HomeMy WebLinkAboutItem No. 23 Third Tax Lien Allocation BondsCity of Lake Elsinore
130 South Main Street
Lake Elsinore, CA 92530
www.lake - elsinore.org
°"` In - City Council Agenda Report
File Number: ID# 19 -670
Agenda Date: 7/14/2020 Version: 1 Status: Approval Final
In Control: City Council / Successor Agency
Agenda Number: 23)
File Type: Successor Business
Item
Issuance and Sale of Third Lien Tax Allocation Bonds and Approving the Form of a First
Supplemental Indenture of Trust, Bond Purchase Contract Supplemental Indenture of Trust, Bond Purchase Contract, Continuing Certificate Certificate
and Related Documents and Authorizina Certain Other Actions in Connection Therewith
Adopt A RESOLUTION OF THE CITY COUNCIL OF THE SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AUTHORIZING THE
ISSUANCE AND SALE OF THIRD LIEN TAX ALLOCATION BONDS AND APPROVING THE FORM OF
A FIRST SUPPLEMENTAL INDENTURE OF TRUST, BOND PURCHASE AGREEMENT, CONTINUING
DISCLOSURE CERTIFICATE AND RELATED DOCUMENTS AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH.
City of Lake Elsinore Page 1 Printed on 71912020
CITY OF
LADE LSIIE
, DREAM EXTREME
TN
REPORT TO THE SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
To: Honorable Chair and Board Members
From: Grant Yates, Executive Director
Prepared by: Jason Simpson, Assistant Executive Director
Date: July 14, 2020
Subject: Issuance and Sale of Third Lien Tax Allocation Bonds and Approving the
Form of a First Supplemental Indenture of Trust, Bond Purchase Contract,
Continuing Disclosure Certificate and Related Documents and Authorizing
Certain Other Actions in Connection Therewith
Recommendation
Adopt A RESOLUTION OF THE CITY COUNCIL OF THE SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, CALIFORNIA,
AUTHORIZING THE ISSUANCE AND SALE OF THIRD LIEN TAX ALLOCATION BONDS AND
APPROVING THE FORM OF A FIRST SUPPLEMENTAL INDENTURE OF TRUST, BOND
PURCHASE AGREEMENT, CONTINUING DISCLOSURE CERTIFICATE AND RELATED
DOCUMENTS 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
Tax Allocation Bonds
July 14, 2020
Page 2 of 4
Section 34177.5(a)(4). DOF subsequently approved the Implementation Agreement on January
31, 2017.
On October 10, 2017, the Successor Agency authorized the issuance of tax allocation bonds to
finance payments to Civic Partners and McMillin Summerly under the DDA. Both the Oversight
Board and DOF subsequently approved the tax allocation bonds.
On March 20, 2018, the Successor Agency issued the Third Lien Tax Allocation Bonds, Series
2018A (the "2018A Bonds ") and the Third Lien Tax Allocation Bonds, Series 2018B (Federally
Taxable) (the "20188 Bonds" and together with the 2018A Bonds, the "2018 Bonds ").
In order to provide moneys to fund the ongoing DDA obligation, the Successor Agency plans to
issue additional tax allocation bonds (the "2020 Bonds "). The 2020 Bonds will be issued on
parity with the 2018 Bonds, both of which will be payable entirely from the pledge of property tax
increment, as defined in the DDA.
The financing team, with assistance from staff, has produced the form of certain legal
documents for approval by the Successor Agency. If the Successor Agency approves the
financing and documents outlined below, then the financing will be subject to approval by both
the Oversight Board (at its next regularly scheduled meeting on July 18, 2020) and DOF (up to a
65 -day review process). Assuming both the Oversight Board and DOF approve the financing, a
Preliminary Official Statement (POS) will be submitted for the Successor Agency's consideration
and approval prior to pricing the 2020 Bonds (currently estimated to be in late September,
depending on the timing of DOF approval).
Discussion
The DDA requires the Successor Agency to pay tax increment revenues within the Summerly
area to McMillin Summerly and 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 bonds to finance the Successor Agency's
obligation under the DDA to make these payments to McMillin Summerly and Civic Partners.
Pursuant to the DDA, the 2018 Bonds and 2020 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 (more specifically, the Successor Agency's 2015 Bonds, 2019A Bonds, 2019B
Bonds, 2020 Project Area No. I and II Loans, the obligation under the DDA to pay certain
"Pledged Housing Funds" to Civic Partners and certain pass- through payments).
The DDA requires the 2020 Bonds to be sized to generate proceeds that result in annual debt
payments equal to the annual payments paid to McMillin Summerly and Civic Partners,
respectively, under the DDA. Annual McMillin Revenues and Civic Revenues are projected by
HdL Coren & Cone, the Successor Agency's Fiscal Consultant, over the term of the DDA.
The 2020 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 2018 -19 will be due to McMillin Summerly
and Civic Partners on February 1, 2020). Similarly, the 2018 Indenture of Trust and 2020 First
Tax Allocation Bonds
July 14, 2020
Page 3 of 4
Supplement to the Indenture of Trust pursuant to which the 2020 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.
The attached resolution authorizes and approves the issuance of the 2020 Bonds, subject to the
compliance of certain criteria, including that: (i) the aggregate principal amount of the 2020
Bonds does not exceed $9.0 million ($9,000,000); and (ii) the Underwriter's Discount does not
exceed 1.25% of the aggregate principal amount of the 2020 Bonds.
Pursuant to Government Code Section 5852.1, the good faith estimates shown below have
been provided by Urban Futures, Inc., the Successor Agency's Municipal Advisor, in
consultation with Stifel, Nicolaus & Company, Incorporated, the proposed underwriter of the
2020 Bonds. Please note that these estimates are based on current market conditions and
subject to prevailing market conditions at the time of sale.
Good Faith Estimates: Government Code Section 5852.1
- Principal Amount
- True Interest Cost
- Finance Charge (Fees and Charges Paid to Third Parties):
- Amount of Proceeds Received, Less the Finance Charge
Reserves or Capitalized Interest Paid or Funded
- Total Payment Amount (Sum of All Debt Service Payments)
*Numbers are Estimates Based on Current Market Conditions;
2020 Bonds*
$7,525,000
2.92%
$394,063
and any $7,334,193
Subject to Change
$9,600,616
The resolution adopted by the Successor Agency approving the financing allows the Successor
Agency to pursue a public sale (offer of securities to the general public) or a private placement
(direct placement of securities to one or limited number of investors) of the 2020 Bonds.
Depending on prevailing market conditions closer to the time of sale, the Successor Agency will
select the option that generates the lowest borrowing cost to the Successor Agency and the
various taxing entities. 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 would be approved
by the attached resolution should the Successor Agency Board determine to move forward with
the authorization of the 2020 Bonds. The forms of these documents will be finalized upon the
pricing and sale of the 2020 Bonds.
✓ Supplement to the First Indenture of Trust: This document supplements the 2018
Indenture between the Successor Agency and Wilmington Trust, National Association, the
Trustee of the 2018 Bonds and appointed Trustee of the 2020 Bonds. This document
amends certain terms of the 2018 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 2020 Bonds, and
other related matters.
✓ Bond Purchase Contract: Under this contract, the Successor Agency agrees to sell the
2020 Bonds to the underwriter and the underwriter agrees to purchase the 2020 Bonds,
subject to typical closing conditions. Successor Agency (City) staff, the municipal advisor,
and bond counsel will approve the final pricing prior to the execution of the Bond Purchase
Contract.
Tax Allocation Bonds
July 14, 2020
Page 4 of 4
✓ Continuing Disclosure Certificate: Executed for the benefit of bondholders, the Continuing
Disclosure Certificate obligates the Successor Agency to file an annual report that 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 that are significant to bondholders, if, and when they occur.
The proposed resolution also appoints the financing team that includes a Municipal Advisor
(Urban Futures, Inc.), Fiscal Consultant (HdL Coren & Cone), 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 2020 Bonds are approved by the Successor Agency, the financing will be subject
to approval from both the Oversight Board and DOF.
During the 65 -day DOF review period, the financing team and Successor Agency staff will work
to prepare a POS for the 2020 Bonds. The POS is the offering document with respect to the
2020 Bonds and, if the 2020 Bonds will be sold by public offering, the POS must contain all
material information to enable investors to determine whether to purchase 2020 Bonds. If the
2020 Bonds will be sold by public offering, the POS will likely be presented for approval by the
Successor Agency Board in late September 2020. If Successor Agency approval is given at that
time, the 2020 Bonds could be issued a few weeks later.
Fiscal Impact
As previously mentioned, the 2018 Bonds and 2020 Bonds will be secured by tax increment
revenues from Project Area No. II and Project Area No. III (specifically, the `earned' McMillin
Revenues and the Civic Revenues), net of amounts due under senior obligations (more
specifically, the Successor Agency's 2015 Bonds, 2019A Bonds, 2019B Bonds, 2020 Project
Area No. I and II Loans, the obligation under the DDA to pay certain "Pledged Housing Funds"
to Civic Partners and certain pass- through payments).
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 2020 Bonds.
Exhibits
A - Resolution
B - First Supplement to the Indenture of Trust
C - Bond Purchase Agreement
D - Continuing Disclosure Certificate
RESOLUTION NO. SA 2020 -
A RESOLUTION OF THE CITY COUNCIL OF THE SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, CALIFORNIA,
AUTHORIZING THE ISSUANCE AND SALE OF THIRD LIEN TAX ALLOCATION
BONDS AND APPROVING THE FORM OF A FIRST SUPPLEMENTAL INDENTURE
OF TRUST, BOND PURCHASE AGREEMENT, CONTINUING DISCLOSURE
CERTIFICATE AND RELATED DOCUMENTS 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, 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; and
Whereas, a Redevelopment Plan for the Rancho Laguna Redevelopment Project Area No. 11 (the
"Project Area 11 ") 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; and
Whereas, a Redevelopment Plan for the Rancho Laguna Redevelopment Project Area No. III
(the "Project Area I I I "; and, together with the Project Area I and Project Area 11, 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; 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 (defined below), the Existing Bonds (as defined in the Indenture, defined below)
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
Whereas, the Implementation Agreement was approved by the Oversight Board to the Successor
Agency 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, on March 20, 2018, the Successor Agency issued 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 2018A (the "2018A Bonds ") and
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
2018B (Federally Taxable) (the "2018B Bonds "; and, together with the 2018A Bonds, the "2018
Bonds ") to finance a portion of the DDA Payment Obligation; and
Whereas, in order to provide moneys to finance an additional portion of 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 2020B (the "20208 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 2020C
(Federally Taxable) (the "2020C Bonds "; and, together with the 2020B Bonds, the "2020 Bonds ");
and
Whereas, the 2020 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
Whereas, the 2020 Bonds, and any additional Parity Debt (defined in the Indenture), will be
payable from Pledged Tax Revenues (as defined in the Indenture) on a parity with the 2018
Bonds, and the pledge of Pledged Tax Revenues to the payment of the principal of and interest
on the 2020 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 2020 Bonds, as well as payments required under the Pass -
Through Agreements and the Statutory Pass - Through Amounts; and
Whereas, the Successor Agency wishes at this time to approve all matters relating to the issuance
and sale of the 2020 Bonds.
NOW, THEREFORE, THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF
THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, ORDER AND DETERMINE AS
FOLLOWS:
Section 1. Subject to the provisions of the Indenture (defined in Section 2 hereof), the
issuance of the 2020 Bonds in the aggregate principal amount not to exceed Nine Million Dollars
($9,000,000) on the terms and conditions set forth in, and subject to the limitations specified in,
the Indenture, is hereby authorized and approved. The 2020 Bonds will be dated, will bear interest
at the rates, will mature on the dates, will be issued in the form, will be subject to redemption, and
will be as otherwise provided in the Indenture, as the same will be completed as provided in this
Resolution. The proceeds of the sale of the 2020 Bonds shall be applied as provided in the
Indenture. The 2020 Bonds may be issued from time to time in one or more series, as the
Successor Agency shall determine. The 2020 Bonds shall be issued pursuant to the provisions
of Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the
"Bond Law "). The approval of the issuance of the 2020 Bonds by the Successor Agency and the
Riverside Countywide Oversight Board shall constitute the approval of each and every separate
series of 2020 Bonds, without the need for any further approval from the Riverside Countywide
Oversight Board. The Authorized Officers (defined below) are hereby authorized to change the
name of the 2020 Bonds to reflect the year in which the 2020 Bonds are issued.
Section 2. The First Supplemental Indenture of Trust in substantially the form submitted at
this meeting and made a part hereof as though set forth in full herein (the "First Supplemental
Indenture;" and, together with that certain Indenture of Trust dated as of March 1, 2018, pursuant
to which the 2018 Bonds were issued, the "Indenture "), is hereby approved. The Chair of the
Successor Agency, the Executive Director of the Successor Agency, the Assistant Executive
Director of the Successor Agency and the Secretary of the Successor Agency are each hereby
authorized and directed to execute and deliver the Indenture in the form presented at this meeting
with such changes, insertions and omissions as may be requested by Bond Counsel and
approved by the Chair, said execution being conclusive evidence of such approval. The
Authorized Officers are expressly authorized to approve revisions to the Indenture to change the
principal payment dates, covenants relating to the recognized obligation payment schedule and
timing of receipt of moneys from the Redevelopment Property Tax Trust Fund.
Section 3. The Successor Agency hereby finds and determines, based on all evidence and
testimony contained in the record, that the Successor Agency has made diligent efforts to ensure
that the lowest long -term cost financing will be obtained for the 2020 Bonds, that the financing
shall not provide for any bullets or spikes and shall not use variable rates, and that the Successor
Agency has retained the Municipal Advisor (defined below) in developing financing proposals and
the Successor Agency shall make the work product of the Municipal Advisor available to the
California Department of Finance at its request under the provisions of Health and Safety Code
Section 34177.5(h).
Section 4. (a) The Bonds may be sold by negotiated sale pursuant to the Bond Purchase
Agreement between the Successor Agency and Stifel, Nicolaus & Company, Incorporated (the
"Underwriter ") with respect to the 2020 Bonds in substantially the form submitted at this meeting
and made a part hereof as though set forth in full herein, and the same is hereby approved. The
Executive Director of the Successor Agency and the Assistant Executive Director of the
Successor Agency are each hereby authorized and directed to execute the Bond Purchase
Agreement in the form presented at this meeting with such changes, insertions and omissions as
may be approved by the Executive Director or the Assistant Executive Director, said execution
being conclusive evidence of such approval; provided, however, that the Bond Purchase
Agreement shall be signed only if the terms of the agreement are consistent with this Resolution
and provide for an Underwriter's Discount of not to exceed 1.25% of the aggregate principal
amount of the 2020 Bonds. The 2020 Bonds will be sized such that the sum of the portions of
Tax Revenues (defined in the Summerly DDA) that are, or are projected by an independent
financial consultant appointed by the Successor Agency to become, available and that are
pledged for payment to the Developer and Master Developer under the Summerly DDA, will be
sufficient to pay all scheduled debt service on the 2020 Bonds and 2018 Bonds in each year,
through the final maturity thereof.
(b) As an alternative to the sale of the 2020 Bonds through a public offering
authorized in paragraph (a), the 2020 Bonds may be sold on a private placement basis through
Stifel, Nicolaus & Company, Incorporated, acting as private placement agent (the "Private
Placement Agent "), if a private placement of the 2020 Bonds will produce lower interest rates than
are available through a public offering of the 2020 Bonds or is otherwise advisable, in the opinion
of, and upon recommendation of, the Municipal Advisor, which recommendation is agreed to by,
the Executive Director or the Assistant Executive Director, so long as the compensation to the
Private Placement Agent through a private placement of the Bonds does not exceed the
Underwriter's Discount set forth in Section 4(a) above or such other amount as is approved by
the Executive Director.
Section 5. The Continuing Disclosure Certificate in substantially the form submitted at this
meeting and made a part hereof as though set forth in full herein], and the same is hereby
approved. The Executive Director of the Successor Agency and the Assistant Executive Director
of the Successor Agency are each hereby authorized and directed to execute the Continuing
Disclosure Certificate in the form presented at this meeting with such changes, insertions and
omissions as may be approved by the Executive Director or the Assistant Executive Director, said
execution being conclusive evidence of such approval.
Section 6. The Chair of the Successor Agency, the Executive Director of the Successor
Agency, the Assistant Executive Director of the Successor Agency, the Finance Officer of the
Successor Agency, the Secretary of the Successor Agency, and any other proper officer of the
Successor Agency (the "Authorized Officers "), acting singly, be and each of them hereby is
authorized and directed to execute and deliver any and all documents and instruments, relating
to the 2020 Bonds, and to do and cause to be done any and all acts and things necessary or
proper for carrying out the transactions contemplated by the Indenture, the Bond Purchase
Agreement, this Resolution and any such agreements.
Section 7. Each of the Authorized Officers, acting alone, is hereby authorized to negotiate the
terms of a commitment for a policy of bond insurance and a commitment for a debt service reserve
fund surety bond (each a "Commitment ") from one or more municipal bond insurance companies
(an "Insurer ") and, if such officer determines that the acquisition of an insurance policy and /or a
surety bond from an Insurer will result in net interest rate savings, to pay the insurance premium
for such policy and surety bond from the proceeds of the 2020 Bonds and to approve changes to
the Indenture to the extent necessary to conform to the terms of the Commitments.
Section 8. Wilmington Trust, National Association is hereby appointed as Trustee, Stradling
Yocca Carlson & Rauth, a Professional Corporation is hereby appointed as Bond Counsel and
Disclosure Counsel, Urban Futures, Inc. is appointed as Municipal Advisor, HdL Coren & Cone is
appointed as Fiscal Consultant and Stifel, Nicolaus & Company, Incorporated is hereby appointed
as Underwriter or Private Placement Agent, as applicable.
Section 9. This Resolution shall take effect immediately upon its adoption.
IN WITNESS WHEREOF, this Resolution is adopted and approved the 14th day of July, 2020.
Brian Tisdale, Chair
Attest:
Candice Alvarez, MMC
Secretary
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF LAKE ELSINORE )
I, Candice Alvarez, Secretary of the Redevelopment Agency of the City of Lake Elsinore,
California, do hereby certify that Resolution No. SA 2020 - was adopted by the Successor
Agency of the City of Lake Elsinore, California, at the Regular meeting of July 14, 2020, and that
the same was adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Candice Alvarez, MMC
Secretary
Stradling Yocca Carlson & Rauth
Draft of 6/25/2020
FIRST SUPPLEMENTAL INDENTURE OF TRUST
Dated as of 1, 2020
by and between
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 2020B
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 2020C (Federally Taxable)
TABLE OF CONTENTS
Page
ARTICLE X
ADDITIONAL DEFINITIONS RELATING TO THE 2020 BONDS; AMENDMENTS TO
INDENTURE
Section10.01 Definitions .................................................................................. ............................... 4
Section 10.02 Clarification of Indenture ........................................................... ............................... 6
ARTICLE XI
AUTHORIZATION OF 2020 BONDS
Section 11.01 Authorization of 2020 Bonds ...................................................... ............................... 7
Section 11.02 Terms of 2020 Bonds .................................................................. ............................... 7
Section11.03 Redemption .................................................................................. ..............................9
Section 11.04 Form of Bonds .......................................................................... ............................... 10
ARTICLE XII
DEPOSIT AND APPLICATION OF PROCEEDS OF 2020 BONDS
Section 12.01 Issuance of Bonds ....................................................................... .............................11
Section 12.02 Application of Proceeds of Sale and Certain Other Amounts .... .............................11
Section 12.03 Costs of Issuance Fund ............................................................... .............................11
Section12.04 Project Fund ................................................................................ .............................12
Section 12.05 2020 Reserve Subaccount ........................................................... .............................13
Section 12.06 2020 Subaccounts of the Debt Service Fund .............................. .............................13
Section12.07 Rebate Fund ................................................................................ .............................13
ARTICLE XIII
MISCELLANEOUS; 2020 INSURER PROVISIONS
Section 13.01
Continuing Disclosure ................................................................ .............................15
Section 13.02
Benefits Limited to Parties ....................................................... ...............................
15
Section 13.03
Effect of this First Supplement ................................................. ...............................
15
Section 13.04
Rules of Construction ............................................................... ...............................
15
Section 13.05
Provisions Relating to the 2020 Insurance Policy .................... ...............................
15
Section 13.06
Provisions Relating to the 2020 Reserve Policy ....................... ...............................
15
Section 13.07
Rights of the 2020 Insurer ........................................................ ...............................
16
Section 13.08
Execution in Counterparts ........................................................ ...............................
16
Section 13.09
Governing Law ......................................................................... ...............................
16
Signatures................................................................................................ ............................... S -1
EXHIBIT A FORM OF 2020B BOND ....................................................... ............................... A -1
EXHIBIT B FORM OF 2020C BOND ....................................................... ............................... B -1
EXHIBIT C FORM OF REQUISITION FOR PROJECT FUND DISBURSEMENT .............. C -1
1
FIRST SUPPLEMENTAL INDENTURE OF TRUST
This FIRST SUPPLEMENTAL INDENTURE OF TRUST (this "First Supplement ") is made
and entered into and dated as of 1, 2020, by and between the SUCCESSOR AGENCY
OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a public body,
corporate and politic (the "Successor Agency "), as successor agency to the Redevelopment Agency of
the City of Lake Elsinore (the "Former Agency "), and WILMINGTON TRUST, NATIONAL
ASSOCIATION, a national banking association duly organized and existing under the laws of the
United States of America, as trustee under the hereinafter defined 2018 Indenture (the "Trustee ");
WITNESSETH:
WHEREAS, this First Supplement is supplemental to the Indenture of Trust, dated as of
March 1, 2018 (the "2018 Indenture" and, together with this First Supplement and as it may be further
supplemented and amended, the "Indenture "), between the Successor Agency and the Trustee, pursuant
to which the Successor Agency issued its 2018 Bonds, as defined herein;
WHEREAS, prior to its dissolution (as described below), 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 of the State of
California, constituting Part 1 of Division 24 (commencing with Section 33000) of the California
Health and Safety Code (as amended, the "Law ") and the powers of the Former Agency included 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 for
Project Area I, as amended, have been duly complied with;
WHEREAS, a Redevelopment Plan for the Rancho Laguna Redevelopment Project Area
No. II (the "Project Area 11 ") 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 for
Project Area II, 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 the Project Area I and 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 for Project Area III, 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 in the 2018 Indenture, as such
definition is clarified by Section 10.02 hereof) and the related documents to which the Former Agency
was a party;
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;
2
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;
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 a portion of the Successor Agency's DDA
Payment Obligation, the Successor Agency issued its Successor Agency of the Redevelopment Agency
of the City of Lake Elsinore (Rancho Laguna Redevelopment Project Areas No. II and No. 111) Third
Lien Tax Allocation Bonds, Series 2018A (the "2018A 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 2018B (Federally Taxable) (the "2018B
Bonds "; and, together with the 2018A Bonds, the "2018 Bonds ");
WHEREAS, in order to provide moneys to finance an additional portion of 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 2020B (the "2020B 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 2020C
(Federally Taxable) (the "2020C Bonds "; and, together with the 2020B Bonds, the "2020 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 2020 Bonds in the amounts set forth
in Section 11.02 of this First Supplement;
WHEREAS, the 2020 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 2020 Bonds and any additional Parity Debt will be payable from Pledged Tax
Revenues (as defined herein) on a parity with the 2018 Bonds, and the pledge of Pledged Tax Revenues
to the payment of the principal of and interest on the 2020 Bonds will 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 2020 Bonds, as well as payments required under the
Pass - Through Agreements;
WHEREAS, in order to provide for the authentication and delivery of the 2020 Bonds, to
establish and declare the terms and conditions upon which the 2020 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
First Supplement;
WHEREAS, pursuant to Section 7.01 of the 2018 Indenture, the Successor Agency desires to
clarify the definition of "Existing Bonds" set forth in the Indenture to acknowledge the refunding for
savings of the obligations listed in the definition of "Existing Bonds" set forth in the 2018 Indenture;
WHEREAS, the Successor Agency has determined that all acts and proceedings required by
law necessary to make the 2020 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 First Supplement a legal, valid and binding agreement for the uses and purposes
herein set forth in accordance with its terms, have been done or taken; and
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 2020 Bonds, issued and Outstanding under the 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 2020 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 2020 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 2020 Bonds, as follows:
ARTICLE X
ADDITIONAL DEFINITIONS RELATING TO THE 2020 BONDS; AMENDMENTS TO
INDENTURE
Section 10.01 Definitions. Unless the context otherwise requires, the terms defined in this
Section 10.01 shall, for all purposes of this First Supplement, have the respective meanings specified
in this Section 10.01. All terms defined in Section 1.02 of the 2018 Indenture and not otherwise
defined in this Section 10.01 shall, when used in this First Supplement, have the respective meanings
given to such terms in Section 1.02 of the 2018 Indenture.
"Bond" or "Bonds" shall mean the 2018 Bonds, the 2020 Bonds and any Parity Debt issued
as bonds pursuant to a Supplemental Indenture.
"Bond Year" means, with respect to the 2020 Bonds, the one -year period beginning on
March 2 in any year and ending on the next succeeding March 1, provided that the first Bond Year
with respect to the 2020 Bonds shall begin on the Closing Date with respect to the 2020 Bonds and
end on March 1, 2021.
"Closing Date" or "2020 Closing Date" means, with respect to the 2020 Bonds, the date on
which the 2020 Bonds are delivered to the original purchasers thereof, being 12020.
M
"First Supplement" means this First Supplemental Indenture of Trust dated as of
1, 2020, between the Successor Agency and the Trustee.
"Indenture" means the 2018 Indenture, as supplemented and amended by this First
Supplement, and as they may be further supplemented or amended by any Supplemental Indenture
entered into pursuant to the provisions thereof.
[ "Late Payment Rate" means, as calculated by the 2020 Insurer, the lesser of (a) the greater
of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank
at its principal office in the City of New York, New York, as its prime or base lending rate (the "Prime
Rate ") (any change in such rate of interest to be effective on the date such change is announced by
JPMorgan Chase Bank) plus 3 %, and (ii) the then applicable highest rate of interest on the Bonds and
(b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The
Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of
360 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate publicly, Prime Rate
shall be the publicly announced prime or base lending rate of such bank, banking association or trust
company bank as the 2020 Insurer in its sole and absolute discretion shall specify.]
"Qualified Reserve Account Credit Instrument" shall have the meaning set forth in the
Indenture and shall also include the 2020 Reserve Policy.
"2018 Indenture" means the Indenture of Trust dated as of March 1, 2018, by and between
the Successor Agency and Wilmington Trust, National Association, as trustee.
"2020B Bonds" means the $ initial aggregate principal amount of 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 2020B.
"2020C Bonds" means the $ initial aggregate principal amount of 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 2020C (Federally Taxable).
"2020 Bonds" means, collectively, the 2020B Bonds and the 2020C Bonds.
"2020 Continuing Disclosure Certificate" means, with respect to the 2020 Bonds, that certain
Continuing Disclosure Certificate relating to the 2020 Bonds executed by the Successor Agency and
dated the date of issuance and delivery of the 2020 Bonds, as originally executed and as it may be
amended from time to time in accordance with the terms thereof.
"2020 Costs of Issuance Fund" means the fund by that name established and held by the
Trustee pursuant to Section 12.03.
[ "2020 Insurance Policy" means the insurance policy issued by the 2020 Insurer guaranteeing
the scheduled payment of principal of and interest on the 2020 Bonds when due.]
[ "2020 Insurer" means , or any successor thereto or assignee thereof, in
its capacity as issuer of the 2020 Insurance Policy and the 2020 Reserve Policy.]
"2020 Project Fund" means the fund to be maintained by the Trustee pursuant to
Section 12.04 of this First Supplement.
[ "2020 Reserve Policy" means the Municipal Bond Debt Service Reserve Insurance Policy
issued by the 2020 Insurer guaranteeing certain payments into the Reserve Account with respect to the
2020 Bonds as provided therein and subject to the limitations set forth therein.]
"2020 Reserve Requirement" means, subject to Section 4.03(c) of the Indenture, with respect
to the 2020 Bonds, the lesser of
(i) 125% of the average Annual Debt Service with respect to the 2020 Bonds,
(ii) Maximum Annual Debt Service with respect to the 2020 Bonds, or
(iii) 10% of the original principal amount of a series of Bonds (or, if the 2020 Bonds has
more than a de minimis amount of original issue discount or premium, 10% of the issue price of the
2020 Bonds). The 2020 Reserve Requirement shall initially be $ ; in no event shall the
Reserve Requirement for the 2020 Bonds exceed $
"2020 Reserve Subaccount" means the subaccount by that name established within the
Reserve Account pursuant to Section 12.05.
"2020 Tax Certificate" means that certain Tax Certificate executed by the Successor Agency
with respect to the 2020B Bonds.
Section 10.02 Clarification of Indenture.
(a) To more clearly reflect the outstanding obligations payable by the Successor
Agency on a senior basis to the Bonds, the term "Existing Bonds" is hereby amended to mean,
collectively, the following obligations of the Successor Agency, each of which was issued or incurred
by the Successor Agency to refund one or more obligations constituting Existing Bonds under the 2018
Indenture for debt service savings in compliance with the Dissolution Act and Section 3.06 of the 2018
Indenture:
(i) the 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;
(ii) the Successor Agency of the Redevelopment Agency of the City of
Lake Elsinore Subordinated Tax Allocation Refunding Bonds, Series 2019A, with a scheduled final
maturity date of September 1, 2033;
(iii) the Successor Agency of the Redevelopment Agency of the City of
Lake Elsinore Tax Allocation Refunding Bonds, Series 2019B (Housing Set - Aside), with a scheduled
final maturity date of September 1, 2025;
(iv) the Project Area No. I Loan Agreement, dated as of June 1, 2020, by
and between the Successor Agency and the Lake Elsinore Facilities Financing Authority, providing
0
for a loan from the Authority to the Agency, with a scheduled final maturity date of September 1, 2030;
and
(v) the Project Area No. II Loan Agreement, dated as of June 1, 2020, by
and between the Successor Agency and the Lake Elsinore Facilities Financing Authority, providing
for a loan from the Authority to the Agency, with a scheduled final maturity date of September 1, 2030.
(b) As used in the Indenture, "Oversight Board" means the Riverside Countywide
Oversight Board established and operating pursuant to Section 34179 of the Dissolution Act.
(c) The Successor Agency hereby determines that the foregoing amendments to
the Indenture constitute clarifications only, and do not, under any circumstances, materially adversely
affect the interests of the Owners of any Outstanding 2018 Bonds or the 2018 Insurer.
ARTICLE XI
AUTHORIZATION OF 2020 BONDS
Section 11.01 Authorization of 2020 Bonds.
(a) 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 2020 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 2020 Bonds in the manner and form provided in this First Supplement.
(b) Two issues of Bonds are hereby authorized to be issued by the Successor
Agency under and subject to the terms of this First Supplement, the 2018 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 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 202013" (the "2020B
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 2020C (Federally Taxable)" (the "2020C Bonds "). The 2020B Bonds shall be issued in the
initial aggregate principal amount of $ , and the 2020C Bonds shall be issued in the initial
aggregate principal amount of $
Section 11.02 Terms of 2020 Bonds. The 2020 Bonds shall be issued in fully registered form
without coupons. The 2020 Bonds shall be issued in denominations of $5,000 or any integral multiple
thereof, so long as no 2020 Bond shall have more than one maturity date. The 2020 Bonds shall be
dated as of their Closing Date. The 2020 Bonds shall be lettered and numbered as the Trustee shall
prescribe.
7
The 2020 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:
2020B Bonds
Maturity Date Interest
(March 1) Principal Amount Rate
2020C Bonds
Maturity Date Interest
(March 1) Principal Amount Rate
Each 2020 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, 2021], in which event it shall bear interest from its 2020
Closing Date; provided, however, that if, as of the date of authentication of any 2020 Bond, interest
thereon is in default, such 2020 Bond shall bear interest from the Interest Payment Date to which
interest has previously been paid or made available for payment thereon.
8
Interest on the 2020 Bonds (including the final interest payment upon maturity or redemption)
is payable when due by check or draft of the Trustee mailed 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
the 2020 Bonds, which written request is on file with the Trustee as of any Record Date, interest on
such 2020 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 2020 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.
Section 11.03 Redemption.
(a) Optional Redemption of 2020 Bonds.
(i) The 2020B Bonds maturing on or prior to March 1, 20 are not subject
to optional redemption. The 2020B 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 2020C Bonds maturing on or prior to March 1, 20 are not subject
to optional redemption. The 2020C 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 2020 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 2020B 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) of the Indenture, 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 2020B Term Bonds may be purchased by
the Successor Agency pursuant to Section 2.03(g) of the Indenture, and (z) if some but not all of such
E
Series 2020B 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
2020B 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 2020B Term Bonds of 20
March I Principal Amount
t Final Maturity.
(ii) The 2020C 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) of the Indenture, 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 tables; provided
however, that (y) in lieu of redemption thereof such Series 2020C Term Bonds may be purchased by
the Successor Agency pursuant to Section 2.03(g) of the Indenture, and (z) if some but not all of such
Series 2020C 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
2020C 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 2020C Term Bonds of 20
March I Principal Amount
t Final Maturity.
Section 11.04 Form of Bonds. The 2020B 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 to this First Supplement, which is attached hereto and by this reference incorporated
herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by
this First Supplement. The 2020C 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 First Supplement.
10
ARTICLE XII
DEPOSIT AND APPLICATION OF PROCEEDS OF 2020 BONDS
Section 12.01 Issuance of Bonds. Upon the execution and delivery of this First Supplement,
the Successor Agency shall execute and deliver to the Trustee the 2020B Bonds in the aggregate
principal amount of $ , and the 2020C Bonds in the aggregate principal amount of
$ , and the Trustee shall authenticate and deliver the 2020B Bonds and the 2020C Bonds
upon the Written Request of the Successor Agency.
Section 12.02 Application of Proceeds of Sale and Certain Other Amounts.
(a) On the 2020 Closing Date with respect to the 2020B Bonds, the net proceeds
of sale of the 2020B Bonds, being $ (calculated as the par amount thereof, [plus /less
original issue premium/discount] in the amount of $ , less the underwriter's discount in the
amount of $ , less the premiums for the 2020 Reserve Policy and the 2020 Insurance Policy
allocable to the 2020B Bonds in the amount of $ paid directly by the Underwriter to the
2020 Insurer on behalf of the Successor Agency), shall be paid to the Trustee and applied as follows:
(i) The Trustee shall deposit the amount of $ in the 2020B
Account of the 2020 Costs of Issuance Fund.
(ii) The Trustee shall deposit $ , being the remaining amount
of proceeds of the 2020B Bonds, in the 2020B Account of the Project Fund.
(b) On the Closing Date with respect to the 2020C Bonds, the net proceeds of sale
of the 2020C Bonds, being $ (calculated as the par amount thereof, [plus /less 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 2020 Insurance Policy and
the 2020 Reserve Policy allocable to the 2020C Bonds in the amount of $ paid directly to
the 2020 Insurer), shall be paid to the Trustee and applied as follows:
(i) The Trustee shall deposit the amount of $ in the 2020C
Account of the Costs of Issuance Fund.
(ii) The Trustee shall deposit $ , being the remaining amount
of proceeds of the 2020C Bonds, in the 2020C Account of the Project Fund.
(c) On the 2020 Closing Date, the Trustee will credit the 2020 Reserve Subaccount
with the 2020 Reserve Policy.
The Trustee may, at its discretion, establish a temporary fund or account in its books or records to
facilitate such transfers.
Section 12.03 Costs of Issuance Fund. There is hereby established a separate fund to be
known as the "Costs of Issuance Fund" and a "2020B Account" and "2020C Account" therein, which
shall be held by the Trustee in trust. The moneys in the 2020B Account and the 2020C Account of 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 2020B Bonds and the 2020C Bonds, respectively, upon submission of
11
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 2020 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 amounts transferred from the 2020B
Account used to pay debt service on the 2020B Bonds, and amounts transferred from the 2020C
Account used to pay debt service on the 2020C Bonds, and the Costs of Issuance Fund shall be closed.
Section 12.04 Project Fund.
(a) There shall be established a separate and segregated fund to be known as the
"2020 Project Fund" (the "Project Fund "), together with a "202013 Account" and a "2020C Account"
therein.
(b) On the Closing Date with respect to the 2020 Bonds, the Trustee shall disburse
the $ on deposit in the 2020B Account of the Project Fund to the Developer to reimburse the
Developer for Extraordinary Infrastructure Costs under the Summerly DDA.
(c) On the Closing Date with respect to the 2020 Bonds, the Trustee shall disburse
the $ on deposit in the 2020C Account of the Project Fund as follows:
(i) $ shall be transferred to the Developer as payment of a
portion 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
a portion 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.
(iii) $ shall be retained in the 2020C Account of the Project Fund
until disbursed by the Trustee pursuant to a Written Request of the Successor Agency in substantially
the form of Exhibit C attached hereto.
(d) Subject to Section 8.09(b) of the Indenture, the moneys remaining in the
Project Fund following the transfers described in subdivisions (b) and (c) of this Section 12.04 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 2020B Account and the Series 2020C Account of the Project
Fund to the Successor Agency for deposit to the Special Fund and close the Project Fund.
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Section 12.05 2020 Reserve Subaccount. Pursuant to Section 4.03(c) of the 2018 Indenture,
the Trustee shall establish, maintain and hold in trust, a separate subaccount within the Reserve
Account designated as the "2020 Reserve Subaccount." Amounts on deposit in the 2020 Reserve
Subaccount shall be available to pay debt service on the 2020 Bonds.
The 2020 Reserve Requirement will be satisfied by the delivery of the 2020 Reserve Policy by
the 2020 Insurer on the 2020 Closing Date. The Successor Agency will have no obligation to replace
the 2020 Reserve Policy or to fund the 2020 Reserve Subaccount with cash if, at any time that the 2020
Bonds are Outstanding, amounts are not available under the 2020 Reserve Policy other than in
connection with a draw on the 2020 Reserve Policy.
The amounts available under the 2020 Reserve Policy shall be used and withdrawn by the
Trustee solely for the purpose of making transfers to the 2020 Subaccount of the Interest Account and
the 2020 Subaccount of 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 2020 Bonds.
Notwithstanding anything to the contrary set forth in the Indenture, in no event shall amounts
in the 2020 Reserve Subaccount be applied to payment of any Bonds or Parity Debt other than 2020
Bonds.
Section 12.06 2020 Subaccounts of the Debt Service Fund. To facilitate treatment of the
2020 Bonds as Parity Debt under the Indenture, there is hereby established in the Debt Service Fund a
2020 Subaccount of the Interest Account, a 2020 Subaccount of the Principal Account and a 2020
Subaccount of the Redemption Account, respectively with respect to the 2020 Bonds.
Section 12.07 Rebate Fund. The Trustee shall establish a separate fund for the 2020B 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 2020B 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 2020 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 2020B Bonds shall be governed by this
Section and the 2020 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 2020B Bonds will
not be adversely affected for federal income tax purposes if such requirements are not satisfied.
Notwithstanding anything to the contrary contained herein or in the 2020 Tax Certificate, the Trustee
shall be deemed conclusively to have complied with the provisions of this Section and the 2020 Tax
Certificate if the Trustee follows the directions of the Successor Agency, and the Trustee shall have no
independent responsibility to or liability resulting from failure of the Trustee to enforce compliance by
the Successor Agency with the 2020 Tax Certificate or the provisions of this Section.
(a) Excess Investment Earnings.
(i) Computation. Within 55 days of the end of each fifth Bond Year with
respect to the 2020B 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 2020 Tax Certificate (e.g. the temporary
investments exception of Section 148(f)(4)(B) and the construction expenditure exception of
13
Section 148(f)(4)(C) of the Code), for this purpose treating the last day of the applicable Bond Year as
a computation date, within the meaning of Section 1.148 -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 Bond Year with
respect to the 2020B Bonds, upon the Finance Director'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 12.07(a). In the event
that immediately following the transfer required by the previous sentence, the amount then on deposit
to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon written
instructions from the Finance Director, 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 Bond Year
with respect to the 2020B Bonds, and (B) each applicable fifth Bond Year thereafter, an amount equal
to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and
(Y) Not later than 60 days after the payment of all the 2020B
Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable
Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with
Section 148(f) of the Code.
In the event that, prior to the time of any payment required to be made from the
Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such
payment is due, the 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 Section 12.07(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 2020B Bonds and the payments described in Section 12.07(a)(iii),
shall be transferred by the Trustee to the Successor Agency at the written direction of the Successor
Agency and utilized in any manner by the Successor Agency.
(c) Survival of Defeasance. Notwithstanding anything in this Section 12.07 or this
First Supplement to the contrary, the obligation to comply with the requirements of this Section shall
survive the defeasance of the 2020B Bonds and any Parity Debt.
(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
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shall have no responsibility to make any calculations of rebate or to independently review or verify
such calculations.
ARTICLE XIII
MISCELLANEOUS; 2020 INSURER PROVISIONS
Section 13.01 Continuing Disclosure. The Successor Agency hereby covenants and agrees
that it will comply with and carry out all of the provisions of the 2020 Continuing Disclosure
Certificate. Notwithstanding any other provision of the Indenture, failure of the Successor Agency to
comply with the 2020 Continuing Disclosure Certificate shall not be considered an Event of Default;
however, any Participating Underwriter or any owner or beneficial owner of the 2020 Bonds may take
such actions as may be necessary and appropriate, including seeking specific performance by court
order, to cause the Successor Agency to comply with its obligations under this Section 13.01.
Section 13.02 Benefits Limited to Parties. Nothing in this First Supplement, expressed or
implied, is intended to give to any person other than the Successor Agency, the Trustee, the 2020
Insurer and the Owners of the 2020 Bonds, any right, remedy, claim under or by reason of this First
Supplement. Any covenants, stipulations, promises or agreements in this First Supplement contained
by and on behalf of the Successor Agency shall be for the sole and exclusive benefit of the Trustee,
the 2020 Insurer and the Owners of the 2020 Bonds.
Section 13.03 Effect of this First Supplement.
(a) Except as in this First Supplement expressly provided or except to the extent
inconsistent with any provision of this First Supplement, the 2020 Bonds shall be deemed to be Parity
Debt under and within the meaning thereof as set forth in Sections 1.02 and 3.05 of the 2018 Indenture.
(b) All of the covenants set forth in Article V of the 2018 Indenture shall equally
apply to the 2020 Bonds.
(c) The 2020B Bonds constitute "Parity Bonds issued as tax exempt bonds" for
purposes of Section 5.11 of the 2018 Indenture.
Section 13.04 Rules of Construction. All references herein to "Articles," "Sections" and
other subdivisions are to the corresponding Articles, Sections or subdivisions of this First Supplement,
and the words "herein," "hereof," "hereunder" and other words of similar import refer to this First
Supplement as a whole and not to any particular Article, Section or subdivision hereof.
Section 13.05 Provisions Relating to the 2020 Insurance Policy. Notwithstanding any
other provision herein to the contrary, so long as the 2020 Insurance Policy is in effect and the 2020
Insurer is not in default thereunder, the Successor Agency and the Trustee agree to comply with the
following provisions: [TO COME]
Section 13.06 Provisions Relating to the 2020 Reserve Policy. Notwithstanding any other
provision herein to the contrary, so long as the 2020 Reserve Policy is in effect, the Successor Agency
and the Trustee agree to comply with the following provisions: [TO COME]
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Section 13.07 Rights of the 2020 Insurer. [TO COME]
Section 13.08 Execution in Counterparts. This First Supplement 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 13.09 Governing Law. This First Supplement shall be construed and governed in
accordance with the laws of the State of California.
[REMAINDER OF PAGE INTENTIONALLYLEFT BLANK.]
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IN WITNESS WHEREOF, the SUCCESSOR AGENCY OF THE REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE has caused this First Supplement to be signed in its
name by its Executive Director, and WILMINGTON TRUST, NATIONAL ASSOCIATION, in token
of its acceptance of the trusts created hereunder, has caused this First Supplement 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
Lo
Executive Director
WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
:
Authorized Officer
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EXHIBIT A
[FORM OF 2020B BOND]
UNLESS THIS BOND IS PRESENTED BYANAUTHORIZED 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 VAL UE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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 2020B
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
March 1, , 2020
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 [February 15, 2021], 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
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in full, at the Interest Rate per annum stated above, payable semiannually on March 1 and September 1
in each year, commencing [March 1, 202 11 (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. 111) Third Lien Tax Allocation Bonds, Series 2020B" (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 the Refunding Law, the
Dissolution Act, and the Law (as such terms are defined in the Indenture), and pursuant to an Indenture
of Trust, dated as of March 1, 2018, entered into by and between the Successor Agency and the Trustee,
as supplemented by a First Supplemental Indenture of Trust dated as of 1, 2020 by and
between the same parties (collectively, 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 2020C (Federally Taxable)" (the
"2020C Bonds ") that are payable from Pledged Tax Revenues on a parity with the Bonds. The Bonds
and the 2020C Bonds are issued as Parity Debt under the Indenture on a parity with certain 2018 Bonds
(as defined in the Indenture) and on a subordinated basis to certain Existing Bonds (as defined in the
Indenture). Additional bonds or other obligations may be issued on a parity with the Bonds, the 2020C
Bonds and the 2018 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 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 have been issued by the Successor Agency for the purpose of providing funds to
finance a portion of the DDA Payment Obligation (as such term is defined in the Indenture) and to pay
certain expenses of the Successor Agency in issuing the Bonds.
The Bonds are special 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
A -2
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 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 2018 Bonds, the Bonds, the 2020C 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 2018 Bonds, the Bonds, the 2020C Bonds, and any
additional Parity Debt. 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 2018 Bonds, the Bonds, or the 2020C Bonds.
[The Bonds shall be subject to optional and mandatory sinking fund 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 optional 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 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.
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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
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 herein of any Bond without the express written consent of the registered 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, and neither said City, said State, nor any of its political
subdivisions 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. The Bonds do not constitute an indebtedness within
the meaning of any constitutional or statutory debt limitation or restriction.
It is hereby certified that all of the things, conditions and acts required to exist, to have
happened or to have been performed precedent to and in the issuance of this Bond do exist, have
happened or have been performed in due and regular time and manner as required by the Law and the
laws of the State of California, and that the amount of this Bond, together with all other indebtedness
of the Successor Agency, does not exceed any limit prescribed by the Law or any laws of the State of
California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory
for any purpose until the Trustee's Certificate of Authentication hereon shall have been manually
signed by the Trustee.
ME
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 manual or
facsimile signature of its Executive Director and attested by the manual or facsimile signature of its
Secretary, all as of the Dated Date set forth above.
ATTEST:
Secretary
SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE
Executive Director
[FORM OF 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
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Bond, shall be
construed as though they were written out in full according to applicable laws or Tax Regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT Custodian
TEN ENT -- as tenants by the entireties (Cost.) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as tenants (State)
in common
COMM PROP -- as community property
ADDITIONAL ABBREVIATIONS MAY ALSO BE USED
THOUGH NOT IN THE LIST ABOVE
[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 Note: The signatures(s) on this Assignment muse
eligible guarantor. 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.
[FORM OF STATEMENT OF INSURANCE]
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EXHIBIT B
[FORM OF 2020C BOND]
UNLESS THIS BOND IS PRESENTED BYANAUTHORIZED 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 VAL UE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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 2020C (FEDERALLY TAXABLE)
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
March 1, , 2020
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 [February 15, 2021], 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, payable semiannually on March 1 and September 1
in each year, commencing [March 1, 202 11 (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 2020C
(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 the Refunding Law, the Dissolution Act, and the Law (as such terms are defined in the Indenture),
and pursuant to an Indenture of Trust, dated as of March 1, 2018, entered into by and between the
Successor Agency and the Trustee, as supplemented by a First Supplemental Indenture of Trust dated
as of 1, 2020 by and between the same parties (collectively, 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
2020B" (the "2020B Bonds ") that are payable from Pledged Tax Revenues on a parity with the Bonds.
The Bonds and the 2020C Bonds are issued as Parity Debt under the Indenture on a parity with certain
2018 Bonds (as defined in the Indenture) and on a subordinated basis to certain Existing Bonds (as
defined in the Indenture). Additional bonds or other obligations may be issued on a parity with the
Bonds, the 2020B Bonds and the 2018 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 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 have been issued by the Successor Agency for the purpose of providing funds to
finance a portion of the DDA Payment Obligation (as such term is defined in the Indenture) and to pay
certain expenses of the Successor Agency in issuing the Bonds.
The Bonds are special 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
B -2
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 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 2018 Bonds, the Bonds, the 2020B 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 2018 Bonds, the Bonds, the 2020B Bonds and any
additional Parity Debt. 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 2018 Bonds, the Bonds, or the 2020B Bonds.
[The Bonds shall be subject to optional and mandatory sinking fund 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 optional 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 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.
IM
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
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 herein of any Bond without the express written consent of the registered 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, and neither said City, said State, nor any of its political
subdivisions 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. The Bonds do not constitute an indebtedness within
the meaning of any constitutional or statutory debt limitation or restriction.
It is hereby certified that all of the things, conditions and acts required to exist, to have
happened or to have been performed precedent to and in the issuance of this Bond do exist, have
happened or have been performed in due and regular time and manner as required by the Law and the
laws of the State of California, and that the amount of this Bond, together with all other indebtedness
of the Successor Agency, does not exceed any limit prescribed by the Law or any laws of the State of
California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory
for any purpose until the Trustee's Certificate of Authentication hereon shall have been manually
signed by the Trustee.
.,
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 manual or
facsimile signature of its Executive Director and attested by the manual or facsimile signature of its
Secretary, all as of the Dated Date set forth above.
ATTEST:
Secretary
SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE
Executive Director
[FORM OF 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
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Bond, shall be
construed as though they were written out in full according to applicable laws or Tax Regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT Custodian
TEN ENT -- as tenants by the entireties (Cost.) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as tenants (State)
in common
COMM PROP -- as community property
ADDITIONAL ABBREVIATIONS MAY ALSO BE USED
THOUGH NOT IN THE LIST ABOVE
[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 Note: The signatures(s) on this Assignment muse
eligible guarantor. 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.
:.
[FORM OF STATEMENT OF INSURANCE]
I:
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 2020B
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 2020C (Federally Taxable)
REQUISITION NO. FOR
DISBURSEMENT FROM PROJECT FUND
SERIES [202013][2020C] 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 12.04 of that certain Indenture of Trust, dated as of March 1,
2018, as supplemented by that certain First Supplemental Indenture of Trust dated as of 1,
2020 (collectively, 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 [2020B][2020C] Account of the Project Fund
established under the Indenture relating to the above - captioned obligations, to the payees designated
on the attached Schedule I;
(iii) that each obligation mentioned herein is an obligation to the payee stated in Schedule I
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
go
Authorized Officer
C -1
SCHEDULE I
PROJECT FUND DISBURSEMENTS
Series [2020B][2020C] Account
Item
Number Payee Name and Address Purpose of'Obligation Amount
C -2
SUCCESSOR AGENCY OF THE SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE
LAKE ELSINORE
(RANCHO LAGUNA REDEVELOPMENT (RANCHO LAGUNA REDEVELOPMENT
PROJECT AREAS NO. II AND NO. III) PROJECT AREAS NO. II AND NO. III)
THIRD LIEN TAX ALLOCATION BONDS THIRD LIEN TAX ALLOCATION BONDS
SERIES 2020B SERIES 2020C (FEDERALLY TAXABLE)
BOND PURCHASE AGREEMENT
, 2020
Successor Agency of 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 (as 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 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 15Bal), 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 March 1, 2018 (the
"Original Indenture "), by and between the Successor Agency and Wilmington Trust, National
Association, as trustee (the "Trustee "), as supplemented by a First Supplemental Indenture of Trust,
dated as of 1, 2020 (the "First Supplemental" and together with the Original Indenture, the
"Indenture "), between the Successor Agency and the Trustee, pursuant to which the Bonds are being
issued.
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) $ 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 2020B (the "Series B Bonds "), at the purchase price of $ (the
"Series B Purchase Price ") (being the principal amount of the Series B Bonds, less an Underwriter's
discount of $ , and less a net original issue discount 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 2020C (Federally Taxable)
(the "Series C Bonds," and together with the Series B Bonds, the "Bonds "), at the purchase price of
$ (the "Series C Purchase Price," and together with the Series B Purchase Price, the
"Purchase Price ") (being the principal amount of the Series C Bonds, 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 its municipal bond
insurance policy issued for the Bonds (the "Municipal Bond Insurance Policy ") and the sum of
$ to the Insurer as the premium for its reserve account municipal bond insurance policy issued
for the Bonds (the "Reserve Account Insurance Policy "). 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
2
(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 on a parity with the Successor Agency of the Redevelopment Agency
of the City of Lake Elsinore (Rancho Laguna Redevelopment Project Areas No. II and No. 111) Third
Lien Tax Allocation Bonds, Series 2018A (the "2018A Bonds ") and the Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore (Rancho Laguna Redevelopment Project Areas
No. 11 and No. III) Third Lien Tax Allocation Bonds, Series 2018B (Federally Taxable) (the "2018B
Bonds "; and, together with the 2018A Bonds, the "2018 Bonds ").
[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 July 14, 2020 (the "Successor Agency Resolution "), and a resolution of the Countywide
Oversight Board for the County of Riverside, adopted on July 16, 2020 (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 (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 , 2020 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.
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.
(d) The information contained in the Preliminary Official Statement (excluding
therefrom 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 projections, forecasts, statistical information, and financial
information, and any information received from the Underwriter including 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.
2
(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 projections, forecasts, statistical information, and financial information,
and any information received from the Underwriter including 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) The execution and delivery by the Successor Agency of the Successor Agency
Documents, the issuance of the Bonds and 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 not 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 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 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 B Bonds for federal income tax purposes or in any
other way questions the status of the Series B 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.
0) 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
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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.
(k) 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 have been duly obtained or made and are in full force and effect.
(1) 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 secured by a pledge of or lien on Pledged Tax Revenues on a basis senior to or on a
parity with the Bonds except as previously disclosed in writing to the Underwriter.
(m) The Successor Agency will apply the proceeds of the Bonds in accordance with
the Indenture.
(n) Except as otherwise described in the Official Statement, as of the Closing Date,
the Successor Agency will not have outstanding any indebtedness which 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.
(o) Except as described in the Preliminary Official Statement and the Official
Statement and based upon a review of its previous undertakings, the Successor Agency has not
failed, within the last five years, to comply in all material respects with any undertaking of the
Successor Agency pursuant to Rule 15c2 -12.
(p) 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,
no
unless the Underwriter gives notice to the contrary, the Successor Agency may assume that the
"End of the Underwriting Period" is the Closing Date.
(q) 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.
(r) 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.
(s) The Department of Finance of the State (the "Department of Finance ") has
issued a letter, dated , 2020, approving the issuance of the Bonds. No further
Department of Finance approval or consent is required for the issuance of the Bonds or 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.
(t) 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.
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
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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 B Bonds to be includable in gross income of the owners of the Series B Bonds
for federal income tax purposes.
6. Closing. On , 2020, 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, 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 B 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 B Bonds.
(b) The Successor Agency will treat the first price at which 10% of each maturity
of the Series B Bonds (the "10% test ") is sold to the public as the issue price of that maturity. 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 public each maturity of Series B Bonds.
If at that time the 10% test has not been satisfied as to any maturity of the Series B Bonds, the
Underwriter agrees to promptly report to the Successor Agency the prices at which it sells the unsold
Series B Bonds of that maturity to the public. That reporting obligation shall continue, whether or not
the Closing Date has occurred, until either (i) the Underwriter has sold all Series B Bonds of that
maturity or (ii) the 10% test has been satisfied as to the Series B Bonds of that maturity, provided that,
the Underwriter's reporting obligation after the Closing Date may be at reasonable periodic intervals
or otherwise upon request of the Successor Agency or Bond Counsel. For purposes of this Section, if
Series B Bonds mature on the same date but have different interest rates, each separate CUSIP number
within that maturity will be treated as a separate maturity of the Series B Bonds.
Subsection (c) shall apply only if the Underwriter agrees to apply the hold- the- offering-
price rule, as described below.
(c) The Underwriter confirms that it has offered the Series B 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 B Bonds for which the Underwriter represents that (i) the 10% test
has been satisfied (assuming orders are confirmed by the close of the business day immediately
following the date 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 B Bonds, the Underwriter will neither offer nor sell unsold Series B 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 B Bonds to the public at a price that is no higher than the initial offering price
to the public.
The Underwriter will advise the Successor Agency promptly after the close of the fifth (5th)
business day after the sale date whether it has sold 10% of that maturity of the Series B Bonds to the
public at a price that is no higher than the initial offering price to the public.
(d) The Underwriter confirms that:
(i) any selling group agreement and any third -party distribution agreement relating to
the initial sale of the Series B 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 parry to such third -party distribution agreement, as applicable:
X
(A)(i) to report the prices at which it sells to the public the unsold Series B
Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all
Series B Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that
the 10% test has been satisfied as to the Series B Bonds of that maturity, provided that, the reporting
obligation after the Closing Date may be reasonable periodic intervals or otherwise upon request of the
Underwriter and (ii) to comply with the hold- the - offering -price rule, if applicable, if and for so long as
directed by the Underwriter,
(B) to promptly notify the Underwriter of any sales of Series B Bonds that, to
its knowledge, are made to a purchaser who is a related party to an underwriter participating in the
initial sale of the Series B Bonds to the public (each such term being used as defined below), and
(C) to acknowledge that, unless otherwise advised by the dealer or broker -
dealer, the Underwriter shall assume that each order submitted by the dealer or broker - dealer is a sale
to the public.
(ii) any selling group agreement relating to the initial sale of the Series B Bonds to the
public, together with the related pricing wires, contains or will contain language obligating each dealer
that is a party to a third -parry distribution agreement to be employed in connection with the initial sale
of the Series B Bonds to the public to require each broker - dealer that is a party to such third -party
distribution agreement to (A) report the prices at which it sells to the public the unsold Series B Bonds
of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Series B
Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer
that the 10% test has been satisfied as to the Series B Bonds of that maturity, provided that, the
reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon
request of the Underwriter or the dealer, and (B) comply with the hold- the - offering -price rule, if
applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related
pricing wires.
(e) The Successor Agency acknowledges that, in making the representation set
forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in
connection with the initial sale of the Series B Bonds to the public, the agreement of each dealer who
is a member of the selling group to comply with the requirements for establishing issue price of the
Series B Bonds, including, but not limited to, its agreement to comply with the hold- the - offering -price
rule, if applicable to the Series B Bonds, as set forth in a selling group agreement and the related pricing
wires, and (ii) in the event that a third -party distribution agreement was employed in connection with
the initial sale of the Series B Bonds to the public, the agreement of each broker - dealer that is a party
to such agreement to comply with the requirements for establishing issue price of the Series B Bonds,
including, but not limited to, its agreement to comply with the hold- the - offering -price rule, if
applicable to the Series B Bonds, as set forth in the third -party distribution agreement and the related
pricing wires. The Successor Agency further acknowledges that the Underwriter shall not be liable for
the failure of any dealer who is a member of a selling group, or of any broker - dealer that is a party to
a third -parry distribution agreement, to comply with its corresponding agreement to comply with the
requirements for establishing issue price of the Series B Bonds, including, but not limited to, its
agreement to comply with the hold - the - offering -price rule, if applicable to the Series B Bonds.
(f) The Underwriter acknowledges that sales of any Series B Bonds to any person
that is a related party to an underwriter participating in the initial sale of the Series B Bonds to the
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public (each such term being used as defined below) shall not constitute sales to the public for purposes
of this section. Further, for purposes of this section:
(i) "public" means any person other than an underwriter or a related party,
(ii) "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 B 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 B Bonds to the public (including a member of a selling group or a party to a
third -party distribution agreement participating in the initial sale of the Series B Bonds
to the public);
(iii) a purchaser of any of the Series B Bonds is a "related party" to an
underwriter if the underwriter and the purchaser are subject, directly or indirectly, to
(A) more than 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), (B) 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 (C) 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
(iv) "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, 2019;
(c) as of the Closing Date, all official action of the Successor Agency relating to
the approval and authorization of 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;
11
(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 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, 2019, as
Appendix E to the Official Statement;
(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
12
Resolution is in full force and effect and has not been modified, amended or
rescinded;
(D) the Indenture, the Continuing 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 Continuing 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 Continuing 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 Pledged 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 Continuing 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:
(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
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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; (C) the Trustee has duly authenticated the
Bonds in accordance with the Indenture; and (D) 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, except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
other laws relating to or affecting generally the enforcement of creditors' rights,
by equitable principles, by the exercise of judicial discretion in appropriate
cases and by the limitations on legal remedies against public entities in the State
of California; provided that no opinion is expressed with respect to any
indemnification or contribution provisions contained therein;
(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
(C) the statements contained in the Official Statement under the
captions "THE 2020 BONDS," "SECURITY FOR THE 2020 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 Kutak Rock LLP, counsel to the Underwriter, addressed
to the Underwriter and dated the Closing Date, in form and substance satisfactory to
the Underwriter;
(xi) a Tax Certificate relating to the Series B Bonds in the form satisfactory
to Bond Counsel;
(xii) the final Official Statement executed by an authorized officer of the
Successor Agency;
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(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 B 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 the 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:
(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;
15
(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 its date and 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 projections, forecasts,
statistical information, and financial information, and any information therein under
the caption "CONCLUDING INFORMATION - Underwriting" 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;
(xxiv) an executed copy of the Consent and Subordination entered into by the
Developer and Master Developer and accepted by the Successor Agency;
(xxv) a copy of the notice to the insurer for the 2018 Bonds and related
evidence required pursuant to Section 3.05(b)(v) of the Original Indenture that the
issuance of the Bonds will comply with the conditions set forth in the Original
Indenture;
(xxvi) a Written Certificate of the Successor Agency required pursuant to
Section 3.05(b)(vi) of the Original Indenture certifying that the conditions precedent to
the issuance of the Bonds set forth in the Original Indenture have been satisfied; and
(xxvii) 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 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,
16
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 B Bonds, including causing
interest on the Series B Bonds to be included in gross income of the owners of the Series B
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 Series B 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, 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) there shall have occurred (1) an outbreak or escalation of hostilities or the
declaration by the United States of a national emergency or war or (2) any other calamity or
crisis in the financial markets of the United States or elsewhere or the escalation of such
calamity or crisis either of which would, in the reasonable judgement of the Underwriter,
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
(e) a general suspension of trading on the New York Stock Exchange or other
major exchange shall be in force, or minimum or maximum prices for trading shall have been
fixed and be in force, or maximum ranges for prices for securities shall have been required and
be in force on any such exchange, whether by virtue of determination by that exchange or by
order of the SEC or any other governmental authority having jurisdiction; or
(f) a general banking moratorium shall have been declared by federal, New York
or California authorities; or
(g) any proceeding shall be pending or threatened by the Securities and Exchange
Commission against the Successor Agency; or
17
(h) 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
(i) 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
0) 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
(k) [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
(1) a material disruption in securities settlement, payment or clearance services
affecting the Bonds shall have occurred; or
(m) 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 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.
(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.
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]
19
19. Counterparts. This Bond Purchase Agreement may be executed in several counterparts
which together shall constitute one and the same instrument.
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
Authorized Representative
Time of Execution:
Very truly yours,
STIFEL, NICOLAUS & COMPANY,
INCORPORATED, as Underwriter
p.m. California time
Authorized Representative
[EXECUTION PAGE OF BOND PURCHASE AGREEMENT]
S -1
EXHIBIT A TO THE
BOND PURCHASE AGREEMENT
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 2020B
MATURITY SCHEDULE
Maturity Principal Interest
(March 1) Amount Rate Yield
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
20 (T)
Subject to
Hold -The-
Offering-
10% Test Price Rule
10% Test Not (marked if
Price Satisfied* Satisfied used)
(T) Term Bond.
(1) Priced to optional call at [par] on March 1, 20
At the time of execution of this Bond Purchase Agreement and assuming orders are confirmed by the close of the business day
immediately following the date of this Bond Purchase Agreement.
A -1
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 2020C (FEDERALLY TAXABLE)
Maturity
(March 1)
2021
2022
2023
2024
2025
2026
2027
2028
20_(T)
20 (T)
(T) Term Bond.
MATURITY SCHEDULE
Principal Interest
Amount Rate Yield Price
A -2
EXHIBIT B TO THE
BOND PURCHASE AGREEMENT
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 2020B
ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated ( "Stifel ") hereby
certifies as set forth below with respect to the sale and issuance of the above - captioned bonds (the
"Bonds ").
1. Sale of the General Rule Maturities. As of the date of this certificate, for each
Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold
to the Public is the respective price listed in Schedule A.
2. Initial Offering Price of the Hold-the-Offering-Price Maturities.
(a) Stifel offered the Hold- the - Offering -Price Maturities to the Public for purchase at the
respective initial offering prices listed in Schedule A (the "Initial Offering Prices ") on or before the
Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this
certificate as Schedule B.
(b) As set forth in the Bond Purchase Agreement, dated , 2020, by and between Stifel
and the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore, Stifel has agreed
in writing that, (i) for each Maturity of the Hold- the - Offering -Price Maturities, it would neither offer
nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering
Price for such Maturity during the Holding Period for such Maturity (the "hold- the - offering -price
rule "), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member
of the selling group, and any retail distribution agreement shall contain the agreement of each broker -
dealer who is a party to the retail distribution agreement, to comply with the hold- the - offering -price
rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity
of the Hold- the - Offering -Price Maturities at a price that is higher than the respective Initial Offering
Price for that Maturity of the Bonds during the Holding Period.
Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A
hereto as the "General Rule Maturities."
(b) Hold - the - Offering -Price Maturities means those Maturities of the Bonds listed in
Schedule A hereto as the "Hold- the - Offering -Price Maturities."
IM
(c) Holding Period means, with respect to a Hold- the - Offering -Price Maturity, the period
starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the
Sale Date (, 2020), or (ii) the date on which Stifel has sold at least 10% of such Hold -the-
Offering -Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such
Hold - the - Offering -Price Maturity.
(d) Issuer means the Successor Agency of the Redevelopment Agency of the City of Lake
Elsinore.
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different
maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as
separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership,
association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term "related party" for purposes of this certificate generally means any two or more persons who
have greater than 50 percent common ownership, directly or indirectly.
(g) Sale Date means the first day on which there is a binding contract in writing for the
sale of a Maturity of the Bonds. The Sale Date of the Bonds is , 2020.
(h) Underwriter means (i) any person that agrees pursuant to a written contract with the
Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale
of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or
indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the
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 Bonds to the Public).
mm
The representations set forth in this certificate are limited to factual matters only. Nothing in
this certificate represents Stifel's interpretation of any laws, including specifically Sections 103 and
148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The
undersigned understands that the foregoing information will be relied upon by the Issuer with respect
to certain of the representations set forth in the Tax Certificate and with respect to compliance with the
federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson & Rauth, a Professional
Corporation, in connection with rendering its opinion that the interest on the Bonds is excluded from
gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form
8038 -G, and other federal income tax advice that it may give to the Issuer from time to time relating
to the Bonds.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
N
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
Name:
Dated: , 2020
MW
SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING
PRICES OF THE HOLD - THE - OFFERING -PRICE MATURITIES
(Attached)
.,
SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
Stradling Yocca Carlson & Rauth
Draft of 612412020
SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY
OF THE CITY OF LAKE ELSINORE
(RANCHO LAGUNA REDEVELOPMENT (RANCHO LAGUNA REDEVELOPMENT
PROJECT AREAS NO. II AND NO. III) PROJECT AREAS NO. II AND NO. III)
THIRD LIEN TAX ALLOCATION BONDS, THIRD LIEN TAX ALLOCATION BONDS,
SERIES 2020B SERIES 2020C (FEDERALLY TAXABLE)
CONTINUING DISCLOSURE CERTIFICATE
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 issued pursuant to an Indenture of Trust dated
as of March 1, 2018 (the "2018 Indenture "), as supplemented by a First Supplemental Indenture of
Trust dated as of 1, 2020 (the "First Supplemental Indenture," and together with the 2018
Indenture, the "Indenture "), each by and between the Successor Agency and Wilmington Trust,
National Association, as trustee.
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, Incorporated, the original
underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.
"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, 2021 with the report for the 2019 -20 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(b). 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
2
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.
(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 _ in
the Official Statement.
(iv) The ten largest local secured property taxpayers in the Project Areas in the form
of Table in the Official Statement.
(v) Assessment appeals data in the form of Table _ 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 _ and _, respectively, in the Official
Statement without any requirement to update any projected Pledged Tax Revenues set forth in
Tables _ or
(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.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform.
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701 -TEB) or other material notices or determinations with respect to the tax
status of the Bonds, or other material events affecting the tax status of the
Bonds.
(7) Modifications to rights of Bond holders, if material.
(8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the 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.
(15) Incurrence of a financial obligation of the Successor Agency or an obligated
person, if material, or agreement to covenants, events of default, remedies,
priority rights, or other similar terms of a financial obligation of the Successor
Agency or an obligated person, any of which affect Bond holders, if material.
2
(16) Default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a financial obligation of the Successor
Agency or an obligated person, any of which reflect financial difficulties.
(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 a Listed Event described in subsection (a)(8) 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), (a)(14) and (a)(15) 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
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.
(e) For purposes of the events identified in paragraphs (a)(15) and (a)(16) above, the term
"financial obligation" means a (i) debt obligation; (ii) derivative instrument entered into in connection
with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii)
guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which
a final official statement has been provided to the MSRB consistent with the Rule.
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 g 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(b).
5
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
(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(b).
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
M
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 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 parry. 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.
7
Section 14. Counterparts. This Disclosure Certificate maybe executed in several counterparts,
each of which shall be regarded as an original, and all of which shall constitute one and the same
instrument.
Dated: , 2020 SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE
AGREED AND ACCEPTED:
URBAN FUTURES, INC.,
as Dissemination Agent
Michael Busch
Chief Executive Officer
Rj
Grant Yates
Executive Director
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 Bonds, Series 2020B
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 2020C (Federally Taxable)
Date of Issuance: _'2020
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 Continuing Disclosure Certificate, dated as
of , 2020, executed by the Successor Agency in connection with the issuance of the above -
referenced bonds. The Successor Agency anticipates that the Annual Report will be filed by
Dated: DISSEMINATION AGENT:
By:
Its:
A -1