United States Tax Court shall have been rendered, or a ruling, release, order, regulation
or offering circular by or on behalf of the United States Treasury Department, the Internal
Revenue Service or other governmental agency shall have been made or proposed to be
made having the purpose or effect, or any other action or event shall have occurred which
has the purpose or effect, directly or indirectly, of adversely affecting the federal income
tax consequences of owning the Series A Bonds, including causing interest on the Series
A Bonds to be included in gross income of the owners of the Series A Bonds for purposes
of federal income taxation, or imposing federal income taxation upon revenues or other
income of the general character to be derived by the Successor Agency or by any similar
body under the Indenture or similar documents or upon interest received on obligations of
the general character of the Bonds which, in the reasonable opinion of the Underwriter,
materially adversely affects the market price of or market for the Bonds or the ability of
the Underwriter to enforce contracts for the sale of the Bonds; or
(b)legislation shall have been enacted, or considered for enactment with an
effective date prior to the Closing Date, or a decision by a court of the United States shall
have been rendered, the effect of which is that of the Bonds, including any underlying
obligations, or the Indenture, as the case may be, are not exempt from the registration,
qualification or other requirements of the Securities Act of 1933, as amended and as then
in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the
Trust Indenture Act of 1939, as amended and as then in effect; or
(c)a stop order, ruling, regulation or offering circular by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the
subject matter shall have been issued or made or any other event occurs, the effect of
which is that the issuance, offering or sale of the Bonds, including any underlying
obligations, or the delivery or performance of the Indenture, the Escrow Agreements or
the Continuing Disclosure Certificate, as contemplated hereby or by the Official
Statement, is or would be in violation of any provisions of the federal securities laws,
including the Securities Act of 1933, as amended and as then in effect, the Securities
Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of
1939, as amended and as then in effect; or
(d)any event shall have occurred or any information shall have become
known to the Underwriter which causes the Underwriter to reasonably believe that the
18
Official Statement as then amended or supplemented includes an untrue statement of a
material fact, or omits to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; or
(e)there shall have occurred any outbreak or escalation of hostilities or any
national or international calamity or crisis, including a financial crisis, the effect of which
on the financial markets of the United States is such as, in the reasonable judgment of the
Underwriter, would materially adversely affect the market for or market price of the
Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; or
(f)there shall be in force a general suspension of trading on the New York
Stock Exchange, the effect of which on the financial markets of the United States is such
as, in the reasonable judgment of the Underwriter, would materially adversely affect the
market for or market price of the Bonds or the ability of the Underwriter to enforce
contracts for the sale of the Bonds; or
(g)a general banking moratorium shall have been declared by federal, New
York or California authorities; or
(h)any proceeding shall be pending or threatened by the Securities and
Exchange Commission against the Successor Agency or the Former Agency; or
(i)additional material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any governmental authority or by
any national securities exchange; or
(j)the New York Stock Exchange or other national securities exchange, or
any governmental or regulatory authority, shall impose, as to the Bonds or obligations of
the general character of the Bonds, any material restrictions not now in force, or increase
materially those now in force, with respect to the extension of credit by, or the charge to
the net capital requirements of the Underwriter; or
(k)there shall exist any event which in the reasonable opinion of the
Underwriter that either: (i) makes untrue or incorrect in any material respect any
statement or information contained in the Official Statement; or (ii) is not reflected in the
Official Statement but should be reflected therein to make the statements and information
contained therein not misleading in any material respect; or
(l)there shall have occurred or any notice shall have been given of any
intended downgrade, suspension, withdrawal or negative change in credit watch status by
any national credit agency of the Insurer; or
(m)a material disruption in securities settlement, payment or clearance
services affecting the Bonds shall have occurred; or
(n)any rating of the Bonds shall have been downgraded, suspended or
withdrawn or placed on negative outlook or negative watch by a national rating service,
which, in the Underwriter’s reasonable opinion, materially adversely affects the
19
marketability or market price of the Bonds or the ability of the Underwriter to enforce
contracts for the sale of the Bonds.
10.Contingency of Obligations.The obligations of the Successor Agency hereunder
are subject to the performance by the Underwriter of its obligations hereunder.
11.Duration of Representations, Warranties, Agreements and Covenants.All
representations, warranties, agreements and covenants of the Successor Agency shall remain
operative and in full force and effect, regardless of any investigations made by or on behalf of
the Underwriter or the Successor Agency and shall survive the Closing Date.
12.Expenses. (a) The Successor Agency will pay or cause to be paid all reasonable
expenses incident to the performance of its obligations under this Bond Purchase Agreement,
including, but not limited to, execution and delivery of the Bonds, costs of printing the Bonds,
printing, distribution and delivery of the Preliminary Official Statement, the Official Statement
and any amendment or supplement thereto, the fees and disbursements of Bond Counsel,
Disclosure Counsel, and counsel to the Successor Agency, the fees and expenses of the
Successor Agency’s accountants, fees of the Municipal Advisor, fees of the Fiscal Consultant,
any fees charged by rating agencies for the rating of the Bonds and fees of the Trustee. In the
event this Bond Purchase Agreement shall terminate because of the default of the Underwriter,
the Successor Agency will, nevertheless, pay, or cause to be paid, all of the expenses specified
above.
(b)The Underwriter shall pay the fees and expenses of any counsel retained
by it, all advertising expenses incurred in connection with the public offering of the Bonds, fees
of the California Debt and Investment Advisory Commission, CUSIP fees and all other expenses
incurred by it in connection with the public offering and distribution of the Bonds (including out-
of-pocket expenses and related regulatory expenses).
13.Notices.Any notice or other communication to be given to the Successor Agency
under this Bond Purchase Agreement may be given by delivering the same in writing to the
Executive Director, Successor Agency to the Executive Director, Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore, 130 South Main Street, Lake Elsinore, CA
95965, and any notice or other communication to be given to the Underwriter under this Bond
Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus &
Company, Incorporated 515 S. Figueroa Street, Suite 1800, Los Angeles, CA 90071 Attention:
John Kim.
14.Parties in Interest. This Bond Purchase Agreement is made solely for the benefit
of the Successor Agency and the Underwriter (including the successors or assigns of the
Underwriter) and no other person, including any purchaser of the Bonds, shall acquire or have
any right hereunder or by virtue hereof.
15.Governing Law. This Bond Purchase Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to contracts made and
performed in California.
20
16.Headings. The headings of the paragraphs of this Bond Purchase Agreement are
inserted for convenience of reference only and shall not be deemed to be a part hereof.
17.Severability. In case any one or more of the provisions contained herein shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision hereof.
18.Effectiveness. This Bond Purchase Agreement shall become effective upon its
acceptance hereof by the Successor Agency.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
S-1
19.Counterparts. This Bond Purchase Agreement may be executed in several
counterparts which together shall constitute one and the same instrument.
Very truly yours,
STIFEL, NICOLAUS & COMPANY,
INCORPORATED, as Underwriter
By
Managing Director
The foregoing is hereby agreed to and accepted
as of the date first above written:
SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE
By
Authorized Representative
Time of Execution: _____________ p.m.
California time
[EXECUTION PAGE OF BOND PURCHASE AGREEMENT]
A-1
EXHIBIT A TO THE
BOND PURCHASE AGREEMENT
$________
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE
(RANCHO LAGUNA REDEVELOPMENT PROJECT AREAS NO. II AND NO. III)
THIRD LIEN TAX ALLOCATION BONDS
SERIES 2017A
MATURITY SCHEDULE
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to
Hold-The-
Offering-
Price Rule
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
20__(T)
20__(T)
________________
(T) Term Bond.
(C) Priced to optional call at [par] on September 1, 20__.
* At the time of execution of this Purchase Agreement and assuming orders are confirmed
immediately after the execution of this Purchase Agreement.
A-2
$________
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE
(RANCHO LAGUNA REDEVELOPMENT PROJECT AREAS NO. II AND NO. III)
THIRD LIEN TAX ALLOCATION BONDS
SERIES 2017B (FEDERALLY TAXABLE)
MATURITY SCHEDULE
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
20__(T)
20__(T)
________________
(T) Term Bond.
(C) Priced to optional call at [par] on September 1, 20__.
B-1
EXHIBIT B TO THE
BOND PURCHASE AGREEMENT
$________
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE
(RANCHO LAGUNA REDEVELOPMENT PROJECT AREAS NO. II AND NO. III)
THIRD LIEN TAX ALLOCATION BONDS
SERIES 2017A
ISSUE PRICE CERTIFICATE
[TO COME AT PRICING]
$__________
Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore
(Rancho Laguna Redevelopment Project
Areas No. II and No. III)
Third Lien Tax Allocation Refunding Bonds,
Series 2017A
$__________
Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore
(Rancho Laguna Redevelopment Project
Areas No. II and No. III)
Third Lien Tax Allocation Refunding Bonds,
Series 2017B (Federally Taxable)
This CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) is
executed and delivered by the Successor Agency of the Redevelopment Agency of the City of Lake
Elsinore (the “Successor Agency”) in connection with the execution and delivery of the above-
referenced bonds (the “Bonds”). The Bonds are being executed and delivered pursuant to an
Indenture of Trust, dated as of ___________ 1, 2017, by and between the Successor Agency and
Wilmington Trust, National Association, as trustee (the “Indenture”).
The Successor Agency covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the Successor Agency for the benefit of the holders and beneficial owners
of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule
15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth above and in the Indenture,
which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in
this Section 2, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the Successor Agency pursuant to,
and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means the date that is nine months after the end of the Successor
Agency’s fiscal year (currently March 31 based on the Successor Agency’s fiscal year end of
June 30).
“Dissemination Agent” means, initially, Urban Futures, Inc., or any successor Dissemination
Agent designated in writing by the Successor Agency and which has filed with the Successor Agency
a written acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by
the Securities and Exchange Commission as the sole repository of disclosure information for
purposes of the Rule, or any other repository of disclosure information that may be designated by the
Securities and Exchange Commission as such for purposes of the Rule in the future.
“Official Statement” means the final official statement executed by the Successor Agency in
connection with the issuance of the Bonds.
“Participating Underwriter” means Stifel, Nicolaus & Company, Inc., the original
underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.
2
“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as it may be amended from time to time.
Section 3. Provision of Annual Reports.
(a)The Successor Agency shall, or shall cause the Dissemination Agent to, not later than
the Annual Report Date, commencing March 31, 2016 with the report for the 2014-15 fiscal year,
provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is
consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15
Business Days prior to the Annual Report Date, the Successor Agency shall provide the Annual
Report to the Dissemination Agent (if other than the Successor Agency). If by 15 Business Days
prior to the Annual Report Date the Dissemination Agent (if other than the Successor Agency) has
not received a copy of the Annual Report, the Dissemination Agent shall contact the Successor
Agency to determine if the Successor Agency is in compliance with the previous sentence. The
Annual Report may be submitted as a single document or as separate documents comprising a
package, and may include by reference other information as provided in Section 4 of this Disclosure
Certificate; provided that the audited financial statements of the Successor Agency may be submitted
separately from the balance of the Annual Report, and later than the Annual Report Date, if not
available by that date. If the Successor Agency’s fiscal year changes, it shall give notice of such
change in the same manner as for a Listed Event under Section 5(c). The Successor Agency shall
provide a written certification with each Annual Report furnished to the Dissemination Agent to the
effect that such Annual Report constitutes the Annual Report required to be furnished by the
Successor Agency hereunder.
(b)If the Successor Agency does not provide (or cause the Dissemination Agent to
provide) an Annual Report by the Annual Report Date, the Successor Agency shall provide (or cause
the Dissemination Agent to provide) in a timely manner to the MSRB, in an electronic format as
prescribed by the MSRB, a notice in substantially the form attached as Exhibit A.
(c)With respect to each Annual Report, the Dissemination Agent shall:
(i)determine each year prior to the Annual Report Date the then-applicable rules
and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports;
and
(ii)if the Dissemination Agent is other than the Successor Agency, file a report
with the Successor Agency certifying that the Annual Report has been provided pursuant to this
Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports. The Annual Report shall contain or incorporate by
reference the following:
(a)The Successor Agency’s audited financial statements prepared in accordance with
generally accepted accounting principles as promulgated to apply to governmental entities from time
to time by the Governmental Accounting Standards Board. If the Successor Agency’s audited
financial statements are not available by the Annual Report Date, the Annual Report shall contain
unaudited financial statements in a format similar to the financial statements contained in the final
Official Statement, and the audited financial statements shall be filed in the same manner as the
Annual Report when they become available.
3
(b)Unless otherwise provided in the audited financial statements filed on or before the
Annual Report Date, financial information and operating data with respect to the Successor Agency
for the preceding fiscal year, substantially similar to that provided in the corresponding tables in the
Official Statement:
(i)Principal amount of Bonds outstanding.
(ii)Description of issuance by the Successor Agency of any debt payable from or
secured by a pledge of Pledged Tax Revenues in the Project Areas (as defined in the Official
Statement) in the most recently completed fiscal year (including details as to date, amount, term,
rating, insurance).
(iii)The assessed value of property in each Project Area in the form of Table 3 in
the Official Statement.
(iv)The ten largest local secured property taxpayers in the Project Areas in the
form of Table 4 in the Official Statement.
(v)Assessment appeals data in the form of Table 6 in the Official Statement.
(vi)The amount of Pledged Tax Revenues (current fiscal year only) and the
coverage ratio provided by Pledged Tax Revenues with respect to debt service on the Bonds and any
Parity Bonds (current fiscal year only), in the form of Tables 7 and 9, respectively, in the Official
Statement without any requirement to update any projected Pledged Tax Revenues set forth in Tables
7 or 9.
(vii)In the event that during the most recently completed fiscal year the County of
Riverside eliminates its policy pursuant to which the County Auditor-Controller distributes 100% of
tax increment revenues allocated to each redevelopment successor agency in the County without
regard to delinquencies in the payment of property taxes, notice thereof.
(c)In addition to any of the information expressly required to be provided under this
Disclosure Certificate, the Successor Agency shall provide such further material information, if any,
as may be necessary to make the specifically required statements, in the light of the circumstances
under which they are made, not misleading.
(d)Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the Successor Agency or related public
entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities
and Exchange Commission. The Successor Agency shall clearly identify each such other document
so included by reference.
Section 5. Reporting of Significant Events.
(a)The Successor Agency shall give, or cause to be given, notice of the occurrence of
any of the following Listed Events with respect to the Bonds:
(1)Principal and interest payment delinquencies.
(2)Non-payment related defaults, if material.
4
(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 security, or other material events affecting the tax status
of the security.
(7)Modifications to rights of security holders, if material.
(8)Bond calls, if material, and tender offers.
(9)Defeasances.
(10)Release, substitution, or sale of property securing repayment of the securities,
if material.
(11)Rating changes.
(12)Bankruptcy, insolvency, receivership or similar event of the Successor
Agency or other obligated person.
(13)The consummation of a merger, consolidation, or acquisition involving the
Successor Agency or an obligated person, or the sale of all or substantially all
of the assets of the Successor Agency or an obligated person (other than in
the ordinary course of business), the entry into a definitive agreement to
undertake such an action, or the termination of a definitive agreement relating
to any such actions, other than pursuant to its terms, if material.
(14)Appointment of a successor or additional trustee or the change of name of a
trustee, if material.
(b)Whenever the Successor Agency obtains knowledge of the occurrence of a Listed
Event, the Successor Agency shall, or shall cause the Dissemination Agent (if not the Successor
Agency) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by
the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed
Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and
(9) above need not be given under this subsection any earlier than the notice (if any) of the
underlying event is given to holders of affected Bonds under the Indenture.
(c)The Successor Agency acknowledges that the events described in subparagraphs
(a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), and (a)(14) of this Section 5 contain
the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier “material” with
respect to certain notices, determinations or other events affecting the tax status of the Bonds. The
Successor Agency shall cause a notice to be filed as set forth in paragraph (b) above with respect to
any such event only to the extent that it determines the event’s occurrence is material for purposes of
5
U.S. federal securities law. Whenever the Successor Agency obtains knowledge of the occurrence of
any of these Listed Events, the Successor Agency will as soon as possible determine if such event
would be material under applicable federal securities law. If such event is determined to be material,
the Successor Agency will cause a notice to be filed as set forth in paragraph (b) above.
(d)For purposes of this Disclosure Certificate, any event described in paragraph (a)(12)
above is considered to occur when any of the following occur: the appointment of a receiver, fiscal
agent, or similar officer for the Successor Agency in a proceeding under the United States
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
Successor Agency, 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 Successor Agency.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to
the MSRB under the Disclosure Certificate shall be accompanied by identifying information as
prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The Successor Agency’s obligations under
this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in
full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the
Successor Agency shall give notice of such termination in the same manner as for a Listed Event
under Section 5(c).
Section 8. Dissemination Agent. The Successor Agency may, from time to time, appoint or
engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure
Certificate, and may discharge any Dissemination Agent, with or without appointing a successor
Dissemination Agent. The initial Dissemination Agent shall be Urban Futures, Inc. Any
Dissemination Agent may resign by providing 30 days’ written notice to the Successor Agency.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Successor Agency may amend this Disclosure Certificate, and any provision of this
Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a)if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may
only be made in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature, or status of an obligated person with
respect to the Bonds, or type of business conducted;
(b)the undertakings herein, as proposed to be amended or waived, would, in the opinion
of nationally recognized bond counsel, have complied with the requirements of the Rule at the time
of the primary offering of the Bonds, after taking into account any amendments or interpretations of
the Rule, as well as any change in circumstances; and
(c)the proposed amendment or waiver either (i) is approved by holders of the Bonds in
the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or
6
(ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of
the holders or beneficial owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is
amended pursuant to the provisions hereof, the first Annual Report filed pursuant hereto containing
the amended operating data or financial information shall explain, in narrative form, the reasons for
the amendment and the impact of the change in the type of operating data or financial information
being provided.
If an amendment is made to this Disclosure Certificate modifying the accounting principles
to be followed in preparing financial statements, the Annual Report for the year in which the change
is made shall present a comparison between the financial statements or information prepared on the
basis of the new accounting principles and those prepared on the basis of the former accounting
principles. The comparison shall include a qualitative discussion of the differences in the accounting
principles and the impact of the change in the accounting principles on the presentation of the
financial information, in order to provide information to investors to enable them to evaluate the
ability of the Successor Agency to meet its obligations. To the extent reasonably feasible, the
comparison shall be quantitative.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner
as for a Listed Event under Section 5(c).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed
to prevent the Successor Agency from disseminating any other information, using the means of
dissemination set forth in this Disclosure Certificate or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event, in
addition to that which is required by this Disclosure Certificate. If the Successor Agency chooses to
include any information in any Annual Report or notice of occurrence of a Listed Event 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 or notice of occurrence of a Listed Event.
Section 11. Default. If the Successor Agency fails to comply with any provision of this
Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds
may take such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the Successor Agency to comply with its obligations under this
Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of
Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any
failure of the Successor Agency to comply with this Disclosure Certificate shall be an action to
compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent.
(a)The 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
Dissemination Agent, its officers, directors, employees and agents, harmless against any loss,
expense and liabilities which they may incur 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 Dissemination Agent’s
7
negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to
review any information provided to it by the Successor Agency hereunder, and shall not be deemed
to be acting in any fiduciary capacity for the Successor Agency, the Bond holders or any other party.
The obligations of the Successor Agency under this Section shall survive resignation or removal of
the Dissemination Agent and payment of the Bonds.
(b)The Dissemination Agent shall be paid compensation by the Successor Agency for its
services provided hereunder in accordance with its schedule of fees as amended from time to time,
and shall be reimbursed for all expenses, legal fees and advances made or incurred by the
Dissemination Agent in the performance of its duties hereunder.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the
Successor Agency, the Dissemination Agent, the Participating Underwriter and the holders and
beneficial owners from time to time of the Bonds, and shall create no rights in any other person or
entity.
Section 14. Counterparts. This Disclosure Certificate may be executed in several
counterparts, each of which shall be regarded as an original, and all of which shall constitute one and
the same instrument.
Date: ____________, 2017
SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE
By:
Name: Grant Yates
Title: Executive Director
AGREED AND ACCEPTED:
URBAN FUTURES, INC.,
as Dissemination Agent
By:
Name:
Title:
8
EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Successor Agency of the Redevelopment Agency of the City of Lake
Elsinore
Name of Issue: Successor Agency of the Redevelopment Agency of the City of Lake
Elsinore (Rancho Laguna Redevelopment Project Areas No. II and
No. III) Third Lien Tax Allocation Refunding Bonds, Series 2017A
and
Successor Agency of the Redevelopment Agency of the City of Lake
Elsinore (Rancho Laguna Redevelopment Project Areas No. II and
No. III) Third Lien Tax Allocation Refunding Bonds, Series 2017B
(Federally Taxable)
Date of Issuance: _____________, 2017
NOTICE IS HEREBY GIVEN that the Successor Agency has not provided an Annual Report
with respect to the above-named Bonds as required by the Indenture of Trust, dated as of
___________ 1, 2017, by and between the Successor Agency and Wilmington Trust, National
Association, as trustee. The Successor Agency anticipates that the Annual Report will be filed by
________________.
Dated: __________
DISSEMINATION AGENT:
_________________
By:
Its:
DEVELOPER/MASTER DEVELOPER LETTER
REQUESTING ISSUANCE OF BONDS
October 5, 2017
Successor Agency of the
Redevelopment Agency
of the City of Lake Elsinore
130 South Main Street
Lake Elsinore, California 95965
Attention: Executive Director
Dear Mr. Yates:
McMillin Summerly LLC and Civic Partners-Elsinore LLC as “Developer” and “Master Developer”
respectively, under that certain Amended and Restated Disposition and Development Agreement by and
among the Redevelopment Agency of the City of Lake Elsinore (the “Former Agency”), McMillin
Summerly LLC, and Civic Partners-Elsinore LLC dated as of March 8, 2011 (the “Amended and Restated
DDA”) hereby request the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore
(the “Successor Agency” or “Agency”), as Successor Agency of the Former Agency, to issue bonds in
order to pay Developer and Master Developer, as applicable, the portions of the Project Area II and
Project Area III Tax Revenues, owing to them as provided in Sections 602.2, 604.2, 605 and 607 of the
Amended and Restated DDA (the “DDA Payment Obligation”), which payment obligation is secured by
an express pledge of certain tax increment revenues from Project Areas II & III pursuant to Section 607 of
the Amended and Restated DDA. All capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Amended and Restated DDA.
The DDA Payment Obligation was confirmed by the Successor Agency, the Developer and the Master
Developer in that certain Second Implementation Agreement dated as of January 24, 2017, by and among
the Successor Agency, the Developer and the Master Developer (the “Implementation Agreement”; and,
together with the Amended and Restated DDA, the “Summerly DDA”). The Implementation Agreement
also confirms the Successor Agency’s obligation to issue bonds to finance the DDA Payment Obligation
and the Implementation Agreement was approved by the Oversight Board by Resolution No. OB-2017-
002 on January 23, 2017 and by the Department of Finance by letter dated March 17, 2017. At the
request of the Successor Agency, pursuant to Health and Safety Code Section 34177.5(i), the Department
of Finance issued a Final and Conclusive Determination dated November 19, 2015 with respect to the
DDA Payment Obligation. Copies of the DOF determination letters are attached.
McMillin Summerly LLC and Civic Partners-Elsinore LLC further request, under Section 607 of the
Summerly DDA that Agency submit to them a reasonable proposal for the issuance of such bonds,
including the timing, structuring, and marketing of the bonds for approval.
The Developer has completed Phase 1 and Phases A through C of the Project on the Developer Property
and has received Release of Project Development Covenants for all such Phases. Developer expects to
complete Phase D in the next 30 days and receive Release of Project Development Covenants with
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 1
SOURCES AND USES OF FUNDS
Successor Agency of the Lake Elsinore Redevelopment Agency
2017 Taxable and Tax-Exempt Tax Allocation Bonds
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Dated Date 12/28/2017
Delivery Date 12/28/2017
Taxable (Mast Taxable (Net Tax-Exempt
Sources: Dev Portion) Dev Portion) (Ext Infr DDA) Total
Bond Proceeds:
Par Amount 775,000.00 6,805,000.00 1,935,000.00 9,515,000.00
Premium 247,761.40 247,761.40
775,000.00 6,805,000.00 2,182,761.40 9,762,761.40
Taxable (Mast Taxable (Net Tax-Exempt
Uses: Dev Portion) Dev Portion) (Ext Infr DDA) Total
Project Fund Deposits:
Project Fund 677,335.91 5,911,951.04 1,910,166.79 8,499,453.74
Other Fund Deposits:
Debt Service Reserve Fund 65,985.00 614,886.09 193,499.07 874,370.16
Delivery Date Expenses:
Cost of Issuance 31,679.09 278,162.87 79,095.54 388,937.50
775,000.00 6,805,000.00 2,182,761.40 9,762,761.40
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 2
BOND DEBT SERVICE BREAKDOWN
Successor Agency of the Lake Elsinore Redevelopment Agency
2017 Taxable and Tax-Exempt Tax Allocation Bonds
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Period Taxable (Mast Taxable (Net Dev Tax-Exempt Annual
Ending Dev Portion) Portion)(Ext Infr DDA) Total Total
03/01/2018 5,357.01 47,005.44 16,625 68,987.45 68,987.45
09/01/2018 15,305.75 134,301.25 47,500 197,107.00
03/01/2019 50,305.75 409,301.25 107,500 567,107.00 764,214.00
09/01/2019 14,901.50 131,125.00 46,600 192,626.50
03/01/2020 49,901.50 486,125.00 101,600 637,626.50 830,253.00
09/01/2020 14,455.25 126,598.75 45,500 186,554.00
03/01/2021 49,455.25 491,598.75 105,500 646,554.00 833,108.00
09/01/2021 13,967.00 121,507.00 44,000 179,474.00
03/01/2022 48,967.00 496,507.00 109,000 654,474.00 833,948.00
09/01/2022 13,443.75 115,900.75 42,375 171,719.50
03/01/2023 48,443.75 410,900.75 112,375 571,719.50 743,439.00
09/01/2023 12,882.00 111,166.00 40,625 164,673.00
03/01/2024 52,882.00 416,166.00 115,625 584,673.00 749,346.00
09/01/2024 12,200.00 105,965.75 38,750 156,915.75
03/01/2025 52,200.00 420,965.75 113,750 586,915.75 743,831.50
09/01/2025 11,480.00 100,295.75 36,875 148,650.75
03/01/2026 51,480.00 425,295.75 116,875 593,650.75 742,301.50
09/01/2026 10,730.00 94,202.00 34,875 139,807.00
03/01/2027 50,730.00 429,202.00 114,875 594,807.00 734,614.00
09/01/2027 9,950.00 87,669.50 32,875 130,494.50
03/01/2028 54,950.00 437,669.50 117,875 610,494.50 740,989.00
09/01/2028 8,971.25 80,057.00 30,750 119,778.25
03/01/2029 53,971.25 445,057.00 120,750 619,778.25 739,556.50
09/01/2029 7,992.50 72,118.25 28,500 108,610.75
03/01/2030 57,992.50 452,118.25 123,500 633,610.75 742,221.50
09/01/2030 6,905.00 63,853.25 26,125 96,883.25
03/01/2031 56,905.00 458,853.25 126,125 641,883.25 738,766.50
09/01/2031 5,817.50 55,262.00 23,625 84,704.50
03/01/2032 55,817.50 470,262.00 128,625 654,704.50 739,409.00
09/01/2032 4,730.00 46,235.75 21,000 71,965.75
03/01/2033 59,730.00 476,235.75 131,000 666,965.75 738,931.50
09/01/2033 3,429.25 36,066.25 18,250 57,745.50
03/01/2034 58,429.25 491,066.25 138,250 687,745.50 745,491.00
09/01/2034 2,128.50 25,305.50 15,250 42,684.00
03/01/2035 62,128.50 500,305.50 385,250 947,684.00 990,368.00
09/01/2035 709.50 14,071.75 6,000 20,781.25
03/01/2036 10,709.50 204,071.75 81,000 295,781.25 316,562.50
09/01/2036 473.00 9,578.25 4,125 14,176.25
03/01/2037 10,473.00 209,578.25 84,125 304,176.25 318,352.50
09/01/2037 236.50 4,848.25 2,125 7,209.75
03/01/2038 10,236.50 209,848.25 87,125 307,209.75 314,419.50
1,121,773.51 9,924,261.44 3,123,075 14,169,109.95 14,169,109.95
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 3
BOND PRICING
Successor Agency of the Lake Elsinore Redevelopment Agency
Taxable (Mast Dev Portion)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Maturity
Bond Component Date Amount Rate Yield Price
Taxable Serial Bonds:
03/01/2019 35,000 2.310% 2.310% 100.000
03/01/2020 35,000 2.550% 2.550% 100.000
03/01/2021 35,000 2.790% 2.790% 100.000
03/01/2022 35,000 2.990% 2.990% 100.000
03/01/2023 35,000 3.210% 3.210% 100.000
03/01/2024 40,000 3.410% 3.410% 100.000
03/01/2025 40,000 3.600% 3.600% 100.000
03/01/2026 40,000 3.750% 3.750% 100.000
03/01/2027 40,000 3.900% 3.900% 100.000
335,000
Taxable Term Bond 2032:
03/01/2032 240,000 4.350% 4.350% 100.000
Taxable Term Bond 2038:
03/01/2038 200,000 4.730% 4.730% 100.000
775,000
Dated Date 12/28/2017
Delivery Date 12/28/2017
First Coupon 03/01/2018
Par Amount 775,000.00
Original Issue Discount
Production 775,000.00 100.000000%
Underwriter's Discount
Purchase Price 775,000.00 100.000000%
Accrued Interest
Net Proceeds 775,000.00
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 4
BOND SUMMARY STATISTICS
Successor Agency of the Lake Elsinore Redevelopment Agency
Taxable (Mast Dev Portion)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Dated Date 12/28/2017
Delivery Date 12/28/2017
First Coupon 03/01/2018
Last Maturity 03/01/2038
Arbitrage Yield 4.083679%
True Interest Cost (TIC) 4.265887%
Net Interest Cost (NIC) 4.307411%
All-In TIC 4.790254%
Average Coupon 4.307411%
Average Life (years) 10.388
Weighted Average Maturity (years) 10.388
Duration of Issue (years) 8.205
Par Amount 775,000.00
Bond Proceeds 775,000.00
Total Interest 346,773.51
Net Interest 346,773.51
Bond Years from Dated Date 8,050,625.00
Bond Years from Delivery Date 8,050,625.00
Total Debt Service 1,121,773.51
Maximum Annual Debt Service 65,985.00
Average Annual Debt Service 55,602.16
Par Average Average PV of 1 bp
Bond Component Value Price Coupon Life change
Taxable Serial Bonds 335,000.00 100.000 3.448% 5.324 158.10
Taxable Term Bond 2032 240,000.00 100.000 4.350% 12.238 252.00
Taxable Term Bond 2038 200,000.00 100.000 4.730% 16.650 258.00
775,000.00 10.388 668.10
All-In Arbitrage
TIC TIC Yield
Par Value 775,000.00 775,000.00 775,000.00
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount
- Cost of Issuance Expense -31,679.09
- Other Amounts
Target Value 775,000.00 743,320.91 775,000.00
Target Date 12/28/2017 12/28/2017 12/28/2017
Yield 4.265887% 4.790254% 4.083679%
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 5
BOND DEBT SERVICE
Successor Agency of the Lake Elsinore Redevelopment Agency
Taxable (Mast Dev Portion)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Dated Date 12/28/2017
Delivery Date 12/28/2017
Period
Ending Principal Coupon Interest Debt Service
03/01/2018 5,357.01 5,357.01
03/01/2019 35,000 2.310% 30,611.50 65,611.50
03/01/2020 35,000 2.550% 29,803.00 64,803.00
03/01/2021 35,000 2.790% 28,910.50 63,910.50
03/01/2022 35,000 2.990% 27,934.00 62,934.00
03/01/2023 35,000 3.210% 26,887.50 61,887.50
03/01/2024 40,000 3.410% 25,764.00 65,764.00
03/01/2025 40,000 3.600% 24,400.00 64,400.00
03/01/2026 40,000 3.750% 22,960.00 62,960.00
03/01/2027 40,000 3.900% 21,460.00 61,460.00
03/01/2028 45,000 4.350% 19,900.00 64,900.00
03/01/2029 45,000 4.350% 17,942.50 62,942.50
03/01/2030 50,000 4.350% 15,985.00 65,985.00
03/01/2031 50,000 4.350% 13,810.00 63,810.00
03/01/2032 50,000 4.350% 11,635.00 61,635.00
03/01/2033 55,000 4.730% 9,460.00 64,460.00
03/01/2034 55,000 4.730% 6,858.50 61,858.50
03/01/2035 60,000 4.730% 4,257.00 64,257.00
03/01/2036 10,000 4.730% 1,419.00 11,419.00
03/01/2037 10,000 4.730% 946.00 10,946.00
03/01/2038 10,000 4.730% 473.00 10,473.00
775,000 346,773.51 1,121,773.51
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 6
BOND SOLUTION
Successor Agency of the Lake Elsinore Redevelopment Agency
Taxable (Mast Dev Portion)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Period Proposed Proposed Total Adj Revenue Unused Debt Serv
Ending Principal Debt Service Debt Service Constraints Revenues Coverage
03/01/2018 5,357 5,357 -5,357
03/01/2019 35,000 65,612 65,612 83,922 18,311 127.90747%
03/01/2020 35,000 64,803 64,803 83,922 19,119 129.50328%
03/01/2021 35,000 63,911 63,911 83,922 20,012 131.31177%
03/01/2022 35,000 62,934 62,934 83,922 20,988 133.34924%
03/01/2023 35,000 61,888 61,888 83,089 21,202 134.25844%
03/01/2024 40,000 65,764 65,764 83,089 17,325 126.34449%
03/01/2025 40,000 64,400 64,400 83,089 18,689 129.02048%
03/01/2026 40,000 62,960 62,960 83,089 20,129 131.97139%
03/01/2027 40,000 61,460 61,460 83,089 21,629 135.19230%
03/01/2028 45,000 64,900 64,900 83,089 18,189 128.02649%
03/01/2029 45,000 62,943 62,943 83,089 20,147 132.00809%
03/01/2030 50,000 65,985 65,985 83,089 17,104 125.92133%
03/01/2031 50,000 63,810 63,810 83,089 19,279 130.21343%
03/01/2032 50,000 61,635 61,635 83,089 21,454 134.80845%
03/01/2033 55,000 64,460 64,460 83,089 18,629 128.90039%
03/01/2034 55,000 61,859 61,859 83,089 21,231 134.32138%
03/01/2035 60,000 64,257 64,257 83,089 18,832 129.30761%
03/01/2036 10,000 11,419 11,419 16,872 5,453 147.75190%
03/01/2037 10,000 10,946 10,946 16,872 5,926 154.13658%
03/01/2038 10,000 10,473 10,473 16,872 6,399 161.09797%
775,000 1,121,774 1,121,774 1,466,463 344,689
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 7
BOND PRICING
Successor Agency of the Lake Elsinore Redevelopment Agency
Taxable (Net Dev Portion)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Maturity
Bond Component Date Amount Rate Yield Price
Taxable Serial Bonds:
03/01/2019 275,000 2.310% 2.310% 100.000
03/01/2020 355,000 2.550% 2.550% 100.000
03/01/2021 365,000 2.790% 2.790% 100.000
03/01/2022 375,000 2.990% 2.990% 100.000
03/01/2023 295,000 3.210% 3.210% 100.000
03/01/2024 305,000 3.410% 3.410% 100.000
03/01/2025 315,000 3.600% 3.600% 100.000
03/01/2026 325,000 3.750% 3.750% 100.000
03/01/2027 335,000 3.900% 3.900% 100.000
2,945,000
Taxable Term Bond 2032:
03/01/2032 1,905,000 4.350% 4.350% 100.000
Taxable Term Bond 2038:
03/01/2038 1,955,000 4.730% 4.730% 100.000
6,805,000
Dated Date 12/28/2017
Delivery Date 12/28/2017
First Coupon 03/01/2018
Par Amount 6,805,000.00
Original Issue Discount
Production 6,805,000.00 100.000000%
Underwriter's Discount
Purchase Price 6,805,000.00 100.000000%
Accrued Interest
Net Proceeds 6,805,000.00
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 8
BOND SUMMARY STATISTICS
Successor Agency of the Lake Elsinore Redevelopment Agency
Taxable (Net Dev Portion)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Dated Date 12/28/2017
Delivery Date 12/28/2017
First Coupon 03/01/2018
Last Maturity 03/01/2038
Arbitrage Yield 4.083679%
True Interest Cost (TIC) 4.284256%
Net Interest Cost (NIC) 4.329849%
All-In TIC 4.803730%
Average Coupon 4.329849%
Average Life (years) 10.586
Weighted Average Maturity (years) 10.586
Duration of Issue (years) 8.288
Par Amount 6,805,000.00
Bond Proceeds 6,805,000.00
Total Interest 3,119,261.44
Net Interest 3,119,261.44
Bond Years from Dated Date 72,040,875.00
Bond Years from Delivery Date 72,040,875.00
Total Debt Service 9,924,261.44
Maximum Annual Debt Service 618,197.50
Average Annual Debt Service 491,908.87
Par Average Average PV of 1 bp
Bond Component Value Price Coupon Life change
Taxable Serial Bonds 2,945,000.00 100.000 3.419% 5.168 1,353.20
Taxable Term Bond 2032 1,905,000.00 100.000 4.350% 12.259 2,000.25
Taxable Term Bond 2038 1,955,000.00 100.000 4.730% 17.119 2,521.95
6,805,000.00 10.586 5,875.40
All-In Arbitrage
TIC TIC Yield
Par Value 6,805,000.00 6,805,000.00 6,805,000.00
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount
- Cost of Issuance Expense -278,162.87
- Other Amounts
Target Value 6,805,000.00 6,526,837.13 6,805,000.00
Target Date 12/28/2017 12/28/2017 12/28/2017
Yield 4.284256% 4.803730% 4.083679%
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 9
BOND DEBT SERVICE
Successor Agency of the Lake Elsinore Redevelopment Agency
Taxable (Net Dev Portion)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Dated Date 12/28/2017
Delivery Date 12/28/2017
Period
Ending Principal Coupon Interest Debt Service
03/01/2018 47,005.44 47,005.44
03/01/2019 275,000 2.310% 268,602.50 543,602.50
03/01/2020 355,000 2.550% 262,250.00 617,250.00
03/01/2021 365,000 2.790% 253,197.50 618,197.50
03/01/2022 375,000 2.990% 243,014.00 618,014.00
03/01/2023 295,000 3.210% 231,801.50 526,801.50
03/01/2024 305,000 3.410% 222,332.00 527,332.00
03/01/2025 315,000 3.600% 211,931.50 526,931.50
03/01/2026 325,000 3.750% 200,591.50 525,591.50
03/01/2027 335,000 3.900% 188,404.00 523,404.00
03/01/2028 350,000 4.350% 175,339.00 525,339.00
03/01/2029 365,000 4.350% 160,114.00 525,114.00
03/01/2030 380,000 4.350% 144,236.50 524,236.50
03/01/2031 395,000 4.350% 127,706.50 522,706.50
03/01/2032 415,000 4.350% 110,524.00 525,524.00
03/01/2033 430,000 4.730% 92,471.50 522,471.50
03/01/2034 455,000 4.730% 72,132.50 527,132.50
03/01/2035 475,000 4.730% 50,611.00 525,611.00
03/01/2036 190,000 4.730% 28,143.50 218,143.50
03/01/2037 200,000 4.730% 19,156.50 219,156.50
03/01/2038 205,000 4.730% 9,696.50 214,696.50
6,805,000 3,119,261.44 9,924,261.44
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 10
BOND SOLUTION
Successor Agency of the Lake Elsinore Redevelopment Agency
Taxable (Net Dev Portion)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Period Proposed Proposed Total Adj Revenue Unused Debt Serv
Ending Principal Debt Service Debt Service Constraints Revenues Coverage
03/01/2018 47,005 47,005 -47,005
03/01/2019 275,000 543,603 543,603 684,159 140,556 125.85641%
03/01/2020 355,000 617,250 617,250 775,975 158,725 125.71493%
03/01/2021 365,000 618,198 618,198 775,975 157,778 125.52225%
03/01/2022 375,000 618,014 618,014 775,975 157,961 125.55952%
03/01/2023 295,000 526,802 526,802 659,579 132,778 125.20448%
03/01/2024 305,000 527,332 527,332 659,579 132,247 125.07852%
03/01/2025 315,000 526,932 526,932 659,579 132,648 125.17359%
03/01/2026 325,000 525,592 525,592 659,579 133,988 125.49272%
03/01/2027 335,000 523,404 523,404 659,579 136,175 126.01720%
03/01/2028 350,000 525,339 525,339 659,579 134,240 125.55304%
03/01/2029 365,000 525,114 525,114 659,579 134,465 125.60684%
03/01/2030 380,000 524,237 524,237 659,579 135,343 125.81708%
03/01/2031 395,000 522,707 522,707 659,579 136,873 126.18536%
03/01/2032 415,000 525,524 525,524 659,579 134,055 125.50884%
03/01/2033 430,000 522,472 522,472 659,579 137,108 126.24212%
03/01/2034 455,000 527,133 527,133 659,579 132,447 125.12586%
03/01/2035 475,000 525,611 525,611 659,579 133,968 125.48807%
03/01/2036 190,000 218,144 218,144 274,707 56,564 125.92950%
03/01/2037 200,000 219,157 219,157 274,707 55,551 125.34742%
03/01/2038 205,000 214,697 214,697 274,707 60,011 127.95133%
6,805,000 9,924,261 9,924,261 12,410,734 2,486,472
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated(Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 11BOND PRICINGSuccessor Agency of the Lake Elsinore Redevelopment AgencyTax-Exempt (Ext Infr DDA)(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)****************************************************************************************************(Summerly / Civic Partners DDA Obligation)Public Insured ScenarioMaturity Yield to Call Call PremiumBond Component Date Amount Rate Yield Price Maturity Date Price (-Discount)Tax-Exempt Serial Bonds:03/01/2019 60,000 3.000% 1.520% 101.715 1,029.0003/01/2020 55,000 4.000% 1.660% 104.976 2,736.8003/01/2021 60,000 5.000% 1.820% 109.764 5,858.4003/01/2022 65,000 5.000% 1.990% 111.998 7,798.7003/01/2023 70,000 5.000% 2.110% 114.094 9,865.8003/01/2024 75,000 5.000% 2.310% 115.394 11,545.5003/01/2025 75,000 5.000% 2.480% 116.467 12,350.2503/01/2026 80,000 5.000% 2.670% 117.007 13,605.6003/01/2027 80,000 5.000% 2.830% 117.423 13,938.4003/01/2028 85,000 5.000% 3.010% 117.325 14,726.2503/01/2029 90,000 5.000% 3.150% 115.994 C 3.279% 03/01/2028 100.000 14,394.6003/01/2030 95,000 5.000% 3.280% 114.773 C 3.499% 03/01/2028 100.000 14,034.3503/01/2031 100,000 5.000% 3.370% 113.937 C 3.657% 03/01/2028 100.000 13,937.0003/01/2032 105,000 5.000% 3.440% 113.292 C 3.780% 03/01/2028 100.000 13,956.6003/01/2033 110,000 5.000% 3.500% 112.743 C 3.881% 03/01/2028 100.000 14,017.3003/01/2034 120,000 5.000% 3.560% 112.196 C 3.970% 03/01/2028 100.000 14,635.2003/01/2035 370,000 5.000% 3.620% 111.653 C 4.051% 03/01/2028 100.000 43,116.1003/01/2036 75,000 5.000% 3.670% 111.203 C 4.118% 03/01/2028 100.000 8,402.2503/01/2037 80,000 5.000% 3.700% 110.934 C 4.166% 03/01/2028 100.000 8,747.2003/01/2038 85,000 5.000% 3.730% 110.666 C 4.210% 03/01/2028 100.000 9,066.101,935,000247,761.40Dated Date 12/28/2017Delivery Date 12/28/2017First Coupon 03/01/2018Par Amount 1,935,000.00Premium 247,761.40Production 2,182,761.40 112.804207%Underwriter's DiscountPurchase Price 2,182,761.40 112.804207%Accrued InterestNet Proceeds 2,182,761.40
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated(Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 12BOND PRICINGSuccessor Agency of the Lake Elsinore Redevelopment AgencyTax-Exempt (Ext Infr DDA)(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)****************************************************************************************************(Summerly / Civic Partners DDA Obligation)Public Insured Scenario All Numbers and Rates are Preliminary; Subject to Change Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011) Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017) Revenue Estimates Provided by HdL Consultants on September 14, 2017 Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 13
BOND SUMMARY STATISTICS
Successor Agency of the Lake Elsinore Redevelopment Agency
Tax-Exempt (Ext Infr DDA)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Dated Date 12/28/2017
Delivery Date 12/28/2017
First Coupon 03/01/2018
Last Maturity 03/01/2038
Arbitrage Yield 4.083679%
True Interest Cost (TIC) 3.638978%
Net Interest Cost (NIC) 3.948637%
All-In TIC 4.044165%
Average Coupon 4.989056%
Average Life (years) 12.307
Weighted Average Maturity (years) 12.314
Duration of Issue (years) 9.348
Par Amount 1,935,000.00
Bond Proceeds 2,182,761.40
Total Interest 1,188,075.00
Net Interest 940,313.60
Bond Years from Dated Date 23,813,625.00
Bond Years from Delivery Date 23,813,625.00
Total Debt Service 3,123,075.00
Maximum Annual Debt Service 400,500.00
Average Annual Debt Service 154,799.26
Par Average Average PV of 1 bp
Bond Component Value Price Coupon Life change
Tax-Exempt Serial Bonds 1,935,000.00 112.804 4.989% 12.307 1,538.70
1,935,000.00 12.307 1,538.70
All-In Arbitrage
TIC TIC Yield
Par Value 1,935,000.00 1,935,000.00 1,935,000.00
+ Accrued Interest
+ Premium (Discount) 247,761.40 247,761.40 247,761.40
- Underwriter's Discount
- Cost of Issuance Expense -79,095.54
- Other Amounts
Target Value 2,182,761.40 2,103,665.86 2,182,761.40
Target Date 12/28/2017 12/28/2017 12/28/2017
Yield 3.638978% 4.044165% 4.083679%
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 14
BOND DEBT SERVICE
Successor Agency of the Lake Elsinore Redevelopment Agency
Tax-Exempt (Ext Infr DDA)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Dated Date 12/28/2017
Delivery Date 12/28/2017
Period Debt
Ending Principal Coupon Interest Service
03/01/2018 16,625 16,625
03/01/2019 60,000 3.000% 95,000 155,000
03/01/2020 55,000 4.000% 93,200 148,200
03/01/2021 60,000 5.000% 91,000 151,000
03/01/2022 65,000 5.000% 88,000 153,000
03/01/2023 70,000 5.000% 84,750 154,750
03/01/2024 75,000 5.000% 81,250 156,250
03/01/2025 75,000 5.000% 77,500 152,500
03/01/2026 80,000 5.000% 73,750 153,750
03/01/2027 80,000 5.000% 69,750 149,750
03/01/2028 85,000 5.000% 65,750 150,750
03/01/2029 90,000 5.000% 61,500 151,500
03/01/2030 95,000 5.000% 57,000 152,000
03/01/2031 100,000 5.000% 52,250 152,250
03/01/2032 105,000 5.000% 47,250 152,250
03/01/2033 110,000 5.000% 42,000 152,000
03/01/2034 120,000 5.000% 36,500 156,500
03/01/2035 370,000 5.000% 30,500 400,500
03/01/2036 75,000 5.000% 12,000 87,000
03/01/2037 80,000 5.000% 8,250 88,250
03/01/2038 85,000 5.000% 4,250 89,250
1,935,000 1,188,075 3,123,075
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 15
BOND SOLUTION
Successor Agency of the Lake Elsinore Redevelopment Agency
Tax-Exempt (Ext Infr DDA)
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Period Proposed Proposed Total Adj Revenue Unused Debt Serv
Ending Principal Debt Service Debt Service Constraints Revenues Coverage
03/01/2018 16,625 16,625 -16,625
03/01/2019 60,000 155,000 155,000 197,178 42,178 127.21134%
03/01/2020 55,000 148,200 148,200 191,078 42,878 128.93223%
03/01/2021 60,000 151,000 151,000 194,278 43,278 128.66064%
03/01/2022 65,000 153,000 153,000 192,690 39,690 125.94122%
03/01/2023 70,000 154,750 154,750 196,290 41,540 126.84334%
03/01/2024 75,000 156,250 156,250 200,090 43,840 128.05764%
03/01/2025 75,000 152,500 152,500 194,090 41,590 127.27218%
03/01/2026 80,000 153,750 153,750 193,690 39,940 125.97728%
03/01/2027 80,000 149,750 149,750 193,690 43,940 129.34228%
03/01/2028 85,000 150,750 150,750 189,090 38,340 125.43288%
03/01/2029 90,000 151,500 151,500 192,840 41,340 127.28717%
03/01/2030 95,000 152,000 152,000 196,390 44,390 129.20399%
03/01/2031 100,000 152,250 152,250 195,453 43,203 128.37607%
03/01/2032 105,000 152,250 152,250 195,203 42,953 128.21187%
03/01/2033 110,000 152,000 152,000 195,665 43,665 128.72702%
03/01/2034 120,000 156,500 156,500 196,865 40,365 125.79238%
03/01/2035 370,000 400,500 400,500 503,415 102,915 125.69665%
03/01/2036 75,000 87,000 87,000 115,146 28,146 132.35147%
03/01/2037 80,000 88,250 88,250 116,596 28,346 132.11986%
03/01/2038 85,000 89,250 89,250 113,046 23,796 126.66194%
1,935,000 3,123,075 3,123,075 3,962,781 839,706
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels
Sep 29, 2017 4:44 pm Prepared by Stifel, Nicolaus & Company, Incorporated (Finance 7.017 Affordable Housing Bonds:UNINSUR) Page 16
DISCLOSURE
Successor Agency of the Lake Elsinore Redevelopment Agency
2017 Taxable and Tax-Exempt Tax Allocation Bonds
(Rancho Laguna Redevelopment Project Area No. 2 and No. 3)
****************************************************************************************************
(Summerly / Civic Partners DDA Obligation)
Public Insured Scenario
Stifel, Nicolaus & Company, Incorporated (“Stifel”) has been engaged or appointed to serve as an underwriter or placement agent with respect to a particular issuance
of municipal securities to which the attached material relates and Stifel is providing all information and advice contained in the attached material in its capacity as
underwriter or placement agent for that particular issuance. As outlined in the SEC’s Municipal Advisor Rule, Stifel has not acted, and will not act, as your municipal
advisor with respect to the issuance of the municipal securities that is the subject to the engagement.
Stifel is providing information and is declaring to the proposed municipal issuer that it has done so within the regulatory framework of MSRB Rule G-23 as an
underwriter (by definition also including the role of placement agent) and not as a financial advisor, as defined therein, with respect to the referenced proposed issuance
of municipal securities. The primary role of Stifel, as an underwriter, is to purchase securities for resale to investors in an arm’s-length commercial transaction. Serving
in the role of underwriter, Stifel has financial and other interests that differ from those of the issuer. The issuer should consult with its own financial and/or municipal,
legal, accounting, tax and other advisors, as applicable, to the extent it deems appropriate.
These materials have been prepared by Stifel for the client or potential client to whom such materials are directly addressed and delivered for discussion purposes only.
All terms and conditions are subject to further discussion and negotiation. Stifel does not express any view as to whether financing options presented in these materials
are achievable or will be available at the time of any contemplated transaction. These materials do not constitute an offer or solicitation to sell or purchase any securities
and are not a commitment by Stifel to provide or arrange any financing for any transaction or to purchase any security in connection therewith and may not relied upon
as an indication that such an offer will be provided in the future. Where indicated, this presentation may contain information derived from sources other than Stifel.
While we believe such information to be accurate and complete, Stifel does not guarantee the accuracy of this information. This material is based on information
currently available to Stifel or its sources and is subject to change without notice. Stifel does not provide accounting, tax or legal advice; however, you should be aware
that any proposed indicative transaction could have accounting, tax, legal or other implications that should be discussed with your advisors and /or counsel as you deem
appropriate.
All Numbers and Rates are Preliminary; Subject to Change
Successor Agency has Ability to Finance Project Pursuant to Section 603 of the Amended Summerly DDA (Dated March 8, 2011)
Credit Assumed to have 'BBB' Underlying Rating (Third Tier Lien Assumption Provided by Stradling on July 19, 2017)
Revenue Estimates Provided by HdL Consultants on September 14, 2017
Cost of Issuance (Inclusive of Underwriter's Discount) are Estimates; Subject to Change
Agency's Actual Results may Differ, and Stifel makes no Commitment to Underwrite at these Levels