Loading...
HomeMy WebLinkAboutRDA 5 TAX ALLOC BONDS 07-15-91RDA N0. 5 7-15-91 AGENDA7-/-s -9/ Al ASE: JULY 15, 1991 1 nte r- . TO: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR FROM: TOWN CENTER REDEVELOPMENT - PROJECT FINANCING TEAM S U SJECI: 1991 TAX ALLOCATION BONDS - AWARD OF BID RECOMMENDATION It is recommended that the Redevelopment Agency: 1. Adopt RDA Resolution No. 91-12, authorizing the issuance of $13,800,000 principal amount of Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991. 2. Approve modifications to invitation of bids and the official form of bid for purchase of Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991. 3. Review bids and if recommended by the Agency's Financial Consultant, adopt RDA Resolution No. 91-13 awarding bid on Subordinate Tax Allocation Bonds, Series 1991, authorizing officers of the Agency to do all follow-up. BACKGROUND At the Agency's regular meeting on May 20, 1991, the Agency approved certain documents as follows: 1. RDA Resolution No. 91-10 authorizing the issuance of $13,800,000 in Tax Allocation Bonds, and 2. RDA Resolution No. 91-11 authorizing the invitation of bids for the Agency's Town Center Redevelopment Project Tax Allocation Bonds, 1991, and approving certain attached documents including' a preliminary official statement. As discussed in a memorandum to the Agency on June 26th ( attached) , certain amendments to the issuance resolution and notice inviting bid documents were necessary prior to award of bond sale to reflect the terms of bond insurance to be issued by Municipal Bond Investors Assurance Corporation. Attached is a supplemental RDA Resolution (No. 91-12) amending the previously adopted Resolution authorizing the issuance and a revised Notice inviting bids. Redevelopment Agency Report 1991 Tax Allocation Bonds - Award of Bid July 15, 1991 Page 2 The Agency is also scheduled to consider the bids submitted on July 15, 1991 for the purchase of the Agency's 1991 Tax Allocation Bonds. The bids are scheduled to be submitted at 10:00 a.m. on July 15. They will be reviewed and evaluated by staff and the Agency's financial advisor and a final recommendation will be presented that night at the Agency's meeting. The Agency will be considering the following in connection with the award of bid: 1. Review of bids received. The Agency's options with regard to award or rejection of the bids will be explained. 2. If the bid is to be awarded. Adoption of RDA Resolution No. 91-13, including approval of the Agency's final official statement. r stine A. Shingleton el Assistant City Manager CAS:nm/91award.rpt Lq�tW%-./ R Nault Finance Director RDA NO. 5 / 7-1-91PAM Ab L A 7 } (p Inter -Com JATE: `/ JUNE 26, 1991 AppROVED TO: A. ITY MANAGER ST�4FFRScO WILLIAM HUSTON,, FROM: RONALD A. NAULT, DIRECTOR OF FINANCE G�4 SUBJECT: STATUS OF 1991 RDA BOND FINANCING RECOMMENDATION: Receive and file. DISCUSSION: At its meeting on May 20, the Agency approved the preliminary documents and authorized staff to proceed with the proposed $13.8 million bond issue. The Agency approved the preliminary documents with the understanding that the documents may be modified subject to comments made by the bond rating agencies and/or bond insurance companies. In response to their comments the Agency's financial - advisors and staff are recommending some minor modifications to the original documents that would first change the issue from a parity issue, subject to terms and conditions of the original 1983 issue and also, expand the permitted investments to include sureties. This will allow us to purchase a Surety Bond, in essence an insurance policy, to substitute for a cash bond reserve. At the present time MBIA has declined to insure our issue without these modifications. Without. insurance Standard and Poors has assigned a preliminary rating of BBB. (Bond insurance automatically raises the rating to AAA). In today's market the interest spread between AAA and BBB is about 84 basis points. On an issue of our size this can mean approximately two (2) million dollars in additional interest expense over the life of the Bonds. Following a review of the conditions of MBIA and the alternatives, staff feels that the changes are in the interest of the Agency and will not create impediments to the Agency's flexibility regarding any future debt issuance. kasa aua Ronald A. Nault Director of Finance RAN: 1s a:status.rda 'G *6"PUM9' I690619SQQ'- -' T66T GSTXOS 'spuog UOT4100TTY XVJ, 04VUTp=ogn8 409102d 4u9wdOT0A8p0v TBSP Si u8 uj►O JO 4unOMY TudTOuTzd 000'OOT#£T$ jO O*Uvissl eq4 buTZT,oq4n KAOIBbV �uemdOTOAepeg A4tunwmOD UT4sns eq4 ;o ot nTosag Z T -T6 Kaki 'lox NIOISII7ogMH XON SOV 1T-,!Rmdo7zA2azv xzixnm(oo IIIZSIIZ RESOLUTION NO. RDA 91-12 , ADOPTED JULY 15, 1991 RESOLUTION OF THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF $13,100,000 PRINCIPAL AMOUNT OF TOWN CENTER AREA REDEVELOPMENT PROJECT SUBORDINATE TAX ALLOCATION BONDS, SERIES 1991 WHEREAS, the Tustin Community Redevelopment Agency is a redevelopment agency, a public body, corporate and politic, duly created, 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 amendments thereto, for the Town Center Area Redevelopment Project in the City of Tustin, California, have been adopted in compliance with all requirements of law; WHEREAS, the Agency previously issued $8,500,000 of its tax allocation bonds pursuant to Resolution No. RDA 82-10, adopted October 20, 1982, and Resolution No. RDA 82-12 adopted on November 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"; WHEREAS, the Agency subsequently issued $8,060,000 of its tax allocation bonds for the purpose of refunding all of said Series 1982 Bonds, pursuant to Resolution No. RDA 87-8, adopted on August 3, 1987, said bonds having been designated "Tustin Community Redevelopment Agency Town Center Area Redevelopment Project Tax Allocation Refunding Bonds, Series 1987" (the "Prior Bonds"); and WHEREAS, the Agency deems it necessary and desirable to finance additional costs of the Project by issuing additional tax allocation bonds for such purpose; NOW, THEREFORE, BE IT RESOLVED by the Tustin Community Redevelopment Agency, as follows! ARTICLE I AUTHORIZATION OF SERIES 1991 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, c: \6056\44691.6\1oodltw9. Doc 1 conditions and acts required by law to exist, happen and be performed precedent to and in connection with the issuance of the Series 1991 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Agency is now duly empowered, pursuant to each and every requirement of law, to issue the Series 1991 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 purposes of this Resolution, of any resolution supplemental hereto, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. "Agency" means the Tustin Community Redevelopment Agency, a public body, corporate and politic, established under the Law. Annual Debt Service "Annual Debt Service" means, for each Bond Year, the sum of (1) the interest payable on the Outstanding Series 1991 Bonds, Parity Bonds and the Prior Bonds in such Bond Year, assuming that the Outstanding Serial Series 1991 Bonds, Serial Parity Bonds and Prior Bonds are retired as scheduled and that the Outstanding Term Series 1991 Bonds, Term Parity Bonds and Term Prior Bonds are redeemed from minimum sinking account payments as scheduled, (2) the principal amount of the Outstanding Serial Series 1991 Bonds, Serial Parity Bonds and Prior Bonds payable by their terms in such Bond Year, and (3) the principal amount of the Outstanding Term Series 1991 Bonds, Term Parity Bonds and Term Prior Bonds scheduled to be paid or called and redeemed from minimum sinking account payments in such Bond Year, excluding the redemption premiums, if any, thereon. Bond Counsel "Bond Counsel" means an attorney-at-law, or a f irm of such attorneys, of nationally recognized standing in matters pertaining to tax-exempt nature of interest on obligations issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America. Bond Insurance Policy "Bond Insurance Policy" means the municipal bond insurance policy to be issued by the Bond Insurer with respect to the Series 1991 Bonds. c: \6056\94691.6\BoWRw9. Doc 2 Bond Insurer "Bond Insurer" means Municipal Bond Investors Assurance Corporation. Bond Year "Bond Year" means the twelve-month period commencing with July 1 of any year and ending June 30 of the next succeeding year and each twelve-month period thereafter. Bonds "Bonds" means the Series 1991 Bonds. Business Day "Business Day" means a day of the year, other than Saturday or Sunday, 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 pursuant to Section 33113 of the Law, or other duly appointed officer of the Agency authorized by the Agency by resolution or by-law to perform the functions of the chairman in the event of the chairman's absence or disqualification. 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 Series 1991 Bonds (including without limitation legal and consultant fees, rating agency fees, bond insurance premiums, surety fees and costs, initial Fiscal Agent fees and charges, costs of reproducing and binding documents and printing and advertising expenses). Depository "Depository" means the securities depository acting as Depository pursuant to Section 2.16. c: \6056\94691.6\BoWRm9. Doc 3 DIC "DTC" means the Depository Trust Company, New York, New York, and its successors and Assigns. 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 general circulation in New York, New York, and selected by the Fiscal Agent, whose decision shall be final and conclusive. Fiscal Agent "Fiscal Agent" means Security Pacific National Bank, Los Angeles, California, its successors and assigns, and any other corporation 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. Independent Certified Public Accountant "Independent Certified Public Accountant" means any accountant or f irm of such accountants duly licensed or registered or entitled to practice and practicing as such under the laws of the State of California, appointed by the Agency, and who, or each of whom: (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 Financial Consultant - "Independent Financial Consultant" means any financial consultant or f irm of such consultants appointed by the Agency, and who, or each of whom: c: \6056\%01.6\BoW1t=9. Doc 4 (1) is in fact independent and not under domination of this 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. Interest Payment Date "Interest Payment Date" means June 1 and December 1 of each year, commencing June 1, 1992. 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. Maximum Annual Debt Service "Maximum Annual Debt Service" means, as of any date of computation the largest Annual Debt Service for the Bond Year of such computation or any Bond Year thereafter. Nominee "Nominee" means the nominee of DTC, which may be DTC, as determined from time pursuant to Section 2.12. c: \6056\94691.6\BoodRa9. Doc 5 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 County 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 such office is ever abolished or changed. Outstanding "Outstanding," when used as of any particular time with reference to the Series 1991 Bonds, means (subject to the provisions of Section 8.04) all Series 1991 Bonds except: (1) Series 1991 Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (2) Series 1991 Bonds paid or deemed to have been paid within the meaning of Section 10.03; and (3) Series 1991 Bonds in lieu of or in substitution for which other Series 1991 Bonds shall have been authorized, executed, issued and delivered by the Agency pursuant to the Resolution or any Supplemental Resolution. Owner "Owner" means any person who shall be the registered owner of any Outstanding Series 1991 Bond. Parity Bonds "Parity Bonds" means any tax allocation bonds hereafter issued by the Agency which are payable out of the Pledged Tax Revenues and which rank on a parity with the Series 1991 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 ,.)6\%01.6\BoodRa9. Doc 6 provided for in Section 5.02) plus an amount, if any, necessary to maintain the Reserve Requirement, less any amount required for payment of the principal or redemption price of, interest and maintenance of reserve fund requirements, on the Prior Bonds. Principal Payment Date "Principal Payment Date" means December 1 of each year, commencing December 1, 1993. Prior Bonds "Prior Bonds" means the Series 1987 Bonds or any obligations issued for the purpose of refunding said Prior Bonds. Prior Bond Resolution "Prior Bond Resolution" means Resolution No. RDA 87-8, adopted by the Agency on August 3, 1987. Project "Project" means the undertaking of the Agency pursuant to the Redevelopment Plan and the Law of the Town Center Area Redevelopment Project. 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, and Ordinance No. 1021, enacted by the City Council of the City of Tustin on March 20, 1989, together with any amendments thereof hereafter duly authorized pursuant to the Law. 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 f irm making or giving such Report has read the pertinent provisions of the Resolution to which such Report relates; c: \6056\94691.6\BoW Rw9. Doc 7 (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, as of any date of calculation, an amount equal to the least of (a) Maximum Annual Debt Service, (b) 125% of average Annual Debt Service and (c) 10% of the total proceeds of the Series 1991 Bonds and Parity Bonds. Resolution "Resolution" means this Resolution, adopted by the Agency under the Law, as originally adopted or as it may be amended or supplemented by any Supplemental Resolution adopted pursuant to the provisions herein. Serial Series 1991 Bonds "Serial Series 1991 Bonds" means Series 1991 Bonds not subject to mandatory call prior to maturity. Serial Parity Bonds "Serial Parity Bonds" means Parity Bonds not subject to mandatory call prior to maturity. Series 1991 Bonds "Series 1991 Bonds" means the Town Center Area Redevelopment Project Tax Allocation Bonds, Series 1991, authorized by this Resolution. Special State Subventions "Special State Subventions" means reimbursement payments made by the state to the redevelopment agencies to compensate the agencies for the loss of business inventory tax revenues. Supplemental Resolution "Supplemental Resolution" or "supplemental resolution" means any resolution then in full force and effect which has been duly 6...,456\94691.6\BoodRw9. Doc 8 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 specifically authorized hereunder. Tax Revenues "Tax Revenues" means that portion of taxes levied upon taxable 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 3 3 67 0 ) 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 reimbursements, if any, to the Agency specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limitations, but excluding tax increment revenues required by law to be deposited in a low and moderate income housing fund and also excluding to the extent required by the Law, Special State Subventions and subject, in all respects, to any limitation set forth in the Redevelopment Plan. Term Series 1991 Bonds "Term Series 1991 Bonds" means Series 1991 Bonds which are subject to mandatory call prior to maturity. Term Parity Bonds "Term Parity Bonds" means Parity Bonds which are subject to mandatory call prior to maturity. 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. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding 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. c: \6056\94691.6\BoWRa9. Doc 9 SECTION 1.04. Equal Security. In consideration of the acceptance of the Series 1991 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 Series 1991 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 protection of all Owners of the Series 1991 Bonds and Parity Bonds without preference, priority or distinction as to security or otherwise of any of the Series 1991 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. ARTICLE II THE SERIES 1991 BONDS SECTION 2.01. Authorization. The Series 1991 Bonds are hereby authorized to be issued by the Agency under and subject to the terms of the Resolution, the Redevelopment Plan and the Constitution and laws of the State of California for the purpose of financing a portion of the cost of the Project. This Resolution constitutes a continuing agreement with the Owners of all of the Series 1991 Bonds issued hereunder and then Outstanding to secure the full and final payment of principal and premiums, if any, and the interest on all Series 1991 Bonds executed and delivered hereunder, subject to the covenants, agreements, provisions and conditions herein contained. SECTION 2.02. Description of Series 1991 Bonds. The Series 1991 Bonds shall be designated "Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991" and shall be in the principal amount of $13,100,000. The Series 1991 Bonds shall be dated July 15, 1991. The Series 1991 Bonds shall be numbered in the discretion of the Fiscal Agent. Each Series 1991 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 May 15, 1992, in which case it shall bear interest from July 15, 1991; provided, however, that if , at the time of authentication of any Series 1991 Bond, interest is in default on Outstanding Series 1991 Bonds, such Series 1991 Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding Series 1991 Bonds. The Series 1991 Bonds shall be issued only as fully registered bonds in the denomination of $5,000 or any integral multiple thereof , and shall mature on the dates and c: \6056\94691.6\BoW P"9. Doc 10 in the principal amounts, and shall bear interest, based on a year composed of twelve thirty -day months, payable semiannually on June 1 and December 1, commencing June 1, 1992 at the respective rates per annum, shown below: Maturity Principal Interest (December 11 Amount Rate 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2016 Each Series 1991 Bond shall bear interest until the principal sum thereof has been paid; provided, however, that if at the maturity date of any Series 1991 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 Series 1991 Bond shall then cease to bear interest. SECTION 2.03. Place of Payment. The principal or redemption price of the Series 1991 Bonds shall be payable in lawful money of the United States of America upon surrender thereof at the principal corporate trust office of the Fiscal Agent in Los Angeles, California. Payment of the interest on any Series 1991 Bond shall be made to the person whose name appears on the bond registration books of the Fiscal Agent, the registrar for the Series 1991 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 Series 1991 Bonds. The Series 1991 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. c:\6056\94691.6\BoWP"9.Doc 11 SECTION 2.05. Execution of Series 1991 Bonds. The Series 1991 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 Series 1991 Bond ceases to be such officer before delivery of the Series 1991 Bonds to the purchaser, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Series 1991 Bonds to the purchaser. Any Series 1991 Bond may be signed and attested on behalf of the Agency by such persons as at the actual date of the execution of such Series 1991 Bond shall be the proper officers of the Agency although on the date of such Series 1991 Bond any such person shall not have been such officer of the Agency. Only such of the Series 1991 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 the Resolution, and such certificate of the Fiscal Agent shall be conclusive evidence that the Series 1991 Bonds so registered have been duly authenticated, registered and delivered hereunder and are entitled to the benefits of this Resolution. SECTION 2.06. Transfer of Series 1991 Bonds. Any Series 1991 Bond may, in accordance 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 Series 1991 Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Fiscal Agent, duly executed. whenever any Series 1991 Bond or Series 1991 Bonds shall be surrendered for transfer, the Agency shall execute and the Fiscal Agent shall deliver a new Series 1991 Bond or Series 1991 Bonds, for like aggregate principal amount of the same maturity. No transfers of Series 1991 Bonds shall be required to be made during the period established by the Fiscal Agent for the selection of Series 1991 Bonds for redemption or after a Series 1991 Bond has been selected for redemption. The Fiscal Agent shall require the payment by the Owner requesting the transfer of any Series 1991 Bond of any tax or other governmental charge required to be paid with respect to such transfer. SECTION 2.07. Exchange of Series 1991 Bonds. Series 1991 Bonds may be exchanged at the principal office of the Fiscal Agent for a like aggregate principal amount of Series 1991 Bonds of other authorized denominations of the same maturity. The Fiscal Agent shall require the payment by the Owner requesting such exchange of X56\94691.6\BoodRa9. Doc 12 any tax or other governmental charge required to be paid with respect to such exchange. No exchanges of Series 1991 Bonds shall be required to be made during the period established by the Fiscal Agent for the selection of Series 1991 Bonds for redemption or after a Series 1991 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 transfer of the Series 1991 Bonds, which shall be open to inspection by the Agency at reasonable times during regular business hours; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Series 1991 Bonds as hereinbefore provided. SECTION 2.09. Ownership of Series 1991 Bonds. The person in whose name any Series 1991 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 interest on, any such Series 1991 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 Series 1991 Bond including the interest thereon to the extent of the sum or sums so paid. SECTION 2.10. Temporary Series 1991 Bonds. The Series 1991 Bonds may be initially issued in temporary form exchangeable for definitive Series 1991 Bonds when ready for delivery. The temporary Series 1991 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 Series 1991 Bond shall be executed by the Agency upon the same conditions and in substantially the same manner as the definitive Series 1991 Bonds. If the Agency issues temporary Series 1991 Bonds it will execute and furnish definitive Series 1991 Bonds without delay, and thereupon the temporary Series 1991 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 Series 1991 Bonds an equal aggregate principal amount of definitive Series 1991 Bonds of authorized denominations. Until so exchanged, the temporary Series 1991 Bonds shall be entitled to the same benefits pursuant to this Resolution as definitive Series 1991 Bonds authenticated and delivered hereunder. SECTION 2.11. Series 1991 Bonds Mutilated, Lost, Destroyed or Stolen. If any Series 1991 Bond shall become mutilated the Agency, -- at the expense of the owner of said Series 1991 Bond, shall ...,,)56\94691.6\BoW P.=9. Doc 13 execute, and the Fiscal Agent shall thereupon deliver, a new Series 1991 Bond of like tenor and amount in exchange and substitution for the Series 1991 Bond so mutilated, but only upon surrender to the Fiscal Agent of the Series 1991 Bond so mutilated. Every mutilated Series 1991 Bond so surrendered to the Fiscal Agent shall be canceled by it and delivered to, or upon the order of, the Agency. If any Series 1991 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 Series 1991 Bond of like tenor and amount in lieu of and in substitution for the Series 1991 Bond so lost, destroyed or stolen. The Agency may require payment of a sum not exceeding the actual cost of preparing each new Series 1991 Bond issued under this Section and of the expenses which may be incurred by the Agency and the Fiscal Agent in the premises. Any Series 1991 Bond issued under the provisions of this Section in lieu of any Series 1991 Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Agency whether or not the Series 1991 Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Resolution with all other series 1991 Bonds and Parity Bonds issued pursuant to this Resolution. SECTION 2.12. Book -Entry System. The Series 1991 Bonds shall be initially issued in the form of a separate single fully registered Series 1991 Bond (which may be typewritten) for each of the maturities of the Series 1991 Bonds. Upon initial execution and delivery, the ownership of each such Series 1991 Bond shall be registered in the registration books kept by the Fiscal Agent in the name of the Nominee as nominee of the Depository. Except as provided in Section 2.14 hereof , all of the Outstanding Series 1991 Bonds shall be registered in the registration books kept by the Fiscal Agent in the name of the Nominee. With respect to Series 1991 Bonds registered in the registration books kept by the Fiscal Agent in the name of the Nominee, the Agency and the Fiscal Agent shall have no responsibility or obligation to any Participant or to any Person on behalf of which such a Participant holds an interest in the Series 1991 Bonds. Without limiting the immediately preceding sentence, the Agency and the Fiscal Agent shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Series 1991 Bonds, (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Fiscal Agent, of any notice with respect to the Series 1991 Bonds, including any notice redemption, (iii) the selection by the Depository and its Participants of the beneficial interest in the Series 1991 Bonds to c: \6056\94691.6\BoodRa9. Doc 14 be redeemed in the event the Series 1991 Bonds are redeemed in part, or (iv) the payment to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Fiscal Agent, of any amount with respect to principal of, premium, if any, or interest on the Series 1991 Bonds. The Agent and the Fiscal Agent may treat and consider the Person in whose name each Series 1991 Bond is registered in the registration books kept by the Fiscal Agent as the absolute owner of such Series 1991 Bond for the purpose of payment of principal, premium and interest with respect to such Series 1991 Bond, for the purpose of giving notices of redemption and other matters with respect to such Series 1991 Bond, for the purpose of registering transfers with respect to such Series 1991 Bond, and for all other purposes whatsoever. The Fiscal Agent shall pay all principal of, premium, if any, and interest with respect to the Series 1991 Bonds only to or upon the order of the respective Owners, as shown in the registration books kept by the Fiscal Agent, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Agency's obligations with respect to payment of principal of, premium, if any, and interest on the Series 1991 Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the registration books kept by the Fiscal Agent, shall receive a Series 1991 Bond evidencing the obligation of the Fiscal Agent to make payments of principal, premium, if any, and interest pursuant to this Resolution. Upon delivery by the Depository to the Owner, the Fiscal Agent and the Agency of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee the word Nominee in this Resolution shall refer to such new nominee of the Depository. SECTION 2.13. Representation Letter. In order to qualify the Series 1991 Bonds for the Depository's book -entry system, the Treasurer or a Responsible Officer is hereby authorized to execute from time to time and deliver to such Depository a letter representing such matters as shall be necessary to so qualify the Series 1991 Bonds (the "Representation Letter"). The execution and delivery of the Representation Letter shall not in any way limit the provisions of Section 2.12 or in any other way impose upon the Agency or the Fiscal Agent any obligation whatsoever with respect to the Persons having interest in the Series 1991 Bonds other than the Owners, as shown on the registration books kept by the Fiscal Agent. In the written acceptance of the Fiscal Agent, such Fiscal Agent shall agree to take all actions necessary for all representations of the Agency in the Representation Letter with respect to the Fiscal Agent to at all times be complied with. In addition to the execution and delivery of the Representation Letter, the Treasurer or a Responsible Officer is hereby authorized to take any other actions, not inconsistent with this Resolution, to qualify the Series 1991 Bonds for the Depository's book -entry program. ., ,456\94691.6\BoWRw9.Doc 15 SECTION 2.14. Transfer Outside Book -Entry System. In the event (i) the Depository determines not to continue to act as securities depository for the Series 1991 Bonds, or (ii) the Agency determines that the Depository shall no longer so act, then the Agency will discontinue the book -entry system with the Depository provided that in no event may the Agency or the Depository discontinue the book -entry system (i) during the period from the 15th day of the month immediately preceding an Interest Payment Date to such Interest Payment Date, or ( ii) during the 15 days next preceding the date of mailing and publication of a notice of redemption. If the Agency fails to identify another qualified securities depository to replace the Depository or if the Agency determines that the interests of the Owners may be adversely affected if the book -entry system in continued, then the Agency shall issue, authenticate and delivery the Replacement Series 1991 Bonds. Replacement Series 1991 Bonds will be transferable only by presentation and surrender to the Agency or an agent of the Agency to be designated in the Replacement Series 1991 Bonds, together with an assignment duly executed by the Owner of the Replacement Series 1991 Bond or by such Owner's representative in form satisfactory to the Agency, or any agent of the Agency, and containing information required by the Agency in order to effect such transfer. SECTION 2.15. Payments to the Nominee. Notwithstanding any other provisions of this Resolution to the contrary, so long as any Series 1991 Bond is registered in the name of the Nominee, all payments with respect to principal, of, premium, if any, and interest on such Series 1991 Bond and all notices with respect to such Series 1991 Bonds shall be made and give, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository and agreed upon by the Fiscal Agent. SECTION 2.16. Initial Depository and Nominee. The initial Depository under this Resolution shall be DTC. The initial Nominee shall be Cede & Co., as Nominee of DTC. SECTION 2.17. Purchases of Outstanding Series 1991 Bonds. The Trustee may purchase Series 1991 Bonds on the open market, with monies on deposit in the Special Fund, at a price not to exceed the greater of par plus accrued interest or the price at which the Series 1991 Bonds may be called for redemption, except as otherwise permitted under the Redevelopment Law. Any Series 1991 Bonds purchased by the Agency or by the Trustee on behalf of the Agency shall be canceled. c: \6056\94691.6\BoWRa9. Doc 16 ARTICLE III REDEMPTION OF SERIES 1991 BONDS SECTION 3.01. (a) Optional Redemption. Series 1991 Bonds maturing on or before December 1, 2001 are not subject to optional redemption before their maturity. Series 1991 Bonds maturing on or after December 1, 2002, are subject to optional redemption in whole or in part on any Interest Payment Date on or after December 1, 2001, in inverse order of maturity and by lot within a maturity, upon notice as described below, at the option of the Agency from any available source of funds, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest thereon to the redemption date, plus a premium (expressed as a percentage of the principal amount of Series 1991 Bonds to be redeemed) as follows: Redemption Dates Redemption Price December 1, 2001 and June 1, 2002 102% December 1, 2002 and June 1, 2003 101% December 1, 2003 and thereafter 100% (b) Mandatory Redemption. Series 1991 Bonds maturing on December 1, 2016 are subject to mandatory redemption in part by lot prior to maturity from Sinking Account Installments made on December 1, 2006 and on each December 1 thereafter to and including December 1, 2016 (each a "Sinking Account Payment Date") at a redemption price equal to 100% of the principal amount thereof plus accrued interest, if any, to the redemption date as follows: Redemption Date (December 1) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (Maturity) Principal Amount (c) Special Mandatory Redemption. Series 1991 Bonds are subject to special mandatory redemption in part by lot on a pro rata basis from all maturities, on June 1, 1994, from amounts transferred by the Fiscal Agent from the Escrow Fund to the Redemption Fund, at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption c: \6056\94691.6\BmWRa9. Doc 17 date; provided that such date may, from time to time, at the written request of the Agency, be extended if, at least sixty (60) days prior to such redemption date, the Fiscal Agent receives a certificate of an Independent Financial Consultant that: (i) the interest earnings on proceeds held in the Escrow Fund, together with amounts, if any deposited by the Agency in the Interest Account of the Special Fund for such purpose, will be sufficient to pay the interest due on the principal amount held in the Escrow Fund for the period of time the redemption date is being extended; and (ii) the Agency and the Fiscal Agent have received an opinion of Bond Counsel to the effect that such extension will not adversely affect the exclusion of interest on the Bonds from the gross income of the Owners for Federal income tax purposes. SECTION 3.02. Selection for Redemption. Whenever less than all Outstanding Series 1991 Bonds maturing on any one date are called for redemption at any one time, the Fiscal Agent shall select the Series 1991 Bonds to be redeemed from the Outstanding Series 1991 Bonds maturing on such date not previously selected for redemption, by lot in any manner which the Fiscal Agent deems fair; provided, however, that if less than all the Outstanding Term Bonds of any maturity are called for redemption at any one time, the Fiscal Agent shall specify a reduction in any Sinking Account Installments required to be made with respect to such Term Bonds (in an amount equal to the amount of Outstanding Term Bonds to be redeemed) which, to the extent practicable, results in approximately equal annual debt service on the Series 1991 Bonds Outstanding following such redemption. For purposes of selecting Series 1991 Bonds for redemption, Series 1991 Bonds shall be deemed to be composed of $5,000 portions, and any such portions may be separately redeemed. SECTION 3.03. 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 Series 1991 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 Investors Assurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Surveillance (or to such other address as the Bond Insurer 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 Series 1991 Bonds, the distinctive numbers of the Series 1991 Bonds to be redeemed and, in the case of Series 1991 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 Series 1991 Bonds the redemption price thereof or of said specified portion of the principal thereof in the case of a Series 1991 Bond to be redeemed in part only, together with — -A56\94691.6\BondRea9.Doc 18 interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Series 1991 Bonds be then surrendered. The Agency shall notify the Fiscal Agent in writing of its intention to call and redeem Series 1991 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 Series 1991 Bonds as herein provided shall be conclusive as against all parties, and no Owner whose Series 1991 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 Series 1991 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 Series 1991 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 available 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 Series 1991 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 Series 1991 Bonds to be redeemed upon presentation and surrender of such Series 1991 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 Series 1991 Bonds called have been redeemed and canceled or paid and canceled 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 said refunding bonds. When official notice of redemption has been given, as provided herein, and when the amount necessary for the redemption of the Series 1991 Bonds called for redemption (principal and premium, if any) is set aside for that purpose in the Redemption Fund, as provided herein the Series 1991 Bonds designated for redemption shall become due and payable on the date fixed for redemption thereof, and, upon presentation and surrender of said Series 1991 Bonds, at the place specified in the official notice of redemption, such Series 1991 Bonds shall be redeemed and paid at said redemption price out of the Redemption Fund, and no interest will accrue on such Series 1991 Bonds called for redemption from and after the redemption date specified in such notice, and the Owners c: \6056\94691.6\BoodRa9. Doc 19 of said Series 1991 Bonds so called for redemption after such redemption date shall look for the payment of such Series 1991 Bonds and the premium thereon only to the Redemption Fund. All Series 1991 Bonds redeemed shall forthwith be canceled and destroyed by the Fiscal Agent and shall not be reissued. Upon surrender of any Series 1991 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 Series 1991 Bond or Series 1991 Bonds of the same maturity and of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Series 1991 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 further notice nor any failure to give all or any portion of such further 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 numbers of all Series 1991 Bonds being redeemed; (ii) the date of issue of the Series 1991 Bonds as originally issued; (iii) the rate of interest borne by each Series 1991 Bond being redeemed; ( iv) the maturity date of each Series 1991 Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Series 1991 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 facsimile transmission, or overnight delivery service, to the registered securities depositories (such depositories 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: The Depository Trust Company 711 Stewart Avenue Garden City, New York 11530 Facsimile transmission: (516) 227-4039 (516) 227-4190 ...0056\94691.6\BoWRw9.Doc 20 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 redemption is mailed to the Owners, by registered or certified mail, postage prepaid, or overnight delivery service, 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 Series 1991 Bonds shall be accompanied by a written instrument which bears the CUSIP numbers identifying, by issue and maturity, the Series 1991 Bonds being redeemed with the proceeds of such check or other transfer. c: \6056\94691.6\Bood1tw9. Doc 21 ARTICLE IV FUNDS; DISPOSITION OF BOND PROCEEDS; PARITY BONDS SECTION 4.01. Funds. (a) The following special trust fund shall be held and maintained by the Treasurer: (1) The Town Center Area Redevelopment Project Redevelopment Fund (the "Redevelopment Fund"); and (b) The following special trust funds shall 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; (2) The Town Center Area Redevelopment Project Redemption Fund (the "Redemption Fund"); and (3) The Town Center Area Redevelopment Project Escrow Fund (the "Escrow Fund"). So long as any of the Series 1991 Bonds herein authorized, or any interest thereon, remains 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 Series 1991 Bond Proceeds. The proceeds from the sale of the Series 1991 Bonds shall be deposited simultaneously with the delivery of the Series 1991 Bonds, as follows: (a) In the Interest Account in the Special Fund, the accrued interest and premium, if any, and capitalized interest, if any, received upon the sale of the Series 1991 Bonds. (b) In the Reserve Account in the Special Fund, such sum as may be necessary so that the amount on deposit in the Reserve Account is equal to the Reserve Requirement. (c) In the Escrow Fund, $ (d) In the Redevelopment Fund, the remainder of the proceeds. SECTION 4.03. Redevelopment Fund. Moneys in the Redevelopment Fund shall be used in the manner provided by law solely for the c:\6056\94691.6\BoodRa9.Doc 22 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 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 4.04 Escrow Fund. Moneys deposited in the Escrow Fund from proceeds of the Series 1991 Bonds shall be held therein and invested by the Fiscal Agent in such investments authorized in the list of permissible investments of indentured funds provided by the Bond Insurer attached hereto as Schedule A until the following conditions for the transfer from time to time of all or any portion of such moneys to the Treasurer for deposit in the Redevelopment Fund have been satisfied as shown by a Certificate of an Independent Financial Consultant to the Agency: (a) The conditions for the Issuance of Parity Bonds set forth in Section 4.05 shall be satisfied, taking into account the sum of the principal amount of Prior Bonds and Series 1991 Bonds; and (b) 80% of the Tax Revenues, excluding interest earnings thereon, received or to be received by the Agency in the then current Fiscal Year, 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), are at least equal to 110% of the Maximum Annual Debt Service on the sum of the Prior Bonds and Series 1991 Bonds, after deducting from the Series 1991 Bonds any amounts not then proposed to be released from the Escrow Fund. Notwithstanding any other requirements for release of moneys from the Escrow Fund, such moneys may be used for the purchase of Series 1991 Bonds by the Fiscal Agent, upon the Written Request of the Agency, at public or private sale as and when and at such prices as the Fiscal Agent is instructed by the Agency, but only at prices (including brokerage or other expenses) of not more than par plus accrued interest. Any accrued interest payable upon the purchase of Series 1991 Bonds from moneys held in the Escrow Fund may be paid from the amount reserved if any, in the Interest Account of the Special Fund for the payment of interest on the next following Interest Payment Date. Any Series 1991 Bonds so purchased shall be canceled by the Fiscal Agent and shall not be reissued. _P6\94691.6\BoodP"9.Doc 23 SECTION 4.05. ,,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 construction of improvements in the Project Area which has been completed prior to the date of issuance of such Parity Bonds but which is not yet on the tax rolls, including any increase in taxable valuation of the land underlying such improvements) are at least equal to 125% of the Maximum Annual Debt Service on all Series 1991 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 to consultant; (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 principal of and interest on the Series 1991 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 cost incidental to or connected with such financing, and/or (ii) the purpose of refunding any Series 1991 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. The term "Series 1991 Bonds" when used in Article V includes Parity Bonds. c:\6056\94691.6\BoodRm9.Doc 24 SECTION 4.06. 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 Series 1991 Bonds. SECTION 4.07. Validity of Series 1991 Bonds. The validity of the authorization and issuance of the Series 1991 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. ARTICLE V PLEDGE AS SECURITY; SPECIAL FUND AND ACCOUNTS SECTION 5.01. Pledged Tax Revenues. All 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 Series 1991 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 Series 1991 Bonds remain Outstanding. This pledge shall constitute an exclusive lien on the Pledged Tax Revenues and such other money for the payment of the Series 1991 Bonds in accordance with the terms thereof. SECTION 5.02. Special Fund. From and after the date of delivery of the Series 1991 Bonds and, so long as any Series 1991 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 Series 1991 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 ....456194691.6\BoWR=9.Doc 25 the aggregate amount of the interest becoming due and payable on all Outstanding Series 1991 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 Series 1991 Bonds on the next succeeding Interest Payment Date. All money in the Interest Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying the interest on the Series 1991 Bonds as the same becomes due and payable (including accrued interest on any Series 1991 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 Series 1991 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 Series 1991 Bonds maturing or required to be redeemed through mandatory call on the next succeeding Principal Payment Date. All money in the Principal Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying the principal of the Series 1991 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 Series 1991 Bonds in the event that no other money of the Agency is lawfully available therefor, or for c: \6056\94691.6\BoMP.w9. Doc 26 the retirement of all the Series 1991 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 Series 1991 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 in its discretion may determine, but not to exceed the par value of such Series 1991 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 Series 1991 Bonds which are subject to call and redemption prior to maturity. The Agency may at any time elect, after review and with the approval of the Bond Insurer, so long as any Bond Insurance Policy is in full force and effect, to maintain the Reserve Requirement by obtaining a letter of credit, a surety bond, a policy of insurance or any other security device (in each case rated in the highest category by Standard & Poor's or Moody's), in any amount which, together with any funds on deposit in the Reserve Account, will guarantee to the Agency the full amount of the Reserve Requirement at such times as all or any portion of the Reserve Requirement is needed for transfer to the Interest Account and/or Principal Account. SECTION 5.03. Deposit and Investment of Money in Funds and Accounts. 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. 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 any investments permitted by law; provided, however, that, so long as the Bond Insurance Policy is in effect, such investments shall be permitted only if and to the extent expressly authorized in the list of permissible investments of indentured funds provided by the Bond Insurer attached hereto as Schedule A. Investments of money in the Special Fund or in the Interest Account or in the Principal Account must mature prior to the date c: \6056\94691.6\BoWP"9. Doc 27 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 any legally permitted investments maturing not more than 10 years from the date of purchase by the Fiscal Agent; provided, however, that, so long as the Bond Insurance Policy is in effect, such investments shall be permitted only and to the extent expressly authorized in the list of permissible investments of indentured funds provided by the Bond Insurer attached hereto as Schedule A. 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, notwithstanding such commingling. Any interest, income or profits from the deposits or investments of the Redevelopment Fund shall remain in the Redevelopment Fund. Any interest, income or profits from the deposits or investments of all funds other than the Redevelopment Fund and of all accounts shall be deposited in the Special Fund. ARTICLE VI COVENANTS OF THE AGENCY SECTION 6.01. General. The Agency shall preserve and protect the security of the Series 1991 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 Series 1991 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 Series 1991 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 punctually pay or cause to be paid the principal and interest to become due in respect of all the Series 1991 Bonds, in strict conformity with the terms of the Series 1991 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 Series 1991 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. ,36\94691.6\BoWRa9.Doc 28 SECTION 6.03. Extension of Series 1991 Bonds. The Agency will not, directly or indirectly, extend or consent to the extension of the time for the payment of any Series 1991 Bond or claim for interest on any of the Series 1991 Bonds and will not, directly or indirectly, be a party to approve any such arrangement by purchasing or funding the Series 1991 Bonds or claims for interest or in any other manner. In case the maturity of any such Series 1991 Bond or claim for interest shall be extended or funded, whether or not with the consent of the Agency, such Series 1991 Bond or claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Resolution, except subject to the prior payment in full of the principal of all the Series 1991 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 Series 1991 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 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 Series 1991 Bonds. Nothing herein contained shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of said claims. SECTION 6.07. Books and Accounts; Financial Statement. The Agency will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Agency and the City of 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 Series 1991 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 c:\6056\94691.6\BoWR=9.Doc 29 so long as any of the Series 1991 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 furnish 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 Series 1991 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 Series 1991 Bonds by the Agency, the Series 1991 Bonds shall be incontestable by the Agency. SECTION 6.09. Payment 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 hereafter be lawfully imposed upon the Agency or the properties then owned by the Agency in the Project Area when the same shall become due. Nothing herein contained shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of said taxes, assessments or charges. The Agency will duly observe and conform with all valid requirements of any governmental authority relative to the Project or any part thereof. SECTION 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 redevelopment, 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 of Property. The Agency will not authorize the disposition of any land or real property in the Project Area to anyone which will result in such property becoming exempt from taxation because of public ownership or use or c: \6056\9"91.6\HoWR=9.Doc 30 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 dispositions, 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 concludes that the security of the Series 1991 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 diminished 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 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 proceeds of the Series 1991 Bonds or of any Parity Bonds shall be treated as Tax Revenues. SECTION 6.15. Tax Covenants. (a) The Agency covenants that, in order to maintain the exclusion from gross income for Federal income tax purposes of the interest on the Series 1991 Bonds, and for no other purpose, the Agency will satisfy, or take such actions as are necessary to cause to be satisfied, each provision of the Code necessary to maintain such exclusion. In furtherance of this covenant the Agency agrees to comply with such written instructions as may be provided by Bond Counsel. (b) The Agency covenants that no part of the proceeds of the Series 1991 Bonds shall be used, directly or indirectly, to acquire any "investment property," as defined in section 148 of the Code, which would cause the Series 1991 Bonds to become "arbitrage - bonds" within the meaning of Section 148 of the Code, as in effect ,0056\94691.6\B0odlta9. Doc 31 from time to time, or under applicable Treasury regulations promulgated thereunder. In order to assure compliance with the rebate requirements of Section 148 of the Code, the Agency further covenants that it will pay or cause to be paid to the United States Treasury Department the amounts necessary to satisfy the requirements of Section 148(f) of the Code, and that it will establish such accounting procedures as are necessary to adequately determine, account for and pay over any such 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 covenants to survive the defeasance of the Series 1991 Bonds. (c) The Agency covenants that it will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial execution and delivery of the Series 1991 Bonds, would result'in a loss of exclusion from gross income for purposes of Federal income taxation, under Section 103 of the Code, of interest on the Series 1991 Bonds. (d) The Agency covenants that it will not use or permit the use of any property financed with the proceeds of the Series 1991 Bonds by any person (other than a state or local governmental unit) in such manner or to such extent as would result in a loss of exclusion of the interest on the Series 1991 Bonds from gross income for Federal income tax purposes under Section 103 of the Code. (e) Notwithstanding any provision of this Resolution, and except as provided below, the Agency covenants that none of the moneys contained in any of the funds or accounts created pursuant to the Resolution shall be: (1) used in making loans guaranteed by the United States (or any agency or instrumentality thereof), (2) invested directly or indirectly in a deposit or account insured by the Federal Deposit Insurance Corporation, National Credit Union Administration or any other similar Federally chartered corporation, or (3) otherwise 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 above restrictions do not apply to: (i) the investment of moneys held in the Special Fund or any other "bona fide debt service fund" as defined for purposes of Section 148 of the Code, (ii) to investment in direct obligations of the United States Treasury, (iii) to investment in obligations guaranteed by the Federal National Mortgage Association, Government National Mortgage Association, or the Federal Home Loan Mortgage Corporation, (iv) obligations issued pursuant to Section 21B(d)(3) of the Federal Home Loan Bank Act, as amended by Section 511(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, (v) to investments permitted under regulations issued pursuant to Section 149(b)(3)(B) of the Code, or (vi) to such other investments permitted under the Resolution as, in the opinion of Bond Counsel, .S6\94691.6\BmWRa9.Doc 32 do not jeopardize the exclusion from gross income for Federal income tax purposes of interest on the Series 1991 Bonds. SECTION 6.16. 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 Series 1991 Bonds of the rights and benefits provided in this Resolution. ARTICLE VII THE FISCAL AGENT SECTION 7.01. Atioointment 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 hereunder, to allocate, use and apply the same, to hold, receive and disburse the Pledged Tax Revenues and other funds pledged or held hereunder, and otherwise to hold all the offices and perform all the functions and duties provided in this Resolution to be held and performed 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 acceptance thereof; and by executing and delivering such acceptance, the Fiscal Agent shall be deemed to have accepted such duties and obligations, 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 thereto, 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 Series 1991 Bonds then Outstanding (or their attorneys duly authorized in writing) and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company doing business and having an office in Los Angeles, California, having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000), and subject to supervision of examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. c: \6056\94691.6\BoW Rag. Doc 33 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 successor Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent. SECTION 7.02. Liability of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Series 1991 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 sufficiency of this Resolution or of the Series 1991 Bonds, and shall not incur and responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Series 1991 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 negligence or willful misconduct. SECTION 7.03. Notice to Fiscal Agent. 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 questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Fiscal Agent shall not be bound to recognize any person as the Owner of a Series 1991 Bond unless and until such Series 1991 Bond is submitted for inspection, if required, and his title thereto satisfactorily established, if disputed. Whenever in the administration of its duties under the 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 certificate 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 see reasonable. c: \6056\94691.6\BoW Rag. Doc 34 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 financial liability in the performance of any of its duties hereunder. The Agency agrees to pay the Fiscal Agent reasonable 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 resignation of the Fiscal Agent hereunder for acts or failure to act which arose prior to such satisfaction, defeasance or resignation. 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 Series 1991 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 Series 1991 Bonds then Outstanding, exclusive of Series 1991 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 the Bond Insurer. No such modification or amendment shall (1) extend the maturity of any Series 1991 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 Series 1991 Bond, or (2) permit the creation by the Agency of any mortgage,pledge or lien upon the Tax Revenues superior to or on a parity with the pledge and lien created for the benefit of the Series 1991 Bonds (except as expressly permitted by the Resolution), or reduce the percentage of Series 1991 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. c: \6056\9 691.6\BondRm9. Doc 35 This Resolution and the rights and obligations of the Agency and of the Owners of the Series 1991 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 the Bond Insurer, 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 necessary or desirable and not inconsistent with this Resolution, and which shall not adversely affect the interests of the Owners; and (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 Series 1991 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 Series 1991 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 consents of the Owners of at least 60% in aggregate principal amount of the Series 1991 Bonds then Outstanding (exclusive of Series 1991 Bonds c:\6056\94691.6\BoWRa9.Doc 36 disqualified as provided in Section 8.04) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Series 1991 Bonds f or 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 Series 1991 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 this Section provided for has been mailed. After the Owners of the required percentage of Series 1991 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 Series 1991 Bonds and 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, consisting 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 effective upon the filing with the Fiscal Agent of the proof of the mailing 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 Series 1991 Bonds at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty-day period. SECTION 8.04. Disqualified Series 1991 Bonds. Series 1991 Bonds owned or held for the account of the Agency or the City of Tustin, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Series 1991 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 pursuant 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 Series 1991 Bonds Outstanding shall thereafter be c: \6056\94691.6\Bond Rm9. Doc 37 determined, exercised and enforced hereunder subject in all respects to such modification 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 Series 1991 Bonds as to which such consent is given are disqualified as provided in Section 8.04. SECTION 8.06. Endorsement or Replacement of Series 1991 Bonds Issued After Amendments. The Agency may determine that Series 1991 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 Series 1991 Bond Outstanding at such effective date and presentation of the applicable Series 1991 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 made on such Series 1991 Bond. The Agency may determine that new Series 1991 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 Series 1991 Bonds then Outstanding, such new Series 1991 Bonds shall be exchanged at the office of the Fiscal Agent in Los Angeles, California, without cost to any Owner for Series 1991 Bonds then Outstanding, upon surrender of such Series 1991 Bonds. SECTION 8.07. Amendatory Endorsement of Series 1991 Bonds. The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Series 1991 Bonds held by him, provided that due notation thereof is made on such Series 1991 Bonds. ARTICLE IX EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS SECTION 9.01. Proceedings Constitute Contract. The provisions of this Resolution and of any other resolution supplementing or amending this Resolution and adopted prior to the issuance of the Series 1991 Bonds hereunder shall constitute a contract between the Agency and the Owners and the provisions thereof shall be enforceable as provided herein. After the issuance and delivery of the Series 1991 Bonds this Resolution and any supplemental resolutions hereto shall be irrepealable, 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. _-16\94691.6\BoWRa9.Doc 38 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 payment of the principal of or redemption premium (if any) on any Series 1991 Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) if default shall be made in the due and punctual payment of any installment of interest on any Series 1991 Bond when and as such interest installment shall become due and payable; (c) if default shall be made by the Agency in the observance of any of the covenants, agreements or conditions on its part contained in this Resolution or in the Series 1991 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 or court of competent jurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization until 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 Series 1991 Bonds at the time Outstanding (such request to be in writing to the Fiscal Agent and to the Agency), declare the principal of all of the Series 1991 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 Series 1991 Bonds contained to the contrary notwithstanding, 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 the Bond Insurer. If, at any time after the principal of the Series 1991 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 sufficient to pay all principal on the Series 1991 Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Series 1991 Bonds, with interest at the rate of 12% per annum on such overdue installments of principal, and the reasonable expenses of the c:\6056\94691.6\BoWRa9.Doc 39 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 Series 1991 Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Owners of a majority in aggregate principal amount of the Series 1991 Bonds Outstanding or provision deemed by the Owners of a majority in aggregate principal amount or the Series 1991 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 Series 1991 Bonds then Outstanding, by written notice to the Agency and to the Fiscal Agent, may, on behalf of the Owners of all of the Series 1991 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 Series 1991 Bonds, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid: First, to the payment of the 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 the Series 1991 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 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 the Series 1991 Bonds shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon the Series 1991 Bonds for principal and interest, with interest on the overdue principal and installments of interest at the rate of 12% per annum (to the extent that such interest 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 Series 1991 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 ...., j56\94691.6\BoodRn9. Doc 40 interest over any other installment of interest, ratably to the aggregate of such principal and interest. SECTION 9.04. Other Remedies of 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 Series 1991 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 Series 1991 Bonds, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay the principal of and interest on the Series 1991 Bonds to the respective Owners of the Series 1991 Bonds at the respective dates of maturity, 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 Series 1991 Bonds. 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 Series 1991 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. c: \6056\94691.6\BoWRw9. Doc 41 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 Series 1991 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 Series 1991 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 Series 1991 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 indemnified 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 Series 1991 Bonds is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law. ARTICLE X BOND INSURANCE SECTION 10.01. Provisions Applicable to MBIA Insurance. As long as a Bond Insurance Policy issued by MBIA shall be in full force and effect, the Agency agrees to comply, and to cause the Fiscal Agent to comply, with the following provisions: (a) Payments under the Bond Insurance Policy. (1) In the event that, on the second Business Day, and again on the Business Day, prior to an Interest Payment Date, the Fiscal Agent has not received sufficient moneys to pay all principal of and interest on the Series 1991 Bonds due on such Interest Payment Date, the Fiscal Agent shall immediately notify MBIA or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. c:\6056\%Ol.6gkWRa9.Doc 42 (2) If the deficiency is made up in whole or in part prior to or on the Interest Payment Date, the Fiscal Agent shall so notify MBIA or its designee. (3 ) In addition, if the Fiscal Agent has notice that any Owner has been required to disgorge payments of principal or interest on the Series 1991 Bonds to a trustee in Bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Owner within the meaning of any applicable bankruptcy laws, then the Fiscal Agent shall notify MBIA or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. (4) The Fiscal Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Owners as follows: (i) If and to the extent there is a deficiency in amounts required to pay interest on the Series 1991 Bonds, the Fiscal Agent shall (x) execute and deliver to Citibank, N.A., or its successors under the Bond Insurance Policy (the "Insurance Paying Agent") , in form satisfactory to the Insurance Paying Agent, an instrument appointing MBIA as agent for such Owners in any legal proceeding related to the payment of such interest and an assignment to MBIA of the claims for interest to which such deficiency relates and which are paid by MBIA, (y) receive as designee of the respective Owners (and not as Fiscal Agent) in accordance with the tenor of the Bond Insurance Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (z) disburse the same to such respective Owners; and (ii) If and to the extent of a deficiency in amounts required to pay principal of the Series 1991 Bonds, the Fiscal Agent shall (x) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing MBIA as agent for such Owner in any legal proceeding relating to the payment of such principal and an assignment to MBIA of any of the Series 1991 Bonds surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are c: \6056\94691.6\BoWRa9. Doc 43 not held by the Fiscal Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (y) receive as designee of the respective Owners (and not as Fiscal Agent) in accordance with the tenor of the Bond Insurance Policy payment therefor from the Insurance Paying Agent, and (z) disburse the same to such Owners. (5) Payments with respect to claims for interest on and principal of Series 1991 Bonds disbursed by the Fiscal Agent from proceeds of the Bond Insurance Policy shall not be considered to discharge the obligation of the Agency with respect to such Series 1991 Bonds, and MBIA shall become the owner of such unpaid Series 1991 Bonds and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. (6) Irrespective of whether any such assignment is executed and delivered, the Agency agrees, and shall cause the Fiscal Agent to agree for the benefit of MBIA that, (i) They recognize that to the extent MBIA makes payments, directly or indirectly (as by paying through the Fiscal Agent), on account of principal of or interest on the Series 1991 Bonds, MBIA will be subrogated to the rights of such Owners to receive the amount of such principal and interest from the Agency, with interest thereon as provided and solely from the sources stated in this Resolution and the Series 1991 Bonds; and (ii) They will accordingly pay to MBIA the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Bond Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Resolution and the Series 1991 Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Series 1991 Bonds to Owners, and will otherwise treat MBIA as the owner of such rights to the amount of such principal and interest. ,..,,,,56\94691.6\BoWRa9.Doc 44 (7) In connection with the issuance of Parity Bonds, the Agency shall deliver to MBIA a copy of the disclosure document, if any, circulated with respect to such Parity Bonds. (8) Copies of any amendments made to the documents executed or adopted in connection with the issuance of the Series 1991 Bonds which are consented to by MBIA shall be sent to Standard & Poor's Corporation. (9) MBIA shall receive notice of the resignation or removal of the Fiscal Agent and the appointment of a successor thereto. (10) MBIA shall receive copies of all notices required to be delivered to Owners and, on an annual basis, copies of the Agency's audited financial statements and Annual Budget. (11) Notwithstanding any of the foregoing provisions, MBIA shall have the ability to control all remedies upon an Event of Default and shall receive immediate notice upon an Event of Default. (12) In the event the Reserve Account contains both an MBIA surety bond and cash, the cash shall be drawn down completely before any demand is made on the surety bond. In the event the Reserve Account contains a surety bond from another entity and an MBIA surety bond, there shall be a pro -rata draw on each of the surety bonds. (13) Notwithstanding any of the foregoing provisions, with regard to replenishment, any available monies shall be used to reimburse MBIA, thereby reinstating the surety bond, and second to replenish the cash in the Reserve Account. (14) The Fiscal Agent shall deliver a demand for payment to the Bond Insurer at least three days prior to the date at which funds are required. (15) MBIA shall be paid all amounts owed to it under the terms of the Financial Guaranty Agreement or any other documents before the bond documents may be terminated. (16) Notwithstanding any of the foregoing provisions, there shall be no optional redemption of the bonds or distribution of funds to the issuer and/or the underlying obligor unless all amounts owed to MBIA 1.6\BoodRw9.Dw 45 under the terms of the Financial Guaranty Agreement or any other documents have been paid in full. (17) MBIA is granted the same interest in collateral as granted to the Bondholders, subject only to that of the Bondholders. (18) The Fiscal Agent shall maintain adequate records, verified by MBIA, as to the amount available to be drawn at any given time under the surety bond and as to the amounts paid and owing to MBIA under the terms of the Financial Guaranty Agreement. (b) Notices. Any notice that is required to be given to an Owner or to the Fiscal Agent pursuant to this Resolution shall also be provided to MBIA. All notices required to be given to the Bond Insurer under this Resolution shall be in writing and shall be sent by registered or certified mail addressed to Municipal Bond Investors Assurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Surveillance. ARTICLE XI MISCELLANEOUS SECTION 11.01. 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 Series 1991 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 Series 1991 Bonds and the Fiscal Agent. SECTION 11.02. Successor is Deemed Included in All 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 11.03. Discharge of Resolution. If the Agency shall pay and discharge the entire indebtedness on all Series 1991 Bonds Outstanding in any one or more of the following ways, subject to the Bond Insurer's Standard Refunding Conditions attached hereto as Schedule B so long as the Bond Insurance Policy is in effect: c:\6056\94691.6\BoWRa9.Doc 46 (a) by well and truly paying or causing to be paid the principal of and interest on all Series 1991 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 Series 1991 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 (provided, however, that so long as the Bond Insurance Policy is in full force and effect, the Agency shall deposit with the Fiscal Agent only those defeasance securities permitted in the list provided by the Bond Insurer and attached hereto as Schedule C) in such amount as an Independent Certified Public Accountant from a "Big 6" Certified Public Accountant Firm shall verify that, 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 Series 1991 Bonds Outstanding (including all principal, interest and redemption premiums) at or before the respective maturity dates; and if such Series 1991 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, then, notwithstanding that any Series 1991 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 Series 1991 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 Series 1991 Bonds not so surrendered 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 Series 1991 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 Series 1991 Bonds by the Bond Insurer shall not constitute payment, or provision for payment, of such principal and interest by the Agency within the meaning of this Section. In the event of such payment by the Bond Insurer, the pledge of the Pledged Tax Revenues and all other rights granted by this Resolution to Owners shall continue to exist and the Bond Insurer shall be subrogated to the rights of such Owners. c:\6056\%N1.6VkmdR=9.Doc 47 SECTION 11.04. 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 Series 1991 Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. SECTION 11.05. Destruction of Canceled Series 1991 Bonds. Whenever in this Resolution provision is made for the surrender to the Agency of any Series 1991 Bonds which have been paid or canceled pursuant to the provisions of this Resolution, a certificate of destruction duly executed by the Fiscal Agent shall be deemed to be the equivalent of the surrender of such canceled Series 1991 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 Series 1991 Bonds therein referred to. SECTION 11.06. Notices and Demands on Agency. Any notice or demand which by any provision of this Resolution is required permitted to be given or served by the Fiscal Agent to or on the 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 11.07. Partial Invalidity. If any Section, paragraph, 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 Series 1991 Bonds. The Agency hereby declares that it would have adopted this Resolution and each and every other Section, paragraph, sentence, clause or phrase herein and authorized the issue of the Series 1991 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 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 Series 1991 Bonds. j6\%691.6\BoWP"9.D0c 48 SECTION 11.08. Effective Date of Resolution. This Resolution shall take effect from and after the date of its passage and adoption. Attest: PASSED AND ADOPTED this day of City Clerk c: \6056\94691.6\BoodRw9. Doc 49 , 1991. Charles E. Puckett, Chairman BOND FORM No........ EXHIBIT A UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR ITS AGENTS FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF TUSTIN TUSTIN COMMUNITY REDEVELOPMENT AGENCY TOWN CENTER AREA REDEVELOPMENT PROJECT SUBORDINATE TAX ALLOCATION BOND, SERIES 1991 INTEREST RATE: MATURITY DATE: DATED DATE: 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 uhder the laws of the State of California, for value received, hereby promises to pay (but solely from the funds hereinafter mentioned) to the Owner named above 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 said funds). Interest on this Bond is payable from the interest payment date next preceding 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 and ending on such c:\6os6\%0i.6\soaPtw9.Doc A-1 interest payment date, in which event it shall bear interest from such Interest Payment Date, or unless it is authenticated on or before May 15, 1992, in which event it shall bear interest from July 15, 1991 at the interest rate specified above per annum, based on a year of twelve thirty day months, payable semiannually on the first day of June and the first day of December of each and every year commencing June 1, 1992 until this Bond is paid; provided, however, that if, at the time of authentication of any Series 1991 Bond, interest is in default on Outstanding Series 1991 Bonds, such Series 1991 Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding Series 1991 Bonds. If at the maturity date of this Bond or, if the same is duly called for redemption, then at'the date fixed for redemption, funds are available for payment or redemption thereof, as provided in the Resolution hereinafter mentioned, this Bond shall then cease to bear interest. The principal 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 the address shown on the bond register kept by the Fiscal Agent hereinafter 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 neither 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 constitute 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. c:\6056\94691.6\BoWRw9.Doc A-2 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. 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 fifteenth day of July, 1991. Chairman of the Tustin Community Redevelopment Agency (SEAL) Treasurer of the Tustin Community Redevelopment Agency [FORM OF FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION] This is one of the Series 1991 Bonds described in the within -mentioned Resolution and has been authenticated on . as Fiscal Agent BY: AUTHORIZED OFFICER .,6\%01.6\BoWP.w9.Doc A-3 (FORM OF BACK OF BOND] This Bond is one of a duly authorized issue of Series 1991 Bonds of the Agency designated "Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991" (herein called the "Series 1991 Bonds") in the aggregate principal amount of $13,100,000 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 financing portions of the cost of the redevelopment project above designated, and are authorized by and issued pursuant to Resolution No. RDA 91 - adopted by the Agency on July 15, 1991 (herein called the "Resolution"), and all of the Series 1991 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 provided for said Series 1991 Bonds, for the nature, extent and manner of enforcement of such security, for the covenants and agreements made for the benefit of the registered owners of the Series 1991 Bonds (herein called the "Owners") , and for a statement of the rights of the Owners, and by the acceptance of this Series 1991 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 obligations 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 Outstanding Series 1991 Bonds, exclusive of Series 1991 Bonds owned by the Agency or the City of Tustin. The principal of this Series 1991 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 Series 1991 Bond matures on or before December 1, 2001 it is not subject to optional redemption before its maturity. If this Series 1991 Bond matures on or after December 1, 2002, it is subject to optional redemption in whole or in part on any Interest Payment Date on or after December 1, 2001, in inverse order of maturity and by lot within a maturity, upon notice as described below, at the option of the Agency from any available source of funds, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest thereon to the redemption date, plus a premium (expressed as a percentage of the principal amount of Series 1991 Bonds to be redeemed) as follows: c: \6056\94691.6U1oWRa9. Doc A-4 Redemption Dates Redemption Price December 1, 2001 and June 1, 2002 102% December 1, 2002 and June 1, 2003 101% December 1, 2003 and thereafter 100% Series 1991 Bonds maturing on December 1, 2016 are subject to mandatory redemption in part by lot prior to maturity from Sinking Account Installments made on December 1, 2006 and on each December 1 thereafter to and including December 1, 2016 (each a "Sinking Account Payment Date") at a redemption price equal to 100$ of the principal amount thereof plus accrued interest, if any, to the redemption date as follows: Redemption Date (December 1) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (Maturity) Principal Amount Notice of the call for any redemption, identifying the Series 1991 Bonds or 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 Series 1991 Bond to be redeemed in whole or in part at the address shown on the registration books maintained by the Fiscal Agent. If this Series 1991 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 Series 1991 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. c: \6056\%01.6\BoodRa9. Doc A-5 The Series 1991 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 Series 1991 Bond may be exchanged, at the principal corporate trust office of the Fiscal Agent, for registered Series 1991 Bonds of the same maturity of other authorized denominations. This Series 1991 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 surrender and cancellation of this Series 1991 Bond. Upon such transfer a new fully registered Series 1991 Bond or Series 1991 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. c: \6056\94691.6\BoWR=9. Doc A-6 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. 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, 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 fund 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: $13,100,000 Tustin Community Redevelopment Agency Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991 Upon receipt of telephonic or subsequently confirmed in writing l or upon receipt of written notice l by the Insurer from the Paying Agei the payment of an Insured Amount f required payment has not been made such payment or within one business such nonpayment, whichever is late: in an account with Citibank, N.A. , successor, sufficient for the payor which are then due. Upon pres Obligations or presentment of such telegraphic notice, such notice y registered or certified mail, y registered or certified mail, t or any owner of an Obligation )r which is then due, that such the Insurer on the due date of day after receipt of notice of will make a deposit of funds, in New York, New York, or its ant of any such Insured Amounts tntment and surrender of such other proof of ownership of the 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 C: %oO56\94691.6\BoWRa9. Doc A-7 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 satisfactory 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 113 King Street, Armonk, New York 10504. 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. In the event the Insurer were to become insolvent, any claims arising under a policy of financial guaranty insurance are excluded from coverage by the California Insurance Guaranty Association, established pursuant to Article 15.2, (commencing with Section 1063 ) of Chapter 1 of Part 2 of Division 1. MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION c: k6056\94691.6\BoWRa9. Doc A-8 [FORM OF ASSIGNMENT TO APPEAR ON BONDS] For value received the undersigned do(es) hereby sell, assign and transfer unto the within -mentioned Series 1991 Bond and do(es) hereby irrevocably constitute and appoint attorney to transfer the same on the Series 1991 Bond register of the Fiscal Agent, with full power of substitution in the premises. Dated: Note: The signatures) to this Assignment must correspond with the name(s) as written on the face of the within Series 1991 Bond in every particular, without alteration or enlargement or any change whatsoever. c:\6os6\%0i.6\sonaPtw9.Doc A-9 SCHEDULE A LIST OF PERMISSIBLE INVESTMENTS FOR INDENTURED FUNDS A. Direct obligations of the United States of America (including obligations issued or held in book -entry form on the books of the Department of the Treasury) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. B. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America: 1. U.S. Export -Import Bank: Direct obligations or fully guaranteed certificates of beneficial ownership. 2. 3. 4. 5. Farmers Home Administration: ownership. Federal Financing Bank Certificates of beneficial Federal Housing Administration Debentures General Services Administration: Participation certificates. 6. Government National Mortgage Association ("GNMA"): GNMA - guaranteed mortgage-backed bonds; GNMA - guaranteed pass-through obligations (not acceptable for certain cash-flow sensitive issues.) 7. U.S. Maritime Administration: Guaranteed Title XI financing. 8. New Communities Debentures: U.S. government guaranteed debentures. 9. U.S. Public Housing Notes and Bonds: U.S. government guaranteed public housing notes and bonds. 10. U.S. Department of Housing and Urban Development: Project Notes; Local Authority Bonds. C. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following U.S. government agencies (non -full faith and credit agencies): c: \6056\%01.6\BmWP"9. Doc A-1 1. Federal Home Loan Bank System: Senior debt obligations. 2. Federal Home Loan Mortgage Corporation: Participation Certificates; Senior debt obligations. 3. Federal National Mortgage Association: Mortgage-backed securities and senior debt obligations. 4. Student Loan Marketing Association: Senior debt obligations. D. Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of AAAm-G; AAAm; or AAm. E. Certificates of deposit secured at all times by collateral described in (A) and/or (B) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral. F. Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC or FSLIC. G. Investment Agreements, including GICs, acceptable to MBIA. H. Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's or "A-1" or better by S&P. I. Bonds or notes issued by any state or municipality which are rated by Moody Is or S&P in one of the two highest rating categories assigned by such agencies. J. Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - 1" or 11A3" or better by Moody's and "A-1" or "A" or better by S&P. K. Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to a municipal entity (buyer/ lender) , and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date. c: \6056\94691.6\BondRw9. Doc A-2 Repurchase Agreements must satisfy the following criteria or be approved by MBIA. 1. Repos must be between the municipal entity and a dealer bank or securities firm a. Primary dealers on the Federal Reserve reporting dealer list, or b. Banks rated "A" or above by Standard & Poor 's Corporation and Moody's Investor Services. 2. The written repo contract must include the following: a. Securities which are acceptable for transfer are: (1) Direct U.S. governments, or (2) Federal agencies backed by the full faith and credit of the U.S. government. b. The term of the repo may be up to 30 days. C. The collateral must be delivered to the municipal - entity, trustee (if trustee is not supplying the collateral) or third party acting as agent for the trustee ( if the trustee is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities). d. Valuation of Collateral. (1) The securities must be valued weekly, marked - to -market at current market price plus accrued interest. (a) The value of collateral must be equal to 103% of the amount of cash transferred by the municipal entity to the dealer bank or security firm under the repo plus accrued interest. If the value of securities held as collateral slips below 103% of the value of the cash transferred by municipality, then additional cash and/or acceptable securities must be transferred. c: \6056\94691.6\BoodRm9. Doc A-3 3. Legal opinion which must be delivered to the municipal entity: a. Repo meets guidelines under state law for legal investment of public funds. c: \6056\94691.6\BmW Rm9. Doc A-4 SCHEDULE B SPECIAL CONDITIONS FOR REFUNDINGS 1. Receipt by Municipal Bond Investors Assurance Corporation of the final debt service schedule on the issue within three business days from the sale date. 2. Receipt, satisfactory review and subsequent oral approval by Municipal Bond Investors Assurance Corporation of draft copies of the CPA's verification, escrow securities purchase contracts of SLG subscription forms and escrow agreement at least ten business days prior to closing. Final and signed copies of all the above documents to be sent via overnight mail from closing. 3. Receipt by Municipal Bond Investors Assurance Corporation at least five business days prior to closing of a draft opinion from Bond counsel (or Special Tax Counsel) to the effect that the refunding bonds are being issued in compliance with state law and that the interest on the refunding bonds is tax- exempt. 4. Receipt by Municipal Bond Investors Assurance Corporation at least five business days prior to closing of a draft opinion from Bond counsel stating that the refunded bonds have been legally defeased. (This condition is only applicable in those situations where the refunding issue is legally defeasing the refunded issue.) Final executed copies of #3 and #4 to be sent via overnight mail. 5. If the escrow agreement allows for the substitution of securities in the escrow account, then it should be provided in the escrow agreement that no such substitution may occur unless there has first been delivered to the escrow agent/trustee, (1) a CPA verification that the escrow investments, as substituted, are sufficient to pay debt service, as it becomes due, on the refunded bonds and (2) an opinion of nationally recognized bond counsel to the effect that the substitution is permitted under the documents and the substitution has no adverse effect on the tax-exempt nature of the refunding bonds. 6. Escrow investments must be limited to U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series -- "SLGS"), direct obligations of the Treasury which have been stripped by the Treasury itself, "CATS" and "TIGRS" and obligations issued by the following agencies which are backed by the full faith and credit of the c: \6056\94691.6\BondRa9. Doc B-1 1. U.S. Exhort -Import Bank Direct obligations or fully guaranteed certificates of beneficial ownership. 2. Farmers Home Administration Certificate of beneficial ownership. 3. Federal Financing Bank 4. Federal Housing Administration Debentures 5. General Services Administration Participation certificates. 6. U.S. Maritime Administration Guaranteed Title XI financing. 7. New Communities Debentures U.S. government guaranteed debentures. 8. U.S. Public Housing Notes and Bonds U.S. government guaranteed public housing notes and bonds. 9. U.S. Department of Housing and Urban Development Project Notes Local Authority Bonds 10. Prerefunded municipal bonds must be rated "Aaa" by Moody's or "AAA" by S&P. If the issue is only rated by S&P (i.e., there is no Moody's rating), then the prerefunded bonds must have been prerefunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA -rated prerefunded municipals that satisfy this condition. c: \6056\94691.6\BoodRa9. Doc B-2 SCHEDULE C CRITERIA FOR DEFEASANCE Defeasance should require the deposit of cash or U. S. Treasury Certificates, Notes and Bonds ( including State and Local Government Series -- "SLGs"), direct obligations of the treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities and obligations issued by the following agencies which are backed by the full faith and credit of the U.S.: 1. u.5. Export -Import Bank Direct obligations or fully guaranteed certificates of beneficial ownership. 2. Farmers Home Administration Certificates of beneficial ownership. 3. Federal Financing Bank 4. Federal Housing Administration Debentures 5. General Services Administration Participation certificates. 6. U.S. Maritime Administration Guaranteed Title XI financing. 7. New Communities Debentures U.S. government guaranteed debentures. 8. U.S. Public Housing Notes and Bonds U.S. government guaranteed public housing notes and bonds. 9. U.S. Department of Housing and Urban Development Project Notes Local Authority Bonds 10. Prerefunded municipal bonds must be rated "Aaa" by Moody's or "AAA" by S&P. If the issue is only rated by S&P (i.e., there is no Moody's rating), then the prerefunded bonds must have been prerefunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA -rated prerefunded municipals that satisfy this condition. c: \6056\94691.6\BoW R=9. Doc C-1 TUSTIN COMMUNITY REDEVELOPMENT AGENCY RESOLUTION NO. RDA 91- 13 RESOLUTION OF THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY CONFIRMING THE AWARD OF ITS TOWN CENTER AREA REDEVELOPMENT PROJECT SUBORDINATE TAY ALLOCATION BONDS, SERIES 1991 WHEREAS, at the time and place fixed for the opening of bids for the Tustin Community Redevelopment Agency Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991 (the "Series 1991 Bonds"), bids were received by the Tustin Community Redevelopment Agency (the "Agency"); WHEREAS, Resolution No. RDA 91-11 authorizing the Notice Inviting Bids for the Series 1991 Bonds provides in the section entitled "Terms of Series 1991 Bonds" that the Agency will take action awarding the Series 1991 Bonds or rejecting all bids not later than 26 hours after the time bids were received; provided that award may be made after the expiration of such specified time if the bidder shall not have given to the Agency notice in writing of the withdrawal of such bid; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Tustin Community Redevelopment Agency: Section 1. The bid attached hereto as Exhibit A, specifying the purchase price for the Series 1991 Bonds (including accrued interest to the date of delivery), the designation of serial Series 1991 Bonds or term Series 1991 Bonds ( for Series 1991 Bonds maturing on or after December 1, 2006) and the interest rates per annum for each of the maturities of the Series 1991 Bonds is the best responsible bid for the Series 1991 Bonds producing the lowest true interest cost to the Agency. The Board hereby confirms the acceptance of the bid and the award of the Series 1991 Bonds to the bidder named in the bid in accordance with the terms of the bid. Section 2. All bids other than the bid hereby accepted by the Agency are rejected. Section 3. The interest rates and the serial and/or term designations on the Series 1991 Bonds are hereby fixed as set forth in the attached bid. c:\6056\94691.6\RnoBid.doc Section 4. The Agency will deliver the Series 1991 Bonds to the successful bidder upon payment therefor at the purchase price specified in the attached bid, including accrued interest to the date of delivery, and to undertake any and all acts necessary or desirable to accomplish the purpose of this Resolution. PASSED AND ADOPTED this 15th day of July, 1991. Charles E. Puckett, Chairman Attest: City Clerk c: \6056\94691.6\RwoBid.d0c 2 NOTICE INVITING BIDS $13,100,000 TUSTIN COMMUNITY REDEVELOPMENT AGENCY Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991 NOTICE IS HEREBY GIVEN that sealed proposals for the purchase of $13,100,000 par value bonds entitled "Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991" (the "Series 1991 Bonds") of the Tustin Community Redevelopment Agency (the "Agency") will be received by said Agency at the place and up to the time specified below. TIME: Monday, July 15, 1991 10:00 a.m., Pacific Daylight Savings Time PLACE: Law Offices of Mudge Rose Guthrie Alexander & Ferdon 333 South Grand Avenue Suite 2020 Los Angeles, California 90071 MAILED BIDS: Mailed bids should be addressed to: City Clerk of the City of Tustin c/o Mudge Rose Guthrie Alexander & Ferdon 333 South Grand Avenue Suite 2020 Los Angeles, California 90071 OPENING OF BIDS: The bids will be publicly opened and read at the above address at the time and place shown above and will be presented to the Agency at its meeting to be held later on the same date in the City Hall Council Chambers, 300 Centennial Way, Tustin, California. If no acceptable bids are received at the time shown above, the Agency will again offer the Series 1991 Bonds on July 22, 1991 and on each successive Monday thereafter at 10:00 a.m. at the place indicated above, until the Series 1991 Bonds are sold or this notice is withdrawn by the Agency. ISSUE: $13,100,000 designated "Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991." The Series 1991 Bonds will be fully registered, will be in the denomination of $5,000 or any integral multiple thereof and will be dated July 15, 1991, and will be in the denomination of $5,000 per final maturity. c: \6056\94691.6\Notice.3 PRINCIPAL PAYMENTS: Principal of the Series 1991 Bonds will be payable on December 1 in the amounts for each of the several years as follows: Principal Principal Year Amount Year Amount 1993 $ 2005 $ 1994 2006* 1995 2007* 1996 2008* 1997 2009* 1998 2010* 1999 2011* 2000 2012* 2001 2013* 2002 2014* 2003 2015* 2004 2016* INTEREST: The Series 1991 Bonds shall bear interest from July 11 1991 at a rate or rates to be fixed upon the sale thereof but not to exceed 12% per annum, payable semiannually on May 1 and December 1, commencing June 1, 1992. PAYMENT: Interest on the Series 1991 Bonds will be payable by check or draft of Security Pacific National Bank (the "Fiscal Agent"), mailed to the registered owners thereof as of the fifteenth day of the calendar month immediately preceding the Interest Payment Date. REDEMPTION: Optional Redemption. The Series 1991 Bonds maturing on or prior to December 1 2001, are not subject to optional redemption before their maturity. Series 1991 Bonds maturing on and after December 1, 2002, are subject to optional redemption in whole or in part on any Interest Payment Date on or after December 1, 2001, in inverse order of maturity and by lot within a maturity, upon notice at the option of the Agency from any available source of funds, at a redemption price equal to the principal amount of accreted value thereof to be redeemed, together *To be designated by the winning bidder as either a maturity date or a sinking fund payment date with respect to term Series 1991 Bonds. See "Terms of Sale". c: \6056\94691.6\No6ce. 3 2 with accrued interest thereon to the redemption date, plus a premium (expressed as a percentage of the principal amount or accreted value of Series 1991 Bonds to be redeemed) as follows: Redemption Dates Premiums December 1, 2001 through June 1, 2002 102 December 1, 2002 through June 1, 2003 101 December 1, 2003 and thereafter 100 Sinking Fund Redemption. Any Series 1991 Bonds designated by the winning bidder as term Series 1991 Bonds are subject to mandatory call and redemption in part at par and by lot on December 1 in the years prior to their maturity date or dates, but in no event prior to December 1, 2007. Special Mandatory Redemption. Series 1991 Bonds are subject to special mandatory redemption in part by lot on a pro rata basis from all maturities, on June 1, 1994 from amounts transferred by the Fiscal Agent from the Escrow Fund to the Redemption Fund, at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date; provided that such date may, from time to time, at the written request of the Agency, be extended if, at least sixty (60) days prior to such redemption date, the Fiscal Agent receives a certificate of an Independent Financial Consultant that: (i) the interest earnings on proceeds held in the Escrow Fund, together with amounts, if any deposited by the Agency in the Interest Account of the Special Fund for such purpose, will be sufficient to pay the interest due on the principal amount held in the Escrow Fund for the period of time the redemption date is being extended; and (ii) the Agency and the Fiscal Agent have received an opinion of Bond Counsel to the effect that such extention will not adversely affect the exclusion of interest on the Bonds from the gross income of the Owners for Federal income tax purposes. PURPOSE AND AUTHORIZATION: The Series 1991 Bonds are being issued to finance a portion of the costs of the Town Center Area Redevelopment Project. The Series 1991 Bonds are to be issued pursuant to the Community Redevelopment Law (Part 1 of Division 24 of the California Health and Safety Code) and pursuant to the resolution (to be adopted by the Agency following the award of the Series 1991 Bonds, authorizing the issuance of the Series 1991 Bonds (the "Resolution"). SECURITY: The Series 1991 Bonds are payable from and secured solely by the Pledged Tax Revenues (as defined in the Resolution) and certain funds and accounts created under the Resolution and do not constitute a debt of the City of Tustin or of the State of California or any of its political subdivisions (other than the Agency). The Series 1991 Bonds will be subordinate to the outstanding Town Center Area Redevelopment Project Tax Allocation c:\6056\94691.6\Nodce.3 3 Refunding Bonds, Series 1987 and will be on a parity with any additional parity bonds which may be issued in the future in accordance with the Resolution. TERMS OF SALE Interest Rate. The maximum rate bid may not exceed 12% per annum payable semiannually. Each rate bid must be a multiple of 1/8 or 1/20 of 1%. No Series 1991 Bond shall bear more than one interest rate, and all Series 1991 Bonds of the same maturity shall bear the same rate. Each Series 1991 Bond must bear interest at the rate specified in the bid from its date to its fixed maturity date. Only one interest rate will be assigned to each Series 1991 Bond for each installment of interest thereon, and bids providing for additional or supplemental interest rates will be rejected. The interest rate on any maturity or group of maturities shall not be more than 2% higher than the interest rate on any other maturity or group of maturities. The interest rate on any maturity shall not be lower than the interest rate on any earlier maturity. Purchase Price; Premium or Discount. Bidders may specify a premium or discount, but the discount shall not exceed 2% of the par value of the Series 1991 Bonds. The Series 1991 Bonds shall be sold for cash only. All bids must be for not less than all of the Series 1991 Bonds hereby offered for sale and each bid shall state that the bidder offers accrued interest to the date of delivery, the purchase price, which shall not be less than 98% of par, and the interest rate or rates not to exceed that specified herein, at which the bidder offers to buy the Series 1991 Bonds. Each bidder shall state in its bid the true interest cost (expressed as a percentage), which shall be considered informative only and not a part of the bid. The Agency reserves the right to alter the principal maturities and sinking fund redemption installments of the Series 1991 Bonds. Maturity/Mandatory Call Schedule. Each bidder shall designate each of the years 2006 to and including 2016 (as shown above under the caption "PRINCIPAL PAYMENTS") as either a serial Series 1991 Bond maturity date, a term Series 1991 Bond maturity date, or a sinking fund payment date with respect to a term Series 1991 Bond maturity. Insurance. Municipal Bond Investors Assurance Corporation has issued a commitment for municipal bond insurance relating to the Series 1991 Bonds. All bids may be conditioned upon the issuance effective as of the date on which the Series 1991 Bonds are issued, of a policy of insurance by Municipal Bond Investors Assurance Corporation, insuring the payment when due of principal of and interest on the Series 1991 Bonds. Each Series 1991 Bond will bear a legend referring to the insurance. The purchaser, holder or owner is not authorized to make any statements concerning the insurance beyond those set out here and in the bond legend without the approval of Municipal Bond Investors Assurance Corporation. c: \6056\94691.6\Notice. 3 4 Best Bidder. The Series 1991 Bonds will be awarded to the best responsible bidder or bidders, considering the interest rate or rates specified and the premium or discount offered, if any. The best bid will be determined by doubling the semiannual interest rate (compounded semiannually) necessary to discount the debt service payment from the payment dates to the date of the Series 1991 Bonds and to the price bid, excluding accrued interest. Such true interest cost calculation shall be made to the eighth decimal place. The calculation will be based on the bid schedule submitted by each bidder. The purchaser must pay accrued interest (computed on a 360 -day year basis) from the date of the Series 1991 Bonds to the date of delivery. The cost of printing the Series 1991 Bonds will be borne by the Agency. Right of Rejection. The Agency reserves the right, in its discretion, to reject any and all bids and to the extent not prohibited by law to waive any irregularity or informality in any bid. Prompt Award. The Agency will take action awarding the Series 1991 Bonds or rejecting all bids not later than 26 hours after the time herein provided for the receipt of proposals; provided that the award may be made after the expiration of the specified time if the bidder shall not have given to the Agency notice in writing of the withdrawal of such proposal. Place of Closina; Place of Delivery and Funds for Pavment. The closing will take place at the offices of Mudge Rose Guthrie Alexander & Ferdon, 333 South Grand Avenue, Los Angeles, California, or at such other place as may be agreed upon by the successful bidder and the Agency. Payment for the Series 1991 Bonds shall be made in Federal Reserve Bank funds or other funds immediately available to the Agency. Any expense of providing immediately available funds, whether by transfer of Federal Reserve Bank funds or otherwise, shall be borne by the purchaser. Prompt Delivery; Cancellation for Late Delivery. The Series 1991 Bonds will be issued by means of a book -entry system with no physical distribution of bond certificates made to the public. One bond certificate for each maturity will be issued to the Depository Trust Company ("DTC") and immobilized in its custody. The book - entry system will evidence ownership of the Series 1991 Bonds in the principal amount of $5,000 or any multiple thereof, with transfers of ownership effected on the records of DTC and its participants. The successful bidder shall have the right, at its option, to cancel the contract of purchase if the Agency shall fail to execute the Series 1991 Bonds and tender them for delivery to DTC within 60 days from the date herein fixed for the receipt of bids, and in such event the successful bidder shall be entitled to the return of the check accompanying its bid. c: \6056\94691.6\No6m.3 5 Form of Bid. Each bid, together with the bid check, must be in a sealed envelope, addressed to the Agency, with the envelope and bid clearly marked "Proposal for Tustin Community Redevelopment Agency, Town Center Area Redevelopment Project, Subordinate Tax Allocation Bonds, Series 1991." Each bid must be in accordance with the terms and conditions set forth herein, or permitted herein, and must be submitted on, or in substantial accordance with, the Official Bid Form provided by the Agency. Bid Check. A certified or cashier's check on a responsible bank or trust company in the amount of $10 o , o o o , payable to the order of the Agency, must accompany each proposal to secure the Agency from any loss resulting from the failure of the bidder to comply with the terms of its bid. No interest will be paid upon the deposit made by any bidder. The check accompanying each unaccepted proposal will be returned promptly. The deposit of the successful bidder shall become the property of the Agency and shall be cashed by the Agency, and the amount of said deposit shall be credited toward the purchase price of the Series 1991 Bonds. If the purchase price is not so paidupon the tender of the Series 1991 Bonds, the successful bidder shall have no right in or to the Series 1991 Bonds or to the recovery of said deposit, unless it shall appear that the Series 1991 Bonds cannot be validly issued in the form and manner proposed. Change in Tax Exempt Status. At any time before the Series 1991 - Bonds are tendered for delivery, the successful bidder may disaffirm and withdraw the proposal if the interest received by private holders from bonds of the same type and character shall be declared to be no longer excluded from gross income of such holders under present federal income tax laws, either by a ruling of the Internal Revenue Service or by a decision of any federal court, or shall be declared taxable or be required to be taken into account in computing any federal income taxes (except to the extent presently taken into account in calculating book income and current earnings for purposes of calculating corporate alternative minimum taxable income) , by the terms of any federal income tax law enacted subsequent to the date of this notice. Reoffering Price. Simultaneously with or before delivery of the Series 1991 Bonds, the successful bidder shall furnish to the Agency a written statement in form and substance acceptable to bond counsel: (a) stating the initial reoffering prices on each maturity of the Series 1991 Bonds to the general public and the reoffering prices of each maturity of the Series 1991 Bonds, if any, reoffered to institutional or other investors with concessions or at discounts from the reoffering prices to the general public; (b) certifying that a bona fide offering of the Series 1991 Bonds has by such date been made to the public (excluding bond houses, brokers, and other intermediaries); and (c) stating the price at which each Series 1991 Bond was sold, or will be sold, to institutional or other investors with concessions or at a discount from the prices at which Series 1991 Bonds were, or will be, sold to the general public (excluding bond houses, brokers, and other c: \6056\94691.6\Notke.3 6 intermediaries) prior to the sale of any Series 1991 Bonds of each maturity at other prices. California Debt Advisory Commission. The Agency has duly notified the California Debt Advisory Commission of the proposed sale of the Series 1991 Bonds. Payment of all fees to the California Debt Advisory Commission in connection with the execution, sale and delivery of the Series 1991 Bonds shall be the sole responsibility of the successful bidder, and not of the Agency. Closing Papers: Legal Opinion. Each proposal will be understood to be conditioned upon the Agency furnishing to the purchaser, without charge, concurrently with payment for and delivery of the Series 1991Bonds, the following closing papers, each dated the date of delivery: (a) Legal Opinion - The opinion of Mudge Rose Guthrie Alexander & Ferdon, Los Angeles, California, and Rourke & Woodruff, A Professional Corporation, Orange, California, co -bond counsel, approving the validity of the Series 1991 Bonds and stating that interest on the Series 1991 Bonds is excluded from gross income of the holders under present federal income tax laws, and that such interest is also exempt from personal income taxes of the State of California under present state income tax laws; (b) Nonarbitrage Certificate - A certificate of the Agency certifying that on the basis of the facts, estimates and circumstances in existence on the date of issue, it is expected that the proceeds of the Series 1991 Bonds will not be used in a manner that would cause the Series 1991 Bonds to be arbitrage bonds; (c) Signature and No -Litigation Certificate - A certificate of the Agency signed by officers of the Agency certifying the following: (1) that said officers have signed the Series 1991 Bonds, whether by facsimile or manual signature, and that they were respectively duly authorized to execute the same; and (2) that there is no litigation threatened or pending affecting the validity of the Series 1991 Bonds; (d) Receipt - The receipt of the Agency showing that the purchase price of the Series 1991 Bonds, including interest accrued to the date of delivery thereof, has been received by the Agency; and (e) Certificate re Official Statement - A certificate of an officer of the Agency, acting in such person's official and not personal capacity, to the effect that at the time of the sale of the Series 1991 Bonds and at all times subsequent thereto up to and including the time of delivery of the Series 1991 Bonds, the Official Statement relating to the Series 1991 Bonds did not contain any untrue statement of a material fact or omit to state a material fact necessary to c:\6056k94691.6\Nodce.3 7 make the statements therein, in light of the circumstances under which they were made, not misleading. Official Statement. The Preliminary Official Statement dated July 91 1991 is in a form "deemed final" by the Agency, except for certain pricing information, for the purpose of Rule 15c2-12 (b) (1) of the Securities and Exchange Commission but is subject to revision, amendment and completion in a final Official Statement. The Agency will furnish to the successful bidder or bidders within seven business days following award of the Series 1991 Bonds as many copies of the final Official Statement as the bidder or bidders shall request in their Official Form of Bid. No charge will be made to the successful bidder for the first 300 copies of the final Official Statement. CUSIP Numbers. It is anticipated that CUSIP numbers will be printed on the Series 1991 Bonds, but neither the failure to print such numbers on any Series 1991 Bond nor error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Series 1991 Bonds in accordance with the terms of the bid. All expenses of printing CUSIP numbers on the Series 1991 Bonds shall be paid by the Agency, but the CUSIP Service Bureau charge for the assignment of said numbers shall be paid by the purchaser. INFORMATION AVAILABLE. Requests for information concerning the Agency or additional copies of this Notice Inviting Bids, the Official Bid Form and the Preliminary Official Statement should be addressed to: Stone & Youngberg 15260 Ventura Boulevard Suite 900 Sherman Oaks, California 91403 818-906-0315 GIVEN by order of the Tustin Community Redevelopment Agency, adopted May 20, 1991. WILLIAM A. HUSTON --------- - -- Executive Director Tustin Community Redevelopment Agency c: \6056\%691.6\Notice.3 8 N 914 to V.1 0 • iy1 $13,100,000 TUSTIN COMMUNITY REDEVELOPMENT AGENCY Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991 July 15, 1991 Tustin Community Redevelopment Agency Ladies and Gentlemen: On behalf of a group which we have formed, consisting of the firms hereinafter named, and pursuant to the Notice Inviting Bids dated , 1991, we offer to purchase $13,100,000 principal amount, all or none, of the bonds of the Agency designated as "Town Center Area Redevelopment Project Tax Allocation Bonds, Series 199111, particularly described in said Notice, with interest as set forth in the following schedule, entitled "Schedule of Interest Rates", and to pay therefor the principal amount thereof [plus a premium of $ ] [ less a discount of $ ] making a total sum of plus interest accrued on such bonds to the date of delivery thereof. c: \6056\%01.6\Notice.3 9 Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 SCHEDULE OF INTEREST RATES Principal Amount Rate For Years 2006 through 2016, indicate whether serial bond maturity, term bond maturity or sinking fund payment This bid is made subject to all of the terms and conditions of the Notice Inviting Bids dated , 1991, all of which terms and conditions are made a part hereof as fully as though set forth in this bid. There is enclosed herewith a certified or cashier's check for $100,000 payable to the order of the Agency. If this bid is accepted and the Series 1991 Bonds are awarded to us the amount of the check will be credited toward the purchase price of the Series 1991 Bonds. If this bid is unsuccessful, the check will be returned promptly to the undersigned. There is submitted herewith a "Memorandum of Interest Cost" (which shall not constitute a part of this bid), stating the total interest and the true interest cost determined thereby. c:\6056\94691.6\Nooce.3 10 We hereby request that copies of the Official Statement be furnished to us in accordance with the Notice Inviting Bids. Very truly yours, By. Address: Phone: LIST OF SYNDICATE MEMBERS (subject to Change prior to Delivery of Series 1991 Bonds) c: \6056\94691.6\Notice.3 11 MEMORANDUM OF INTEREST COST The purchase price of the Series 1991 Bonds and the true interest cost is determined as follows: PRINCIPAL AMOUNT OF SERIES 1991 BONDS$ LESS DISCOUNT OR PLUS PREMIUM TOTAL PURCHASE PRICE $ (excluding accrued interest) TRUE INTEREST COST* * Please calculate to eight (8) decimal places. c: \6056\94691.6\Notice.3 12