HomeMy WebLinkAbout0167C - FIRST INTERSTATE BANK - REFINANCE 1984 TAX ALLOCATION BOND PA1 26011.4 JHHW CFA.dfd March 1�7 F7273
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AGREEMENT #167
Resolution 463, 3-4-87
ESCROW DEPOSIT AND TRUST AGREEMENT
by and between
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
and
FIRST INTERSTATE BANK OF CALIFORNIA,
as Escrow Bank
Dated as of March _, 1987
ESCROW DEPOSIT AND TRUST AGREEMENT
This ESCROW DEPOSIT AND TRUST AGREEMENT is made and entered into as of
this 24th day of March, 1987, by and between the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic,
organized and existing under the laws of the State of California (the "Agency"), and FIRST
INTERSTATE BANK OF CALIFORNIA, a banking corporation organized and existing
under the laws of the State of California, as escrow holder hereunder (the "Escrow Bank")
and as fiscal agent with respect to the 1984 Bonds hereinafter referred to (the "Fiscal
Agent"):
INITNESSETH:
WHEREAS, under and pursuant to its Resolution No. 194 (the "1984 Bond Resolution")
the Agency has heretofore issued $9,300,000 aggregate principal amount of Community
Redevelopment Agency of the City of Palm Springs Central Business District
Redevelopment Project Tax Allocation Bonds, 1984 Series A (the "1984 Bonds"), for the
purpose of providing funds to finance the redevelopment of the Central Business District
Redevelopment Project of the Agency; and
WHEREAS, the Agency has determined to issue its bonds (the "Bonds") pursuant to
the Community Redevelopment Law of the State of California and pursuant to the
provisions of Article 11 of Chapter 3 of Part 1 of Division 2 of the California Government
Code for the purpose of providing funds to refund the 1984 Bonds in full; and
WHEREAS, the Agency is currently proceeding to issue, and as of the date of
execution and delivery of this Agreement is issuing, its $10,355,000 aggregate principal
amount of its Community Redevelopment Agency of the City of Palm Springs Central
Business District Redevelopment Project 1987 Tax Allocation Refunding Bonds, Series
1987 (the "1987 Bonds") pursuant to an Indenture of Trust dated as ofNMarch 1, 1987, (the
"1987 Bond Indenture") by and between the Agency and First Interstate Bank of California
acting as trustee thereunder (the "Trustee"), for the purpose (among others) of providing
funds to refinance the 1984 Bonds; and
WHEREAS, the Escrow Bank acts as the Fiscal Agent under the 1984 Bond Resolution
with respect to the 1984 Bonds; and
WHEREAS, Section 9.03 of the 1984 Bond Resolution provides that if the Agency shall
deposit with the Fiscal Agent, in trust, Federal Securities (as therein defined) in such
amount as the Fiscal Agent shall determine will, together with the interest to accrue
thereon and moneys then on deposit in the funds and accounts provided for in Sections
3.03, 4.02 and 4.03 of the 1984 Bond Resolution, be fully sufficient to pay and discharge
the indebtedness on all 1984 Bonds (including all principal, interest and redemption
premiums) at or before their respective maturity dates, and if the 1984 Bonds are to be
redeemed prior to the maturity thereof provision satisfactory to the Fiscal Agent shall have
been made for the giving of notice of such redemption, then at the election of the Agency
the pledge of the Tax Revenues (as therein defined) and other funds provided for in the
1984 Bond Resolution shall cease and all other obligations of the Agency thereunder with
respect to all outstanding 1984 Bonds shall cease and terminate, except only the
obligation of the Agency to pay or cause to be paid to the owners of the 1984 Bonds all
sums due thereon; and
WHEREAS, the Agency wishes to make such a deposit with the Escrow Bank and to
enter into this Agreement for the purpose of providing the terms and conditions for the
deposit and application of amounts so deposited; and
WHEREAS, the Escrow Bank has full powers to act with respect to the irrevocable
escrow and trust created herein and to perform the duties and obligations to be
undertaken pursuant to the Agreement;
NOW, THEREFORE, in consideration of the above premises and of the mutual
promises and covenants herein contained and for other valuable consideration, the
parties hereto do hereby agree as follows:
Section 1. Definition of Federal Securities. As used herein, the term "Federal
Securities" shall mean United States Treasury notes, bonds, bills or certificates of
indebtedness or other direct general obligations of the United States of America for which
the faith and credit of the United States of America are pledged for the payment of
principal and interest, including but not limited to such obligations issued in book entry
form.
Section 2. Appointment of Escrow Bank. The Agency hereby appoints the Escrow
Bank as escrow holder and trustee for all purposes of this Agreement and in accordance
with the terms and provisions of this Agreement, and the Escrow Bank hereby accepts
such appointment.
Section 3. Establishment of Escrow Fund. The Escrow Bank hereby agrees to
establish and maintain a special escrow fund to be designated the "Escrow Fund," which
shall be held by the Escrow Bank in trust as security for the payment of the principal of
and interest and premium, if any, on the 1984 Bonds. If at any time the Escrow Bank shall
receive actual knowledge that the moneys and Federal Securities in the Escrow Fund will
not be sufficient to make any payment required by Section 6 hereof, the Escrow Bank shall
notify the Agency of such fact and the Agency shall immediately cure such deficiency.
Section 4. Deposit and Application of Funds. Concurrently with delivery of the 1987
Bonds, the Agency shall cause to be transferred to the Escrow Bank the amount of
$9,717,400 derived by the Agency from the proceeds of sale of the 1987 Bonds, for
deposit in the Escrow Fund. The amount deposited by the Agency with the Escrow Bank
pursuant to Section 3 shall be applied by the Escrow Bank on the date hereof,,to acquire
the Federal Securities described in Exhibit A attached hereto and by this reference
incorporated herein (the Original Federal Securities").n
Section 5. Transfer of Remaining 1984 Bond Funds. Concurrently with the deposit into
the Escrow Fund pursuant to Section 4 hereof, the Escrow Bank, acting as Fiscal Agent,
shall transfer amounts in the funds and accounts established for the 1984 Bonds pursuant
to the 1984 Bond Resolution, as follows:
(a) The Fiscal Agent shall withdraw all amounts on deposit in the
Reserve Account established under Section 3.03 of the 1984 Bond
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Resolution (the "1984 Reserve Account"), and transfer such amounts to the
Trustee for deposit into the Reserve Account established under the
Indenture; and
( ' (b) All remaining amounts held by the Fiscal Agent under the 1984 Bond
Resolution shall be transferred to the Trustee for deposit into the 1987
Interest Account.
The Fiscal Agent shall not be required to liquidate any investments in order to make
such transfers, but shall transfer the investments as required pursuant to this Section 5.
All funds and accounts held by the Fiscal Agent under the 1984 Bond Resolution shall be
closed following the transfers pursuant to this Section 5.
Section 6. Instructions as to Application of Deposit. The total amount of cash and
Original Federal Securities deposited in the Escrow Fund pursuant to Section 4 hereof
shall be deemed to be .and shall constitute the deposit permitted to be made by the
Agency pursuant to Section 9.03 of the 1984 Bond Resolution. In accordance with such
Section 9.03, the Agency hereby instructs the Escrow Bank to apply the maturing principal
and interest on the Original Federal Securities to pay: (a) the interest on the 1984 Bonds
coming due and payable on,,September 1, 1987, and March 1, 1989; (b) the principal of
the 1984 Bonds coming due and payable on March 1, 1988, and,p March 1 in each year
thereafter to and including March 1, 1989; and (c) the redemption price of all outstanding
1984 Bonds to be redeemed on March 1, 1989, pursuant to Section 2.03(a) of the 1984
Bond Resolution; all at the times and in the amounts as set forth in Exhibit B attached
hereto and by this reference incorporated herein.
Section 7. Investment of Any Remaining Moneys. At the written direction of the
Agency, the Escrow Bank shall invest and reinvest the proceeds received from any of the
Original Federal Securities, and any other amounts of cash on deposit in the Escrow
Fund, for a period ending not later than the date on which such proceeds or cash are
required for the purposes specified in Section 6, in Federal Securities; provided, however,
that (a) such written directions of the Agency shall be accompanied by an opinion of
nationally recognized bond counsel that investment in accordance with such directions will
not affect the exemption from federal income taxes of the interest on the 1984 Bonds or
the 1987 Bonds, and (b) if the Agency directs such investment or reinvestment to be made
in United States Treasury Securities - State and Local Government Series, the Agency
shall at its cost cause to be prepared all necessary subscription forms therefor in
sufficient time to enable the Escrow Bank to acquire such securities. Any interest income
resulting from investment or reinvestment of moneys pursuant to this Section 7 shall be
paid to the Agency promptly upon the receipt of such interest income by the Escrow Bank.
Section 8. Substitution or Withdrawal of Federal Securities. With the prior written
consent (which shall not be unreasonably withheld) of Municipal Bond Investors
Assurance Corporation (the "Bond Insurer"), the Agency may at any time direct the
scrow Bank to substitute Federal Securities for any or all of the Original Federal
Securities then deposited in the Escrow Fund, or to withdraw from the Escrow Fund and
transfer to the Agency any Federal Securities or portions thereof, provided that any such
direction and substitution or withdrawal shall be accompanied with a certification of an
independent certified public accountant or firm of certified public accountants of favorable
national reputation experienced in the refunding of obligations of political subdivisions that
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the Federal Securities then to be so deposited in the Escrow Fund, or in the case of any
such withdrawal the Federal Securities to remain in the Escrow Fund following such
withdrawal, in either case together with interest to be derived therefrom, shall be in an
amount at all times at least sufficient to make the payments specified in Section 6 hereof
and, further, to be accompanied with an opinion of nationally recognized bond counsel that
the substitution will not affect the exemption from federal income taxes of the interest on
the 1984 Bonds or the 1987 Bonds. In the event that, following any such substitution or
withdrawal of Federal Securities pursuant to this Section 8, there is an amount of moneys
or Federal Securities in excess of an amount sufficient to make the payments required by
Section 6 hereof, such excess shall be paid to the Agency.
Section 9. Notice of Redemption. Pursuant to Section 2.03(a) of the 1984 Bond
Resolution, the Agency hereby instructs the Escrow Bank, acting as Fiscal Agent, to take
all steps required to redeem on March 1, 1989, all of the outstanding 1984 Bonds maturing
on or after March 1, 1990, at a redemption price equal to the principal amount thereof to
be redeemed together with accrued interest thereon to the redemption date, together with
a redemption premium equal too of the principal amount of the 1984 Bonds to be
redeemed. Pursuant to Section 2.03(d) of the 1984 Bond Resolution, at the expense of the
Agency the Escrow Bank, acting as the Fiscal Agent, shall cause a notice of redemption
of such 1984 Bonds, in substantially the form attached hereto as Exhibit C and by this
reference incorporated herein, to be mailed by first class mail, at least thirty (30) but not
more than sixty (60) days prior to March 1, 1989, to the owners of all outstanding 1984
Bonds, at their respective addresses appearing on the registration books of the Fiscal
Agent.
Section 10. Application of Certain Terms of 1984 Bond Resolution. All of the terms of
the 1984 Bond Resolution relating to the making of payments of principal and interest on
the 1984 Bonds are incorporated in this Agreement as if set forth in full herein. The
provisions of the 1984 Bond Resolution relating to the resignation and removal of the
Fiscal Agent are also incorporated in this Agreement as if set forth in full herein and shall
be the procedure to be followed with respect to any resignation or removal of the Escrow
Bank hereunder.
Section 11. Effect of Deposit. The Agency hereby elects and signifies its election that
the deposit and application of amounts in the Escrow Fund pursuant to this Agreement
shall constitute the deposit described in Section 9.03(3) of the 1984 Bond Resolution, and
that the pledge of the Tax Revenues (as such term is defined in the 1984 Bond Resolution)
and other funds provided for in the 1984 Bond Resolution shall cease and all other
obligations of the Agency thereunder with respect to all outstanding 1984 Bonds shall
cease and terminate, except only the obligation of the Agency to pay or cause to be paid
to the owners of the 1984 Bonds all sums due thereon, and excepting only the obligations
of the Fiscal Agent to transfer and exchange 1984 on s pursuant of the 1984 Bond
Resolution.
Section 12. Liability of Escrow Bank. The Escrow Bank undertakes to perform such
duties and only such duties specifically set forth in this Agreement and no implied duties
or obligations shall be read into this Agreement against the Escrow Bank. The Agency
further agrees to indemnify the Escrow Bank, its officers, directors and employees from
any and all claims, losses or expenses arising from the performance of its duties
hereunder except that the Escrow Bank shall not be indemnified for any claim, loss or
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expense arising from the gross negligence or willful misconduct of the Escrow Bank, its
officers, directors or employees. No provision of this Agreement shall require the Escrow
Bank to risk or advance its own funds and the Escrow Bank's sole responsibility is to
administer the amounts deposited hereunder in accordance with the terms of this
Agreement.
Section 13. Compensation to Escrow Bank. The Agency shall pay the Escrow Bank
full compensation for its duties under this Agreement, including out-of-pocket costs such
as publication costs, redemption expenses, legal fees and other costs and expenses
relating hereto and, in addition, fees, costs and expenses relating to the purchase of any
Federal Securities after the date hereof, pursuant to separate agreement between the
Agency and the Escrow Bank. Under no circumstances shall amounts deposited in the
Escrow Fund be deemed to be available for said purposes.
Section 14. Amendment Hereof. This Agreement may not be amended by the parties
hereto unless there shall first have been filed with the Agency and the Escrow Bank the
written consent of the Bond Insurer and a written opinion of nationally-recognized bona
counsel stating that such amendment will not adversely affect the exemption from federal
income taxation of interest on the 1984 Bonds or the Bonds.
Section 15. Execution in Counterparts. This Escrow Deposit and Trust Agreement
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.
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IN WITNESS WHEREOF, the Agency and the Escrow Bank have each caused this
Agreement to be executed by their duly authorized officers all as of the date first above
written.
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
By
Executive Director
FIRST INTERSTATE BANK OF
CALIFORNIA, as Escrow Bank
By
Vice President
By
Assistant Vice President
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EXHIBIT A
SCHEDULE OF ORIGINAL FEDERAL SECURITIES
Interest
Securi Maturi Par Amount Rate
Certificate of Indebtedness September 1, 198$' 150,800 5.510%
Certificate of Indebtedness March 1, 1988 244,500 5.730
Note September 1, 1988 111,700 5.970
Note March 1, 1989 9,210,400 6.190
*All securities are United States Treasury obligations - State and Local Government
Series, of the type indicated.
Exhibit A
1
EXHIBIT B
SCHEDULE OF PAYMENTS ON 1984 BONDS
Interest Payment Date Interest PaymenPrincipal Payment Total
September 1, 1987 $405,947.50 $ -0- $ 405,947.50
March 1, 1988 405,947.50 140,000 545,947.50
September 1, 1988 400,067.50 -0- 400,067.50
March 1 , 1989 400,067.50 9,095,40W 9,495,467.50
Includes redemption premium of $175,400.
Exhibit B
1
EXHIBIT C
NOTICE OF REDEMPTION
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT
TAX ALLOCATION BONDS, 1984 SERIES A
NOTICE IS HEREBY GIVEN to the owners of the Community Redevelopment Agency of
the City of Palm Springs Central Business District Redevelopment Project Tax Allocation
Bonds, 1984 Series A, (the "Bonds") that all of the Bonds maturing on or after March 1,
1990, have been called for redemption on March 1, 1989, (the "Redemption Date") in
accordance with their terms at a redemption price equal to 102% of the principal amount
thereof. Said redemption price shall become due and payable on the Redemption Date
and interest shall cease to accrue on the Bonds from and after the Redemption Date.
Owners of the Bonds to be redeemed shall present and surrender their Bonds at the
corporate trust office of First Interstate Bank of California at for
redemption at said redemption price.
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
By FIRST INTERSTATE BANK
OF CALIFORNIA,as Fiscal Agent
Dated:
Exhibit B
1
26011-4 JHHW CFA dIs March 18. F7225
R:::c F.....
3/l a/B7
INDENTURE OF TRUST
Dated as of March 1, 1987
by and between
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
and
FIRST INTERSTATE BANK OF CALIFORNIA,
as Trustee
Relating to $10,355,000
Community Redevelopment Agency of the City of Palm Springs
Central Business District Redevelopment Project
Tax Allocation Refunding Bonds, Issue of 1987
F7225.TOC
TABLE OF CONTENTS
Page
ARTICLE I
AUTHORIZATION OF BONDS; DEFINITIONS
Section 1.01. Authorization ........................................................................................ 3
Section 1.02. Definitions ............................................................................................ 3
Section 1.03. Rules of Construction.......................................................................... 11
Section 1.04. Equal Security ......................................................................................11
ARTICLE II
THE BONDS
Section 2.01. Authorization ........................................................................................ 12
Section 2.02. Terms of Bonds................................................................................... 12
Section2.03. Redemption.......................................................................................... 13
Section 2.04. Form of Bonds..................................................................................... 15
Section 2.05. Execution of Bonds.............................................................................. 15
Section 2.06. Transfer of Bonds................................................................................ 15
Section 2.07. Exchange of Bonds............................................................................. 16
Section 2.08. Registration Books .............................................................................. 16
Section 2.09. Temporary Bonds................................................................................ 16
Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen .......................................16
ARTICLE III
ISSUE OF BONDS; PARITY BONDS
Section 3.01. Issuance of Bonds ...............................................................................18
Section 3.02. Application of Proceeds of Sale of Bonds ......................................... 18
Section 3.03. Reserve Account................................................................................. 18
Section 3.04. Costs of Issuance Fund ...................................................................... 18
Section 3.05. Issuance of Parity Bonds.................................................................... 19
Section 3.06. Validity of Bonds.................................................................................. 19
Page
ARTICLE IV
PLEDGE OF TAX REVENUES;
SPECIAL FUND AND ACCOUNTS
Section 4.01. Pledge of Tax Revenues..................................................................... 20
Section 4.02. Special Fund; Deposit of Tax Revenues............................................ 20
Section 4.03. Establishment and Maintenance of Accounts for
Revenues; Use and Withdrawal of Revenues......................... 20
ARTICLE V
OTHER COVENANTS OF THE AGENCY
Section 5.01. Punctual Payment................................................................................ 23
Section 5.02. Limitation on Superior Debt; Refinancing of 1984
Bonds ........................................................................................ 23
Section 5.03. Extension of Bonds.............................................................................. 23
Section 5.04. Management and Operations of Properties....................................... 23
Section 5.05. Payment of Claims .............................................................................. 23
Section 5.06. Books and Accounts; Financial Statement ........................................ 24
Section 5.07. Protection of Security and Rights of Bond Owners ............................24
Section 5.08. Payments of Taxes and Other Charges............................................. 24
Section 5.09. Completion of Project ..........................................................................24
Section 5.10. Taxation of Leased Property............................................................... 24
Section 5.11. Disposition of Property........................................................................ 24
Section 5.12. Tax Revenues...................................................................................... 25
Section 5.13. Eminent Domain.................................................................................. 25
Section 5.14. No Arbitrage......................................................................................... 25
Section 5.15. Rebate of Excess Investment Earnings to United States.................. 25
Section 5.16. Private Business Use Limitation......................................................... 28
Section 5.17. Private Loan Limitation ........................................................................28
Section 5.18. Federal Guarantee Prohibition............................................................ 28
Section 5.19. Further Assurances .............................................................................28
ARTICLE VI
THE TRUSTEE
Section 6.01. Duties, Immunities and Liabilities of Trustee..................................... 29
Section 6.02. Merger or Consolidation ..................................................................... 30
Section 6.03. Liability of Trustee ............................................................................... 30
Section 6.04. Right to Rely on Documents ............................................................... 31
Section 6.05. Preservation and Inspection of Documents....................................... 32
Section 6.06. Compensation and Indemnification.................................................... 32
Section 6.07. Deposit and Investment of Moneys in Funds..................................... 32
Section 6.08. Accounting Records and Financial Statements................................. 33
Page
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 7.01. Amendments Permitted....................................................................... 34
Section 7.02. Bond Owners' Meeting ........................................................................35
Section 7.03. Disqualified Bonds ...............................................................................37
Section 7.04. Effect of Supplemental Indenture........................................................ 37
Section 7.05. Endorsement or Replacement of Bonds Issued After
Amendments............................................................................. 37
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
Section 8.01. Events of Default and Acceleration of Maturities............................... 38
Section 8.02. Application of Funds Upon Acceleration............................................ 39
Section 8.03. Power of Trustee to Control Proceedings.......................................... 39
Section 8.04. Limitation on Bond Owners' Right to Sue ...........................................39
Section8.05. Non-waiver........................................................................................... 40
Section 8.06. Actions by Trustee as Attorney-in-Fact.............................................. 40
Section 8.07. Remedies Not Exclusive..................................................................... 41
ARTICLE IX
MISCELLANEOUS
Section 9.01. Benefits Limited to Parties.................................................................. 42
Section 9.02. Successor is Deemed Included in All References to
Predecessor............................................................................. 42
Section 9.03. Discharge of Indenture ........................................................................42
Section 9.04. Execution of Documents and Proof of Ownership by
BondOwners ............................................................................ 43
Section 9.05. Waiver of Personal Liability................................................................. 43
Section 9.06. Destruction of Canceled Bonds........................................................... 43
Section9.07. Notices................................................................................................. 43
Section 9.08. Partial Invalidity ....................................................................................43
Section 9.09. Unclaimed Moneys ..............................................................................44
iii
INDENTURE OF TRUST
THIS INDENTURE OF TRUST, made and entered into as of March 1, 1987, by and
between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM
SPRINGS, a public body corporate and politic duly organized and existing under the laws
of the State of California (the "Agency"), and FIRST INTERSTATE BANK OF CALIFORNIA,
a banking corporation organized and existing under the laws of the State of California as
trustee (the "Trustee");
WITNESSETH:
WHEREAS, the Agency is a public body, corporate and politic, duly established
and authorized to transact business and exercise powers under and pursuant to the
provisions of the Community Redevelopment Law of the State of California (the "Law"),
including the power to issue bonds for any of its corporate purposes;
WHEREAS, a Redevelopment Plan for the Central Business District Redevelopment
Project, in the City of Palm Springs, California, (the "Project') has been adopted in
compliance with all requirements of the Law; and
WHEREAS, under and pursuant to the Law and its Resolution No. 194 the Agency
has heretofore issued $9,300,000 aggregate principal amount of Community
Redevelopment Agency of the City of Palm Springs Central Business District
Redevelopment Project Tax Allocation Bonds, 1984 Series A (the "1984 Bonds"); and
WHEREAS, the Agency has determined to issue its bonds (the "Bonds") pursuant
to the Law and pursuant to the provisions of Article 11 of Chapter 3 of Part 1 of Division 2
of the California Government Code for the purpose of providing funds to refund the 1984
Bonds in full; and
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to
establish and declare the terms and conditions upon which the Bonds are to be issued
and secured and to secure the payment of the principal thereof and interest and
premium, if any, thereon, the Agency has authorized the execution and delivery of this
Indenture;
WHEREAS, all acts and proceedings required by law necessary to make the
Bonds, when executed by the Agency, authenticated and delivered by the Trustee, and
duly issued, the valid, binding and legal special obligations of the Agency, and to
constitute this Indenture a valid and binding agreement for the uses and purposes herein
set forth in accordance with its terms, have been done and taken, and the execution and
delivery of the Indenture have been in all respects duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of and the interest and premium (if any) on all Bonds at any time
issued and outstanding under this Indenture, according to their tenor, and to secure the
performance and observance of all the covenants and conditions therein and herein set
forth, and to declare the terms and conditions upon and subject to which the Bonds are to
be issued and received, and in consideration of the premises and of the mutual covenants
herein contained and of the purchase and acceptance of the Bonds by the Owners
thereof, and for other valuable considerations, the receipt whereof is hereby
acknowledged, the Agency does hereby covenant and agree with the Trustee, for the
benefit of the respective Owners from time to time of the Bonds, as follows:
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ARTICLE I
AUTHORIZATION OF BONDS; DEFINITIONS
Section 1.01. Authorization. The Agency has reviewed all proceedings heretofore
taken and has found, as a result of such review, and hereby finds and determines, that all
things, conditions and acts required by law to exist, happen or be performed precedent to
and in connection with the issuance of the Bonds do exist, have happened and have been
performed in due time, form and manner as required by law, and the Agency is now duly
empowered, pursuant to each and every requirement of law, to issue the Bonds in the
manner and form provided in this Indenture.
Section 1.02. Definitions. Unless the context otherwise requires, the terms defined
in this Section 1.02 shall, for all purposes of this Indenture, of any indenture supplemental
hereto, and of any certificate, opinion or other document herein mentioned, have the
meanings herein specified.
r "Agency" means the Community Redevelopment Agency of the City of Palm
Springs, a public body corporate and politic duly organized and existing under the Law.
"Annual Debt Service" means, for each Bond Year, the sum of (a) the interest
payable on the Outstanding Bonds in such Bond Year, assuming that the Outstanding
Serial Bonds are retired as scheduled and that the Outstanding Term Bonds are
redeemed from sinking account payments as scheduled, (b) the principal amount of the
Outstanding Serial Bonds payable by their terms in such Bond Year, and (c) the principal
amount of the Outstanding Term Bonds scheduled to be paid or redeemed from sinking
account payments in such Bond Year, excluding the redemption premiums (if any)
thereon.
r "Bond Insurer" means Municipal Bond Investors Assurance Corporation, its
successors and assigns, as issuer of the policy of the Municipal Bond Guaranty Insurance
with respect to the Bonds.
"Bond Year" means each twelve-month period beginning on March 2 in any year
and extending to the next succeeding March 1, both dates inclusive.
"Bonds" means the Community Redevelopment Agency of the City of Palm Springs
Central Business District Redevelopment Project Tax Allocation Refunding Bonds, Issue of
1987 and, to the extent required by any Supplemental Indenture, any Parity Bonds
authorized by, and at any time Outstanding pursuant to, this Indenture and such
Supplemental Indenture.
"Business Day" means a day of the year on which banks in Los Angeles,
California, are not required or authorized to remain closed and on which The New York
Stock Exchange is not closed.
"Chairman" means the Chairman of the Agency appointed pursuant to Section
33113 of the Health and Safety Code of the State of California, or other duly appointed
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officer of the Agency authorized by the Agency by resolution or by-law to perform the
functions of the chairman in the event of the chairman's absence or disqualification.
"Closing Date" means the date on which the Bonds are delivered by the Agency to
the original purchasers thereof.
"Costs of Issuance Fund" means the fund by that name established and held by
the Trustee pursuant to Section 3.04.
"Costs of Issuance" means all items of expense directly or indirectly payable by or
reimbursable to the Agency relating to the authorization, issuance, sale and delivery of the
Bonds and the refunding of the 1984 Bonds, including but not limited to printing expenses,
filing and recording fees, initial fees and charges of the Trustee, the Escrow Bank and
their respective counsel, fees, charges and disbursements of attorneys, financial advisors,
accounting firms, consultants and other professionals, fees and charges for preparation,
execution and safekeeping of the Bonds and any other cost, charge or fee in connection
with the original issuance of the Bonds.
"Earnings Account" _means the account by that name established and held by the
Trustee pursuant to Section 5.15(a).
"Escrow Bank" means First Interstate Bank of California, its successors and
assigns, as escrow bank under the Escrow Agreement.
"Escrow Agreement" means that certain Escrow Deposit and Trust Agreement
dated as of the Closing Date, by and between the Agency and the Escrow Bank, with
respect to the establishment and administration of the Escrow Fund for the purpose of
accomplishing the refunding of the 1984 Bonds and the defeasance of the 1984 Bond
Resolution.
"Escrow Fund" means the fund by that name established and held by the Escrow
Bank pursuant to the Escrow Agreement.
"Event of Default" means any of the events described in Section 8.01.
"Excess Investment Earnings" means an amount equal to the sum of:
(a) the excess of
(i) the aggregate amount earned from the Closing Date on all Nonpurpose
Obligations in which Gross Proceeds are invested (other than amounts
attributable to an excess described in this paragraph (a)), over
(ii) the amount which would have been earned if the Yield on such
Nonpurpose Obligations (other than amounts attributable to an excess described
in this paragraph (a)) had been equal to the Yield on the Bonds,
plus (b) any income attributable to the excess described in the preceding
paragraph (a).
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"Federal Securities' means any of the following which are noncallable and which at
the time of investment are legal investments under the laws of the State of California for
trust funds held by the Trustee:
(a) direct general obligations of the United States of America (including
obligations issued or held in book entry form on the books of the Department of
the Treasury of the United States of America), the payment of principal of and
interest on which are unconditionally and fully guaranteed by the United States of
America; or
(b) any of the following obligations of the following agencies of the United
States of America: (i) direct obligations of the Export-Import Bank; (ii) certificates
of beneficial ownership issued by the Farmers Home Administration; (iii)
obligations of the Federal Financing Bank; (iv) debentures of the Federal Housing
Administration; (v) participation certificates issued by the General Services
Administration; (vi) mortgage-backed bonds or pass-through obligations issued
and guaranteed by the Government National Mortgage Association; (vii)
guaranteed Title XI financings of the U.S. Maritime Administration; and (viii) public
housing notes and bonds guaranteed by the United States of America.
"Fiscal Year" means any twelve-month period extending from July 1 in one
calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any
other twelve-month period selected and designated by the Agency as its official fiscal year
period.
"Gross Proceeds" means and includes all of the following amounts:
(a) the proceeds remaining from the sale of the Bonds after
payment of all Costs of Issuance, including accrued interest but excluding
underwriter's and original issue discount, and excluding any such proceeds
which become transferred proceeds (determined in accordance with
applicable Tax Regulations) of obligations issued to refund the Bonds in
whole or in part;
(b) amounts received at any time from the investment of any
proceeds described in the preceding clause (a), or from the investment of
amounts described in this clause (b), in Nonpurpose Obligations, increased
by the amount of any profits and decreased (if necessary, below zero) by the
amount of any losses on such investments, excluding such amounts which
become transferred proceeds (determined in accordance with applicable
Tax Regulations) of obligations issued to refund the Bonds in whole or in
part;
2(c) original proceeds of the 1984 Bonds together with earnings and
profits but excluding losses resulting from the investment of such original
proceeds in Nonpurpose Obligations, which are deemed to become
proceeds of the Bonds ratably as proceeds of the Bonds, and interest
earnings and profits resulting from the investment of such proceeds in
Nonpurpose Obligations, discharge the principal of the outstanding 1984
Bonds;
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0
(d) amounts, other than amounts described in the preceding
clauses (a), (b) and (c), which are held in the Special Fund, the Interest
Account, the Principal Account, the Sinking Account, the Redemption
Account and any other fund or account which the Agency reasonably
expects to be used to pay Annual Debt Service on the Bonds;
(e) amounts in the Reserve Account and any other fund established
as a reasonably required reserve or replacement fund;
(f) Investment Property pledged as security for payment of Annual
Debt Service by an ultimate obligor, a related person or the Agency;
(g) amounts, other than amounts described elsewhere in this
definition, used to pay Annual Debt Service on the Bonds; and
(h) amounts received as a result of the investment of amounts
described elsewhere in this definition.
"Indenture" means this Indenture of Trust by and between the Agency and the
Trustee, as originally entered into or as it may be amended or supplemented by any
Supplemental Indenture entered into pursuant to the provisions hereof.
"Independent.Accountant" means any accountant or firm of such accountants duly
licensed or registered or entitled to practice and practicing as such under the laws of the
State of California, appointed by the Agency, and who, or each of whom:
(a) is in fact independent and not under domination of the Agency;
(b) does not have any substantial interest, direct or indirect, with the
Agency; and
(c) is not connected with the Agency as an officer or employee of the
Agency, but who may be regularly retained to make reports to the Agency.
"Independent Financial Consultant" means any financial consultant or firm of such
consultants appointed by the Agency, and who, or each of whom:
(a) is in fact independent and not under domination of the Agency;
(b) does not have any substantial interest, direct or indirect, with the
Agency, other than as original purchaser of the Bonds or any Parity Bonds;
and
(c) is not connected with the Agency as an officer or employee of the
Agency, but who may be regularly retained to make reports to the Agency.
"Interest Account" means the account by that name established and held by the
Trustee pursuant to Section 4.03(a).
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"Interest Payment Date" means September 1, 1987, and March 1 and September 1
in each year thereafter so long as any of the Bonds remain Outstanding hereunder.
"Investment Property" means any security (as said term is defined in section
165(g)(2)(A) or (B) of the Tax Code), obligation, annuity or investment-type property,
excluding, however, obligations the interest on which islexcludable from rg oss incomeq
under section 103 of the Tax Code.
"Law" means the Community Redevelopment Law of the State of California,
constituting Part 1 of Division 24 of the Health and Safety Code of the State of California,
and the acts amendatory thereof and supplemental thereto.
"Maximum Annual Debt Service" means, as of the date of any calculation, the
largest Annual Debt Service during the current or any future Bond Year, initially being the
amount of $902,640.
"Net Proceeds" means the par amount of the Bonds plus accrued interest and
premium, if any, less the amount of any original issue discount, less the proceeds of the
Bonds applied to ay Costs of Issuance, and less any amount of proceeds of the Bonds
deposited in the Reserve Account.
"1984 Bond Resolution" means Resolution No. 194 of the Agency adopted on
March 14, 1984, authorizing the issuance of the 1984 Bonds, as amended or
supplemented from time to time in accordance with its terms.
"1984 Bonds" means the $9,300,000 aggregate principal amount of Community
Redevelopment Agency of the City of Palm Springs Central Business District
Redevelopment Project Tax Allocation Bonds, 1984 Series A, issued and outstanding
under the 1984 Bond Resolution.
"Nonpurpose Obligation" means any Investment Property which is acquired with
the Gross Proceeds and is not acquired in order to carry out the governmental purpose of
the Bonds.
"Outstanding", when used as of any particular time with reference to Bonds, means
(subject to the provisions of Section 7.03) all Bonds except:
(a) Bonds theretofore canceled by the Trustee or surrendered to the
Trustee for cancellation;
(b) Bonds paid or deemed to have been paid within the meaning of
Section 9.03; and
(c) Bonds in lieu of or in substitution for which other Bonds shall
have been authorized, executed, issued and delivered by the Agency
pursuant to this Indenture or any Supplemental Indenture.
"Owner" or "Bond Owner" means any person who shall be the person in whose
name the ownership of any Outstanding Bond shall be registered on the Registration
Books.
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"Parity Bonds" means any loans, advances or indebtedness issued or incurred by
the Agency on a parity with the Bonds pursuant to Section 3.05.
"Permitted Investments" means any of the following which at the time of investment
are legal investments under the laws of the State of California for the moneys proposed to
be invested therein:
(a) Federal Securities;
(b) Any of the following obligations issued or guaranteed by any of
the following federal agencies: i senior debt obligations of the Federal
Home Loan Bank System; (ii) participation certificates of the Federal Home
Loan Mortgage Corporation; (iii) mortgage-backed securities or senior debt
obligations of the Federal National Mortgage Association; or (iv) senior debt
obligations of the Student Loan Marketing Association;
(c) interest-bearing demand or time deposits (including certificates of
deposit) in federal or state chartered savings and loan associations or in
national or State banks (including the Trustee) provided that either: (i) such
deposits are secured at all times by Federal Securities and there shall be
filed with the Trustee an opinion of a nationally recognized law firm stating
that such collateral has been delivered to the Trustee or a third party acting
as agent for the Trustee, that the Bond Owners have a perfected first
security interest in such collateral and that such collateral is free and clear
of all liens, claims and encumbrances except those securing the Bond
Owners; or (ii) such deposits are fully insured by the Federal Deposit
Insurance Corporation or the Federal Savings and Loan Insurance
Corporation; and
(d) investment agreements acceptable to the Bond Insurer.
"Principal Account" means the account by that name established and held by the
Trustee pursuant to Section 4.03(b).
"Principal Payment Date" means March 1 in each year in which any of the Bonds
mature by their respective terms; and with respect to any Bond means the stated maturity
date of such Bond.
"Private Business Use" means use directly or indirectly in a trade or business
carried on by a natural person or in any activity carried on by a person other than a
natural person, excluding use by a governmental unit and use by any person as a
member of the general public.
"Project" or "Redevelopment Project" means the undertaking of the Agency
pursuant to the Redevelopment Plan and the Law for the redevelopment of the Project
Area.
"Project Area" means the project area described in the Redevelopment Plan.
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i •
"Purchase Price", for the purpose of computation of the Yield of the Bonds, has the
same meaning as the term "issue price" in sections 1273(b) and 1274 of the Tax Code,
and, in general, means the initial offering price to the public (not including bond houses
and brokers, or similar persons or organizations acting in the capacity of underwriters or
wholesalers) at which price a substantial amount of the Bonds are sold or, if the Bonds
are privately placed, the price paid by the Original Purchaser or the acquisition cost of the
Original Purchaser. The term "Purchase Price," for the purpose of computation of the
Yield of Nonpurpose Obligations, means the fair market value of the Nonpurpose
Obligations on the date of use of Gross Proceeds for acquisition thereof, or if later, on the
date that Investment Property constituting a Nonpurpose Obligation becomes a
Nonpurpose Obligation of the Bonds.
"Rebate Account" means the account by that name established pursuant to
Section 5.15(a).
"Rebate Calculation Period" means the twelve-month period beginning on the
Closing Date or on any anniversary of the Closing Date and extending to but not including
the next succeeding anniversary of the Closing Date.
"Record Date" means the close of business on the fifteenth (15th) calendar day of
the month preceding each Interest Payment Date, whether or not such fifteenth (15th)
calendar day is a Business Day.
"Redemption Account" means the account by that name established and held by
the Trustee pursuant to Section 4.03(e).
"Redevelopment Plan" means the Redevelopment Plan for the Central Business
District Redevelopment Project, approved by Ordinance No. 952 enacted by the City
Council of the City of Palm Springs on July 11, 1973, together with any amendments
thereof heretofore or hereafter duly authorized pursuant to the Law.
"Registration Books" means the records maintained by the Trustee pursuant to
Section 2.08 for the registration and transfer of ownership of the Bonds.
"Report" means a document in writing signed by an Independent Financial
Consultant and including:
(a) a statement that the person or firm making or giving such Report
has read the pertinent provisions of this Indenture to which such Report
relates;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the Report is based; and
(c) a statement that, in the opinion of such person or firm, sufficient
examination or investigation was made as is necessary to enable said
consultant to express an informed opinion with respect to the subject matter
referred to in the Report.
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"Reserve Account" means the account by that name established and held by the
Trustee pursuant to Section 3.03.
"Riverside County Auditor-Controller" means the person who holds the office
designated Riverside County Auditor-Controller from time to time, or one of the duly
appointed deputies of such person, or any person or persons performing substantially the
same duties in the event said office is ever abolished or changed.
"Serial Bonds" means all Bonds other than the Term Bonds.
"Sinking Account" means the account by that name established and held by the
Trustee pursuant to Section 4.03(c).
"Special Fund" means the fund established and held by the Agency pursuant to
Section 4.02.
"S&P" means Standard & Poor's Corporation, its successors and assigns.
"Supplemental Indenture" means any resolution, agreement or other instrument
then in full force and effect which has been duly adopted or entered into by the Agency;
but only if and to the extent that such Supplemental Indenture is specifically authorized
hereunder.
"Tax Code" means the Internal Revenue Code of 1986, as amended from time to
time. Any reference to a provision of the Tax Code shall be deemed to include the
applicable Tax Regulations promulgated with respect to such provision.
"Tax Regulations" means temporary and permanent regulations promulgated under
section 103 and all related provisions of the Tax Code.
"Tax Revenues" means all taxes annually allocated to the Agency with respect to
the Project Area following the Closing Date, pursuant to Article 6 of Chapter 6
(commencing with Section 33670) of the Law and Section 16 of Article XVI of the
constitution of the State of California, and as provided in the Redevelopment Plan,
including all payments, subventions and reimbursements, if any, to the Agency specifically
attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limitations.
"Term Bonds" means the Bonds maturing on March 1, 2008, and with respect to
any Parity Bonds means such Parity Bonds which are payable on or before their specified
Principal Payment Dates from sinking account payments established for that purpose and
calculated to retire such Parity Bonds on or before their respective Principal Payment
Dates.
r "Trustee" means First Interstate Bank of California as trustee hereunder, or any
successor thereto appointed as trustee hereunder in accordance with the provisions of
Article VI.
"Trust Office" means such corporate trust office of the Trustee as may be
designated from time to time by written notice from the Trustee to the Agency, initially
being 707 Wilshire Boulevard, Corporate Trust W10-2, Los Angeles, California 90017.
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"Written Request of the Agency" or "Written Certificate of the Agency" means a
request or certificate, in writing signed by the Executive Director, Treasurer or Secretary of
the Agency or by any other officer of the Agency duly authorized by the Agency for that
purpose.
"Yield" means that yield which, when used in computing the present worth of all
payments of principal and interest (or other payments in the case of Nonpurpose
Obligations which require payments in a form not characterized as principal and interest)
on a Nonpurpose Obligation or on the Bonds produces an amount equal to the Purchase
Price of such Nonpurpose Obligation or the Bonds, as the case may be, all computed as
prescribed in the applicable Tax Regulations.
Section 1.03. Rules of Construction. All references herein to "Articles," "Sections"
and other subdivisions are to the corresponding Articles, Sections or subdivisions of this
Indenture, and the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article, Section or
subdivision hereof.
Section 1.04. Equal Security. In consideration of the acceptance of the Bonds by
those who shall hold the same from time to time, this Indenture shall be deemed to be and
shall constitute a contract between the Agency and the Owners from time to time of the
Bonds, and the covenants and agreements herein set forth to be performed on behalf of
the Agency shall be for the equal and proportionate benefit, security and protection of all
Owners of the Bonds without preference, priority or distinction as to security or otherwise
of any of the Bonds over any of the others by reason of the number or date thereof or the
time of sale, execution and delivery thereof, or otherwise for any cause whatsoever,
except as expressly provided therein or herein.
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ARTICLE ll
THE BONDS
Section 2.01. Authorization. Bonds in the aggregate principal amount of Ten
Million Three Hundred Fifty-Five Thousand Dollars ($10,355,000) are hereby authorized to
be issued by the Agency under and subject to the terms of this Indenture and the Law and
pursuant to the provisions of Article 11 of Chapter 3 of Part 1 of Division 2 of the California
Government Code. 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 premiums, if any, and the interest on all Bonds which
may from time to time be executed and delivered hereunder, subject to the covenants,
agreements, provisions and conditions herein contained. The Bonds shall be designated
the "Community Redevelopment Agency of the City of Palm Springs Central Business
District Redevelopment Project Tax Allocation Refunding Bonds, Issue of 1987".
Section 2.02. Terms of Bonds. The Bonds shall be issued in fully registered form
without coupons in denominations of $5,000 or any integral multiple thereof, so long as no
Bond shall mature on more than one Principal Payment Date. The Bonds shall be
substantially in the form hereinafter set forth.
The Bonds shall mature and become payable on the Principal Payment Dates in
each of the years and in the amounts, and shall bear interest (calculated on the basis of a
360-day year of twelve 30-day months) at the rates, as follows:
Year Principal Interest Rate
March 1 Amount Per Annum
1988 $ 280,000 3.75%
1989 290,000 4.25
1990 300,000 4.50
1991 315,000 4.70
1992 330,000 4.90
1993 345,000 5.10
1994 365,000 5.30
1995 385,000 5.50
1996 405,000 5.70
1997 430,000 5.90
1998 455,000 6.00
1999 480,000 6.10
2000 510,000 6.20
2001 540,000 6.30
2008 4,925,000 6.60
Interest on the Bonds shall be payable on each Interest Payment Date to the
person whose name appears on the Registration Books as the Owner thereof as of the
Record Date immediately preceding each such Interest Payment Date, such interest to be
paid by check or draft of the Trustee mailed to the Owner at the address of such Owner as
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its appears on the Registration Books. Principal of and premium (if any) on any Bond
shall be paid upon presentation and surrender thereof at the Trust Office of the Trustee.
Both the principal of and interest and premium (if any) on the Bonds shall be payable in
lawful money of the United States of America.
Each Bond shall be dated as of the date of its authentication and shall bear interest
from the Interest Payment Date next preceding the date of authentication thereof, unless
(a) it is authenticated as of an Interest Payment Date, in which event it shall bear interest
from such Interest Payment Date; or (b) it is authenticated after a Record Date and before
the following Interest Payment Date, in which event it shall bear interest from such Interest
Payment Date; or (c) it is authenticated, or before August 15, 1987, in which event it
shall bear interest from March 1, 1987; provided, however, that if, as of the date of
authentication of any Bond, interest thereon is in default, such Bond shall bear interest
from the Interest Payment Date to which interest has previously been paid or made
available for payment thereon.
Section 2.03. Redemption.
(a) Optional Redemption. The Bonds maturing on or before March 1, 1994, shall
not be subject to optional redemption prior to maturity. The Bonds maturing on or after
March 1, 1995, shall be subject to redemption in whole, or in part in inverse order of
maturity and by lot within a maturity, at the option of the Agency, on any Interest Payment
Date on or after March 1, 1994, from any available source of funds, at a redemption price
equal to the principal amount thereof to be redeemed together with accrued interest
thereon to the redemption date, plus a premium (expressed as a percentage of the
principal amount of the Bonds to be redeemed) as follows:
Redemption Dates Redemption Premium
March 1, 1994, and September 1, 1994 2%
March 1, 1995, and September 1, 1995 1i
March 1, 1996, and September 1, 1996 1
March 1, 1997, and September 1, 1997
March 1, 1998, and thereafter 0
The Agency shall be required to give the Trustee written notice of its intention to
redeem Bonds under this subsection (a), and shall deposit all amounts required for such
redemption at least forty-five (45) days prior to the date fixed for such redemption.
(b) Sinking Account Redemption. The Term Bonds shall also be subject to
redemption in whole, or in part by lot, on each Principal Payment Date commencing
March 1, 2002, from Sinking Account payments made by the Agency pursuant to Section
4.03(c), at a redemption price equal to the principal amount thereof to be redeemed
together with accrued interest thereon to the redemption date (such interest to be paid in
the manner provided in Section 2.02), without premium, or in lieu thereof shall be
purchased pursuant to the succeeding paragraph of this subsection (b), in the aggregate
respective principal amounts and on the respective Principal Payment Dates as set forth
in the following table; provided, however, that if some but not all of the Term Bonds have
been redeemed pursuant to subsection (a) above the total amount of all future Sinking
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Account payments shall be reduced by the aggregate principal amount of Bonds so
redeemed, to be allocated among such Sinking Account payment on a pro rata basis in
integral multiples of $5,000 as determined by the Agency (notice of which determination
shall be given by the Agency to the Trustee).
Sinking Account
Redemption Date Principal Amount to be
(March 1) Redeemed or Purchased
2002 $575,000
2003 615,000
2004 655,000
2005 700,000
2006 745,000
2007 790,000
2008 (Maturity) 845,000
In lieu of redemption of Term Bonds pursuant to the preceding paragraph of this
subsection (b), amounts on deposit in the Special Fund or in the Sinking Account may
also be used and withdrawn by the Trustee at any time, upon the Written Request of the
Agency, for the purchase of Term Bonds at public or private sale as and when and at
such prices (including brokerage and other charges, but excluding accrued interest, which
is payable from the Interest Account) as the Agency may in its discretion determine. The
par amount of any Term Bonds so purchased by the Agency in any twelve-month period
ending on August 1 in any year shall be credited towards and shall reduce the par amount
of Term Bonds required to be redeemed pursuant to this subsection (b) on September 1 in
such year.
(c) Notice of Redemption. The Trustee on behalf and at the expense of the
Agency shall mail (by first class mail) notice of any redemption to the respective owners of
any Bonds designated for redemption, at least fifteen (15) but not more than thirty (30)
days prior to the redemption date, at their addresses appearing on the Registration Books;
but such mailing shall not be a condition precedent to such redemption and neither failure
to mail or to receive any such notice nor any defect therein shall affect the validity of the
proceedings for the redemption of such Bonds or the cessation of the accrual of interest
thereon. Such notice shall state the redemption date and the redemption price,shall
designate the CUSIP numbers of the Bonds to be redeemed by giving the individual
number of each Bond or by stating that all Bonds between two stated numbers, both
inclusive, or by stating that all of the Bonds of one or more Principal Payment Dates have
been called for redemption, and shall require that such Bonds be then surrendered at the
Trust Office of the Trustee for redemption at the said redemption price, giving notice also
that further interest on such Bonds will not accrue after the redemption date.
(d) Partial Redemption of Bonds. In the event only a portion of any Bond is called
for redemption, then upon surrender of such Bond the Agency shall execute and the
Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Agency,
a new Bond or Bonds of the same series and Principal Payment Date, of authorized
denominations in aggregate principal amount equal to the unredeemed portion of the Bond
to be redeemed.
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(e) Effect of Redemption. From and after the date fixed for redemption, if funds
available for the payment of the principal of and interest (and premium, if any) on the
Bonds so called for redemption shall have been duly provided, such Bonds so called shall
cease to be entitled to any benefit under this Indenture other than the right to receive
payment of the redemption price, and no interest shall accrue thereon from and after the
redemption date specified in such notice.
(f) Manner of Redemption. Whenever any Bonds are to be selected for
redemption, the Trustee shall determine by lot, the Bonds or portions thereof to be
redeemed, and shall notify the Agency thereof. All Bonds redeemed or purchased
pursuant to this Section shall be canceled and shall be surrendered to the Agency.
Section 2.04. Form of Bonds. The Bonds, the form of Trustee's certificate of
authentication, and the form of assignment to appear thereon, shall be substantially in the
respective forms set forth in Exhibit A attached hereto and by this reference incorporated
herein, with necessary or appropriate variations, omissions and insertions, as permitted or
required by this Indenture.
Section 2.05. Execution of Bonds. The Bonds shall be executed on behalf of the
Agency by the signature of its Chairman and the signature of its Secretary who are in
office on the date of execution and delivery of this Indenture or at any time thereafter, and
the seal of the Agency shall be impressed, imprinted or reproduced by facsimile signature
thereon. Either or both of such signatures may be made manually or may be affixed by
facsimile thereof. If any officer whose signature appears on any Bond ceases to be such
officer before delivery of the Bonds to the purchaser, such signature shall nevertheless be
as effective as if the officer had remained in office until the delivery of the Bonds to the
purchaser. Any Bond may be signed and attested on behalf of the Agency by such
persons as at the actual date of the execution of such Bond shall be the proper officers of
the Agency although on the date of such Bond any such person shall not have been such
officer of the Agency.
Only such of the Bonds as shall bear thereon a certificate of authentication in the
form hereinbefore set forth, executed and dated by the Trustee, shall be valid or obligatory
for any purpose or entitled to the benefits of this Indenture, and such certificate of the
Trustee shall be conclusive evidence that such Bonds have been duly authenticated and
delivered hereunder and are entitled to the benefits of this Indenture.
Section 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred, upon the Registration Books, by the person in whose name it is registered, in
person or by a duly authorized attorney of such person, upon surrender of such Bond to
the Trustee at its Trust Office for cancellation, accompanied by delivery of a written
instrument of transfer in a form approved by the Trustee, duly executed. Whenever any
Bond or Bonds shall be surrendered for registration of transfer, the Agency shall execute
and the Trustee shall deliver a new Bond or Bonds, for like Principal Payment Date and
like aggregate principal amount. The Trustee shall collect any tax or other governmental
charge on the transfer of any Bonds pursuant to this Section 2.06.
A The Trustee may refuse to transfer any Bonds under the provisions of this Section
2.06 during the period fifteen (15) days prior to the date established by the Trustee for the
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selection of Bonds for redemption, or as to Bonds the notice of redemption of which has
been mailed pursuant to the provisions of Section 2.03(c).
Section 2.07. Exchange of Bonds. Bonds may be exchanged at the Trust Office of
the Trustee for a like aggregate principal amount of Bonds of other authorized
denominations of the same Principal Payment Date. The Trustee shall collect any tax or
other governmental charge on the exchange of any Bonds pursuant to this Section 2.07.
The Trustee may refuse to exchange any Bonds under the provisions of this
Section 2.07 during the fifteen days(tprior to the date established by the Trustee for the
selection of Bonds or as to Bonds the notice of redemption of which has been mailed
pursuant to the provisions of Section 2.03(c).
Section 2.08. Registration Books. The Trustee will keep or cause to be kept, at its
Trust Office, sufficient records for the registration and registration of transfer of the Bonds,
which shall at all times during normal business hours be open to inspection by the
Agency; and, upon presentation for such purpose, the Trustee shall, under such
reasonable regulations as it may prescribe, register or transfer or cause to be registered
or transferred, on said records, Bonds as hereinbefore provided.
Section 2.09. Temporary Bonds. The Bonds may be initially issued in temporary
form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds
may be printed, lithographed or typewritten, shall be of such denominations as may be
determined by the Agency, and may contain such reference to any of the provisions of this
Indenture as may be appropriate. Every temporary Bond shall be executed by the Agency
upon the same conditions and in substantially the same manner as the definitive Bonds. If
the Agency issues temporary Bonds it will execute and furnish definitive Bonds without
delay, and thereupon the temporary Bonds may be surrendered, for cancellation, in
exchange therefor at the Trust Office of the Trustee, and the Trustee shall deliver in
exchange for such temporary Bonds an equal aggregate principal amount of definitive
Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be
entitled to the same benefits pursuant to this Indenture as definitive Bonds authenticated
and delivered hereunder.
Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall
become mutilated the Agency, at the expense of the Owner of said Bond, shall execute,
and the Trustee shall thereupon deliver, a new Bond of like tenor and number in exchange
and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the
Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled
by it and delivered to, or upon the order of, the Agency. If any Bond shall be lost,
destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the
Agency and the Trustee and, if such evidence be satisfactory to both and indemnity
satisfactory to them shall be given, the Agency, at the expense of the owner, shall execute,
and the Trustee shall thereupon deliver, a new Bond of like tenor and number in lieu of
and in substitution for the Bond so lost, destroyed or stolen, The Agency may require
payment of a sum not exceeding the actual cost of preparing each new Bond issued
under this Section and of the expenses which may be incurred by the Agency and the
Trustee in the premises. Any Bond issued under the provisions of this Section in lieu of
any Bond alleged to be lost, destroyed or stolen shall constitute an original additional
contractual obligation on the part of the Agency whether or not the Bond so alleged to be
-16-
lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and
proportionately entitled to the benefits of this Indenture with all other Bonds issued
pursuant to this Indenture.
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ARTICLE III
ISSUE OF BONDS; PARITY BONDS
Section 3.01. Issuance of Bonds. Upon the execution and delivery of this
Indenture, the Agency shall execute and deliver Bonds in the aggregate principal amount
of Ten Million Three Hundred Fifty-Five Thousand Dollars ($10,355,000).
Section 3.02. Application of Proceeds of Sale of Bonds. Upon the receipt of
payment for any of the Bonds when the same shall have been sold by the Agency, the
proceeds thereof shall be paid to the Trustee and applied as follows:
(a) The Trustee shall transfer the amount of Nine Million Seven
Hundred Seventeen Thousand Four Hundred Dollars ($9,717,400) to the
Escrow Bank for deposit in the Escrow Fund.
(b) The Trustee shall deposit the amount of Thirty-Nine Thousand Six
Hundred Eighty-Three Dollars and Ninety-Four Cents ($39,683.94) in the
r, Interest Account.
(c) The Trustee shall deposit in the Reserve Account an amount
which, together with the amounts transferred tote Trustee for eposit
therein on the Closing Date pursuant to the Escrow Deposit and Trust
Agreement, is equal to Maximum Annual Debt Service.
(d) The Trustee shall deposit the remainder of such proceeds in
Costs of Issuance Fund.
Section 3.03. Reserve Account. There is hereby created a separate account to be
known as the "Reserve Account", which shall be held in trust by the Trustee. Pursuant to
the Escrow Deposit and Trust Agreement, on the Closing Date the Escrow Bank shall
transfer to the Trustee, for deposit into the Reserve Account, all amounts then on deposit
in the account established pursuant to Section 3.03 of the 1984 Bond Resolution. In
addition, the Trustee shall deposit in the Reserve Account from the proceeds of sale of
the Bonds an amount sufficient to cause the balance therein to equal Maximum Annual
Debt Service on the Closing Date. An amount equal to Maximum Annual Debt Service
shall be maintained in the Reserve Account at all times,r\and any deficiency therein shall
be replenished from the first available moneys in the Special Fund pursuant to Section
4.03(d). The amount required to be maintained in the Reserve Account may be increased
by any Supplemental Indenture establishing any Parity Bonds pursuant to Section 3.05.
Section 3.04. Costs of Issuance Fund. There is hereby established a separate
fund to be known as the "Costs of Issuance Fund", which shall be held by the Trustee in
trust. The moneys in the Costs of Issuance Fund shall be used and withdrawn by the
Trustee from time to time to pay the Costs of Issuance upon submission of a Written
Request of the 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 thirty (30) days following the Closing Date,
or upon the earlier Request of the Agency, all amounts (if any) remaining in the Costs of
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Issuance Fund shall be withdrawn therefrom by the Trustee and transferred to the Interest
Account.
Section 3.05. Issuance of Parity Bonds. In addition to the Bonds the Agency may,
by Supplemental Indenture, issue or incur other loans, advances or indebtedness payable
from Tax Revenues on a parity with the Bonds to finance the Project in such principal
amount as shall be determined by the Agency. The Agency may issue and deliver any
such Parity Bonds subject to the following specific conditions which are hereby made
conditions precedent to the issuance and delivery of such Parity Bonds issued under this
Section:
(a) The Agency shall be in compliance with all covenants set forth in
this Indenture.
(b) The Tax Revenues for the then current Fiscal YearAbased on
assessed valuation of property in the Project Area as evidenced in a written
document from an appropriate official of Riverside County, shall be equal to
one hundred twenty percent (120%) of Maximum Annual Debt Service on all
Bonds and Parity Bonds which will be Outstanding following the issuance of
such series of Parity Bonds.
(c) The Supplemental Indenture providing for the issuance of such
Parity Bonds under this Section 3.05 shall provide that:
(i) Interest on said Parity Bonds shall be payable on
March 1 and September 1 in each year of the term of such
Parity Bonds except the firs7;,twelve month period, during whichA
interest may be payable on any March 1 or September 1;
(ii) The principal of such Parity Bonds shall be payable
on March 1 in any year in which principal is payable; and
(iii) Money shall be deposited in the Reserve Account
from the proceeds of the sale of said Parity Bonds to increase
the amount on deposit in the Reserve Account to an amount
equal to Average Annual Debt Service on all Outstanding
Bonds and on the Parity Bonds then to be issued.
Section 3.06. Validity of Bonds. The validity of the authorization and issuance of
the Bonds shall not be dependent upon the completion of the Project or upon the
performance by any person of his obligation with respect to the Project.
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s •
ARTICLE IV
PLEDGE OF TAX REVENUES;
SPECIAL FUND AND ACCOUNTS
Section 4.01. Pledge of Tax Revenues. The Bonds shall be secured by a first
pledge (which pledge shall be effected in the manner and to the extent hereinafter
provided) of all of the Tax Revenues and a pledge of all of the moneys in the Special
Fund, the Interest Account, the Principal Account, the Sinking Account, the Redemption
Account and the Reserve Account, including all amounts derived from the investment of
such moneys. The Tax Revenues are hereby allocated in their entirety to the payment of
the principal of and interest on the Bonds as provided herein.
Section 4.02. Special Fund; Deposit of Tax Revenues. There is hereby
established a special fund to be known as the "Special Fund", which shall be held by the
Agency. The Agency shall deposit all of the Tax Revenues received in any Bond Year in
the Special Fund promptly upon receipt thereof by the Agency, subject to Section 4.03(f).
All Tax Revenues at any time paid into the Special Fund shall be held by the Agency
solely for the uses and purposes hereinafter in this Article IV set forth. So long as any of
the Bonds are Outstanding, the Agency shall not have any beneficial right or interest in the
Tax Revenues, except only as in this Indenture provided, and such moneys shall be used
and applied by the Trustee as hereinafter set forth in this Article IV.
Section 4.03. Establishment and Maintenance of Accounts for Revenues; Use and
Withdrawal of Revenues. Moneys in the Special Fund shall be transferred by the Agency
to the Trustee in the following amounts at the following times, for deposit by the Trustee
the following respective special accounts in the following order of priority:
(a) Interest Account. On or before the f� ifth Business Day preceding
each Interest Payment Date, the Agency shall withdraw from the Special
Fund and transfer to the Trustee for deposit in the Interest Account an
amount which, when added to the amount contained in the Interest Account
on that date, will be equal to the aggregate amount of the interest becoming
due and payable on the Outstanding Bonds on such Interest Payment Date.
No such transfer and deposit need be made to the Interest Account if the
amount contained therein is at least equal to the interest to become due on
the next succeeding Interest Payment Date upon all of the Bonds issued
hereunder and then Outstanding. All moneys in the Interest Account shall
be used and withdrawn by the Trustee solely for the purpose of paying the
interest on the Bonds as it shall become due and payable (including
accrued interest on any Bonds purchased or redeemed prior to maturity
pursuant to this Indenture).
(b) Principal Account. On or before th fey ifth Business Day preceding
each Principal Payment Date, the Agency shall withdraw from the Special
Fund and transfer to the Trustee for deposit in the Principal Account an
amount which, when added to the amount then contained in the Principal
Account, will be equal to the principal becoming due and payable on the
Outstanding Serial Bonds on such Principal Payment Date. No such
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transfer and deposit need be made to the Principal Account if the amount
contained therein is at least equal to the principal to become due on the next
succeeding Principal Payment Date upon all of the Serial Bonds issued
hereunder and then Outstanding. All moneys in the Principal Account shall
be used and withdrawn by the Trustee solely for the purpose of paying the
principal on the Serial Bonds as it shall become due and payable.
(c) Sinking Account. No later than the fifth Business Day preceding
each March 1 on which any Outstanding Bonds are subject to mandatory
sinking account redemption pursuant to Section 2.03(b), the Agency shall
withdraw from the Special Fund and transfer to the Trustee for deposit in the
Sinking Account an amount which, when added to the amount then
contained in the Sinking Account, will be equal to the aggregate principal
amount of the Term Bonds required to be redeemed on such March 1
pursuant to Section 2.03(b). All moneys on deposit in the Sinking Account
shall be used and withdrawn by the Trustee for the sole purpose of
redeeming or purchasing (in lieu of redemption) Term Bonds pursuant to
Section 2.03(b).
(d) Reserve Account. On or before each Interest Payment Date,Ahe
Agency shall withdraw from the Special Fund and transfer to the Trustee for
deposit in the Reserve Account an amount of money that shall be required
to maintain in the Reserve Account the full amount of, Maximum Annual Debt
Service. No such transfer and deposit need be made to the Reserve
Account so long as there shall be on deposit therein a sum at least equal to
Maximum Annual Debt Service. All money in the Reserve Account shall be
used and withdrawn by the Trustee solely for the purpose of making
transfers to the Interest Account, the Principal Account and the Sinking
Account, in such order, in the event of any deficiency at any time in any of
such accounts or for the retirement of all the Bonds then Outstanding,
except that so long as the Agency is not in default hereunder, any amount in
the Reserve Account in excess of,,Maximum Annual Debt Service shall be
withdrawn from the Reserve Account from time to time by the Trustee and
deposited in the Interest Account. All amounts in the Reserve Account on
the day preceding the final Principal Payment Date shall be withdrawn from
the Reserve Account and transferred to the Interest Account, the Principal
Account and the Sinking Account, in such order, to the extent required to
make the deposits then required to be made pursuant to this Section 4.03.
(e) Redemption Account. On or before the f^ifth_ Business Day
preceding any Interest Payment Date on which Bonds are to be redeemed
pursuant to Section 2.03(a), the Agency shall withdraw from the Special
Fund and transfer to the Trustee for deposit in the Redemption Account an
amount required to pay the principal of and premium, if any, on the Bonds to
be redeemed on such Interest Payment Date pursuant to Section 2.03(a).
All moneys in the Redemption Account shall be used and withdrawn by the
Trustee solely for the purpose of paying the principal of and premium, if any,
on the Bonds to be redeemed pursuant to Section 2.03(a) on the date set for
such redemption.
_P1_
(f) Surplus. The Agency shall not be obligated to deposit in the
Special Fund in any Bond Year an amount of Tax Revenues which, together
with other available amounts in the Special Fund, exceeds the amounts
required to be transferred to the Trustee for deposit into the Interest
Account, the Principal Account, the Sinking Account, the Redemption
Account and the Reserve Account in such Bond Year pursuant to this
Section 4.03. In the event that for any reason whatsoever any amounts shall
remain on deposit in the Special Fund on any March 2 after making all of
the transfers theretofore required to be made pursuant to the preceding
clauses (a) through (e), the Agency may withdraw such amounts from the
Special Fund, to be used for any lawful purpose of the Agency.
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ARTICLE V
OTHER COVENANTS OF THE AGENCY
Section 5.01. Punctual Payment. The Agency will punctually pay or cause to be
paid the principal and interest to become due in respect of all the Bonds together with the
premium thereon, if any, in strict conformity with the terms of the Bonds and of this
Indenture, and it will faithfully observe and perform all of the conditions, covenants and
requirements of this Indenture and all Supplemental Indentures and of the Bonds. Nothing
herein contained shall prevent the Agency from making advances of its own moneys
howsoever derived to any of the uses or purposes referred to herein.
Section 5.02. Limitation on Superior Debt; Refinancing of 1984 Bonds. The
Agency hereby covenants that, so long as the Bonds are Outstanding, the Agency shall
not issue any bonds, notes or other obligations, enter into any agreement or otherwise
incur any indebtedness, which is in any case secured by a lien on all or any part of the
Tax Revenues which is superior to or on a parity with the lien established hereunder for
the security of the Bonds, excepting only Parity Bonds issued pursuant to Section 3.05.
The Agency covenants that it will deposit a portion of the proceeds of the Bonds,
pursuant to Section 3.02 hereof, with the Escrow Bank for investment and application as
provided in the Escrow Agreement, and that the indebtedness represented by the 1984
Bonds will be fully discharged and the lien of the 1984 Bond Resolution will be defeased
thereby.
Section 5.03. Extension of Bonds. The Agency will not, directly or indirectly,
extend or consent to the extension of the time for the payment of any Bond or claim for
interest on any of the Bonds and will not, directly or indirectly, be a party to approve any
such arrangement by purchasing or funding the Bonds or claims for interest or in any
other manner. In case the Principal Payment Date of any such Bond or claim for interest
shall be extended or funded, whether or not with the consent of the Agency, such Bond or
claim for interest so extended or funded shall not be entitled, in case of default hereunder,
to the benefits of this Indenture, except subject to the prior payment in full of the principal
of all of the Bonds then Outstanding and of all claims for interest which shall not have
been so extended or funded.
Section 5.04. Management and Operations of Properties. The Agency will manage
and operate all properties owned by the Agency and comprising any part of the Project in
a sound and businesslike manner.
Section 5.05. Payment of Claims. The Agency will pay and discharge, or cause to
be paid and discharged, any and all lawful claims for labor, materials or supplies which, if
unpaid, might become a lien or charge upon the properties owned by the Agency or upon
the Tax Revenues or any part thereof, or upon any funds in the hands of the Trustee, or
which might impair the security of the Bonds. Nothing herein contained shall require the
Agency to make any such payment so long as the Agency in good faith shall contest the
validity of said claims.
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Section 5.06. Books and Accounts; Financial Statement. The Agency will keep, or
cause to be kept, proper books of record and accounts, separate from all other records
and accounts of the Agency and the City of Palm Springs, in which complete and correct
entries shall be made of all transactions relating to the Project and to the Tax Revenues.
Such books of record and accounts shall at all times during business hours be subject to
the inspection of the Owners of not less than ten percent (10%) in aggregate principal
amount of the Bonds then Outstanding, or their representatives authorized in writing.
The Agency will cause to be prepared and filed with the Trustee annually, within
one hundred and eighty (180) days after the close of each Fiscal Year so long as any of
the Bonds are Outstanding, complete financial statements with respect to such Fiscal
Year showing the Tax Revenues, all disbursements from the Tax Revenues and the
financial condition of the Project, including the balances in all funds and accounts relating
to the Project, as of the end of such Fiscal Year, which statement shall be accompanied
by a certificate or opinion in writing of an Independent Accountant. The Agency will furnish
a copy of such statements to any Bond Owner upon reasonable request.
Section 5.07. Protection of Security and Rights of Bond Owners. The Agency will
preserve and protect the security of the Bonds and the rights of the Bond Owners. From
and after the sale and delivery of any of the Bonds by the Agency, the Bonds shall be
incontestable by the Agency.
Section 5.08. Payments of Taxes and Other Charges. The Agency will pay and
discharge, or cause to be paid and discharged, all taxes, service charges, assessments
and other governmental charges which may hereafter be lawfully imposed upon the
Agency or the properties then owned by the Agency in the Project Area, when the same
shall become due. Nothing herein contained shall require the Agency to make any such
payment so long as the Agency in good faith shall contest the validity of said taxes,
assessments or charges. The Agency will duly observe and conform with all valid
requirements of any governmental authority relative to the Project or any part thereof.
Section 5.09. Completion of Project. The Agency will commence, and will
continue to completion, with all practicable dispatch, the Project, and the Project will be
accomplished and completed in a sound and economical manner and in conformity with
the Redevelopment Plan and the Law.
Section 5.10. Taxation of Leased Property. All amounts derived by the Agency
pursuant to Section 33673 of the Law with respect to the lease of property for
redevelopment shall be treated as Tax Revenues for all purposes of this Indenture, and
shall be deposited with the Agency for deposit in the Special Fund.
Section 5.11. Disposition of Property. The Agency will not authorize the disposition
of any land or real property in the Project Area to anyone which will result in such property
becoming exempt from taxation because of public ownership or use or otherwise (except
property dedicated for public right-of-way and except property planned for public
ownership or use by the Redevelopment Plans in effect on the date of this Indenture) so
that such disposition shall, when taken together with other such dispositions, aggregate
more than ten percent (10%) of the land area in the Project Area unless such disposition
is permitted as hereinafter provided in this Section 5.11. If the Agency proposes to make
such a disposition, it shall thereupon appoint an Independent Financial Consultant to
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report on the effect of said proposed disposition. If the Report of the Independent
Financial Consultant concludes that the security of the Bonds or the rights of the Bond
Owners will not be materially impaired by said proposed disposition, the Agency may
thereafter make such disposition. If said Report concludes that such security will be
materially impaired by said proposed disposition, the Agency shall disapprove said
proposed disposition.
Section 5.12. Tax Revenues. The Agency shall comply with all requirements of the
Law to insure the allocation and payment to it of the Tax Revenues, including without
limitation the timely filing of any necessary statements of indebtedness with appropriate
officials of Riverside County and (in the case of supplemental revenues and other amounts
payable by the State of California) appropriate officials of the State of California, and shall
forward information copies of each such filing to the Trustee. The Agency shall not enter
into any agreement with the County of Riverside or any other governmental unit which
would have the effect of reducing the amount of Tax Revenues available to the Agency for
payment of the Bonds, without the prior written consent of the Bond Insurer and unless in
the written opinion of an Independent Financial Consultant filed with the Trustee such
reduction will not adversely affect the interests hereunder of or the security granted
hereunder to the Bond Owners.
Section 5.13. Eminent Domain. The net proceeds received by the Agency from
any taking of property in the Project Area in any eminent domain proceeding shall be
deposited by the Agency in the Special Fund; provided that the net proceeds received by
the Agency from the taking of any property in the Project Area the redevelopment of which
was financed by the Agency through the issuance of lease revenue bonds or other lease
revenue or installment sale obligations shall be deposited, used and applied in the manner
provided by the resolution authorizing the issuance of such lease revenue bonds or other
lease revenue or installment sale obligations.
Section 5.14. No Arbitrage. The Agency shall not take, or permit or suffer to be
taken by the Trustee or otherwise, any action with respect to the Gross Proceeds of the
Bonds which if such action had been reasonably expected to have been taken, or had
been deliberately and intentionally taken, on the Closing Date would have caused any of
the Bonds to be "arbitrage bonds" within the meaning of section 148(a) of the Tax Code.
Section 5.15. Rebate of Excess Investment Earnings to United States.
(a) There are hereby established, to be held by the Trustee as separate accounts
distinct from all other funds and accounts held by the Trustee under this Indenture, the
Earnings Account and the Rebate Account. All earnings on the investment of amounts in
the Reserve AccountWnd all earnings on the amounts deposited hereunder in the Special
Fund and the accounts therein (other than earnings on the amounts deposited in the
Special Fund and the Interest Account, Principal Account, Sinking Account and
Redemption Account if such earnings in any Rebate Calculation Period are less than
$100,000) shall, upon receipt by the Trustee or the Agency, as the case may be, be
deposited with the Trustee in the Earnings Account. Annually, on the last day of each
Rebate Calculation Period or on the preceding Business Day in the event that such last
day is not a Business Day, the Trustee shall, in accordance with written instructions from
the Agency, transfer from the Earnings Account to the Rebate Account for purposes of
ultimate rebate to the United States an amount equal to Excess Investment Earnings, all
-25-
as more particularly described in this Section 5.15. Following the transfer described in the
preceding sentence, the Trustee shall transfer all amounts remaining in the Earnings
Account to theASpecial Fund.
r (b) Prior to the last day of the first Rebate Calculation Period, the Agency shall
calculate or cause to be calculated, and shall provide or cause to be provided written
notice to the Trustee of, the Excess Investment Earnings described in clause (a)(i) of the
definition thereof. Thereafter, prior to the last day of each Rebate Calculation Period and
on the date of the retirement of the Bonds, the Agency shall calculate or cause to be
calculated, and shall provide or cause to be provided written notice to the Trustee of, the
amount of Excess Investment Earnings referenced in paragraphs (i) and (ii) of subsection
(a) of the definition of Excess Investment Earnings. Said calculations shall be made or
caused to be made in accordance with the following:
(i) Except as provided in paragraph (ii) below, in determining the
amount described in paragraph (a)(i) of the definition of Excess Investment
Earnings, the aggregate amount earned on Nonpurpose Obligations shall
include (A) all income realized under federal income tax accounting
principles (whether or not the person earning such income is subject to
federal income tax) with respect to such Nonpurpose Obligations and with
respect to the reinvestment of investment receipts from such Nonpurpose
Obligations (without regard to the transaction costs incurred in acquiring,
carrying, selling or redeeming such Nonpurpose Obligations), including, but
not limited to, gain or loss realized on the disposition of such Nonpurpose
Obligations (without regard to when such gains are taken into account under
section 453 of the Tax Code relating to taxable year of inclusion of gross
income), and income under section 1272 of the Tax Code (relating to
original issue discount) and (ii) any unrealized gain or loss as of the date of
retirement of the Bonds in the event that any Nonpurpose Obligation is
retained after such date.
(ii) In determining the amount described in paragraph (a)(i) of the
definition of Excess Investment Earnings, Investment Property shall be
treated as acquired for its fair market value at the time it becomes a
Nonpurpose Obligation, so that gain or loss on the disposition of such
Investment Property shall be computed with reference to such fair market
value as its adjusted basis.
(iii) In determining the amount described in paragraph (a)(ii) of the
definition of Excess Investment Earnings, the Yield on the Bonds shall be
determined based on the actual Yield on the Bonds during the period
between the Closing Date and the date the computation is made (with
adjustments for discount or premium).
(iv) In determining the amount described in paragraph (b) of the
definition of Excess Investment Earnings, all income attributable to the
excess described in paragraph (a) of such definition must be taken into
account, whether or not that income exceeds the Yield on the Bonds, and no
amount may be treated as "negative arbitrage".
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(v) In determining the amount described in subsection (b) of this
Section, there shall be excluded any amount earned on any fund or account
which is used primarily to achieve a proper matching of revenues and
Annual Debt Service on the Bonds during each Rebate Calculation Period
and which is depleted at least once a year except for a reasonable
carryover amount not in excess of the greater of one year's earnings on
such fund or account or one-twelfth (1/12th) of Annual Debt Service on the
Bonds as well as amounts earned on said earnings if the gross earnings on
all such funds and accounts for the Rebate Calculation Period is less than
$100,000.
(c) The Agency shall direct the Trustee in writing to pay from the Rebate Account
an amount equal to Excess Investment Earnings to the United States of America in
installments with the first payment to be made not later than thirty (30) days after the end of
the fifth Rebate Calculation Period and with subsequent payments to be made not later
than five (5) years after the preceding payment was due. The Agency shall assure that
each such installment is in an amount equal to at least ninety percent (90%) of the Excess
Investment Earnings on the Bonds as of the close of the computation period. Not later
than thirty (30) days after the retirement of the Bonds, the Agency shall direct the Trustee
to pay from the Excess Investment Earnings to the United States of America an amount
equal to one hundred percent (100%) of the theretofore unpaid Excess Investment
Earnings. In the event that there are amounts remaining on deposit in the Rebate Account
following such payment, the Trustee shall pay such remaining amounts to the Agency to
be used for any lawful purposes of the Agency. Payments to the United States of America
shall be made to the address prescribed by the Tax Regulations as the same may be in
time to time in effect with such reports and statements as may be prescribed by such Tax
Regulations. In the event that amounts on deposit in the Rebate Account are insufficient to
make any payment to the United States of America required pursuant to this subsection
(c), the Agency shall made such payment from any funds which are lawfully available for
such purpose.
(d) The Agency shall assure that Excess Investment Earnings are not paid or
disbursed except as required in this Section 5.15. To that end the Agency shall assure
that investment transactions are on an arm's length basis. In the event that Nonpurpose
Obligations consist of certificates of deposit or investment contracts, investment in such
Nonpurpose Obligations shall be made in accordance with the procedures described in
applicable Tax Regulations as from time to time in effect.
(e) The Agency shall keep, and retain for a period of six (6) years following the
retirement of the Bonds, records of the determinations made pursuant to this Section 5.15.
(f) In order to provide for the administration of this Section 5.15, the Agency and
the Trustee may provide for the employment of independent attorneys, accountants and
consultants compensated on such reasonable basis as the Agency or the Trustee may
deem appropriate.
(g) The Trustee shall conclusively be entitled to rely upon all calculations and
directions made and furnished by the Agency under this Section 5.15, and the Trustee
shall not incur any liability whatsoever in reasonably acting upon and as instructed by
such calculations and directions.
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Section 5.16. Private Business Use Limitation. Not more than ten percent (10%) of
the Net Proceeds shall be used for Private Business Use if, in addition, the payment of
more than ten percent (10%) of the principal of the Bonds or ten percent (10%) of the
interest due on the Bonds during the term thereof is, under the terms of the Bonds or any
underlying arrangement, directly or indirectly, secured by any interest in property used or
to be used for a Private Business Use or in payments in respect of property used or to be
used for a Private Business Use or is to be derived from payments, whether or not to the
Agency, in respect of property or borrowed money used or to be used for a Private
Business Use. In the event that both (i) an amount in excess of five percent (5%) of the
Net Proceeds is used for a Private Business Use, and (ii) an amount in excess of five
percent (5%) of the principal or five percent (5%) of the interest due on the Bonds during
the term thereof is, under the terms of the Bonds or any underlying arrangement, directly
or indirectly secured by any interest in property used or to be used for said Private
Business Use or in payments in respect of property used or to be used for said Private
Business Use or is to be derived from payments, whether or not to the Agency, in respect
of property or borrowed money used or to be used for said Private Business Use, then
such excess over five percent (5%) of Net Proceeds used for a Private Business Use
shall be used for a Private Business Use related to the governmental use of the Project.
Section 5.17. Private Loan Limitation. Not more than five percent (5%) of the Net
Proceeds shall be used, directly or indirectly, to make or finance a loan (other than loans
constituting Nonpurpose Obligations or a tax or assessment of general application for a
specific governmental function) to persons other than state or local government units.
Section 5.18. Federal Guarantee Prohibition. The Agency shall not take any action
or permit or suffer any action to be taken if the result of the same would be to cause any
of the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Tax
Code.
Section 5.19. Further Assurances. The Agency will adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be
reasonably necessary or proper to carry out the intention or to facilitate the performance
of this Indenture, and for the better assuring and confirming unto the Owners of the Bonds
of the rights and benefits provided in this Indenture.
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ARTICLE VI
THE TRUSTEE
Section 6.01. Duties, Immunities and Liabilities of Trustee.
(a) The Trustee shall, prior to the occurrence of an Event of Default, and
after the curing of all Events of Default which may have occurred, perform such duties and
only such duties as are specifically set forth in this Indenture. The Trustee shall only be
obligated to perform such duties as are expressly set forth herein, and no duties or
obligations not expressly set forth herein shall be implied. The Trustee shall, during the
existence of any Event of Default (which has not been cured), exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) The Agency may remove the Trustee at any time, unless an Event of
Default shall have occurred and then be continuing, and shall remove the Trustee (i) if at
any time requested to do so by an instrument or concurrent instruments in writing signed
by the Owners of not less than a majority in aggregate principal amount of the Bonds then
Outstanding (or their attorneys duly authorized in writing) or (ii) if at any time the Trustee
shall cease to be eligible in accordance with subsection (e) of this Section, or shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or its property shall be appointed, or any public officer shall take control or
charge of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation. In each case such removal shall be accomplished by the
giving of written notice of such removal by the Agency to the Trustee, whereupon the
Agency shall appoint a successor Trustee by an instrument in writing.
(c) The Trustee may at any time resign by giving written notice of such
resignation to the Agency and by giving the Bond Owners notice of such resignation by
mail at their respective addresses shown on the Registration Books. Upon receiving such
notice of resignation, the Agency shall promptly appoint a successor Trustee by an
instrument in writing. The Trustee shall not be relieved of its duties until such successor
Trustee has accepted such appointment.
(d) Any removal or resignation of the Trustee and appointment of a
successor Trustee shall become effective upon acceptance of appointment by the
successor Trustee. If no successor Trustee shall have been appointed and have
accepted appointment within forty-five (45) days of giving notice of removal or notice of
resignation as aforesaid, the resigning Trustee or any Bond Owner (on behalf of himself
and all other Bond Owners) may petition any court of competent jurisdiction for the
appointment of a successor Trustee, and such court may thereupon, after such notice (if
any) as it may deem proper, appoint such successor Trustee. Any successor Trustee
appointed under this Indenture, shall signify its acceptance of such appointment by
executing and delivering to the Agency and to its predecessor Trustee a written
acceptance thereof, and thereupon such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the moneys, estates, properties, rights,
powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if
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originally named Trustee herein; but, nevertheless at the Request of the Agency or the
request of the successor Trustee, such predecessor Trustee shall execute and deliver
any and all instruments of conveyance or further assurance and do such other things as
may reasonably be required for more fully and certainly vesting in and confirming to such
successor Trustee all the right, title and interest of such predecessor Trustee in and to
any property held by it under this Indenture and shall pay over, transfer, assign and deliver
to the successor Trustee any money or other property subject to the trusts and conditions
herein set forth. Upon request of the successor Trustee, the Agency shall execute and
deliver any and all instruments as may be reasonably required for more fully and certainly
vesting in and confirming to such successor Trustee all such moneys, estates, properties,
rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a
successor Trustee as provided in this subsection, the Agency shall mail a notice of the
succession of such Trustee to the trusts hereunder to each rating agency which then has
a current rating on the Bonds and to the Bond Owners at their respective addresses
shown on the Registration Books. If the Agency fails to mail such notice within fifteen (15)
days after acceptance of appointment by the successor Trustee, the successor Trustee
shall cause such notice to be mailed at the expense of the Agency.
(e) Any Trustee appointed under the provisions of this Section in
succession to the Trustee shall be a trust company or bank having the powers of a trust
company having a trust office in the State of California, having a combined capital and
surplus of at least Fifty Million Dollars ($50,000,000), and subject to supervision or
examination by federal or state authority. If such bank or trust company publishes a report
of condition at least annually, pursuant to law or to the requirements of any supervising or
examining authority above referred to, then for the purpose of this subsection the
combined capital and surplus of such bank or trust company shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in accordance with
the provisions of this subsection (e), the Trustee shall resign immediately in the manner
and with the effect specified in this Section.
Section 6.02. Merger or Consolidation. Any bank or trust company into which the
Trustee may be merged or converted or with which either of them may be consolidated or
any bank or trust company resulting from any merger, conversion or consolidation to
which it shall be a party or any bank or trust company to which the Trustee may sell or
transfer all or substantially all of its corporate trust business, provided such bank or trust
company shall be eligible under subsection (e) of Section 6.01 shall be the successor to
such Trustee without the execution or filing of any paper or any further act, anything herein
to the contrary notwithstanding.
Section 6.03. Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as
statements of the Agency, and the Trustee shall not assume responsibility for the
correctness of the same, nor make any representations as to the validity or sufficiency of
this Indenture or of the Bonds nor shall incur any responsibility in respect thereof, other
than as expressly stated herein. The Trustee shall, however, be responsible for its
representations contained in its certificate of authentication on the Bonds. The Trustee
shall not be liable in connection with the performance of its duties hereunder, except for its
own gross negligence or willful misconduct or breach. The Trustee shall not be liable for
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the acts of any agents of the Trustee selected by it with due care. The Trustee may
become the Owner of Bonds with the same rights it Would have it t ey were not Trustee
and, to the extent permitted by law, may act as depositary for and permit any of its officers
or directors to act as a member of, or in any other capacity with respect to, any committee
formed to protect the rights of Bond Owners, whether or not such committee shall
represent the Owners of a majority in principal amount of the Bonds then Outstanding.
(b) The Trustee shall not be liable for any error of judgment made in good
faith by a responsible officer, unless it shall be proved that the Trustee was grossly
negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the Owners of not
less than a majority in aggregate principal amount of the Bonds at the time Outstanding
relating to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the Trustee
under this Indenture.
(d) The Trustee shall not be liable for any action taken by it in good faith
and believed by it to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture.
(e) The Trustee shall not be deemed to have knowledge of any Event of
Default hereunder unless and until it shall have actual knowledge thereof, or shall have
received written notice thereof, at its Trust Office. Except as otherwise expressly provided
herein, the Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or of any of
the documents executed in connection with the Bonds, or as to the existence of an Event
of Default thereunder. The Trustee shall not be responsible for the validity or effectiveness
of any collateral given to or held by it.
Section 6.04. Right to Rely on Documents. The Trustee shall be protected in
acting upon any notice, resolution, request, consent, order, certificate, report, opinion,
Bonds or other paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties. The Trustee may consult with counsel, who
may be counsel of or to the Agency, with regard to legal questions, and the opinion of
such counsel shall be full and complete authorization and protection in respect of any
action taken or suffered by it hereunder in good faith and in accordance therewith.
The Trustee shall not be bound to recognize any person as the Owner of a Bond
unless and until such Bond is submitted for inspection, if required, and his title thereto is
established to the satisfaction of the Trustee.
Whenever in the administration of the trusts imposed upon it by this Indenture the
Trustee shall deem it necessary or desirable that a matter be proved or established prior
to taking or suffering any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively proved and
established by a Written Certificate of the Agency, which shall be full warrant to the
Trustee for any action taken or suffered in good faith under the provisions of this Indenture
in reliance upon such Written Certificate, but in its discretion the Trustee may, in lieu
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thereof, accept other evidence of such matter or may require such additional evidence as
to it may deem reasonable.
Section 6.05. Preservation and Inspection of Documents. All documents received
by the Trustee under the provisions of this Indenture shall be retained in its possession
and shall be subject at all reasonable times upon reasonable notice to the inspection of
the Agency and any Bond Owner, and their agents and representatives duly authorized in
writing, at reasonable hours and under reasonable conditions.
Section 6.06. Compensation and Indemnification. The Agency shall pay to the
Trustee from time to time all compensation for all services rendered under this Indenture
in accordance with the letter proposal from the Trustee approved by the Agency, and also
all reasonable expenses, charges, legal and consulting fees and other disbursements and
those of its attorneys, agents and employees, incurred in and about the performance of its
powers and duties under this Indenture.
The Agency further covenants and agrees to indemnify and save the Trustee and
its officers, directors, agents and employees, harmless against any loss, expense and
liabilities which it may incur arising out of or in the exercise and performance of its powers
and duties hereunder, including the costs and expenses of defending against any claim of
liability, but excluding any and all losses, expenses and liabilities which are due to the
n negligence, willful misconduct or willful default of the Trustee, its officers, directors, agents
or employees. The obligations of the Agency under this paragraph shall survive
resignation or removal of the Trustee under this Indenture and payment of the Bonds and
discharge of this Indenture.
Section 6.07. Deposit and Investment of Moneys in Funds. Moneys in the Interest
Account, the Principal Account, the Sinking Account, the Reserve Account, the
Redemption Account, the Earnings Account, the Rebate Account and the Costs of
Issuance Fund shall be invested by the Trustee in Permitted Investments specified in the
Written Request of the Agency filed with the Trustee at least two (2) Business Days in
advance of the making of such investments. In the absence of any such Written Request
of the Agency, the Trustee may (but shall not be required to) invest any such moneys in
Permitted Investments selected by the Trustee which by their terms mature prior to the
date on which such moneys are required to be paid out hereunder. Moneys in the Special
Fundl\may be invested by the Agency in any obligations in which the Agency is legally
authorized to invest its funds. Obligations purchased as an investment of moneys in any
fund shall be deemed to be part of such fund or account. All interest or gain derived from
the investment of amounts in any of the funds or accounts established hereunder shall be
deposited in the Earnings Account pursuant to and except as provided in Section 5.15(a).
For purposes of acquiring any investments hereunder, the Trustee may commingle funds
held by it hereunder upon the Written Request of the Agency. The Trustee may act as
principal or agent in the acquisition of any investment. The Trustee shall incur no liability
for losses arising from any investments made pursuant to this Section. For purposes of
determining the amount on deposit in any fund or account held hereunder, all Permitted
Investments credited to such fund or account shall be valued at the cost thereof (excluding
accrued interest and brokerage commissions, if any); provided, however, that Permitted
Investments credited to the Reserve Account shall be valued at the lesser of the cost
thereof or the market value thereof, such valuation to be performed by the Trustee at least
annually within ninety (90) days following the close of each Bond Year.
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Section 6.08. Accounting Records and Financial Statements. The Trustee shall at
all times keep, or cause to be kept, proper books of record and account, prepared in
accordance with industry standards, in which complete and accurate entries shall be
made of all transactions relating to the proceeds of the Bonds and all funds and accounts
established pursuant to this Indenture. Such books of record and account shall be
available for inspection by the Agency at reasonable hours and under reasonable
circumstances. The Trustee shall furnish to the Agency, at least monthly, an accounting
of all transactions relating to the proceeds of the Bonds and all funds and accounts
established pursuant to this Indenture.
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ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 7.01. Amendments Permitted. This Indenture and the rights and
obligations of the Agency and of the Owners of the Bonds may be modified or amended by
the Agency at any time by the execution of a Supplemental Indenture, but only with: (a) the
prior written consent of the Bond Insurer; and (b) pursuant to the affirmative vote at a
meeting of Bond Owners, or with the written conse—nt without a meeting, of the Owners of
sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding,
exclusive of Bonds disqualified as provided in Section 7.03. Any such Supplemental
Indenture shall become effective upon the execution and delivery thereof by the parties
thereto and upon consent of the requisite number of Bond Owners pursuant to Section
7.02. No such modification or amendment shall (a) extend the Principal Payment Date of
any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of
the Agency to pay the principal thereof, or interest thereon, or any premium payable on the
redemption thereof, at the time and place and at the rate and in the currency provided
therein, without the written consent of the Owner of such Bond, or (b) permit the creation
by the Agency of any mortgage, pledge or lien upon the Tax Revenues superior to or on a
parity with the pledge and lien created for the benefit of the Bonds (except as expressly
permitted by this Indenture), or reduce the percentage of Bonds required for the affirmative
vote or written consent to an amendment or modification, or (c) modify any of the rights or
obligations of the Trustee without its written consent thereto.
This Indenture and the rights and obligations of the Agency and of the Owners of
the Bonds may also be modified or amended at any time by a Supplemental Indenture,
without the consent of any Owners of the Bonds, but only to the extent permitted by law
and only for any one or more of the following purposes:
(a) to add to the covenants and agreements of the Agency in this
Indenture contained, other covenants and agreements thereafter to be
observed, or to surrender any right or power herein reserved to or conferred
upon the Agency;
(b)�to make such provisions for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective provision contained
in this Indenture,rtor otherwise to amend any other provision of this Indenture
as the Agency may deem necessary or desirable„,provided in any case that
such amendment shall not materially adversely affect the interests of the
Owners of the Bonds;
(c) to provide for the issuance of any Parity Bonds, and to provide the
terms and conditions under which such Parity Bonds may be issued, subject
to and in accordance with the provisions of Section 3.05; and
(d) with the prior written approval of nationally-recognized bond
counsel, to modify or delete any of the provisions of Section 5.15.
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Section 7.02. Bond Owners' Meeting.
(a) Calling Bond Owners' Meeting. If the Agency shall desire to obtain any
such consent it may call a meeting of Bond Owners, by resolution, for the purpose of
considering the action, the consent to which is desired.
(b) Notice of Meeting. Notice specifying the purpose, place, date and hour
of such meeting shall be mailed by the Secretary of the Agency, postage prepaid, to the
respective Owners thereof at their respective addresses appearing on the Registration
Books. The place, date and hour of holding such meeting and the date or dates of
publishing and mailing such notice shall be determined by the Agency, in its discretion.
The actual receipt by any Bond Owner of notice of any such meeting shall not be a
condition precedent to the holding of such meeting, and failure to receive such notice shall
not affect the validity of the proceedings thereat. A certificate by the Secretary of the
Agency, approved by resolution of the Agency that the meeting has been called and that
notice thereof has been given as herein provided shall be conclusive as against all parties
and it shall not be open to any Bond Owner to show that he failed to receive notice of such
meeting.
(c) Voting Qualifications. Any Bond Owner may, prior to any such meeting,
deliver his Bond or Bonds to any agency designated by the Agency for the purpose, and
shall thereupon be entitled to receive an appropriate receipt for the Bond or Bonds so
deposited, calling for the redelivery of such Bond or Bonds at any time after the meeting.
The Treasurer of the Agency shall prepare and deliver to the Chairman of the meeting a
list of the names and addresses of the registered Owners of Bonds, with a statement of
the names of Bond Owners so depositing their Bonds and the maturities and serial
numbers of the Bonds so held and deposited and no Bond Owner shall be entitled to vote
at such meeting unless such Owner's name appears on such list or unless he shall
present his Bond or Bonds at the meeting or a certificate of deposit thereof, satisfactory to
the Agency, executed by a bank, trust company or other authorized depository. No Bond
Owners shall be permitted to vote with respect to a larger aggregate principal amount of
Bonds than is set against such Owner's name on such list, unless he shall produce the
Bonds upon which such Owner desires to vote, or a certificate of deposit thereof as above
provided.
(d) Disqualified Bonds. The Agency covenants that it will present at the
meeting a Written Certificate stating the maturities and serial numbers of all Bonds
disqualified pursuant to Section 7.03. No person shall be permitted at the meeting to vote
or consent with respect to any Bond appearing upon such certificate, or any Bond which it
shall be established at or prior to the meeting is disqualified pursuant to Section 7.03 and
no such Bond shall be counted in determining whether a quorum is present at the
meeting.
(e) Quorum and Procedure. A representation of at least sixty percent (60%)
in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds
disqualified pursuant to subsection (d) of this Section) shall be necessary to constitute a
quorum at any meeting of Bond Owners, but less than a quorum may adjourn the meeting
from time to time, and the meeting may be held as so adjourned without further notice,
whether such adjournment shall have been had by a quorum or less than a quorum. The
Agency shall, by an instrument in writing, appoint a temporary chairman of the meeting,
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and the meeting shall be organized by the election of a permanent chairman and a
secretary. At any meeting each Bond Owner shall be entitled to one vote for every $5,000
principal amount of Bonds with respect to which he shall be entitled to vote as aforesaid,
and such vote may be given in person or by proxy duly appointed by an instrument in
writing presented at the meeting. The Agency, by its duly authorized representative, may
attend any meeting of the Bond Owners, but shall not be required to do so.
(f) Vote Required. At any such meeting held as aforesaid there shall be
submitted for the consideration and action of the Bond Owners a statement of proposed
action, consent to which is desired, and if such action shall be consented to and approved
by Bond Owners holding at least sixty percent (60%) in aggregate amount of the Bonds
then Outstanding (exclusive of Bonds disqualified pursuant to subsection (d) of this
Section) the chairman and secretary of the meeting shall so certify in writing to the
Agency, and such certificate shall constitute complete evidence of consent of Bond
Owners under the provisions of this Indenture. A certificate signed and verified by the
chairman and secretary of any such meeting shall be conclusive evidence and the only
competent evidence of matters stated in such certificate relating to proceedings taken at
such meeting.
(g) Written Consent of Bond Owners. If the Agency shall desire to obtain
any such consent in writing, without a meeting of Bond Owners, the Agency may, by
resolution, propose the action to which consent is desired. A copy of such resolution,
together with a request to Bond Owners for their consent to the action proposed therein,
shall be mailed by the Secretary thereof to each Owner at the respective addresses
appearing on the Registration Books.
The actual receipt by any Bond Owner of such resolution and request shall
not affect the validity of the proceedings for the obtaining of such consent. A certificate by
said Secretary, approved by resolution of the Agency, that said resolution and request has
been published and mailed as herein provided shall be conclusive as against all parties,
and it shall not be open to any Bond Owner to show that such Bond Owner failed to
receive such resolution and consent.
Each written consent shall be accompanied by proof of ownership of the
Bonds for which such consent is given. Proof of ownership shall be made in such manner
as shall be prescribed by the resolution proposing the action. Any such written consent
shall be binding upon the Owner of the Bonds giving such consent and on any subsequent
Owner (whether or not such subsequent Owner has notice thereof) unless such consent is
revoked in writing by the Owner giving such consent or by the subsequent Owner. To be
effective, any revocation of consent must be filed before the adoption of the resolution
accepting consents as hereinafter provided.
After the Owners of at least sixty percent (60%) in aggregate principal
amount of the Bonds then Outstanding (exclusive of Bonds disqualified pursuant to
subsection (d) of this Section) shall have consented in writing, the Agency shall adopt a
resolution accepting such consents and such resolution shall constitute complete
evidence of the consent of Bond Owners under this Indenture.
(h) Notice of Consent. Notice specifying the amendment, waiver or
modification that has received the consent of Bond Owners as required by this Section
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•
J_
shall be mailed by the Secretary of the Agency to the Owners at the respective addresses
appearing in the Registration Books, less than sixty (60) days following the final action in
the proceedings for the obtaining of such consent. Said notice is only for the information
of Bond Owners and failure to mail such notice or any defect therein shall not affect the
validity of the proceedings theretofore taken in the obtaining of such consent.
Section 7.03. Disqualified Bonds. Bonds owned or held for the account of the
Agency or the City of Palm Springs, excepting any pension or retirement fund, shall not be
deemed Outstanding for the purpose of any vote, consent or other action or any
calculation of Outstanding Bonds provided for in this Article VII, and shall not be entitled to
vote upon, consent to, or take any other action provided for in this Article VII.
Section 7.04. Effect of Supplemental Indenture. From and after the time any
Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall
be deemed to be modified and amended in accordance therewith, the respective rights,
duties and obligations under this Indenture of the Agency, the Trustee and all Owners of
Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms and
conditions of any such Supplemental Indenture shall be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.
The Agency may adopt appropriate regulations to require each Bond Owner,
before such Owner's consent provided for in this Article VII shall be deemed effective, to
reveal if the Bonds as to which such consent is given are disqualified as provided in
Section 7.03.
Section 7.05. Endorsement or Replacement of Bonds Issued After Amendments.
The Agency may determine that Bonds issued and delivered after the effective date of any
action taken as provided in this Article VII shall bear a notation, by endorsement or
otherwise, in form approved by the Agency, as to such action. In that case, upon demand
,�on the Owner of any Bond Outstanding at such effective date and presentation of the
applicable Bond for that purpose at the Trust Office of the Trustee or at such other office
as the Agency may select and designate for that purpose, a suitable notation shall be
made on such Bond. The Agency may determine that new Bonds, so modified as in the
opinion of the Agency is necessary to conform to such Bond Owners' action, shall be
prepared, executed and delivered. In that case, upon demand,on the Owner of any Bonds
then Outstanding, such new Bonds shall be exchanged at the Trust Office of the Trustee
without cost to any Bond Owner, upon surrender of such Outstanding Bonds.
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x
ARTICLE Vlll
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
Section 8.01. Events of Default and Acceleration of Maturities. The following
events shall constitute Events of Default hereunder:
(a) if default shall be made in the due and punctual payment of the
principal of or interest or redemption premium (if any) on any Bond when
and as the same shall become due and payable, whether at maturity as
therein expressed, by declaration or otherwise;
(b) if default shall be made by the Agency in the observance of any of
the covenants, agreements or conditions on its part in this Indenture or in
the Bonds contained, other than a default described in the preceding clause
(a), and such default shall have continued for a period of ninety (90) days; or
(c) if the Agency shall commence a voluntary action under Title 11 of
the United States Code or any substitute or successor statute.
If an Event of Default has occurred under this Section and is continuing, with the
prior written consent of the Bond Insurer the Trustee may, and with the prior written
consent of the Bond Insurer and if requested in writing by the Owners of a majority in
aggregate principal amount of the Bonds then Outstanding the Trustee shall, (a) declare
the principal of the Bonds, together with the accrued interest thereon, to be due and
payable immediately, and upon any such declaration the same shall become immediately
due and payable, anything in this Indenture or in the Bonds to the contrary notwithstanding,
and (b) exercise any other remedies available to the Trustee and the Bond Owners in law
or at equity.
Immediately upon becoming aware of the occurrence of an Event of Default, the
Trustee shall give notice of such Event of Default to the Bond Insurer and to the Agency by
telephone confirmed in writing. Such notice shall also state whether the principal of the
Bonds shall have been declared to be or have immediately become due and payable.
With respect to any Event of Default described in clauses (a) or (c) above the Trustee
shall, and with respect to any Event of Default described in clause (b) above the Trustee in
its sole discretion may, also give such notice to the Owners of the Bonds in the same
manner as provided herein for notices of redemption of the Bonds, which shall include the
statement that interest on the Bonds shall cease to accrue fromAand after the date, if any,
on which the Trustee shall have declared the Bonds to become due and payable pursuant
to the preceding paragraph.
This provision, however, is subject to the condition that if, at any time after the
principal of the Bonds shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained or
entered, the Agency shall deposit with the Trustee a sum sufficient to pay all principal on
the Bonds matured prior to such declaration and all matured installments of interest (if
any) upon all the Bonds, with interestAon such overdue installments of principal and
interest at the net effective rate then borne by the Outstanding Bonds, and the reasonable
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expenses of the Trustee, and any and all other defaults known to the Trustee (other than in
the payment of principal of and interest on the Bonds due and payable solely by reason of
such declaration) shall have been made good or cured to the satisfaction of the Trustee or
provision deemed by the Trustee to be adequate shall have been made therefor, then, and
in every such case, the Owners of at least a majority in aggregate principal amount of the
Bonds then Outstanding, by written notice to the Agency and to the Trustee, may, on
behalf of the Owners of all of the Bonds, rescind and annul such declaration and its
consequences. However, no such rescission and annulment shall extend to or shall affect
any subsequent default, or shall impair or exhaust any right or power consequent thereon.
Section 8.02. Application of Funds Upon Acceleration. All of the Tax Revenues
and all sums in the funds and accounts established pursuant to Sections 3.03, 3.04, 4.02
and 4.03 upon the date of the declaration of acceleration as provided in Section 8.01, and
all sums thereafter received by the Trustee hereunder, shall be applied by the Trustee in
the order following upon presentation of the several Bonds, and the stamping thereon of
the payment if only partially paid, or upon the surrender thereof if fully paid:
First, to the payment of the fees, costs and expenses of the Trustee
and of the Bond Owners in declaring such Event of Default, including
reasonable compensation to its or their agents, attorneys and counsel; and
Second, to the payment of the whole amount then owing and unpaid
upon the Bonds for principal and interest, with interest on the overdue
principal and installments of interest at the rate of twelve percent (12%) per
annum (to the extent that such interest on overdue installments of principal
and interest shall have been collected), and in case such moneys shall be
insufficient to pay in full the whole amount so owing and unpaid upon the
Bonds, then to the payment of such principal and interest without preference
or priority of principal over interest, or interest over principal, or of any
installment of interest over any other installment of interest, ratably to the
aggregate of such principal and interest.
Section 8.03. Power of Trustee to Control Proceedings. In the event that the
Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial
proceedings or otherwise, pursuant to its duties hereunder, whether upon its own
discretion or upon the request of the Owners of a majority in principal amount of the
Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the
best interests of the Owners of the Bonds, with respect to the continuance,
discontinuance, withdrawal, compromise, settlement or other disposal of such action;
provided, however, that the Trustee shall not, unless there no longer continues an Event of
Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation
pending at law or in equity, if at the time there has been filed with it a written request
signed by the Owners of a majority in principal amount of the Outstanding Bonds
hereunder opposing such discontinuance, withdrawal, compromise, settlement or other
disposal of such litigation.
Section 8.04. Limitation on Bond Owners' Right to Sue. No Owner of any Bond
issued hereunder shall have the right to institute any suit, action or proceeding at law or in
equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have
previously given to the Trustee written notice of the occurrence of an Event of Default; (b)
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• •
the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding
shall have made written request upon the Trustee to exercise the powers hereinbefore
granted or to institute such action, suit or proceeding in its own name; (c) said Owners
shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against
the costs, expenses and liabilities to be incurred in compliance with such request; and (d)
the Trustee shall have refused or omitted to comply with such request for a period of sixty
(60) days after such written request shall have been received by, and said tender of
indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby
declared, in every case, to be conditions precedent to the exercise by any Owner of
Bonds of any remedy hereunder; it being understood and intended that no one or more
Owners of Bonds shall have any right in any manner whatever by his or their action to
enforce any right under this Indenture, except in the manner herein provided, and that all
proceedings at law or in equity to enforce any provision of this Indenture shall be
instituted, had and maintained in the manner herein provided and for the equal benefit of
all Owners of the Outstanding Bonds.
The right of any Owner of any Bond to receive payment of the principal of (and
premium, if any) and interest on such Bond as herein provided or to institute suit for the
enforcement of any such payment, shall not be impaired or affected without the written
consent of such Owner, notwithstanding the foregoing provisions of this Section or any
other provision of this Indenture.
Section 8.05. Non-waiver. Nothing in this Article VIII or in any other provision of
this Indenture or in the Bonds, shall affect or impair the obligation of the Agency, which is
absolute and unconditional, to pay from the Tax Revenues and other amounts pledged
hereunder, the principal of and interest and premium (if any) on the Bonds to the
respective Owners of the Bonds on the respective Interest Payment Dates, as herein
provided, or affect or impair the right of action, which is also absolute and unconditional, of
the Owners to institute suit to enforce such payment by virtue of the contract embodied in
the Bonds.
A waiver of any default by any Bond Owner shall not affect any subsequent default
or impair any rights or remedies on the subsequent default. No delay or omission of any
Owner of any of the Bonds to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver of any such default or
an acquiescence therein, and every power and remedy conferred upon the Bond Owners
by the Law or by this Article VIII may be enforced and exercised from time to time and as
often as shall be deemed expedient by the Owners of the Bonds.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be
abandoned or determined adversely to the Bond Owners, the Agency and the Bond
Owners shall be restored to their former positions, rights and remedies as if such suit,
action or proceeding had not been brought or taken.
Section 8.06. Actions by Trustee as Attorney-in-Fact. Any suit, action or
proceeding which any Owner of Bonds shall have the right to bring to enforce any right or
remedy hereunder may be brought by the Trustee for the equal benefit and protection of
all Owners of Bonds similarly situated and the Trustee is hereby appointed (and the
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9
successive respective Owners of the Bonds issued hereunder, by taking and holding the
same, shall be conclusively deemed so to have appointed it) the true and lawful attorney-
in-fact of the respective Owners of the Bonds for the purpose of bringing any such suit,
action or proceeding and to do and perform any and all acts and things for and on behalf
of the respective Owners of the Bonds as a class or classes, as may be necessary or
advisable in the opinion of the Trustee as such attorney-in-fact.
Section 8.07. Remedies Not Exclusive. No remedy herein conferred upon or
reserved to the Owners of Bonds is intended to be exclusive of any other remedy. Every
such remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and
may be exercised without exhausting and without regard to any other remedy conferred by
the Law or any other law.
-41-
ARTICLE IX
MISCELLANEOUS
Section 9.01. Benefits Limited to Parties. Nothing in this Indenture, expressed or
implied, is intended to give to any person other than the Agency, the Trustee and the
Owners of the Bonds, any right, remedy, claim under or by reason of this Indenture. Any
covenants, stipulations, promises or agreements in this Indenture contained by and on
behalf of the Agency shall be for the sole and exclusive benefit of the Trustee and the
Owners of the Bonds.
Section 9.02. Successor is Deemed Included in All References to Predecessor.
Whenever in this Indenture or any Supplemental Indenture either the Agency or the
Trustee is named or referred to, such reference shall be deemed to include the
successors or assigns thereof, and all the covenants and agreements in this Indenture
contained by or on behalf of the Agency or the Trustee shall bind and inure to the benefit
of the respective successors and assigns thereof whether so expressed or not.
Section 9.03. Discharge of Indenture. If the Agency shall pay and discharge the
entire indebtedness on all Bonds Outstanding in any one or more of the following ways:
(a) by well and truly paying or causing to be paid the principal of and
interest and premium (if any) on all Bonds Outstanding, as and when the
same become due and payable;
(b) by depositing with the Trustee, in trust, at or before maturity,
money which, together with the available amounts then on deposit in the
funds and accounts established pursuant to this Indenture, is fully sufficient
to pay all Bonds Outstanding, including all principal, interest and redemption
premiums, or;
(c) by depositing with the Trustee, in trust, Federal Securities in such
amount as an„ndependent Accountant shall determine will, together with the
interest to accrue thereon and available moneys then on deposit in the funds
and accounts established pursuant to this Indenture, be fully sufficient to pay
and discharge the indebtedness on all Bonds (including all principal, interest
and redemption premiums) at or before maturity;
and if such Bonds are to be redeemed prior to the maturity thereof notice of such
redemption shall have been given pursuant to Section 2.03(c) or provision satisfactory to
the Trustee shall have been made for the giving of such notice, then, at the election of the
Agency, and notwithstanding that any Bonds shall not have been surrendered for payment,
the pledge of the Tax Revenues and other funds provided for in this Indenture and all other
obligations of the Agency under this Indenture with respect to all Bonds Outstanding shall
cease and terminate, except only the obligation of the Agency to pay or cause to be paid
to the Owners of the Bonds not so surrendered and paid all sums due thereon and all
expenses and costs of the Trustee; and thereafter Tax Revenues shall not be payable to
the Trustee. Notice of such election shall be filed with the Trustee.
-42-
Any funds thereafter held by the Trustee, which are not required for said purpose,
shall be paid over to the Agency.
Section 9.04. Execution of Documents and Proof of Ownership by Bond Owners.
Any request, declaration or other instrument which this Indenture may require or permit to
be executed by Bond Owners may be in one or more instruments of similar tenor, and
shall be executed by Bond Owners in person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution
by any Bond Owner or his attorney of such request, declaration or other instrument, or of
such writing appointing such attorney, may be proved by the certificate of any notary
public or other officer authorized to take acknowledgments of deeds to be recorded in the
state in which he purports to act, that the person signing such request, declaration or
other instrument or writing acknowledged to him the execution thereof, or by an affidavit of
a witness of such execution, duly sworn to before such notary public or other officer.
The ownership of Bonds and the amount, Principal Payment Date, number and
date of ownership thereof shall be proved by the Registration Books.
Any request, declaration or other instrument or writing of the Owner of any Bond
shall bind all future Owners of such Bond in respect of anything done or suffered to be
done by the Agency or the Trustee in good faith and in accordance therewith.
Section 9.05. Waiver of Personal Liability. No member, officer, agent or employee
of the Agency shall be individually or personally liable for the payment of the principal of or
interest on the Bonds; but nothing herein contained shall relieve any such member, officer,
agent or employee from the performance of any official duty provided by law.
Section 9.06. Destruction of Canceled Bonds. Whenever in this Indenture
provision is made for the surrender to the Agency of any Bonds which have been paid or
cancelled pursuant to the provisions of this Indenture, at the Written Request of the
Agency a certificate of destruction duly executed by the Trustee shall be deemed to be the
equivalent of the surrender of such canceled Bonds and the Agency shall be entitled to
rely upon any statement of fact contained in any certificate with respect to the destruction
of any such Bonds therein referred to.
Section 9.07. Notices. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served may be given or served by being
deposited postage prepaid in a post office letter box addressed to the Trustee at its Trust
Office or to the Agency (until another address is filed by the Agency with the Trustee) as
follows: Secretary, Community Redevelopment Agency, City Hall, 3200 Tahquitz-McCallum
Way, Palm Springs, California 92262. Any notice, authorization, request or demand
required or permitted to be given hereunder shall also be given to the Bond Insurer, in
writing, by first class mail postage prepaid at 445 Hamilton Avenue, White Plains, New
York 10601.
Section 9.08. Partial Invalidity. If any Section, paragraph, sentence, clause or
phrase of this Indenture shall for any reason be held illegal, invalid or unenforceable, such
holding shall not affect the validity of the remaining portions of this Indenture. The Agency
hereby declares that it would have adopted this Indenture and each and every other
-43-
r
Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the
Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs,
sentences, clauses, or phrases of this Indenture may be held illegal, invalid or
unenforceable. If, by reason of the judgment of any court, the Trustee is rendered unable
to perform its duties hereunder, all such duties and all of the rights and powers of the
Trustee hereunder shall be assumed by and vest in the Treasurer of the Agency in trust
for the benefit of the Bond Owners. The Agency covenants for the direct benefit of the
Bond Owners that its Treasurer in such case shall be vested with all of the rights and
powers of the Trustee hereunder, and shall assume all of the responsibilities and perform
all of the duties of the Trustee hereunder, in trust for the benefit of the Bonds.
Section 9.09. Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding, any money held by the Trustee in trust for the payment and discharge of
the interest or premium (if any) on or principal of the Bonds which remains unclaimed for
six (6) years after the date when the payments of such interest, premium and principal
have become payable, if such money was held by the Trustee at such date, or for six (6)
years after the date of deposit of such money if deposited with the Trustee after the date
when the interest and premium (if any) on and principal of such Bonds have become
payable, shall at the Written Request of the Agency be repaid by the Trustee to the
Agency as its absolute property free from trust, and the Trustee shall thereupon be
released and discharged with respect thereto and the Bond Owners shall look only to the
Agency for the payment of the interest and premium (if any) on and principal of such
Bonds.
-44-
IN WITNESS WHEREOF, the COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF PALM SPRINGS has caused this Indenture to be signed in its name by its
Chairman and attested by its Secretary, and FIRST INTERSTATE BANK OF CALIFORNIA,
in token of its acceptance of the trusts created hereunder, has caused this Indenture to be
signed in its corporate name by its officers thereunto duly authorized, all as of the day and
year first above written.
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
By
Chairman
(SEAL)
Attest:
By
Secretary
FIRST INTERSTATE BANK
OF CALIFORNIA, as Trustee
By
Vice President
By
Assistant Vice President
-45-
EXHIBIT A
(FORM OF BOND)
No. $
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT
TAX ALLOCATION REFUNDING BONDS, ISSUE OF 1987
MATURITY DATE: INTEREST RATE: ORIGINAL ISSUE DATE: CUSIP:
March 1, 1987
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM
SPRINGS, a public body, corporate and politic, duly organized and existing under the laws
of the State of California (the "Agency'), for value received, hereby promises to pay to the
Registered Owner specified above or registered assigns (the "Registered Owner"), on the
Maturity Date specified above (subject to any right of prior redemption hereinafter provided
for), the Principal Amount specified above in lawful money of the United States of America,
and to pay interest thereon in like lawful money from the interest payment date next
preceding the date of authentication of this Bond (unless (i) this Bond is authenticated on
an interest payment date, in which event it shall bear interest from such interest payment
date, or (ii) this Bond is authenticated on or before an interest payment date and after the
fifteenth day of the month preceding such interest payment date, in which event it shall
bear interest from such interest payment date, or (iii) this Bond is authenticated prior to
August 15, 1987, in which event it shall bear interest from March 1, 1987; 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), at the Interest Rate per
annum specified above, payable semiannually on March 1 and September 1 in each year,
commencing September 1, 1987. Principal hereof is payable at the principal corporate
trust office of First Interstate Bank of California, as trustee (the "Trustee"), in Los Angeles,
California. Interest hereon is payable by check or draft of the Trustee mailed to the
EXHIBIT A
Page 1
Registered Owner hereof at the Registered Owner's address as it appears on the
registration books of the Trustee as of the fifteenth (15th) day of the month preceding each
interest payment date, or at such other address as the Registered Owner may have filed
with the Trustee for such purpose.
This Bond is one of a duly authorized issue of bonds of the Agency designated as
the "Community Redevelopment Agency of the City of Palm Springs Central Business
District Redevelopment Project Tax Allocation Refunding Bonds, Issue of 1987" (the
"Bonds") of an aggregate principal amount of Ten Million Three Hundred Fifty-Five
Thousand Dollars ($10,355,000), all of like tenor and date (except for such variation, if any,
as may be required to designate varying numbers, maturities, interest rates or redemption
provisions) and all issued pursuant to the provisions of the Community Redevelopment
Law, being Part 1 (commencing with Section 33000) of Division 24 of the Health and
Safety Code of the State of California (the "Law"), pursuant to the provisions of Article 11
of Chapter 3 of Part 1 of Division 2 of the California Government Code and pursuant to an
Indenture of Trust dated as of March 1, 1987, by and between the Agency and the Trustee
(the "Indenture") and a resolution of the Agency adopted on March 4, 1987, authorizing
the issuance of the Bonds. The Agency may issue or incur additional obligations on a
parity with the Bonds, but only subject to the terms of the Indenture. Reference is hereby
made to the Indenture (copies of which are on file at the office of the Agency) and all
supplements thereto and to the Law for a description of the terms on which the Bonds are
issued, the provisions with regard to the nature and extent of the Tax Revenues, as that
term is defined in the Indenture, and the rights thereunder of the owners of the Bonds and
the rights, duties and immunities of the Trustee and the rights and obligations of the
Agency thereunder, to all of the provisions of which the Registered Owner of this Bond, by
acceptance hereof, assents and agrees.
The Bonds have been issued by the Agency to refund certain bonds previously
issued by the Agency to aid in financing the Central Business District Redevelopment
Project in the City of Palm Springs, California, (the "Project Area"), a duly designated
redevelopment project area under the laws of the State of California.
This Bond and the interest hereon and all other Bonds and the interest thereon (to
the extent set forth in the Indenture) are payable from, and are secured by a charge and
lien on the Tax Revenues derived by the Agency from the Project Area. As and to the
extent set forth in the Indenture, all of the Tax Revenues are exclusively and irrevocably
pledged in accordance with the terms hereof and the provisions of the Indenture and the
Law, to the payment of the principal of and interest and premium (if any) on the Bonds.
Notwithstanding the foregoing, certain amounts out of Tax Revenues may be applied for
other purposes as provided in the Indenture.
This Bond is not a debt of the City of Palm Springs, 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 the Tax Revenues and other funds held under the Indenture.
The rights and obligations of the Agency and the 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 permit a change in the
terms of redemption or maturity of the principal of any outstanding Bond or of any
EXHIBIT A
Page 2
installment of interest thereon or a reduction in the principal amount or the redemption
price thereof or in the rate of interest thereon without the consent of the owner of such
Bond, or shall reduce the percentages of the owners required to effect any such
modification or amendment.
Bonds maturing on or before March 1, 1994, are not subject to redemption prior to
maturity. Bonds maturing on or after March 1, 1995, are subject to redemption in whole,
or in part in inverse order of maturity and by lot within a maturity, at the option of the
Agency, on any interest payment date on or after March 1, 1994, from any available
source of funds, at a redemption price equal to the principal amount thereof to be
redeemed together with accrued interest thereon to the redemption date, plus a premium
(expressed as a percentage of the principal amount of the Bonds to be redeemed) as
follows:
Redemption Dates Redemption Premium
March 1, 1994, and September 1, 1994 2%
March 1, 1995, and September 1, 1995 1z
March 1, 1996, and September 1, 1996 1
March 1, 1997, and September 1, 1997 z
March 1, 1998, and thereafter 0
Bonds maturing on March 1, 2008, are also subject to redemption from sinking
account payments made by the Agency, in whole or in part by lot, on each March 1 on or
after March 1, 2002, at a redemption price equal to the principal amount thereof to be
redeemed together with accrued interest thereon to the redemption date, without premium,
as set forth in the following table:
EXHIBIT A
Page 3
Sinking Account
Redemption Date Principal Amount
(March 1) to be Redeemed
2002 $575,000
2003 615,000
2004 655,000
2005 700,000
2006 745,000
2007 790,000
2008 (Maturity) 845,000
As provided in the Indenture, notice of redemption shall be mailed by first class
mail not less than thirty (30) nor more than sixty (60) days prior to the redemption date to
the respective owners of any Bonds designated for redemption at their addresses
appearing on the Bond registration books of 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 or the cessation of accrual of interest on such Bonds.
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.
This Bond is transferable by the Registered Owner hereof, in person or by his
attorney duly authorized in writing, at said office of the Trustee in Los Angeles, California,
but only in the manner, subject to the limitations and upon payment of the charges
provided in the Indenture, and upon surrender and cancellation of this Bond. Upon
registration of such transfer a new Bond or Bonds, of authorized denomination or
denominations, for the same aggregate principal amount and of the same maturity will be
issued to the transferee in exchange herefor.
The Agency and the Trustee may treat the Registered Owner hereof as the
absolute owner hereof for all purposes, and the Agency and the Trustee shall not be
affected by any notice to the contrary.
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, form 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 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.
EXHIBIT A
Page 4
This Bond shall not be entitled to any benefit under the Indenture or become valid
or obligatory for any purpose until the certificate of authentication hereon endorsed shall
have been signed by the Trustee.
EXHIBIT A
Page 5
` 0
IN WITNESS WHEREOF, the Community Redevelopment Agency of the City of
Palm Springs has caused this Bond to be executed in its name and on its behalf with the
signature of its Chairman and its seal to be reproduced hereon and
attested by the signature of its Secretary.
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
By
Chairman
(SEAL)
Attest:
By:
Secretary
EXHIBIT A
Page 6
{
(FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
TO APPEAR ON BONDS)
This is one of the Bonds described in the within-mentioned Indenture.
Dated:
FIRST INTERSTATE BANK OF
CALIFORNIA,
as Trustee
By
Authorized Signatory
(FORM OF ASSIGNMENT)
For value received the undersigned hereby sells, assigns and transfers unto
whose social security or other tax identifying number is
the within-mentioned Bond and hereby irrevocably constitute(s) and
appoint(s) attorney, to transfer the same on the bond register of the
Trustee with full power of substitution in the premises.
Dated:
Signature Guaranteed:
Note: Signature(s) must be guaranteed by a Note: The signature(s) on this Assignment
member firm of the New York Stock must correspond with the name(s) as written
Exchange or a commercial bank or trust on the face of the within Bond in every
company. particular without alteration or enlargement or
any change whatsoever.
EXHIBIT A
Page 7
• i
PRELIMINARY OFFICIAL STATEMENT DATED FEBRUARY 17, 1987
NEW ISSUE
/n the opinion of Bond Counsel, under existing laws,regulations,ruling and judicial decisions, the interest on the
Bonds is exempt from income taxation by the United States of America, SUBJECT, HOWEVER, to certain
qualifications more particularly described under the caption "Tax Exemption" herein, and from"personal income
o a e taxation by the State of California.
a $1092709000*
"- COMMUNITY REDEVELOPMENT AGENCY
E`e
e OF THE CITY" OF PALM SPRINGS
Central Business District Redevelopment Project
Tax Allocation Refunding Bonds, Issue of 1987
e Z Dated: March 1, 1987
Due: March 1, as shown below
_ Interest on the Bonds will be payable on March 1 and September 1 of each year commencing September 1, 1987.
The Bonds will be issued in fully registered form in the denomination of$5,000 each or any integral multiple thereof.
Interest on the Bonds is payable by check or draft mailed to the registered owners as of the fifteenth day prior to each
a interest payment date and principal of the Bonds will be payable at the corporate trust office of the Trustee.
o= Net proceeds of the Bonds will be used to provide for the advance refunding of the Agnecy's outstanding Central
Business District Redevelopment Project Tax Allocation Bonds, 1984 Series A.The Bonds are special obligations of the
o Agency and are secured by Tax Revenues consisting of a portion of ad valorem taxes levied upon all taxable property
32= within the Project Area as discussed herein. See 'Security for the Bonds" herein.
y a The Bonds are subject to redemption prior to maturity,in whole or in part,on March 1, 1994,and on each interest
payment date thereafter as described herein. See "Optional Redemption".
E o a The Bonds are not a debt of the City of Palm Springs, the State of California or any of its political subdivisions
C >, other than the Agency and neither the City,the State nor any of its political subdivisions other than the Agency is liable
.E9 E9 therefor,nor in any event shall the Bonds be payable out of any funds or properties other than those of the Agency as set
—_— forth in the Indenture. The Bonds do not constitute an indebtedness within the meaning of any Constitutional or
-a= 3 statutory debt limitation or restriction. Neither the members of the Agency nor any persons executing the Bonds are
_z— liable personally on the Bonds by reason of their issuance.
MATURITY SCHEDULE*
— e Maturity Maturity
Date Principal Interest Date Principal Interest
March 1 Amount Rate Price March 1 Amount Rate Price
1988 $245,000 1995 S355,000
— 1989 250,000 1996 385,000
1990 265,000 1997 410,000
1991 285,000 1998 440,000
e N 1992 300,000 1999 470,000
t=' 1993 320,000 2000 505,000
1994 335,000 2001 545,000
E _ $5,160,000 _`R, Term Bonds due March 1, 2008, Price _96
The Bonds are offered when, as and if issued, subject to the approval as to their legality by Jones Hall Hill &
_ White, A Professional Law Corporation, San Francisco, Bond Counsel. Certain legal matters will be passed upon for
the Underwriter by Stradling, Yocca, Carlson & Routh, Newport Beach, California. It is anticipated that the Bonds
e» will be available for delivery in definitive form in Los Angeles, California on or about March 17, 1987"
yE—
Stone & Youngberg
87.
E r
E a Dated: February 1987
Preliminary, subject to change.
PALM SPRINGS COMMUNITY REDEVELOPMENT AGENCY
AND
CITY OF PALM SPRINGS
AGENCY BOARD AND CITY COUNCIL
Frank Bogert, Chairman and Mayor
Richard Smith, Member and Mayor pro Tem
Sharon Apfelbaum, Member and Councilperson
Eli Birer, Member and Councilperson
William Foster, Member and Councilperson
AGENCY AND CITY STAFF
Norman King, Executive Director and City Manager
Dallas Flicek, Assistant City Manager
Kenneth E. Feenstra, Redevelopment Director
Paul R. Howard, Treasurer and City Finance Director
William Adams, Agency General Counsel and City Attorney
John Terell , Project Manager
SPECIAL SERVICES
Trustee
First Interstate Bank
Los Angeles and San Francisco
Bond Counsel
Jones Hall Hill & White, A Professional Law Corporation
San Francisco
- i -
TO WHOM IT MAY CONCERN:
The purpose of this Official Statement is to furnish certain information
regarding the Central Business District Redevelopment Project Tax Allocation
Refunding Bonds, Issue of 1987, to be issued by the Community Redevelopment
Agency of the City of Palm Springs, a public body duly activated by the City
of Palm Springs.
The material contained in this Official Statement was prepared by Stone &
Youngberg with the cooperation of the Agency. All information contained in
this Official Statement is gathered from sources believed to be reliable but
the accuracy thereof is not guaranteed.
All of the following summaries of the Indenture of the Agency and other
documents are subject to the provisions of such documents respectively and do
not purport to be complete statements of any or all of such provisions.
Reference is hereby made to such documents on file with the Agency for further
information in connection therewith. The covenants of the Agency are fully
set forth in the Indenture. This Official Statement does not constitute a
contract with purchasers of the Bonds. Any estimates and projections set
forth or summarized may not be realized. Any statements herein involving
matters of opinion or estimates, whether or not so designated, are to be
construed as provisional rather than factual .
The execution and delivery of this Official Statement have been authorized
by the Agency.
Frank Bogert
Chairman
- ii -
TABLE OF CONTENTS
Page
Introduction. . . .,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Refunding Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
TheBonds. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Security for the Bonds.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Bondowners' Risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Limitations on Tax Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
TheIndenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
The Community Redevelopment Agency of the City of Palm Springs . . . . . . . . . 23
The Central Business District Redevelopment Project. . . . . . . . . . . . . . . . . . . . . 25
Tax Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
LegalOpinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
General Information Concerning the City and Region. . . . . . . . . . . . . . . Appendix A
Form of Bond Counsel Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix B
No dealer, broker, salesman or other person has been authorized by the
Community Redevelopment Agency of the City of Palm Springs or the Underwriter
to give any information or to make any representations other than those
contained herein and, if given or made, such other information or
representation must not be relied upon as having been authorized by the
foregoing. This Official Statement does not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of the Bonds
by a person in any jurisdiction in which it is unlawful for such person to
make such an offer, solicitation or sale.
The information set forth therein has been furnished by the Agency and
from other sources which are believed to be reliable, but is not guaranteed as
to accuracy or completeness, and is not to be construed as a representation by
the Underwriter. The information and expression of opinion herein are subject
to change without notice and neither the delivery of this Official Statement
nor any sale made hereunder shall , under any circumstances, create any
implication that there has been no change in the affairs of the Agency or any
other parties described herein since the date hereof.
- iii -
OFFICIAL STATEMENT
$10,270,000*
Community Redevelopment Agency of the City of Palm Springs
Central Business District Redevelopment Project
Tax Allocation Refunding Bonds, Issue of 1987
INTRODUCTION
The City of Palm Springs, California, (the "City") activated the Community
Redevelopment Agency of the City of Palm Springs (the "Agency") in 1972
pursuant to the California Community Redevelopment Law (the "Law") . The five
members of the City Council also serve as members of the Agency with the Mayor
serving as Chairman of the Agency. The Agency adopted a Redevelopment Plan
for the Palm Springs Central Business District Redevelopment Project (the
"Redevelopment Project") on July 11 , 1973.
The Redevelopment Project consists of approximately 100 acres in the
downtown commercial area of Palm Springs. As further explained in the section
entitled "The Central Business District Redevelopment Project", the
Redevelopment Plan calls for the restoration and preservation of the City's
primary commercial area. Since creation of the Redevelopment Project in 1973,
the assessed valuation of taxable property within the Redevelopment Project
Area has increased by over nearly $110 million.
In March, 1984, the Agency delivered its Central Business District
Redevelopment Project Tax Allocation Bonds, 1984 Series A, in the principal
amount of $9,300,000 (the "1984 Bonds") to pay a portion of the costs of
implementing the Redevelopment Plan. The Agency is now issuing its Central
Business District Redevelopment Project Tax Allocation Refunding Bonds, Issue
of 1987 (referred to as both the "1987 Bonds" and the "Bonds" herein) to
provide for the advance refunding of the $9,060,000 1984 Bonds which will be
outstanding upon delivery of the Bonds. The Bonds are being delivered
pursuant to an Indenture of Trust, dated as of March 1, 1987 (the "Indenture")
by and between the Agency and First Interstate Bank of California (the
"Trustee") .
Refinancing of the 1984 Bonds will reduce the Agency's average annual debt
service with respect to the Redevelopment Project by approximately $80,000*
per year and result in total savings of approximately $1 .7 million* through
March 1, 2008. Based on the assessed valuation of property shown on the
1986/87 tax roll , the Agency expects to receive tax increment revenues of
approximately $1,255,000 which would be over 140%* of average annual debt
service on the Bonds. As explained herein, the Agency may sell additional
obligations secured on a parity with the Bonds upon the satisfaction of
certain conditions precedent.
The summaries and references contained herein to the Indenture, the Bonds,
statutes and other documents do not purport to be comprehensive or definitive
and are qualified by reference to each such document or statute.
* Preliminary, subject to change.
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•
THE REFUNDING PLAN
Escrow Agreement and the Escrow Fund
Upon the delivery of the Bonds, the Agency will enter into an Escrow
Deposit and Trust Agreement (the "Escrow Agreement") created in accordance
with the provisions of the Indenture with First Interstate Bank, Los Angeles,
California (the "Escrow Agent") . Under the Escrow Agreement, a portion of the
proceeds of the Bonds, together with certain funds currently held by the
Trustee for the benefit of owners of the 1984 Bonds, will be deposited in the
Escrow Fund and held by the Escrow Agent as a special trust fund. Moneys in
the Escrow fund will be used to purchase direct obligations of the United
States or obligations of the Federal National Mortgage Association (the
"Federal Securities"), the principal of and interest on which will be used to
pay the remaining debt service requirements of the 1984 Bonds. The escrowed
Federal Securities and subsequent investment earnings plus any cash initially
deposited in the Escrow Fund will be in amounts calculated to be sufficient to
pay scheduled debt service on the 1984 Bonds as well as to redeem the
remaining 1984 Bonds on March 1, 1989, the first date for optional redemption
of the 1984 Bonds.
Under no circumstances will any deposit or investment of moneys in the
Escrow Fund be made at materially higher yields than the yield on the Bonds if
such investment or deposit would cause the Bonds to be "arbitrage bonds" under
section 148(a) of the Internal Revenue Code of 1986, as amended, and rules and
regulations prescribed pursuant thereto.
The sufficiency of the Escrow Fund to refund the 1984 Bonds and the
calculation of the yield on the 1987 Bonds will be verified by an independent
firm of certified public accountants. When the 1984 Bonds are retired, the
Escrow Agent will be required to transfer immediately to the Agency any moneys
remaining in the Escrow Fund and submit a final report to the Agency.
Disposition of Bond Proceeds and Other Funds
The Trustee, on behalf of the Agency, shall receive the proceeds from the
sale of the Bonds, upon the delivery of the Bonds to the Underwriter, and
shall dispose of such proceeds and other available funds as follows:
(1) Deposit in the Escrow Fund an amount, which together with
amounts transferred from accounts established by the resolution of
issuance for the 1984 Bonds will be sufficient to provide for the advance
refunding of the 1984 Bonds;
(2) Deposit in the Interest Account the accrued interest and
premium, if any, paid by the Underwriter;
(3) Transfer to the Reserve Account the Funds then on hand in the
reserve account established for the 1984 Bonds. As of March 2, 1987, such
funds will be invested in "Permitted Investments" (as defined in the
Indenture and described hereinafter) with a market value of approximately
$700,000; and
(4) Deposit into the Costs of Issuance Fund the balance of proceeds
from the sale of the Bonds in order to pay the costs of issuance.
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Estimated Sources and Uses of Funds*
Sources of funds
Principal Amaun.t of the Bands $ 10,270,000
1984 Bond Reserve Account 700,000 (1)
Total Sources $10,970,000
Uses of Funds
Escrow Fund $ 9,661,000
Reserve Account 700,000 (1)
Costs of Issuance(2) 439,000
Provision for Bond Discount 170,000
Total Uses $10,970,000
(1) Approximate market value as of March 2, 1987 of Permitted Investments held
in the reserve account for the 1984 Bonds.
(2) Includes Bond Counsel and Trustee fees, printing, and certain other costs
of issuing the Bonds.
* Preliminary, subject to change.
3
THE BONDS
Authority for Issuance
On July 11, 1973, the City Council enacted Ordinance No. 952 adopting a
Redevelopment Plan for the Palm Springs Central Business District Project
Area. Article vI of the Redevelopment Plan permits the issuance of bonds to
finance all or any part of the Project. On March 14, 1984, the Agency adopted
Resolution No. 194 (the "1984 Resolution") providing for the issuance of the
Series 1984 Bonds. The 1984 Resolution provides for the sale of refunding
bonds pursuant to subsequent official action of the Agency.
On February _, the Agency adopted Resolution No. which authorizes
the Agency to make and enter into the Indenture. Prior to delivery of the
Bonds, the Agency will deliver to the Trustee the documents and officers'
certificates required by the Indenture for the issuance of bonded indebtedness.
The Bonds are being issued in accordance with the Law and other applicable
laws and the Constitution of the State of California.
Description
The Bonds in the aggregate principal amount of $10,270,000* will be issued
as fully registered Bonds in the denomination of $5,000 each or any integral
multiple thereof. The Trustee will maintain at its office books for the
registration, exchange and transfer of Bonds.
The Bonds are dated March 1, 1987. Interest on the Bonds is payable
semiannually on September 1 and March 1 of each year commencing September 1,
1987, by check or draft mailed to the registered owners whose names appear on
the registration books of the Trustee fifteen days prior to each interest
payment date. Principal of the Bonds is payable at the corporate trust office
of the Trustee in Los Angeles, California.
The Bonds will mature on March 1 of the years and in the principal amounts
set forth on the Cover Page hereof. Table 1 on the following page shows the
scheduled debt service on the bonds through their final scheduled maturity on
March 1, 2008.
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l
TABLE 1
Central Business District Redevelopment Project
Tax Allocation Refunding Bonds, Issue of 1987
Scheduled Annual Debt Service
Year
Ending Principal* Interest Total
3/1/88 $245,000 $ $
3/1/89 250,000
265,000
3/1/910 285,000
3/l/92 300,000
3/1/93 320,000
3/1/94 335,000
3/1/95 355,000
3/1/96 385,000
3/1/97 410,000
3/1/98 440,000
3/1/99 470,000
505,000
3/1/010 545,000
3/1/02 585,000
3/1/03 630,000
3/1/04 675,000
3/1/05 730,000
3/1/06 785,000
3/1/07 845,000
3/1/08 910,000
Optional Redemption
Bonds maturing on or before March 1, 1994 are not subject to call and
redemption prior to their stated maturities. Bonds maturing on or after
March 1, 1995, are subject, at the option of the Agency, to call and
redemption prior to their stated maturities on any interest payment date
commencing March 1, 1994, as a whole or in part, in inverse order of maturity
and by lot within any one maturity, upon payment, from any source of funds
available, at the following prices expressed as a percentage of the principal
amount to be redeemed, plus accrued interest to the redemption date:
Redemption Date Redemption Price
March 1, 1994 and September 1, 1994 102.0%
March 1, 1995 and September 1, 1995 101 .5
March 1, 1996 and September 1 , 1996 101 .0
March 1 , 1997 and September 1, 1997 100.5
March 1 , 1998 and thereafter 100.0
* Preliminary, subject to change.
5 -
•
Sinking Fund Redemption
Bonds due March 1, 2008 (the "Term Bonds") are subject to mandatory
redemption in part from sinking fund installments on March 1, 2002 and on each
March 1 thereafter to and including March 1, 2008, at a redemption price equal
to 100 percent of the principal amount thereof plus accrued interest, if any,
to the redemption date without premium. The following sinking fund
installments are calculated to be sufficient to redeem the principal amount of
Term Bonds:
Redemption Date Principal* Redemption Date Principal*
March 1 Amount March 1 Amount
2002 $585,000 2006 $785,000
2003 $630,000 2007 $845,000
2004 $675,000 2008 $910,000 (maturity)
2005 $730,000
Notice of Redemption
Notice of redemption will be mailed to owners of Bonds to be redeemed
between 30 and 60 days prior to a redemption date. The actual receipt by the
owner of any Bond of notice of such redemption shall not be a condition
precedent to redemption, and failure to receive such notice shall not affect
the validity of the proceedings for the redemption of such Bonds or the
cessation of interest on the redemption date. Notice of redemption of Bonds
shall be given by the Trustee on behalf of the Agency and at the expense of
the Agency. A certificate by the Trustee that notice of redemption has been
given as herein provided shall be conclusive against all parties and no
Bondholder whose Bond is called for redemption may object there to or object
to the cessation of interest on the redemption date.
Redemption Fund
Prior to giving notice as above required, the Trustee shall establish,
maintain and hold in trust a separate account entitled "Palm Springs Central
Business District Tax Allocation Bonds, Series 1987, Redemption Account" (the
"Redemption Account") . There shall be set aside in the Redemption Account
sufficient moneys to redeem at the premiums, if any, the Bonds designated in
such notice of redemption.
* Preliminary, subject to change.
6 -
SECURITY FOR THE BONDS
As proviidb in-- the Redevelopment Plan of the Agency and in the Indenture,
and pursu-amt to- Article 6 of Chapter 6 of the Law, and Section 16 of Article
XVI of the Constitution of the State of California, taxes levied upon taxable
property in the Redevelopment Project Area each year by or for the benefit of
the State of California, any city, county, city and county or other public
corporation WiTl be divided as follows:
1. The portion equal to the amount of those taxes which would have
been prad:uced by the current tax rate, applied to the taxable valuation of
such property in the Redevelopment Project as last equalized prior to the
establishment of the Redevelopment Project, or base roll , will be, when
collected paid into the funds of those respective taxing agencies as taxes
by or for such taxing agencies; and
2. The portion of such levied taxes each year in excess of such
amount ("Tax Revenues") will be allocated to, and when collected, be paid
into a special fund of the Agency to pay the principal of and interest on
loans, moneys advanced to, or indebtedness incurred by the Agency to
finance the Redevelopment Project.
The Bonds are payable from and secured by a first pledge of Tax Revenues
and a pledge of all moneys in the Special Fund, the Interest Account, the
Principal Account, the Sinking Account, the Redemption Account and the Reserve
Account. Tax Revenues in the Special Fund, arising as above, except for the
Agency's authorized use of a portion thereof as hereinafter described, are
pledged in their entirety to the payment of principal of, and interest on and
redemption premium, if any, on all bonds (including the 1987 Bonds being
offered hereby), notes or other parity obligations of the Agency with respect
to the Redevelopment Project until all of such obligations, and all interest
thereon, have been paid, or until moneys have been set aside irrevocably for
that purpose. The Agency has no power to levy and collect taxes, and any
property tax limitation, legislative measure, voter initiative or provisions
of additional sources of income to taxing agencies having the effect of
reducing the property tax rate, or the value of property subject to ad valorem
taxations, must necessarily reduce the amount of Tax Revenues that would
otherwise be available to pay the principal of, and interest on, the Bonds.
Likewise, broadened property tax exemptions or successful appeals of assessed
valuations could have a similar effect. See "Bondowners' Risks".
The Bonds are not a debt of the City of Palm Springs, the State of
California or any of its political subdivisions other than the Agency, and
neither the City, State, nor any of its political subdivisions other than the
Agency, is liable therefor. The Bonds do not constitute an indebtedness
within the meaning of any Constitutional or statutory debt limit or
restriction.
Reserve Account
The Trustee is required upon delivery of the Bonds to transfer to the
Reserve Account the funds currently in the Reserve Account for the 1984
Bonds. Interest earned on the Reserve Account shall be retained therein until
the amount in the Reserve Account equals the Average Annual Debt Service on
the Bonds (such amount as is calculated shall be the "Reserve Requirement") .
See "The Indenture - Reserve Account" . Moneys in the Reserve Account will be
used solely for the purpose of paying the principal of and interest on the
Bonds in the event of a deficiency in the Special Fund.
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BONDOWNERS' RISKS
Tax Revenues allocated to the Agency, other than amounts replacing
business inventory subventions (described below) , are determined by the amount
of incremental, taxable value in the Project Area and the current rate or rates
at which property in the Project Area is taxed. The reduction of taxable
values of property in the Project Area caused by economic factors beyond the
Agency's control , such as a relocation out of the Project Area by one or more
major property owners, successful appeals of assessed valuation by property
owners or the destruction of property caused by natural or other disasters,
could cause a reduction in the Tax Revenues that secure the Bonds. Such
reduction of Tax Revenues could have an adverse effect on the Agency's ability
to make timely payments of principal of and interest on the Bonds.
In order to estimate the total revenues available to pay debt service on
the Bonds, the Agency has made certain assumptions with regard to the amount
of funds and the interest rate at which those funds are invested. The Agency
believes these assumptions to be reasonable, but to the extent the amount of
the funds, or the interest rate at which they are invested, are less than the
Agency's assumptions, the total revenues available to pay debt service on the
Bonds may be less than those projected herein. See "The Central Business
District Redevelopment Project--Historical Valuation and' Tax Revenues" herein.
The Agency has no power to levy and collect property taxes. Any reduction
in the tax rate or the implementation of any constitutional or legislative
property tax decrease could reduce the Tax Revenues, and accordingly, could
have an adverse impact on the ability of the Agency to pay debt service on the
Bonds. There is no assurance that the California electorate or Legislature
will not at some future time approve additional limitations which could reduce
the Tax Revenues and adversely affect the security of the Bonds. Likewise,
delinquencies in the payment of property taxes could have an adverse effect on
the Agency's ability to make timely debt service payments.
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LIMITATIONS ON TAX REVENUES
Property Tax Rate Limitations - Article XIII A
California voters, on July 6, 1978, approved an amendment (commonly known
as both Proposition 13 and the Jarvis-Gann Initiative) to the California
Constitution. This amendment, which adds Article XIIIA to the California
Constitution, among other things, defines full cash value to mean "the county
assessor's valuation of real property as shown on the 1975/76 tax bill under
'full cash value' , or thereafter, the appraised value of real property when
purchased, newly constructed, or a change in ownership has occurred after the
1975 assessment period." This full cash value may be increased at a rate not
to exceed 2 percent per year to account for inflation. The amendment further
limits the amount of any ad valorem tax on real property to 1 percent of the
full cash value except that the additional taxes may be levied to pay debt
service on the indebtedness approved by the voters prior to July 1, 1978 and
any bonded indebtedness for the acquisition or improvement of real property
which may hereafter be approved by two-thirds of the votes.
Property Tax Collection Procedures
In California, property which is subject to ad valorem taxes is classified
as "secured" or "unsecured". The secured classification includes property on
which any property tax levied by a county becomes a lien on that property. A
tax levied on unsecured property does not become a lien against the taxed
unsecured property, but may become a lien on certain other property owned by
the taxpayer. Every tax which becomes a lien on secured property has priority
over all other liens, arising pursuant to State law, on the secured property,
regardless of the time of the creation of other liens. The valuation of
property is determined as of March 1 each year and installments of taxes
levied upon secured property become delinquent on the following December 10
and April 10. Taxes on unsecured property are due March 1 and become
delinquent August 31 .
Secured and unsecured property are entered separately on the assessment
roll maintained by the county assessor. The method of collecting delinquent
taxes is substantially different for the two classifications of property. The
exclusive means of enforcing the payment of delinquent taxes with respect to
property on the secured roll is the sale of the property securing the taxes to
the State for the amount of taxes that is delinquent. The taxing authority
has four ways of collecting unsecured personal property taxes: (1) a civil
action against the taxpayer; (2) filing a certificate in the office of the
county clerk specifying certain facts in order to obtain a judgment lien on
certain property of the taxpayer; (3) filing a certificate of delinquency for
record in the county recorder's office, in order to obtain a lien on certain
property of the taxpayer; and (4) seizure and sale of personal property,
improvements or possessory interests belonging or taxable to the assessee.
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Commencing in 1982, a 10 percent penalty is added to delinquent taxes
which have been levied with respect to property on the secured roll . In
addition, property on the secured roll on which taxes are delinquent is sold
to the State on or about June 30 of the fiscal year. Such property may
thereafter be redeemed by payment of the delinquent taxes and a delinquency
penalty, plus a redemption penalty of 1-1/2 percent per month to the time of
redemption. If taxes are unpaid for a period of five years or more, the
property is deeded to the State and then is subject to sale by the county tax
collector. A 10 percent penalty also applies to delinquent taxes on property
on the unsecured roll , and further, an additional penalty of 1-1/2 percent per
month accrues with respect to such taxes beginning on the varying dates
related to the tax billing date.
Supplemental Assessments
Legislation enacted in 1983, SB 813 (Statutes of 1983, Chapter 498) ,
provides for the supplemental assessment and taxation of property as of the
occurrence of a change of ownership or completion of new construction.
Previously, statutes enabled the assessment of such changes only as of the
next March 1 tax lien date following the change and thus delayed the
realization of increased property taxes from the new assessments for up to 14
months. As enacted, Chapter 498 provided increased revenue to redevelopment
agencies to the extent that supplemental assessments of new construction or
changes of ownership occur within the boundaries of redevelopment projects
subsequent to the March 1 lien date. To the extent such supplemental
assessments occur within the Project Area, Agency revenues may increase.
Collection of taxes based on supplemental assessments will occur
throughout the year. Taxes due will be pro rated according to the amount of
time remaining in the tax year, with the exception of tax bills dated March 1
through May 31, which will be calculated on the basis of the remainder of the
current fiscal year and the full twelve months of the next fiscal year.
Business Inventory Exemption
Business Inventory Subventions: Pursuant to legislation adopted in 1979
(Statutes of 1979, Chapter 1150) , business inventories were exempted from
taxation in fiscal year 1980-81 and each fiscal year thereafter. Under
Chapter 1150, the State paid, as a subvention to certain local agencies, an
amount equal to 100% of taxes that would otherwise be due (excluding taxes to
pay for voter-approved indebtedness) on business inventories. This law
further provided a formula for reimbursement by the State to cities, counties,
special districts and school districts for the amount of tax revenues lost by
reason of such exemption, as adjusted for percentage changes in the population
and the cost of living.
Supplemental Revenues/Special Subventions: Legislation adopted in 1984
(Senate Bill 794 and Assembly Bill 1849) has replaced business inventory
subventions with a financing plan for local governments. In Section 1 of
Senate Bill 794 (Section 16110, et seq. of the California Government Cade,
which became operative along with counterpart legislation, Assembly Bill 1849,
on July 1, 1984) , the purpose and intent of the legislation was stated as
follows :
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_ f
"The Legislature finds and declares that some local agencies lack
sufficient revenues to meet their obligations to the landowners and
residents they serve. It is the intent of the Legislature in enacting
this act to provide local agencies with reliable, stable, and very
predictable revenues to finance these obligations. "
In place of the terminated business inventory subvention, the new
legislation makes available to redevelopment agencies and certain other local
agencies, beginning in 1984-85, special subventions to compensate for lost
revenues resulting from the repeal of former business inventory tax subvention
programs. First, agencies receive a share of the revenues generated from
taxes on a new supplemental roll . Then, if agencies do not receive sufficient
revenue from this source, legislation establishes a special subvention. This
special subvention is to be paid by the State to certain local agencies,
including redevelopment agencies, in an attempt to restore to such agencies
the difference between the level of business inventory subventions which were
to be paid under prior law and the amount of revenue received from taxes on
the supplemental roll . As a result of these changes, redevelopment agencies
were to receive approximately the same amounts of revenues as they received in
1983-84 had the business inventory subvention not been terminated.
Appropriation Limitation - Article XIII B
On November 6, 1979, California voters approved Proposition 4, known as
the Gann Initiative, which added Article XIII B to the California
Constitution. The principal effect of Article XIII B is to limit the annual
appropriations of the State and its political subdivisions to the level of
appropriations for the prior fiscal year, as adjusted for changes in the cost
of living, population and services rendered by the government entity.
Effective September 30, 1980, the California Legislature added Section
33678 to the Redevelopment Law which provided that the allocation of taxes to
a redevelopment agency for the purpose of paying principal of, or interest on,
loans, advances, or indebtedness shall not be deemed the receipt by the agency
of proceeds of taxes levied by or on behalf of the agency within the meaning
of Article XIII B or any statutory provision enacted in implementation thereof.
The constitutionality of Section 33678 has been upheld by the Second and
Fourth District Courts of Appeal in two decisions: Bell Community
Redevelopment Agency v. Woosely and Brown v. Community Redevelopment Agency of
the City of Santa Ana. In the Santa Ana decision, a petition for hearing was
filed by the plaintiff and subsequently denied by the California Supreme Court.
Low and Moderate Income Housing Fund
Under Section 33334.2 of the Law, redevelopment agencies in California are
generally required, unless certain findings are made, to set aside 20% of all
tax increment revenues annually in a Low and Moderate Income Housing Fund to
be used within the city to increase and improve the city's supply to low and
moderate income housing, provided that 'such requirement only applies to
project areas for which a redevelopment plan was adopted on or after
January 1, 1977. Because the Redevelopment Plan for the Project Area was
adopted prior to such date, the Agency has not been required to set aside such
amounts under Section 33334.2. Recent legislation, however, enacted Section
33334.6 of the Law imposing such requirements on project areas for which the
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redevelopment plan was adopted before January 1, 1977. Section 33334.6
expressly provides that a redevelopment agency may first provide for payment
of its bonds, before setting aside any amounts in the Low and Moderate Income
Housing Fund, if such bonds are issued to refund obligations issued before
January 1, 1986, and if such refunded obligations are described in a statement
of existing obligations adopted by resolution of the Agency. The Agency has
adopted such statement of existing obligations describing the 1984 Bonds, and
therefore the 20% low and moderate income housing requirement is subordinate
to the repayment of the Bonds.
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•
THE INDENTURE
The following is a brief summary of the provisions of the Indenture of
Trust. Such summary is not intended to be definitive, and reference is made
to the complete document for the complete terms thereof. Capitalized terms
used in this summary which are not otherwise defined in this Official
Statement have the respective meanings given such terms in the Indenture.
Definitions
The following terms have the following meanings in the Indenture and in this
summary:
"Additional Allowance" means, as the date of calculation, the sum of the
following:
(a) the amount of Tax Revenues which, as shown in the Report of an Independent
Financial Consultant, are estimated to be receivable by the Agency as a
result of increases in the assessed valuation of taxable property in the
Project Area due to construction which has been completed but not yet
reflected on the tax rolls; and
(b) the amount of Tax Revenues which, as shown in the Report of an Independent
Financial Consultant, are estimated to be receivable by the Agency within
any one of the three Fiscal Years following the Fiscal Year in which such
calculation is made, as a result of increases in the assessed valuation of
taxable property in the Project Area due to inflation at an assumed annual
inflation rate of two percent (2%) ; and
(c) the amount of earnings which, as shown in the Report of an Independent
Financial Consultant, are estimated to be received in the current Fiscal
Year from the investment of amounts then on deposit in the Reserve
Account, assuming that such amounts are invested at a rate of six percent
(6%) per annum.
For purposes of this definition, the term "increases in the assessed
valuation" means the amount by which the assessed valuation of taxable
property in the Project Area in any Fiscal Year is estimated to exceed the
assessed valuation of taxable property in the Project Area (as reported by the
Riverside County Auditor-Controller) in the Fiscal Year in which such
calculation is made.
"Annual Debt Service" means, for each Bond Year, the sum of (a) the interest
payable on the outstanding Bonds in such Bond Year, assuming that the
outstanding Serial Bonds are retired as scheduled and that the outstanding
Term Bonds are redeemed from sinking account payments as scheduled, (b) the
principal amount of the outstanding Serial Bonds payable by their terms in
such Bond Year, and (c) the principal amount of the outstanding Term Bonds
scheduled to be paid or redeemed from sinking account payments in such Bond
Year, excluding the redemption premiums (if any) thereon.
"Average Annual Debt Service" means, as of the date of any calculation, the
average amount of Annual Debt Service required to be paid in each future Bond
Year.
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"Bond Year" means each twelve-month period beginning on March 2 in any year
and ending on March 1 in the next succeeding year, both dates inclusive.
"Closing Date" means the date on which the Bonds are delivered by the Agency
to the original purchasers thereof.
"Federal Securities" means any of the following which are noncallable and
which at the time of investment are legal investments under the laws of the
State of California for trust funds held by the Trustee:
(a) direct general obligations of the United States of America (including
obligations issued or held in book entry form on the books of the
Department of the Treasury of the United States of America), the payment
of principal of and interest on which are unconditionally and fully
guaranteed by the United States of America; or
(b) obligations of any department, agency or instrumentality of the United
States of America the timely payment of principal of and interest on which
are unconditionally and fully guaranteed by the United States of America.
"Law" means the Community Redevelopment Law of the State of California,
constituting Part 1 of Division 24 of the Health and Safety Code of the State
of California, and the acts amendatory thereof and supplemental thereto.
"Maximum Annual Debt Service" means, as of the date of any calculation, the
largest Annual Debt Service during the current or any future Bond Year.
"Parity Bonds" means any loans, advances or indebtedness issued or incurred by
the Agency on a parity with the Bonds pursuant to the Indenture.
"Permitted Investments" means any of the following:
(a) Federal Securities;
(b) interest-bearing demand or time deposits (including certificates of
deposit) in federal or state chartered savings and loan associations or in
national or State banks (including the Trustee) provided that either:
(i) the obligations of such association or bank or the obligations of the
holding company of such association or bank are rated 'A' or better by
Standard & Poor's Corporation ("S&P") ; or (ii) such deposits are fully
insured by the Federal Deposit Insurance Corporation or the Federal
Savings and Loan Insurance Corporation, provided, however, that the
portion of any certificates of deposit in excess of the amount insured by
the Federal Deposit Insurance Corporation or the Federal Savings and Loan
Insurance Corporation, if any, shall be secured at all times in the manner
provided by law by collateral security having a market value not less than
the amount of such excess, consisting of Federal Securities;
(c) obligations issued by any corporation organized and operating within the
United States of America having assets in excess of $500,000,000, which
obligations are rated 'A' or better by S&P, including but not limited to
commercial paper;
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(d) money market funds which invest solely in Federal Securities or money
market funds which are rated in the highest rating category by S&P;
(e) bills of exchange or time drafts drawn on and accepted by a commercial
bank, otherwise known as bankers acceptances, which are eligible for
purchase by the Federal Reserve System and the obligations of which
commercial bank or the obligations of the holding company of which are
rated 'A' or better by S&P; and
(f) obligations the interest on which is exempt from federal income taxation
under section 103 of the Tax Code, which are rated 'A' or better by S&P.
"Tax Revenues" means all taxes annually allocated to the Agency with respect
to the Project Area following the Closing Date pursuant to Article 6 of
Chapter 6 (commencing with Section 33670) of the Law and Section 16 of Article
XVI of the constitution of the State of California, and as provided in the
Redevelopment Plan, including all payments, subventions and reimbursements, if
any, to the Agency specifically attributable to ad valorem taxes lost by
reason of tax exemptions and tax rate limitations.
Establishment of Funds and Accounts; Flow of Funds
The Indenture establishes the Costs of Issuance Fund, the Special Fund and the
Interest Account, the Principal Account, the Reserve Account and the
Redemption Account.
Costs of Issuance Fund. A portion of the proceeds of sale of the Bonds, in an
amount estimated to be sufficient to pay the estimated costs of issuing the
Bonds, will be deposited into the Costs of Issuance Fund, to be disbursed upon
requisitions of the Agency to pay such costs. On May 1, 1987, or upon the
earlier request of the Agency, all amounts (if any) remaining in the Costs of
Issuance Fund will be transferred to the Agency.
Special Fund. Pursuant to the Indenture, all Tax Revenues pledged thereunder
are required to be deposited by the Agency upon the receipt thereof in the
Special Fund to be held by the Agency. Moneys in the Special Fund will be
transferred by the Agency to the Trustee for deposit in the following
respective special accounts established under the Indenture, in the following
order of priority:
(a) Interest Account. On or before the third business day preceding each
Interest Payment Date the Agency will withdraw from the Special Fund and
transfer to the Trustee for deposit into the Interest Account an amount
which, when added to the amount contained in the Interest Account on that
date, will be equal to the aggregate amount of the interest becoming due
and payable on the outstanding Bonds on such Interest Payment Date.
(b) Principal Account. On or before the third business day preceding each
March 1 date on which principal of the serial Bonds is payable, the Agency
will withdraw from the Special Fund and transfer to the Trustee for
deposit into the Principal Account an amount which, when added to the
amount contained in the Principal Account on that date, will be equal to
the principal becoming due and payable on the next succeeding March 1 on
the outstanding serial Bonds.
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(c) Sinking Account. On or before the third business day preceding each
March 1 date on which principal of the term Bonds is payable at maturity
or upon mandatory redemption, the Agency will withdraw from the Special
Fund and transfer to the Trustee for deposit into the Sinking Account an
amount which, when added to the amount contained in the Sinking Account on
that date, will be equal to the principal becoming due and payable on the
next succeeding March 1 on the outstanding term Bonds. All moneys in the
Principal Account will be used and withdrawn by the Trustee solely for the
purpose of paying the principal on the term Bonds as it becomes due and
payable, or paying the purchase price of term Bonds to be purchased in
lieu of mandatory redemption.
(d) Reserve Account. On the Closing Date the fiscal agent for the 1984 Bonds
will transfer to the Trustee, for deposit into the Reserve Account, all
moneys then on deposit in the reserve account established for the 1984
Bonds. Interest earnings will be retained in the Reserve Account until
such time as the amount therein equals Average Annual Debt Service. On or
before each Interest Payment Date thereafter, the Agency will withdraw
from the Special Fund and transfer to the Trustee for deposit into the
Reserve Account an amount which, when added to the amount contained in the
Reserve Account on that date, will be equal to Average Annual Debt
Service. All money in the Reserve Account will be used and withdrawn by
the Trustee solely for the purpose of replenishing the Interest Account,
the Principal Account or the Sinking Account, in such order, in the event
of any deficiency at any time in any of such accounts.
(d) Redemption Account. On or before the third business day preceding any
Interest Payment Date on which Bonds are to be optionally redeemed, the
Agency will withdraw from the Special Fund and transfer to the Trustee for
deposit in the Redemption Account an amount required to pay the principal
of and premium, if any, on the Bonds to be redeemed on such Interest
Payment Date.
Surplus. The Agency is not required to deposit in the Special Fund in any
Bond Year an amount of Tax Revenues which, together other available amounts,
exceeds the amounts required to be deposited into the Interest Account, the
Principal Account, the Sinking Account, the Redemption Account and the Reserve
Account in such Bond Year. In the event that for any reason whatsoever any
amounts remain on deposit in the Special Fund on March 2 after making all of
the transfers theretofore required to be made pursuant to the preceding
clauses (a) through (d) , the Trustee will withdraw such amounts and pay the
same to the Agency as its sole property to be used for any lawful purpose of
the Agency.
Investment of Funds. Moneys in the foregoing funds and accounts held by the
Trustee shall be invested by the Trustee in Permitted Investments maturing not
later than the date such moneys are estimated to be expended under the
Indenture. Obligations purchased as an investment of moneys in any fund shall
be deemed to be part of such fund or account. The Trustee shall incur no
liability for losses arising from any investments made pursuant to the
Indenture. For the purpose of determining the amount in any fund, the value
of Permitted Investments credited to such fund shall be calculated at the cost
thereof, excluding accrued interest and any brokerage commissions.
- 16 -
Issuance of Parity Bonds
In addition to the Bonds the Agency may, by supplemental indenture, issue or
incur other loans, advances or indebtedness payable from Tax Revenues on a
parity with the Bonds to finance the Project in such principal amount as shall
be determined by the Agency. The Agency may issue and deliver any such Parity
Bonds subject to the following specific conditions:
(a) The Agency shall be in compliance with all covenants set forth in the
Indenture.
(b) The Tax Revenues for the then current Fiscal Year plus at the option of
the Agency the Additional Allowance shall be equal to 120% of Maximum
Annual Debt Service on all Bonds and Parity Bonds which will be
outstanding following the issuance of such series of Parity Bonds.
(c) The Supplemental Indenture providing for the issuance of such Parity Bonds
shall provide that:
(i) Interest on said Parity Bonds shall be payable on each Interest
Payment Date during the term of such Parity Bonds except during the first
year, during which year interest may be payable on any Interest Payment
Date;
(ii) The principal of such Parity Bonds shall be payable on March 1 in
any year in which principal is payable; and
(iii ) Money shall be deposited in the Reserve Account from the proceeds
of the sale of said Parity Bonds to increase the amount on deposit in the
Reserve Account to an amount equal to Average Annual Debt Service on all
outstanding Bonds and on the Parity Bonds then to be issued.
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Covenants of the Agency
Limitation ,on Superior Debt. The Agency covenants that, so long as the Bonds
are outstanding, the Agency shall not issue any bonds, notes or other
obligations, enter into any agreement or otherwise incur any indebtedness,
which is in any case secured by a lien on all or any part of the Tax Revenues
which is superior to or on a parity with the lien established under the
Indenture for the security of the Bonds, excepting only Parity Bonds.
The Agency further covenants that it will deposit a portion of the proceeds of
the Bonds with the Escrow Bank for investment and application as provided in
the Escrow Agreement, and that the indebtedness represented by the 1984 Bonds
will be fully discharged and the lien of the 1984 Bond Resolution will be
defeased thereby.
�11—
agement and Operations of Properties The Agency will manage and operate
properties owned by the Agencyand comprising any part of the Project in a
nd and businesslike manner, and will keep such properties insured at all
times in conformity with sound business practice.
Books and Accounts; Financial Statement. The Agency will keep, or cause to be
kept, proper books of record and accounts, separate from all other records and
accounts of the Agency and the City of Palm Springs, in which complete and
correct entries are made of all transactions relating to the Project and to
the Tax Revenues. Such books of record and accounts will at all times during
business hours be subject to the inspection of the owners of at least 10% of
the principal amount of the Bonds then outstanding, or their representatives
authorized in writing.
The Agency will cause to be prepared and filed with the Trustee annually,
within 180 days after the close of each Fiscal Year so long as any of the
Bonds are outstanding, complete financial statements with respect to such
Fiscal Year showing the Tax Revenues, all disbursements from the Tax Revenues
and the financial condition of the Project, including the balances in all
funds and accounts relating to the Project, as of the end of such Fiscal Year,
which statement is accompanied by a certificate or opinion in writing of an
Independent Certified Public Accountant. The Agency will furnish a copy of
such statements to any Bond owner upon reasonable request.
- 18 -
Taxation of Leased Property. All amounts derived by the Agency pursuant to
the Law as in lieu taxes with respect to the lease of property for
redevelopment shall be treated as Tax Revenues for all purposes of the
Indenture, and shall be deposited by the Agency in the Special Fund.
Disposition of Property. The Agency will not authorize the disposition of any
land or real property in the Project Area to anyone which will result in such
property becoming exempt from taxation because of public ownership or use or
otherwise (except property dedicated for public right- of-way and except
property planned for public ownership or use by the Redevelopment Plan in
i effect on the date of the Indenture) so that such disposition shall , when
taken together with other such dispositions, aggregate more than 10% of the
land area in the Project Area unless such disposition is permitted as provided
in the Indenture. If the Agency proposes to make such a disposition, it shall
thereupon appoint an independent financial consultant to report on the effect
of said proposed disposition. If the report of the independent financial
consultant concludes that the security of the Bonds or the rights of the Bond
owners will not be materially impaired by said proposed disposition, the
Agency may thereafter make such disposition. If such report concludes that
such security will be materially impaired by said proposed disposition, the
Agency shall disapprove said proposed disposition.
Tax Revenues. The Agency shall comply with all requirements of law to insure
the a -location and payment to it of the Tax Revenues, including without
limitation the timely filing of any necessary statements of indebtedness with
appropriate officials of Riverside County and (in the case of supplemental
revenues and other amounts payable by the State of California) appropriate
officials of the State of California, and shall forward information copies of
each such filing to the Trustee. The Agency shall not enter into any
agreement with the County of Riverside or any other governmental unit which
would have the effect of reducing the amount of Tax Revenues available to the
Agency for payment of the Bonds, unless in the written opinion of an
independent financial consultant filed with the Trustee such reduction will
not adversely affect the interests of the Bond owners or the security granted
to the Bond owners.
Eminent Domain. The net proceeds received by the Agency from any taking of
property in the Project Area in any eminent domain proceeding shall be
deposited by the Agency in the Special Fund.
Rebate of Excess Investment Earnings to United States The Indenture
establishes the Rebate Account and the Earnings Account to be held by the
Trustee. All earnings on the investment of amounts in the Reserve Account, to
the extent the Agency certifies that such amounts are transferred proceeds
under the Tax Code, and all earnings on amounts in the Special Fund and the
various debt service accounts held by the Trustee (other than earnings on the
amounts deposited in the Special Fund and such accounts if such earnings in
any Bond Year are less than $100,000) shall , upon receipt by the Trustee or
the Agency, be deposited in the Earnings Account. Annually the Trustee shall ,
in accordance with written instructions from the Agency, transfer from the
Earnings Account to the Rebate Account for purposes of ultimate rebate to the
United States the amount required to be rebated. Following the transfer
described in the preceding sentence, the Trustee shall transfer all amounts
remaining in the Earnings Account to the Agency.
I
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' T
Amendment of Indenture
The Indenture may be modified or amended at any time by a supplemental
indenture _but only with and pursuant to the affirmative vote at a meeting
of Bond owners, or with the written consent without a meeting, of the owners
of a majority in aggregate principal amount of the Bonds then outstanding.
No such modification or amendment may (1) extend the maturity of any Bond
or reduce the interest rate thereon, or otherwise alter or impair the
obligation of the Agency to pay the principal thereof, or interest thereon,
or any premium payable on the redemption thereof, at the time and place
and at the rate and in the currency provided therein, without the express
consent of the owner of such Bond, or (2) permit the creation by the
Agency of any mortgage, pledge or lien upon the Tax Revenues superior to or
on a parity with the pledge and lien created for the benefit of the Bonds
(except as otherwise permitted in the Indenture) , or reduce the percentage
of Bonds required for the affirmative vote or written consent to an
amendment or modification, or (3) modify any of the rights or obligations of
the Trustee without its written assent thereto. The Indenture may also be
modified or amended at any time by a supplemental indenture, but only
for any one or more of the following purposes:
(a) to add to the covenants and agreements of the Agency or to limit or
surrender any right or power reserved to or conferred upon the Agency;
(b) with the written approval of the Trustee, to make such provisions for
the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective provision contained in the Indenture, or
in regard to questions arising under the Indenture, as the Agency
may deem necessary or desirable, and which shall not materially
adversely affect the interests of the owners of the Bonds;
(c) to provide for the issuance of any Parity Bonds, and to provide the
terms and conditions under which such Parity Bonds may be issued,
subject to and in accordance with the provisions of the Indenture; and
(d) with the prior written approval of nationally- recognized bond
counsel , to modify or delete certain of the provisions of the
Indenture relating to arbitrage rebate.
Events of Default; Remedies of Bond owners
Events of Default Defined. The following events constitute Events of Default
under each Indenture:
(a) failure to pay the principal of or interest or redemption premium
(if any) on any Bond when and as the same becomes due and payable,
whether at maturity, by declaration or otherwise;
(b) if default shall be made by the Agency in the observance of any
of the covenants, agreements or conditions on its part in the Indenture
or in the Bonds contained, other than a default described in the
preceding clause (a) , and such default shall have continued for a period
of ninety (90) days; or
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(c) if the Agency shall commence a voluntary action under Title 11 of the
United States Code or any substitute or successor statute.
Remedies. Upon, the occurrence of an Event of Default, the Trustee may,
and if ,re.quested in writing by the owners of a majority in aggregate
principal amount of the Bonds at the time outstanding shall , declare the
principal of all of the Bonds then outstanding, and the interest accrued
thereon, to be due and payable immediately, and upon any such declaration
the same shall be immediately due and payable; subject to the right of the
L Bond owners to rescind such declaration as provided in the Indenture if the
h! Agency curesany such Event of Default.
In addition, any Bond owner has the right, for the equal benefit and
protection of all Bond owners similarly situated, to bring suit against the
Agency to perform its covenants under the Indenture, to enjoin any unlawful
acts, or to require the Agency and its members and employees to account as
if it and they were the trustees of an express trust.
Limitation on Bond Owners' Right to Sue. No owner of any Bond -has the right
to institute any suit, action or proceeding at law or in equity, for any
remedy under the Indenture, unless (a) such owner has previously given to
the Trustee written notice of the occurrence of an Event of Default; (b) the
owners of a majority in aggregate principal amount of all the Bonds then
outstanding have requested the Trustee in writing to exercise its powers
under the Indenture; (c) said owners have tendered to the Trustee indemnity
reasonably acceptable to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request; and (d) the
Trustee has refused or failed to comply with such request for a period of 60
days after such written request has been received by the Trustee and said
tender of indemnity is made to the Trustee.
Non-Waiver. A waiver of any Event of Default by any Bond owner will not
affect any subsequent default or impair any rights or remedies on the
subsequent default. No delay or omission of any owner of any of the Bonds
to exercise any right or power accruing upon any Event of Default will
impair any such right or power or be construed to be a waiver of any such
'i
Event of Default.
Actions by Trustee as Attorney-in-Fact. Any suit, action or proceeding
which any owner of-Bonds has the right to bring to enforce any right or
remedy under the Indenture may be brought by the Trustee for the equal
benefit and protection of all owners of Bonds similarly situated and the
Trustee is appointed the attorney-in-fact of the respective owners of the
Bonds for the purpose of bringing any such suit, action or proceeding and
to do and perform any and all acts and things fo`r and on behalf of the
respective owners of the Bonds as a class or classes, as may be necessary or
advisable in the opinion of the Trustee.
- 21 -
Discharge of Indenture
The Agency may, pay and discharge the indebtedness on all Bonds
outstanding in; any one or more of the following ways:
(a) by paying or, causing to be paid the principal of and interest .on all
Bonds outstanding, as and when the same become due and payable;
(b) by depositing with the Trustee, in trust, at or before maturity,
money which., together with the amounts then on deposit in the funds and
accounts provided for in the Indenture, is fully sufficient to pay all
Bonds outstanding, including all principal , interest and redemption
premiums, or;
(c) by irrevocably depositing with the Trustee, in trust, Federal Securities
or general obligation bonds of the State of California in such
amount as the Trustee determines will , together with the interest to
accrue thereon and moneys then on deposit in the fund and accounts
provided for in the Indenture, be fully sufficient to pay and discharge
the indebtedness on all Bonds (including all principal , interest
and redemption premiums) at or before their respective maturity dates.
Upon such payment, and notwithstanding that any Bonds have not been
surrendered for payment, the pledge of the Tax Revenues and other funds
provided for in the Indenture and all other obligations of the Agency under
the Indenture will cease and terminate, except only the obligation of the
Agency to pay or cause to be paid to the owners of the Bonds not so
surrendered and paid all sums due thereon.
I
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I
THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS
Authority and Management
The ,Agency was established pursuant to the Law and activated by Ordinance
No. 929 of the City Council of Palm Springs on September 26, 1972, The Agency
is responsible for redeveloping and upgrading certain areas of the City which
are deemed to be blighted under provisions of the Law.
Pursuant to the Law, the legislative body of a city is authorized to adopt
an ordinance declaring itself to be a redevelopment agency. The Mayor and the
City Council have adopted such an ordinance declaring themselves to be the
Community Redevelopment Agency of the City of Palm Springs.
Members and Officers
Frank Bogert - Chairman Bogert served as Mayor of Palm Springs from 1958
to 1966 and is currently serving again in such capacity. He has been a local
land developer in the area for over 50 years. Mr. Bogert has served as a
Governor-appointed member of the Palm Springs Aerial Tramway Authority,
Director of.the Desert Water Agency, Governor-appointed member ,of the
California Riding and Hiking Trail Commission, Governor"s Representative to
the Commission of California, and member of the Riverside County Board of
Equalization. A native of Colorado, Mr. Bogert attended U.C.L.A. before
serving in the military as a Navy Lieutenant Commander.
Richard Smith - Mr. Smith holds a Bachelor's Degree in Government from the
University of Miami and a Master's Degree in Public Administration from the
University of Southern California. He moved to Palm Springs in 1960 and
worked as a City Planner. He was named Planning Director in 1965 and Director
of Community Development in 1973. He left City employment in 1978 to become a
partner in Eisner and Smith Planning Consultants. Mr. Smith is a past
President of the Palm Springs Jaycees and the Desert Mental Health
Association. He is also active in the Chamber of Commerce.
Sharon Apfelbaum - Ms. Apfelbaum has been a resident of the City of Palm
Springs since 1969. She graduated from George Washington University in 1966
and served as a legislative aide in the United States Congress -between 1965
and 1969. From 1974 through 1986, she actively participated on numerous
committees of the Palm Springs Unified School District and also served as a
City Planning Commission from 1983 to 1986. She was elected to the City
Council in 1986. Ms. Apfelbaum has worked as a freelance journalist for the
1 past eight years.
Eli Birer - Mr. Birer is a graduate of Johns Hopkins University and has
operated his own real estate brokerage firm since 1972. He is a director of
the Palm Springs Board of Realtors of which he was President for two terms and
is the past Chairman of the Palm Springs United Way.
William Foster - Mr. Foster has been in local government for 25 years. He
served as a Planning Commissioner for 10 years, a City Councilman for 12
years, 3 of which he served as Mayor, and 3 years as Co-Chairman of POST
(Parks, Outdoor Space and Trails) , a non-profit organization which works
closely with the City. Mr. Foster has lived in Palm Springs for 47 years.
- 23 -
Agency Staff •
Norman R. King - Mr. King was named City Manager of Palm Springs and
Executive Director of the Agency in December, 1979. He had previously served
five years as th.e City Manager of Claremont, California. He is a graduate of
Claremont Men°s College and the University of Pennsylvania's Fels Institute of
State and Local Government. Mr. King has held positions with the National
League of Cities and the U.S. Conference of Mayors, and currently serves on
several committees of the League of California Cities.
Kenneth E. Feenstra - Mr. Feenstra has been the Redevelopment Director
for the City of Palm Springs since December 1973. Prior to coming to Palm
Springs, he was in private consulting practice in Palos Verdes Estates,
primarily as advisor to the redevelopment agencies of Long Beach and
Pasadena. He holds an Architectural degree from the University of California
at Berkley and has been a registered architect since 1969.
Paul R. Howard - Mr. Howard served as Finance Director of the Agency since
September, 1978. Prior to that, he served as Senior Accountant/Deputy
Treasurer, and then Fiscal Officer for the City of Anaheim. Mr. Howard
received a B.S. degree in accounting from Long Beach State College, and an
Masters degree in Business Administration from Chapman College. ' Mr. Howard is
a member of a number of organizations for municipal finance officers. He is
President of the Fiscal Officers Department of the League of California Cities
and a former member of the Board of Directors of the California Society of
Municipal Finance Officers. He is also a Certified California Municipal
Treasurer.
Agency Powers and Duties
All powers of the Agency are vested in its five members. The Agency
exercises all of the governmental functions authorized under the Law and has,
among other powers, the authority to acquire, administer, develop and sell or
lease property, including the right to eminent domain, and the right to issue
bonds and expend the proceeds.
The Agency can clear buildings and other improvements, can develop as a
building site any real property owned or acquired, and in connection with such
development, can cause streets, highways and sidewalks to be constructed or
reconstructed and public utilities to be installed.
The Agency may, out of funds available to it for such purposes, pay for
all or part of the value of land and the cost of buildings, facilities,
structures or other improvements to be publicly owned and operated, to the
extent that such improvements are of benefit to a project area and no other
reasonable means of financing are available. The Agency must sell or lease
remaining property within a project for redevelopment by others in strict
conformity with a redevelopment plan, and may specify a period within which
such redevelopment must begin and be completed.
Other Redevelopment Project Areas i
The Community Redevelopment Agency of the City of Palm Springs has seven
Project Areas in addition to the Central Business District Redevelopment
Project Area. These other project areas are: the Tahquitz-Andreas
Redevelopment Project Area, South Palm Canyon Redevelopment Project Area,
Ramon-Bogie Redevelopment Project Area, North Palm Canyon Redevelopment
Project Area, Oasis Redevelopment Project Area, Highland-Gateway Redevelopment
Project Area, and the Baristo-Farrell Redevelopment Project Area.
- 24 -
THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT
The Redevelopment Plan
On July 11, 1973, the Agency and the City Council officially established
the Palm Springs Central Business District Redevelopment Project. This area
comprises approximately 100 acres and is now nearly built-out. With the
adoption of the Central Business District Redevelopment Plan, the following
objectives were established:
1. The restoration and preservation of Palm Springs' palm-lined
downtown area to enhance the business, financial , entertainment, cultural
and fashion shopping "core" of Palm Springs;
2. The redevelopment and aesthetic improvement of the downtown area
designed to compliment the surrounding desert and mountain environment;
3. The elimination of blighting influences, deteriorating buildings,
incompatible and uneconomic land uses, inadequate parking, obsolete
structures, and other environmental , economic and social deficiencies; the
improvement of the overall appearance of downtown buildings, streets,
parking areas and other facilities;
4. To make available property to attract major investors and
developers;
5. The preservation of artistically, architecturally and
historically worthwhile structures and sites;
6. To increase the number of parking areas, accessibility, and
adequate signing and create a safer pedestrian circulation system to
provide easier access to and from shopping areas with minimal conflict
with automotive traffic;
7. To reduce the excessive flow of automotive traffic through
downtown Palm Springs by: (a) providing acceptable alternate routes for
vehicles with destinations beyond Palm Springs; (b) providing for
alternate modes of transportation through downtown including a frequent
shopper bus service, and bike and golf cart routes and (c) other
imaginative methods as may be devised; but without interrupting the
desirable flow of traffic to downtown Palm Springs parking and business
establishments;
8. To establish and implement performance criteria which would
assure the highest site design and environmental quality standards in
conjunction with other design elements, thereby providing unity and
integrity to the entire project;
9. To encourage the development of higher density hotel ,
residential , and commercial use in the downtown area and immediate
peripheral areas so as to insure the economic and social vitality of the
downtown area.
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Historical Valuations and Tax Revenues
Table 2 below sets forth the taxable values for the Project Area for the
past five fiscal years. The growth in Tax Revenues can be attributed to the
construction of various projects within the Area and, in particular, the
construction in 1985 and 1986 of the Desert Fashion Plaza, a luxury, retail
shopping center.
TABLE 2
Central Business District Redevelopment Project
Taxable Values and Tax Revenues
Fiscal Years 1981/82 to 1986/87
Incremental
Fiscal Total Taxable Tax
Year Value Value Revenues Change
1982/83 $ 57,569,550 $ 46,358,114 $ 518,185 +2.0%
1983/84 59,196,911 47,985,475 525,608 +1.4
1984/85 81,406,812 42,029,592 525,608 - (1)
1985/86 101,311,697 61,934,477 748,385 +42.4
1986/87 148,298,431 108,921,211 1,255,000 (2) ' +67.6
(1) State subventions to replace the former business inventory tax covered an
amount limited to the previous increment level .
(2) Tax Revenues estimated by the Agency based on assessed value information
from the County.
Sources: Riverside County Auditor Controller's Office and the Community
Redevelopment Agency of the City of Palm Springs.
As shown below, property on the 1986/87 secured roll accounted for 82% of
the total assessed valuation in 1986/87.
State Total
Secured Unsecured Assessed Valuation
1985/86 $ 81,595, 191 $11,298,936 $8,417,740 $101,311,697
1986/87 122,052,962 17,657,336 8,588,133 148,298,431
Table 3 below shows the estimated debt service coverage ratio on the Bonds
based on estimated 1986/87 Tax Revenues with the 2% annual adjustment provided
by law.
TABLE 3
Estimated Revenues and Debt Service Coverage
Tax Revenues(1) Debt Service(2) Coverage Ratio
1987/88 $1,280,100 $867, 155 1 .48
1988/89 1,305,702 867,955 1.50
1889/90 1,331,816 867, 155 1 .54
1990/91 1,358,452 875,280 1 .55
(1) Estimated Tax Revenues for 1986/87 (from Table 2) increased by 2%
annually through 1990/91.
(2) Estimate based on an average interest rate of approximately 6.6%.
- 26 -
Land Use and Property Ownership
Reflecting its central business district character, business ownership in
the Project Area is very diverse. In the Desert Fashion Plaza alone, there
are now approximately 100 different, large and small tenant businesses. As
shown in Table 4, retail operations and other owners of commercial property
dominate the list of largest property owners.
TABLE 4
Palm Springs Community Redevelopment Agency
Central Business District Redevelopment Project
Major Property Owners, 1986/87
Property Owner 1986/87
Taxable Value
1 . North Plaza Associates $60,576,000
2. South Plaza Associates
3. Vineyard Ltd. 3,989,000
4. North Canyon Plaza Associates 3,950,000
5. Saks Fifth Avenue 3,279,000
6. Irwin-Schuman Trust 2,901,000
7. Mispar Ltd. 2,649,000
8. Plaza Investments 2,619,000
9. Great Western Savings & Loan 2,500,000
10. Project 92 Partnership 2,336,000
Total : $84,799,000
Source: Community Redevelopment Agency of the City of Palm Springs.
The North Plaza Associates and South Plaza Associates are the development
interests for the expansion of the Desert Fashion Plaza. North Plaza
Associates and South Plaza Associates are both California general partnerships
each of which consists of David Blum, Gerson I. Fox and Arthur Gilbert and
Rosalinde Gilbert, Trustees of the Arthur Gilbert and Rosalinde Gilbert 1982
Trust. The Development includes remodeling the 196,818 square foot existing
retail center, including a second floor addition to I. Magnin; the addition of
approximately 116,390 square feet of retail space and concourse area including
a new Saks Fifth Avenue department store; the construction of an all suite
hotel of approximately 200 rooms to be anchored to the mall and to be operated
by Maxim's de Paris; the construction of a landscaped sculptured court
adjacent to the Desert Museum, and, the provision of approximately 1,300
parking spaces with both subterranean and on-grade parking decks.
The Desert Fashion Plaza covers a site area of 672,515 square feet.
Construction was completed in 1986 at a cost of approximately $49,000,000.
The two largest retailers in the Plaza are Saks Fifth Avenue and I. Magnin,
both of which have built their own improvements on land controlled by
long-term leases. The Desert Fashion Plaza has been completed and is
currently 83% leased. Desert Fashion Plaza is managed by The Edward J.
DeBartolo Corporation, a leader in shopping center development and management
nationwide.
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TAX EXEMPTION
On October 22, 1986, the Tax Reform Act of 1986 (the "Act") was enacted.
The Act amends section 103 of the Internal Revenue Code of 1954 in whole and
imposes restrictions upon the tax-exemption of interest on obligations of
states and local government units. Generally, the Act characterizes such
obligations as either "governmental " obligations or "private activity"
obligations. The Bonds constitute governmental obligations for the purposes
of this characterization.
Under section 103 of the Internal Revenue Code of 1986, as amended (the
"Code"), the interest on governmental obligations is excludable from gross
income for federal income tax purposes if the obligations satisfy restrictions
relating to (1) limitations upon the use of proceeds for a private business
use or to make a private loan, (2) reserve fund funding requirements,
investment yield limitations and rebate requirements, (3) federal guarantee
prohibitions, (4) registration requirements, and (5) information reporting
requirements. The City does not expect to violate any of said restrictions
and the City has covenanted against such violation in the Indenture or has
taken other actions to assure compliance with such restrictions.
In the case of certain corporations which are subject to the alternative
minimum tax upon corporations, the interest on the Bonds received by such
corporations for taxable years beginning in 1987, 1988 and 1989 would be
included in adjusted net book income for the purpose of provisions stating
that alternative minimum taxable income shall be increased by 50 percent of
the amount by which the adjusted net book income of such corporations exceeds
the alternative minimum taxable income of such corporations, and for taxable
years beginning after 1989, said interest would be included in adjusted
current earnings for the purpose of provisions stating that the alternative
minimum taxable income shall be increased by 75 percent of the amount by which
the adjusted current earnings of such corporations exceed the alternative
minimum taxable income of such corporations.
In addition, the Act imposes a tax, generally referenced as the branch
profits tax, upon certain foreign corporations, which tax is equal to 30
percent of the dividend equivalent amount for a taxable year, commencing with
taxable years beginning in 1987. The dividend equivalent amount means
earnings and profits of a foreign corporation which are effectively connected
with the conduct of a United States trade or business. Interest on the bonds
received by such corporations will be included in such earnings and profits
for the purpose of computation of such tax if such interest is effectively
connected with a United States trade or business.
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On October 17, 1986, the Superfund Amendments and Reauthorization Act of
1986 ("SARA") was enacted. SARA establishes a program for clearing hazardous
waste sites and imposes an environmental tax to fund such program. The
Environmental tax is imposed upon modified alternative minimum taxable income,
which income includes interest on the Bonds in the same manner as the
computation of alternative minimum taxable income referenced above. The
Environmental tax is effective for taxable years beginning after December 31,
1986 and generally, before January 1, 1992.
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In the o.pi:nion of Jones Hall Hill & White, A Professional Law Corporation,
San Franciscos„ California, Bond Counsel , under existing laws, regulations,
rulings and Ju:d.i.cial decisions, and assuming compliance with the provisions of
the Indenture, designed to meet the requirements of section 148(f) (relating
generally to the required rebate of excess investment earnings to the United
States) of the Code and regulations thereunder, the interest on the Bonds is
exempt -from income taxation by the United States of America and from personal
income taxation, by the State of California; provided, however, that with
respect to corporations (as defined for federal income tax purposes) , such
interest is taken into account in determining adjusted net book income for the
purpose of computing the alternative minimum tax imposed on such corporations
and, for taxable years after December 31, 1989, such interest will be taken
into account in determining adjusted current earnings and profits for such
purposes. Bond Counsel expresses no opinion regarding other federal income
tax consequences caused by the receipt or accrual of interest on the Bonds,
and Bond Counsel assumes compliance by the City with requirements of the
Internal Revenue Code of 1986 which must be met subsequent to the issuance of
the Bonds in order that such interest be and remain excludable from gross
income for federal income tax purposes. Failure to comply with such
requirements could cause such interest to be so includable in gross income
retroactive to the date of issuance of the Bonds. The Agency has covenanted
under the Indenture to comply with such requirements.
In addition, the Tax Reform Act of 1986 disallows the interest reduction,
for taxable years ending after December 31, 1986, on debt incurred by
financial institutions to purchase or carry tax-exempt obligations for
obligations acquired after August 7, 1986. The Bonds would be included as
tax-exempt obligations for the purpose of this provision with the result that
interest on debt incurred by financial institutions to acquire the Bonds would
not be deductible to such institutions.
LEGAL OPINION
The legal opinion of Jones Hall Hill & White, A Professional Law
Corporation, San Francisco, California, approving the validity of the Bonds,
will be made available to purchasers at the time of original delivery of the
Bonds, and a copy thereof will be printed on each Bond.
MISCELLANEOUS
Legality for Investment and to Secure Deposits in California
The Law provides generally that the State and its municipal corporations,
political subdivisions and public bodies, as well as banks, trust companies,
savings banks, insurance companies, and various other financial institutions
and fiduciaries within the State of California may legally invest funds within
their control in bonds or other obligations issued by redevelopment agencies.
Such bonds and other obligations are also made authorized security for public
deposits within the State of California.
The Superintendent of Banks of the State of California, has ruled that
bonds of a redevelopment agency are, by statute, eligible for investment by
savings banks in California.
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Rating
[to be added]
Additional Information
The quotations from, and summaries and explanations of the Indenture and
other statutes and documents contained herein do not purport to be complete,
and reference is made to such documents, Indenture and statutes for full and
complete statements of their provisions.
This Official Statement is submitted only in connection with the sale of
the Bonds by the Agency. All estimates, assumptions, statistical information
and other statements contained herein, while taken from sources considered
reliable, are not guaranteed by the City or the Agency. The information
contained herein should not be construed as representing all conditions
affecting the Agency or the Bonds.
All information contained in this Official Statement pertaining to the
Agency, the City, and the Project have been prepared by Stone & Youngberg {
under the direction of the Agency and the City, and the execution and delivery
of this Official Statement have been duly authorized by the Agency.
PALM SPRINGS COMMUNITY REDEVELOPMENT AGENCY
1
By: Frank Bogert, Chairman
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APPENDIX A
GENERAL INFORMATION CONCERNING THE CITY AND REGION
From its origin as the home of the Agua Caliente band of the Cahilla
Indians, the City of Palm Springs has become a major resort area covering 77
square miles at the base of the San Jacinto Mountains in the upper Coachella
Valley. The Coachella Valley extends from the east entrance of the San
Gorgonio .Pass southeast to the north end of the Salton Sea, and from the base
of the Little San Bernardino Mountains to the base of the San Jacinto-Santa
Rosa Mountains. The elevation varies between 1,000 feet above sea level at
the Pass to 241 feet below sea level at the Salton Sea. The City's elevation
is 487 feet. Palm Springs, situated within the County of Riverside, is
approximately 108 miles east of Los Angeles and 130 miles northeast of San
Diego.
Municipal Government
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Palm Springs was incorporated April 20, 1938 as a general law city and
operates under a council-manager form of government. The City Council is
composed of five members who are elected at large to alternating four-year
terms at 'elections held, every two years. The City of Palm Springs provides a
full range of municipal services and maintains its own police department (91
officers), fire department (67 firefighters),' library (main and branch
library) , wastewater treatment plant, and municipal airport.
Climate
A tabulation of average temperatures and rainfall follows:
Averaqe Temperature RAIN
Period IMin. Mean Max. Inches
January . . . . . . . 39. 1 53.7 68.3 1.22
April . . . . . . . . . 52.6 69.9 86.9 .25
July . . . . . . . . . . 73.2 90.6 107.8 .29
October . . . . . . . 56.5 73.0 91.4 1.33
Year . . . . . . . . . . 54.7 70.9 87.5 7.07
Population
The City's population has increased over 125 percent since 1960. The
present population is approximately 38,925, although services are geared to
handle a population of almost 80,000 because of heavy tourism in the winter.
{ Furthermore, a large number of families maintain second homes in the City,
i resulting in a seasonal population well in excess of the City's permanent
population. The following table shows the City's population growth since 1940.
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CITY OF PALM SPRINGS AND RIVERSIDE COUNTY
POPULATION GROWTH
Riverside Average Palm Average
Year County Annual Change Springs Annual Change
1950 . . . . . . . . . . 7,660 +12.3%
1960 . . . . . . . . . . 306,191 13,468 + 7.6%
1970 . . . . . . . . . . 456,914 +4.9% 20,936 + 5.5% j
1980 . . . . . . . . . . 663,923 +4.5% 32,271 + 5.4%
1986 (1) . . . . . . 838,500 +4.4% 38,925 + 3.4%
Sources: U.S. Census Bureau, 1940-1980 figures.
(1) State Department of Finance estimate.
Major Employers
The following table lists the major manufacturing and non-manufacturing
employers in the area.
PALM SPRINGS ENVIRONS
MAJOR EMPLOYERS
Manufacturing Employment CompanyEmployment Product
Desert Sun Publishing Co. . . . . . . . . . . . 208 Daily Newspaper
Bird Corp. (Division of 3M Co.) . . . . . 104 Respirators
Palm Springs Life . . . . . . . . . . . . . . . . . . . 48 Monthly Magazine
Paul Associates, Inc. . . . . . . . . . . . . . . . 20 Commercial Printing, Labels
Non-Manufacturing
Employment Company Employment Type of Business
Major Hotels 4,646 Resort/Hotel
Desert Hospital . . . . . . . . . . . . . . . . . . . . . 1,500 Public Hospital
Palm Springs Unified School District 898 Public School System
City of Palm Springs . . . . . . . . . . . . . . . . 495 Municipal Government
Banks, Savings & Loan Associations . . 250 Banking
Southern California Gas Co. . . . . . . . . . 110 Utility Company
Source: City of Palm Springs
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Building Permit Valuation
Building Permit Valuation from 1982 through 1986 follows:
CITY OF PALM SPRINGS
BUILDING PERMIT VALUATION
(in thousands of dollars)
Type 1982 1983 1984 1985 1986
RESIDENTIAL
New Single Dwelling $20,218 $ 5,979 $ 6,165
New Multi-Dwelling 2,088 23,285 58,943
Additions, Alterations 1,455 2,041 2,361
Total Residential P3,761 $31,305 $67,469
NON-RESIDENTIAL
New Commercial $ 3,168 $ 5,738 $54,645
New Industrial 270 1,043 356
Other 1,996 3,058 11,533
Additions, Alterations 212. 68 4,676 6,042
{ Total Non-Residential 7,702 $14,515 572,576
TOTAL VALUATION 331,463 545,820 5140,045
NUMBER OF NEW DWELLING UNITS
Single Dwelling 412 91 71
Multi-Dwelling 32 539 1,280
TOTAL UNITS 444 630 1,351
Source: Security Pacific National Bank, California Construction Trends.
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Assessed Valuation
The following table presents the City's assessed valuation in fiscal years
1981/82-1986/87.
CITY OF PALM SPRINGS
ASSESSED VALUATION HISTORY(1)
1981/82-1986/87
Fiscal Secured Unsecured Less Net Taxable Percent
Year Property(2) Property Exemptions(3) Value Increase
1981/82 2, 108,877,704 85,562,291 68,367,582 2, 126,072,413 16.4
1982/83 2,360,026,953 107,756,621 70,037,844 2,397,745,730 12.8
1983/84 2,472,003,262 99,135,161 70,590,017 2,500,548,406 4.3
1984/85 2,680,905,318 111,253,820 72,060, 181 2,720,098,957 8.8
1985/86 2,958,691,061 123,822,852 77,628,228 3,004,885,685 10.5
1986/87 3,076,671,369 178,444, 127 80,862,602 3, 174,252,894 5.6
(1) Beginning in 1981/82, assessed valuations are based on 100% of full market
value, rather than 25% as in previous years.
(2) Includes Utility Property.
(3) Includes property exemptions, homeowner's exemption and, prior to 1981,
business inventory exemption.
Sources: 1981/82: City's Audited Financial Statements.
1982/83-1986/87: Compiled by California Municipal Statistics, Inc.
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CITY AND AGENCY FINANCES
The following presents a Statement of Revenues, Expenditures and Changes
in Fund Balance for fiscal years 1981-82 through 1984-85 as provided by the
City:
CITY OF PALM SPRINGS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GENERAL FUND COMPARISONS
1981-82 1982-83 1983-84 1984-85
Revenues:
Property Tax b 5,717,604 $ 6,422,451 $ 5
Sales and Use Tax 3,262,619 3,244,938
Franchise Tax 682,831 775, 169
Business License Tax 419, 198 418, 117
Other Tax 270,616 340,836
Licenses and Permits 422,137 294,881
Fines and Penalties 177,335 141,898
Use of Revenue and Property 3,049,870 2,109, 128
From Other Agencies 1,597,743 1,207,904
Charges Current Services 485,112 393,607
Intragovernment Revenue 520,643 652,385
Miscellaneous 24,876 28,502
Total Revenues $16,630,584 $16,029,816
_ Expenditures:
General Government b 3,744,388 $ 2,465,158
Public Safety 6,510,883 6,994,952
Public Works 1,964,014 3,572,193
Parks and Recreation 208,069 184,572
Total Expenditures $12,427,354 $13,216,875
Operating Transfers:
In 5 332,422 E 279,847
Out (4,856,815) _ (6,784,074)
Revenues:
Over
Under (321, 163) (3,691,286)
Balances:
Fund-July 1 112308,235 10,987,072
Fund-June 30
$10,987,072 E 7,295,786
Source: City's Audited Financial Statements.
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A summary of revenues and expenditures from the Capital Projects Fund from
fiscal years 1981-82 through 1984-85 follows:
CITY OF PALM SPRINGS
Capital Projects Fund, 1981-82 through 1984-85
1981-82 1982-83 1983-84 1984-85
Revenues:
Sales and Use Tax $ 361,300 $ 360,549 $ 393,400
Interest Income 31,933 368,687 221,319
From Other Agencies 348,669 145,618 402,490
Other Income 76,000 376,000
Total Revenues $ 742,902 $ 950,854 $ 1,393,209
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Expenditures: a
General Government $ 556,525 $ 442,806 $ 1,481,006
Public Safety 249,803 252,602 2,148,555
Public Works 5,870,093 1,649,268 1,983,995
Parks and Recreation 959,078 372,869 459,400
Total Expenditures $7,635,499 $ 2,717,545 $ 6,072,956
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Beginning Fund Balance $8,994,655 $ 6,299,058 $10,703,286
Due from Other Funds 5,500,000(1)
Transfers In 4,197,000 670,919 2,481,278
Proceeds from Public Fin. 8,937,743 i
Excess of Revenues Over
(Under) Expenditures (6,892,597) (1,766,691) (4,679,747)
Ending Fund Balance $6,299,058 $10,703,286 $17,442,560
(1) Previously authorized transfer from the General Fund.
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Source: City's Audited Financial Statements. j
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A tabulation of the City`s direct and overlapping debt as of January 14,
1987 was compiled by California Municipal Statistics, Inc. as follows:
CITY OF PALM SPRINGS
DIRECT AND OVERLAPPING DEBT
Applicable Debt 2/01/87
1986-87 Assessed Valuation: $3,080,488,932 (after deducting $140, 175,667
redevelopment tax allocation increment)
DIRECT AND OVERLAPPING BONDED DEBT:
Riverside County Building Authorities 10.163% $ 20,403,238
Riverside County Board of Education 10. 163 538,639
Desert Hospital District 45.111 142,099
Desert Hospital District Authorities 45.111 7,704,958
San Gorgonio Hospital District Authority 0.065 3,370
Coachella Valley Community College District 27.131 405,879
Palm Springs Unified School District 56.136' 1,942,305
Palm Springs Unified School District
Certificates of Participation 56.136 3,561,829
Mount San Jacinto Community College and
Banning Unified School District 0.007 & 0.104 92
City of Palm Springs 100. 4,230,000(1)
City of Palm Springs Building Authorities 100. 102,034,000(2)
City of Palm Springs 1915 Act Bonds 100. 6,445,000
TOTAL GROSS DIRECT AND OVERLAPPING BONDED DEBT $147,411,409(3)
Less: City of Palm Springs Golf Course
(100% Self-Supporting) 190,000
TOTAL NET DIRECT AND OVERLAPPING BONDED DEBT $147,221,409(3)
(1) Excludes tax and revenue anticipation notes.
(2) Includes $35,000,000 certificates of participation to be sold.
(3) .Excludes revenue, mortgage revenue and tax allocation bonds.
Ratios to Assessed Valuation:
Gross Direct Debt (3106 264 000 3.45%
Net Direct Debt (a106 074 000 3.44%
Total Gross Debt 4.79%
Total Net Debt 4.78%
Ij STATE SCHOOL BUILDING LOANS REPAYABLE AS OF 6/30/86: $153,368
Source: California Municipal Statistics, Inc.
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A tabulation of the Agency's direct and overlapping debt as of January 27,
1987, as compiled by California Municipal Statistics, Inc. follows:
COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF PALM SPRINGS
DIRECT AND OVERLAPPING DEBT
Applicable Debt 2/01/87
1986-87 Assessed Valuation $82,682,391
Less: Base Year Valuation 39,386,220 ,
1986-87 Incremental Valuation $43,296, 171
DIRECT DEBT: !I
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Series 1984 A Tax Allocation Bonds 100. Y $9,185,000(1) �
TOTAL DIRECT DEBT $9, 185,000
Ratio to Incremental Assessed Valuation: 21.21%
OVERLAPPING DEBT:
Riverside County General Fund Obligations 0.130 260,988
Riverside County Board of Education 0. 130 6,890
Coachella Valley Community College District 0.347 5,191
Palm Springs Unified School District 0.718 24,842
Palm Springs Unified School District
Certificates of Participation 0.718 45,557
City of Palm Springs 1 .279 54, 101
City of Palm Springs General Fund Obligations 1.279 857,364(2) i
Desert Hospital District 0.578 1,820
Desert Hospital District Authorities 0.578 98,722
TOTAL GROSS OVERLAPPING DEBT $1,355,475(3)
Less: City of Palm Springs Golf Course Bonds
(100% Self-Supporting) 2,430
TOTAL NET OVERLAPPING DEBT $1,353,045(3) 1
(1) Issue to be sold.
(2) Includes $20,600,000 Refunding Certificates of Participation. Excludes j
$18,000,000 Leasehold Mortgage Bonds (defeased by Escrow Fund) .
(3) Excludes revenue and mortgage revenue bonds.
Ratios to Base Year Valuation:
Gross Overlapping Debt 3.44%
Net Overlapping Debt 3.44%
SHARE OF AUTHORIZED AND UNSOLD BONDS: $0 j
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/86: $1,961 j
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Source: California Municipal Statistics, Inc.
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Media
Nine television stations (via cable) and eight radio stations serve the Palm
Springs area with a wide range of programming ranging from Country-Western
music to Spanish Language broadcasts. Special cable networks are also available.
The Coachella Valley is served by three daily, three bi-weekly, and three weekly
newspapers. The Desert Sun, a daily newspaper, is based in Palm Springs.
Housing Availability, Prices and Rentals
Rentals for one and two bedroom apartments and duplexes range from $350 and up
per month. Rentals for two and three bedroom houses range from $400 and up per
month. There are 12 mobile-home parks in the City.
Sales prices of existing houses are from $65,000 and up. There are several
residential areas within 20 miles of Palm Springs offering homes priced from
$49,000 and up.
s
There are approximately 167 hotels with over 7,000 total rooms in the City.
Education
There are two large school districts and five smaller districts in the
Coachella Valley. Palm Springs is served by the Palm Springs Unified School
District which maintains 5 elementary schools, 2 junior high schools, 1 high school
and 1 continuation school .
College of the Desert, located 10 miles southeast of the City in Palm Desert,
is an accredited junior college with an enrollment of approximately 1,857 day
students, and 2,660 continuing education students. This institution serves the
40,000 square mile Coachella Valley Junior College District. Enrollment growth is
approximately 200 students every year.
The University of California, Riverside (UCR) is located 54 miles west of Palm
Springs. Internationally known for its graduate education programs and its high
quality research contributions, UCR is a cultural , artistic, and information center
for one of the nation's fastest growing population areas. The University is one of
the smaller members of the nine campus University of California systems, and
maintains a student population of 4,707 (approximately thirty percent of the
student body are graduate students) . UCR offers a wide range of courses and is
accredited by the Western Association of Colleges & Universities.
Medical Facilities
The Desert Hospital serves the City of Palm Springs as the local major medical
facility. At the present time, the hospital has a 350 total bed capacity. It has
1,500 employees and 149 physicians.
j The Eisenhower Medical Center, located 15 miles east of Palm Springs in Rancho
Mirage, is one of the foremost medical treatment and teaching facilities in
Southern California. In addition to the present capacity of 285 beds, there are 60
beds in the Betty Ford Center for treatment of chemical dependency. The Eisenhower
Medical Center complex also includes the Annenberg Center for Health Sciences, a
learning center for health professionals, and the Hal B. Wallis Research Center
which is devoted to the problems of aging.
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Transportation
Highway access to the Coachella Valley is via east-west Interstate 10 to
Phoenix and Los Angeles. California Highways 86 and 111 provide service south
to the Salton Sea, Brawley, and E1 Centro. California Highways 60, 15, and 74
provide southwest highway access to San Diego County.
The Palm Springs Municipal Airport provides facilities for scheduled air
carriers, air freight and privately owned planes. Palm Springs has a full
service airport served by American, Western, TWA, Alaska, Continental , Aircal ,
United, Canadian Pacific Airlines, and five commuter carriers. In 1985, there
were 719,341 boarding and deplaning passengers at the Palm Springs Municipal
Airport.
The Southern Pacific Railroad, approximately five miles north of the City,
provides freight services, and parallels Interstate 10 and Highway 111.
The Coachella Valley is served by both Greyhound and Continental Trailways .
Bus Lines. Ten common carriers provide inter and intra-state truck transport.
The Sunline Transit Agency provides transportation within Palm Springs and
also serves the remainder of the Coachella Valley.
Cultural and Recreational Facilities =
The Palm Springs area offers a wide variety of cultural and recreational i
facilities for both residents and visitors. Facilities include 27 churches
and 2 synagogues, a main library and downtown branch library, 5 theaters,
several art galleries, and 10 cultural organizations which sponsor operas, j
plays, concerts, ballet, and other events. Other major cultural facilities j
include the Palm Springs Historical Museum and the Desert Museum. The
Historical Museum, located in two pre-1900 houses, contains artifacts of the
local Indians and later settlers and residents of the City. The Desert
Museum, accredited by the American Association of Museums, shows both national €
exhibitions and its own extensive collection, as well as providing lectures, j
movies, classes and tours. 11
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Recreational facilities include numerous public and private golf courses #
and tennis courts, one regional park, four community parks and two
neighborhood parks, two private equestrian facilities, a rodeo stadium, an j
Olympic-size community pool , and Angel Stadium, spring training camp of the {
California Angels. Several major golf and tennis tournaments are held each
year in the Palm Springs area. There are numerous bicycle, hiking and
equestrian trails, as well as a large variety of night clubs and restaurants.
Other major attractions include the Living Desert Reserve, Moorten's Botanical
Gardens, and the Palm Springs Aerial Tramway. The Aerial Tramway, the longest
double funicular tramway in the world, rises to a mountain station at 8,516
feet where hiking, camping, picnicking and cross-country skiing opportunities
are available. i
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APPENDIX B
[LETTERHEAD OF JONES HALL HILL & WHITE]
[Closing Date]
Community Redevelopment Agency
of the City of Palm Springs
[Address]
OPINION: $ Community Redevelopment Agency of the City of Palm .
Springs Central Business District Redevelopment Project Tax Allocation
Refunding Bonds. Issue of 1987
Members of the Agency:
We have acted as bond counsel in connection with the issuance by the Community
Redevelopment Agency of the City of Palm Springs (the "Agency") of $
Community Redevelopment Agency of the City of Palm Springs Central Business District
Redevelopment Project Allocation Refunding Bonds, Issue of 1987 (the "Bonds"),
pursuant to the Community Redevelopment Law, constituting Part 1 (commencing with
Section 33000) of Division 24 of the Health and Safety Code of the State of California (the
"Law"), the provisions of Article 11 of Chapter 3 of Part 1 of Division 2 of the California
Government Code and an Indenture of Trust, dated as of March 1, 1987, (the "Indenture")
by and between the Agency and First Interstate Bank of California, as Trustee. We have
examined the Law and such certified proceedings and other papers as we deem
necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations
of the Agency contained in the Indenture and in the certified proceedings and other
certifications of public officials furnished to us, without undertaking to verity such facts by
independent investigation.
Based upon our examination, we are of the opinion, as of the date hereof, that:
1. The Agency is a public body, corporate and politic, duly organized and validly
existing under and by virtue of the laws of the State of California.
2. The Bonds constitute valid and binding special obligations of the Agency
i enforceable in accordance with their terms.
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Community Redevelopment Agency •
of the City of Palm Springs
[Closing Date]
Page 2
3. The Indenture creates a valid lien on funds pledged by the Indenture for the
security of the Bonds.
4. Interest on the Bonds is exempt from California personal income taxation.
5. Interest on the Bonds is excludable from gross income for federal income tax
purposes, and interest on the Bonds is not an item of tax preference for purposes of the
federal alternative minimum tax imposed on individuals and corporations; however, with
respect to corporations (as defined for federal income tax purposes), such interest is
required to be taken into account in determining adjusted net book income for the purpose
of computing the alternative minimum tax imposed on such corporations and, for taxable
years after December 31, 1989, such interest is required to be taken into account in
determining adjusted current earnings and profits for such purposes. We express no
opinion regarding other federal income tax consequences caused by the receipt or
accrual of interest on the Bonds. For the purpose of rendering the opinion set forth in this
paragraph, we have assumed compliance by the Agency with requirements of the Internal
Revenue Code of 1986 which must be met subsequent to the issuance of the Bonds in
order that interest thereon be and remain excludable from gross income for federal
income tax purposes. The Agency has covenanted under the Indenture to comply with
such requirements.
The rights of the owners of the Bonds and the enforceability thereof may be subject
to bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights
heretofore or hereafter enacted and their enforcement may be subject to the exercise of
judicial discretion in accordance with general principles of equity.
Respectfully submitted,
A Professional Law Corporation
F7267
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RESOLUTION NO. 463
A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF PALM SPRINGS AUTHORIZING ISSUANCE OF
NOT TO EXCEED $ 10,400,000 PRINCIPAL AMOUNT
OF CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT
TAX ALLOCATION REFUNDING BONDS, APPROVING AND
AUTHORIZING AND DIRECTING EXECUTION OF INDENTURE
OF TRUST RELATING THERETO, AUTHORIZING SALE OF SUCH
BONDS, APPROVING OFFICIAL STATEMENT AND
AUTHORIZING OFFICIAL ACTION
WHEREAS, the Agency is authorized pursuant to the California Redevelopment
Law and the provisions of Article 11 of Chapter 3 of Part 1 of Division 2 of the Government
Code of the State of California (the "Law") to issue its tax allocation bonds for the purpose
of refunding outstanding tax allocation bonds previously issued by the Agency; and
WHEREAS, the Agency has previously issued $9,300,000 aggregate principal
amount of its Community Redevelopment Agency of the City of Palm Springs Central
Business District Redevelopment Project Tax Allocation Bonds, 1984 Series A (the "1984
Bonds"), which are payable from and secured by a lien on the tax revenues derived from
the Central Business District Redevelopment Project; and
WHEREAS, after due investigation and deliberation, the Agency has determined
that it is in the interests of the Agency at this time to provide for the issuance of its
Community Redevelopment Agency of the City of Palm Springs Central Business District
Redevelopment Project Tax Allocation Refunding Bonds, Issue of 1987 (the "Bonds") for
the purpose of refunding the 1984 Bonds and thereby realizing certain interest rate
savings; and
WHEREAS, the Bonds are proposed to be issued pursuant to an Indenture of Trust
dated as of March 1, 1987, (the "Indenture") by and between the Agency and First
Interstate Bank of California as trustee; and
WHEREAS, Stone & Youngberg (the "Underwriter") has informed the Agency that it
intends to submit an offer to purchase the Bonds, and in connection therewith the
Underwriter has caused to be prepared a Official Statement describing the Bonds, the
preliminary form of which is on file with the Secretary; and
WHEREAS, the Agency wishes at this time to approve said transactions in the
public interests of the Agency;
RESOLUTION NO. 463 • •
NOW, THEREFORE, BE IT RESOLVED by the Community Redevelopment Agency
of the City of Palm Springs as follows:
Section 1. Issuance of Bonds. The Agency hereby authorizes the issuance of the
Bonds under and pursuant to the Law and the Indenture in the principal amount of not to
exceed $ 10,400,000The Bonds shall mature on March 1 in each of the years and in the
maximum principal amounts per maturity as set forth in Exhibit A hereto. The Agency
hereby approves the Indenture in substantially the form on file with the Secretary together
with any additions thereto or changes therein deemed necessary or advisable by the
Executive Director. The Chairman and Secretary of the Agency are hereby authorized
and directed to execute, attest and affix the seal of the Agency to the Indenture for and in
the name and on behalf of the Agency. The Agency hereby authorizes the delivery and
performance of the Indenture.
Section 2. Sale of Bonds. The Agency hereby authorizes the sale of the Bonds to
the Underwriter pursuant to the Purchase Agreement between the Agency and the
Underwriter in substantially the form on file with the Secretary. The Executive Director is
hereby delegated the authority to accept an offer from the Underwriter to purchase the
Bonds and to execute said Purchase Agreement for and in the name and on behalf of the
Agency; provided, however, that the rate of interest to be borne by the Bonds of each
maturity shall not exceed the respective rates set forth in Exhibit A hereto.
Section 3. Official Statement The Agency hereby approves the preliminary Official
Statement describing the Bonds, in substantially the form submitted by the Underwriter and
on file with the Secretary, together with any changes therein or additions thereto deemed
approved by the Executive Director, whose execution thereof shall be conclusive evidence
of such approval. Distribution of the preliminary Official Statement by the Underwriter to
prospective purchasers of the bonds is hereby ratified and approved. The Agency hereby
authorizes the distribution by the Underwriter of the final Official Statement. The Executive
Director is hereby authorized and directed to approve any changes in or additions to a
final form of said Official Statement deemed advisable by the Executive Director, and to
execute said final Official Statement for and in the name and on behalf of the Agency.
Section 4. Official Action. All actions heretofore taken by the officers and agents of
the Agency with respect to the issuance of the Bonds are hereby approved, confirmed and
ratified. The Chairman, the Executive Director, the Redevelopment Director, the
Treasurer, the Secretary and any and all other officers of the Agency are hereby
authorized and directed, for and in the name and on behalf of the Agency, to do any and
all things and take any and all actions, including execution and delivery of any and all
assignments, certificates, requisitions, agreements (including but not limited to an Escrow
Deposit and Trust Agreement relating to the refunding of the 1984 Bonds), notices,
consents, instruments of conveyance, warrants and other documents, which they, or any
of them, may deem necessary or advisable in order to consummate the sale and
issuance of the Bonds pursuant to the documents described herein.
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RESOLUTION NO. 463
ADOPTED this 4th day of March 1987.
AYES: Members Apfelbaum, Birer, Foster, Smith and Chairman Bogert
NOES: None
ABSENT: None
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By
Assistant Secretary Chairman
REVIEWED & APPROVED
RESOLUTION NO. 463
EXHIBIT A
Maturity Principal Interest
M r h 1 Amount Rate
1988 $300,000 4.25%
1989 300,000 4. 75
1990 300,000 5.00
1991 325,000 5.25
1992 325,000 5.50
1993 350,000 5.75
1994 350,000 5.90
1995 375,000 6.00
1996 400,000 6.20
1997 425,000 6.30
1998 450,000 6.50
1999 475,000 6.60
2000 515,000 6.70
2001 550,000 6.70
2008 5,250,000 6.75
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