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HomeMy WebLinkAboutRDA 87-08TUSTIN COMMUNITY REDEVELOPMENT AGENCY RESOLUTION NO. RDA 87-8 Resolution of the Tustin Community Redevelopment Agency Authorizing the Issuance of $8,060,000 Principal Amount of Tustin Community Redevelopment Agency Town Center Area Redevelopment Project Tax Allocation Refunding Bonds, Series 1987 94691.7.2982.02:28 TABLE OF CONTENTS Page ARTICLE I Authorization of Bonds; Definitions Section 1.01. Authorization .............. 2 Section 1.02. Definitions ............... 2 Section 1.03. Articles, Sections ........... 10 Section 1.04. Equal Security ............. 10 ARTICLE II The Bonds Section 2.01. Authorization .............. 11 Section 2.02. Description of Bonds .......... 11 Section 2.03. Place of Payment ........... 12 Section 2.04. Form of Bonds .............. 12 Section 2.05. Execution of Bonds ........... 12 Section 2.06. Transfer of Bonds ............ 13 Section 2.07. Exchange of Bonds ............ 13 Section 2.08. Bond Register .............. 13 Section 2.09. Ownership of Bonds ........... 14 Section 2.10. Temporary Bonds ............. 14 Section 2.11. Bonds Mutilated, Lost, Destroyed or Stolen ................. 14 Section 2.12. Escrow Agreement ............ 15 ARTICLE III Redemption of Bonds Section 3.01. Optional Redemption ........... 16 Section 3.02. Notice of Redemption .......... 16 ARTICLE IV Creation of Funds; Disposition of Bond Proceeds; Parity Bonds Section 4.01. Funds ................. 20 Section 4.02. Disposition of Bond Proceeds ..... 20 'Section 4.03. Escrow Fund ............... 21 Section 4.04. Redevelopment Fund ........... 21 -i- TABLE OF CONTENTS, Continued Page Section 4.05. Agency Contribution Fund ........ 22 Section 4.06. Issuance of Parity Bonds ........ 22 Section 4.07. Subordinated Indebtedness ........ 23 Section 4.08. Validity of Bonds ............ 23 ARTICLE V Pledge as Security; Special Fund and Accounts Section 5.01. Pledged Tax Revenues .......... 24 Section 5.02. Special Fund .............. 24 Section 5.03. Rebate Fund ............... 26 Section 5.04. Deposit and Investment of Money in Funds and Accounts ........... 26 ARTICLE VI Covenants of the Agency Section 6.01. General ................. 29 Section 6.02. Punctual Payment ............ 29 Section 6.03. Extension of Bonds ........... 29 Section 6.04. Against Encumbrances .......... 29 Section 6.05. Management and Operation of Properties ............... 29 Section 6.06. Payment of Claims ............ 30 Section 6.07. Books and Accounts; Financial Statement ................ 30 Section 6.08. Protection of Security and Rights of Owners ................. 30 Section 6.09. Payments of Taxes and Other Charges . . .30 Section 6.10. Completion of Project .......... 31 Section 6.11. Taxation of Leased Property ....... 31 Section 6.12. Disposition of Property ......... 31 Section 6.13. Tax Revenues .............. 32 Section 6.14. Eminent Domain Proceeds ......... 32 Section 6.15. Special Tax Covenant .......... 32 Section 6.16. Provisions and Restrictions with Respect to Defeasance .......... 32 Section 6.17. Further Assurances ........... 33 -ii- TABLE OF CONTENTS, Continued ARTICLE VII The Fiscal Agent Paqe Section 7.01. Appointment of Fiscal Agent ....... 34 Section 7.02. Liability of Fiscal Agent ........ 35 Section 7.03. Notice to Fiscal Agent ......... 35 ARTICLE VIII Modification or Amendment of the Resolution Section 8.01. Amendments Permitted .......... 37 Section 8.02. Owners' Meetings ............ 38 Section 8.03. Procedure for Amendment with Written Consent of Owners ............ 38 Section 8.04. Disqualified Bonds ........... 39 Section 8.05. Effect of Supplemental Resolution .... 39 Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments ......... 39 Section 8.07. Amendatory Endorsement of Bonds ..... 40 ARTICLE IX Events of Default and Remedies of Bondholders Section 9.01. Proceedings Constitute Contract ..... 41 Section 9.02. Events of Default and Acceleration of Maturities .............. 41 Section 9.03. Application of Funds Upon Acceleration .............. 42 Section 9.04. Other Remedies of Owners ........ 43 Section 9.05. Non-waiver ............... 43 Section 9.06. Actions by Fiscal Agent as Attorney- in-Fact .............. - 44 Section 9.07 Remedies Not'EXclusive ......... · 44 ARTICLE X Miscellaneous Section lO.O1.Benefits of Resolution Limited to Parties ................. 45 -iii- TABLE OF CONTENTS, Continued Page Section 10.02.Successor is Deemed Included in Ail References to Predecessor ........ 45 Section 10.03,Discharge of Resolution ......... 45 Section lO.04.Waiver of Personal Liability ...... 46 Section 10.05.Publication for Successive Weeks .... 46 Section lO.06.Destruction of Cancelled Bonds ..... 46 Section 10.07.Notices and Demands on Agency ...... 46 Section 10.08.Partial Invalidity ........... 47 Section 10.09.Effective Date of Resolution ...... 47 Exhibit A Form of Bond -iv- RESOLUTION NO. RDA 87-8, ADOPTED AUGUST 3, 1987 RESOLUTION OF THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF $8,060,000 PRINCIPAL AMOUNT OF TUSTIN COMMUNITY REDEVELOPMENT AGENCY TOWN CENTER AREA REDEVELOPMENT PROJECT TAX ALLOCATION REFUNDING BONDS, SERIES 1987 WHEREAS, the Tustin Community Redevelopment Agency is a redevelopment agency, a public body, corporate and politic, duly cre- ated, 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, including the power to issue bonds for any of its corporate purposes; WHEREAS, a redevelopment plan, and an amendment thereto, for the Town Center Area Redevelopment Project in the'City of Tustin, California, have been adopted by the Tustin Community Redevelopment Agency in compliance with all requirements of law; WHEREAS, the Tustin Community Redevelopment Agency has pre- viously issued $8,500,000 in aggregate principal amount of its tax allocation bonds pursuant to Resolution No. RDA 82-10, adopted October 20, 1982 and Resolution No. RDA 82-12 adopted on Novem%ber 15, 1982 for the purpose of aiding in the financing of the Project, said bonds having been designated "Tustin Community Redevelopment Agency Town Center Area Redevelopment Project Tax Allocation Bonds, Series 1982" of which $8,105,000 remain outstanding as of the date hereof (the "Series 1982 Bonds"); and WHEREAS, the Tustin Community Redevelopment Agency deems it necessary and desirable to refund said Series 1982 Bonds by issuing tax allocation bonds in an amount, together with other available moneys of the Agency, sufficient to refund and defease all of said Series 1982 Bonds pursuant to the provisions of said Resolution Nos. RDA 82-10 and RDA 82-12; NOW, THEREFORE, BE IT RESOLVED by the Tustin Community Redevelopment Agency, as follows: 94691.7.2982.02:28 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 and 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 this Resolution, 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 Resolution. SECTION 1.02. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.02 shall, for all pur- poses of this Resolution, of any resolution supplemental hereto, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. Agency "Agency" means the Tustin Community Redevelopment Agency, a public body, corporate and politic, established under the Law. Annua~ Debt Service "Annual Debt Service" means, for each Bond Year, the sum of (1) the interest payable on the outstanding Bonds and Parity Bonds in such Bond Year, assuming that the Outstanding Bonds and Serial Parity Bonds are retired as scheduled and that the Outstanding Term Parity Bonds are redeemed from minimum sinking account payments as sched- uled, (2) the principal amount of the Outstanding Serial Bonds and Serial Parity Bonds payable by their terms in such Bond Year, and (3) the principal amount of the Outstanding Term Parity Bonds scheduled to be paid or called and redeemed from minimum sinking account pay- ments in such Bond Year, excluding the redemption premiums, if any, thereon. Bond Insurance ~olicy "Bond Insurance Policy" means the municipal bond insurance policy to be issued by MBIA with respect to the Bonds. ~ond Year "Bond Year" means the twelve-month period commencing with the date of the Bonds and each twelve-month period thereafter. 94691.7.2982.02:28 -2- BoDds "Bonds" means the Tustin Community Redevelopment Agency Town Center Area Redevelopment Project, Tax Allocation Refunding Bonds, Series 1987, authorized by this Resolution. Business Day "Business Day" means a day of the year on which the Fiscal Agent and banks or trust companies in New York, New York, or in Los Angeles, California are not authorized or required to remain closed. Chairman "Chairman" means the chairman of the Agency appointed pur- suant to Section 33113 of the Law, or other duly appointed officer of the Agency authorized by the Agency by resolution or By-law to per- form the functions of the chairman in the event of the chairman's absence or disqualification. Code "Code" means the Internal Revenue Code of 1986, as amended. Costs of Issuance "Costs of Issuance" means all expenses of the Agency incurred in connection with the authorization, issuance and sale of the Bonds (including without limitation legal and consultant fees, rating agency fees, bond insurance premiums, initial Fiscal Agent fees and charges, costs of reproducing and binding documents and printing and advertising expenses). Escrow Agreement "Escrow Agreement" means that certain agreement dated as of July 1, 1987, by and between the Agency and the Escrow Agent, relat- ing to the defeasance of the Series 1982 Bonds. ~scrow Agent "Escrow Agent" means Security Pacific National Bank, or any successor thereto appointed under the Escrow Agreement. 94691.7.2982.02:28 -3- Escrow Securities "Escrow Securities" means those certain Federal Securities purchased pursuant to this Resolution and the Escrow Agreement and described in Exhibit B to the Escrow Agreement. Federal Securities "Federal Securities" means (1) United States Treasury notes, bonds, bills or certificates of indebtedness or those for which the faith and credit of the United States are pledged for the payment of principal and interest, including United States Treasury (book entry) certificates, notes and bonds, State and Local Government Series; and (2) obligations issued by banks for coopera- tives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank Board and the Tennessee Valley Authority, all as and to the extent that such obligations are (a) eligible for the legal investment of Agency funds and (b), so long as the Bond Insurance Policy is in full force and effect, included in the list of permissible investments to be provided to the Agency and the Fiscal Agent from time to time by MBIA. Financial Newspaper "Financial Newspaper" means The Wall Street Journal or The Bond Buyer or any other newspaper or journal printed in the English language publishing financial news, circulated in Los Angeles, California, and in the same or similar newspaper or journal of gen- eral circulation in New York, New York, and selected by the Fiscal Agent, whose decision shall be final and conclusive. Fisca~ Agent "Fiscal Agent" means the Fiscal Agent appointed by the Agency and acting as an independent agent with the duties and powers herein provided, its successors and assigns, and any other corpora- tion or association which may at any time be substituted in its place, as provided in Section 7.01. Fiscal Year "Fiscal Year" means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both inclusive, or any other twelve-month period hereafter selected and designated by the Agency as its official fiscal year period. 94691.7.2982.02:28 -4- Independent Certified Public AccouDtant "Independent Certified Public Accountant" means any accoun- tant or firm of such accountants duly licensed or registered or enti- tled to practice and practicing as such under the laws of the State of California, appointed by the Agency, and who, or each of whom: is in fact independent and not under domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) 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 "Independent Financial Consultant" means any financial con- sultant or firm of such consultants appointed by the Agency, and who, or each of whom: (1) is in fact independent and not under domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) 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 Real Estate Consultant "Independent Real Estate Consultant" means any real estate consultant or firm of such consultants appointed by the Agency, and who, or each of whom: (1) is in fact independent and not under domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) 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. 94691.7.2982.02:28 -5- Interest payment Date "Interest Payment Date" means May 1 and November 1 of each year, commencing May 1, 1988. Law "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, as heretofore or hereafter amended and supplemented, and Article 11, Chapter 3, Part 1, Division 2, Title 5 of the Government Code of the State of California, as heretofore or hereafter amended and supplemented. Letter of Instructions "Letter of Instructions" means the letter provided to the Agency by Mudge Rose Guthrie Alexander & Ferdon, as Bond Counsel, on the date of issuance and delivery of the Bonds, as such Letter may be amended from time to time, as a source of guidance for compliance with the Code. Maximum Annual Debt Service "Maximum Annual Debt Service" means, as of any date of com- putation, the largest Annual Debt Service for the Bond Year of such computation or any Bond Year thereafter. MBIA "MBIA" means Municipal Bond Investors Assurance Corporation. Orange County Assessor "Orange County Assessor" means the person who holds the office designated Orange County Assessor from time to time, or one of his duly appointed deputies, or any person or persons performing sub- stantially the same duties in the event said office is ever abolished or changed. Orange Couoty Auditor-Controller "Orange County Auditor-Controller" means the person who holds the office designated Orange County Auditor-Controller from time to time, or one of his duly appointed deputies, or any person or persons performing substantially the same duties in the event said office is ever abolished or changed. 94691.7.2982.02:28 -6- Outstanding "Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 8.04) all Bonds except: (1) Bonds theretofore cancelled by the Fiscal Agent or any Paying Agent or surrendered to the Fiscal Agent for cancellation; (2) Bonds paid or deemed to have been paid within the meaning of Section 10.03; and (3) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the Agency pursuant to the Resolution or any Supplemental Resolution. OwDer "Owner" means any person who shall be the registered owner of any outstanding Bond. Parity Bonds "Parity Bonds" means any additional tax allocation bonds issued by the Agency which are payable out of the Pledged Tax Revenues and which rank on a parity with the Bonds. pledged Tax Revenues "Pledged Tax Revenues" means that portion of the first Tax Revenues received by the Agency in each Bond Year equal to the Annual Debt Service for such Bond Year (less any amounts then on deposit in the Interest Account and in the Principal Account provided for in Section 5.02) plus an amount, if any, necessary to maintain the Reserve Requirement. Principa% Payment Date "Principal Payment Date" means November 1 of each year, commencing November 1, 1988. Project "Project" means the undertaking of the Agency pursuant to the Redevelopment Plan and the Law of the Town Center Area Redevelopment Project. 94691.7.2982.02:28 -7- Project Area "Project Area" means the Town Center Area Redevelopment Project area described in the Redevelopment Plan. Redevelopment Plan "Redevelopment Plan" means the Redevelopment Plan for the Town Center Area Redevelopment Project, approved by Ordinance No. 701, enacted by the City Council of the City of Tustin on November 22, 1976, as amended by Ordinance No. 855, enacted by the City Council of the City of Tustin on September 8, 1981, together with any amendments thereof hereafter duly authorized pursuant to the Law. Refunding Requirements "Refunding Requirements" means (i) all installments of principal and interest on the noncallable Refunded Bonds as such pay- ments become due, and (ii) all installments of interest and the redemption price (principal and premium) of the callable Refunded Bonds at their earliest call date. Report "Report" means a document in writing signed by an Independent Financial Consultant or an Independent Real Estate Consultant and including: (1) a statement that the person or firm making or giving such Report has read the pertinent provisions of this Resolution to which such Report relates; (2) a brief statement as to the nature and scope of the examination or investigation upon which the Report is based; (3) a statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said consultant to express an informed opinion with respect to the subject matter referred to in the Report. Reserve Requirement "Reserve Requirement" means $805,500 or Maximum Annual Debt Service, whichever is less. 94691.7.2982.02:28 -8- ResolutiQn "Resolution" means this Resolution, adopted by the Agency under the Law, as originally adopted or as it may be amended or sup- plemented by any Supplemental Resolution adopted pursuant to the pro- visions herein. Serial Parity Bonds "Serial Parity Bonds" means Parity Bonds not subject to mandatory call prior to maturity. Series 1982 Bonds "Series 1982 Bonds" means the outstanding Tustin Community Redevelopment Agency Town Center Area Redevelopment Project Tax Allocation Bonds, Series 1982. supplemental Resolution "Supplemental Resolution" or "supplemental resolution" means any resolution then in full force and effect which has been duly adopted by the Agency under the Law at a meeting of the Agency duly convened and held, at which a quorum was present and acted thereon, amendatory of or supplemental to this Resolution; but only if and to the extent that such Supplemental Resolution is specifi- cally authorized hereunder. Tax Revenues "Tax Revenues" means that portion of taxes levied upon tax- able property in the Project Area annually allocated to the Agency, and paid into a special fund of the Agency pursuant to Article 6 of Chapter 6 (commencing with Section 33670) of the Law and Section 16 of Article XVI of the Constitution of the State of California, and as provided in the Redevelopment Plan, including all payments and reim- bursements, if any, to the Agency specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limita- tions, but subject, in all respects, to any limitation set forth in the Redevelopment Plan. Term Parity ~onds "Term Parity Bonds" means Parity Bonds which are subject to mandatory call prior to maturity. 94691.7.2982.02:28 -9- Treasurer "Treasurer" means the officer who is then performing the functions of Treasurer of the Agency. Written Request of the Agency "Written Request of the Agency" means an instrument in writing signed by the Chairman, the Executive Director or any other officer of the Agency duly authorized by the Agency for that purpose and by the Secretary of the Agency, with the seal of the Agency affixed. SECTION 1.03. Articles, Sections. Ail references herein to "Articles," "Sections" and other subdivisions are to the corre- sponding Articles, Sections or subdivisions of this Resolution, and the words "herein," "hereof," "hereunder" and other words of similar import refer to this Resolution as a whole and not to any particular Article, Section or subdivision herein. SECTION 1.04. Equal Security. In consideration of the acceptance of the Bonds and Parity Bonds by those who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the Agency and the Owners from time to time of the Bonds and any Parity 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 pro- tection of all Owners of the Bonds and Parity Bonds without prefer- ence, priority or distinction as to security or otherwise of any of the Bonds and Parity 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. 94691.7.2982.02:28 -10- ARTICLE II THE BONDS SECTION 2.01. Authorization. Bonds are hereby authorized to be issued by the Agency under and subject to the terms of this Resolution, the Redevelopment Plan and the Constitution and laws of the State of California for the purpose of refinancing a portion of the cost of the Project. This Resolution constitutes a continuing agreement with the Owners of all of the Bonds issued hereunder and then outstanding to secure the full and final payment of principal and premiums, if any, and the interest on all Bonds executed and delivered hereunder, subject to the covenants, agreements, provisions and conditions herein contained. SECTION 2.02. Description of Bonds. The Bonds shall be designated "Tustin Community Redevelopment Agency Town Center Area Redevelopment Project Tax Allocation Refunding Bonds, Series 1987" and shall be in the principal amount of $8,060,000. The Bonds shall be dated, July 1, 1987. The Bonds shall be numbered in the discre- tion of the Fiscal Agent, and each such Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless it is registered during the period commencing on the sixteenth day of the month preceding an Interest Payment Date and ending on such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless it is registered on or before April 15, 1988, in which case it shall bear interest from July 1, 1987; provided, however, that if, at the time of authen- tication of any Bond, interest is in default on Outstanding Bonds, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding Bonds. The Bonds shall be issued only as fully reg- istered bonds in the denomination of $5,000 or any integral multiple thereof, and shall mature on the dates and in the principal amounts, and shall bear interest, based on a year composed of twelve thirty day months, payable semiannually on May 1 and November 1, commencing May 1, 1988 at the respective rates per annum, shown below: 94691.7.2982.02:28 -11- Maturity Principal (November 1) Amount Interest Maturity Rate (November 1) Principal Interest Amount Rate 1988 $ 25,000 4.40% 1998 $425,000 7.00% 1989 255,000 4.60 1999 455,000 7.10 1990 270,000 4.90 2000 490,000 7.20 1991 285,000 5.20 2001 525,000 7.30 1992 300,000 5.40 2002 560,000 7.30 1993 315,000 5.70 2003 605,000 7.40 1994 335,000 5.90 2004 645,000 7.40 1995 355,000 6.20 2005 695,000 7.50 1996 375,000 6.40 2006 745,000 7.50 1997 400,000 6.70 Each Bond shall bear interest until the principal sum thereof has been paid; provided, however, that if at the maturity date of any Bond, or if the same has been duly called for redemption then at the date fixed for redemption, funds are available for the payment or redemption thereof in full accordance with the terms of this Resolution, said Bond shall then cease to bear interest. SECTION 2.03. Place of Payment. The principal or redemp- tion price of the Bonds shall be payable in lawful money of the United States of America upon surrender thereof at the principal cor- porate trust office of the Fiscal Agent in Los Angeles, California. Payment of the interest on any Bond shall be made to the person whose name appears on the bond registration books of the Fiscal Agent, the registrar for the Bonds, as the registered owner thereof as of the 15th day of the month immediately preceding an Interest Payment Date, such interest to be paid by check or draft mailed to such registered owner at his address as it appears on such registration books. SECTION 2.04. Form of Bonds. The Bonds, including the Fiscal Agent's certificate of authentication and registration, shall be substantially in the form set forth in Exhibit A annexed hereto, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Resolution. SECTION 2.05. Execution of Bonds. The Bonds shall be signed on behalf of the Agency by its Chairman and Treasurer by their manual or facsimile signatures, and the seal of the Agency shall be impressed, imprinted or reproduced thereon. If any officer whose signature appears on any Bond ceases to be such officer before deliv- ery 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 94691.7.2982.02:28 -12- 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 and registration in the form set forth in Exhibit A hereto, executed and dated by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Resolution, and such certificate of the Fiscal Agent shall be conclu- sive evidence that the Bonds so registered have been duly authenti- cated, registered and delivered hereunder and are entitled to the benefits of this Resolution. SECTION 2.06. Transfer of Bonds. Any Bond may, in accor- dance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.08, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approvedby the Fiscal Agent, duly executed. Whenever any Bond or Bonds shall be surrendered for trans- fer, the Agency shall execute and the Fiscal Agent shall deliver a new Bond or Bonds, for like aggregate principal amount of the same maturity. No transfers of Bonds shall be required to be made during the period established by the Fiscal Agent for the selection of Bonds for redemption or after a Bond has been selected for redemption. SECTION 2.07. Exchange of Bonds. Bonds may be exchanged at the principal office of the Fiscal Agent for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity. The Fiscal Agent shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. No exchanges of Bonds shall be required to be made during the period established by the Fiscal Agent for the selection of Bonds for redemption or after a Bond has been selected for redemption. SECTION 2.08. Bond Register. The Fiscal Agent will keep or cause to be kept, at its principal corporate trust office in Los Angeles, California, sufficient books for the registration and trans- fer of the Bonds, which shall be open to inspection by the Agency at reasonable times during regular business hours; and, upon presenta- tion for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be 94691.7.2982.02:28 -13- registered or transferred, on said books, Bonds as hereinbefore provided. SECTION 2.09. Ownership of Bonds. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute Owner thereof for all purposes, and payment of or on account of the principal of, premium, if any, and the interest on, any such Bond, shall be made only to or upon the order of the Owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond including the interest thereon to the extent of the sum or sums so paid. SECTION 2.10. 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 Resolution 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 tempo- rary Bonds it will execute and furnish definitive Bonds without delay, and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange therefor at the principal corporate trust office of the Fiscal Agent in Los Angeles, California, and the Fiscal Agent 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 Resolution as defini- tive Bonds authenticated and delivered hereunder. SECTION 2.11. Bonds Mutilated, ~ost, Destroyed or Stolen. If any Bond shall become mutilated the Agency, at the expense of the owner of said Bond, shall execute, and the Fiscal Agent shall there- upon deliver, a new Bond of like tenor and amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be cancelled by it and deliv- ered 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 Fiscal Agent 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 Fiscal Agent shall thereupon deliver, a new Bond of like tenor and amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Agencymay 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 Fiscal Agent in the premises. Any Bond issued under the 94691.7.2982.02:28 -14- provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contrac- tual obligation on the part of the Agency whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the ben- efits of this Resolution with all other Bonds and Parity Bonds issued pursuant to this Resolution. SECTION 2.12. Escrow Agreement. The Agency hereby approves the Escrow Agreement in substantially the form presented to this meeting, with such changes as the Chairman shall approve (such approval to be conclusively evidenced by his execution of the Escrow Agreement) . The Chairman is authorized and directed to execute the Escrow Agreement on behalf of the Agency and to deliver the Escrow Agreement to the proper officials of the Escrow Agent. 94691.7.2982.02:28 -15- ARTICLE III REDEMPTION OF BONDS SECTION 3.01. Optional Redemption. Bonds maturing on or prior to November 1, 1997 shall not be subject to call and redemption prior to maturity. Bonds maturing on or after November 1, 1998 are subject to redemption prior to their respective stated maturities, at the option of the Agency, as a whole, or in part in inverse order of maturity, and by lot within any such maturity if less than all of the Bonds of such maturity are to be redeemed, from any source of avail- able funds, on any Interest Payment Date on or after November 1, 1997 at the respective redemption prices (expressed as percentages of the principal amount of the Bonds or portions thereof to be redeemed) set forth below, in each case together with accrued interest to the date of redemption: Redemption Dates Redemption Price November 1, 1997 and May 1, 1998 ...... 102 % November 1, 1998 and May 1, 1999 ...... 101 1/2 November 1, 1999 and May 1, 2000 ...... 101 November 1, 2000 and May 1, 2001 ...... 100 1/2 November 1, 2001 and each May 1 and November 1 thereafter ........... 100 SECTION 3.02. Notice of Redemption. (a) Official notice of redemption shall be given by the Fiscal Agent for and on behalf of the Agency by first class mail, postage prepaid, not less than 30 nor more than 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 Fiscal Agent and, so long as the Bond Insurance Policy is in full force and effect, to Municipal Bond Investors Assurance Corporation, 445 Hamilton Avenue, White Plains, New York 10601 (or to such other address as MBIA shall provide to the Fiscal Agent). Each official notice of redemption shall state the redemption date, the place or places of redemption, and, if less than all of the Bonds, the distinctive numbers of the Bonds to.be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed, and shall also state that on said date there will become due and payable on each of said Bonds the redemption price thereof or of said specified portion of the principal thereof in the case of a Bond to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such redemp- tion date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered. 94691.7.2982.02:28 -16- The Agency shall notify the Fiscal Agent in writing of its intention to call and redeem Bonds at least 90 days prior to the redemption date. A certificate by the Fiscal Agent that the official notice of redemption has been given to Owners of Bonds as herein pro- vided shall be conclusive as against all parties, and no Owner whose Bond is called for redemption may object thereto or object to the cessation of interest on the redemption date fixed by any claim or showing that he failed to receive actual notice of call and redemption. Whenever any Bonds are to be selected for redemption by lot, the Fiscal Agent shall determine, in any manner deemed by it to be fair, the numbers of the Bonds to be redeemed, and shall notify the Agency thereof. The Fiscal Agent shall determine, in sufficient time to give the notices required by this Section, what sums will be avail- able on the redemption date in accordance with this Resolution, and shall cause notice to be given in accordance with such determination. Funds for the redemption of the Bonds shall be set aside by the Fiscal Agent in the Redemption Fund established pursuant to Section 4.01 of this Resolution (or in another special trust fund or account established for the same purpose) and shall be applied on or after the redemption date to payment (principal and premium, if any) for the Bonds to be redeemed upon presentation and surrender of such Bonds, and shall be used only for that purpose. Any interest due on or prior to the redemption date shall be paid from the Special Fund described in Section 5.02. If after all the Bonds called have been redeemed and cancelled or paid and cancelled there are moneys remaining in the Redemption Fund, said moneys shall be transferred to the Special Fund; provided, however, that if said moneys are part of the proceeds of refunding bonds said moneys shall be transferred to the fund created for the payment of principal of and interest on such refunding bonds. When official notice of redemption has been given, as pro- vided herein, and when the amount necessary for the redemption of the Bonds called for redemption (principal and premium, if any) is set aside for that purpose in the Redemption Fund, as provided herein, the Bonds designated for redemption shall become due and payable on the date fixed for redemption thereof, and, upon presentation and surrender of said Bonds, at the place specified in the official notice of redemption, such Bonds shall be redeemed and paid at said redemption price out of the Redemption Fund, and no interest will accrue on such Bonds called for redemption from and after the redemp- tion date specified in such notice, and the Owners of said Bonds so called for redemption after such redemption date shall look for the payment of such Bonds and the premium thereon only to the Redemption 94691.7.2982.02:28 -17- Fund. Ail Bonds redeemed shall forthwith be cancelled and destroyed by the Fiscal Agent and shall not be reissued. Upon surrender of any Bond redeemed in part only, the Agency shall execute and the Fiscal Agent shall authenticate and deliver to the Owner thereof, at the expense of the Agency, a new Bond or Bonds of the same maturity and of authorized denominations, equal in aggregate principal amount to the unredeemed portion of the Bond surrendered. (b) In addition to the foregoing official notice of redemption, further notice shall be given by the Fiscal Agent for and on behalf of the Agency as set out below, but no defect in said fur- ther notice nor any failure to give all or any portion of such fur- ther notice shall in any manner defeat the effectiveness of a call for redemption. (1) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP num- bers of all Bonds being redeemed; (ii) the date of issue of the Bonds as originally issued; (iii) the rate of interest borne by each Bond being redeemed; (iv) the maturity date of each Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Bonds being redeemed. (2) Each further notice of redemption shall be sent at least two days prior to the date notice of redemption is mailed to the Owners, by registered or certified mail, postage prepaid, telephonically confirmed fac- simile transmission, or overnight delivery service, to the registered securities depositories (such deposito- ries now being the four listed below) at the address or transmission number given, or such other address or transmission number as may have been delivered in writing by any such depository to the Fiscal Agent for such purpose not later than the close of business on the day before such redemption notice is given: 94691.7.2982.02:28 -18- The Depository Trust Company 711 Stewart Avenue Garden City, New York 11530 Facsimile transmission: (516) 227-4039 (516) 227-4190 Midwest Securities Trust Company Capital Structures-Call Notification 440 South La Salle Street Chicago, Illinois 60605 Facsimile transmission: (312) 663-2343 Pacific Securities Depository Trust Company Pacific and Company P.O. Box 7041 San Francisco, California 94120 Facsimile transmission: (415) 393-4128 Philadelphia Depository Trust Company Reorganization Division 1900 Market Street Philadelphia, Pennsylvania 19103 Facsimile transmission: (215) 496-5058; (3) Each further notice of redemption shall also be sent at least two days prior to the date notice of redemp- tion is mailed to the Owners, by registered or certi- fied mail, postage prepaid, or overnight delivery ser- vice, to one of the following services selected by the Agency and designated in writing to the Fiscal Agent: Financial Information, Inc.'s Financial Daily Called Bond Service; Interactive Data Corporation's Bond Service; Kenny Information Service's Called Bond Service; Moody's Municipal and Government; or Standard & Poor's Called Bond Record; and Each check or other transfer of funds to a securities depository issued by the Fiscal Agent for the purpose of redeeming Bonds shall be accompanied by a written instrument which bears the CUSIP numbers identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. 94691.7.2982.02:28 -19- ARTICLE IV CREATION OF FUNDS; DISPOSITION OF BOND PROCEEDS; PARITY BONDS SECTION 4.01. Funds. (a) The following special trust funds, heretofore and hereby respectively created shall be held and maintained by the Treasurer: (1) The Town Center Area Redevelopment Project Redevelopment Fund (the "Redevelopment Fund"); and (2) The Town Center Area Redevelopment Project Rebate Fund (the "Rebate Fund"). (b) The following special trust funds are hereby created, to be held and maintained by the Fiscal Agent: (1) The Town Center Area Redevelopment Project Special Fund (the "Special Fund"), which shall include the accounts described in Section 5.02; and (2) The Town Center Area Redevelopment Project Redemption Fund (the "Redemption Fund"). (3) The Town Center Area Redevelopment Project Agency Contribution Fund (the "Agency Contribution Fund"). (c) A special trust fund called the Town Center Area Redevelopment Project Escrow Fund (the "Escrow Fund") is hereby cre- ated, to be held and administered by the Escrow Agent in accordance with this Resolution and the Escrow Agreement. So long as any of the Bonds herein authorized, or any interest thereon, remain unpaid, the moneys in the foregoing funds shall be used for no purpose other than those required or permitted by this Resolution and the Law. SECTION 4.02. Disposition of Bond Proceeds. The proceeds from the sale of the Bonds shall be deposited simultaneously with the delivery of the Bonds, as follows: 94691.7.2982.02:28 -20- (a) In the Interest Account in the Special Fund, the accrued interest and premium, if any, received upon the sale of the Bonds. (b) In the Reserve Account in the Special Fund, a sum, if any, which, together with other moneys simultaneously deposited therein from sources other than the proceeds of sale of the Bonds is equal to the Reserve Requirement. (c) In the Escrow Fund, an amount which, together with other moneys simultaneously deposited therein from sources other than the proceeds of sale of the Bonds and together with the yield from the investment thereof in the Escrow Securities, will be sufficient to pay the Refunding Requirements (as defined in the Escrow Agreement) as the same become payable in accordance with the Escrow Agreement. (d) To the Agency for deposit in the Redevelopment Fund, the remainder of the proceeds, if any. SECTION 4.03. Escrow Fund. Except as otherwise provided herein or in the Escrow Agreement, moneys in the Escrow Fund shall be used only to meet the Refunding Requirements, and to that end shall be invested in the Escrow Securities described in the Escrow Agreement in such amounts and maturities which together with the investment earnings therefrom and any uninvested cash will be suffi- cient to meet the Refunding Requirements. The Escrow Agent shall cause the timely transfer of moneys from the Escrow Fund to such other funds or accounts as required by the Escrow Agreement. Escrow Securities shall be deemed at all times to be a part of the Escrow Fund, and the interest accruing thereon and any gain realized from such investment shall be credited to the Escrow Fund. The Series 1982 Bonds in the aggregate principal amount of $7,105,000 maturing on and after November 1, 1993 shall be and hereby are ordered to be called for prior redemption and payment on November 1, 1992 at a redemption price equal to 102 1/2% of the prin- cipal amount of each Series 1982 Bond so redeemed. SECTION 4.04. Redevelopment Fund. M o n e y s i n t h e Redevelopment Fund shall be used in the manner provided by law solely for the purpose of aiding in financing the Project or for any lawful purpose in connection therewith. The Agency shall pay moneys from the Redevelopment Fund upon receipt of warrants drawn thereon and signed by at least one 94691.7.2982.02:28 -21- duly authorized officer or member of the Agency. The Agency warrants that no withdrawal shall be made from the Redevelopment Fund for any purpose not authorized by law. Any moneys in the Redevelopment Fund in excess of that amount required to complete the Project shall be transferred from the Redevelopment Fund to the Special Fund. SECTION 4.05. Agency Contribution Fund. M o n e y s o n deposit in the Agency Contribution Fund may be used to pay expenses associated with the Bonds, or any other purpose as permitted by this Resolution and the Law. The Fiscal Agent shall make payments from the Agency Contribution Fund upon the written requisition of the Agency, signed by the Treasurer or at least one other duly authorized officer or member of the Agency stating, with respect to the payment to be made (i) the name and address of the person, firm or corpora- tion to whom payment is due, (ii) the amount of the payment, and (iii) that the payment in the stated amount is a proper charge against the Agency Contribution Fund and that no part of the payment will be applied to any item which has previously been paid. At the end of the six month period beginning August 5, 1987, or upon the instruction of the Agency, whichever is earlier, the Agency Contribution Fund shall be terminated and any amounts then remaining therein shall be transferred to the Agency for deposit in the Redevelopment Fund. SECTION 4.06. Issuance of Parity Bonds. The Agency may provide for the issuance of, and sell, Parity Bonds, subject to any limitation contained in the Redevelopment Plan and subject to the following conditions precedent to such sale: (a) The Agency shall be in compliance with all covenants set forth in this Resolution; (b) Tax Revenues, excluding interest earnings thereon, received or to be received by the Agency based upon the most recent assessed valuation of taxable property in the Project Area (as reported by the Orange County Assessor or the Orange County Auditor-Controller) and uPon the most recently established tax rates (plus an allowance for estimated Tax Revenues resulting from the con- struction of improvements in the Project Area which has been com- pleted prior to the date of issuance of such Parity Bonds but which is not yet on the tax rolls, including any increase in taxable valua- tion of the land underlying such improvements) are at least equal to 125% of the Maximum Annual Debt Service on all Bonds and Parity Bonds which will be outstanding in accordance with their terms following the issuance of such Parity Bonds, all as evidenced by a report of an Independent Financial Consultant or an Independent Real Estate Consultant; 94691.7.2982.02:30 -22- (c) The supplemental resolution providing for the issuance of such Parity Bonds shall provide that: (1) Money shall be deposited in the Reserve Account as necessary so that the amount on deposit in the Reserve Account will equal the Reserve Requirement; (2) Principal of and interest on such Parity Bonds shall be payable on the same month and day as princi- pal of and interest on the Bonds; (3) The proceeds of such Parity Bonds shall be applied solely for (i) the purpose of aiding in financing the Project, including payment of all costs incidental to or connected with such financing, and/or (ii) the purpose of refunding any Bonds or Parity Bonds, including payment of all costs incidental to or connected with such refunding; and (4) The Agency shall have received all required approvals or rulings from any governmental authority having jurisdiction over such Parity Bonds or their terms, including, without limitation, compliance with all requirements of the Department of the Treasury of the United States. Upon the issuance of such Parity Bonds, the term "Bonds" when used in Article V shall include such Parity Bonds. SECTION 4.07. Subordinated Indebtedness. If and to the extent permitted by law the Agency may, at any time and from time to time, issue indebtedness subordinate in all respects to the security interest, pledge and assignment of the Pledged Tax Revenues, moneys, securities and funds created by this Resolution as security for the Bonds. SECTION 4.08. Val%dity 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 or her obligation with respect to the Project. 94691.7.2982.02:28 -23- ARTICLE V PLEDGE AS SECURITY; SPECIAL FUND AND ACCOUNTS SECTION 5.01. pledged Tax Revenues. Ail the Pledged Tax Revenues and all money in the funds and accounts provided for in Section 5.02 are hereby irrevocably pledged to the punctual payment of the interest on and principal of and redemption premiums, if any, on the Bonds, and, except as otherwise provided in Section 5.02 hereof, the Pledged Tax Revenues and such other money shall not be used for any other purpose while any of the Bonds remain Outstanding. This pledge shall constitute an exclusive lien on the Pledged Tax Revenues and such other money for the payment of the Bonds in accordance with the terms thereof. SECTION 5.02. Special FuRd. From and after the date of delivery of the Bonds and, so long as any Bonds shall be outstanding hereunder, all Pledged Tax Revenues shall be paid to the Fiscal Agent when and as received by the Agency, and deposited in the Special Fund. Notwithstanding the foregoing, there shall not be paid to the Fiscal Agent for deposit in the Special Fund any taxes eligible for allocation to the Agency pursuant to the Law in an amount in excess of that amount which, together with all money then on deposit with the Fiscal Agent in the Special Fund and the accounts therein, shall be sufficient to discharge all outstanding Bonds as provided in Section 10.03. All moneys in the Special Fund shall be set aside by the Fiscal Agent in the following respective accounts within the Special Fund (each of which is hereby created and each of which the Agency hereby covenants and agrees to maintain) in the following order of priority, the requirements of each such account at the time of setting aside to be satisfied before any money is set aside in any account subsequent in priority: (a) Interest Account. No later than one Business Day before each Interest Payment Date, the Fiscal Agent shall set aside from the Special Fund and deposit in the Interest Account an amount of money which, together with any money contained therein, is equal to the aggregate amount of the interest becoming due and payable on all Outstanding Bonds on the next succeeding Interest Payment Date. No deposit shall be made into the Interest Account if the amount contained therein is at least equal to the aggregate amount of the interest becoming due and payable on all Outstanding Bonds on the next succeeding Interest Payment Date. Ail money in the Interest Account shall be used and with- drawn by the Fiscal Agent solely for the purpose of paying the interest on the Bonds as the same becomes due and payable (including 94691.7.2982.02:28 -24- accrued interest on any Bonds purchased or redeemed prior to maturity). (b) Principal Account. No later than one Business Day before each Principal Payment Date, the Fiscal Agent shall set aside from the Special Fund and deposit in the Principal Account an amount of money which together with any money contained therein, is equal to the principal amount of Bonds maturing or required to be redeemed through mandatory call on the next succeeding Principal Payment Date. In the event that there shall be insufficient money in the Special Fund to make in full all such principal payments required to be made at any one time, then the available money shall be applied pro rata to the making of such principal payments in the proportion which all such principal payments bear to each other. No deposit shall be made into the Principal Account if the amount contained therein is at least equal to the aggregate amount of the principal of all outstanding Bonds maturing or required to be redeemed through mandatory call on the next succeeding Principal Payment Date. Ail money in the Principal Account shall be used and with- drawn by the Fiscal Agent solely for the purpose of paying the prin- cipal of the Bonds as they mature or are required to be redeemed through mandatory call. (c) Reserve Account No later than one Business Day before each Principal Payment Date, the Fiscal Agent shall set aside from the Special Fund and deposit in the Reserve Account such amount of money as shall be required to maintain a balance in the Reserve Account equal to the Reserve Requirement. No deposit need be made in the Reserve Account so long as there shall be on deposit therein a sum equal to at least the amount required by this paragraph. All money in the Reserve Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of replenishing the Interest Account or the Principal Account, in such order, in the event of any deficiency at any time in either of such accounts, or for the purpose of paying the interest on or principal of or redemption premiums, if any, on the Bonds in the event that no other money of the Agency is lawfully available therefor, or for the retirement of all the Bonds then outstanding, except that so long as the Agency is not in default hereunder and subject to the provisions of Section 5.03, any amount in the Reserve Account in excess of the amount required by this subsection (c) to be on deposit therein shall, at the discretion and at the Written Request of the Agency, be (i) transferred to the Treasurer and deposited in the Redevelopment Fund; (ii) used for the purchase of 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 94691.7.2982.02:28 -25- in its discretion may determine, but not to exceed the par value of such Bonds plus the redemption premium applicable on the next ensuing optional redemption date; or (iii) transferred to the Redemption Fund and used for the redemption of any Bonds which are subject to call and redemption prior to maturity. SECTION 5.03. Rebate Fund.. The Treasurer shall, on or before November 15, commencing November 15, 1988, if such date is a Business Day, and if not, then on the next succeeding Business Day of each year, deposit in the Rebate Fund an amount equal to the sum of: (1) the excess of: (±) the aggregate amount earned on all invest- ments of all Gross Proceeds of the Bonds (as defined in the Letter of Instructions) for the preceding Fiscal Year (other than investments attributable to an excess described in this subparagraph (1) over (ii) the amount which would have been earned if all such investments were made at a yield equal to the Yield on the Bonds (as defined in the Letter of Instructions), plus (2) any income attributable to the excess described in subparagraph (1) above. The Treasurer shall disburse moneys in the Rebate Fund to the United States of America in accordance with the Letter of Instructions. Moneys in the Rebate Fund shall be used for the making of such disbursements and for no other purpose unless the Agency shall receive an opinion of Mudge Rose Guthrie Alexander & Ferdon to the effect that another use of such moneys would not adversely affect the exclusion of the interest on the Bonds from gross income for pur- poses of Federal income taxation. SECTION 5.04. Deposit and Investment o~ Money in Fun~s and A¢couBts. All money held by the Agency or Fiscal Agent in any of the funds or accounts established pursuant to this Resolution shall be held in time or demand deposits in any bank, savings and loan or trust company (including the Fiscal Agent) authorized to accept deposits of public funds, and shall be secured at all times by such obligations as are required by law and (except as the Agency may waive security for such portion of any deposit as is insured pursuant to federal law) to the fullest extent required by law, except such money as is at the time invested in accordance with this Section; provided, however, that this Section 5.04 shall not apply in any 94691.7.2982.02:28 -26- respect to the Escrow Fund created by Section 4.01(c) of this Resolution. Money in the Special Fund or in any account thereof, upon the written request of the Agency, shall be invested by the Fiscal Agent, and money in the Redevelopment Fund may be invested by the Agency, in (i) Federal Securities (ii) repurchase agreements or reverse repurchase agreements (as defined in Section 53601 of the California Government Code) of Federal Securities, or (iii) negotiable certificates of deposit issued by a nationally or state chartered bank, including the Fiscal Agent, provided that, so long as the Bond Insurance Policy is in full force and effect, investments pursuant to clause (ii) or clause (iii) of this paragraph shall be permitted only if and to the extent expressly authorized in the list of permissible investments to be provided to the Agency and the Fiscal Agent from time Go time by MBIA. Investments of money in the Special Fund or in the Interest Account or in the Principal Account must mature prior to the date at which such money is estimated to be required to be paid out hereunder. Money in the Reserve Account, upon the written request of the Agency, shall be invested by the Fiscal Agent in Federal Securities which shall mature not more than 10 years from the date of purchase by the Fiscal Agent. The Fiscal Agent may commingle the moneys held by it in any of the funds or accounts established pursuant to this Resolution for investment purposes only, provided that all funds or accounts held by the Fiscal Agent hereunder shall be accounted for separately, not- withstanding such commingling. Any interest, income or profits from the deposits or investments of the Redevelopment Fund and the Agency Contribution Fund shall remain in the Redevelopment Fund and the Agency Contribution Fund, respectively. Any interest, income or profits from the deposits or investments of all funds other than the Redevelopment Fund (and other than the Escrow Fund, as provided above) and of all accounts shall be deposited in the Special Fund. Notwithstanding any provision of this Resolution, and except as provided below, none of the moneys contained in any of the funds or accounts created pursuant to this Resolution shall be: (i) used in making loans guaranteed by the United States (or any agency or instrumentality thereof), (ii) invested directly or indi- rectly in deposits or accounts insured by the Federal Deposit Insurance Corporation, National Credit Union Administration or any other similar Federally chartered corporation, or (iii) otherwise 94691.7.2982.02:30 -27- invested directly or indirectly in obligations guaranteed (in whole or in part) by the United States (or any agency or instrumentality thereof); provided, however, that the restrictions of this paragraph do not apply (a) during the initial thirty day temporary period fol- lowing issuance and delivery of the Bonds, (b) to the investment of moneys held in the Interest Account and the Principal Account of the Special Fund or any other bona fide debt service funds, (c) to investments in direct obligations of the United States Treasury, (d) to investments in obligations guaranteed by the Federal National Mortgage Association, Government National Mortgage Association or the Federal Home Loan Mortgage Corporation, (e) to investments permitted under regulations issued pursuant to Section 149(b)(3)(B) of the Code, or (f) to such other investments as, in the opinion of Mudge Rose Guthrie Alexander & Ferdon, are investments permitted under the Resolution which do not jeopardize the exclusion from gross income of the interest on the Bonds. -28- 94691.7.2982.02:30 ARTICLE VI COVENANTS OF THE AGENCY SECTION 6.01. General. The Agency shall preserve and pro- tect the security of the Bonds and the rights of the Owners and defend their rights against all claims and demands of all persons. Until such time as an amount has been set aside sufficient to pay at maturity, or to call prior to maturity, all outstanding Bonds, plus unpaid interest thereon to maturity, or to the call date, the Agency will (through its proper members, officers, agents or employees) faithfully perform and abide by all of the covenants, undertakings and provisions contained in this Resolution or in any Bond issued hereunder, including the covenants and agreements set forth herein for the benefit of the Owners. SECTION 6.02. Punctual Payment. The Agency will punctu- ally pay or cause to be paid the principal and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Resolution, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Resolution 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 6.03. 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 maturity 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 here- under, to the benefits of this Resolution, except subject to the prior payment in full of the principal of all the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded. SECTION 6.04. Against Encumbrances. The Agency will not encumber, pledge or place any charge or lien upon any of the Tax Revenues superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by this Resolution. SECTION 6.05. Management and Operation 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 94691.7.2982.02:28 -29- manner, and will keep such properties insured at all times in conformity with sound business practice. SECTION 6.06. 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 Pledged Tax Revenues or any part thereof, or upon any funds in the hands of the Fiscal Agent, 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 con- test the validity of said claims. SECTION 6.07. Books and Accounts; F~naDcial Statement. The Agency will keep, or cause to be keDt, proper books of record and accounts, separate from all other records and accounts of the Agency and the City of Tustin, 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 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 Fiscal Agent 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 that 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 Certified Public Accountant. The Agency will fur- nish a copy of such statements to any Owner upon request. SECTION 6.08. Protection of Security and Rights of Owners. The Agency will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the sale and delivery of any of the Bonds by the Agency, the Bonds shall be incontestable by the Agency. SECTION 6.09. Payments of Taxes and Other Charges. Subject to the provisions of Section 6.12, the Agency will pay and discharge, or cause to be paid and discharged, all taxes, service charges, assessments and other governmental charges which may hereaf- ter 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 94691.7.2982.02:28 -30- 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 6.10. Completion of Project. The Agency will com- mence, and will continue to completion, with all practicable dis- patch, the Project, and the Project will be accomplished and com- pleted in a sound and economical manner and in conformity with the Redevelopment Plan and the Law. SECTION 6.11. Taxation of Leased Property. Whenever any property in the Project Area has been redeveloped and thereafter is leased by the Agency to any person or persons (other than the City of Tustin or the County of Orange) or whenever the Agency leases real property in the Project Area to any person or persons for redevelop- ment, the property shall be assessed and taxed in the same manner as privately owned property (in accordance with Section 33673 of the Law), and the lease or contract shall provide that the lessee shall pay taxes upon the assessed value of the entire property and not merely upon the assessed value of his or its leasehold interest. SECTION 6.12. Disposition o~ 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 planned for such ownership or use by the Redevelopment Plan in effect on the date of this Resolution) so that such disposition shall, when taken together with other such disposi- tions, aggregate more than 10% of the land area in the Project Area, unless such disposition is made as hereinafter provided in this Section 6.12. If the Agency proposes to make such a disposition, it shall thereupon appoint a reputable Independent Financial Consultant and direct such consultant to report on the effect of the proposed disposition. If the report of the Independent Financial Consultant con- cludes that the security of the Bonds and the rights of the Owners will not be materially impaired by the proposed disposition, and that Tax Revenues allocated to the Agency will not be significantly dimin- ished by the proposed disposition, the Agency may thereafter make the disposition. If said Report does not so conclude, the Agency shall not make the proposed disposition. The Agency shall have the sole and exclusive authority to appoint said Consultant. Neither the Agency nor said Consultant shall be liable in connection with the performance of their duties 94691.7.2982.02:28 -31- hereunder, except for their own gross negligence or willful misconduct. SECTION 6.13. 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 and amendments thereto with appropriate officials of the County of Orange. SECTION 6.14. Eminent Domain Proceeds. The net proceeds received by the Agency from any eminent domain proceeding with respect to property within the Project Area acquired with the pro- ceeds of the Bonds or of any Parity Bonds shall be treated as Tax Revenues. SECTION 6.15. Special Tax Covenant. The Agency hereby covenants that no part of the proceeds of the Bonds shall be used, directly or indirectly, to acquire any "investment property", as defined in Section 148 of the Code, and the Agency shall not take or permit to be taken any other action or actions, which would cause any Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code, as in effect from time to time, or under applicable Treasury regulations promulgated thereunder. In order to assure com- pliance with the rebate requirements of Section 148 of the Code, the Agency further covenants that it will establish such accounting pro- cedures as are necessary to adequately determine, account for and pay over any amount or amounts required to be paid to the United States in a manner consistent with the requirements of Section 148 of the Code, such covenant to survive the defeasance of the lien enjoyed by any of the Bonds, pursuant to Section 6.16. In furtherance of this covenant, the Agency agrees to comply with the Letter of Instructions. SECTION 6.16. Provisions and Restrictions with Respect to Defeasance. (a) In the event the Agency shall seek, prior to the matu- rity or redemption date thereof, to pay or cause to be paid, within the meaning and with the effect expressed in Section 10.03, all Bonds then Outstanding, and the provisions of Section 6.15 shall then be of any force or effect, then, notwithstanding the provisions of Section 10.03, such Bonds shall not be deemed to have been paid within the meaning and with the effect expressed in Section 10.03 unless, in addition to all other requirements of Section 10.03: (1) The Agency shall have delivered to the Fiscal Agent a certificate of an authorized officer (the "Certificate") to the effect that: 94691.7.2982.02:28 -32- (~) the Agency is then in compliance with Section 6.15; and (ii) the Agency has irrevocably deposited with the Fiscal Agent such moneys, securities, documents and other things and issued such irrevocable instructions to the Fiscal Agent so that any remaining and continuing applicable requirements of the Code, with respect to the Bonds, from compliance with which the City has not theretofore been relieved under the provisions of Section 10.03, are ministerial and reportorial in nature; and (2) There shall have been delivered to the Fiscal Agent an opinion of Mudge Rose Guthrie Alexander & Ferdon to the effect that based upon the matters set forth in the Certificate described in (1) above and assuming compliance by the Fiscal Agent with its undertaking described in (1)(iii) above, no further action by or on the part of the Agency will be required under the applicable requirements of the Code to maintain the Federal income tax exemption of inter- est on the Bonds. (b) In the event the Agency shall seek, prior to the matu- rity or redemption date thereof, to pay or cause to be paid, within the meaning and with the effect expressed in the Resolution, less than all of the outstanding Bonds, and the provisions of Section 6.15 shall then be of any force or effect, then, notwithstanding the pro- visions of Section 10.03, the Bonds which the Agency then seeks to pay or cause to be paid shall not be deemed to have been paid within the meaning and with the effect expressed in Section 10.03 unless there shall have been delivered to the Fiscal Agent an opinion of Mudge Rose Guthrie Alexander & Ferdon to the effect that either (i) noncompliance thereafter with the applicable provisions of the Code will not change the then current Federal income tax status of the interest on such Bonds, or (ii) there are no provisions of the Code which must thereafter be complied with by the Agency in order to maintain the Federal income tax exemption of interest on such Bonds. SECTION 6.17. 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 Resolution, and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Resolution. 94691.7.2982.02:28 -33- ARTICLE VII THE FISCAL AGENT SECTION 7.01. Appointment of Fiscal Agent. Security Pacific National Bank at its principal corporate trust office in Los Angeles, California, is hereby appointed Fiscal Agent for the Agency to act as the agent and depositary of the Agency for the purpose of receiving all moneys required to be paid to the Fiscal Agent hereun- der, to allocate, use and apply the same, to hold, receive and dis- burse the Pledged Tax Revenues and other funds pledged or held here- under, and otherwise to hold all the offices and perform all the functions and duties provided in this Resolution to be held and per- formed by the Fiscal Agent. The Fiscal Agent shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing and delivering to the Agency a written accep- tance thereof; and by executing and delivering such acceptance, the Fiscal Agent shall be deemed to have accepted such duties and obliga- tions, but only upon the terms and conditions set forth in this Resolution. The Agency, so long as it is not in default hereunder may remove the Fiscal Agent initially appointed, and any successor there- to, and shall remove the Fiscal Agent if at any time it is 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 autho- rized in writing) and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company doing busi- ness and having an office in Los Angeles, California, having a com- bined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000), and subject to supervision or examination by federal or state authority. 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 author- ity above referred to, then for the purposes of this Section the com- bined 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. The Fiscal Agent may at any time resign by giving written notice by first class mail to the Agency and the Owners. Upon receiving notice of such resignation, the Agency shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent and appointment of a suc- cessor Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent. 94691.7.2982.02:28 -34- SECTION 7.02. Liability of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the Agency, and the Fiscal Agent assumes no responsibility for the correctness of the same, and makes no representations as to the validity or suffi- ciency of this Resolution or of the Bonds, and shall not incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own gross negli- gence or willful misconduct. SECTION 7.03. Notice to Fiscal AgeDt. The Fiscal Agent shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Fiscal Agent may consult with counsel of its own choice with regard to legal ques- tions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suf- fered by it hereunder in good faith and in accordance therewith. The Fiscal Agent shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto satisfactorily estab- lished, if disputed. Whenever in the administration of its duties under this Resolution the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Fiscal Agent, be deemed to be conclusively proved and established by a certificate of the Agency, and such cer- tificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the provisions of this Resolution or any Supplemental Resolution upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. The Fiscal Agent undertakes to perform such duties, and only such duties as are specifically set forth in this Resolution and no implied duties or obligations shall be read into this Resolution against the Fiscal Agent. No provision in this Resolution shall require the Fiscal Agent to risk or expend its own funds or otherwise incur any 94691.7.2982.02:28 -35- financial liability in the performance of any of its duties hereunder. The Agency agrees to pay the Fiscal Agent compensation for its services and to reimburse the Fiscal Agent for all its fees and expenses, including but not limited to attorneys fees. The Agency further agrees to indemnify and hold the Fiscal Agent harmless from any loss, liability or expense, including attorneys fees not arising from its negligence or willful misconduct which it may incur in the exercise and performance of its duties hereunder. Such indemnity shall survive the satisfaction or defeasance of the bonds or resigna- tion of the Fiscal Agent hereunder. 94691.7.2982.02:28 -36- ARTICLE VIII MODIFICATION OR AMENDMENT OF THE RESOLUTION SECTION 8.01. Amendments Permitted. This Resolution and the rights and obligations of the Agency and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Resolution and pursuant to the affirmative vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8.04, and, so long as the Bond Insurance Policy is in full force and effect, with the written consent of MBIA. No such modifi- cation or amendment shall (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 written 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 cre- ated for the benefit of the Bonds (except as expressly permitted by the Resolution), 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 Fiscal Agent without its written consent thereto. This Resolution 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 Resolution, without the consent of any Owner, 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 Resolution contained, other covenants and agreements thereaf- ter to be observed, or to surrender any right or power herein reserved to or conferred upon the Agency; (b) with the written approval of the Fiscal Agent, and the written consent of MBIA, to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Resolution, or in regard to questions arising under this Resolution, as the Agency may deem nec- essary or desirable and not inconsistent with this Resolution, and which shall not adversely affect the interests of the Owners; and 94691.7.2982.02:28 -37- (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 4.06. SECTION 8.02. Owners' Meetings. The Agency may at any time call a meeting of the Owners. In such event the Fiscal Agent is authorized to give notice of the time and place of said meeting and to give notice of the rules and regulations adopted by the Agency for the conduct of said meeting. SECTION 8.03. Procedure for Amendment with Written Consent of Owners. The Agency may at any time adopt a Supplemental Resolution amending the provisions of the Bonds or of this Resolution or any Supplemental Resolution, to the extent that such amendment is permitted by Section 8.01, to take effect when and as provided in this Section. A copy of such Supplemental Resolution, together with a request to Owners for their consent thereto, shall be mailed by the Agency to each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental Resolution and request shall not affect the validity of the Supplemental Resolution when consented to as in this Section provided. Notice of the fact of the adoption of such Supplemental Resolution (stating that a copy thereof is available for inspection at the office of the Agency) shall be mailed to the Owners not more than fifteen (15) days after the date of adoption of such Supplemental Resolution. Such Supplemental Resolution shall not become effective unless there shall be filed with the Fiscal Agent the written con- sents of the Owners of at least 60% in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as pro- vided in Section 8.04) and a notice shall have been mailed as herein- after in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 2.10. Any such 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 a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in the Section provided for has been published. After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Resolution, the Agency shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Resolution, stating in substance that the Supplemental Resolution has been consented to by the Owners of the required percentage of Bonds and 94691.7.2982.02:28 -38- will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Resolution or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, con- sisting of the papers required by this Section to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Resolution shall become effec- tive upon the filing with the Fiscal Agent of the proof of the mail- ing of such last-mentioned notice, and the Supplemental Resolution shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the Agency and the Owners of all Bonds at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent juris- diction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty-day period. SECTION 8.04. Disqualified Bonds. Bonds owned or held for the account of the Agency or the City of Tustin, excepting any pen- sion or retirement fund, shall not be deemed Outstanding for the pur- pose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Article VIII. SECTION 8.05. Effect of Supplemental Resolution. From and after the time any Supplemental Resolution becomes effective pur- suant to this Article VIII, this Resolution shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Resolution of the Agency 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 Resolution shall be deemed to be part of the terms and conditions of this Resolution for any and all purposes. The Agency may adopt appropriate regulations to require each Owner, before his consent provided for in this Article VIII shall be deemed effective, to reveal if the Bonds as to which such consent is given are disqualified as provided in Section 8.04. SECTION 8.06. SDdorsement or ~eplaceme~t 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 VIII shall bear a notation, by endorsement or otherwise, in form approved by the Agency, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and presentation of the applicable Bond for that purpose at the office of the Fiscal Agent or at such other office as the Agency may select and designate for that purpose, a suitable notation shall be 94691.7.2982.02:28 -39- 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 action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the office of the Fiscal Agent in Los Angeles, California, without cost to any Owner for Bonds then Outstanding, upon surrender of such Bonds. SECTION 8.07. Amenda~ory Endorsement of Bonds. The pro- visions of this Article VIII shall not prevent any Owner from accept- ing any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds. -40- 94691.7.2982.02:28 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS SECTION 9.01. Proceedings Constitute Contract. The pro- visions of this Resolution and of any other resolution supplementing or amending this Resolution and adopted prior to the issuance of the Bonds hereunder shall constitute a contract between the Agency and the Owners and the provisions thereof shall be enforceable as pro- vided herein. After the issuance and delivery of the Bonds this Resolution and any supplemental resolutions hereto shall be irrepeal- able, but shall be subject to modification or amendment to the extent and in the manner provided in this Resolution, but to no greater extent and in no other manner. SECTION 9.02. Events of Default and Acceleration of Maturities. If one or more of the following events ("events of default") shall happen, that is to say: (a) if default shall be made in the due and punctual pay- ment of the principal of or redemption premium (if any) on any Bond when and as the same shall become due and payable, whether at matu- rity as therein expressed, by declaration or otherwise; (b) if default shall be made in the due and punctual pay- ment of any installment of interest on any Bond when and as such interest installment shall become due and payable; (c) if default shall be made by the Agency in the obser- vance of any of the covenants, agreements or conditions on its part contained in this Resolution or in the Bonds, and such default shall have continued for a period of 90 days; or (d) if the Agency shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Agency or of the whole or any substantial part of its property; then, and in each and every such case during the continuance of such event of default, the Fiscal Agent may, upon notice in writing to the Agency, and shall, if so requested by the Owners of at least 60% in aggregate principal amount of the Bonds at the time Outstanding (such request to be in writing 94691.7.2982.02:28 -41- to the Fiscal Agent and to the Agency), 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 become and shall be immediately due and payable, anything in this Resolution or in the Bonds contained to the contrary notwith- standing, provided that, so long as the Bond Insurance Policy is in full force and effect, no such declaration shall be effective without the written consent of MBIA. If, at any time after the principal of the Bonds shall have been so declared immediately 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 Fiscal Agent a sum suf- ficient to pay all principal on the Bonds matured prior to such dec- laration and all matured installments of interest (if any) upon all the Bonds, with interest at the rate of 12% per annum on such overdue installments of principal, and the reasonable expenses of the Fiscal Agent, and any and all other defaults known to the Fiscal Agent (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 a majority in aggregate principal amount of the Bonds Outstanding or provision deemed by a majority in aggregate principal amount of the Bonds Outstanding 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 Fiscal Agent, 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 9.03. Application of Funds Upon Acceleration. All of the Pledged Tax Revenues and all sums in the funds and accounts provided for in Sections 4.05 and 5.02 upon the date of the declaration of acceleration as provided in Section 9.02, and all sums thereafter received by the Fiscal Agent hereunder, shall be applied by the Fiscal Agent in the order following upon presentation of the several Bonds, and the stamping thereon of the payment if only par- tially paid, or upon the surrender thereof if fully paid: First, to the payment of the costs and expenses of the Fiscal Agent and of the Owners in declaring such event of default, including reasonable compensation to its or their agents, attorneys and counsel; Second, in case the principal of all of Bonds shall not have become due and payable, to the payment of the interest in default in the order of the maturity of the installments of such 94691.7.2982.02:28 -42- interest with interest on the overdue installments at the rate of 12% per annum (to the extent that such interest on overdue installments shall have been collected), such payments to be made ratably to the persons entitled thereto without discrimination or preference; and Third, in case the principal of all of Bonds shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon the Bonds for principal and inter- est, with interest on the overdue principal and installments of interest at the rate of 12% per annum (to the extent that such inter- est on overdue installments of 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, rat- ably to the aggregate of such principal and interest. SECTION 9.04. Other Remedies o~ Owners. Any Owner shall have the right, for the equal benefit and protection of all Owners similarly situated- (a) by mandamus, suit, action or proceeding, to compel the Agency and its members, officers, agents or employees to perform each and every term, provision and covenant contained in this Resolution and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the Agency and the fulfillment of all duties imposed upon it by the law; (b) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the Owners' rights; or (c) upon the happening of any event of default (as defined in Section 9.02), by suit, action or proceeding in any court of com- petent jurisdiction, to require the Agency and its members and employees to account as if it and they were the trustees of an express trust. SECTION 9.05. Non-waiver. Nothing in this Article IX or in any other provision of this Resolution, or in the Bonds, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Owners of the Bonds at the respective dates of maturi- ty, 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. 94691.7.2982.02:28 -43- A waiver of any default by any Owner shall not affect any subsequent default or impair any rights or remedies on the subsequent default. No delay or omission of any Owner 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 Owners by the Law or by this Article IX 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 be abandoned or determined adversely to the Owners the Agency and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. SECTION 9.06. Actions by Fiscal Agent as Attorney-in-Fact. Any suit, action or proceeding which any Owner shall have the right to bring to enforce any right or remedy hereunder may be brought by the Fiscal Agent for the equal benefit and protection of all Owners similarly situated and the Fiscal Agent is hereby appointed (and the 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 Fiscal Agent as such attorney-in-fact, provided, however, the Fiscal Agent shall have no obligation or duty to bring any suit, action or enforce any such rights or remedies unless it has been first indemni- fied to its satisfaction by the Owners from any liability or expense, including attorneys fees. SECTION 9.07. 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 other- wise, and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law. 94691.7.2982.02:28 -44- ARTICLE X MISCELLANEOUS SECTION 10.01. Benefits of Resolution Limited to Parties. Nothing in this Resolution, expressed or implied, is intended to give to any person other than the Agency, the Fiscal Agent and the Owners of the Bonds, any right, remedy, claim under or by reason of this Resolution. Any covenants, stipulations, promises or agreements in this Resolution contained by and on behalf of the Agency shall be for the sole and exclusive benefit of the Owners of the Bonds and the Fiscal Agent. SECTION 10.02. Successor is Deemed Included. in Ail References to Predecessor. Whenever in this Resolution or any Supplemental Resolution either the Agency or the Fiscal Agent 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 Resolution contained by or on behalf of the Agency or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. SECTION 10.03. Discharge of Resolution. 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 on all Bonds Outstanding, as and when the same become due and payable; (b) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in Sections 4.05 and 5.02, is fully sufficient to pay all Bonds Outstanding, including all principal, interest and redemption premiums; or (c) by depositing with the Fiscal Agent, in trust, direct obligations of the United States, or obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest, in such amount as an Independent Certified Public Accountant shall determine will, together with the interest to accrue thereon and moneys then on deposit in the funds and accounts provided for in Section 4.05 and 5.02, be fully sufficient to pay and discharge the indebtedness on all Bonds Outstanding (including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been given as in this Resolution provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, 94691.7.2982.02:30 -45- then, notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Pledged Tax Revenues and other funds provided for in this Resolution and all other obligations of the Agency under this Resolution 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 surren- dered and paid all sums due thereon; and thereafter Pledged Tax Revenues shall not be payable to the Fiscal Agent. Any funds held by any Fiscal Agent which are not required for the payment and discharge of the indebtedness on the Bonds above mentioned, shall be paid over to the Agency. Notwithstanding the foregoing provisions of this Section 10.03, the payment of principal and interest on the Bonds by MBIA shall not constitute payment, or provision for payment, of such prin- cipal and interest by the Agency within the meaning of this Section. In the event of such payment by MBIA, the pledge of the Pledged Tax Revenues and all other rights granted by this Resolution to Owners shall continue to exist and MBIA shall be subrogated to the rights of such Owners. SECTION 10.04. 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 offi- cial duty provided by law. SECTION 10.05. Publication for Successive Weeks. Any publication to be made under the provisions of this Resolution in successive weeks may be made in each instance upon any business day of the week and need not be made on the same day of any succeeding week or in the same newspaper for any or all of the successive publi- cations, but may be made on different days of the week and in differ- ent newspapers. SECTION 10.06. Destruction of Cancelled Bonds. Whenever in this Resolution provision is made for the surrender to the Agency of any Bonds which have been paid or cancelled pursuant to the provi- sions of this Resolution, a certificate of destruction duly executed by the Fiscal Agent shall be deemed to be the equivalent of the sur- render of such cancelled 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 10.07. Notices and Demands on Agency. Any notice or demand which by any provision of this Resolution is required or permitted to be given or served by the Fiscal Agent to or on the 94691.7.2982.02:30 -46- Agency may be given or served by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the Agency with the Fiscal Agent).as follows: Secretary, Tustin Community Redevelopment Agency, 300 Centennial Way, Tustin, California 92680. SECTION 10.08. Partial Invalidity. If any Section, para- graph, sentence, clause or phrase of this Resolution shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Resolution or the Bonds. The Agency hereby declares that it would have adopted this Resolution and each and every other Section, paragraph, sen- tence, clause or phrase herein 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 Resolution may be held illegal, invalid or unenforceable. If, by reason of the judgment of any court, the Fiscal Agent is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Fiscal Agent hereunder shall be assumed by and vest in the Treasurer of the Agency in trust for the benefit of the Bondholders. The Agency covenants for the direct benefit of the Bondholders that its Treasurer in such case shall be vested with all of the rights and powers of the Fiscal Agent hereunder, and shall assume all of the responsibilities and perform all of the duties of the Fiscal Agent hereunder, in trust for the benefit of the Bonds. SECTION 10.09. Effective Date of Resolution. This Resolution shall take effect from and after the date of its passage and adoption. 94691.7.2982.02:30 -47- vote: (SEAL) Attest: PASSED AND ADOPTED on August 3, 1987, by the following AYES: NOES: None ABSENT: None Edgar, Kennedy, Kelly, Hoesterey, Prescott secre~ry of ~e Tustin Community ~Redeveld~pment Agency 94691.7.2982.02:28 -48- EXHIBIT A [FORM OF FACE OF BOND] UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANG~ CITY OF TUSTIN TUSTIN COMMUNITY REDEVELOPMENT AGENCY TOWN CENTER AREA REDEVELOPMENT PROJECT TAX ATz~)CATION REFUNDING BOND, SERIES 1987 INTEREST RATE: MATURITY DATE: DATED DATE: JULY 1, 1987 CUSIP: REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The Tustin Community Redevelopment Agency (hereinafter sometimes called the "Agency"), a public body corporate and politic, duly organized and existing under the laws of the State of California, for value received, hereby promises to pay (but solely from the funds hereinafter mentioned) to or registered assigns, on the Maturity Date stated above (subject to right of prior redemption as hereinafter stated), upon presentation and surrender of this Bond, the principal sum specified above with interest thereon (payable solely from the said funds) from the interest payment date next pre- ceding the date of authentication of this Bond (unless this bond is authenticated during the period commencing on the sixteenth day of the month preceding an interest payment date to such interest payment date, in which event it shall bear interest from such interest pay- ment date, or unless it is authenticated on or before April 15, 1988, in which event it shall bear interest from July 1, 1987) at the interest rate specified above per annum, based on a year of twelve 94691.7.2982.02:28 A-1 thirty day months, payable semiannually on the first day of May and the first day of November of each and every year until this Bond is paid commencing May 1, 1988; provided, however, that if at the ~atu- rity date of this Bond or, if the same is duly called for redemption, then at the date fixed for redemption, funds are available for pay- ment or redemption thereof, as provided in the Resolution hereinafter mentioned, this Bond shall then cease to bear interest. The princi- pal of and interest on this Bond and any premium upon the redemption prior to maturity of all or any part hereof are payable in lawful money of the United States of America, and (except for interest which is payable by check or draft mailed to the Owner hereof at his address shown on the bond register kept by the Fiscal Agent hereinaf- ter named) are payable upon presentment at the principal corporate trust office of Security Pacific National Bank, Fiscal Agent for the Agency, in Los Angeles, California. This Bond, the interest thereon, and any premium payable upon the redemption thereof, are not a debt of the City of Tustin, the State of California or any of its political subdivisions and nei- ther said City, said State nor any of its political subdivisions is liable thereon, nor in any event shall this Bond or said interest or premiums be payable out of any funds or properties other than the funds of the Agency hereinafter mentioned. This Bond does not con- stitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the members of the Agency nor any persons executing this Bond are liable personally on this Bond by reason of its issuance. THE TERMS AND PROVISIONS OF THIS BOND ARE CONTINUED ON THE REVERSE SIDE HEREOF AND SUCH CONTINUED TERMS AND PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. It is hereby recited, certified and declared that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in due time, form and manner as required by the Constitution and statutes of the State of California. This Bond shall not be entitled to any benefits under the Resolution or become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been signed by the Fiscal Agent. 94691.7.2982.02:28 A-2 IN WITNESS WHEREOF, the Tustin Community Redevelopment Agency has caused this Bond to be signed on its behalf by its Chairman and by its Treasurer and the seal of said Agency to be impressed, imprinted or reproduced hereon, and this Bond to be dated the first day of July, 1987. (SEAL) Chairman of the Tustin Community Redevelopment Agency Treasurer of the Tustin Community Redevelopment Agency [ FORM OF FISCAL AGEI~T' S CERTIFICATE OF AUTHENTICATIOn] This is one of the Bonds described in the within-mentioned Resolution and has been authenticated on DATE D: SECURITY PACIFIC NATIONAL BANK as Fiscal Agent BY: AUTHORIZED OFFICER [FORM OF BACK OF BOND] This Bond is one of a duly authorized issue of Bonds of the Agency designated "Town Center Area Redevelopment Project Tax Allocation Refunding Bonds, Series 1987" (herein called the "Bonds") in the aggregate principal amount of $8,060,000 all of like tenor (except for bond numbers and maturity dates and differences, if any, in date of authentication, denomination and interest rate) and all of which have been issued pursuant to and in full conformity with the Constitution and laws of the State of California and particularly the Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code of the State of California) for the purpose of refinanc- ing portions of the cost of the redevelopment project above designated, and are authorized by and issued pursuant to Resolution No. RDA 87-8 adopted by the Agency on August 3, 1987 (herein called 94691.7.2982.02:28 A-3 the "Resolution"), and all of the Bonds are equally secured in accordance with the terms of the Resolution, reference to which is hereby made for a specific description of the security therein pro- vided for said Bonds, for the nature, extent and manner of enforce- ment of such security, for the covenants and agreements made for the benefit of the registered owners of the Bonds (herein called the "Owners"), and for a statement of the rights of the Owners, and by the acceptance of this Bond the Owner hereof assents to all of the terms, conditions and provisions of said Resolution. In the manner provided in the Resolution, said Resolution and the rights and obli- gations of the Agency and of the Owners, may (with certain exceptions as stated in said Resolution) be modified or amended with the consent of the Owners of at least 60% in aggregate principal amount of out- standing Bonds, exclusive of Bonds owned by the Agency or the City of Tustin. The principal of this Bond, the interest hereon, and any premium payable upon redemption of all or any part hereof are secured by an irrevocable pledge of, and are payable solely from, the Pledged Tax Revenues (as such term is defined in the Resolution). If this Bond matures on or after November 1, 1998, it is redeemable, in whole or in part, in the manner and subject to the terms and provisions, and with the effect, set forth in the Resolution, at the option of said Agency, on November 1, 1997, or on any interest payment date thereafter prior to maturity, at a redemp- tion price equal to the principal amount thereof plus the following premiums (percentage of par value) if redeemed at the following times: Redemption Dates Redemption Pric~ November 1, 1997 and May 1, 1998 ...... 102 % November 1, 1998 and May 1, 1999 ...... 101 1/2 November 1, 1999 and May 1, 2000 ...... 101 November 1, 2000 and May 1, 2001 ...... 100 1/2 November 1, 2001 and thereafter ....... 100 Notice of the call for any redemption, identifying the bonds or a portion thereof to be redeemed, shall be given by the Fiscal Agent by mailing by first-class mail, postage prepaid, a copy of the redemption notice not more than 60 days and not less than 30 days prior to the date fixed for redemption to the Owner of each Bond to be redeemed in whole or in part at the address shown on the regis- tration books maintained by the Fiscal Agent. 94691.7.2982.02:28 A-4 If this Bond is called for redemption and payment is duly provided therefor as specified in the Resolution, interest shall cease to accrue hereon from and after the date fixed for redemption. If an event of default, as defined in the Resolution, 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 Resolution, provided that, so long as the Bond Insurance Policy (as defined in the Resolution) is in full force and effect, no such declaration shall be effective without the written consent of Municipal Bond Investors Assurance Corporation. Such declaration and its consequences may be rescinded and annulled as further provided in the Resolution. The Bonds are issuable only in fully registered form in denominations of $5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the charges, if any, provided in the Resolution, this Bond may be exchanged, at the principal corpo- rate trust office of the Fiscal Agent, for registered Bonds of the same maturity of other authorized denominations. This Bond is transferable by the Owner hereof, in person or by his attorney duly authorized in writing, at said office of the Fiscal Agent, but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution, and upon sur- render and cancellation of this Bond. Upon such transfer a new fully registered Bond or Bonds without coupons, 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 Fiscal Agent may treat the Owner hereof as the absolute owner hereof for all purposes, and the Agency and the Fiscal Agent shall not be affected by any notice to the contrary. For purposes of the following Statement of Insurance, ref- erences therein to Security Pacific National Bank as Paying Agent shall have the same meaning as if those references were to Security Pacific National Bank as Fiscal Agent for the Agency. 94691.7.2982.02:28 A-5 STATEMENT OF INSURANCE The Municipal Bond Investors Assurance Corporation (the "Insurer") has issued a policy containing the following provisions, such policy being on file at the principal corporate trust office of Security Pacific National Bank in Los Angeles, California. The Insurer, in consideration of the payment of the premium and subject to the terms of this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations, the full and complete payment required to be made by or on behalf of the Issuer to Security Pacific National Bank, in Los Angeles, California or its successor (the "Paying Agent") of an amount equal to (i) the principal of (either at the stated maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Obligations (as that term is defined below) as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking f~nd payment, the payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the preceding sentence shall be referred to herein collectively as the "Insured Amounts." "Obligations" shall mean: $8,060,000 Tustin Community Redevelopment Agency Town Center Area Redevelopment Project Tax Allocation Refunding Bonds, Series 1987 Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with Citibank, N.A., in New York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon presentment and surrender of such Obligations or presentment of such other proof of ownership of the 94691.7.2982.02:28 A-6 Obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent, for such owners of the Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such instruments being in a form satis- factory to Citibank, N.A., Citibank, N.A. shall disburse to such owners or the Paying Agent payment of the Insured Amounts due on such Obligations, less any amount held by the Paying Agent for the payment of such Insured Amounts and legally available therefor. This policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Obligation. As used herein, the term "owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. The term owner shall not include the Issuer or any party whose agreement with the Issuer constitutes the underlying security for the Obligations. Any service of process on the Insurer may be made to the Insurer at its offices located at 445 Hamilton Avenue, White Plains, New York 10601. This policy is non-cancellable for any reason. The premium on this policy is not refundable for any reason including the payment prior to maturity of the Obligations. MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION [FORM OF ASSIGNMENT TO APPEAR ON BONDS] For value received the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned Bond and do(es) hereby irrevocably constitute and appoint attorney to transfer the same on the Bond register of the Fiscal Agent, with full power of substitution in the premises. Dated: Note: The signature(s) to this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. 94691.7.2982.02:28 A-7 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) § CITY OF TUSTIN ) MARY E. WYNN, City Clerk and Secretary Clerk of the Community Redevelopment Agency of the City of Tustin, California, does hereby certify that the whole num- ber of the members of the City Council as the Community Redevelopment Agency is five; that the above and foregoing Resolution No. RI)A 87-8 was duly and regularly introduced, passed and adopted at a regular meeting of the City Council as the Community Redevelopment Agency held on the 3rd day of August, 1987, by the following vote: AYES : NOES : ABSENT: COUNCILPERSONS: Edgar, Hoesterey, Kelly, Kennedy, Prescott COUNCILPERSONS: None COUNCILPERSONS: None MARY E. WYNN, Ci~ Clerk/Secretary Clerk City of Tustin, ~alifornia SECRETARY'S CERTIFICATE I, Mary E. Wynn, Secretary of the Tustin Community Redevelopment Agency, hereby certify that the foregoing is a full, true and correct copy of a Resolution duly adopted at a regular meet- ing of said Agency duly and regularly held at the regular meeting place thereof on August 3, 1987, of which meeting all the members of said Agency had due notice and at which majority thereof was present; and that at said meeting said Resolution was adopted by the following vote: AYES: Agency members Edgar, Kennedy, Kelly, Hoesterey, Prescott NOES: None ABSENT: None I further certify that I have carefully compared the same with the original Resolution on file and of record in my office; that said Resolution is a full, true and correct copy of the original Resolution adopted at said meeting; and that said Resolution has not been amended, modified or rescinded since the date of its adoption, and is now in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal of said Agency on August ~__, 1987. Community opment hgency 94691.7.2982.02:28