HomeMy WebLinkAboutSA-3 - RESO TAX ALLOCATION BONDREQUEST FOR
SUCCESSOR AGENCY19�
ACTION --
MEETING DATE:
JULY 17, 2018
TITLE:
RESOLUTION AUTHORIZING THE
REFUNDING OF THE TAX ALLOCATION
BONDS, SERIES 2003 A & B, AND 2011A
{STRATEGIC PLAN NO. 4,2101)
CITY ER
RECOMMENDED ACTION
CLERK OF THE COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Implementing Resolution
❑ Other
CONTINUED TO
FILE NUMBER
Adopt a resolution authorizing the refunding of the former Community Redevelopment Agency
of the City of Santa Ana, South Main Street Redevelopment Project, Tax Allocation Bonds
Series 2003 A & B and the City of Santa Ana Tax Allocation Bonds (Merged Project Area) 2011
A and approval of related bond documents: Indenture of Trust, Bond Purchase Agreement,
Continuing Disclosure Certificate and Escrow Agreement.
2. Receive and File the Savings Analysis provided by Urban Futures, Inc. as the Financial Advisor
in this transaction.
DISCUSSION
In 2003, the Community Redevelopment Agency of the City of Santa Ana (the "former RDA") issued
its South Main Street Redevelopment Project, Tax Allocation Bonds, Series 2003A in the amount
of $20,945,000 (the "2003A Bonds"), and its Tax Allocation Refunding Bonds, Series 2003B in the
amount of $34,145,000 (the "2003B Bonds", and collectively the "2003A & B Bonds'). The 2003A
Bonds were issued to fund redevelopment activities of benefit to the South Main Street
Redevelopment Project Area. Approximately $12.5 million of the 2003A Bonds and $2.8 million of
the 2003B Bonds will be currently outstanding as of September 2, 2018. The 2003A & B Bonds
consist of interest rates ranging from 4.5% to 5% with the longest maturity (9/1/2031).
In 2011, the former RDA issued its Tax Allocation Bonds, Merged Project Area, 2011 Series A
bonds (the "2011A Bonds') in the principal amount of $66,790,000, of which approximately $64.8
million will be outstanding as of September 2, 2018. The interest rates on the 2011A Bonds range
from 5.00% to 6.75% for the longest maturity (9/1/2028).
Per Assembly Bill (AB) 26, the State of California ("State") dissolved existing redevelopment
agencies, which led to the formation of the Successor Agency to the Santa Ana Community
Redevelopment Agency (the "Successor Agency'). The Successor Agency inherited the
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Resolution Authorizing the Refunding
of 2003 A & B and 2011 Tax Allocation Bonds
July 17, 2018
Page 2
responsibility for repayment of the former RDA debt service including the 2003A & B and 2011A
Bonds. The State introduced additional legislation, AB 1484, which allowed existing successor
agencies to refund existing bonds, with approval of the Oversight Board and the State Department
of Finance, for the purpose of generating debt service savings.
CURRENT MARKET ANALYSIS
Currently, interest rates are at 3.49%. Refinancing the 2003A & B and 2011A Bonds through the
issuance of a refunding bond issue (the "2018 Bonds") is expected to generate a total debt service
savings of approximately $19.9 million, without extending the current maturity date of the bonds.
In order to maximize the savings amount, the Agency will contribute the existing cash funded
reserve account (approx. $6.7 million) and unexpended proceeds (approx. $5.8 million) from the
2011A Bonds, to the refunding escrow for the 2018 Bonds. The former RDA was prohibited from
entering into new agreements for the use of the 2011 bond proceeds upon enactment of AB X1 26,
shortly after the issuance of the 2011 Bonds. As such, the $5.8 million remain unexpended and is
available to be used in this refunding transaction.
The final savings amount will depend on the market interest rates in effect at the time the 2018
Bonds are priced, which is anticipated to be during the first week of October 2018. Based on the
redevelopment dissolution laws, the estimated annual savings amount (approximately $1.97 million
per year through 2028 and then $100,000 from 2029 to 2031) would be allocated towards
enforceable obligations, or shared among taxing entities as residual revenues.
FUTURE ACTIONS
Upon approval by the Successor Agency, the Oversight Board Resolution will be sent to the State
Department of Finance ("DOF") for review. The DOF has up to 60 days to review the Oversight
Board Resolution and the issuance of the 2018 Bonds by the Successor Agency. Upon DOF
approval, staff will evaluate the market conditions and determine if the rates are still favorable for
a refunding. If the rates are still favorable, staff will present the financing team agreements for
Agency consideration.
Based on the timing of the DOF review period, it is anticipated that the Successor Agency will be
pricing the 2018 Bonds in the first week of October 2018, with bond closing scheduled for the third
week of October 2018. Upon bond closing, the 2003A & B bonds will be defeased. The net bond
proceeds necessary to redeem the outstanding 2011 A Bonds will be placed into an escrow account
with the Escrow Agent, to be used to pay remaining principal and interest payments on the 2011A
Bonds through the first call date of March 1, 2021, at which time the remaining escrow balance will
be used to redeem all outstanding 2011A Bonds.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's effort to meet Goal #4 — City Financial Stability, Objective
#2 — (Provide a reliable five-year financial forecast that ensures financial stability in accordance
with the strategic_ plan), Strategy D (Conduct an assessment of the City's debt and refinancing
options to achieve savings).
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Resolution Authorizing the Refunding
of 2003 A & B and 2011 Tax Allocation Bonds
July 17, 2018
Page 3
FISCAL IMPACT
All costs associated with this transaction will be paid at closing with proceeds from the refunding
2018 Bonds. The proposed 2018 Bonds will generate an estimated total debt service savings of
$18.6 million net of all costs related to the issuance of the debt. An estimated 20% of the savings
will be obtained in the City's General Fund with the balance going to the local school district and
other governmental entities.
Steven Mendoza Francisco Gutierrez
Executive Director Executive Director
Community Development Agency Finance and Management Services Agency
Exhibits: 1. Successor Agency Resolution
2. Indenture of Trust
3. Bond Purchase Agreement
4. Continuing Disclosure Certificate
5. Escrow Agreement
6. Savings Analysis
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EXHIBIT 1
RESOLUTION NO. _
RESOLUTION OF THE SUCCESSOR AGENCY TO THE
COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF SANTA ANA AUTHORIZING THE ISSUANCE OF
ITS SUCCESSOR AGENCY TO THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF SANTA
ANA, TAX ALLOCATION REFUNDING BONDS (MERGED
PROJECT AREA), SERIES 2018; APPROVING A FORM OF
INDENTURE, A FORM OF ESCROW AGREEMENT, A
FORM OF BOND PURCHASE AGREEMENT AND A FORM
OF CONTINUING DISCLOSURE CERTIFICATE; MAKING
CERTAIN DETERMINATIONS RELATING THERETO;
AND AUTHORIZING CERTAIN OTHER ACTION IN
CONNECTION THEREWITH
WHEREAS, pursuant to the Community Redevelopment Law (Part 1 of Division 24 of
the Health and Safety Code of the State of California and referred to herein as the "Law"), the City
Council of the City of Santa Ana (the "City") created the former Community Redevelopment
Agency of the City of Santa Ana (the "Former RDA" );
WHEREAS, the Former RDA was a redevelopment agency, a public body, corporate and
politic duly created, established and authorized to transact business and exercise its powers, all
under and pursuant to the Law, and the powers of such agency included the power to issue bonds
for any of its corporate purposes;
WHEREAS, the Former RDA adopted six redevelopment project areas between 1973 and
1989, including the Central City Redevelopment Project Area, the Inter -City Commuter Station
Redevelopment Project Area, the North Harbor Boulevard Redevelopment Project Area, the South
Harbor Boulevard/Fairview Street Redevelopment Project Area, the South Main Street
Redevelopment Project Area, and the Bristol Corridor Redevelopment Project Area (the
"constituent Redevelopment Projects" or "Redevelopment Projects"), each of which was adopted
and approved in accordance with the Law;
WHEREAS, to allow tax increment revenues to be shared between Redevelopment
Projects and thereby facilitate redevelopment of the Redevelopment Projects, the Redevelopment
Projects were merged in 2004 in compliance with all requirements of the Law, creating the Merged
Project Area;
WHEREAS, the Merged Plan contemplated that the Former RDA would issue its bonds
to finance and/or refinance a portion of the cost of such redevelopment;
WHEREAS, California Assembly Bill No. 26 (First Extraordinary Session) ("ABX1 26")
adopted on June 28, 2011, dissolved all redevelopment agencies and community development
agencies in existence in the State of California, as of February 1, 2012, and designated "successor
agencies" and "oversight boards" to satisfy "enforceable obligations" of the former redevelopment
agencies and administer dissolution and wind down of the former redevelopment agencies;
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WHEREAS, the City agreed to serve as the successor agency (referred to herein as the
"Successor Agency") to the Former RDA commencing upon the dissolution of the Former RDA
on February 1, 2012 pursuant to ABX1 26;
WHEREAS, on June 27, 2012 as part of the Fiscal Year 2012-2013 State of California
budget bill, the Governor signed into law Assembly Bill 1484 ("AB 1484"), which modified or
added to some of the provisions of ABX1 26, including provisions related to the refunding of
outstanding redevelopment agency bonds and the expenditure of remaining bond proceeds derived
from redevelopment agency bonds issued on or before December 31, 2010;
WHEREAS, in 2003, the Former RDA issued and sold $20,945,000 aggregate principal
amount of its Community Redevelopment Agency of the City of Santa Ana, South Main Street
Redevelopment Project, Tax Allocation Bonds, Series 2003A, of which $12,545,000 aggregate
principal amount will be outstanding as of September 2, 2018 (the "Series 2003A Bonds"), and
$34,145,000 aggregate principal amount of its Community Redevelopment Agency of the City of
Santa Ana, South Main Street Redevelopment Project, Tax Allocation Refunding Bonds, Series
2003B, of which $2,820,000 aggregate principal amount will be outstanding as of September 2,
2018 (the "Series 2003B Bonds" and, together with the Series 2003A Bonds, the "2003 Bonds"),
pursuant to a First Supplement to Indenture with respect to the Series 2003A Bonds, dated as of
April 1, 2003 (the "2003 First Supplement'), and a Second Supplement to Indenture with respect
to the Series 2003B Bonds, dated as of May 1, 2003 (the "2003 Second Supplement'), each by
and between the Former RDA and BNY Western Trust Company (now known as The Bank of
New York Mellon Trust Company, N.A.), as successor trustee (the "2003 Trustee") and each
supplementing that Indenture dated as of August 1, 1993, by and between the Former RDA and
Dai-Ichi Kangyo Bank of California (the "1993 Indenture" and, as supplemented and amended by
the 2003 First Supplement and the 2003 Second Supplement, the "2003 Indenture"), secured by
and payable from tax increment revenues allocated to the South Main Street Redevelopment
Project, and which 2003 Bonds are subject to optional redemption at any time at a redemption
price equal to the outstanding principal amount thereof, plus interest due thereon to the date fixed
for redemption, without premium;
WHEREAS, on February 4, 2011, the Former RDA issued and sold $66,790,000 aggregate
principal amount of its Community Redevelopment Agency of the City of Santa Ana Tax
Allocation Bonds (Merged Project Area), 2011 Series A, of which $64,840,000 aggregate principal
amount will be outstanding as of September 2, 2018 (the "Series 2011 Bonds" and, together with
the Series 2003 Bonds, the "Refunded Bonds"), pursuant to an Indenture of Trust, dated as of
February 1, 2011 (the "2011 Indenture"), between the Former RDA and The Bank of New York
Mellon Trust Company, N.A., as trustee, which Series 2011 Bonds are subject to refunding and
defeasance in accordance with the 2011 Indenture but are not subject to optional redemption until
March 1, 2021 and are therefore not eligible for a tax-exempt advance refunding;
WHEREAS, there is approximately $5;831,788.68 of unspent proceeds of the Series 2011
Bonds which will be applied subject to Section 34191.4(c)(2) of the Health and Safety Code of the
State of California and as approved by the Department of Finance, and depending on the
determination of the Department of Finance, the balance of unspent proceeds of the Series 2011
Bonds will be applied to the defeasance of the Series 2011 Bonds;
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WHEREAS, Health & Safety Code Section 34177.5(a)(1) authorizes successor agencies
to refund outstanding bonds provided that (i) the total interest cost to maturity on the refunding
bonds or other indebtedness plus the principal amount of the refunding bonds or other indebtedness
shall not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to
be refunded plus the remaining principal of the bonds or other indebtedness to be refunded, and
(ii) the principal amount of the refunding bonds or other indebtedness shall not exceed the amount
required to defease the refunded bonds or other indebtedness, to establish customary debt service
reserves, and to pay related costs of issuance;
WHEREAS, Senate Bill 1029 (Chapter 307 of the 2015-2016 Session of the California
Legislature) ("SB 1029") amended Government Code Section 8855 to require a debt policy to be
adopted by local agency issuers of public debt for any financings completed on or after January
21, 2017 and the City Council, acting as Successor Agency, wishes to specify debt management
policies to guide the Successor Agency, its officers and staff regarding the issuance of Successor
Agency debt;
WHEREAS, on February 8, 2018, the City Council adopted a Debt Management Policy
for the City, the Santa Ana Financing Authority and the Successor Agency (the "Debt Management
Policy"), in the form presented at this meeting, that complies with Government Code Section
8855(1), and the Successor Agency wishes to adopt the terms of the Debt Management Policy as
its local debt policies, and the Successor Agency's sale and issuance of the Refunding Bonds as
contemplated by this Resolution is in compliance with the Debt Management Policy;
WHEREAS, the Successor Agency has solicited a report of an independent financial
advisor entitled Bond Refunding Savings Analysis (a copy of which is presented at this meeting)
and employed such advisor in developing financing proposals for consideration by the Successor
Agency and it is understood that such report, as it may be further revised, may be made available
to the Department of Finance at its request;
WHEREAS, the Successor Agency has determined to issue not to exceed $80,000,000
aggregate principal amount of its Successor Agency to the Community Redevelopment Agency of
the City of Santa Ana, Tax Allocation Refunding Bonds (Merged Project Area), Series 2018 in
two series, one federally tax exempt and one federally taxable, and with such other name and series
designation as is deemed appropriate (the "Refunding Bonds"), for the purpose of (i) refinancing
certain redevelopment activities of the Former RDA through the refunding of the Refunded Bonds,
(ii) paying the costs of issuing the Refunding Bonds, (iii) funding a Reserve Account as may be
required for the Refunding Bonds and (iv) if advisable, paying for the cost of municipal bond
insurance and/or a surety to fund the Reserve Account for the Refunding Bonds;
WHEREAS, the Refunding Bonds will be issued, payable from amounts on deposit in the
Redevelopment Property Tax Trust Fund of the Agency (the "RPTTF") and allocated to the
Agency's Redevelopment Obligation Retirement Fund, pursuant to an Indenture of Trust (the
"Indenture"), by and between the Successor Agency and The Bank of New York Mellon Trust
Company, N.A., as trustee (the "Trustee");
WHEREAS, Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California
Legislature) ("SB 450") requires that the Successor Agency obtain from an underwriter, municipal
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advisor or private lender and disclose, prior to authorization of the issuance of bonds, including
debt instruments such as the Refunding Bonds, with a tern of greater than 13 months, good faith
estimates of the following information in a meeting open to the public: (a) the true interest cost of
the Refunding Bonds, (b) the sum of all fees and charges paid to third parties with respect to the
Refunding Bonds, (c) the amount of proceeds of the Refunding Bonds expected to be received net
of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded
with proceeds of the Refunding Bonds, and (d) the sum total of all debt service payments on the
Refunding Bonds calculated to the final maturity of the Refunding Bonds plus the fees and charges
paid to third parties not paid with the proceeds of the Refunding Bonds;
WHEREAS, in compliance with SB 450, the Successor Agency has obtained from Urban
Futures, as the Successor Agency's municipal advisor, and the Underwriter, the required good
faith estimates and such estimates are disclosed and set forth on Exhibit A attached hereto;
WHEREAS, on June 26, 2018, the Successor Agency's Oversight Board (the "Oversight
Board") approved the issuance of the Refunding Bonds by the Successor Agency, and upon
approval by the Department of Finance of such approval by the Oversight Board, the Successor
Agency will, with the assistance of bond counsel, disclosure counsel and its financial advisor,
cause to be prepared a form of Official Statement describing the Refunding Bonds and containing
material information relating to the Refunding Bonds, the preliminary form of which will be
submitted to the Successor Agency for approval for distribution by Samuel A. Ramirez & Co., Inc.
(the "Underwriter") to persons and institutions interested in purchasing the Refunding Bonds; and
WHEREAS, there has been presented at this meeting a form of Indenture, a form of
Continuing Disclosure Certificate, a form of Escrow Agreement, and a form of Purchase Contract,
each to be executed in connection with the issuance of the Refunding Bonds;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA ANA
ACTING AS SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF SANTA ANA DOES HEREBY RESOLVE AS FOLLOWS:
1. Approval of Issuance of Refunding Bonds. The issuance of the Refunding Bonds,
in order to refinance redevelopment activity pursuant to the Merged Plan, which is permitted by
Health and Safety Code Section 34177.5(a)(1), is hereby authorized and approved. The Refunding
Bonds are authorized to be executed by the manual or facsimile signature of the Mayor of the City,
acting for the Successor Agency, and attested by the manual or facsimile signature of the Clerk of
the Council, acting for the Successor Agency. The Refunding Bonds, when so executed, are
authorized to be delivered the Trustee for authentication. The Successor Agency confirms that the
form of this Resolution, and documents approved hereunder, and Exhibit A hereto, and the Savings
Analysis presented at this meeting, are each in substantially the form presented at the June 26,
2018 meeting of the Oversight Board.
2. Approval of Indenture. The form of Indenture presented at this meeting is hereby
approved and the Mayor, the City Manager, the Executive Director - Finance & Management
Services Agency and the Clerk of the Council (each an "Authorized Officer," acting for the
Successor Agency) are each acting alone authorized and directed, for and in the name of and on
behalf of the Successor Agency, to execute, acknowledge and deliver the Indenture in substantially
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the form presented at this meeting with such changes therein as the Authorized Officer executing
the same may approve, such approval to be conclusively evidenced by the execution and delivery
thereof. The date, maturity date or dates, interest rate or rates, interest payment dates, terms of
redemption and other terms of the Refunding Bonds shall be as provided in the Indenture as finally
executed.
3. Approval of Escrow Aereement. The form of Escrow Agreement, between the
Successor Agency and The Bank of New York Mellon Trust Company, N.A. (the "Escrow
Agreement"), presented at this meeting is hereby approved and any Authorized Officer, acting
alone, is authorized and directed, for and in the name of and on behalf of the Successor Agency,
to execute, acknowledge and deliver one or more Escrow Agreements with respect to the bonds to
be refunded in substantially the form presented at this meeting with such changes therein as the
officer executing the same may approve, such approval to be conclusively evidenced by the
execution and delivery thereof.
4. Anoroval of Continuing Disclosure Certificate. The form of Continuing Disclosure
Certificate to be executed and delivered by the Successor Agency (the "Continuing Disclosure
Certificate"), presented at this meeting is hereby approved and any Authorized Officer, acting
alone, is authorized and directed, for and in the name of and on behalf of the Successor Agency,
to execute, acknowledge and deliver the Continuing Disclosure Certificate in substantially the
form presented at this meeting with such changes therein as the officer executing the same may
approve, such approval to be conclusively evidenced by the execution and delivery thereof.
5. Approval of Purchase Contract. The form of Bond Purchase Agreement; between
the Successor Agency and the Underwriter (the "Purchase Agreement"), presented at this meeting
is hereby approved and any Authorized Officer acting alone is authorized and directed, for and in
the name of and on behalf of the Successor Agency, to execute, acknowledge and deliver the
Purchase Agreement in substantially the form presented at this meeting with such changes therein
as the officer executing the same may approve, such approval to be conclusively evidenced by the
execution and delivery thereof; provided, however, that the true interest cost of the Refunding
Bonds shall not exceed 3.979%, the underwriters' discount (exclusive of original issue discount)
shall not exceed 0.38%, the maturity of the Refunding Bonds date shall not exceed the maximum
permitted under the Law, and, as required by Health & Safety Code Section 34177.5, (i) the total
interest cost to maturity on the Refunding Bonds plus the principal amount of the Refunding Bonds
shall not exceed the total remaining interest cost to maturity on the bonds to be refunded plus the
remaining principal of the bonds to be refunded, and (ii) the principal amount of the Refunding
Bonds shall not exceed the amount required to defease and refund the refunded bonds, to establish
customary debt service reserves, and to pay related costs of issuance.
6. Bond Insurance and Surety Bond. If an Authorized Officer determines that it will
be advantageous to the Successor Agency to purchase municipal bond insurance or a debt service
reserve fund surety bond with respect to some or all of the Refunding Bonds, such officer is hereby
authorized (a) to purchase such insurance or surety bond on behalf of the Successor Agency at
market rates, and (b) to make such changes to the agreements and documents relating to the
Refunding Bonds as may be needed to obtain such insurance or surety bond. In connection with
any such surety bond, each Authorized Officer is hereby severally authorized and directed to
execute and deliver an agreement on behalf of the Successor Agency, in such form as approved by
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such Authorized Officer, with the provider of such surety bond pursuant to which the Successor
Agency would agree to reimburse such provider for any draws under such surety bond and to pay
such provider any other fees and expenses related thereto as such Authorized Officer shall approve,
such approval (and the approval by the Authorized Officer of the form of such agreement) to be
conclusively evidenced by the execution and delivery of such agreement.
7. Recovery of Costs. The Successor Agency is hereby authorized to recover its costs
of issuance with respect to the Refunding Bonds including the cost of reimbursing the City for
staff time and costs spent with respect to the Refunding Bonds.
8. Approval of Debt Management Policy. With the passage of this Resolution, the
Successor Agency hereby certifies that the form of Debt Management Policy presented at this
meeting complies with Government Code Section 8855(1), and that the Refunding Bonds
authorized to be issued pursuant to this Resolution are consistent with such policy, and instructs
Orrick, Herrington & Sutcliffe LLP, as Bond Counsel, on behalf of the Successor Agency, with
respect to the Refunding Bonds issued pursuant to this Resolution, (a) to cause notices of the
proposed sale and final sale of the Refunding Bonds to be filed in a timely manner with the
California Debt and Investment Advisory Commission pursuant to Government Code Section
8855, and (b) to check, on behalf of the Successor Agency, the "Yes" box relating to such
certifications in the notice of proposed sale filed pursuant to Government Code Section 8855.
9. Good Faith Estimates of Costs of Finance. In accordance with SB 450, good faith
estimates of the following have been obtained from the Underwriter and the Municipal Advisor
and are set forth on Exhibit A attached hereto: (a) the true interest cost of the Refunding Bonds,
(b) the sum of all fees and charges paid to third parties with respect to the Refunding Bonds, (c)
the amount of proceeds of the Refunding Bonds expected to be received net of the fees and charges
paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the
Refunding Bonds, and (d) the sum total of all debt service payments on the Refunding Bonds
calculated to the final maturity of the Refunding Bonds plus the fees and charges paid to third
parties not paid with the proceeds of the Refunding Bonds.
10. Bond Issuance Services. The Bank of New York Mellon Trust Company, N.A. is
hereby appointed as Trustee and Escrow Bank, Samuel A. Ramirez & Co., Inc. is hereby appointed
as Underwriter, Orrick, Herrington and Sutcliffe LLP is hereby appointed as Bond Counsel, Best
Best & Krieger LLP is hereby appointed as Disclosure Counsel, Keyser, Marston & Associates is
hereby appointed as Fiscal Consultant and Urban Futures is hereby appointed as Financial Advisor.
Either the City Manager or the Executive Director - Finance & Management Services Agency,
acting for the Successor Agency, is authorized to execute contracts for such services and any other
related services as may be required to defease and/or refund all or a portion of the Refunded Bonds.
11. Other Acts. The officers and staff of the Successor Agency are hereby authorized
and directed, jointly and severally, to do any and all things, to execute and deliver any and all
documents, including refunding escrow agreements or instructions, which in consultation with
Orrick, Herrington & Sutcliffe LLP, the Successor Agency's bond counsel, they may deem
necessary or advisable in order to consummate the issuance, sale and delivery of the Refunding
Bonds, or otherwise effectuate the purposes of this Resolution, and any and all such actions
previously taken by such officers or staff members are hereby ratified and confirmed.
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12. Effective Date. This Resolution shall take effect upon adoption.
ADOPTED this _ day of 2018.
APPROVED AS TO FORM:
City Attorney
Um
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
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Miguel A. Pulido
Mayor
EXHIBIT 1
EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Refunding Bonds
in accordance with California Government Code Section 5852.1. Such good faith estimates have
been provided to the Successor Agency by Samuel A. Ramirez & Co., Inc., as underwriter (the
"Underwriter") and Urban Futures, as municipal advisor to the Successor Agency (the "Municipal
Advisor"), each with respect to the Refunding Bonds.
Principal Amount. The Underwriter and the Municipal Advisor have informed the
Successor Agency that, based on the Successor Agency's Savings Analysis and current market
conditions, its good faith estimate of the aggregate principal amount of the Refunding Bonds to be
sold is $80,000,000 (the "Estimated Principal Amount").
True Interest Cost of the Refunding Bonds. The Underwriter and the Municipal Advisor
have informed the Successor Agency that, assuming that the Estimated Principal Amount of the
Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation
of such estimate, its good faith estimate of the true interest cost of the Refunding Bonds, which
means the rate necessary to discount the amounts payable on the respective principal and interest
payment dates to the purchase price received for the Refunding Bonds, is 3.479%.
Finance Charge of the Refunding Bonds. The Underwriter and the Municipal Advisor have
informed the Successor Agency that, assuming that the Estimated Principal Amount of the
Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation
of such estimate, its good faith estimate of the finance charge for the Refunding Bonds, which
means the sum of all fees and charges paid to third parties (or costs associated with the Refunding
Bonds), is $1,278,564 (assuming $278,407 underwriter's discount, $700,157 municipal bond
insurance and debt service reserve policy premiums, and $300,000 additional costs of issuance).
Amount of Proceeds to be Received. The Underwriter and the Municipal Advisor have
informed the Successor Agency that, assuming that the Estimated Principal Amount of the
Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation
of such estimate, its good faith estimate of the amount of proceeds expected to be received by the
Successor Agency for sale of the Refunding Bonds, less the finance charge of the Refunding
Bonds, as estimated above, and any reserve fund funded with proceeds of the Refunding Bonds,
is $73,632,675.
Total Payment Amount. The Underwriter and the Municipal Advisor have informed the
Successor Agency that, assuming that the Estimated Principal Amount of the Refunding Bonds is
sold, and based on market interest rates prevailing at the time of preparation of such estimate, its
good faith estimate of the total payment amount, which means the sum total of all payments the
Successor Agency will make to pay debt service on the Refunding Bonds, plus the finance charge
for the Refunding Bonds, as described above, not paid with the proceeds of the Refunding Bonds,
calculated to the final maturity of the Refunding Bonds, is $88,911,277.
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The foregoing estimates constitute good faith estimates only. The actual principal amount
of the Refunding Bonds issued and sold, the true interest cost thereof, the finance charges thereof,
the amount of proceeds received therefrom and total payment amount with respect thereto may
differ from such good faith estimates due to (a) the actual date of the sale of the Refunding Bonds
being different than the date assumed for purposes of such estimates, (b) the actual principal
amount of Refunding Bonds sold being different from the Estimated Principal Amount, (c) the
actual amortization of the Refunding Bonds being different than the amortization assumed for
purposes of such estimates, (d) the actual market interest rates at the time of sale of the Refunding
Bonds being different than those estimated for purposes of such estimates, (e) other market
conditions, or (f) alterations in the Successor Agency's financing plan, or a combination of such
factors. The actual date of sale of the Refunding Bonds and the actual principal amount of
Refunding Bonds sold will be determined by the Successor Agency based on the timing of the
need for proceeds of the Refunding Bonds and other factors. The actual interest rates home by the
Refunding Bonds will depend on market interest rates at the time of sale thereof. The actual
amortization of the Refunding Bonds will also depend, in part, on market interest rates at the time
of sale thereof. Market interest rates are affected by economic and other factors beyond the control
of the Successor Agency.
A-2
4154-5855-2844.7
SA -3-13
EXHIBIT 1
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Maria D. Huizar, Clerk of the Council, do hereby attest to and certify the attached
Resolution No, to be the original resolution adopted by the City Council of the City of
Santa Ana on , 2018.
Date:
4154-5855-28443
SA -3-14
Clerk of the Council
City of Santa Ana
EXHIBIT 2
INDENTURE OF TRUST
by and between
SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF SANTA ANA
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
Dated as of [DATED DATE]
relating to
Successor Agency to the former Community Redevelopment Agency of
the City of Santa Ana
Tax Allocation Refunding Bonds
including
Series 2018A (Tax -Exempt) Series 2018B (Federally Taxable)
4150-2542-5420.3
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SA -3-15
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; EQUAL SECURITY................................................................
3
Section1.01 Definitions .....................................................................................................
3
Section 1.02 Equal Security.............................................................................................
15
ARTICLE II THE BONDS; CERTAIN PROVISIONS OF THE BONDS ...........................
16
Section 2.01 General Authorization; Bonds....................................................................
16
Section 2.02 Terms of Series 2018 Bonds.......................................................................
16
Section 2.03 Form of Series 2018 Bonds........................................................................
18
Section 2.04 Redemption of Series 2018 Bonds..............................................................
18
Section 2.05 Notice of Redemption.................................................................................
18
Section 2.06 Selection of Bonds for Redemption............................................................
18
Section 2.07 Payment of Redeemed Bonds.....................................................................
19
Section 2.08 Purchase in Lieu of Redemption.................................................................
19
Section 2.09 Execution of Bonds.....................................................................................
19
Section 2.10 Transfer of Bonds.......................................................................................
20
Section 2.11 Exchange of Bonds.....................................................................................
20
Section 2.12 Use of Depository.......................................................................................
20
Section 2.13 Bond Registration Books............................................................................
22
Section 2.14 Mutilated, Destroyed, Stolen or Lost Bonds ...............................................
22
Section 2.15 Validity of Bonds........................................................................................
23
ARTICLE III APPLICATION OF PROCEEDS OF BONDS .................................................
23
Section 3.01 Application of Proceeds of Sale of Series 2018 Bonds -Allocation
Among Funds and Accounts................................................................................
23
ARTICLE IV ISSUANCE OF ADDITIONAL BONDS.........................................................
24
Section 4.01 Conditions for the Issuance of Additional Bonds .......................................
24
Section 4.02 Procedure for the Issuance of Additional Bonds ........................................
25
ARTICLE V TAX REVENUES; CREATION OF FUNDS ..................................................
26
Section 5.01 Pledge of Tax Revenues; Tax Increment Fund ........................................... 26
Section 5.02 Receipt and Deposit of Tax Revenues........................................................ 29
Section 5.03 Establishment and Maintenance of Accounts for Use of Moneys in
the Tax Increment Fund....................................................................................... 29
Section 5.04 Investment of Moneys in Funds and Accounts ........................................... 31
Section 5.05 2018 Reserve Policy Payment and Reimbursement Provisions ................. 32
Section 5.06 Costs of Issuance Fund............................................................................... 35
ARTICLE VI COVENANTS OF THE AGENCY.................................................................. 36
Section 6.01 Punctual Payment........................................................................................ 36
Section 6.02 Against Encumbrances................................................................................ 36
Section 6.03 Extension or Funding of Claims for Interest ............................................... 36
Section 6.04 Payment of Claims...................................................................................... 36
4150-2542-5420.3
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SA -3-16
TABLE OF CONTENTS
(continued)
Page
Section 6.05 Books and Accounts; Financial Statements ................................................ 36
Section 6.06 Protection of Security and Rights of Owners ............................................. 37
Section 6.07 Payment of Taxes and Other Charges......................................................... 37
Section 6.08 Amendment of Redevelopment Plan.......................................................... 37
Section 6.09 Tax Revenues........................................................
Section 6.10 Further Assurances ................................................
Section 6.11 Tax Covenants; Rebate Fund ................................
Section 6.12 Compliance with the Dissolution Act ...................
Section 6.13 Negative Pledge ....................................................
Section 6.14 Adverse Change in State Law ...............................
Section 6.15 Credits to Redevelopment Obligation Retirement
Section 6.16 Compliance Costs ............................
Section 6.17 Continuing Disclosure .....................
ARTICLE VII THE TRUSTEE ..........................................
.................. 37
.................. 37
.................. 37
.................. 39
.................. 40
.................. 40
.................. 40
.................. 40
.................. 40
........ 41
Section 7.01 Appointment and Acceptance of Duties .....................................................
41
Section 7.02 Duties, Immunities and Liability of Trustee ...............................................
41
Section 7.03 Merger or Consolidation.............................................................................
44
Section 7.04 Compensation.............................................................................................
45
Section 7.05 Liability of Trustee.....................................................................................
45
Section 7.06 Right to Rely on Documents.......................................................................
46
Section 7.07 Preservation and Inspection of Documents .................................................
46
Section 7.08 Indemnity for Trustee.................................................................................
46
ARTICLE VIII EXECUTION OF INSTRUMENTS BY OWNERS AND PROOF OF
OWNERSHIP OF THE BONDS...................................................................... 47
Section 8.01 Execution of Instruments; Proof of Ownership .......................................... 47
ARTICLE IX AMENDMENT OF THE INDENTURE.......................................................... 47
Section 9.01 Amendment by Consent of Owners............................................................ 47
Section 9.02 Disqualified Bonds...................................................................................... 48
Section 9.03 Endorsement or Replacement of Bonds After Amendment ....................... 49
Section 9.04 Amendment by Mutual Consent................................................................. 49
Section 9.05 Opinion of Counsel..................................................................................... 49
Section 9.06 Notice to Rating Agencies.......................................................................... 49
Section 9.07 Transcript of Proceedings to Bond Insurer ................................................. 49
ARTICLE X EVENTS OF DEFAULT AND REMEDIES OF OWNERS ............................ 49
Section 10.01 Events of Default and Acceleration of Maturities .................................... 49
Section 10.02 Application of Funds Upon Acceleration ................................................. 51
Section 10.03 Trustee to Represent Bondowners............................................................ 51
Section 10.04 Bondowners' Direction of Proceedings.................................................... 52
Section 10.05 Limitation on Bondowners' Right to Sue ................................................. 52
Section 10.06 Non-Waiver............................................................................................... 52
4150-2542-5420.3 -11-
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SA -3-17
TABLE OF CONTENTS
(continued)
Page
Section 10.07 Remedies Not Exclusive........................................................................... 53
ARTICLE XI DEFEASANCE
Section 11.01 Discharge of Indebtedness ................
Section 11.02 Bonds Deemed to Have Been Paid ...
53
..... 53
..... 54
ARTICLE XII MISCELLANEOUS.......................................................................................... 55
Section 12.01 Liability of Agency Limited to Tax Revenues .........................................
55
Section 12.02 Parties Interested Herein...........................................................................
55
Section 12.03 Unclaimed Moneys...................................................................................
56
Section 12.04 Moneys Held for Particular Bonds...........................................................
56
Section 12.05 Successor Is Deemed Included in All References to Predecessor............
56
Section 12.06 Execution of Documents by Owners........................................................
56
Section 12.07 Waiver of Personal Liability.....................................................................
57
Section 12.08 Acquisition of Bonds by Agency..............................................................
57
Section 12.09 Destruction of Cancelled Bonds...............................................................
57
Section 12.10 Content of Certificates and Reports..........................................................
57
Section 12.11 Funds and Accounts..................................................................................
57
Section 12.12 Article and Section Headings and References ..........................................
58
Section 12.13 Partial Invalidity........................................................................................
58
Section12.14 Notices......................................................................................................
58
Section 12.15 2018 Bond Insurance Policy Payment and Reimbursement
Provisions.............................................................................................................
59
Section 12.16 Bond Insurer Notice Provisions................................................................
63
Section 12.17 Bond Insurer as Third Party Beneficiary ..................................................
64
Section 12.18 California Law..........................................................................................
64
APPENDIX A FORM OF BOND............................................................................................ A-1
APPENDIX B SCHEDULE OF SEMI-ANNUAL AND ANNUAL INTEREST AND
PRINCIPAL PAYMENTS OF THE SERIES 2018 BONDS ......................... B-1
4150-2542-5420.3 -111-
40990-25
SA -3-18
THIS INDENTURE OF TRUST, dated as of [DATED DATE] (the "Indenture"), by
and between the SUCCESSOR AGENCY TO THE FORMER COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA (the "Agency"), a public
body, corporate and politic, duly organized and existing pursuant to the Community
Redevelopment Law of the State of California and THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., a national banking association organized and existing under the laws
of the United States and authorized to accept and execute trusts of the character herein set out
with a corporate trust office located in Los Angeles, California, as trustee (the "Trustee"),
WITNESSETH:
WHEREAS, pursuant to the Community Redevelopment Law (Part 1 of Division 24 of
the California Health and Safety Code and referred to herein as the "Law"), the City Council of
the City of Santa Ana (the "City") created the Community Redevelopment Agency of the City of
Santa Ana (the "Former RDA"); and
WHEREAS, the Former RDA was a redevelopment agency, a public body, corporate
and politic duly created, established and authorized to transact business and exercise its powers,
all under and pursuant to the Law, and the powers of such agency included the power to issue
bonds for any of its corporate purposes; and
WHEREAS, pursuant to California Health and Safety Code Section 34173(d), the
Successor Agency to the former Community Redevelopment Agency of the City of Santa Ana is
the successor agency established following the dissolution of the Former RDA on February 1,
2012 pursuant to Assembly Bill X126 ("AB 26"); and
WHEREAS, as provided in California Health and Safety Code Section 34173(g), the
Agency is a separate public entity from the City, which provides for its governance, and the two
entities shall not merge; and
WHEREAS, Assembly Bill No. 1484 ("AB 1484"), a follow on bill to AB Xl 26, was
enacted on June 27, 2012 and provides a mechanism to refund outstanding bonds or other
indebtedness under certain circumstances; and
WHEREAS, Senate Bill No. 107 ("AB 107"), a follow on bill to AB 26 and AB 1484,
was enacted on September 22, 2015 and provides additional terms and amendments for
operations of a successor agency; and
WHEREAS, California Health and Safety Code Section 34177.5(a) authorizes successor
agencies to refund outstanding bonds or other indebtedness provided that (i) the total interest cost
to maturity on the refunding bonds or other indebtedness plus the principal amount of the
refunding bonds or other indebtedness shall not exceed the total remaining ,interest cost to
maturity on the bonds or other indebtedness to be refunded plus the remaining principal of the
bonds or other indebtedness to be refunded, and (ii) the principal amount of the refunding bonds
or other indebtedness shall not exceed the amount required to defease the refunded bonds or
other indebtedness, to establish customary debt service reserves, and to pay related costs of
issuance; and
4150-2542-5420.3
40990-25
SA -3-19
WHEREAS, in 2003, the Former RDA issued and sold $20,945,000 aggregate principal
amount of its Community Redevelopment Agency of the City of Santa Ana, South Main Street
Redevelopment Project, Tax Allocation Bonds, Series 2003A, of which $ aggregate
principal amount is currently outstanding (the "Series 2003A Bonds"), and $34,145,000
aggregate principal amount of its Community Redevelopment Agency of the City of Santa Ana,
South Main Street Redevelopment Project, Tax Allocation Refunding Bonds, Series 2003B, of
which $ aggregate principal amount is currently outstanding (the "Series 2003B Bonds"
and, together with the Series 2003A Bonds, the "Series 2003 Bonds"), pursuant to a First
Supplement to Indenture with respect to the Series 2003A Bonds, dated as of April 1, 2003 (the
"2003 First Supplement'), and a Second Supplement to Indenture with respect to the Series
2003B Bonds, dated as of May 1, 2003 (the "2003 Second Supplement'), each by and between
the Former RDA and BNY Western Trust Company (predecessor in interest to The Bank of New
York Mellon Trust Company, N.A.), as successor trustee (the "2003 Trustee") and each
supplementing that Indenture dated as of August 1, 1993, by and between the Agency and Dai-
Ichi Kangyo Bank of California (the "1993 Indenture" and, as supplemented and amended by the
2003 First Supplement and the 2003 Second Supplement, the "2003 Indenture"), secured by and
payable from tax increment revenues allocated to the South Main Street Redevelopment Project,
and which Series 2003 Bonds are subject to optional redemption at any time at a redemption
price equal to the outstanding principal amount thereof, plus interest due thereon to the date fixed
for redemption, without premium; and
WHEREAS, in 2011, the Former RDA issued and sold $66,790,000 aggregate principal
amount of its Community Redevelopment Agency of the City of Santa Ana Tax Allocation
Bonds (Merged Project Area), 2011 Series A, of which $ aggregate principal amount is
currently outstanding (the "Series 2011 Bonds" and, together with the Series 2003 Bonds, the
"Refunded Bonds"), pursuant to an Indenture of Trust, dated as of February 1, 2011 (the "Series
2011 Indenture"), between the Former RDA and The Bank of New York Mellon Trust Company,
N.A., as trustee, which Series 2011 Bonds are subject to refunding and defeasance in accordance
with the Series 2011 Indenture but are not subject to optional redemption until March 1, 2021;
WHEREAS, the Agency has determined to refund and defease the Refunded Bonds; and
WHEREAS, the Agency has determined to issue its Successor Agency to the former
Community Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds
(Merged Project Area), Series 2018A (Tax Exempt) (the "Series 2018A Bonds") and Tax
Allocation Refunding Bonds, Series 2018B (Federally Taxable) (the "Series 2018B Bonds" and,
together with the Series 2018A Bonds, the "Series 2018 Bonds"), in order to refund the
Refunded Bonds, purchasing a Qualified Reserve Account Credit Instrument for deposit to the
reserve account for the Series 2018 Bonds and pay the costs of issuance of the Series 2018
Bonds; and
WHEREAS, the Bonds will be secured by a pledge of, and lien on, and shall be repaid
from Tax Revenues (as defined herein) and certain moneys deposited from time to time in the
Redevelopment Property Tax Trust Fund established pursuant to subdivision (c) of Section
34172 of the California Health and Safety Code; and
4150-2542-5420.3
40990-25
SA -3-20
WHEREAS, the Bonds will be issued and payable from amounts on deposit in the
Redevelopment Property Tax Trust Fund; and
WHEREAS, all conditions, things and acts required by law to exist, happen and be
performed precedent to and in connection with the issuance of the Series 2018 Bonds exist, have
happened and have been performed in regular and due time, form and manner as required by law,
and the Agency is now duly empowered to issue the Series 2018 Bonds;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure
the payment of the principal of, premium, if any, and the interest on all Bonds at any time issued
and outstanding under the Indenture, according to their tenor, and to secure the performance and
observance of all the covenants and conditions therein and herein set forth, and to declare the
terms and conditions upon and subject to which the Bonds are to be issued and received, and in
consideration of the premises and of the mutual covenants herein contained and of the purchase
and acceptance of the Bonds by the owners thereof, and for other valuable considerations, the
receipt of which is hereby acknowledged, the Agency does hereby covenant and agree with the
Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows:
ARTICLE I
DEFINITIONS: EOUAL SECURITY
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in
this section shall for all purposes of the Indenture and of the Bonds and of any certificate,
opinion, report, request or other document herein or therein mentioned have the meanings herein
specified.
"Additional Bonds" shall mean all tax allocation bonds of the Agency authorized and
executed pursuant to the Indenture and issued and delivered in accordance with Article IV.
"Agency" shall mean the Successor Agency to the former Community Redevelopment
Agency of the City of Santa Ana, as successor to the Former RDA in accordance with the
Dissolution Act.
"Annual Debt Service" shall mean, for each Bond Year, the sum of (a) the interest due
on the Outstanding Bonds and any Parity Debt in such Bond Year, assuming that the Outstanding
Bonds are retired as scheduled (including by reason of mandatory sinking fund redemptions),
and (b) the scheduled principal amount of the Outstanding Bonds due in such Bond Year
(including any mandatory sinking fund redemptions due in such Bond Year).
"Authorized Denomination" shall mean $5,000 principal amount of Bonds, or any
integral multiple thereof.
"Average Annual Debt Service" shall mean the average of the Annual Debt Service for
all Bond Years, including the Bond Year in which the calculation is made.
"Bond Counsel" shall mean counsel of recognized national standing in the field of law
relating to municipal bonds.
4150-2542-5420.3
40990-25
SA -3-21
["Bond Insurance Policy" and "2018 Bond Insurance Policy" have the following
meanings: "Bond Insurance Policy" shall mean, as the context suggests, each of the insurance
policies or the applicable insurance policy including, without limitation, the 2018 Bond
Insurance Policy, issued by the Bond Insurer guaranteeing the scheduled payment of principal of,
and the interest when due on, the applicable Series of Bonds. "2018 Bond Insurance Policy"
shall mean, respectively, the Municipal Bond Insurance Policy guaranteeing the scheduled
payment of principal of, and the interest when due on, the Insured Series 2018A Bonds and the
Insured Series 2018B Bonds, issued by the 2018 Bond Insurer and dated , 2018.]
["Bond Insurer" and "2018 Bond Insurer" have the following meanings: "Bond
Insurer" shall mean the issuer or issuers of a policy or policies of municipal bond insurance
obtained by the Agency to insure the payment of principal of and interest on a Series of Bonds
issued under this Indenture, when due otherwise than by acceleration, and which, in fact, are at
any time insuring such Series of Bonds. "2018 Bond Insurer" shall mean ,
or any successor thereto or assignee thereof, as insurer of the Insured Series 2018 Bonds and
issuer of the 2018 Reserve Policy.]
"Bond Register" shall mean the registration books specified as such in Section 2.13
hereof.
"Bond Year" shall mean (1) with respect to the initial Bond Year, the period from the
date the Bonds are originally delivered to and including the first succeeding September 1, and
(2) thereafter, each twelve-month period from September 2 in any calendar year to and including
September 1 in the following calendar year.
"Bonds" shall mean the Series 2018 Bonds and all Additional Bonds.
"Business Day" shall mean a day of the year on which banks in Los Angeles, California,
and any other place in which the Corporate Trust Office of the Trustee is located are not required
or authorized to remain closed and on which the New York Stock Exchange is not closed.
"City" shall mean the City of Santa Ana, California.
"Code" shall mean the Internal Revenue Code of 1986, as amended and any regulations
of the United States Department of the Treasury issued thereunder.
"Compliance Costs" shall mean those costs incurred by the Agency or the Trustee in
connection with their compliance with the Indenture and the Continuing Disclosure Agreement
that are chargeable against the Redevelopment Property Tax Trust Fund as provided in Section
5.01 and 6.16, including legal fees and charges, fees and disbursements of consultants and
professionals, raring agency fees, amounts to reimburse the Bond Insurer for draws on its Bond
Insurance Policy (including any other amounts due to the 2018 Bond Insurer), and Qualified
Reserve Account Credit Instruments, and all amounts required to be rebated to the United States
pursuant to Section 148(f) of the Code in accordance with Section 6.11 and the Tax Certificate.
"Consultant's Report" shall mean a report signed by an Independent Financial
Consultant or an Independent Redevelopment Consultant, as may be appropriate to the subject of
the report, and including:
4150-2542-5420.7 4
40990-25
SA -3-22
(1) a statement that the person or firm making or giving such report has read the
pertinent provisions of the Indenture to which such report relates;
(2) a brief statement as to the nature and scope of the examination or investigation
upon which the report is based; and
(3) a statement that, in the opinion of such person or firm, sufficient examination or
investigation was made as is necessary to enable said Independent Financial Consultant or
Independent Redevelopment Consultant to express an informed opinion with respect to the
subject matter referred to in the report.
"Continuing Disclosure Agreement" shall mean that Continuing Disclosure
Agreement, by and between the Agency and Urban Futures, Inc. as dissemination agent, dated as
of [DATED DATE], relating to the Series 2018 Bonds, as originally executed and as it may be
amended from time to time in accordance with the terms thereof.
"Corporate Trust Office" shall mean such corporate trust office of the Trustee as may
be designated from time to time by written notice from the Trustee to the Agency, initially being
such office located in Los Angeles, California except that with respect to presentation of Bonds
for registration, payment, redemption, transfer or exchange, such terms shall mean the office, or
agency of the Trustee at any particular time, its corporate trust agency business shall be
conducted, or such other office designated by the Trustee from time to time as its Corporate
Trust Office.
"Costs of Issuance Fund" shall mean the Fund by that name established pursuant to
Section 5.06 hereof.
"Costs of Issuance" shall mean all items of expense directly or indirectly payable by or
reimbursable to the Agency or the City and related to the authorization, issuance, sale and
delivery of the Bonds and the refunding of the Refunded Bonds, including but not limited to
publication and printing costs, costs of preparation and reproduction of documents, filing and
recording fees, fees and charges of the Trustee and the Escrow Agent, legal fees and charges,
fees and disbursements of consultants and professionals, rating agency fees, fees and charges for
preparation, execution, transportation and safekeeping of the Bonds and any other cost, charge or
fee in connection with the original issuance of the Bonds and the refunding of the Refunded
Bonds as provided in a Costs of Issuance invoice transmitted by the Agency (which may include
costs and expenses of the Agency and the City) to the Agency and the Trustee at the time of the
original issuance of the Bonds to be paid from proceeds of the Bonds in accordance with Section
3.01 or as provided in a Supplemental Indenture.
"County" shall mean the County of Orange, a political subdivision of the State of
California. -_.
"County Auditor -Controller" shall mean the Auditor -Controller of the County of
Orange.
"Dissolution Act" shall mean Parts 1.8 (commencing with Section 34161) and 1.85
(commencing with Section 34170) of the Law.
4150-2542-5420.3 5
40990-25
SA -3-23
"DOF" shall mean the State of California Department of Finance.
"Escrow Agent" shall mean The Bank of New York Mellon Trust Company, N.A., as
prior trustee and Escrow Agent under the Escrow Agreement.
"Escrow Agreement" shall mean the Escrow Agreement (2003 Bonds) and the Escrow
Agreement (2011 Bonds).
"Escrow Agreement (2003 Bonds)" shall mean the Irrevocable Refunding Instructions
and Agreement (Series 2003 Bonds).
"Escrow Agreement (2011 Bonds)" shall mean the Escrow Agreement by and between
the Agency and The Bank of New York Mellon Trust Company, N.A., as trustee and as Escrow
Agent thereunder.
"Expense Account" shall mean the account established pursuant to Section 5.03 hereof.
"Federal Securities" shall mean (a) non -callable direct obligations of the United States
of America ("United States Treasury Obligations"), and (b) evidences of ownership of
proportionate interests in future interest and principal payments on United States Treasury
Obligations held by a bank or trust company as custodian, under which the owner of the
investment is the real parry in interest and has the right to proceed directly and individually
against the obligor and the underlying United States Treasury Obligations are not available to
any person claiming through the custodian or to whom the custodian may be obligated.
"Fiscal Year" shall mean the period commencing on July 1 of each year after the date of
the sale and delivery of the Bonds and terminating on the next succeeding June 30, or any other
annual accounting period hereafter selected and designated by the Agency as its Fiscal Year in
accordance with the Law and with notice to the Trustee.
"Former RDA" shall mean the former Community Redevelopment Agency of the City
of Santa Ana, created by the City Council of the City.
"Indenture" shall mean this Indenture and all Supplemental Indentures.
"Independent Certified Public Accountant" shall mean any certified public accountant
or firm of such accountants duly licensed and entitled to practice and practicing as such under the
laws of the State of California, appointed and paid by the Agency, and who, or each of whom:
(1) is in fact independent and not under the 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 a member, officer or employee of the
Agency, but who may be regularly retained to make annual or other audits of the books of or
reports to the Agency.
4150-2542-5420.3
40990-25
SA -3-24
"Independent Financial Consultant" shall mean a financial consultant or firm of such
consultants generally recognized to be well qualified in the financial consulting field, appointed
and paid by the Agency and who, or each of whom:
(1) is in fact independent and not under the 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 a member, officer or employee of the
Agency, but who may be regularly retained to make annual or other reports to the Agency.
"Independent Redevelopment Consultant" shall mean a consultant or firm of such
consultants generally recognized to be well qualified in the field of consulting relating to tax
allocation bond financing by California redevelopment agencies and their successor agencies,
appointed and paid by the Agency and who, or each of whom:
(1) is in fact independent and not under the 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 a member, officer or employee of the
Agency, but who may be regularly retained to make annual or other reports to the Agency.
["Insured Series 2018 Bonds" shall mean the Insured Series 2018A Bonds and the
Insured Series 2018B Bonds.
"Insured Series 2018A Bonds" shall mean the Series 2018A Bonds maturing on
September 1, 20_ through September 1, 20 .
"Insured Series 2018B Bonds" shall mean the Series 2018B Bonds maturing on
September 1, 20_ through September 1, 20_.]
"Interest Account" shall mean the account maintained within the Tax Increment Fund
pursuant to Section 5.03 of the Indenture.
"Interest Payment Date" shall mean any March 1 or September 1 on which interest on
any Series of Bonds is scheduled to be paid, commencing 1, 20. with respect to the
Series 2018 Bonds.
"Investment Agreement" shall mean an investment agreement or guaranteed investment
contract meeting the description and the requirements contained in clause (10) of the definition
of Permitted Investments herein.
"Investment Earnings" shall mean all interest earned and any realized gains and losses
on the investment of moneys in any fund or account created by the Indenture or by any
Supplemental Indenture.
4150-2542-5420.3 7
40990-25
SA -3-25
"Law" shall mean the Community Redevelopment Law of the State of California (being
Part I of Division 24 of the California Health and Safety Code, as amended), and all laws
amendatory thereof or supplemental thereto including, without limitation, the Dissolution Act.
"Maximum Annual Debt Service" shall mean the largest Annual Debt Service for any
Bond Year, including the Bond Year in which the calculation is made.
"MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity
designated or authorized by the Securities and Exchange Commission to receive reports pursuant
to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange
Commission, filings with the MSRB are to be made through the Electronic Municipal Market
Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org.
"Officer's Certificate" shall mean a certificate signed by the Mayor, the City Manager
or the Director of Finance, acting for and on behalf of the Agency, the Executive Director of the
Agency, or the City Clerk acting for the Agency.
"Outstanding" when used as of any particular time with reference to Bonds, shall mean
(subject to the provisions of Section 9.02) all Bonds except:
(1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for
cancellation;
(2) Bonds paid or deemed to have been paid within the meaning of Section 11.02;
and
(3) Bonds in lieu of or in substitution for which other Bonds shall have been
authorized, executed, issued and delivered by the Agency pursuant to the Indenture.
"Oversight Board" shall mean the oversight board of the Agency duly constituted from
time to time pursuant to Section 34179 of the Dissolution Act.
"Owner" or "Boudowner" whenever employed herein shall mean the person in whose
name such Bond shall be registered.
"Parity Debt" shall mean any additional tax allocation bonds, notes, interim certificates,
debentures or other obligations issued by the Agency as permitted by the Indenture payable out
of Tax Revenues and ranking on a parity with the Bonds.
"Pass -Through Agreements" shall mean each pass-through agreement and tax sharing
agreement entered into by the Agency with respect to a Project Area.
"Pass Through Obligations" shall mean (i) the statutory pass-through obligations of the
Agency described under Section 33607.5 of the Law, and (ii) the Pass -Through Agreements, and
shall include amounts elected to be allocated pursuant to subdivision (a) of Section 33676 and
Section 33607.7 or of the California Health and Safety Code.
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"Permitted Investments" shall mean any of the following to the extent then permitted
by the general laws of the State of California applicable to investments by local agencies
(provided that the Trustee shall be entitled to rely upon any Written Request from the Agency as
conclusive certification to the Trustee that the investments described therein are permitted by the
general laws of the State of California applicable to investments by local agencies):
(1) (a) Direct obligations (other than an obligation subject to variation in principal
repayment) of the United States of America ("United States Treasury Obligations"), (b)
obligations fully and unconditionally guaranteed as to timely payment of principal and interest
by the United States of America, (c) obligations fully and unconditionally guaranteed as to
timely payment of principal and interest by any agency or instrumentality of the United States of
America when such obligations are backed by the full faith and credit of the United States of
America, or (d) evidences of ownership of proportionate interests in future interest and principal
payments on obligations described above held by a national banking association, bank, trust
company or bank holding company as custodian, under which the owner of the investment is the
real party in interest and has the right to proceed directly and individually against the obligor and
the underlying government obligations are not available to any person claiming through the
custodian or to whom the custodian may be obligated (collectively "United States Obligations").
These include, but are not necessarily limited to:
- U.S. Treasury obligations
All direct or fully guaranteed obligations
- General Services Administration
Participation certificates
- U.S. Maritime Administration
Guaranteed Title XI financing
- Small Business Administration
Guaranteed participation certificates
- Guaranteed pool certificates
- Government National Mortgage Association (GNMA)
GNMA-guaranteed mortgage-backed securities
GNMA-guaranteed participation certificates
- U.S. Department of Housing & Urban Development
Local authority bonds
(2) Obligations of instrumentalities or agencies of the United States of America
limited to the following: (a) the Federal Home Loan Bank Board ("FHLB"); (b) the Federal
Home Loan Mortgage Corporation ("FHLMC"); (c) the Federal National Mortgage Association
(FNMA); (d) Federal Farm Credit Bank ("FFCB"); (e) Government National Mortgage
Association ("GNMA"); and (f) guaranteed portions of Small Business Administration ("SBA")
notes.
(3) Commercial paper having original maturities of not more than 270 days, payable
in the United States of America and issued by corporations that are organized and operating in
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the United States with total assets in excess of $500 million and having at the time of purchase
"A" or better rating for the issuer's long-term debt as provided by S&P and "A-1" or better
rating for the issuer's short-term debt as provided by S&P.
(4) The Orange County Treasury Pool.
(5) Bills of exchange or time drafts drawn on and accepted by a commercial bank,
otherwise known as "bankers' acceptances," having original maturities of not more than 180
days. The institution must have a minimum short-term debt rating of "P-1" by S&P, and a long-
term debt rating of no less than "A" by S&P.
(6) Shares of beneficial interest issued by diversified management companies, known
as money market funds, registered with the U.S. Securities and Exchange Commission under the
Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.) and whose fund has received
the highest possible rating from S&P and at least one other Rating Agency including funds for
which the Trustee or its affiliates receives and retains a fee for services provided to the fund,
whether as a custodian, transfer agent, investment advisor or otherwise.
(7) Certificates of deposit issued by a nationally- or state -chartered bank or a state or
federal association (as defined by Section 5102 of the California Financial Code) or by a state -
licensed branch of a foreign bank, in each case which has, or which is a subsidiary of a parent
company which has, obligations outstanding having a rating in the "A" category or better from
S&P which may include the Trustee and its affiliates.
(8) Pre -refunded municipal obligations rated "AAA" by S&P meeting the following
requirements:
(a) the municipal obligations are (i) not subject to redemption prior to
maturity or (ii) the trustee for the municipal obligations has been given irrevocable
instructions concerning their call and redemption and the issuer of the municipal
obligations has covenanted not to redeem such municipal obligations other than as set
forth in such instructions;
(b) the municipal obligations are secured by cash or United States Treasury
Obligations which may be applied only to payment of the principal of, interest and
premium on such municipal obligations;
(c) the principal of and interest on the United States Treasury Obligations
(plus any cash in the escrow) has been verified by the report of independent certified
public accountants to be sufficient to pay in full all principal of, interest, and premium, if
any, due and to become due on the municipal obligations ("Verification");
(d) the cash or United States Treasury Obligations serving as security for the
municipal obligations are held by an escrow agent or trustee in trust for owners of the
municipal obligations;
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(e) no substitution of a United States Treasury Obligation shall be permitted
except with another United States Treasury Obligation and upon delivery of a new
Verification; and
(f) the cash or United States Treasury Obligations are not available to satisfy
any other claims, including those by or against the trustee or escrow agent.
(9) Repurchase agreements which have a maximum maturity of 30 days, or due on
demand, and are fully secured at or greater than 102% of the market value plus accrued interest
by obligations of the United States Government, its agencies and instrumentalities, in accordance
with number (2) above.
(10) Investment agreements and guaranteed investment contracts with issuers having a
long-term debt rating of at least "AA-" by S&P.
(11) Local Agency Investment Fund (established under Section 16429.1 of the
California Government Code), provided that such investment is held in the name and to the
credit of the Trustee, and provided further that the Trustee may restrict such investment if
required to keep moneys available for the purposes of the Indenture.
(12) Shares in a State of California common law trust established pursuant to Title 1,
Division 7, Chapter 5 of the California Government Code which invests exclusively in
investments permitted by Section 53601 of Title 5, Division 2, Chapter 4 of the California
Government Code, as it may be amended.
"Principal Account" shall mean the account maintained within the Tax Increment Fund
pursuant to Section 5.03 of the Indenture.
"Principal Installment" shall mean, with respect to any Principal Payment Date, the
principal amount of Outstanding Bonds (including mandatory sinking fund payments) due on
such date, if any.
"Principal Corporate Trust Office" shall mean the office of the Trustee in Los
Angeles, California, except that with respect to presentation of Bonds for payment, transfer or
exchange, such term shall mean the corporate trust office, or agency of the Trustee at any
particular time its corporate trust agency business shall be conducted, or such other offices as it
shall designate from time to time.
"Principal Payment Date" shall mean any September 1 on which principal of any Series
of Bonds is scheduled to be paid, commencing on 1, 20_ with respect to the Series 2018
Bonds.
"Project Area" shall mean collectively the territory comprising the following
redevelopment projects of the Agency: (i) the Bristol Corridor Redevelopment Project,
approved by Ordinance No. NS -2039 enacted by the City Council of the City on December 4,
1989; (ii) the Central City Redevelopment Project, approved by Ordinance No. NS -1173
enacted by the City Council of the City on July 2, 1973, (iii) the Inter -City Commuter
Station Redevelopment Project, approved by Ordinance No. ,NS -1636 enacted by the City
Council of the City on July 6, 1982; the North Harbor Boulevard Redevelopment Project,
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approved by Ordinance No. NS -1637 enacted by the City Council of the City on July 6,
1982; the South Harbor Boulevard/Fairview Street Redevelopment Project, approved by
Ordinance No, NS -1639 enacted by the City Council of the City on July 6, 1982; and the
South Main Street Redevelopment Project, approved by Ordinance No. NS -1639 enacted
by the City Council of the City on July 6, 1982; in each case together with any amendments duly
authorized pursuant to the Redevelopment Law.
"Qualified Reserve Account Credit Instrument" shall mean (i) the 2018 Reserve
Policy or (ii) an irrevocable standby or direct -pay letter of credit or surety bond issued by a
commercial bank or insurance company and deposited with the Trustee pursuant to Section
5.03(d) provided that all of the following requirements are met by the Agency at the time of
delivery thereof to the Trustee: (a) S&P or Moody's has assigned a long-term credit rating to
such bank or insurance company of "A" (without regard to modifier) or higher; (b) such letter of
credit or surety bond has a term of at least twelve (12) months; (c) such letter of credit or surety
bond has a stated amount at least equal to the portion of the Reserve Account Requirement with
respect to which funds are proposed to be released pursuant to Section 5.03(d); (d) the Trustee is
authorized pursuant to the terms of such letter of credit or surety bond to draw thereunder an
amount equal to any deficiencies which may exist from time to time in the Interest Account, the
Principal Account or the Term Bonds Sinking Account for the purpose of making payments
required pursuant to Section 5.03(d); and (e) prior written notice is given to the Trustee before
the effective date of any such Qualified Reserve Account Credit Instrument.
"Rebate Fund" shall mean the Rebate Fund established pursuant to Section 6.11 hereof.
"Rebate Instructions" shall mean those calculations and directions required to be
delivered to the Trustee by the Agency pursuant to the Tax Certificate.
"Rebate Requirement" shall mean the Rebate Requirement defined in the Tax
Certificate.
"Recognized Obligation Payment Schedule" or "ROPS" shall mean a Recognized
Obligation Payment Schedule, setting forth the minimum payment amounts and due dates of
payments required by enforceable obligations for each fiscal year as provided in subdivision (o)
of Section 34177 of the Dissolution Act, each prepared and approved from time to time pursuant
to the Dissolution Act.
"Redevelopment Obligation Retirement Fund" shall mean the fund by that name
established pursuant to Section 34170.5(a) of the Law and administered by the Agency.
"Redevelopment Plan" shall mean the [Amended and Restated Redevelopment Plan for
the Santa Ana Merged Redevelopment Project Area], together with any amendments to such
redevelopment plan duly authorized pursuant to the Law.
"Redevelopment Property Tax Trust Fund" shall mean the fund by that name
established pursuant to Section 34170.5(b) of the Law and administered by the County Auditor -
Controller.
"Refunded Bonds" shall have the meaning set forth in the whereas clauses above.
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"Regulations" shall mean temporary and permanent regulations promulgated or
applicable under Section 103 and all related provisions of the Code.
"Related Documents" shall mean the Indenture and any other document executed by the
Agency in connection with the issuance of the Series 2018 Bonds including, without limitation,
the Series 2018 Bonds issued hereunder.
"Reserve Account" shall mean the account maintained within the Tax Increment Fund
pursuant to Section 5.03 of the Indenture
"Reserve Account Requirement" shall mean as of the date of any calculation, with
respect to all Outstanding Bonds an amount equal to the lesser of (i) the Maximum Annual Debt
Service attributable to the Outstanding Bonds or (ii) 125% of Average Annual Debt Service
attributable to the Outstanding Bonds; provided however, that the Reserve Account Requirement
when issuing a new Series of Bonds shall be the lesser of (i) or (ii) above, but limited to the
addition to the Reserve Account of no more than 10% of the proceeds from the sale of such new
Series of Bonds.
"Responsible Officer" shall mean any Vice -President, Assistant Vice President, Trust
Officer or other officer of the Trustee having regular responsibility for corporate trust matters.
"ROPS Payment Period" shall mean a ROPS Period; provided, that if the Dissolution
Act is hereafter amended such that each ROPS Period covers a fiscal period of a different length,
then "ROPS Payment Period" shall mean the period during which moneys distributed on a
RPTTF Distribution Date are permitted to be expended under the Dissolution Act, as amended.
"ROPS Period" shall mean each annual period from July 1 to June 30, inclusive, as
provided in subdivision (o) of Section 34177 of the Dissolution Act; provided, that if the
Dissolution Act is hereafter amended such that each ROPS covers a fiscal period of a different
length, then "ROPS Period" shall mean such other applicable period established under the
Dissolution Act, as amended.
"RPTTF" or "Redevelopment Property Tax Trust Fund" shall mean the fund by that
name established pursuant to Health and Safety Code Section 34170.5(b) and administered by
the County Auditor -Controller.
"RPTTF Distribution Date" shall mean each January 2 and June 1, as specified in
Section 34183 of the Dissolution Act, on which the County Auditor -Controller allocates and
distributes to the Agency monies from the RPTTF for payment on enforceable obligations
pursuant to an approved ROPS.
"Securities Depository" shall mean, initially, The Depository Trust Company, New
York, N.Y., or, in accordance with then -current guidelines of the Securities and Exchange
Commission, such other securities depositories, or no such depositories, as designated by the
Trustee.
"Serial Bonds" shall mean Bonds for which no Sinking Account Installments are
provided.
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"Series" shall mean each initial series of Series 2018 Bonds executed, authenticated and
delivered and identified pursuant to the Indenture as the Series 2018A Bonds and the Series
2018B and any Additional Bonds issued pursuant to a Supplemental Indenture and identified as a
separate series of Bonds.
["Series 2011 Indenture" shall mean the Indenture, dated as of February 1, 2011,
between the Former RDA and The Bank of New York Mellon Trust Company, N.A., as
successor trustee.]
["Series 2011 Bonds" shall mean the outstanding Community Redevelopment Agency of
the City of Santa Ana Tax Allocation Bonds (Merged Project Area), 2011 Series A.]
"Series 2018A Bonds" shall mean the Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds, Series
2018A (Tax Exempt).
"Series 2018B Bonds" shall mean the Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds, Series
2018B (Federally Taxable).
"Series 2018 Bonds" shall mean, collectively, the Series 2018A Bonds and the Series
2018B Bonds.
"Sinking Account Installment" shall mean the amount of money required to be paid by
the Agency on a Sinking Account Payment Date toward the retirement of any particular Term
Bonds on or prior to their respective stated maturities, as set forth in the Indenture.
"Sinking Account Payment Date" shall mean any September 1 on which Sinking
Account Installments on Term Bonds are scheduled to be paid, as set forth in the Indenture.
"S&P" shall mean Standard & Poor's Financial Services LLC and its successors and
assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform
the functions of a securities rating agency, then "S&P" shall be deemed to refer to any other
nationally -recognized rating agency selected by the Agency.
"Substitute Depository" shall mean the substitute depository as defined in Section 2.12.
"Supplemental Indenture" shall mean any indenture amending or supplementing the
Indenture, but only if and to the extent that such Supplemental Indenture is specifically
authorized hereunder.
"2018 Reserve Policy" shall mean the Municipal Bond Debt Service Reserve Insurance
Policy issued by the 2018 Bond Insurer and dated 2018.
"Tax Certificate" shall mean that certificate and agreement, relating to various federal
tax requirements, including the requirements of Section 148 of the Code, signed by the Agency
on the date the Tax Exempt Bonds and the Series 2018A Bonds are issued, as the same may be
amendedor supplemented in accordance with its terms.
".,
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"Tax Exempt" shall mean, with respect to interest on any obligations of a state or local
government, that such interest is excluded from the gross income of the owners thereof for
federal income tax purposes, whether or not such interest is includable as an item of tax
preference or otherwise includable directly or indirectly for purposes of calculating other tax
liabilities, including any alternative minimum tax or environmental tax under the Code.
"Tax Increment Fund" shall mean the fund established pursuant to Section 5.01 hereof.
"Tax Revenues" shall mean all taxes annually allocated and paid to the Agency pursuant
to Article 6 of Chapter 6 (commencing with Section 33670) of the Law, Section 16 of Article
XVI of the Constitution of the State and other applicable state laws and as provided in the
Redevelopment Plan available for or deposited into the RPTTF, [to the extent not payable with
respect to Pass Through Obligations, and subject to the equal and senior claims of indebtedness,
if, any.]
If, and to the extent, that the provisions of Section 34172 or paragraph (2) of subdivision
(a) of Section 34183 of the Dissolution Act are invalidated by a final judicial decision, then Tax
Revenues will include all tax revenues allocated to the payment of indebtedness pursuant to
California Health and Safety Code Section 33670 or such other section as may be in effect at the
time providing for the allocation of tax increment revenues in accordance with Article XVI,
Section 16 of the California Constitution.
"Term Bonds" shall mean Bonds which are payable on or before their specified maturity
dates from Sinking Account Installments established for that purpose.
"Term Bonds Sinking Account" shall mean the account maintained within the Tax
Increment Fund pursuant to Section 5.03 of the Indenture.
"Trustee" shall mean The Bank of New York Mellon Trust Company, N.A., appointed
by the Agency in Section 7.01 and acting with the duties and powers herein provided, and its
successors and assigns, or any other corporation or association which may at any time be
substituted in its place, as provided in Section 7.02.
"Verification Report" shall mean a report of an independent firm of nationally
recognized certified public accountants, or such other firm as shall be acceptable to the Bond
Insurer, addressed to the Agency, the Trustee and the Bond Insurer, verifying the sufficiency of
the escrow established to pay Bonds in full at maturity or on a redemption date.
"Written Request of the Agency" shall mean an instrument in writing signed by the
Mayor, the City Manager or Director of Finance, acting for and on behalf of the Agency, the
Executive Director of the Agency, or the City Clerk acting for the Agency, or by any other
officer of the Agency duly authorized by the Agency for that purpose.
Section 1.02 Equal Security. In consideration of the acceptance of the Bonds by the
Owners thereof, the Indenture shall be deemed to be and shall constitute a contract between the
Agency and the Owners from time to time of all Bonds issued hereunder and then Outstanding to
secure the full and final payment of the interest on and principal of and redemption premiums, if
any, on all Bonds authorized, executed, issued and delivered hereunder, subject to the
4150-2542-5420.3 15
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agreements, conditions, covenants and provisions herein contained; and the agreements and
covenants herein set forth to be performed on behalf of the Agency shall be for the equal and
proportionate benefit, security and protection of all Owners of the Bonds without preference,
priority or distinction as to security or otherwise of any Bonds over any other Bonds.
ARTICLE II
THE BONDS; CERTAIN PROVISIONS
OF THE BONDS
Section 2.01 General Authorization; Bonds. The Series 2018 Bonds and Additional
Bonds may be issued at any time under and subject to the terms of the Indenture. The Agency
has reviewed all proceedings heretofore taken relative to the authorization of the Series 2018
Bonds and has found, as a result of such review, and hereby finds and determines that all acts,
conditions and things required by law to exist, happen or be performed precedent to and in
connection with the issuance of the Series 2018 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
authorized, pursuant to each and every requirement of law, to issue the Series 2018 Bonds in the
manner and form provided in the Indenture. Accordingly, the Agency hereby authorizes the
issuance of the Series 2018 Bonds for the purposes set forth in the preamble of the Indenture.
Section 2.02 Terms of Series 2018 Bonds. The Series 2018 Bonds authorized to be
issued by the Agency under and subject to the terns of the Indenture and the Law shall be
designated the "Successor Agency to the former Community Redevelopment Agency of the City
of Santa Ana Tax Allocation Refunding Bonds, Series 2018A (Tax Exempt)" and shall be in the
aggregate principal amount of $XX,000,000 and the "Successor Agency to the former
Community Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds,
Series 2018B (Federally Taxable)" and shall be in the aggregate principal amount of
$YY,000,000. The Series 2018 Bonds shall be issued as fully registered bonds in denominations
of $5,000, or any integral multiple thereof (not exceeding the principal amount of such Bonds
maturing at any one time). The Bonds shall be registered initially in the name of "Cede & Co.,"
as nominee of the Securities Depository and shall be evidenced by one bond for each maturity of
Bonds in the principal amount of the respective maturities of Bonds. Registered ownership of
the Bonds, or any portion thereof, may not thereafter be transferred except as set forth herein.
Payment of interest on the Series 2018 Bonds shall be made to Cede & Co. as registered
owner, or such other person whose name appears on the bond registration books of the Trustee as
the registered owner of the Series 2018 Bonds, as of the close of business on the fifteenth (15th)
day of the calendar month preceding the Interest Payment Date (the "Record Date), or if
otherwise instructed, by check mailed to such registered owner at its address as it appears on
such books or at such other address as it may have filed with the Trustee for that purpose prior to
the Record Date.
Each Series of Series 2018 Bonds shall be numbered in consecutive numerical order from
RI upwards. Each Series of Series 2018 Bonds shall bear interest from the Interest Payment
Date next preceding the date of authentication thereof, unless such date of authentication is an
Interest Payment Date, in which event they shall bear interest from such Interest Payment Date,
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or unless such date of authentication is prior to the first Interest Payment Date, in which event
they shall bear interest from 15, 20, provided, however, that if, at the time of
authentication of any Series 2018 Bond, interest is then in default on such Series of Series 2018
Bond, such Series of Series 2018 Bond shall bear interest from the Interest Payment Date to
which interest previously has been paid or made available for payment. Interest on the Series
2018 Bonds shall be computed on the basis of a 360 -day year of twelve 30 -day months.
The Series 2018A Bonds shall be dated their date of initial delivery and shall bear interest
at the rates specified in the table below, such interest being payable on each Interest Payment
Date, and shall mature on the Principal Payment Dates in the following years in the following
principal amounts, namely:
Maturity Date Principal Interest
(September 1) Amount
Rate
2019
2020
2022
2023
2024
• Insured Series 2018A Bonds.
The Series 2018B Bonds shall be dated their date of initial delivery and shall bear interest
at the rates specified in the table below, such interest being payable on each Interest Payment
Date, and shall mature on the Principal Payment Dates in the following years in the following
principal amounts, namely:
Maturity Date Principal Interest
(September 1) Amount
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
' Insured Series 2018B Bonds.
Rate
Principal and redemption premiums, if any, on the Series 2018 Bonds shall be payable in
immediately available funds. Principal and redemption premiums, if any, and interest on the
Series 2018 Bonds shall be paid in lawful money of the United States of America.
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Section 2.03 Form of Series 2018 Bonds. The Series 2018 Bonds, the Trustee's
authentication and registration endorsement, and the assignment to appear thereon shall be
substantially in the form attached hereto as Appendix A.
Section 2.04 Redemption of Series 2018 Bonds.
(a) Optional Redemption of Series 2018A Bonds. The Series 2018A Bonds maturing
on or after September 1, 20_, are subject to optional redemption before maturity on or after
September 1, 20. at the option of the Agency, in whole or in part, on any date, at a redemption
price equal to the principal amount of the Series 2018A Bonds to be redeemed, plus accrued but
unpaid interest to the redemption date.
(b) Optional Redemption of Series 2018B Bonds. The Series 2018B Bonds are not
subject to optional redemption.
Section 2.05 Notice of Redemption. In the case of any redemption of Bonds, the
Trustee shall give notice, as hereinafter in this section provided, that Bonds, identified by serial
numbers, Series and maturity date (and interest rate in the case of bifurcated maturities), have
been called for redemption and, in the case of Bonds to be redeemed in part only, the portion of
the principal amount thereof that has been called for redemption (or if all the Outstanding Bonds
are to be redeemed, so stating, in which event such serial numbers may be omitted), that they
will be due and payable on the date fixed for redemption (specifying such date) upon surrender
thereof at the Principal Corporate Trust Office, at the redemption price (specifying such price),
together with any accrued interest to such date, and that all interest on the Bonds, the respective
series of Bonds, or portions thereof, as applicable, so to be redeemed will cease to accrue on and
after such date and that from and after such date such Bond or such portion shall no longer be
entitled to any lien, benefit or security under the Indenture, and the Owner thereof shall have no
rights in respect of such redeemed Bond or such portion except to receive payment from such
moneys of such redemption price plus accrued interest to the date fixed for redemption.
Such notice shall be mailed by first class mail, postage prepaid, at least twenty (20) but
not more than sixty (60) days before the date fixed for redemption, to the Security Depository,
the MSRB and the Owners of such Bonds, or portions thereof, so called for redemption, at their
respective addresses as the same shall last appear on the Bond Register. No notice of redemption
need be given to the Owner of a Bond to be called for redemption if such Owner waives notice
thereof in writing, and such waiver is filed with the Trustee prior to the redemption date. Neither
the failure of an Owner to receive notice of redemption of Bonds hereunder nor any error in such
notice shall affect the validity of the proceedings for the redemption of Bonds.
Any notice of redemption may be expressly conditional and may be rescinded by Written
Request of the Agency given to the Trustee not later than the date fixed for redemption. Upon
receipt of such Written Request of the Agency, the Trustee shall promptly mail notice of such
rescission to the same parties that were mailed the original notice of redemption.
Section 2.06 Selection of Bonds for Redemption. Whenever less than all the
Outstanding Bonds of any one maturity are to be redeemed on any one date, the Trustee shall
select the particular Bonds to be redeemed by lot (subject in the case of such redemption of
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Insured Series 2018 Bonds to the prior written approval of the Bond Insurer), and in selecting the
Bonds for redemption the Trustee shall treat each Bond of a denomination of more than five
thousand dollars ($5,000) as representing that number of Bonds of five thousand dollars ($5,000)
denomination which is obtained by dividing the principal amount of such Bond by five thousand
dollars ($5,000), and the portion of any Bond of a denomination of more than five thousand
dollars ($5,000) to be redeemed shall be redeemed in an Authorized Denomination. The Trustee
shall promptly notify the Agency in writing of the numbers of the Bonds so selected for
redemption in whole or in part on such date.
Section 2.07 Payment of Redeemed Bonds. If notice of redemption has been given or
waived as provided in Section 2.05, the Bonds or portions thereof called for redemption shall be
due and payable on the date fixed for redemption at the redemption price thereof, together with
accrued interest to the date fixed for redemption, upon presentation and surrender of the Bonds to
be redeemed at the office specified in the notice of redemption. If there shall be called for
redemption less than the full principal amount of a Bond, the Agency shall execute and deliver
and the Trustee shall authenticate, upon surrender of such Bond, and without charge to the
Owner thereof, Bonds of like interest rate and maturity in an aggregate principal amount equal to
the unredeemed portion of the principal amount of the Bonds so surrendered in such authorized
denominations as shall be specified by the Owner. If the Owner of the Bonds is registered to
Cede & Co., payment of the redeemed Bonds shall be made without presentment.
If any Bond or any portion thereof shall have been duly called for redemption and
payment of the redemption price, together with unpaid interest accrued to the date fixed for
redemption, shall have been made or provided for by the Agency, then interest on such Bond or
such portion shall cease to accrue from such date, and from and after such date such Bond or
such portion shall no longer be entitled to any lien, benefit or security under the Indenture, and
the Owner thereof shall have no rights in respect of such Bond or such portion except to receive
payment of such redemption price, and unpaid interest accrued to the date fixed for redemption.
Section 2.08 Purchase in Lieu of Redemption. In lieu of redemption of any Bond
pursuant to the provisions of subsection (a) of Section 2.04 or Section 5.02 hereof, amounts on
deposit in the Term Bonds Sinking Account may also be used and withdrawn by the Trustee at
any time prior to selection of Bonds for redemption having taken place with respect to such
amounts, upon a Written Request of the Agency, for the purchase of such Term Bonds at public
or private sale as and when and at such prices (including brokerage and other charges) as the
Agency may in its discretion determine, but not in excess of par plus accrued interest. Any
accrued interest payable upon the purchase of Bonds shall be paid from amounts held in the Tax
Increment Fund for the payment of interest on the next following Interest Payment Date. Any
Term Bonds so purchased shall be cancelled by the Trustee forthwith and shall not be reissued.
The principal of any Term Bonds so purchased by the Trustee in any twelve-month period
ending 60 days prior to any Sinking Account Payment Date in any year shall be credited towards
and shall reduce the principal of such Term Bonds required to be redeemed on such Sinking
Account Payment Date in such year.
Section 2.09 Execution of Bonds. The Mayor, [the City Manager, Director of Finance
or the Debt Manager], acting for and on behalf of the Agency or the Executive Director of the
Agency shall execute each of the Bonds on behalf of the Agency and the City Clerk shall attest
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each of the Bonds on behalf of the Agency. Any of the signatures of said Mayor, [the City
Manager, Director of Finance and the Debt Manager], acting for and on behalf of the Agency,
the Executive Director of the Agency and the City Clerk may be by printed, lithographed or
engraved facsimile reproduction. In case any officer whose signature appears on the Bonds shall
cease to be such officer before the delivery of the Bonds to the purchaser thereof, such signature
shall nevertheless be valid and sufficient for all purposes the same as though he had remained in
office until such delivery of the Bonds. Any Bond may be signed and attested on behalf of the
Agency by such persons as at the actual date of the execution of such Bond shall be the proper
officers of the Agency although at the nominal date of such Bond any such person may not have
been such officer of the Agency.
Except as may be provided in a Supplemental Indenture, only such of the Bonds as shall
bear thereon a certificate of authentication and registration in the form hereinbefore recited,
executed and dated by the Trustee, upon the Written Request of the Agency, shall be entitled to
any benefits under the Indenture or be valid or obligatory for any purpose, and such certificate of
the Trustee shall be conclusive evidence that the Bonds so registered have been duly issued and
delivered hereunder and are entitled to the benefits of the Indenture.
Section 2.10 Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred, upon the books required to be kept pursuant to the provisions of Section 2.12, by the
person in whose name it is registered, in person or by his duly authorized attorney, upon
surrender of such Bond at the Corporate Trust Office for cancellation, accompanied by delivery
of a duly executed written instrument of transfer in a form approved by the Trustee.
Whenever any Bond or Bonds shall be surrendered for transfer, the Agency shall execute
and the Trustee shall authenticate and deliver a new Bond or Bonds for a like aggregate principal
amount of the same Series, interest rate and maturity date (and interest rate in the case of
bifurcated maturities). The Trustee shall require the payment by the Owner requesting such
transfer of any tax or other governmental charge required to be paid with respect to such transfer.
The Trustee shall not be required to register the transfer of any Bonds during the fifteen
(15) days prior to the date of selection of the Bonds for redemption, or of any Bonds selected for
redemption.
Section 2.11 Exchange of Bonds. The Bonds may be exchanged at the Corporate Trust
Office for a like aggregate principal amount of Bonds of the same Series, interest rate and
maturity date (and interest rate in the case of bifurcated maturities) in other authorized
denominations. The Trustee shall require the payment by the Owner requesting such exchange
of any tax or other governmental charge required to be paid with respect to such exchange.
The Trustee shall not be required to exchange any Bonds during the fifteen (15) days
prior to the date -of selection of the Bonds for redemption, or of any Bonds selected for
redemption.
Section 2.12 Use of Depository. Notwithstanding any provision of the Indenture to the
contrary:
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(a) The Bonds shall be initially issued as provided in Section 2.01. Registered
ownership of the Bonds, or any portion thereof, may not thereafter be transferred except:
(i) To any successor of the Securities Depository or its nominee, or to
any substitute depository designated pursuant to clause (ii) of this subsection (a)
("Substitute Depository"); provided that any successor of the Securities
Depository or Substitute Depository shall be qualified under any applicable laws
to provide the service proposed to be provided by it;
(ii) To any Substitute Depository designated by the Agency and not
objected to by the Trustee, upon (1) the resignation of the Securities Depository or
its successor (or any Substitute Depository or its successor) from its functions as
depository or (2) a determination by the Agency that the Securities Depository or
its successor (or any Substitute Depository or its successor) is no longer able to
carry out its functions as depository; provided that any such Substitute Depository
shall be qualified under any applicable laws to provide the services proposed to be
provided by it; or
(iii) To any person as provided below, upon (1) the resignation of the
Securities Depository or its successor (or Substitute Depository or its successor)
from its functions as depository; provided that no Substitute Depository which is
not objected to by the Trustee can be obtained or (2) a determination by the
Agency that it is in the best interests of the Agency to remove the Securities
Depository or its successor (or any Substitute Depository or its successor) from its
functions as depository.
(b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection
(a) hereof, upon receipt of the Outstanding Bonds by the Trustee, together with a Written
Request of the Agency to the Trustee, a single new Bond shall be executed and delivered
in the aggregate principal amount of the Bonds then Outstanding, registered in the name
of such successor or such Substitute Depository, or their nominees, as the case may be,
all as specified in such Written Request of the Agency. In the case of any transfer
pursuant to clause (iii) of subsection (a) hereof, upon receipt of the Outstanding Bonds by
the Trustee together with a Written Request of the Agency to the Trustee, new Bonds
shall be executed and delivered in such denominations numbered in consecutive order
and registered in the names of such persons as are requested in such a Written Request of
the Agency, subject to the limitations of Section 2.02 hereof, provided the Trustee shall
not be required to deliver such new Bonds within a period less than sixty (60) days from
the date of receipt of such a Written Request of the Agency.
(c) In the case of partial redemption or an advance refunding of the Bonds
evidencing all or a portion of the principal amount Outstanding, the Securities Depository
shall make an appropriate notation on the Bonds indicating the date and amounts of such
reduction in principal, in form acceptable to the Trustee.
(d) The Agency and the Trustee shall be entitled to treat the person in whose
name any Bond is registered as the Owner thereof for all purposes of the Indenture and
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any applicable laws, notwithstanding any notice to the contrary received by the Trustee or
the Agency; and the Agency and the Trustee shall have no responsibility for transmitting
payments to, communication with, notifying, or otherwise dealing with any beneficial
owners of the Bonds. Neither the Agency nor the Trustee will have any responsibility or
obligations, legal or otherwise, to the beneficial owners or to any other party including
the Securities Depository or its successor (or Substitute Depository or its successor),
except for the Owner of any Bond.
(e) So long as the outstanding Bonds are registered in the name of Cede &
Co. or its registered assign, the Agency and the Trustee shall cooperate with Cede & Co.,
as sole registered Owner, and its registered assigns in effecting payment of the principal
of and redemption premium, if any, and interest on the Bonds by arranging for payment
in such manner that funds for such payments are properly identified and are made
immediately available on the date they are due.
Section 2.13 Bond Registration Books. (a) The Trustee will keep or cause to be kept
sufficient books for the registration and transfer of the Bonds, which shall at all times, upon
reasonable notice, be open to inspection by any Bondowner or his agent duly authorized in
writing or the Agency; and, upon presentation for such purpose, the Trustee shall, under such
reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred, on such books, Bonds as hereinbefore provided.
(b) The person in whose name any Bond shall be registered shall be deemed the
owner thereof for all purposes thereof, and payment of or on account of the principal of, and the
interest on or redemption price of by such Bond shall be made only to or upon the order in
writing of such Owner, which payment shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid.
(c) Upon initial issuance of the Bonds, the ownership of all such Bonds shall be
registered in the registration records maintained by the Trustee pursuant to Section 2.12 in the
name of Cede & Co.
Section 2.14 Mutilated, Destroyed, Stolen or Lost Bonds. In case any Bond shall
become mutilated, or shall be believed by the Agency or the Trustee to have been destroyed,
stolen or lost, upon proof of ownership satisfactory to the Trustee, and upon the surrender of
such mutilated Bond at the Corporate Trust Office or upon the receipt of evidence satisfactory to
the Trustee of such destruction, theft or loss, and upon receipt also of indemnity for the Trustee
and the Agency satisfactory to the Trustee, and upon payment by the Owner of all expenses
incurred by the Agency and the Trustee, the Agency shall execute and the Trustee shall
authenticate and deliver at said office a new Bond or Bonds of the same Series and maturity and
for the same aggregate principal amount, of like tenor and date, bearing the same number or
numbers, with such notations as the Trustee shall determine, in exchange and substitution for and
upon cancellation of the mutilated Bond, or in lieu of and in substitution for the Bond so
destroyed, stolen or lost.
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If any such destroyed, stolen or lost Bond shall have matured or shall have been called
for redemption, payment of the amount due thereon may be made by the Agency or the Trustee
upon receipt of like proof, indemnity and payment of expenses.
Any such replacement Bonds issued pursuant to this section shall be entitled to equal and
proportionate benefits with all other Bonds issued hereunder. The Agency and the Trustee shall
not be required to treat both the original Bond and any duplicate Bond as being Outstanding for
the purpose of determining the principal amount of Bonds which may be issued hereunder or for
the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original
and replacement Bond shall be treated as one and the same.
Section 2.15 Validity of Bonds. The validity of the authorization and issuance of the
Bonds shall not be affected in any way by any proceedings taken by the Agency for the financing
or refinancing of any redevelopment project financed with proceeds of the Refunded Bonds, or
by any contracts made by the Agency in connection therewith, and shall not be dependent upon
the completion of the financing such redevelopment project or upon the performance by any
person of his obligation with respect to such redevelopment project, and the recital contained in
the Bonds that the same are issued pursuant to the Law shall be conclusive evidence of their
validity and of the regularity of their issuance.
ARTICLE III
APPLICATION OF PROCEEDS OF BONDS
Section 3.01 Application of Proceeds of Sale of Series 2018 Bonds—Allocation
Among Funds and Accounts. The proceeds of the sale of the Series 2018 Bonds shall be
deposited with the Trustee and shall be held in trust and set aside or transferred by the Trustee as
set forth below:
The proceeds (net of an allocable portion of underwriter's discount [and a proportionate
cost of the premiums paid to the 2018 Bond Insurer for its 2018 Reserve Policy and 2018 Bond
Insurance Policy)] of the sale of the Series 2018A Bonds shall be deposited with the Trustee and
shall be held in trust and set aside or transferred by the Trustee as follows:
(a) The Trustee shall deposit in the Reserve Account established pursuant to
Section 5.03(d) hereof the 2018 Reserve Policy;
(b) The Trustee shall transfer $ to the Escrow Agent for deposit
into the trust account established in the "Refunding Escrow," as provided in the "Escrow
Agreement (2003 Bonds); and
. (c) The Trustee shall transfer $ to the Costs of Issuance Fund
for the payment of the Costs of Issuance allocable to the Series 2018A Bonds.
The proceeds (net of an allocable portion of underwriter's discount [and a proportionate
cost of the premiums paid to the 2018 Bond Insurer for its 2018 Reserve Policy and 2018 Bond
Insurance Policy)] of the sale of the Series 2018B Bonds shall be deposited with the Trustee and
shall be held in trust and set aside or transferred by the Trustee as follows:
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(a) [The Trustee shall transfer $ to the Escrow Agent for
deposit into the trust account established in the "Refunding Escrow," as provided in the
Escrow Agreement (2003 Bonds); and]
(b) The Trustee shall transfer $ to the Escrow Agent for
deposit into the trust account established in the "Refunding Escrow," as provided in the
Escrow Agreement (2011 Bonds); and
(c) The Trustee shall transfer $ to the Costs of Issuance
Fund for the payment of the Costs of Issuance allocable to the Series 2018B Bonds.
The Trustee may establish and use temporary funds or accounts in its records to facilitate
and record such deposits and transfers.
ARTICLE IV
ISSUANCE OF ADDITIONAL BONDS
Section 4.01 Conditions for the Issuance of Additional Bonds. The Agency may at
any time after the issuance and delivery of the Series 2018 Bonds hereunder issue Additional
Bonds hereunder payable from the Tax Revenues and secured by a lien and charge upon the Tax
Revenues equal to and on a parity with the lien and charge securing the Outstanding Bonds
theretofore issued under the Indenture, for the purpose of refunding bonds or other indebtedness
of the Agency or the Former RDA (including, without limitation, refunding Bonds outstanding
under the Indenture) in accordance with the Law, including payment of all costs incidental to or
connected with such refunding or providing for the funding of related reserves, but only subject
to the following specific conditions, which are hereby made conditions precedent to the issuance
of any such Additional Bonds:
(a) A Written Request of the Agency shall have been filed with the Trustee
containing a statement to the effect that the Agency shall be in compliance with all
covenants set forth in the Indenture and any Supplemental Indentures, and no Event of
Default shall have occurred and be continuing.
(b) The issuance of such Additional Bonds shall have been duly authorized
pursuant to the Law and all applicable laws, and the issuance of such Additional Bonds
shall have been provided for by a Supplemental Indenture; which shall specify the
following:
(i) The authorized principal amount of such Additional Bonds;
(ii) The date and the maturity date or dates of such Additional Bonds;
provided that (i) Principal Payment Dates and Sinking Account Payment Dates
may occur only on Interest Payment Dates, and (ii) fixed serial maturities or
mandatory Sinking Account Installments, or any combination thereof, shall be
established to provide for the retirement of all such Additional Bonds on or before
their respective maturity dates;
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(iii) The Interest Payment Dates for such Additional Bonds; provided
that Interest Payment Dates shall be on the same semiannual dates as the Interest
Payment Dates for Series 2018 Bonds;
(iv) The denomination and method of numbering of such Additional
Bonds;
(v) The redemption premiums, if any, and the redemption terms, if
any, for such Additional Bonds;
(vi) The amount and due date of each mandatory Sinking Account
Installment, if any, for such Additional Bonds;
(vii) The amount, if any, to be deposited from the proceeds of such
Additional Bonds in the Reserve Account; provided that the amount deposited in
or credited to such Reserve Account shall be increased at or prior to the time such
Additional Bonds become Outstanding to an amount at least equal to the Reserve
Account Requirement on all then Outstanding Bonds and such Additional Bonds,
and that an amount at least equal to the Reserve Account Requirement on all
Outstanding Bonds shall thereafter be maintained in or credited to such Reserve
Account;
(viii) The form of such Additional Bonds; and
(ix) Such other provisions, as are necessary or appropriate and not
inconsistent with the Indenture.
(c) Such Additional Bonds may be issued only for the purpose of refunding
bonds or other indebtedness of the Agency or its Former RDA (including, without
limitation, refunding Bonds outstanding under the Indenture) in accordance with the Law,
including payment of all costs incidental to or connected with such refunding and funding
or providing for the funding of related reserves, and the payment of all costs incidental to
or connected with such refunding, provided that the issuance of such Additional Bonds
shall comply with the terms of California Health and Safety Code Section 34177.5.
Nothing contained in the Indenture shall limit the issuance of any tax increment
bonds or other obligations of the Agency secured by a lien and charge on Tax Revenues
junior to that of the Bonds.
Section 4.02 Procedure for the Issuance of Additional Bonds. All of the Additional
Bonds shall be executed by the Agency for issuance under the Indenture and delivered to the
Trustee and thereupon shall be delivered by the Trustee upon the Written Request of the Agency,_
but only upon receipt by the Trustee of the following documents or money or securities:
(a) A certified copy of the Supplemental Indenture authorizing the issuance of
such Additional Bonds;
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(b) A Written Request of the Agency as to the authentication and delivery of
such Additional Bonds;
(c) An opinion of Bond Counsel to the effect that (1) the Agency has the right
and power under the Law to enter into the Indenture and all Supplemental Indentures
thereto, and the Indenture and all such Supplemental Indentures have been duly executed
by the Agency and are valid and binding upon the Agency and enforceable against the
Agency in accordance with their terms (except as enforcement may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement
of creditors' rights, by application of equitable principles and by exercise of judicial
discretion in appropriate cases), and no other authorization for the Indenture or such
Supplemental Indentures is required; (2) the Indenture creates the valid pledge which it
purports to create of the Tax Revenues as provided in the Indenture, subject to the
application thereof to the purposes and on the conditions permitted by the Indenture; and
(3) such Additional Bonds are valid and binding special obligations of the Agency,
enforceable in accordance with their terms (except as enforcement may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement
of creditors' rights, by application of equitable principles and by exercise of judicial
discretion in appropriate cases) and the terms of the Indenture and all Supplemental
Indentures thereto and entitled to the benefits of the Indenture and all such Supplemental
Indentures and the Law, and such Additional Bonds have been duly and validly
authorized and issued in accordance with the Law and the Indenture and all such
Supplemental Indentures;
(d) A Written Request of the Agency containing such statements as may be
reasonably necessary to show compliance with the requirements of the Indenture; and
(e) Such further documents, money and securities as are required by the
provisions of the Indenture and the Supplemental Indenture providing for the issuance of
such Additional Bonds.
ARTICLE V
TAX REVENUES; CREATION OF FUNDS
Section 5.01 Pledge of Tax Revenues; Tax Increment Fund. Subject only to the
provisions of the Indenture permitting the application thereof for the purposes and on the terms
and conditions set forth herein, all of the Tax Revenues and all amounts on deposit from time to
time in the funds and accounts established hereunder (other than the Expense Account and the
Rebate Fund) are hereby pledged to the payment of the principal of and interest on the
Outstanding Bonds and any Parity Debt as provided herein. The Agency hereby irrevocably
grants to the Trustee for the benefit of the 2018 Bond Insurer, the issuer of the 2018 Reserve
Policy and the Owners of the Outstanding Bonds a first charge and lien on, and a security interest
in, and hereby pledges and assigns, the Tax Revenues, whether held by the Agency, the County
Auditor -Controller or the Trustee, and all amounts in the funds and accounts established
hereunder (other than the Expense Account and the Rebate Fund), including the "Successor
Agency to the former Community Redevelopment Agency of the City of Santa Ana Tax
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Increment Fund" (hereinafter called the "Tax Increment Fund'), which is hereby created by the
Agency and which fund the Agency hereby covenants and agrees to maintain with the Trustee so
long as any Bonds shall be Outstanding hereunder or amounts are owed to the 2018 Bond Insurer
or the issuer of the 2018 Reserve Policy, to the Trustee for the benefit of the 2018 Bond Insurer,
the issuer of the 2018 Reserve Policy and the Owners of the Outstanding Bonds.
Notwithstanding the foregoing, there shall not be deposited with the Trustee for deposit
in the Tax Increment 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
Trustee in the Tax Increment Fund and the accounts therein, shall be sufficient to discharge all
Outstanding Bonds as provided in Article X hereof. No additional bonds payable from Tax
Revenues on a basis senior to or on a parity with the Bonds will be issued except pursuant to
Article IV of the Indenture.
The Agency covenants and agrees that all Tax Revenues when and as received, will be
received by the Agency in trust hereunder and will be transferred to the Trustee within a
reasonable period of time from the receipt by the Agency thereof, for deposit by the Trustee in
the Tax Increment Fund and will be accounted for through and held in trust in the Tax Increment
Fund, and the Agency shall have no beneficial right or interest in any of such money, except only
as specifically provided otherwise in the Indenture. All such Tax Revenues, whether received by
the Agency and held in trust pending transfer or deposited with the Trustee, all as herein
provided, shall nevertheless be disbursed, allocated and applied solely to the uses and purposes
hereinafter set forth in the Indenture, and shall be accounted for separately and apart from all
other money, funds, accounts or other resources of the Agency. Any Tax Revenues received by
the Trustee in the Tax Increment Fund (other than amounts deposited in the Reserve Account) in
excess of the amounts required to be held by the Trustee in the Tax Increment Fund shall be
released from the pledge and lien hereunder and transferred to the Agency and may be used for
any lawful purpose of the Agency.
Pursuant to the laws of the State of California, including California Health and Safety
Code Sections 34183 and 34170.5(b), the County Auditor -Controller is obligated to deposit the
Tax Revenues into the Redevelopment Property Tax Trust Fund. In furtherance of this Section
5.01 and the Dissolution Act, and in accordance with the County Auditor -Controller's
obligations as set forth in California Health and Safety Code Section 34183, the Agency shall
take all steps to ensure that the County Auditor -Controller (1) deposits the Tax Revenues into the
Redevelopment Property Tax Trust Fund, (2) allocates funds for the principal and interest
payments due on the Outstanding Bonds and any Parity Debt and any deficiency in the Reserve
Account (including amounts due to the issuer of the 2018 Reserve Policy) pursuant to each valid
Recognized Obligation Payment Schedule in accordance with the Dissolution Act and as
provided in this Section 5.01, and (3) make the transfers to the Trustee required under Section
5.02 of the Indenture.
The Agency will take all actions required under the Dissolution Act to include on its
ROPS the amounts described below to be transmitted to the Trustee for the applicable ROPS
Period in order to satisfy the requirements of the Indenture, including any amounts required to
pay principal and interest payments due on Outstanding Bonds and any Parity Debt, any
Compliance Costs, any deficiency in the Reserve Account to the full amount of the Reserve
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Account Requirement (including amounts due to the issuer of the 2018 Reserve Policy). The
Agency shall submit an Oversight Board -approved ROPS to the County Auditor -Controller and
the Department of Finance on or before February 1 with respect to the ROPS Period
commencing the following July 1.
Expected Compliance Costs, if any, will be included in each ROPS in accordance with
the Dissolution Act.
In furtherance of such pledge, and in preparing a given ROPS, the Agency shall reflect on
each annual ROPS that the amount due to the Trustee, received in trust from the County Auditor -
Controller for deposit in the Tax Increment Fund on June 1 of the then -current calendar year
from Tax Revenues required to be deposited into the RPTTF shall equal (1) the sum of (a) all
scheduled principal payments and Sinking Account Installments due and payable on the
Outstanding Bonds and any Parity Debt during the then -current calendar year as shown on
Appendix B - Schedule of Semi -Annual and Annual Interest and Principal Payments of the
Outstanding Bonds, and (b) all scheduled interest payments due and payable on the Outstanding
Bonds and any Parity Debt during the then -current calendar year as shown on Appendix B -
Schedule of Semi -Annual and Annual Interest and Principal Payments of the Outstanding Bonds,
plus (2) the amount of any deficiency in the Reserve Account (including amounts due to the
issuer of the 2018 Reserve Policy), less (3) the amounts, if any, on deposit in the Tax Increment
Fund as of the date of submission for the ROPS pursuant to this Section that are in excess of the
amounts required to be applied to payment of principal of or interest or sinking account
payments on the Outstanding Bonds and any Parity Debt in the then current calendar year. The
amount due to the Trustee from the County Auditor -Controller for deposit in the Tax Increment
Fund on January 2 of the then -current calendar year from amounts required to be deposited into
the RPTTF shall be equal to the remainder due and payable on the Outstanding Bonds and any
Parity Debt during the then -current calendar year in an amount equal to not less than (1) the
remaining the sum of (a) all scheduled principal payments and Sinking Account Installments due
and payable on the Outstanding Bonds and any Parity Debt during the then -current calendar year
as shown on Appendix B - Schedule of Semi -Annual and Annual Interest and Principal
Payments of the Outstanding Bonds, and (b) all scheduled interest payments due and payable on
the Outstanding Bonds and any Parity Debt during the then -current calendar year as shown on
Appendix B - Schedule of Semi -Annual and Annual Interest and Principal Payments of the
Outstanding Bonds, plus (2) the amount of any remaining deficiency in the Reserve Account.
Tax Revenues received by the Agency during a ROPS Period in excess of the amount
required, as provided in this Section, to be deposited in the Tax Increment Fund shall,
immediately following the deposit with the Trustee of the amounts required to be so deposited as
provided in this Section on each such date, be released from the pledge, security interest and lien
hereunder for the security of the Outstanding Bonds, and may be applied by the Agency for any
lawful purpose of the Agency, including but not limited to the payment of subordinate debt, or
the payment of any amounts due and owing to the United States of America pursuant to Section
6.11. Prior to the payment in full of the principal of and interest and redemption premium (if
any) on the Outstanding Bonds and any Parity Debt and the payment in full of all other amounts
payable hereunder and under any Supplemental Indentures, the Agency shall not have any
beneficial right or interest in the moneys on deposit in the Tax Increment Fund, except as may be
provided in the Indenture and in any Supplemental Indenture. . ,
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Section 5.02 Receipt and Deposit of Tax Revenues. The Agency covenants and agrees
that all Tax Revenues, when and as received in accordance with Section 5.01 hereof, will be
received by the Agency in trust hereunder and shall be deemed to be held by the Agency as agent
for the Trustee and will, not later than five (5) Business Days following such receipt, be
deposited by the Agency with the Trustee in the Tax Increment Fund and will be accounted for
through and held in trust in the Tax Increment Fund, and the Agency shall have no beneficial
right or interest in any of such money, except only as in the Indenture provided; provided that the
Agency shall not be obligated to deposit in the Tax Increment Fund in any calendar year an
amount which exceeds the amounts required to be transferred to the Trustee for deposit into the
Tax Increment Fund pursuant to Section 5.01. All such Tax Revenues, whether received by the
Agency in trust or deposited with the Trustee, all as herein provided, shall nevertheless be
disbursed, allocated and applied solely to the uses and purposes set forth herein, and shall be
accounted for separately and apart from all other money, funds, accounts or other resources of
the Agency.
Section 5.03 Establishment and Maintenance of Accounts for Use of Moneys in the
Tax Increment Fund. All Tax Revenues in the Tax Increment Fund shall be set aside by the
Trustee in each Bond Year when and as received in the following respective special accounts
within the Tax Increment Fund (each of which is hereby created and each of which the Agency
hereby covenants and agrees to cause to be maintained with the Trustee so long as the Bonds
shall be Outstanding hereunder), in the following order of priority (except as otherwise provided
in subsection (b) below):
(1)
Interest Account;
(2)
Principal Account;
(3)
Term Bonds Sinking Account;
(4)
Reserve Account; and
(5)
Expense Account.
All moneys in each of such accounts shall be held in trust by the Trustee and shall be
applied, used and withdrawn only for the purposes hereinafter authorized in this Section 5.03.
(a) Interest Account. The Trustee shall set aside from the Tax Increment Fund and
deposit in the Interest Account an amount of money which, together with any money contained
therein, is equal to the aggregate amount of the interest becoming due and payable on all
Outstanding Bonds on the Interest Payment Dates in such Bond Year. No deposit need be made
into the Interest Account if the amount contained therein is at least equal to the aggregate amount
of the interest becoming due and payable on all Outstanding Bonds on the Interest Payment
Dates in such Bond Year. All moneys in the Interest Account shall be used and withdrawn by
the Trustee solely for the purpose of paying the interest on the Bonds as it shall become due and
payable (including accrued interest on any Bonds purchased or redeemed prior to maturity).
(b) Principal Account. The Trustee shall set aside from the Tax Increment Fund and
deposit in the Principal Account an amount of money which, together with any money contained
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therein, is equal to the aggregate amount of principal becoming due and payable on all
Outstanding Serial Bonds on the Principal Payment Date in such Bond Year. No deposit need be
made into the Principal Account if the amount contained therein is at least equal to the aggregate
amount of principal of all Outstanding Serial Bonds becoming due and payable on the Principal
Payment Date in such Bond Year. All money in the Principal Account shall be used and
withdrawn by the Trustee solely for the purpose of paying principal of the Serial Bonds as they
shall become due and payable.
In the event that there shall be insufficient money in the Tax Increment Fund to pay in
full all such principal and Sinking Account Installments due pursuant to Section 5.03(c) hereof in
such Bond Year, then the money available in the Tax Increment Fund shall be applied pro rata to
the payment of such principal and Sinking Account Installments in the proportion which all such
principal and Sinking Account Installments bear to each other.
(c) Term Bonds Sinking Account. The Trustee shall deposit in the Term Bonds
Sinking Account an amount of money which, together with any money contained therein, is
equal to the Sinking Account Installments payable on the Sinking Account Payment Date in such
Bond Year. No deposit need be made in the Term Bonds Sinking Account if the amount
contained therein is at least equal to the aggregate amount of all Sinking Account Installments
required to be made on the Sinking Account Payment Date in such Bond Year. All moneys in
the Term Bonds Sinking Account shall be used and withdrawn by the Trustee solely for the
purpose of purchasing or redeeming the Term Bonds in accordance with Section 2.04(c) hereof.
(d) Reserve Account. The Trustee shall set aside from the Tax Increment Fund and
deposit in the Reserve Account such amount as may be necessary to maintain on deposit therein
an amount equal to the Reserve Account Requirement. No deposit need be made into the
Reserve Account so long as there shall be on deposit therein an amount equal to the Reserve
Account Requirement. All money in or credited to the Reserve Account shall be used and
withdrawn by the Trustee solely for the purpose of replenishing the Interest Account, the
Principal Account or the Term Bonds Sinking Account in such order, in the event of any
deficiency in any of such accounts occurring on any Interest Payment Date, Principal Payment
Date or Sinking Account Payment Date, or for the purpose of paying the interest on or the
principal of the Bonds in the event that no other money of the Agency is lawfully available
therefor, or for the retirement of all Bonds then Outstanding, except that for so long as the
Agency is not in default hereunder, any amount in the Reserve Account in excess of the Reserve
Account Requirement shall be transferred to the Tax Increment Fund.
On any date on which Bonds are defeased in accordance with Section 11.02 hereof, the
Trustee shall, if so directed in a Written Request of the Agency, transfer any moneys in the
Reserve Account in excess of the Reserve Account Requirement resulting from such defeasance
to the entity or fund so specified in such Written Request of the Agency, to be applied to such
defeasance.
If at any time the Trustee fails to pay principal or interest due on any scheduled payment
date for the Bonds and any Parity Debt or withdraws funds from the Reserve Account to pay
principal and interest on the Bonds and any Parity Debt, the Trustee shall notify the Agency in
writing of such failure or withdrawal, as applicable.
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The prior written consent of the 2018 Bond Insurer shall be a condition precedent to the
deposit of any Qualified Reserve Account Credit Instrument credited to the Reserve Account
established for the Series 2018 Bonds (other than the 2018 Reserve Policy) in lieu of a cash
deposit into the Reserve Account. Amounts drawn under the 2018 Reserve Policy shall be
available only for the payment of scheduled principal and interest on the Series 2018 Bonds
when due.
The Trustee shall ascertain the necessity for a claim upon the 2018 Reserve Policy in
accordance with the provisions of paragraph (a) of Section 5.05 hereof and to provide notice to
the 2018 Bond Insurer in accordance with the terms of the 2018 Reserve Policy at least five
Business Days prior to each date upon which interest or principal is due on the Series 2018
Bonds, respectively. Where deposits are required to be made by the Agency with the Trustee to
the Interest Account and Principal Account of the Tax Increment Fund for the Series 2018
Bonds, respectively, more often than semi-annually, the Trustee shall be instructed to give notice
to the 2018 Bond Insurer of any failure of the Agency to make timely payment in full of such
deposits within two Business Days of the date due.
(e) Expense Account. The Trustee shall set aside from the Tax Increment Fund and
deposit in the Expense Account such amount as may be necessary to pay from time to time
Compliance Costs as specified in a Written Request of the Agency setting forth the amounts. All
moneys in the Expense Account shall be applied to the payment of Compliance Costs, upon
presentation of a Written Request of the Agency setting forth the amounts, purposes, the names
of the payees and a statement that the amounts to be paid are proper charges against the Expense
Account. So long as any of the Bonds herein authorized, or any interest thereon, remain unpaid,
the moneys in the Expense Account shall be used for no purpose other than those required or
permitted by the Indenture and the Law.
Section 5.04 Investment of Moneys in Funds and Accounts. Moneys in the Tax
Increment Fund and the Interest Account, the Principal Account, the Term Bonds Sinking
Account and the Expense Account thereunder, upon the Written Request of the Agency, filed
with the Trustee at least two (2) Business Days in advance of the making of such investments
shall be invested by the Trustee in Permitted Investments. If such instructions are not provided,
the Trustee shall hold such funds uninvested pending the receipt of written investment
instructions. Moneys in the Interest Account representing accrued interest paid to the Agency
upon the initial sale and delivery of any Bonds and in the Reserve Account, upon the Written
Request of the Agency, shall be invested by the Trustee in Permitted Investments. Permitted
Investments purchased with amounts on deposit in the Reserve Account shall have an average
aggregate weighted term to maturity of not greater than five (5) years; provided, however, that if
such investments may be redeemed at par so as to be available on each Interest Payment Date,
any amount in the Reserve Account may be invested in such redeemable Permitted Investments
maturing on any date on or prior to the final maturity date of the Bonds. The obligations in
which moneys in the Tax Increment Fund and the Interest Account, the Principal Account, the
Term Bonds Sinking Account and the Expense Account thereunder are so invested shall mature
prior to the date on which such moneys are estimated to be required to be paid out hereunder.
Any interest, income or profits from the deposits or investments of all other funds and accounts
held by the Trustee (other than the Expense Account and the Rebate Fund) shall be deposited in
the Tax Increment Fund., For purposes of determining the amount on deposit in any fund or
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account held by the Trustee hereunder, all Permitted Investments credited to such fund or
account shall be valued at the lower of cost or the market price thereof (excluding accrued
interest and brokerage commissions, if any); provided that Permitted Investments credited to the
Reserve Account shall be valued at market value (exclusive of accrued interest and brokerage
commissions, if any), and any deficiency in the Reserve Account resulting from a decline in
market value shall be restored to the Reserve Account Requirement no later than the next Bond
Year. Amounts in the funds and accounts held by the Trustee under the Indenture shall be
valued at least annually on the first day of August after the principal payment has been made.
The Agency acknowledges that to the extent regulations of the Comptroller of the
Currency or other applicable regulatory entity grant the Agency the right to receive brokerage
confirmations of security transactions as they occur, the Agency will not receive such
confirmations to the extent permitted by law. The Trustee will furnish the Agency periodic cash
transaction statements which shall include detail for all investment transactions made by the
Trustee hereunder.
The Trustee or any of its affiliates may act as agent, sponsor or advisor in connection
with any investment made by the Trustee hereunder. To the extent Permitted Investments are
registrable, such investments shall be registered in the name of the Trustee. The Trustee may sell
or present for redemption, any securities so purchased whenever it shall be necessary to provide
moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or
account to which such securities are credited, and the Trustee shall not be responsible for any
loss resulting from such investment. The Trustee is hereby authorized t, in making or disposing
of any investment permitted by this Section, to deal with itself (in its individual capacity) or with
any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or
for any third person or dealing as principal for its own account. The Trustee shall have no
investment discretion.
Section 5.05 2018 Reserve Policy Payment and Reimbursement Provisions.
[THE FOLLOWING ARE SAMPLE BOND INSURER PROVISIONS]
The following provisions shall govern in the event of a conflict with any contrary
provision of the Indenture.
(a) The Agency shall repay from available Tax Revenues any draws under the
2018 Reserve Policy and pay all related reasonable expenses incurred by the 2018 Bond
Insurer and shall pay interest thereon from the date of payment by the 2018 Bond Insurer
at the Late Payment Rate. "Late Payment Rate" means the lesser of (x) the greater of (i)
the per annum rate of interest, publicly announced from time to time by JPMorgan Chase
Bank at its principal office in the City of New York, as its prime or base lending rate
("Prime Rate") (any change in such Prime Rate to be effective on the date such change is
announced by JPMorgan Chase Bank) plus _%, and (ii) the then applicable highest rate
of interest on the outstanding Series 2018 Bonds and (y) the maximum rate permissible
under applicable usury or similar laws limiting interest rates. The Late Payment Rate
shall be computed on the basis of the actual number of days elapsed over a year of 360
days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate publicly,
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Prime Rate shall be the publicly announced prime or base lending rate of such national
bank as the 2018 Bond Insurer shall specify. If the interest provisions of this
subparagraph (a) shall result in an effective rate of interest which, for any period, exceeds
the limit of the usury or any other laws applicable to the indebtedness created herein, then
all sums in excess of those lawfully collectible as interest for the period in question shall,
without further agreement or notice between or by any party hereto, be applied as
additional interest for any later periods of time when amounts are outstanding hereunder
to the extent that interest otherwise due hereunder for such periods plus such additional
interest would not exceed the limit of the usury or such other laws, and any excess shall
be applied upon principal immediately upon receipt of such moneys by the 2018 Bond
Insurer, with the same force and effect as if the Agency had specifically designated such
extra sums to be so applied and the 2018 Bond Insurer had agreed to accept such extra
payment(s) as additional interest for such later periods. In no event shall any agreed -to or
actual exaction as consideration for the indebtedness created herein exceed the limits
imposed or provided by the law applicable to this transaction for the use or detention of
money or for forbearance in seeking its collection.
(b) Repayment of draws and payment of expenses and accrued interest
thereon at the Late Payment Rate (collectively, "Policy Costs") shall commence in the
first month following each draw, and each such monthly payment shall be in an amount
at least equal to 1/12 of the aggregate of Policy Costs related to such draw.
(c) The obligation to pay Policy Costs shall be secured by a valid lien on all
revenues and other collateral pledged as security for the Series 2018 Bonds (subject only
to the priority of payment provisions set forth under the Indenture). Amounts in respect
of Policy Costs paid to the 2018 Bond Insurer shall be credited first to interest due, then
to the expenses due and then to principal due. As and to the extent that payments are
made to the 2018 Bond Insurer on account of principal due, the coverage under the 2018
Reserve Policy will be increased by a like amount, subject to the terms of the 2018
Reserve Policy.
(d) All cash and investments in the Reserve Account not otherwise securing a
particular Series of Bonds shall be transferred to the Interest Account and Principal
Account of the Tax Increment Fund for payment of debt service on the Series 2018
Bonds before any drawing may be made on the 2018 Reserve Policy or any other
Qualified Reserve Account Credit Instrument credited to the Reserve Account in lieu of
cash. Payment of any Policy Costs shall be made prior to replenishment of any such cash
amounts. Draws on all Qualified Reserve Account Credit Instruments (including the 2018
Reserve Policy) on which there is available coverage shall be made on a pro -rata basis
(calculated by reference to the coverage then available thereunder) after applying all
available cash and investments in the Reserve Account. Payment of Policy Costs and
reimbursement of amounts with respect to other Qualified Reserve Account Credit
Instruments shall be made on a pro -rata basis prior to replenishment of any cash drawn
from the Reserve Account. For the avoidance of doubt, "available coverage means the
coverage then available for disbursement pursuant to the terms of the applicable
alternative credit instrument without regard to the legal or financial ability or willingness
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of the provider of such instrument to honor a claim or draw thereon or the failure of such
provider to honor any such claim or draw.
(e) Upon a failure to pay Policy Costs when due or any other breach of the
terms of this Section, the 2018 Bond Insurer shall be entitled to exercise any and all legal
and equitable remedies available to it, including those provided under the Indenture, other
than (i) acceleration of the maturity of the Series 2018 Bonds, if any, or (ii) remedies
which would adversely affect owners of the Series 2018 Bonds.
(f) The Indenture shall not be discharged until all Policy Costs owing to the
2018 Bond Insurer shall have been paid in full. The Agency's obligation to pay such
amounts shall expressly survive payment in full of the Series 2018 Bonds.
(g) The Agency shall include any Policy Costs then due and owing the 2018
Bond Insurer in the calculation of the additional bonds test.
(h) The Agency will pay or reimburse the 2018 Bond Insurer any and all
reasonable charges, fees, costs, losses, liabilities and expenses which the 2018 Bond
Insurer may pay or incur, including, but not limited to, fees and expenses of attorneys,
accountants, consultants and auditors and reasonable costs of investigations, in
connection with (i) any accounts established to facilitate payments under the 2018
Reserve Policy, (ii) the administration, enforcement, defense or preservation of any rights
in respect of the Indenture or the Related Documents, including defending, monitoring or
participating in any litigation or proceeding (including any bankruptcy proceeding in
respect of the Agency) relating to the Indenture or any other Related Document, any
party to the Indenture or any other Related Document or the transactions contemplated by
the Related Documents, (iii) the foreclosure against, sale or other disposition of any
collateral securing any obligations under the Indenture or any other Related Document, if
any, or the pursuit of any remedies under the Indenture or any other Related Document,
to the extent such costs and expenses are not recovered from such foreclosure, sale or
other disposition, (iv) any amendment, waiver or other action with respect to, or related
to the Indenture, the 2018 Reserve Policy or any other Related Document whether or not
executed or completed, or (v) any action taken by the 2018 Bond Insurer to cure a default
or termination or similar event (or to mitigate the effect thereof) under the Indenture or
any other Related Document; costs and expenses shall include a reasonable allocation of
compensation and overhead attributable to time of employees of the 2018 Bond Insurer
spent in connection with the actions described in clauses (ii) through (v) above. The
2018 Bond Insurer reserves the right to charge a reasonable fee as a condition to
executing any amendment, waiver or consent proposed in respect of the Indenture or any
other Related Document. Amounts payable by the Agency hereunder shall bear interest at
the Late Payment Rate from the date such amount is paid or incurred by the 2018 Bond
Insurer until the date the 2018 Bond Insurer is paid in full.
(i) The obligation of the Agency to pay all amounts due to the 2018 Bond
Insurer shall be an absolute and unconditional obligation of the Agency and will be paid
or performed strictly in accordance with the provisions of this Section, irrespective of (i)
any lack of validity or enforceability of or any amendment or other modifications of, or
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waiver with respect to the Series 2018 Bonds, the Indenture or any other Related
Document, or (ii) any amendment or other modification of, or waiver with respect to the
2018 Reserve Policy; (iii) any exchange, release or non -perfection of any security interest
in property securing the Series 2018 Bonds, the Indenture or any other Related
Documents; (iv) whether or not such Series 2018 Bonds are contingent or matured,
disputed or undisputed, liquidated or unliquidated; (v) any amendment, modification or
waiver of or any consent to departure from the 2018 Reserve Policy, the Indenture or all
or any of the other Related Documents; (vi) the existence of any claim, setoff, defense
(other than the defense of payment in full), reduction, abatement or other right which the
Agency may have at any time against the Trustee or any other person or entity other than
the 2018 Bond Insurer, whether in connection with the transactions contemplated herein
or in any other Related Documents or any unrelated transactions; (vii) any statement or
any other document presented under or in connection with the 2018 Reserve Policy
proving in any and all respects invalid, inaccurate, insufficient, fraudulent or forged or
any statement therein being untrue or inaccurate in any respect; or (viii) any payment by
the 2018 Bond Insurer under the 2018 Reserve Policy against presentation of a certificate
or other document which does not strictly comply with the terms of the 2018 Reserve
Policy.
0) The Agency shall fully observe, perform, and fulfill each of the provisions
(as each of those provisions may be amended, supplemented, modified or waived with
the prior written consent of the 2018 Bond Insurer) of the Indenture applicable to it, each
of the provisions thereof being expressly incorporated into this Section by reference
solely for the benefit of the 2018 Bond Insurer as if set forth directly herein. No provision
of the Indenture or any other Related Document shall be amended, supplemented,
modified or waived, without the prior written consent of the 2018 Bond Insurer, in any
material respect or otherwise in a manner that could adversely affect the payment
obligations of the Agency hereunder or the priority accorded to the reimbursement of
Policy Costs under the Indenture.
(k) The Agency covenants to provide to the 2018 Bond Insurer, promptly
upon request, any information regarding the Series 2018 Bonds or the financial condition
and operations of the Agency as reasonably requested by the 2018 Bond Insurer. The
Agency will permit the 2018 Bond Insurer to discuss the affairs, finances and accounts of
the Agency or any information the 2018 Bond Insurer may reasonably request regarding
the security for the Series 2018 Bonds with appropriate officers of the Agency and will
use commercially reasonable efforts to enable the 2018 Bond Insurer to have access to
the facilities, books and records of the Agency on any Business Day upon reasonable
prior notice.
Section 5.06 Costs of Issuance Fund. Moneys deposited in the Costs of Issuance Fund
shall be held by the Trustee in trust and applied to the payment of Costs of Issuance upon a
Requisition of the Agency filed with the Trustee. Each such requisition shall be sufficient
evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm
the accuracy of such facts. In no event shall moneys from any other fund or account established
hereunder be used to pay Costs of Issuance. All payments from the Costs of Issuance Fund shall
be reflected on the Trustee's regular accounting statements. At the end of twelve months from
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the date of issuance of the Bonds, or upon earlier receipt of a Written Order of the Agency
stating that amounts in such fund are no longer required for the payment of Costs of Issuance,
such fund shall be terminated and any amounts then remaining in such fund shall be transferred
to the Tax Increment Fund. The Trustee shall then close the Costs of Issuance Fund.
ARTICLE VI
COVENANTS OF THE AGENCY
Section 6.01 Punctual Payment. The Agency will punctually pay the principal of,
premium, if any, and the interest to become due with respect to the Bonds, in strict conformity
with the terms of the Bonds and of the Indenture and will faithfully satisfy, observe and perform
all conditions, covenants and requirements of the Bonds and of the Indenture.
Section 6.02 Against Encumbrances. The Agency will not mortgage or otherwise
encumber, pledge or place any charge upon any of the Tax Revenues, except as provided in the
Indenture, and will not issue any obligation or security superior to or on a parity with then
Outstanding Bonds payable in whole or in part from the Tax Revenues (other than Additional
Bonds in accordance with Section 4.01).
Section 6.03 Extension or Funding of Claims for Interest. In order to prevent any
claims for interest after maturity, the Agency will not, directly or indirectly, extend or consent to
the extension of the time for the payment of any claim for interest on any Bonds and will not,
directly or indirectly, be a party to or approve any such arrangements by purchasing or funding
said claims for interest or in any other manner. In case any such claim for interest shall be
extended or funded, whether or not with the consent of the Agency, such claim for interest so
extended or funded shall not be entitled, in case of default hereunder, to the benefits of the
Indenture, except subject to the prior payment in full of the principal of the Bonds then
Outstanding and of all claims for interest which shall not have been so extended or funded.
Section 6.04 Payment of Claims. Subject to the terms of the Dissolution Act, the
Agency will pay and discharge any and all lawful claims for labor, materials or supplies which, if
unpaid, might become a lien or charge upon the properties owned by the Agency or upon the Tax
Revenues or any part thereof, or upon any funds in the hands of the Trustee, or which might
impair the security of the Bonds; provided that nothing herein contained shall require the Agency
to make any such payments so long as the Agency in good faith shall contest the validity of any
such claims.
Section 6.05 Books and Accounts; Financial Statements. The Agency will keep
proper books of record and accounts, separate from all other records and accounts of the Agency,
in which complete and correct entries shall be made of all transactions relating to the Tax
Increment Fund. Such books of record and accounts shall at all times during business hours be
subject to the inspection of the Trustee (who shall have no duty to inspect) and the Owners of not
less than ten per cent (10%) of the aggregate principal amount of Bonds Outstanding or their
representatives authorized in writing.
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The Agency will prepare and file with the Trustee and the Bond Insurer annually, so long
as any Bonds are Outstanding, the audited financial statements of the Agency as part of the
Annual Report (as defined in the Continuing Disclosure Agreement), provided, however, that the
audited financial statements of the Agency may be submitted separately from the balance of the
Annual Report, and later than the date required for the filing of the Annual Report and as soon as
practicable if they are not available by that date.
Section 6.06 Protection of Security and Rights of Owners. The Agency will preserve
and protect the security of the Bonds and the rights of the Owners, and will warrant and defend
their rights against all claims and demands of all persons. From and after the sale and delivery of
any Bonds by the Agency, such Bonds shall be incontestable by the Agency.
Section 6.07 Payment of Taxes and Other Charges. The Agency will pay and
discharge all taxes, service charges, assessments and other governmental charges which may
hereafter be lawfully imposed upon the Agency or any properties owned by the Agency in the
Project Area, or upon the revenues therefrom, when the same shall become due; provided that
nothing herein contained shall require the Agency to make any such payments so long as the
Agency in good faith shall contest the validity of any such taxes, service charges, assessments or
other governmental charges.
Section 6.08 Amendment of Redevelopment Plan. The Agency will not amend the
Redevelopment Plan except as provided in this section and as permitted by the Law. If the
Agency proposes to amend the Redevelopment Plan, it shall cause to be filed with the Trustee a
Consultant's Report on the effect of such proposed amendment. If the Consultant's Report
concludes that Tax Revenues will not be materially reduced by such proposed amendment, the
Agency may undertake such amendment. If the Consultant's Report concludes that Tax
Revenues will be materially reduced by such proposed amendment, the Agency may not
undertake such proposed amendment. Notwithstanding the foregoing, the Agency must obtain
the Bond Insurer's prior written consent for any amendment of the Redevelopment Plan which
would (i) reduce the amount of Tax Revenues that may be received by the Agency or (ii) reduce
the period during which the Agency may collect Tax Revenues.
Section 6.09 Tax Revenues. The Agency shall comply with all requirements of the Law
to ensure the allocation and payment to it of the Tax Revenues, including without limitation the
timely filing of any necessary ROPS. The Agency shall manage its fiscal affairs in a manner so
that it will have sufficient Tax Revenues available under the Redevelopment Plan in the amounts
and at the times required to enable the Agency to pay the principal of, premium, if any and
interest on the Series 2018 Bonds and any Parity Debt when due.
Section 6.10 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 the Indenture, and for the
better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided
in the Indenture.
Section 6.11 Tax Covenants, Rebate Fund.
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(a) The Agency covenants that it will not take any action, or fail to take any action, if
any such action or failure to take action would adversely affect the exclusion from gross income
of the interest on any of the Tax Exempt Bonds under Section 103 of the Code. Without limiting
the generality of the foregoing, the Agency shall comply with the requirements of the Tax
Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive
payment in full or defeasance of the Bonds.
(b) The Agency agrees that there shall be paid from time to time all amounts required
to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary,
proposed or final Treasury Regulations as may be applicable to the Tax Exempt Bonds from time
to time.
(c) The Trustee shall establish and maintain a fund separate from any other fund
established and maintained hereunder designated as the Rebate Fund. Notwithstanding any other
provision of the Indenture to the contrary, all amounts deposited into or on deposit in the Rebate
Fund shall be governed by this Section 6.11 and by the Tax Certificate (which is incorporated
herein by reference). The Agency shall cause to be deposited in the Rebate Fund the Rebate
Requirement as provided in the Tax Certificate. Subject to the provisions of this Section 6.11,
all money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for
payment to the federal government of the United States of America from time to time in
accordance with the Tax Certificate. The Agency and the Owners shall have no rights in or
claim to such money.
(d) Upon the written direction of the Agency, the Trustee shall invest all amounts
held in the Rebate Fund in Permitted Investments, subject to the restrictions set forth in the Tax
Certificate.
(e) Upon receipt of the Rebate Instructions required to be delivered to the Trustee by
the Tax Certificate, the Trustee shall remit part or all of the balances held in the Rebate Fund to
the Trustee for payment to the federal government of the United States of America, as so
directed. In addition, if the Rebate Instructions so direct, the Trustee shall deposit moneys into
or transfer moneys out of the Rebate Fund from or into such accounts or funds as the Rebate
Instructions direct. Any funds remaining in the Rebate Fund after redemption and payment of all
of the Tax Exempt Bonds and payment of any required rebate amount, or provision made
therefor satisfactory to the Trustee, shall be withdrawn and remitted to the Agency.
(f) The Trustee shall have no obligation to pay any amounts required to be remitted
pursuant to this Section 6.11, other than from moneys held in the funds and accounts created
under the Indenture or from other moneys provided to it by the Agency.
(g) The Trustee shall conclusively be deemed to have complied with the provisions of
this Section 6.11 if it follows the directions of the Agency set forth in the Rebate Instructions,
and shall not be required to take any actions thereunder in the absence of Rebate Instructions
from the Agency.
(h) Notwithstanding any other provision of the Indenture, the obligation of the
Agency to remit or cause to be remitted any required rebate amount to the United States
4150-2542-5420.3 38
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government and to comply with all other requirements of this Section 6.11 and the Tax
Certificate shall survive the defeasance or payment in full of the Tax Exempt Bonds.
(i) Notwithstanding any provision of this Section 6.11 to the contrary, if the Agency
shall provide to the Trustee an opinion of counsel of recognized standing in the field of law
relating to municipal bonds (and approved in writing by the Agency) to the effect that any action
required under this Section 6.11 is no longer required, or that some further or different action is
required, to maintain the exclusion from federal gross income of the interest on the Tax Exempt
Bonds pursuant to the Code, the Trustee and the Agency may conclusively rely on such opinion
in complying with the provisions of this Section 6.11, and the provisions hereof shall be deemed
to be modified to that extent.
Section 6.12 Compliance with the Dissolution Act. The Agency covenants that in
addition to complying with the requirements of Section 5.01 hereof, it will comply with all other
requirements of the Dissolution Act. Without limiting the generality of the foregoing, the
Agency covenants and agrees to file all required statements and seek all necessary successor
agency or an oversight board approvals required under the Dissolution Act to assure compliance
by the Agency with its covenants under the Indenture. Further, the Agency will take all actions
required under the Dissolution Act to include on its ROPS for each ROPS Period all payments
expected to be made to the Trustee in order to satisfy the requirements of the Indenture,
including any amounts required to pay principal and interest payments due on the Outstanding
Bonds and any Parity Debt, any deficiency in the Reserve Account to the full amount of the
Reserve Account Requirement (including amounts due to the 2018 Bond Insurer as issuer of the
2018 Reserve Policy) and any Compliance Costs, and any required debt service, reserve set -
asides, and any other payments required under the Indenture or similar documents pursuant to
Section 34171(d)(1)(A) of the California Health and Safety Code, so as to enable the County
Auditor -Controller to distribute from the RPTTF amounts to the Trustee for deposit in the Tax
Increment Fund on each ROPS Distribution Date amounts required for the Agency to pay the
principal of, premium, if any, and the interest on the Outstanding Bonds and any Parity Debt
coming due in the respective ROPS Period. These actions will include, without limitation,
placing on the periodic ROPS for approval by the Oversight Board and the DOF, to the extent
necessary, the amounts to be held by the Agency as a reserve until the next ROPS Period, as
contemplated by paragraph (1)(A) of subdivision (d) of Section 34171 of the Dissolution Act,
that are necessary to provide for the payment of principal of, premium, if any, and the interest
under the Indenture when the next property tax allocation is projected to be insufficient to pay all
obligations due under the Indenture for the next payment due in the following ROPS Period.
The Agency covenants that (i) it will include all amounts presently due and payable to the
2018 Bond Insurer on each Recognized Payment Obligation Schedule ("ROPS") submission, (ii)
if any amounts payable to the 2018 Bond Insurer are not included on any current ROPS and the
Agency is then legally permitted to amend such ROPS, the Agency will amend its current ROPS
to include such amounts payable to the 2018 Bond Insurer, and (iii) the Agency will not submit
for approval by the Oversight Board or the DOF a ROPS covering multiple ROPS Periods or any
Last and Final Recognized Obligation Payment Schedule as provided in the Dissolution Law
without the prior consent of the 2018 Bond Insurer.
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Section 6.13 Negative Pledge. The Agency may not create or allow to exist any liens
on Tax Revenues senior to or on a parity with the Series 2018 Bonds except as provided in
Article IV hereof.
Section 6.14 Adverse Change in State Law. If, due to an adverse change in State law
resulting from legislation or the decision of a court of competent jurisdiction, the Agency
determines that it can no longer comply with Section 6.12, then the Agency shall immediately
notify the County Auditor -Controller and the Trustee in writing of such determination. The
Agency shall immediately seek a declaratory judgment or take other appropriate action in a court
of competent jurisdiction to determine the duties of all parties to the Indenture, including the
County Auditor -Controller and the Agency, with regard to the performance of Section 6.12 by
the Agency. The Trustee may, but is in no event obligated to, participate in the process of
seeking such declaratory judgment to protect its rights hereunder. Any reasonable fees and
expenses incurred by the Trustee (including, without limitation, legal fees and expenses) in
connection with such participation shall be borne by the Agency.
Section 6.15 Credits to Redevelopment Obligation Retirement Fund. The Agency
covenants and agrees to credit all Tax Revenues withdrawn from the RPTTF by the County
Auditor -Controller and remitted to the Trustee for the payment of the Bonds and any Parity Debt
to the Redevelopment Obligation Retirement Fund established pursuant to Section 34170.5(x) of
the California Health and Safety Code.
Section 6.16 Compliance Costs. The Agency, to the fullest extent permitted by law,
shall pay the annual Compliance Costs, from amounts on deposit in the Expense Account,
including fees and disbursements of the consultants and professionals engaged in connection
with the Bonds, costs of the Agency and the Trustee payable from the RPTTF.
Section 6.17 Continuing Disclosure. The Agency hereby covenants and agrees that it
will comply with and carry out all of the provisions of the Continuing Disclosure Agreement.
Notwithstanding any other provision of the Indenture, failure of the Agency to comply with the
Continuing Disclosure Agreement shall not be considered an Event of Default; provided,
however, the Trustee, at the written request of any Participating Underwriter (as defined in the
Continuing Disclosure Agreement), the Bond Insurer or the Bondowners of at least 25%
aggregate principal amount of Bonds Outstanding, shall to the extent the Trustee is indemnified
to its satisfaction from and against any liability or expense related thereto, or any Bondowner or
Beneficial Owner may take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by court order, to cause the Agency to comply with its
obligations under this section and the Continuing Disclosure Agreement. For purposes of this
section, `Beneficial Owner" shall mean any person which has or shares the power, directly or
indirectly, to make investment decisions concerning ownership of any Bonds (including persons
holding Bonds through nominees, depositories or other intermediaries).
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ARTICLE VII
THE TRUSTEE
Section 7.01 Appointment and Acceptance of Duties. The Trustee hereby accepts and
agrees to the trusts hereby created to all of which the Agency agrees and the respective Owners
of the Bonds, by their purchase and acceptance thereof, agree.
Section 7.02 Duties. Immunities and Liability of Trustee.
(a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of
all Events of Default which may have occurred, perform such duties and only such duties as are
specifically set forth in the Indenture, and no implied duties or obligations shall be read into the
Indenture against the Trustee. The Trustee shall, during the existence of any Event of Default
(which has not been cured or waived), exercise the rights and powers vested in it by the
Indenture, and use the same degree of care and skill in their exercise as a reasonable individual
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Subject to Section 12.15, the Agency may, in the absence of an Event of Default,
and upon receipt of an instrument or concurrent instruments in writing signed by the Owners of
not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their
attorneys duly authorized in writing) or upon receipt of a written request of the Bond Insurer, or
upon receipt of a written request of any Bond Insurer following an Event of Default (irrespective
of cause), or if at any time the Trustee shall cease to be eligible in accordance with subsection (e)
of this section, or shall become incapable of acting, or shall commence a case under any
bankruptcy, insolvency or similar law, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take control or charge of the Trustee or its property or
affairs for the purpose of rehabilitation, conservation or liquidation, shall, remove the Trustee by
giving written notice of such removal to the Trustee, and thereupon the Agency shall promptly
appoint a successor Trustee by an instrument in writing.
(c) The Trustee may, subject to (d) below, resign by giving at least 60 days' written
notice of such resignation to the Agency and the Bond Insurer and by giving notice of such
resignation by mail, first class postage prepaid, to the Owners at the addresses listed in the Bond
Register. Upon receiving such notice of resignation, the Agency shall promptly appoint a
successor Trustee by an instrument in writing, and shall notify the Bond Insurer of such
appointment.
(d) Any removal or resignation of the Trustee and appointment of a successor Trustee
shall become effective only upon acceptance of appointment by the successor Trustee. If no
successor Trustee shall have been appointed and shall have accepted appointment within thirty
(30) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee
or any Owner (on behalf of himself and all other Owners) may petition, at the expense of the
Agency, any court of competent jurisdiction for the appointment of a successor Trustee, and such
court may thereupon, after such notice (if any) as it may deem proper, appoint such successor
Trustee. Any successor Trustee appointed under the Indenture shall signify its acceptance of
such appointment by executing and delivering to the Agency and to its predecessor Trustee and
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the Bond Insurer a written acceptance thereof, and thereupon such successor Trustee, without
any further act, deed or conveyance, shall become vested with all the moneys, estates, properties,
rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if
originally named Trustee herein; but, nevertheless, at the written request of the Agency or of the
successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of
conveyance or further assurance and do such other things as may reasonably be required for fully
and certainly vesting in and confirming to such successor Trustee all the right, title and interest
of such predecessor Trustee in and to any property held by it under the Indenture and shall pay
over, transfer, assign and deliver to the successor Trustee any money or other property subject to
the trusts and conditions set forth herein. Upon request of the successor Trustee, the Agency
shall execute and deliver any and all instruments as may be reasonably required for fully and
certainly vesting in and confirming to such successor Trustee all such moneys, estates,
properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a
successor Trustee as provided in this subsection, such successor Trustee shall mail a notice of the
succession of such Trustee to the trusts hereunder by first class mail, postage prepaid, to the
Owners at their addresses listed in the Bond Register.
(e) Any Trustee appointed under the provisions of this section shall be a national
banking association trust company or bank having the powers of a trust company or authorized
to exercise trust powers, having a corporate trust office in California, having (or in the case of a
national banking association, bank, trust company or bank holding company which is a member
of a bank holding company system, the related bank holding company shall have) a combined
capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or
examination by federal or state authority. If such national banking association, bank, trust
company or bank holding company publishes a report of condition at least annually, pursuant to
law or to the requirements of any supervising or examining authority above referred to, then for
the purpose of this subsection the combined capital and surplus of such national banking
association, bank, trust company or bank holding company shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of this subsection,
the Trustee shall resign immediately in the manner and with the effect specified in this section.
(f) No provision in the Indenture shall require the Trustee to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
unless the Owners shall have offered to the Trustee security or indemnity it deems reasonable,
against the costs, expenses and liabilities that may be incurred.
(g) In accepting the trust hereby created, the Trustee acts solely as Trustee for the
Owners and not in its individual capacity, and under no circumstances shall the Trustee be liable
in its individual capacity for the obligations evidenced by the Bonds.
- (h) The Trustee makes no representation or warranty, express or implied, as to the
compliance with legal requirements of the use contemplated by the Agency of the funds under
the Indenture.
(i) The Trustee shall not be responsible for the recording or filing of any document
relating to the Indenture or of financing statements (or continuation statements in connection
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therewith). The Trustee shall not be deemed to have made representations as to the security
afforded thereby or as to the validity, sufficiency or priority of any such document, collateral or
security of the Bonds.
0) The Trustee shall not be deemed to have knowledge of any Event of Default
hereunder unless and until a Responsible Officer shall have actual knowledge thereof at the
Trustee's Principal Corporate Trust Office. The Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any of the terms, conditions, covenants or
agreements herein or of any documents executed in connection with the Bonds or as to the
existence of an Event of Default hereunder.
(k) The Trustee shall not be accountable for the use or application by the Agency or
any other party of any funds which the Trustee has released under the Indenture.
(1) The Trustee shall provide a monthly accounting of all Funds held pursuant to the
Indenture to the Agency within fifteen (15) Business Days after the end of each month and shall
provide statements of account for each annual period beginning July 1 and ending June 30,
within 90 days after the end of such period. Such accounting shall show in reasonable detail all
transactions made by the Trustee under the Indenture during the accounting period and the
balance in any Funds and accounts created under the Indenture as of the beginning and close of
such accounting period.
(m) All moneys received by the Trustee shall, until used or applied or invested as
herein provided, be held in trust for the purposes for which they were received but need not be
segregated from other funds except to the extent required by law.
(n) The permissive rights of the Trustee to do things enumerated in the Indenture
shall not be construed as a duty unless so specified herein.
(o) The Trustee may appoint and act through an agent and shall not be responsible for
any misconduct or negligence of any such agent appointed with due care. The Trustee may
execute any of the trusts or powers hereof and perform the duties required of it hereunder by or
through attorneys, agents, affiliates, or receivers, and shall be entitled to advice of counsel
concerning all matters of trust and its duty hereunder, and the Trustee shall not be answerable for
the acts or omissions of any such attorney, agent, or receiver selected by it with reasonable care.
(p) The Trustee shall have the right to accept and act upon instructions, including
funds transfer instructions ("Instructions") given pursuant to this Indenture and delivered using
Electronic Means ("Electronic Means" shall mean the following communications methods: e-
mail, facsimile transmission, secure electronic transmission containing applicable authorization
codes, passwords and/or authentication keys issued by the Trustee, or another method or system
specified by the Trustee as available for use in connection with its services hereunder); provided,
however, that the Agency shall provide to the Trustee an incumbency certificate listing officers
with the authority to provide such Instructions ("Authorized Officers") and containing specimen
signatures of such Authorized Officers, which incumbency certificate shall be amended by the
Agency whenever a person is to be added or deleted from the listing. If the Agency elects to
give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act
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upon such Instructions, the Trustee's understanding of such Instructions shall be deemed
controlling. The Agency understands and agrees that the Trustee cannot determine the identity
of the actual sender of such Instructions and that the Trustee shall conclusively presume that
directions that purport to have been sent by an Authorized Officer listed on the incumbency
certificate provided to the Trustee have been sent by such Authorized Officer. The Agency shall
be responsible for ensuring that only Authorized Officers transmit such Instructions to the
Trustee and that the Agency and all Authorized Officers are solely responsible to safeguard the
use and confidentiality of applicable user and authorization codes, passwords and/or
authentication keys upon receipt by the Agency. The Trustee shall not be liable for any losses,
costs or expenses arising directly or indirectly from the Trustee's reliance upon and compliance
with such Instructions notwithstanding such directions conflict or are inconsistent with a
subsequent written instruction. The Agency agrees: (i) to assume all risks arising out of the use
of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of
the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third
parties; (ii) that it is fully informed of the protections and risks associated with the various
methods of transmitting Instructions to the Trustee and that there may be more secure methods of
transmitting Instructions than the method(s) selected by the Agency; (iii) that the security
procedures (if any) to be followed in connection with its transmission of Instructions provide to
it a commercially reasonable degree of protection in light of its particular needs and
circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or
unauthorized use of the security procedures.
(q) The Trustee shall not be liable to the parties hereto or deemed in breach or default
hereunder if and to the extent its performance hereunder is prevented by reason of force majeure.
The term "force majeure" means an occurrence that is beyond the control of the Trustee and
could not have been avoided by exercising due care. Force majeure shall include but not be
limited to acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other
similar occurrences.
(r) To the fullest extent permitted by law and notwithstanding anything in this
Indenture to the contrary, the Trustee shall not be personally liable for (i) special, consequential
or punitive damages, however styled, including, without limitation, lost profits or (ii) the acts or
omissions of any nominee, correspondent, clearing agency, or securities depository through
which it holds securities or assets.
(s) The Trustee shall have no responsibility or liability with respect to any
information, statements or recital in any offering memorandum or other disclosure material
prepared or distributed with respect to the issuance of the Bonds.
Section 7.03 Merger or Consolidation. Any company into which the Trustee may be
merged or converted or with which it may be consolidated or any company resulting from any
merger, conversion or consolidation to which it shall be a party or any company to which the
Trustee may sell or transfer all or substantially all of its corporate trust business, provided such
company shall be eligible under subsection (e) of Section 7.02, shall succeed to the rights and
obligations of such Trustee without the execution or filing of any paper or any further act,
anything herein to the contrary notwithstanding.
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Section 7.04 Compensation. The Agency shall pay to the Trustee a reasonable
compensation for its services rendered hereunder and reimburse the Trustee for reasonable
expenses, disbursements and advances, including attorney's and agent's fees and expenses,
incurred by the Trustee in the performance of its obligations hereunder.
The Agency agrees, to the extent permitted by law, to indemnify the Trustee and its
officers, directors, employees, attorneys and agents for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or willful misconduct on its part arising out of or
in connection with (i) the acceptance or administration of the trusts imposed by the Indenture,
including performance of its duties hereunder, including the costs and expenses of defending
itself against any claims or liability in connection with the exercise or performance of any of its
powers or duties hereunder (ii) the Bonds; (iii) the sale of any Bonds and the carrying out of any
of the transactions contemplated by the Bonds; or (iv) any untrue statement of any material fact
or omission to state a material fact necessary to make the statements made, in light of the
circumstances under which they were made, not misleading in any official statement or other
disclosure document utilized by the Agency or under its authority in connection with the sale of
the Bonds. The Agency's obligations hereunder with respect to indemnity of the Trustee and the
provision for its compensation set forth in this Article shall survive and remain valid and binding
notwithstanding the maturity and payment of the Bonds, or the resignation, or removal of the
Trustee.
The Trustee shall have no responsibility for or liability in connection with assuring that
all of the procedures or conditions to closing set forth in the contract of purchase for sale of the
Bonds are satisfied, or that all documents required to be delivered on the closing date to the
parties are actually delivered, except its own responsibility to receive or deliver the proceeds of
the sale, deliver the Bonds and other certificates expressly required to be delivered by it and its
counsel.
Section 7.05 Liabilitv of Trustee. The recitals of facts herein and in the Bonds
contained shall be taken as statements of the Agency, and the Trustee does not assume any
responsibility for the correctness of the same, and does not make any representations as to the
validity or sufficiency of the Indenture or of the Bonds, and shall not incur any responsibility in
respect thereof, other than in connection with the duties or obligations herein or in the Bonds
assigned to or imposed upon it; provided, that the Trustee shall be responsible for its
representations contained in its certificate of authentication on the Bonds. The Trustee shall not
be liable in connection with the performance of its duties hereunder except for its own
negligence or willful misconduct. The Trustee (in its individual or any other capacity) may
become the Owner of Bonds with the same rights it would have if it were not Trustee hereunder,
and, to the extent permitted by law, may act as depository for and permit any of its officers,
directors and employees to act as a member of, or in any other capacity with respect to, any
committee formed to protect the rights of Owners, whether or not such committee shall represent
the Owners of a majority in principal amount (or any lesser amount that may direct the Trustee in
accordance with, and as provided in, the provisions of the Indenture) of the Bonds then
Outstanding. The Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Bond Insurer or the Owners of a
majority in principal amount (or any lesser amount that may direct the Trustee in accordance
with, and as provided in, the provisions of the Indenture) of the Outstanding Bonds relating to
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the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, hereunder. Whether or not
therein expressly so provided, every provision of the Indenture or related documents relating to
the conduct or affecting the liability of or affording protection to the Trustee shall be subject to
the provisions of this Article. All indemnifications and releases from liability granted herein to
the Trustee shall extend to the directors, officers, employees and agents of the Trustee.
Section 7.06 Right to Rely on Documents. The Trustee may rely on and shall be
protected in acting or refraining from acting upon any notice, resolution, request, consent, order,
certificate, report, opinion, bond or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties. The Trustee may
consult with counsel, who may be counsel of or to the Agency, with regard to legal questions,
and the opinion of such counsel shall be full and complete authorization and protection for any
action taken or suffered or omitted by it hereunder in good faith and in accordance therewith.
Whenever in the administration of the trusts imposed upon it by the Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and established by
an Officer's Certificate, and such Certificate shall be full warrant to the Trustee for any action
taken or suffered or omitted in good faith under the provisions of the Indenture in reliance upon
such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of
such matter or may require such additional evidence as to it may seem reasonable.
The Trustee shall be entitled to advice of counsel and other professionals concerning all
matters of trust and its duty hereunder, but the Trustee shall not be answerable for the
professional malpractice of any attorney-at-law or certified public accountant in connection with
the rendering of his professional advice in accordance with the terms of the Indenture, if such
attorney-at-law or certified public accountant was selected by the Trustee with due care.
Section 7.07 Preservation and Inspection of Documents. All documents received by
the Trustee under the provisions of the Indenture shall be retained in its possession and shall be
subject at all reasonable times upon prior notice to the inspection of the Agency, the Bond
Insurer and the Owners of at least twenty-five percent (25%) of the aggregate principal amount
of the Bonds, and their agents and representatives duly authorized in writing, at reasonable hours
and under reasonable conditions.
Section 7.08 Indemnity for Trustee. Before taking any action or exercising any rights
or powers under the Indenture, the Trustee may require that satisfactory indemnity be furnished
to it for the reimbursement of all costs and expenses which it may incur and to indemnify it
against all liability, except liability which may result from its negligence or willful misconduct,
by reason of any action so taken.
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ARTICLE VIII
Section 8.01 Execution of Instruments; Proof of Ownership. Any request, direction,
consent or other instrument in writing required or permitted by the Indenture to be signed or
executed by Owners may be in any number of concurrent instruments of similar tenor by
different parties and may be signed or executed by such Owners in person or by agent appointed
by an instrument in writing. Proof of the execution of any such instrument and of the ownership
of the Bonds shall be sufficient for any purpose of the Indenture and shall be conclusive in favor
of the Trustee with regard to any action taken, suffered or omitted by either of them under such
instrument if made in the following manner:
(a) The fact and date of the execution by any person of any such instrument
may be proved by the certificate of any officer in any jurisdiction who, by the laws
thereof, has power to take acknowledgments within such jurisdiction, to the effect that
the person signing such instrument acknowledged before him the execution thereof, or by
an affidavit of a witness to such execution.
(b) The fact of the ownership of the Bonds under the Indenture by any Owner
and the serial numbers of such Bonds and the date of his ownership of the same shall be
proved by the Bond Register.
Nothing contained in this Article shall be construed as limiting the Trustee to such proof,
it being intended that the Trustee may accept any other evidence of the matters in this Article
stated which to it may seem sufficient. Any request or consent of the Owner of any Bond shall
bind every future Owner of the same Bond and any Bond or Bonds issued in exchange or
substitution therefor or upon the registration of transfer thereof in respect of anything done by
the Trustee in pursuance of such request or consent.
ARTICLE IX
AMENDMENT OF THE INDENTURE
Section 9.01 Amendment by Consent of Owners. The Indenture and the rights and
obligations of the Agency and of the Owners may be amended at any time, upon the written
consent of the Bond Insurer, by a Supplemental Indenture which shall become binding when the
written consents of the Owners of sixty per cent (60%) in aggregate principal amount of Bonds
Outstanding, exclusive of Bonds disqualified as provided in Section 9.02 are filed with the
Trustee, provided that no such amendment shall (1) extend the maturity of or reduce the interest
rate on, or otherwise alter or impair the obligation of the Agency to pay the interest or principal
of, and premium, if any, at the time and place and at the rate and in the currency provided herein
of any Bond, without the express written consent of the Owner of such Bond, or (2) permit the
creation by the Agency of any mortgage, pledge or lien upon the Tax Revenues superior to or on
a parity with the pledge and lien created in the Indenture for the benefit of the Bonds, without the
express written consent of the Owner of such Bond, or (3) reduce the percentage of Bonds
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required for the written consent to any such amendment, without the express written consent of
the Owner of such Bond, or (4) modify the rights or obligations of the Trustee without its prior
written assent thereto.
Any amendment, supplement, modification to, or waiver of, the terms of any Related
Document that requires the consent of Bondowners or adversely affects the rights and interests of
the 2018 Bond Insurer shall be subject to the prior written consent of the 2018 Bond Insurer.
The Indenture and the rights and obligations of the Agency and of the Owners may also
be amended at any time, upon the written notice to the Bond Insurer, by a Supplemental
Indenture which shall become binding upon adoption, without the consent of any Owners, 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 the Indenture
contained, other covenants and agreements thereafter to be observed, or to surrender any
right or power herein reserved to or conferred upon the Agency;
(b) To make such provisions for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provision contained in the Indenture,
or in regard to questions arising under the Indenture, as the Agency may deem necessary
or desirable and not inconsistent with the Indenture, and which shall not materially
adversely affect the interests of the Owners of the Bonds or the Bond Insurer;
(c) To provide for the issuance of any Additional Bonds, and to provide the
terms and conditions under which such Additional Bonds may be issued, subject to and in
accordance with the provisions of Article IV;
(d) To modify, amend or supplement the Indenture in such manner as to
permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any
similar federal statute hereafter in effect, and to add such other terms, conditions and
provisions as may be permitted by said act or similar federal statute, and which shall not
materially adversely affect the interests of the Owners of the Bonds;
(e) To maintain the exclusion of interest on the Tax Exempt Bonds from gross
income for federal income tax purposes;
(f) To modify, amend or supplement the Indenture in such manner as to
conform to changes in the Dissolution Act so long as there is no material adverse effect to
holders of the Bonds; or
(g) To obtain a bond insurance policy or a rating on the Bonds.
Section 9.02 Disqualified Bonds. Bonds owned or held by or for the account of the
Agency or the City shall not be deemed Outstanding for the purpose of any consent or other
action or any calculation of Outstanding Bonds in this Article provided for, and shall not be
entitled to consent to, or take any other action in this Article provided for. Upon request of the
Trustee, the Agency and the City shall specify in a certificate to the Trustee those Bonds
disqualified pursuant to this Section and the Trustee may conclusively rely on such certificate.
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Section 9.03 Endorsement or Replacement of Bonds After Amendment. After the
effective date of any action taken as hereinabove provided, the Agency may determine that the
Bonds may bear a notation, by endorsement in form approved by the Agency, as to such action,
and in that case upon demand of the Owner of any Bond Outstanding at such effective date and
presentation of his Bond for the purpose at the office of the Trustee or at such additional offices
as the Trustee may select and designate for that purpose, a suitable notation as to such action
shall be made on such Bond. If the Agency shall so determine, new Bonds so modified as, in the
opinion of the Agency, shall be necessary to conform to such action shall be prepared and
executed, and in that case upon demand of the Owner of any Bond Outstanding at such effective
date such new Bonds shall be exchanged at the office of the Trustee or at such additional offices
as the Trustee may select and designate for that purpose, without cost to each Owner, for Bonds
then Outstanding, upon surrender of such Outstanding Bonds.
Section 9.04 Amendment by Mutual Consent. The provisions of this Article shall not
prevent any Owner from accepting any amendment as to the particular Bonds held by him,
provided that due notation thereof is made on such Bonds.
Section 9.05 Opinion of Counsel. The Trustee may request and conclusively accept an
opinion of counsel to the Agency that an amendment of the Indenture is in conformity with the
provisions of this Article.
Section 9.06 Notice to Rating Agencies. The Agency shall provide each rating agency
rating the Bonds with a notice of any amendment to the Indenture pursuant to this Article and a
copy of any Supplemental Indenture at least 15 days in advance of its execution.
Section 9.07 Transcript of Proceedings to Bond Insurer. The Agency shall provide
the Bond Insurer with a full transcript of the proceedings relating to the execution and delivery of
any Supplemental Indenture.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
Section 10.01 Events of Default and Acceleration of Maturities. If one or more of the
following events (herein called "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 premium, if any, on any Bond when and as the same shall become due and payable,
whether at maturity as therein expressed, by declaration or otherwise;
(b) If default shall be made in the due and punctual payment of the interest on
any Bond when and as the same shall become due and payable;
(c) If default shall be made by the Agency in the observance of any of the
agreements, conditions or covenants on its part in the Indenture or in the Bonds
contained, and such default shall have continued for a period of thirty (30) days after the
Agency shall have been given notice in writing of such default by the Trustee; provided,
however, that such default shall not constitute an Event of Default hereunder if the
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Agency shall commence to cure such default within said 30 -day period and thereafter
diligently and in good faith proceed to cure such default within a reasonable period of
time not to exceed 60 days after such notice; and provided further that no grace period for
such covenant default shall exceed 30 days or be extended for more than 60 days without
the without the prior written consent of the Bond Insurer; or
(d) If the Agency shall file a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the United
States of America, or if a court of competent jurisdiction shall approve a petition, filed
with or without the consent of the Agency, seeking reorganization under the federal
bankruptcy laws or any other applicable law of the United States of America, or if, under
the provisions of any other law for the relief or aid of debtors, any court of competent
jurisdiction shall assume custody or control of the Agency or of the whole or any
substantial part of its property;
then, and in each and every such case during the continuance of such Event of Default, with the
written consent of the Bond Insurer, the Trustee may, and upon the written request of the Owners
of not less than twenty-five per cent (25%) in aggregate principal amount of Bonds Outstanding,
shall, by notice in writing to the Agency, declare the principal of all of the Bonds then
Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any
such declaration the same shall become and shall be immediately due and payable. For all
purposes under this Article X, the 2018 Bond Insurer is deemed to be an owner of one hundred
percent (100%) of the Bonds insured by it unless such Bond Insurer is in default under the terms
of its Bond Insurance Policy.
The maturity of Insured Series 2018 Bonds shall not be accelerated without the consent
of the 2018 Bond Insurer and in the event the maturity of the Insured Series 2018 Bonds is
accelerated, the 2018 Bond Insurer may elect, in its sole discretion, to pay accelerated principal
and interest accrued, on such principal to the date of acceleration (to the extent unpaid by the
Agency) and the Trustee shall be required to accept such amounts. Upon payment of such
accelerated principal and interest accrued to the acceleration date as provided above, the 2018
Bond Insurer's obligations under the 2018 Bond Insurance Policy with respect to such Insured
Series 2018 Bonds shall be fully discharged.
If, at any time after the principal of the Bonds shall have been so declared due and
payable, and before any judgment or decree for the payment of the money due shall have been
obtained or entered, the Agency shall deposit with the Trustee a sum sufficient to pay all
principal on the Outstanding Bonds and any Parity Debt matured prior to such declaration and all
matured installments of interest (if any) upon all the Bonds, with interest at the rate of ten per
cent (10%) per annum on such overdue installments of principal and interest, and the reasonable
expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the
payment of principal of and interest on the Outstanding Bonds and any Parity Debt due and
payable solely by reason of such declaration) shall have been made good or cured to the
satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been
made therefor, then, and in every such case, the Owners of at least twenty-five per cent (25%) in
aggregate principal amount of Bonds Outstanding, by written notice to the Agency and to the
Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration
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and its consequences. 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.
An Event of Default shall continue to exist under subsections (a) and (b) of this Section
10.01 after payment is made by the Bond Insurer when due, pursuant to the terms of its Bond
Insurance Policy.
Section 10.02 Application of Funds Upon Acceleration. All money in the funds and
accounts provided for in the Indenture upon the date of the declaration of acceleration by the
Trustee as provided in Section 10.01, all Tax Revenues thereafter received by the Agency
hereunder, shall be transmitted to the Trustee and shall be applied by the Trustee in the following
order:
First, to the payment of the costs and expenses of the Trustee, if any, in carrying out the
provisions of this Article, including reasonable compensation to its agents, attorneys and counsel
and any outstanding fees and expenses of the Trustee and then to the payment of the costs and
expenses of the Owners in providing for the declaration of such Event of Default, including
reasonable compensation to their agents, attorneys and counsel;
Second, upon presentation of the several Bonds, and the stamping thereon of the amount
of the payment if only partially paid, or upon the surrender thereof if fully paid, (A) to the
payment of the whole amount then owing and unpaid upon the Outstanding Bonds and any
Parity Debt for principal of, and interest on the Outstanding Bonds and any Panty Debt, with
interest on the overdue interest and principal at the rate of ten per cent (10%) per annum, and (B)
in case such money shall be insufficient to pay in full the whole amount so owing and unpaid
upon the Outstanding Bonds and any Panty Debt, then to the payment of such interest, principal,
and interest on overdue interest and principal without preference or priority among such interest,
principal, and interest on overdue interest and principal, ratably to the aggregate of such interest,
principal, and interest on overdue interest and principal.
Section 10.03 Trustee to Represent Bondowners. The Trustee is hereby irrevocably
appointed (and the successive respective Owners of the Bonds, by taking and owning the same,
shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful
attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on
their behalf such rights and remedies as may be available to such Owners under the provisions of
the Bonds, the Indenture, the Law and applicable provisions of any other law. Upon the
occurrence and continuance of an Event of Default or other occasion giving rise to a right in the
Trustee to represent the Owners of the Bonds, the Trustee in its discretion may with the consent
of the Bond Insurer, and upon the written request of the Owners of not less than twenty-five per
cent (25%) in aggregate principal amount of Bonds then Outstanding, and upon being
indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights
of such Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem
most effectual to protect and enforce any such right, at law or in equity, either for the specific
performance of any covenant or agreement contained herein, or in aid of the execution of any
power herein granted, or for the enforcement of any other appropriate legal or equitable right or
remedy vested in the Trustee or in such Owners under the Indenture, the Law or any other law.
All rights of action under the Indenture or the Bonds or otherwise may be prosecuted and
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enforced by the Trustee without the possession of any of the Bonds or the production thereof in
any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee
shall be brought in the name of the Trustee for the benefit and protection of all the Owners of
such Bonds, subject to the provisions of the Indenture.
Section 10.04 Bondowners' Direction of Proceedings. The Owners of a majority in
aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument
or concurrent instruments in writing executed and delivered to the Trustee, to direct the method
of conducting all remedial proceedings taken by the Trustee hereunder; provided, that such
direction shall not be otherwise than in accordance with law and the provisions of the Indenture,
and that the Trustee shall have the right to decline to follow any such direction which in the
opinion of the Trustee would be unjustly prejudicial to Bondowners not parties to such direction.
Section 10.05 Limitation on Bondowners' Right to Sue. No Owner of any Bond shall
have the right to institute any suit, action or proceeding at law or in equity, for the protection or
enforcement of any right or remedy under the Indenture, the Law or any other applicable law
with respect to such Bond, unless (1) such Owner shall have given to the Trustee written notice
of the occurrence of an Event of Default; (2) the Owners of not less than twenty-five per cent
(25%) in aggregate principal amount of Bonds then Outstanding shall have made written request
upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or
proceeding in its own name; (3) such Owner or said Owners shall have tendered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with
such request; and (4) the Trustee shall have refused or omitted to comply with such request for a
period of sixty (60) days after such written request shall have been received by, and said tender
of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby
declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any
remedy hereunder or under law; it being understood and intended that no one or more Owner of
Bonds shall have any right in any manner whatever by his or their action to affect, disturb or
prejudice the security of the Indenture or the rights of any other Owners of Bonds, or to enforce
any right under the Indenture, the Law or other applicable law with respect to the Bonds, except
in the manner herein provided, and that all proceedings at law or in equity to enforce any such
right shall be instituted, had and maintained in the manner herein provided and for the benefit
and protection of all Owners of the Outstanding Bonds, subject to the provisions of the
Indenture.
Section 10.06 Non -Waiver. Nothing in this Article or in any other provision of the
Indenture, or in the Bonds, shall affect or impair the obligation of the Agency, which is absolute
and unconditional, to pay the principal of, and the interest on the Bonds to the respective Owners
of the Bonds at the respective dates of maturity, as herein provided, out of the Tax Revenues
pledged for such payment, or affect or impair the right of action, which is also absolute and
unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract
embodied in the Bonds and in the Indenture.
A waiver of any default or breach of duty or contract by any Owner shall not affect any
subsequent default or breach of duty or contract, or impair any rights or remedies on any such
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subsequent default or breach. No delay or omission by any Owner to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a
waiver of any such default or an acquiescence therein, and every power and remedy conferred
upon the Owners by the Law or by this Article may be enforced and exercised from time to time
and as often as shall be deemed expedient by the Owners.
If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned
or determined adversely to the Owners, the Trustee, the Agency and the Owners shall be restored
to their former positions, rights and remedies as if such suit, action or proceeding had not been
brought or taken.
Section 10.07 Remedies Not Exclusive. No remedy herein conferred upon or reserved
to the Trustee or the Owners is intended to be exclusive of any other remedy. Every such
remedy shall be cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised
without exhausting and without regard to any other remedy conferred by the Law or any other
law.
ARTICLE XI
DEFEASANCE
Section 11.01 Discharge of Indebtedness. (a) If (i) the Agency shall pay or cause to be
paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof
and the interest and premium, if any, thereon at the times and in the manner stipulated herein and
therein, and (ii) all other amounts due and payable hereunder shall have been paid, then the
Owners shall cease to be entitled to the lien created hereby, and all agreements, covenants and
other obligations of the Agency hereunder shall thereupon cease, terminate and become void and
be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Agency all
such instruments as may be necessary or desirable to evidence such discharge and satisfaction,
and the Trustee shall pay over or deliver to the Agency all money or securities held by it
pursuant hereto which are not required for the payment of the principal of and interest and
premium, if any, on the Bonds.
(b) Subject to the provisions of subsection (a) of this section, when any Bond shall
have been paid and if, at the time of such payment, the Agency shall have kept, performed and
observed all of the covenants and promises in such Bonds and in the Indenture required or
contemplated to be kept, performed and observed by it or on its part on or prior to that time, then
the Indenture shall be considered to have been discharged in respect of such Bond and such Bond
shall cease to be entitled to the lien created hereby, and all agreements, covenants and other
obligations of the Agency hereunder shall cease, terminate, become void and be completely
discharged and satisfied as to such Bond.
(c) Notwithstanding the discharge and satisfaction of the Indenture or the discharge
and satisfaction of the Indenture in respect of any Bond, those provisions of the Indenture
relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer
of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and
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cancellation of Bonds, non -presentment of Bonds, and the duties of the Trustee in connection
with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the
Owners and the Trustee shall continue to be obligated to hold in trust any moneys or investments
then held by the Trustee for the payment of the principal of and interest and premium, if any, on
the Bonds, to pay to the Owners of the Bonds the funds so held by the Trustee as and when such
payment becomes due.
Section 11.02 Bonds Deemed to Have Been Paid. (a) If moneys shall have been set
aside and held by the Trustee for the payment or redemption of any Bond and the payment of the
interest thereon to the maturity or redemption date thereof, such Bond shall be deemed to have
been paid within the meaning and with the effect provided in Section 11.01 hereof. Any
Outstanding Bond shall prior to the maturity date or redemption date thereof be deemed to have
been paid within the meaning of and with the effect expressed in Section 11.01 hereof if:
(i) there shall have been deposited with the Trustee either (A) money in an
amount which shall be sufficient, or (B) Federal Securities, the principal of and the
interest on which when due, and without any reinvestment thereof, will provide moneys
which shall be sufficient to pay when due the interest to become due on such Bond on
and prior to the maturity date or redemption date thereof, as the case may be, and the
principal of and premium, if any, on such Bond, and
(ii) in the event such Bond is not by its terms subject to redemption within the
next succeeding 60 days, the Agency shall have given the Trustee in form satisfactory to
it irrevocable instructions to mail as soon as practicable, a notice to the owners of such
Bond that the deposit required by clause (i) above has been made with the Trustee and
that such Bond is deemed to have been paid in accordance with this section and stating
the maturity date or redemption date upon which money is to be available for the
payment of the principal of and premium, if any, on such Bond.
Neither the money nor the Federal Securities deposited with the Trustee pursuant to this
subsection in connection with the deemed payment of Bonds, nor principal or interest payments
on any such Federal Securities, shall be withdrawn or used for any purpose other than, and shall
be held in trust for and pledged to, the payment of the principal of and, premium, if any, and
interest on such Bonds.
(b) No Bond shall be deemed to have been paid pursuant to clause (i) of subsection
(a) of this section unless the Agency shall cause to be delivered (A) an executed copy of a
Verification Report with respect to such deemed payment, (B) a copy of the escrow agreement
entered into in connection with the deposit pursuant to clause (i) of subsection (a) of this section
resulting in such deemed payment, which escrow agreement shall be acceptable to the Bond
Insurer and provide that no substitution of Federal Securities shall be permitted except with other
Federal Securities and upon delivery of a new Verification Report and no reinvestment of
Federal Securities shall be permitted except as contemplated by the original Verification Report
or upon delivery of a new Verification Report, and (C) a copy of an opinion of counsel of
recognized standing in the field of law relating to municipal bonds, dated the date of such
deemed payment and addressed to the Agency, the Trustee and the Bond Insurer, insuring the
Bonds to be defeased, to the effect that such Bond has been paid within the meaning and with the
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effect expressed in the Indenture, and all agreements, covenants and other obligations of the
Agency hereunder as to such Bond have ceased, terminated, become void and been completely
discharged and satisfied.
The 2018 Bond Insurer shall be provided with drafts of the above -referenced
documentation not less than five (5) business days prior to the funding of the escrow.
Insured Series 2018 Bonds shall be deemed to be "Outstanding" under the Indenture
unless and until they are in fact paid and retired or the above criteria are met.
(c) The Trustee is entitled to rely upon (i) an opinion of counsel of recognized
standing in the field of law relating to municipal bonds to the effect that the conditions precedent
to a deemed payment pursuant to clause (ii) of subsection (a) of this section have been satisfied,
and (ii) such other opinions, certifications and computations, of accountants or other financial
consultants concerning the matters described in paragraph (a)(i) of this section.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Liability of Agency Limited to Tax Revenues. The Agency shall not be
required to advance any money derived from any source of income other than the Tax Revenues
for the payment of the principal of, and the interest on the Bonds or for the performance of any
covenants herein contained, other than the covenants contained in Section 6.11 hereof. The
Agency may, however, advance funds for any such purpose, provided that such funds are derived
from a source legally available for such purpose.
The Bonds are special obligations of the Agency and are payable, as to interest thereon
and principal thereof, exclusively from the Tax Revenues, and the Agency is not obligated to pay
them except from the Tax Revenues. All of the Bonds are equally secured by a pledge of, and
charge and lien upon, all of the Tax Revenues, and the Tax Revenues constitute a trust fund for
the security and payment of the principal of, and the interest on the Bonds, to the extent set forth
in the Indenture. The Bonds are not a debt of the City, the County, the State of California or any
other political subdivision of the State, and neither said City, said State, said County nor any of
the State's other political subdivisions is liable therefor, nor in any event shall the Bonds be
payable out of any funds or properties other than those of the Agency pledged therefor as
provided in the Indenture. The Bonds do not constitute an indebtedness within the meaning of
any constitutional or statutory limitation or restriction, and neither the City Council members
acting for the Agency nor any persons executing the Bonds are liable personally on the Bonds by
reason of their issuance.
Section 12.02 Parties Interested Herein. Nothing in the Indenture, expressed or
implied, is intended to give to any person other than the Agency, the Trustee, the Bond Insurer
and the Owners any right, remedy or claim under or by reason of the Indenture. Any covenants,
stipulations, promises or agreements in the Indenture contained by and on behalf of the Agency
or any City Council member or officer or employee of the Agency shall be for the sole and
exclusive benefit of the Trustee, the Bond Insurer and the Owners.
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Section 12.03 Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding, any money held by the Trustee in trust for the payment and discharge of the
interest on, or principal or prepayment premium, if any, of any Bond which remains unclaimed
for two (2) years after the date when such amounts have become payable, if such money was
held by the Trustee on such date, or for two (2) years after the date of deposit of such money if
deposited with the Trustee after the date such amounts have become payable shall be paid by the
Trustee to the Agency as its absolute property free from trust, and the Trustee shall thereupon be
released and discharged with respect thereto and the Owners shall look only to the Agency for
the payment of such amounts; provided, that before being required to make any such payment to
the Agency, the Trustee shall, at the expense of the Agency, give notice by first class mail to all
Owners and to the Securities Depository and the MSRB that such money remains unclaimed and
that after a date named in such notice, which date shall not be less than sixty (60) days after the
date of giving such notice, the balance of such money then unclaimed will be returned to the
Agency.
Section 12.04 Moneys Held for Particular Bonds. The money held by the Trustee for
the payment of the principal of or premium or interest on particular Bonds due on any date (or
portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and
pending such payment, be set aside on its books and held in trust by it for the Owners of the
Bonds entitled thereto, subject, however, to the provisions of Section 12.03 hereof, but without
any liability for interest thereon.
Section 12.05 Successor Is Deemed Included in All References to Predecessor.
Whenever in the Indenture either the Agency or any City Council member or officer or employee
thereof is named or referred to, such reference shall be deemed to include the successor to the
powers, duties and functions, with respect to the management, administration and control of the
affairs of the Agency, that are presently vested in the Agency or such City Council member,
officer or employee, and all the agreements, covenants and provisions contained in the Indenture
by or on behalf of the Agency or any City Council member, officer or employee thereof shall
bind and inure to the benefit of the respective successors thereof whether so expressed or not.
Section 12.06 Execution of Documents by Owners. Any request, declaration or other
instrument which the Indenture may require or permit to be executed by Owners may be in one
or more instruments of similar tenor, and shall be executed by Owners in person or by their
attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by any
Owner or his attorney of such request, declaration or other instrument, or of such writing
appointing such attorney, may be proved by the certificate of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded in the state or territory in which he
purports to act, that the person signing such request, declaration or other instrument or writing
acknowledged to him the execution thereof, or by an affidavit of -a witness of such execution,
duly sworn to before such notary public or other officer.
The Trustee may nevertheless in its discretion require further or other proof in cases
where it deems the same desirable. The ownership of registered Bonds and the amount,
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maturity, number and date of holding the same shall be proved by the registry books provided for
in Section 2.12.
Any request, declaration or other instrument or writing of the Owner of any Bond shall
bind all future Owners of such Bond with respect to anything done by the Agency in good faith
and in accordance therewith.
Section 12.07 Waiver of Personal Liability. No City Council member or officer or
employee of the Agency shall be individually or personally liable for the payment of the
principal of, premium, if any, and the interest on the Bonds; but nothing herein contained shall
relieve any City Council member or officer or employee of the Agency from the performance of
any official duty provided by law.
Section 12.08 Acquisition of Bonds by Agency. All Bonds acquired by the Agency,
whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation.
Section 12.09 Destruction of Cancelled Bonds. Whenever in the Indenture provision is
made for return to the Agency of any Bonds which have been cancelled pursuant to the
provisions of the Indenture, the Agency may, by a Written Request of the Agency, direct the
Trustee to destroy such Bonds and famish to the Agency a certificate of such destruction.
Section 12.10 Content of Certificates and Reports. Every certificate or report with
respect to compliance with a condition or covenant provided for in the Indenture shall include (a)
a statement that the person or persons making or giving such certificate or report have read such
covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements or opinions
contained in such certificate or report are based; (c) a statement that, in the opinion of the
signers, they have made or caused to be made such examination or investigation as is necessary
to enable them to express an informed opinion as to whether or not such covenant or condition
has been complied with; and (d) a statement as to whether, in the opinion of the signers, such
condition or covenant has been complied with.
Any such certificate made or given by an officer of the Agency may be based, insofar as
it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless
such officer knows that the certificate or opinion or representations with respect to the matters
upon which his certificate may be based, as aforesaid, are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous. Any such certificate or
opinion or representation made or given by counsel may be based, insofar as it relates to factual
matters information with respect to which is in the possession of the Agency, upon the certificate
or opinion of or representations by an officer or officers of the Agency, unless such counsel
knows that the certificate or opinion or representations with respect to the matters upon which
his certificate, opinion or representation may be based, as aforesaid, are erroneous, or in exercise
of reasonable care should have known that the same were erroneous.
Section 12.11 Funds and Accounts. Any fund or account required by the Indenture to
be established and maintained by the Agency or the Trustee may be established and maintained
in the accounting records of the Agency or the Trustee either as a fund or an account, and may,
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for the purposes of such records, any audits thereof and any reports or statements with respect
thereto, be treated either as a fund or as an account; but all such records with respect to all such
funds and accounts shall at all times be maintained in accordance with sound accounting
practices and with due regard for the protection of the security of the Bonds and the rights of the
Owners.
Section 12.12 Article and Section Headinss and References. The headings or titles of
the several Articles and sections hereof, and the table of contents appended hereto, shall be
solely for convenience of reference and shall not affect the meaning, construction or effect of the
Indenture.
All references herein to "Articles," "Sections" and other subdivisions are to the
corresponding articles, sections or subdivisions of the Indenture; and the words "herein,"
"hereof," "hereunder" and other words of similar import refer to the Indenture as a whole and not
to any particular article, section or subdivision hereof.
Section 12.13 Partial Invalidity. If any one or more of the agreements or covenants or
portions thereof provided in the Indenture to be performed on the part of the Agency (or of the
Trustee) should be contrary to law, then such agreement or agreements, such covenant or
covenants, or such portions thereof, shall be null and void and shall be deemed separable from
the remaining agreements and covenants or portions thereof and shall in no way affect the
validity of the Indenture or of the Bonds; but the Owners shall retain all the rights and benefits
accorded to them under the Law or any other applicable provisions of law. The Agency hereby
declares that it would have entered into the Indenture and each and every other section,
paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the
issuance of the Bonds pursuant hereto irrespective of the fact that any one or more sections,
paragraphs, subdivisions, sentences, clauses or phrases of the Indenture or the application thereof
to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.
Section 12.14 Notices. All notices required to be given hereunder to the Agency, the
Trustee and the 2018 Bond Insurer, shall be sent to the following addresses:
Agency: Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
Attention: Executive Director
Trustee: The Bank of New York Mellon Trust Company, N.A.
400 South Hope Street, Suite 500
Los Angeles, California 90071
Attention: Corporate Trust Department
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2018 Bond Insurer:
Telephone:
Telecopier:
In each case in which notice or other communication
refers to an Event of Default, then a copy of such
notice or other communication shall also be sent to
the attention of the Deputy General Counsel - Public
Finance and shall be marked to indicate "URGENT
MATERIAL ENCLOSED."
Section 12.15 2018 Bond Insurance Policy Payment and Reimbursement Provisions.
[SAMPLE PROVISIONS]
The following provisions shall govern in the event of a conflict with any contrary
provision of the Indenture.
If, on the third Business Day prior to the related scheduled interest payment date or
principal payment date ("Payment Date") there is not on deposit with the Trustee, after making
all transfers and deposits required under the Indenture, moneys sufficient to pay the principal of
and interest on the Insured Series 2018 Bonds due on such Payment Date, the Trustee shall give
notice to the 2018 Bond Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent")
by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time,
on such Business Day. If, on the second Business Day prior to the related Payment Date, there
continues to be a deficiency in the amount available to pay the principal of and interest on the
Insured Series 2018 Bonds due on such Payment Date, the Trustee shall make a claim under the
2018 Bond Insurance Policy and give notice to the 2018 Bond Insurer and the Insurer's Fiscal
Agent (if any) by telephone of the amount of such deficiency, and the allocation of such
deficiency between the amount required to pay interest on the Insured Series 2018 Bonds and the
amount required to pay principal of the Insured Series 2018 Bonds, confirmed in writing to the
2018 Bond Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such
second Business Day by filling in the form of Notice of Claim and Certificate delivered with the
2018 Bond Insurance Policy.
The Trustee shall designate any portion of payment of principal on Insured Series 2018
Bonds paid by the 2018 Bond Insurer, whether by virtue of mandatory sinking fiend redemption,
maturity or other advancement of maturity, on its books as a reduction in the principal amount of
Insured Series 2018 Bonds registered to the then current Owner, whether DTC or its nominee or
otherwise, and shall issue a replacement Bond to the 2018 Bond Insurer, registered in the name
of , in a principal amount equal to the amount of principal so paid (without
regard to authorized denominations); provided that the Trustee's failure to so designate any
payment or issue any replacement Insured Series 2018 Bond shall have no effect on the amount
of principal or interest payable by the Agency on any Insured Series 2018 Bond or the
subrogation rights of the 2018 Bond Insurer.
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The Trustee shall keep a complete and accurate record of all funds deposited by the 2018
Bond Insurer into the Policy Payments Account (defined below) and the allocation of such funds
to payment of interest on and principal of any Insured Series 2018 Bond. The 2018 Bond Insurer
shall have the right to inspect such records at reasonable times upon reasonable notice to the
Trustee.
Upon payment of a claim under the 2018 Bond Insurance Policy, the Trustee shall
establish a separate special purpose trust account for the benefit of Owners referred to herein as
the "Policy Payments Account' and over which the Trustee shall have exclusive control and sole
right of withdrawal. The Trustee shall receive any amount paid under the 2018 Bond Insurance
Policy in trust on behalf of Owners and shall deposit any such amount in the Policy Payments
Account and distribute such amount only for purposes of making the payments for which a claim
was made. Such amounts shall be disbursed by the Trustee to Owners in the same manner as
principal and interest payments are to be made with respect to the Insured Series 2018 Bonds
under the sections hereof regarding payment of Insured Series 2018 Bonds. It shall not be
necessary for such payments to be made by checks or wire transfers separate from the check or
wire transfer used to pay debt service with other funds available to make such payments.
Notwithstanding anything herein to the contrary, the Agency agrees to pay to the 2018 Bond
Insurer (i) a sum equal to the total of all amounts paid by the 2018 Bond Insurer under the 2018
Bond Insurance Policy (the "Insurer Advances"); and (ii) interest on such Insurer Advances from
the date paid by the 2018 Bond Insurer until payment thereof in full, payable to the 2018 Bond
Insurer at the Late Payment Rate per annum (collectively, the "Insurer Reimbursement
Amounts"). "Late Payment Rate" means the lesser of (a) the greater of (i) the per annum rate of
interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in
The City of New York, as its prime or base lending rate (any change in such rate of interest to be
effective on the date such change is announced by JPMorgan Chase Bank) plus _%, and (ii)
the then applicable highest rate of interest on the Insured Series 2018 Bonds and (b) the
maximum rate permissible under applicable usury or similar laws limiting interest rates. The
Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a
year of 360 days. The Agency hereby covenants and agrees that the Insurer Reimbursement
Amounts are secured by a lien on and pledge of the Tax Revenues and payable from such Tax
Revenues on a parity with debt service due on the Insured Series 2018 Bonds, payable solely
from the Tax Revenues.
Funds held in the Policy Payments Account shall not be invested by the Trustee and may
not be applied to satisfy any costs, expenses or liabilities of the Trustee. Any funds remaining in
the Policy Payments Account following a bond payment date shall promptly be remitted to the
2018 Bond Insurer.
The 2018 Bond Insurer shall, to the extent it makes any payment of principal of or
interest on the Insured Series 2018 Bonds, become subrogated to the rights of the recipients of
such payments in accordance with the terms of the 2018 Bond Insurance Policy (which
subrogation rights shall include the rights of any such recipients in connection with any
Insolvency Proceeding). Each obligation of the Agency to the 2018 Bond Insurer under the
Related Documents shall survive discharge or termination of such Related Documents.
4150-2542-5420.3 60
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The Agency shall pay or reimburse the 2018 Bond Insurer any and all charges, fees, costs
and expenses that the 2018 Bond Insurer may reasonably pay or incur in connection with (i) the
administration, enforcement, defense or preservation of any rights or security in any Related
Document; (ii) the pursuit of any remedies under the Indenture or any other Related Document
or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect
to, or related to, the Indenture or any other Related Document whether or not executed or
completed, or (iv) any litigation or other dispute in connection with the Indenture or any other
Related Document or the transactions contemplated thereby, other than costs resulting from the
failure of the 2018 Bond Insurer to honor its obligations under the 2018 Bond Insurance Policy.
The 2018 Bond Insurer reserves the right to charge a reasonable fee as a condition to executing
any amendment, waiver or consent proposed in respect of the Indenture or any other Related
Document.
After payment of reasonable expenses of the Trustee, the application of funds realized
upon default shall be applied to the payment of expenses of the Agency or rebate only after the
payment of past due and current debt service on the Insured Series 2018 Bonds and amounts
required to restore the Reserve Account to the Reserve Account Requirement.
The 2018 Bond Insurer shall be entitled to pay principal or interest on the Insured Series
2018 Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by
the Issuer (as such terms are defined in the 2018 Bond Insurance Policy) and any amounts due on
the Insured Series 2018 Bonds as a result of acceleration of the maturity thereof in accordance
with the Indenture, whether or not the 2018 Bond Insurer has received a Notice of Nonpayment
(as such terms are defined in the 2018 Bond Insurance Policy) or a claim upon the 2018 Bond
Insurance Policy.
The rights granted to the 2018 Bond Insurer under the Indenture or any other Related
Document to request, consent to or direct any action are rights granted to the 2018 Bond Insurer
in consideration of its issuance of the 2018 Bond Insurance Policy. Any exercise by the 2018
Bond Insurer of such rights is merely an exercise of the 2018 Bond Insurer's contractual rights
and shall not be construed or deemed to be taken for the benefit, or on behalf, of the Owners and
such action does not evidence any position of the 2018 Bond Insurer, affirmative or negative, as
to whether the consent of the Bondowners or any other person is required in addition to the
consent of the 2018 Bond Insurer.
Amounts paid by the 2018 Bond Insurer under the 2018 Bond Insurance Policy shall not
be deemed paid for purposes of the Indenture and the Insured Series 2018 Bonds relating to such
payments shall remain Outstanding and continue to be due and owing until paid by the Agency
in accordance with the Indenture. The Indenture shall not be discharged unless all amounts due
or to become due to the 2018 Bond Insurer have been paid in full or duly provided for.
In determining whether any amendment, consent, waiver or other action to be taken, or
any failure to take action, under the Indenture would adversely affect the security for the Insured
Series 2018 Bonds or the rights of the Owners, the Trustee shall consider the effect of any such
amendment, consent, waiver, action or inaction as if there were no 2018 Bond Insurance Policy.
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The 2018 Bond Insurer shall be deemed to be the sole holder of the Insured Series 2018
Bonds for the purpose of exercising any voting right or privilege or giving any consent or
direction or taking any other action that the holders of the Bonds insured by it are entitled to take
pursuant to the Indenture pertaining to (i) defaults and remedies and (ii) the duties and
obligations of the Trustee. In furtherance thereof and as a term of the Indenture and each Insured
Series 2018 Bond, each holder of an Insured Series 2018 Bond appoint the 2018 Bond Insurer as
their agent and attorney-in-fact and agree that the 2018 Bond Insurer may at any time during the
continuation of any proceeding by or against the Agency under the United States Bankruptcy
Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law
(an ".Insolvency Proceeding") direct all matters relating to such Insolvency Proceeding, including
without limitation, (A) all matters relating to any claim or enforcement proceeding in connection
with an Insolvency Proceeding (a "Claim"), (B) the direction of any appeal of any order relating
to any Claim, (C) the posting of any surety, supersedeas or performance bond pending any such
appeal, and (D) the right to vote to accept or reject any plan of adjustment. In addition, each
holder of an Insured Series 2018 Bond delegate and assign to the 2018 Bond Insurer, to the
fullest extent permitted by law, the rights of each holder of an Insured Series 2018 Bond in the
conduct of any Insolvency Proceeding, including, without limitation, all rights of any party to an
adversary proceeding or action with respect to any court order issued in connection with any
such Insolvency Proceeding. The Trustee acknowledges such appointment, delegation and
assignment by each holder of an Insured Series 2018 Bond for the 2018 Bond Insurer's benefit,
and agrees to cooperate with the 2018 Bond Insurer in taking any action reasonably necessary or
appropriate in connection with such appointment, delegation and assignment. Remedies granted
to the holder of an Insured Series 2018 Bond shall expressly include mandamus.
No contract shall be entered into or any action taken by which the rights of the 2018
Bond Insurer or security for or sources of payment of the Insured Series 2018 Bonds may be
impaired or prejudiced in any material respect except upon obtaining the prior written consent of
the 2018 Bond Insurer.
Any interest rate exchange agreement ("Swap Agreement") entered into by the Agency
with respect to the Series 2018 Bonds shall meet the following conditions: (i) the Swap
Agreement must be entered into to manage interest costs related to, or a hedge against (a) assets
then held, or (b) debt then outstanding, or (iii) debt reasonably expected to be issued within the
next twelve (12) months, and (ii) the Swap Agreement shall not contain any leverage element or
multiplier component greater than 1.Ox unless there is a matching hedge arrangement which
effectively off -sets the exposure from any such element or component. Unless otherwise
consented to in writing by the 2018 Bond Insurer, any uninsured net settlement, breakage or
other termination amount then in effect shall be subordinate to debt service on the Insured Series
2018 Bonds and on any debt on parity with the Bonds. The Agency shall not terminate a Swap
Agreement unless it demonstrates to the satisfaction of the 2018 Bond Insurer prior to the
payment of any such termination amount that such payment will not cause the Agency to be in
default under the Related Documents, including but not limited to, any monetary obligations
thereunder. All counterparties or guarantors to any Swap Agreement must have a rating of at
least "A-" and "A3" by Standard & Poor's (S&P") and Moody's Investors Service ("Moody's").
If the counterparty or guarantor's rating falls below "A-" or "A3" by either S&P or Moody's, the
counterparty or guarantor shall execute a credit support annex to the Swap Agreement, which
„ credit support annex shall be acceptable to the 2018 Bond Insurer. If the counterparty or the
4150-2542-5420.3 C2
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guarantor's long term unsecured rating falls below "Baal" or "BBB+" by either Moody's or S&P,
a replacement counterparty or guarantor, acceptable to the 2018 Bond Insurer, shall be required.
Section 12.16 Bond Insurer Notice Provisions. [SAMPLE PROVISIONS] The
Bond Insurer shall be provided with the following information by the Agency or Trustee, as the
case may be:
(i) Annual audited financial statements as part of the Annual Report (as
defined in the Continuing Disclosure Agreement), provided, however, that the audited
financial statements of the Agency may be submitted separately from the balance of the
Annual Report, and later than the date required for the filing of the Annual Report and as
soon as practicable if they are not available by that date, and such other information, data
or reports as the Bond Insurer shall reasonably request from time to time;
(ii) Notice of any draw upon the Agency's Reserve Account within two
Business Days after knowledge thereof other than (i) withdrawals of amounts in excess of
the applicable Reserve Account Requirement and (ii) withdrawals in connection with a
refunding of the Bonds insured by the Bond Insurer;
(iii) Notice of any default known to the Trustee or Agency within five
Business Days after knowledge thereof,
(iv) Prior notice of the advance refunding or redemption of any of the Bonds
insured by the Bond Insurer, including the principal amount, maturities and CUSIP
numbers thereof,
(v) Notice of the resignation or removal of the Trustee and Bond Registrar
and the appointment of, and acceptance of duties by, any successor thereto;
(vi) Notice of the commencement of any proceeding by or against the Agency
commenced under the United States Bankruptcy Code or any other applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency
Proceeding");
(vii) Notice of the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer of any payment of principal
of, or interest on, the Bonds insured by the Bond Insurer;
(viii) A full original transcript of all proceedings relating to the execution of any
amendment, supplement, or waiver to the Related Documents; and
(ix) All reports, notices and correspondence to be delivered to Bondowners
under the terms of the Related Documents.
In addition, to the extent that the Agency has entered into a continuing disclosure
agreement, covenant or undertaking with respect to the Bonds insured by the Bond Insurer, all
information famished pursuant to such agreements shall also be provided to the Bond Insurer,
simultaneously with the furnishing of such information.
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The Bond Insurer shall have the right to receive such additional information as it may
reasonably request.
Notwithstanding the foregoing, the Bond Insurer agrees to receive notice, and shall be
deemed to have received notice in satisfaction of the provisions set forth in this Section, by
filings made (or caused to be made) by the Agency through the Electronic Municipal Market
Access website of the Municipal Securities Rulemaking Board (including in accordance with
Section 12.16(1)), currently located at http://emma.msrb.org. The Agency will use good faith
efforts to provide notice (by first class mail or facsimile or electronic mail) of such filings to the
Bond Insurer.
Section 12.17 Bond Insurer as Third Party Beneficiary. The Bond Insurer is hereby
expressly made a third party beneficiary of the Indenture and each other Related Documents.
Section 12.18 California Law. The Indenture of Trust shall be construed and governed
in accordance with the laws of the State of California.
[Remainder of page intentionally left blank.]
4150-2542-5420.3 64
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IN WITNESS WHEREOF, the Agency and the Trustee have entered into this Indenture
of Trust by their officers thereunto duly authorized as of the day and year first above written.
ATTEST:
In
City Clerk of the City of Santa Ana,
acting for Successor Agency to the
former Community Redevelopment
Agency of the City of Santa Ana
4150-2542-5420.3
40990-25
SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF SANTA ANA
By:
Director of Finance, acting for the
Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Trustee
LE
[Signature page to Indenture]
SA -3-83
Authorized Officer
APPENDIX A
FORM OF BOND
No.
SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA
TAX ALLOCATION REFUNDING BONDS
[SERIES 2018A (TAX EXEMPT)] [2018B (FEDERALLY TAXABLE)]
RATE OF
BOND DATE: MATURITY DATE: INTEREST: CUSIP NUMBER:
, 2018 September 1, 20
Registered Owner: CEDE & CO.
Principal Amount:
THE SUCCESSOR AGENCY TO THE FORMER COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate
and politic, duly organized and existing under and pursuant to the laws of the State of California
(the "Agency"), for value received hereby promises to pay to the registered owner specified
above, or registered assigns, on the maturity date set forth above (subject to any right of prior
redemption hereinafter mentioned) the principal sum set forth above in lawful money of the
United States of America; and to pay interest thereon at the interest rate per annum set forth
above in like lawful money from the date hereof. The interest on this Bond will be payable on
March 1 and September 1 in each year (each an "Interest Payment Date"), commencing on
1, 20 . The principal hereof and redemption premium hereon, if any, are payable upon
presentation and surrender hereof at the Principal Corporate Trust Office (as defined in the
Indenture) of The Bank of New York Mellon Trust Company, N.A. (together with any successor
as trustee under the Indenture hereinafter mentioned, the "Trustee"). Interest hereon is payable
by check, mailed by first class mail, on each interest payment date to the owner whose name
appears on the Bond Register maintained by the Trustee as of the close of business on the
fifteenth day of the month preceding the month in which the interest payment date occurs (the
"Record Date"), except with respect to defaulted interest for which a special record date will be
established; provided, that in the case of an owner of one million dollars ($1,000,000) or more in
aggregate principal amount of Bonds, upon written request of such owner to the Trustee received
not later than the Record Date, such interest shall be paid on the interest payment date in
immediately available funds by wire transfer. Interest shall be calculated on the basis of a 360 -
day year consisting of twelve 30 -day months.
This Bond is a duly authorized issue of Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds, Series
2018A (Tax Exempt) (the `Bonds"), limited in aggregate principal amount to $XX,000,000 all of
like tenor and date (except for such variations, if any, as may be required to designate varying
numbers, maturities, interest rates or redemption provisions), all issued under the provisions of
4150-2542-5420.3 A -I
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the Community Redevelopment Law of the State of California, as amended including, without
limitation, by Parts 1.8 (commencing with Section 34161) and 1.85 (commencing with Section
34170) (the "Law"), and pursuant to the provisions of the Indenture of Trust, dated as of
[DATED DATE], by and between the Agency and The Bank of New York Mellon Trust
Company, N.A., as trustee (the "Indenture").
[Simultaneously with the issuance of the Bonds, the Agency is issuing its Successor
Agency to the former Community Redevelopment Agency of the City of Santa Ana Tax
Allocation Refunding Bonds, Series 2018B (Federally Taxable) (the "Series 2018B Bonds"), in
the aggregate principal amount of $YY,000,000]. The Bonds are on a parity with the Series
2018B Bonds.] Pursuant to and as more particularly provided in the Indenture, Additional Bonds
may be issued by the Agency payable from Tax Revenues as provided in the Indenture.
All Bonds are equally and ratably secured in accordance with the terms and conditions of
the Indenture, and reference. is hereby made to the Indenture, to any resolutions supplemental
thereto and to the Law for a description of the terms on which the Bonds are issued, for the
provisions with regard to the nature and extent of the security provided for the Bonds and of the
nature, extent and manner of enforcement of such security, and for a statement of the rights of
the registered owners of the Bonds; and all the terms of the Indenture and the Law are hereby
incorporated herein and constitute a contract between the Agency and the registered owner from
time to time of this Bond, and to all the provisions thereof the registered owner of this Bond, by
his acceptance hereof, consents and agrees. Each registered owner hereof shall have recourse to
all the provisions of the Law and the Indenture and shall be bound by all the terms and
conditions thereof.
The Bonds are issued to provide funds to aid in refunding outstanding bonds of the
Agency as more particularly described in the Indenture. The Bonds are special obligations of the
Agency and are payable, as to interest thereon, principal thereof and any premiums upon the
redemption thereof, exclusively from the Tax Revenues (as that term is defined in the Indenture
and herein called the "Tax Revenues"), and the Agency is not obligated to pay them except from
the Tax Revenues. The Bonds are equally secured by a pledge of, and charge and lien upon, the
Tax Revenues, and the Tax Revenues constitute a trust fund for the security and payment of the
principal of, premium, if any, and the interest on the Bonds.
The Agency hereby covenants and warrants that, for the payment of the principal of,
premium, if any, and the interest on this Bond and all other Bonds issued under the Indenture
when due, there has been created and will be maintained by the Trustee a special fund into which
Tax Revenues shall be deposited, as provided in the Indenture, and as an irrevocable charge the
Agency has allocated the Tax Revenues solely to the payment of the principal of, premium, if
any, and the interest on the Bonds to the extent set forth in the Indenture, and the Agency will
pay promptly when due the principal of, premium, if any, and the interest on this Bond and all
other Bonds of this issue out of said special fund, all in accordance with the terms and provisions
set forth in the Indenture.
The Bond shall be subject to redemption on the dates, in the amounts and in the manner
provided therefor in the Indenture. [The Series 2018B Bonds are not subject to optional
redemption.]
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If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds
may be declared due and payable upon the conditions, in the manner and with the effect provided
in the Indenture; except that the Indenture provides that in certain events such declaration and its
consequences may be rescinded by the registered owners of at least twenty-five per cent (25%)
in aggregate principal amount of the Bonds then Outstanding.
The Bonds are issuable only in the form of fully registered Bonds in the denomination of
$5,000 or any integral multiple thereof (not exceeding the principal amount of Bonds maturing at
any one time). The owner of any Bond or Bonds may surrender the same at the above-
mentioned office of the Trustee in exchange for an equal aggregate principal amount of fully
registered Bonds of any other authorized denominations, in the manner, subject to the conditions
and upon the payment of the charges provided in the Indenture.
This Bond is transferable, as provided in the Indenture, only upon a register to be kept for
that purpose at the above-mentioned office of the Trustee by the registered owner hereof in
person, or by his duly authorized attorney, upon surrender of this Bond together with a written
instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his
duly authorized attorney, and thereupon a new fully registered Bond or Bonds, in the same
aggregate principal amount, shall be issued to the transferee in exchange therefor as provided in
the Indenture, and upon payment of the charges therein prescribed. The Agency and the Trustee
may deem and treat the person in whose name this Bond is registered as the absolute owner
hereof for the purpose of receiving payment of, or on account of, the interest hereon and
principal hereof and redemption premium, if any, hereon and for all other purposes, and the
Agency and the Trustee shall not be affected by any notice to the contrary.
The rights and obligations of the Agency and of the registered owners of the Bonds may
be amended at any time in the manner, to the extent and upon the terms provided in the
Indenture, but no such amendment shall (1) extend the maturity of this Bond, or reduce the
interest rate hereon, or otherwise alter or impair the obligation of the Agency to pay the interest
hereon or principal hereof or any premium payable on the redemption hereof at the time and
place and at the rate and in the currency provided herein, without the express written consent of
the registered owner of this 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
in the Indenture for the benefit of the Bonds and all additional tax allocation bonds authorized by
the Indenture or (3) reduce the percentage of Bonds required for the written consent to an
amendment of the Indenture, or (4) modify any rights or obligations of the Trustee without its
prior written assent thereto; all as more fully set forth in the Indenture.
This Bond is not a debt of the City of Santa Ana, the County of Orange, the State of
California or any other political subdivision of the State, and neither said City, said State, said
County nor any of the State's other political subdivisions is liable therefor, nor in any event shall
this Bond be payable out of any funds or properties other than those of the Agency pledged
therefor as provided in the Indenture. This Bond does not constitute an indebtedness within the
meaning of any constitutional or statutory limitation or restriction, and neither the City Council
members acting for the Agency nor any persons executing the Bonds are liable personally on this
Bond by reason of its issuance.
4150-2542-5420.3 A-3
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This Bond shall not be entitled to any benefits under the Indenture or become valid or
obligatory for any purpose until the certificate of authentication and registration hereon endorsed
shall have been signed by the Trustee.
It is hereby certified that all of the acts, conditions and things required to exist, to have
happened or to have been performed precedent to and in the issuance of this Bond do exist, have
happened and have been performed in due time, form and manner as required by law and that the
amount of this Bond, together with all other indebtedness of the Agency, does not exceed any
limit prescribed by the Constitution or laws of the State of California, and is not in excess of the
amount of Bonds permitted to be issued under the Indenture.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company to the Trustee for registration of transfer, exchange or payment, and any Bond issued
is registered in the name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
Capitalized undefined terms used herein shall have the meanings ascribed thereto in the
Indenture.
[Remainder of page intentionally left blank]
4150-2542-5420.3 A-4
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SA -3-87
IN WITNESS WHEREOF, the Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana has caused this Bond to be executed in its name
and on its behalf by its Mayor, acting as Chair for Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana and attested by its City Clerk, acting as
Secretary for Successor Agency to the former Community Redevelopment Agency of the City of
Santa Ana, and has caused this Bond to be dated as of the date above written.
SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF SANTA ANA
go
Mayor of the City of Santa Ana, acting as
Chair for Successor Agency to the former
Community Redevelopment Agency of the
City of Santa Ana
ATTEST:
City Clerk of the City of Santa
Ana, acting as Secretary for Successor
Agency to the former Community
Redevelopment Agency of the City of Santa
Ana
4150-2542-5420.3 A-5
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SA -3-88
STATEMENT OF INSURANCE
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SA -3-89
[FORM OF TRUSTEE CERTIFICATE OF AUTHENTICATION
AND REGISTRATION TO APPEAR ON BONDS]
This is one of the Bonds described in the within- mentioned Indenture which has been
authenticated and registered on the date set forth below.
DATED:
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as trustee
0
Authorized Officer
[FORM OF ASSIGNMENT TO APPEAR ON BONDS]
For value received the undersigned do(es) hereby sell, assign and transfer unto
the within -mentioned registered
Bond and do(es) hereby irrevocably constitute and appoint
attorney to transfer the same on the bond register of the Trustee, with full power of substitution
in the premises.
Date:
Signature Guaranteed:
Note: The signature(s) to this Assignment must
correspond with the name(s) as written on the
face of the within registered Bond in every
particular, without alteration or enlargement or
any change whatsoever.
Notice: Signature must be guaranteed by an
eligible guarantor institution.
4150-2542-5420.3 A-7
40990-25
SA -3-90
APPENDIX B
SCHEDULE OF SEMI-ANNUAL AND ANNUAL INTEREST AND
PRINCIPAL PAYMENTS OF THE SERIES 2018 BONDS
SERIES 2018A BONDS
Annual Interest and Principal Payments:
Period
Ending Principal
9/1/2019
9/1/2020
9/1/2021
9/l/2022
9/1/2023
9/1/2024
Semi -Annual Interest and Principal Payments:
Period
Ending
3/1/2019
9/1/2019
3/1/2020
9/1/2020
3/1/2021
9/1/2021
3/1/2022
9/1/2022
3/1/2023
9/1/2023
3/1/2024
9/1/2024
Principal Interest
Annual
Interest Debt Service
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SA -3-91
Annual Debt
Debt Service Service
SERIES 2018B BONDS
Annual Interest and Principal Payments:
Period
Ending Principal
9/1/2019
9/1/2020
9/1/2021
9/1/2022
9/1/2023
9/1/2024
9/1/2025
9/1/2026
9/1/2027
9/1/2028
Semi -Annual Interest and Principal Payments:
Period
Ending Principal Interest
3/1/2019
9/1/2019
3/1/2020
9/1/2020
3/1/2021
9/1/2021
3/1/2022
9/1/2022
3/1/2023
9/1/2023
3/1/2024
9/l/2024
3/1/2025
9/1/2025
3/1/2026
9/1/2026
3/1/2027
9/1/2027
3/1/2028
9/1/2028
Annual
Interest Debt Service
4150-2542-5420.3 B_2
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SA -3-92
Annual Debt
Debt Service Service
s
SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF SANTA ANA
TAX ALLOCATION REFUNDING BONDS
SERIES 2018A (TAX-EXEMPT)
EXHIBIT 3
s
SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF SANTA ANA
TAX ALLOCATION REFUNDING BONDS
SERIES 2018B (FEDERALLY TAXABLE)
Bond Purchase Agreement
2018
Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
Ladies and Gentlemen:
Samuel A. Ramirez & Co., Inc. (the "Underwriter") offers to enter into this Bond Purchase
Agreement (the "Bond Purchase Agreement") with the Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana (the "Successor Agency"), which will be binding
upon the Successor Agency and the Underwriter upon the acceptance hereof by the Successor
Agency. This offer is made subject to its acceptance by the Successor Agency by execution of this
Bond Purchase Agreement and its delivery to the Underwriter on or before 5:00 P.M., California time,
on the date hereof.
The Successor Agency acknowledges and agrees that: (i) the purchase and sale of the above -
captioned Bonds (and defined below) pursuant to this Bond Purchase Agreement is an arm's-length
commercial transaction between the Successor Agency and the Underwriter; (ii) in connection with
such transaction, including the process leading thereto, the Underwriter is acting solely as a principal
and not as an agent or a fiduciary of the Successor Agency; (iii) the Underwriter has neither assumed
an advisory or fiduciary responsibility in favor of the Successor Agency with respect to the offering
of the Bonds or the process leading thereto (whether or not the Underwriter, or any affiliate of the
Underwriter, has advised or is currently advising the Successor Agency on other matters) nor has it
assumed any other obligation to the Successor Agency except the obligations expressly set forth in
this Bond Purchase Agreement; (iv) the Underwriter has financial and other interests that differ from
those of the Successor Agency; and (v) the Successor Agency has consulted with its own legal and
financial advisors to the extent it deemed appropriate in connection with the offering of the Bonds.
The Successor Agency hereby acknowledges receipt from the Underwriter of disclosures
required by the Municipal Securities Rulemaking Board ("MSRB") Rule G-17 (as set forth in MSRB
Notice 2012-25 (May 7, 2012), relating to disclosures concerning the Underwriter's role in the
transaction, disclosures concerning the Underwriter's compensation, conflict disclosures, if any, and
disclosures concerning complex municipal securities financing, if any. The Successor Agency
acknowledges that it has engaged Urban Futures Incorporated (the "Municipal Advisor"), as its
SA -3-93
municipal advisor (as defined in Securities and Exchange Commission Rule 15Ba1), and for
financial advice purposes, will rely only on the advice of the Municipal Advisor.
Capitalized terms used and not otherwise defined in this Bond Purchase Agreement shall
have the same meanings given them in that certain Indenture of Trust, dated as of 1, 2018
(the "Indenture"), by and between the Successor Agency and The Bank of New York Mellon Trust
Company, N.A., as trustee (the "Trustee"), pursuant to which the Bonds are being issued.
Purchase and Sale; Use of Proceeds.
(a) Upon the terms and conditions and in reliance upon the representations,
warranties and covenants herein, the Successor Agency hereby agrees to sell to the Underwriter and
the Underwriter hereby agrees to purchase from the Successor Agency for offering to the public, all
(but not less than all) of the (i) $ Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds, Series 2018A
(Tax -Exempt) (the "Series A Bonds"), at the purchase price of $ (the "Series A Purchase
Price") (being the principal amount of the Series A Bonds of $ , less an Underwriter's
discount of $ , and plus a net original issue premium of $ and the (ii) $
Successor Agency to the former Community Redevelopment Agency of the City of Santa Ana Tax
Allocation Refunding Bonds, Series 2018B (Federally Taxable) (the "Series B Bonds," and together
with the Series A Bonds, the "Bonds"), at the purchase price of $ (the "Series B Purchase
Price," and together with the Series A Purchase Price, the "Purchase Price") (being the principal
amount of the Series B Bonds of $ , less an Underwriter's discount of $ , and less an
original issue discount of The Purchase Price will be delivered to the Trustee on behalf of
the Successor Agency.
The Purchase Price is to be paid on the Closing Date (as defined in Section 6 below). The
Bonds shall be dated the Closing Date, and shall bear interest at the rates, shall mature on the dates
and in the principal amounts, all as set forth in the attached Exhibit A.
As an accommodation to the Successor Agency, the Underwriter will pay, from the Purchase
Price, the sum of $ to (the "Insurer") as the premium for the portion of its
municipal bond insurance policy issued for the Bonds (the "Municipal Bond Insurance Policy") and
allocable to the Bonds and the sum of $ to the Insurer as the premium for its reserve account
municipal bond insurance policy issued for the Bonds (the "Reserve Account Insurance Policy") and
allocable to the Bonds. Such amounts shall be credited against the Purchase Price to be remitted by
the Underwriter to the Trustee pursuant to the foregoing paragraph.
(b) The Bonds are being issued for the purpose of (a) providing funds to the
Successor Agency to refund in whole the following bonds issued by the Community Redevelopment
Agency of the City of Santa Ana (the "Former Agency"), (i) the outstanding Community
Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax
Allocation Bonds, Series 2003A (the "Series 2003A Bonds"), (ii) the outstanding Community
Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax
Allocation Refunding Bonds, Series 2003B (the "Series 2003B Bonds") and (iii) the outstanding
Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project
Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project
Area), 2011 Series A (the "Series 2011 Bonds" and, together with the Series 2003A Bonds, and the
Series 2003B Bonds, the "Refunded Bonds"); (b) purchasing the Municipal Bond Insurance Policy
2
SA -3-94
for the Bonds; (c) purchasing the Reserve Account Insurance Policy for the Bonds, and (d) paying
the costs of issuing the Bonds.
The Bonds are special obligations of the Successor Agency, payable from, and secured by a
lien on Tax Revenues.
The payment of principal of and interest on the Bonds, when due, will be insured by the
Municipal Bond Insurance Policy issued by the Insurer concurrently with the delivery of the Bonds.
(c) Under a Escrow Agreement, dated as of 1, 2018 (the "Escrow
Agreement"), by and between the Successor Agency and The Bank of New York Mellon Trust
Company, N.A., as escrow bank (the "Escrow Bank"), provision will be made for the redemption of
the Refunded Bonds.
(d) Issuance of the Bonds was authorized by resolutions of the Successor
Agency, adopted on , 2018 and , 2018 (collectively, the "Successor Agency
Resolutions"), and Resolution No. OB- of the Oversight Board of the Successor Agency to the
former Community Redevelopment Agency of the City of Santa Ana, adopted on , 2018 (the
"Oversight Board Resolution").
2. Bona Fide Public Offering. The Underwriter agrees to make a bona fide public
offering of all of the Bonds, at prices not in excess of the initial public offering yields or prices set
forth in Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than such
initial public offering prices.
3. Official Statement. The Successor Agency shall deliver or cause to be delivered to the
Underwriter promptly after acceptance of this Bond Purchase Agreement copies of the Official
Statement relating to the Bonds, dated the date hereof (which, together with all exhibits and
appendices included therein or Attached thereto and with such amendments or supplements thereto
which shall be approved by the Underwriter, the "Official Statement"). The Successor Agency
authorizes the Official Statement, including the cover page and Appendices thereto and the
information contained therein, to be used in connection with the sale of the Bonds and ratifies,
confirms and approves the use and distribution by the Underwriter for such purpose, prior to the date
hereof, of the Preliminary Official Statement dated '2018 relating to the Bonds (the
"Preliminary Official Statement"). The Successor Agency deems the Preliminary Official Statement
final as of its date for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934, as
amended ("Rule 15c2-12"), except for information allowed to be omitted by Rule 15c2-12.
The Successor Agency also agrees to deliver to the Underwriter, at the Successor Agency's
sole cost and at such address as the Underwriter shall specify, as many copies of the Official
Statement as the Underwriter shall reasonably request as necessary to comply with paragraph (b)(4)
of Rule 15c2-12, with Rule G-32 and all other applicable rules of the Municipal Securities
Rulemaking Board. At least one copy of the Official Statement shall be in word searchable portable
document format (PDF). The Successor Agency agrees to deliver such copies of the Official
Statement within seven (7) business days after the date hereof, but in any event no later than the
Closing Date. The Official Statement shall contain all information previously permitted to be omitted
from the Preliminary Official Statement by Rule 15c2-12.
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SA -3-95
The Underwriter agrees to deliver or cause to be delivered to each purchaser of the Bonds
from it, upon request, a copy of the Official Statement, for the time period required under Rule 15c2-
12. The Underwriter also agrees to promptly file a copy of the final Official Statement, including any
supplements prepared by the Successor Agency and delivered to the Underwriter, with a nationally
recognized municipal securities information repository (currently, the Electronic Municipal Market
Access System (referred to as "EMMA"), a facility of the Municipal Securities Rulemaking Board, at
www.emma.msrb.org), and to take any and all other actions necessary to comply with applicable
Securities and Exchange Commission rules and Municipal Securities Rulemaking Board rules
governing the use of the Official Statement in connection with offering, sale and delivery of the
Bonds to the ultimate purchasers thereof.
4. Representations, Warranties and Agreements of the Successor Agency. The Successor
Agency represents and warrants to the Underwriter that, as of the Closing Date:
(a) The Successor Agency is a public entity existing under the laws of the State,
including the Dissolution Act, and is authorized, among other things, (i) to issue the Bonds,
and (ii) to secure the Bonds in the manner contemplated by the Indenture.
(b) The Successor Agency has the full right, power and authority (i) to enter into
the Indenture, the Escrow Agreement, the Continuing Disclosure Certificate, and this Bond
Purchase Agreement (collectively, the "Successor Agency Documents"), (ii) to issue, sell and
deliver the Bonds to the Underwriter as provided herein, and (iii) to carry out and
consummate all other transactions on its part contemplated by each of the aforesaid
documents, and the Successor Agency has complied with all provisions of applicable law in
all matters relating to such transactions.
(c) The Successor Agency has duly authorized (i) the execution and delivery of
the Bonds and the execution, delivery and due performance by the Successor Agency of the
Successor Agency Documents, (ii) the distribution and use of the "deemed final" Preliminary
Official Statement and the execution, delivery and distribution of the final Official Statement,
and (iii) the taking of any and all such action as may be required on the part of the Successor
Agency to carry out, give effect to and consummate the transactions on its part contemplated
by such instruments. All consents or approvals necessary to be obtained by the Successor
Agency in connection with the foregoing have been received, and the consents or approvals
so received are still in full force and effect.
(d) The information contained in the Preliminary Official Statement (excluding
therefrom for any information relating to the Insurer, the Municipal Bond Insurance Policy,
the Reserve Account Insurance Policy, The Depository Trust Company ("DTC") and its
book -entry system included therein and the information therein under the caption
"CONCLUDING INFORMATION - Underwriting") is true and correct in all material
respects, and the Preliminary Official Statement did not as of its date contain any untrue or
misleading statement of a material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading.
(e) The information contained in the Official Statement (excluding therefrom for
any information relating to the Insurer, the Municipal Bond Insurance Policy, the Reserve
Account Insurance Policy, DTC and its book -entry system included therein and the
4
SA -3-96
information therein under the caption "CONCLUDING INFORMATION - Underwriting") is
true and correct in all material respects, and the Official Statement does not contain any
untrue or misleading statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made,
not misleading.
(f) Neither the execution and delivery by the Successor Agency of the Successor
Agency Documents and of the Bonds nor the consummation of the transactions on the part of
the Successor Agency contemplated herein or therein or the compliance with the provisions
hereof or thereof will conflict with, or constitute on the part of the Successor Agency a
violation of, or a breach of or default under, (i) any statute, indenture, mortgage, note or other
agreement or instrument to which the Successor Agency is a party or by which it is bound,
(ii) any provision of the State Constitution, or (iii) any existing law, rule, regulation,
ordinance, judgment, order or decree to which the Successor Agency (or the Board members
of the Successor Agency or any of its officers in their respective capacities as such) is
subject.
(g) The Successor Agency has never been in default at any time, as to principal
of or interest on any obligation which it has issued except as otherwise specifically disclosed
in the Official Statement; and the Successor Agency has not entered into any contract or
arrangement of any kind which might give rise to any lien or encumbrance on the Tax
Revenues (senior to or on a parity with the pledge thereof under the Indenture), except as is
specifically disclosed in the Preliminary Official Statement and the Official Statement.
(h) Except as will be specifically disclosed in the Official Statement, there is no
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court,
public board or body, which has been served on the Successor Agency or, to the knowledge
of the Successor Agency, threatened, which in any way questions the powers of the
Successor Agency referred to in paragraph (b) above, or the validity of any proceeding taken
by the Successor Agency in connection with the issuance of the Bonds, or wherein an
unfavorable decision, ruling or finding could materially adversely affect the transactions
contemplated by the Successor Agency Documents, or which, in any way, could adversely
affect the validity or enforceability of the Successor Agency Documents or the Bonds or, to
the knowledge of the Successor Agency, which in any way questions the exclusion from
gross income of the recipients thereof the interest on the Series A Bonds for federal income
tax purposes or in any other way questions the status of the Series A Bonds under federal or
state tax laws or regulations or which in any way could materially adversely affect the
availability of Tax Revenues to pay the debt service on the Bonds.
(i) Any written certificate signed by any official of the Successor Agency and
delivered to the Underwriter in connection with the offer or sale of the Bonds shall be
deemed a representation and warranty by the Successor Agency to the Underwriter as to the
truth of the statements therein contained.
0) The Successor Agency has not been notified of any listing or proposed listing
by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
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SA -3-97
(k) The Successor Agency will furnish such information, execute such
instruments and take such other action in cooperation with the Underwriter and at the
expense of the Underwriter as the Underwriter may reasonably request in order (i) to qualify
the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of
such states and other jurisdictions of the United States as the Underwriter may designate and
(ii) to determine the eligibility of the Bonds for investment under the laws of such states and
other jurisdictions, and will use its best efforts to continue such qualifications in effect so
long as required for the distribution of the Bonds; provided, however, that the Successor
Agency will not be required to execute a special or general consent to service of process or
qualify as a foreign corporation in connection with any such qualification or determination in
any jurisdiction.
(1) All authorizations, approvals, licenses, permits, consents, elections, and
orders of or filings with any governmental authority, legislative body, board, agency or
commission having jurisdiction in the matters which are required by the Closing Date for the
due authorization of, which would constitute a condition precedent to or the absence of which
would adversely affect the due performance by the Successor Agency of, its obligations
under the hidenture and the Escrow Agreement has been duly obtained or made and are in
full force and effect.
(m) Between the date of this Bond Purchase Agreement and the Closing Date, the
Successor Agency will not offer or issue any bonds, notes or other obligations for borrowed
money not previously disclosed in writing to the Underwriter.
(n) The Successor Agency will apply the proceeds of the Bonds in accordance
with the Indenture and as described in the Preliminary Official Statement and the Official
Statement.
(o) Except as otherwise described in the Official Statement, as of the Closing
Date, the Successor Agency will not have outstanding any indebtedness which indebtedness
is secured by a lien on the Tax Revenues on a parity with or senior to the lien provided for in
the Indenture on the Tax Revenues.
(p) Except as described in the Preliminary Official Statement and the Official
Statement and based upon a review of their previous undertakings, neither the Former
Agency nor the Successor Agency has failed, within the last five years, to comply in all
material respects with any undertaking of the Successor Agency or the Former Agency,
respectively, pursuant to Rule 15c2-12.
(q) If between the date hereof and the date which is 25 days after the End of the
Underwriting Period for the Bonds, an event occurs which would cause the information
contained in the Official Statement, as then supplemented or amended, to contain an untrue
statement of a material fact or to omit to state a material fact required to be stated therein or
necessary to make the information therein, in the light of the circumstances under which it
was presented, not misleading, the Successor Agency will notify the Underwriter, and, if in
the opinion of the Underwriter or the Successor Agency, or their respective counsel, such
event requires the preparation and publication of a supplement or amendment to the Official
Statement, the Successor Agency will cooperate in the preparation of an amendment or
supplement to the Official Statement in a form and manner approved by the Underwriter, and
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SA -3-98
shall pay all expenses thereby incurred. For the purposes of this subsection, between the date
hereof and the date which is 25 days after the End of the Underwriting Period for the Bonds,
the Successor Agency will furnish such information with respect to itself as the Underwriter
may from time to time reasonably request. As used herein, the term "End of the Underwriting
Period" means the later of such time as: (i) the Successor Agency delivers the Bonds to the
Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an
underwriting syndicate, an unsold balance of the Bonds for sale to the public.
Notwithstanding the foregoing, unless the Underwriter gives notice to the contrary, the
Successor Agency may assume that the "End of the Underwriting Period" is the Closing
Date.
(r) If the information contained in the Official Statement is amended or
supplemented pursuant to paragraph (q) hereof, at the time of each supplement or amendment
thereto and (unless subsequently again supplemented or amended pursuant to such
subparagraph) at all times subsequent thereto up to and including the date which is 25 days
after the End of the Underwriting Period for the Bonds, the portions of the Official Statement
so supplemented or amended (including any financial and statistical data contained therein)
will not contain any untrue statement of a material fact required to be stated therein or
necessary to make the information therein in the light of the circumstances under which it
was presented, not misleading.
(s) The Oversight Board has duly adopted the Oversight Board Resolution and
no further Oversight Board approval or consent is required for the issuance of the Bonds or
the consummation of the transactions described in the Official Statement.
(t) The Department of Finance of the State (the "Department of Finance") has
issued a letter, dated , 2018, approving the issuance of the Bonds. No further
Department of Finance approval or consent is required for the issuance of the Bonds or the
consummation of the transactions described in the Official Statement. The Successor Agency
has received its Finding of Completion from the Department of Finance pursuant to section
34179.7 of the Dissolution Act. Except as disclosed in the Official Statement, the Successor
Agency is not aware of the Department of Finance directing or having any basis to direct the
County Auditor -Controller to deduct unpaid unencumbered funds from future allocations to
the Successor Agency pursuant to Section 34183 of the Dissolution Act.
(u) As of the time of acceptance hereof and as of the Closing Date, the Successor
Agency has complied with the filing requirements of the Law, including, without limitation,
the filing of all Recognized Obligation Payment Schedules as required by law, as well as
sections 33080 to 33080.6 of the Law.
5. Covenants of the Successor Agency. The Successor Agency covenants with the
Underwriter as of the Closing Date as follows:
(a) The Successor Agency covenants and agrees that it will execute a continuing
disclosure certificate, constituting an undertaking to provide ongoing disclosure about the
Successor Agency, for the benefit of the owners of the Bonds as required by Section (b)(5)(i)
of Rule 15c2-12, substantially in the form attached to the Official Statement (the "Continuing
Disclosure Certificate").
SA -3-99
(b) The Successor Agency agrees to cooperate with the Underwriter in the
preparation of any supplement or amendment to the Official Statement deemed necessary by
the Underwriter to comply with Rule 15c2-12 and any applicable rule of the MSRB.
(c) If at any time prior to the Closing Date, any event occurs with respect to the
Successor Agency as a result of which the Official Statement, as then amended or
supplemented, might include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, the Successor Agency shall promptly notify the
Underwriter in writing of such event. Any information supplied by the Successor Agency for
inclusion in any amendments or supplements to the Official Statement will not contain any
untrue or misleading statement of a material fact or omit to state any such fact necessary to
make the statements therein, in the light of the circumstances under which they were made,
not misleading.
(d) The Successor Agency will not knowingly take or omit to take any action,
which action or omission will in any way cause the proceeds from the sale of the Bonds to be
applied in a manner other than as provided in the Indenture or which would cause the interest
on the Series A Bonds to be includable in gross income of the owners of the Series A Bonds
for federal income tax purposes.
6. Closing. On , 2018, or at such other date and times as shall have been
mutually agreed upon by the Successor Agency and the Underwriter (the "Closing Date"), the
Successor Agency will deliver or cause to be delivered the Bonds to the Underwriter, and the
Successor Agency shall deliver or cause to be delivered to the Underwriter the certificates, opinions
and documents hereinafter mentioned, each of which shall be dated as of the Closing Date. The
activities relating to the execution and delivery of the Bonds, opinions and other instruments as
described in Section 8 of this Bond Purchase Agreement shall occur on the Closing Date, unless
otherwise specified herein. The delivery of the certificates, opinions and documents as described
herein shall be made at the offices Orrick, Herrington & Sutcliffe LLP, in Los Angeles, California
("Bond Counsel'), or at such other place as shall have been mutually agreed upon by the Successor
Agency and the Underwriter. Such delivery is herein called the "Closing."
The Bonds will be prepared and physically delivered to the Trustee on the Closing Date in
the form of a separate single fully registered bond for each of the maturities of the Bonds. The Bonds
shall be registered in the name of the Cede & Co., as registered owner and nominee for DTC, New
York, New York. The Bonds will be authenticated by the Trustee in accordance with the terms and
provisions of the Indenture and shall be delivered to DTC prior to the Closing Date as required by
DTC to assure delivery of the Bonds on the Closing Date. It is anticipated that CUSIP identification
numbers will be printed on the Bonds, but neither the failure to print such number on any Bond nor
any error with respect thereto shall constitute cause for a failure or refusal by the Underwriter to
accept delivery of and pay for the Bonds in accordance with the terms of this Bond Purchase
Agreement.
At or before 8:00 a.m., Pacific Standard time, on the Closing Date, the Successor Agency
will deliver, or cause to be delivered, the Bonds to DTC, in definitive form duly executed and
authenticated by the Trustee, and the Underwriter will pay the Purchase Price of the Bonds by
delivering to the Trustee, for the account of the Successor Agency a wire transfer in federal funds of
8
SA -3-100
the Purchase Price payable to the order of the Trustee, less the amounts remitted by the Underwriter
to the Insurer as described in the third paragraph of Section I (a).
Establishment oflssue Price.
(a) The Underwriter agrees to assist the Successor Agency in establishing the
issue price of the Series A Bonds and shall execute and deliver to the Successor Agency at Closing
an "issue price" or similar certificate, together with the supporting pricing wires or equivalent
communications, substantially in the form attached hereto as Exhibit E, with such modifications as
may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Successor
Agency and Bond Counsel (as defined herein), to accurately reflect, as applicable, the sales price or
prices or the initial offering price or prices to the public of the Series A Bonds.
(b) Except as otherwise set forth in Exhibit A attached hereto, the Successor
Agency will treat the first price at which 10% of each maturity of the Series A Bonds (the "10%
test") is sold to the public as the issue price of that maturity. At or promptly after the execution of
this Bond Purchase Agreement, the Underwriter shall report to the Successor Agency the price or
prices at which it has sold to the public each maturity of Series A Bonds. If at that time the 10% test
has not been satisfied as to any maturity of the Series A Bonds, the Underwriter agrees to promptly
report to the Successor Agency the prices at which it sells the unsold Bonds of that maturity to the
public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until
either (i) the Underwriter has sold all Series A Bonds of that maturity or (ii) the 10% test has been
satisfied as to the Series A Bonds of that maturity, provided that, the Underwriter's reporting
obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of
the Successor Agency or Bond Counsel. For purposes of this Section, if Series A Bonds mature on
the same date but have different interest rates, each separate CUSIP number within that maturity will
be treated as a separate maturity of the Series A Bonds.
(c) The Underwriter confirms that it has offered the Series A Bonds to the public
on or before the date of this Bond Purchase Agreement at the offering price or prices (the "initial
offering price"), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except
as otherwise set forth therein. Exhibit A also sets forth, as of the date of this Bond Purchase
Agreement, the maturities, if any, of the Series A Bonds for which the Underwriter represents that (i)
the 10% test has been satisfied (assuming orders are confirmed by the close of the business day
immediately following the date of this Bond Purchase Agreement) and (ii) the 10% test has not been
satisfied and for which the Successor Agency and the Underwriter agree that the restrictions set forth
in the next sentence shall apply, which will allow the Successor Agency to treat the initial offering
price to the public of each such maturity as of the sale date as the issue price of that maturity (the
"hold -the -offering -price rule"). So long as the hold -the -offering -price rule remains applicable to any
maturity of the Series A Bonds, the Underwriter will neither offer nor sell unsold Series A Bonds of
that maturity to any person at a price that is higher than the initial offering price to the public during
the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or
(2) the date on which the Underwriter has sold at least 10% of that
maturity of the Series A Bonds to the public at a price that is no
higher than the initial offering price to the public.
SA -3-101
The Underwriter will advise the Successor Agency promptly after the close of the
fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Series A
Bonds to the public at a price that is no higher than the initial offering price to the public.
(d) The Underwriter confirms that:
(i) any selling group agreement and any third -party distribution agreement relating to
the initial sale of the Series A Bonds to the public, together with the related pricing wires, contains or
will contain language obligating each dealer who is a member of the selling group and each broker-
dealer that is a party to such third -party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Series A
Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all
Series A Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that
the 10% test has been satisfied as to the Series A Bonds of that maturity, provided that, the reporting
obligation after the Closing Date may be reasonable periodic intervals or otherwise upon request of
the Underwriter and (ii) to comply with the hold -the -offering -price rule, if applicable, if and for so
long as directed by the Underwriter,
(B) to promptly notify the Underwriter of any sales of Series A Bonds that, to
its knowledge, are made to a purchaser who is a related party to an underwriter participating in the
initial sale of the Series A Bonds to the public (each such term being used as defined below), and
(C) to acknowledge that, unless otherwise advised by the dealer or broker-
dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale
to the public.
(ii) any selling group agreement relating to the initial sale of the Series A Bonds to
the public, together with the related pricing wires, contains or will contain language obligating each
dealer that is a party to a third -party distribution agreement to be employed in connection with the
initial sale of the Series A Bonds to the public to require each broker-dealer that is a party to such
third -party distribution agreement to (A) report the prices at which it sells to the public the unsold
Series A Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until
either all Series A Bonds of that maturity allocated to it have been sold or it is notified by the
Underwriter or the dealer that the 10% test has been satisfied as to the Series A Bonds of that
maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic
intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold -
the -offering -price rule, if applicable, if and for so long as directed by the Underwriter or the dealer
and as set forth in the related pricing wires.
(e) The Successor Agency acknowledges that, in making the representation set
forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in
connection with the initial sale of the Series A Bonds to the public, the agreement of each dealer who
is a member of the selling group to comply with the requirements for establishing issue price of the
Series A Bonds, including, but not limited to, its agreement to comply with the hold -the -offering -
price rule, if applicable to the Series A Bonds, as set forth in a selling group agreement and the
related pricing wires, and (ii) in the event that a third -party distribution agreement was employed in
connection with the initial sale of the Series A Bonds to the public, the agreement of each broker-
dealer that is a party to such agreement to comply with the requirements for establishing issue price
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SA -3-102
of the Series A Bonds, including, but not limited to, its agreement to comply with the hold -the -
offering -price rule, if applicable to the Series A Bonds, as set forth in the third -party distribution
agreement and the related pricing wires. The Successor Agency further acknowledges that the
Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of
any broker-dealer that is a party to a third -party distribution agreement, to comply with its
corresponding agreement to comply with the requirements for establishing issue price of the Series A
Bonds, including, but not limited to, its agreement to comply with the hold -the -offering -price rule, if
applicable to the Series A Bonds.
(0 The Underwriter acknowledges that sales of any Series A Bonds to any
person that is a related party to an underwriter participating in the initial sale of the Series A Bonds to
the public (each such term being used as defined below) shall not constitute sales to the public for
purposes of this section. Further, for purposes of this section:
(i) "public" means any person other than an underwriter or a related
party,
(ii) "underwriter" means (A) any person that agrees pursuant to a written
contract with the Successor Agency (or with the lead underwriter to form an
underwriting syndicate) to participate in the initial sale of the Series A Bonds to the
public and (B) any person that agrees pursuant to a written contract directly or
indirectly with a person described in clause (A) to participate in the initial sale of the
Series A Bonds to the public (including a member of a selling group or a party to a
third -party distribution agreement participating in the initial sale of the Series A
Bonds to the public);
(iii) a purchaser of any of the Series A Bonds is a "related party" to an
underwriter if the underwriter and the purchaser are subject, directly or indirectly, to
(A) more than 50% common ownership of the voting power or the total value of their
stock, if both entities are corporations (including direct ownership by one corporation
of another), (B) more than 50% common ownership of their capital interests or profits
interests, if both entities are partnerships (including direct ownership by one
partnership of another), or (C) more than 50% common ownership of the value of the
outstanding stock of the corporation or the capital interests or profit interests of the
partnership, as applicable, if one entity is a corporation and the other entity is a
partnership (including direct ownership of the applicable stock or interests by one
entity of the other); and
(iv) "sale date" means the date of execution of this Bond Purchase
Agreement by all parties.
S. Closing Conditions. The obligations of the Underwriter hereunder shall be subject to
the performance by the Successor Agency of its obligations hereunder at or prior to the Closing Date
and are also subject to the following conditions:
(a) the representations, warranties and covenants of the Successor Agency
contained herein shall be true and correct in all material respects as of the Closing Date;
11
SA -3-103
(b) as of the Closing Date, there shall have been no material adverse change in
the financial condition of the Successor Agency since June 30, 2017;
(c) as of the Closing Date, all official action of the Successor Agency relating to
this Bond Purchase Agreement, the Continuing Disclosure Certificate, the Escrow Agreement
and the Indenture shall be in full force and effect;
(d) as of the Closing Date, the Underwriter shall receive the following
certificates, opinions and documents, in each case satisfactory in form and substance to the
Underwriter:
(i) a copy of the Indenture, as duly executed and delivered by the
Successor Agency and the Trustee;
(ii) a copy of the Continuing Disclosure Certificate, as duly executed and
delivered by the Successor Agency;
(iii) a copy of the Escrow Agreement, as duly executed and delivered by
the Successor Agency and the Escrow Bank;
(iv) the opinions of Bond Counsel, dated the Closing Date and addressed
to the Underwriter, in the form attached as Appendix C to the Official Statement and
reliance letters, dated the Closing Date and addressed to the Underwriter which shall
include a statement that the opinions substantially in the form attached as Appendix C
to the Official Statement may be relied upon by the Underwriter to the same extent as
if such opinions was addressed to them;
(v) a certificate, dated the Closing Date, of the Successor Agency
executed by its Executive Director (or other duly appointed officer of the Successor
Agency authorized by the Successor Agency by resolution of the Successor Agency)
to the effect that (A) there is no action, suit, proceeding or investigation at law or in
equity before or by any court, public board or body which has been served on the
Successor Agency or, to the knowledge of the Executive Director, threatened against
or affecting the Successor Agency to restrain or enjoin the Successor Agency's
participation in, or in any way contesting the existence of the Successor Agency or
the powers of the Successor Agency with respect to, the transactions contemplated by
the Escrow Agreement, this Bond Purchase Agreement, the Continuing Disclosure
Certificate or the Indenture, and consummation of such transactions; (B) the
representations and warranties of the Successor Agency contained in this Bond
Purchase Agreement are true and correct in all material respects, and the Successor
Agency has complied with all agreements and covenants and satisfied all conditions
to be satisfied at or prior to the Closing Date as contemplated by the Indenture and
this Bond Purchase Agreement; (C) no event affecting the Successor Agency has
occurred since the date of the Official Statement which has not been disclosed therein
or in any supplement or amendment thereto which event should be disclosed in the
Official Statement in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (D) no further
consent is required to be obtained for the inclusion of the Audited Financial
12
SA -3-104
Statements of the City of Santa Ana for the Fiscal Year End June 30, 2017, as
Appendix E to the Official Statement;
(vi) an opinion of the City Attorney, as counsel to the Successor Agency,
dated the Closing Date, addressed to the Successor Agency and the Underwriter, in
substantially the form attached hereto as Exhibit C:
(vii) an opinion of counsel to the Trustee, dated the Closing Date and
addressed to the Successor Agency and the Underwriter, to the effect that:
(A) The Trustee is a national banking association organized and
existing under the laws of the United States of America, having full power to
enter into, accept and administer the trust created under the Indenture;
(B) The Indenture has been duly authorized, executed and
delivered by the Trustee and the Indenture constitutes a legal, valid and
binding obligation of the Trustee enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency or
other laws affecting the enforcement of creditors' rights generally and by the
application of equitable principles, if equitable remedies are sought; and
(C) No consent, approval, authorization or other action by any
governmental or regulatory authority having jurisdiction over the Trustee that
has not been obtained is or will be required for the execution and delivery by
the Trustee of the Indenture or the consummation of the transactions on the
part of the Trustee contemplated by the Indenture;
(viii) an opinion of counsel to the Escrow Bank, dated the Closing Date and
addressed to the Successor Agency and the Underwriter, to the effect that:
(A) The Escrow Bank is a national banking association organized
and existing under the laws of the United States of America, having full
power to enter into, accept and administer its obligations created under the
Escrow Agreement;
(B) The Escrow Agreement has been duly authorized, executed
and delivered by the Escrow Bank and the Escrow Agreement constitutes the
legal, valid and binding obligation of the Escrow Bank enforceable in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws affecting the enforcement of creditors'
rights generally and by the application of equitable principles, if equitable
remedies are sought; and
(C) No consent, approval, authorization or -other action by any
governmental or regulatory authority having jurisdiction over the Escrow
Bank that has not been obtained is or will be required for the execution and
delivery by the Escrow Bank of the Escrow Agreement or the consummation
of the transactions on the part of the Escrow Bank contemplated by the
Escrow Agreement;
13
SA -3-105
(ix) a certificate, dated the Closing Date, of the Trustee, signed by a duly
authorized officer of the Trustee, to the effect that (A) the Trustee is duly organized
and validly existing as a national banking association, with full corporate power to
undertake the obligations of the Indenture; (B) the Trustee has duly authorized,
executed and delivered the Indenture and by all proper corporate action has
authorized the acceptance of the trust of the Indenture; and (C) there is no action, suit,
proceeding or investigation at law or in equity before or by any court, public board or
body which has been served on the Trustee (either in state or federal courts), or to the
knowledge of the Trustee threatened against the Trustee which would restrain or
enjoin the execution or delivery of the Indenture, or which would affect the validity
or enforceability of the Indenture, or the Trustee's participation in, or in any way
contesting the powers or the authority of the Trustee with respect to, the transactions
contemplated by the Indenture, or any other agreement, document or certificate
related to such transactions;
(x) a certificate, dated the Closing Date, of the Escrow Bank, signed by a
duly authorized officer of the Escrow Bank, to the effect that (A) the Escrow Bank is
duly organized and validly existing as a national banking association, with full
corporate power to undertake of its obligations under the Escrow Agreement; (B) the
Escrow Bank has duly authorized, executed and delivered the Escrow Agreement and
by all proper corporate action has authorized the acceptance of the obligations of the
Escrow Bank under the Escrow Agreement; and (C) there is no action, suit,
proceeding or investigation at law or in equity before or by any court, public board or
body which has been served on the Escrow Bank (either in state or federal courts), or
to the knowledge of the Escrow Bank threatened against the Escrow Bank which
would restrain or enjoin the execution or delivery of the Escrow Agreement, or which
would affect the validity or enforceability of the Escrow Agreement or the Escrow
Bank's participation in, or in any way contesting the powers or the authority of the
Escrow Bank with respect to, the transactions contemplated by the Escrow
Agreement, or any other agreement, document or certificate related to such
transactions;
(xi) A supplemental opinion of Bond Counsel addressed to the
Underwriter, in substantially the form attached hereto as Exhibit B;
(xii) the opinion of Underwriter's counsel satisfactory to Underwriter;
(xiii) a Tax Certificate in the form satisfactory to Bond Counsel;
(xiv) the final Official Statement executed by an authorized officer of the
Successor Agency;
(xv) certified copies of the Successor Agency Resolutions and the
Oversight Board Resolution;
(xvi) specimen Bonds;
(xvii) evidence that the federal tax information form 8038-G with respect to
the Series A Bonds has been prepared by Bond Counsel for filing;
14
SA -3-106
(xviii) a verification report of , as to the sufficiency to pay in full
the redemption price of the Refunded Bonds of the moneys in the escrow fund
created under the Escrow Agreement;
(xix) a copy of the Municipal Bond Insurance Policy;
(xx) a copy of the Reserve Account Insurance Policy;
(xxi) an opinion of counsel to the Insurer, addressed to the Successor
Agency and the Underwriter to the effect that:
(A) the descriptions of the Insurer, the Municipal Bond Insurance
Policy and the Reserve Account Insurance Policy included in the Official
Statement are accurate;
(B) the Municipal Bond Insurance Policy and the Reserve
Account Insurance Policy constitute legal, valid and binding obligations of
the Insurer, enforceable in accordance with their respective terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditor's rights generally and by the application of equitable
principles if equitable remedies are sought, and
(C) as to such other matters as the Successor Agency or the
Underwriter may reasonably request;
(xxii) a certificate of the Insurer, signed by an authorized officer of the
Insurer, to the effect that:
(A) the information contained in the Official Statement relating to
the Insurer, the Municipal Bond Insurance Policy and the Reserve Account
Insurance Policy is true and accurate and
(B) as to such other matters as the Successor Agency or the
Underwriter may reasonably request;
(xxiii) satisfactory evidence that the Bonds have been assigned the ratings as
set forth in the Official Statement;
(xxiv) a certificate of an officer of Keyser, Marston & Associates (the
"Fiscal Consultant"), dated the Closing Date, addressed to the Successor Agency and
the Underwriter, to the effect that, to the best of its knowledge, the assessed
valuations and other fiscal information contained in the Official Statement, including
such fern's Fiscal Consultant's Report attached thereto as APPENDIX A, are
presented fairly and accurately, and consenting to the use of their report as
APPENDIX A to the Preliminary Official Statement and the Official Statement;
(xxv) evidence of required filings with the California Debt and Investment
Advisory Commission;
15
SA -3-107
(xxvi) a defeasance opinion of Bond Counsel with respect to the Refunded
Bonds, dated the Closing Date and addressed to the Trustee, the Insurer and the
Underwriter, in form and substance satisfactory to the Underwriter;
(xxvii) an opinion or letter of Best Best & Krieger LLP, as Disclosure
Counsel, addressed to the Successor Agency and the Underwriter, in substantially
the form attached hereto as Exhibit D; and
(xxviii) such additional legal opinions, certificates, instruments and other
documents as the Underwriter may reasonably deem necessary to evidence the truth
and accuracy as of the time of the Closing Date of the representations and warranties
of the Successor Agency contained in this Bond Purchase Agreement and the due
performance or satisfaction by the Successor Agency at or prior to such time of all
agreements then to be performed and all conditions then to be satisfied by the
Successor Agency pursuant to this Bond Purchase Agreement.
9. Termination. The Underwriter shall have the right to cancel its obligations to
purchase the Bonds if between the date hereof and the Closing Date:
(a) a decision with respect to legislation shall be reached by a committee of the
House of Representatives or the Senate of the Congress of the United States, or legislation
shall be favorably reported by such a committee or be introduced, by amendment or
otherwise, in or be passed by the House of Representatives or the Senate, or recommended to
the Congress of the United States for passage by the President of the United States, or be
enacted or a decision by a federal court of the United States or the United States Tax Court
shall have been rendered, or a ruling, release, order, regulation or offering circular by or on
behalf of the United States Treasury Department, the Internal Revenue Service or other
governmental agency shall have been made or proposed to be made having the purpose or
effect, or any other action or event shall have occurred which has the purpose or effect,
directly or indirectly, of adversely affecting the federal income tax consequences of owning
the Series A Bonds, including causing interest on the Series A Bonds to be included in gross
income of the owners of the Series A Bonds for purposes of federal income taxation, or
imposing federal income taxation upon revenues or other income of the general character to
be derived by the Successor Agency or by any similar body under the Indenture or similar
documents or upon interest received on obligations of the general character of the Bonds
which, in the reasonable opinion of the Underwriter, materially adversely affects the market
price of or market for the Bonds or the ability of the Underwriter to enforce contracts for the
sale of the Bonds; or
(b) legislation shall have been enacted, or considered for enactment with an
effective date prior to the Closing Date, or a decision by a court of the United States shall
have been rendered, the effect of which is that of the Bonds, including any underlying
obligations, or the Indenture, as the case may be, are not exempt from the registration,
qualification or other requirements of the Securities Act of 1933, as amended and as then in
effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust
Indenture Act of 1939, as amended and as then in effect; or
(c) a stop order, ruling, regulation or offering circular by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the subject
16
SA -3-108
matter shall have been issued or made or any other event occurs, the effect of which is that
the issuance, offering or sale of the Bonds, including any underlying obligations, or the
delivery or performance of the Indenture, the Escrow Agreement or the Continuing
Disclosure Certificate, as contemplated hereby or by the Official Statement, is or would be in
violation of any provisions of the federal securities laws, including the Securities Act of
1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and
as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or
(d) any event shall have occurred or any information shall have become known to
the Underwriter which causes the Underwriter to reasonably believe that the Official
Statement as then amended or supplemented includes an untrue statement of a material fact,
or omits to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or
(e) there shall have occurred any outbreak or escalation of hostilities or any
national or international calamity or crisis, including a financial crisis, the effect of which on
the financial markets of the United States is such as, in the reasonable judgment of the
Underwriter, would materially adversely affect the market for or market price of the Bonds or
the ability of the Underwriter to enforce contracts for the sale of the Bonds; or
(f) there shall be in force a general suspension of trading on the New York Stock
Exchange, the effect of which on the financial markets of the United States is such as, in the
reasonable judgment of the Underwriter, would materially adversely affect the market for or
market price of the Bonds or the ability of the Underwriter to enforce contracts for the sale of
the Bonds; or
(g) a general banking moratorium shall have been declared by federal, New York
or California authorities; or
(h) any proceeding shall be pending or threatened by the Securities and Exchange
Commission against the Successor Agency or the Former Agency; or
(i) additional material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any governmental authority or by any
national securities exchange; or
Q) the New York Stock Exchange or other national securities exchange, or any
governmental or regulatory authority, shall impose, as to the Bonds or obligations of the
general character of the Bonds, any material restrictions not now in force, or increase
materially those now in force, with respect to the extension of credit by, or the charge to the
net capital requirements of the Underwriter; or
(k) there shall exist any event which in the reasonable opinion of the Underwriter
that either: (i) makes untrue or incorrect in any material respect any statement or information
contained in the Official Statement; or (ii) is not reflected in the Official Statement but
should be reflected therein to make the statements and information contained therein not
misleading in any material respect; or
17
SA -3-109
(1) there shall have occurred or any notice shall have been given of any intended
downgrade, suspension, withdrawal or negative change in credit watch status by any national
credit agency of the Insurer; or
(m) a material disruption in securities settlement, payment or clearance services
affecting the Bonds shall have occurred; or
(n) any rating of the Bonds shall have been downgraded, suspended or withdrawn
or placed on negative outlook or negative watch by a national rating service, which, in the
Underwriter's reasonable opinion, materially adversely affects the marketability or market
price of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the
Bonds.
10. Contingency of Obligations. The obligations of the Successor Agency hereunder are
subject to the performance by the Underwriter of its obligations hereunder.
11. Duration of Representations, Warranties, Agreements and Covenants. All
representations, warranties, agreements and covenants of the Successor Agency shall remain
operative and in full force and effect, regardless of any investigations made by or on behalf of the
Underwriter or the Successor Agency and shall survive the Closing Date.
12. Expenses. (a) The Successor Agency will pay or cause to be paid all reasonable
expenses incident to the performance of its obligations under this Bond Purchase Agreement,
including, but not limited to, execution and delivery of the Bonds, costs of printing the Bonds,
printing, distribution and delivery of the Preliminary Official Statement, the Official Statement and
any amendment or supplement thereto, the fees and disbursements of Bond Counsel, Disclosure
Counsel, and counsel to the Successor Agency, the fees and expenses of the Successor Agency's
accountants, fees of the Municipal Advisor, fees of the Fiscal Consultant, any fees charged by rating
agencies for the rating of the Bonds and fees of the Trustee and the Escrow Bank. In the event this
Bond Purchase Agreement shall terminate because of the default of the Underwriter, the Successor
Agency will, nevertheless, pay, or cause to be paid, all of the expenses specified above.
(b) The Underwriter shall pay the fees and expenses of any counsel retained by it,
all advertising expenses incurred in connection with the public offering of the Bonds, fees of the
California Debt and Investment Advisory Commission, CUSIP fees and all other expenses incurred
by it in connection with the public offering and distribution of the Bonds (including out-of-pocket
expenses and related regulatory expenses).
13. Notices. Any notice or other communication to be given to the Successor Agency
under this Bond Purchase Agreement may be given by delivering the same in writing to the
Executive Director, Successor Agency to the former Community Redevelopment Agency of the City
of Santa Ana, 20 Civic Center Plaza, Santa Ana, CA 92701, and any notice or other communication
to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the
same in writing to Samuel A. Ramirez & Co., Inc., 445 S. Figueroa Street, Suite 2310, Los Angeles,
California 90071; Attention: Michael Mejia, Vice President.
14. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of
the Successor Agency and the Underwriter (including the successors or assigns of the Underwriter)
18
SA -3-110
and no other person, including any purchaser of the Bonds, shall acquire or have any right hereunder
or by virtue hereof.
15. Governing Law. This Bond Purchase Agreement shall be governed by and construed
in accordance with the laws of the State of California applicable to contracts made and performed in
California.
16. Headings. The headings of the paragraphs of this Bond Purchase Agreement are
inserted for convenience of reference only and shall not be deemed to be a part hereof.
17. Severability. In case any one or more of the provisions contained herein shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof.
18. Effectiveness. This Bond Purchase Agreement shall become effective upon its
acceptance hereof by the Successor Agency.
19
SA -3-111
19. Counterparts. This Bond Purchase Agreement may be executed in several
counterparts which together shall constitute one and the same instrument.
The foregoing is hereby agreed to and accepted as
of the date fust above written:
SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF SANTA ANA
Authorized Representative
Time of Execution: p.m.
California time
Very truly yours,
SAMUEL A. RAMIREZ & CO., INC., as
Underwriter
By
Authorized Representative
S-1
SA -3-112
Maturity
(September 1)
2019
2020
2021
2022
2023
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
20-(T)
EXHIBIT A TO THE
BOND PURCHASE AGREEMENT
SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF SANTA ANA
TAX ALLOCATION REFUNDING BONDS
SERIES 2018A (TAX-EXEMPT)
11 0401NYIlY.YN7ID11100
10% Test
Principal Interest 10% Test Not
Amount Rate Yield Price Satisfied Satisfied
Term Bond.
o) Insured Bond.
Ick Priced to optional call at [par] on September 1, 20 .
At the time of execution of this Purchase Agreement and assuming orders are confirmed by the close of the
business day immediately following the date of this Purchase Agreement.
A-1
SA -3-113
Subject to
Hold -The-
Offering -
Price Rule
S
SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF SANTA ANA
TAX ALLOCATION REFUNDING BONDS
SERIES 2018B (FEDERALLY TAXABLE)
MATURITY SCHEDULE
Maturity Principal Interest
(September 1) Amount Rate Yield Price
A-2
SA -3-114
EXHIBIT B
FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL
[TO COME]
B-1
SA -3-115
EXIT BIT C
FORM OF CITY ATTORNEY OPINION
Samuel A. Ramirez & Co., Inc.
Los Angeles, California
Successor Agency to the Former
Community Redevelopment Agency of
the City of Santa Ana
Santa Ana, California
Re: Successor Agency to the Former Community Redevelopment Agency of the City of
Santa Ana Tax Allocation Refunding Bonds Series 2018A (Tax Exempt) and Series 2018B
(Federally Taxable)
Ladies and Gentlemen:
We serve as City Attorney to the City of Santa Ana and counsel to the Successor Agency to
the former Community Redevelopment Agency of the City of Santa Ana (the "Successor Agency").
This letter is addressed to you pursuant to Section 8(d)(vi) of the Bond Purchase Agreement dated
2018 (the "Purchase Agreement"), between Samuel A. Ramirez & Co., Inc., as underwriter
(the "Underwriter") and the Successor Agency, providing for the purchase of $ principal
amount of the above -captioned bonds (collectively, the "Bonds").
We have been furnished with and have examined copies of the (i) Resolution No.
adopted by the Successor Agency on , 2018 (the "Successor Agency Resolution"); (ii)
Resolution No. , adopted by the Successor Agency on , 2018 (the "Successor Agency
POS Resolution"); (iii) the Indenture, dated as of 1, 2018 (the "Indenture"), between the
Successor Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the
"Trustee"); (iv) the Continuing Disclosure Certificate, dated , 2018 (the "Continuing
Disclosure Certificate") executed by the Successor Agency; the Escrow Agreement, dated as of
1, 2018 by and between the Successor Agency and The Bank of New York Mellon Trust
Company, N.A.; and (v) the Purchase Agreement. The Indenture, Continuing Disclosure Certificate,
Purchase Agreement, and Escrow Agreement are collectively referred to herein as the "Successor
Agency Agreements." All capitalized terms used herein and not otherwise defined shall have the
meanings given to such terms as set forth in the Indenture, or if not defined in the Indenture, in the
Purchase Agreement.
We have examined the law and such certified proceedings and other documents as we deem
necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon
the representations of the Successor Agency contained in the Indenture and the certified proceedings
and other certifications of public officials furnished to us. In the course of our representation,
nothing has come to our attention that caused us to believe that any of the factual representations
upon which we have relied are untrue, but we have made no other factual investigations.
When used herein, the phrase "to our current actual knowledge" means that, during the
course of our representation of the Successor Agency, no information that would give us current
actual knowledge of the inaccuracy of such statement has come to the attention of those attorneys in
C-1
SA -3-116
the firm who have rendered legal services in connection with the representation described in the
introductory paragraph of this opinion letter. However, we have not undertaken any independent
investigation or inquiry to determine the accuracy of such statement other than inquiry of officials of
the Successor Agency.
Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are
of the following opinions or conclusions:
1. The Successor Agency is a public entity, duly organized and validly existing under
and by virtue of the Constitution and the laws of the State.
2. The Successor Agency has full legal power and lawful authority to enter into the
Successor Agency Agreements.
3. Each of (i) Successor Agency Resolution approving and authorizing the execution
and delivery of the Successor Agency Agreements and (ii) the Successor Agency POS Resolution
approving the Preliminary Official Statement and Purchase Agreement was duly adopted at a
meeting of the Agency which was called and held on, respectively, , 2018, and 2018,
pursuant to law and with all public notice required by law and at which a quorum was present and
acting throughout, and each of the Successor Agency Resolution and the Successor Agency POS
Resolution is in full force and effect and has not been modified, amended or rescinded.
4. To the best of our knowledge, the authorization, execution and delivery of the
Successor Agency Agreements by the Successor Agency and compliance with the provisions thereof
by the Successor Agency of its obligations thereunder, will not conflict with, or constitute a breach or
default under, in any material respect, any law, administrative regulation, court decree, resolution,
ordinance or other agreement to which the Successor Agency is subject or by which it is bound.
5. To our current actual knowledge, except as otherwise disclosed in the Official
Statement, there is no litigation pending (having been served) or overtly threatened in writing against
the Successor Agency that (a) challenges the right or title of any member or officer of the Successor
Agency to hold his or her respective office or exercise or perform the powers and duties pertaining
thereto; (b) challenges the validity or enforceability of the Bonds or the Successor Agency
Agreements; (c) seeks to restrain or enjoin the issuance and sale of the Bonds, the adoption or
effectiveness of the Successor Agency Resolution and the Indenture, or the execution and delivery by
the Successor Agency of, or the performance by the Successor Agency of its obligations under the
Bonds or the Successor Agency Agreements; or (d) if determined adversely to the Successor Agency
or its interests, would have a material and adverse effect upon availability of Tax Revenues to pay
the debt service on the Bonds, or which, in any manner, questions the right of the Successor Agency
to enter into, and perform its obligations under, the Successor Agency Agreements.
6. The Successor Agency Agreements have been duly authorized, executed and
delivered by the Successor Agency and are valid, legal and binding agreements of the Successor
Agency, enforceable in accordance with its respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights in general and by general equity principles (regardless of whether such enforcement
is considered in a proceeding in equity or at law).
Our opinions are subject to the following qualifications
C-2
SA -3-117
(a) Our opinions are limited to the matters expressly set forth herein and no opinion is to
be implied or may be inferred beyond the matters expressly so stated;
(b) We are licensed to practice law in the State of California. Accordingly, the foregoing
opinions only apply insofar as the laws of the State of California and the United States may be
concerned, and we express no opinion with respect to the laws of any other jurisdiction;
(c) We express no opinion as to the enforceability under certain circumstances of
contractual provisions respecting various summary remedies without notice or opportunity for
hearing or correction, especially if their operation would work a substantial forfeiture or impose a
substantial penalty upon the burdened party;
(d) We express no opinion as to the effect or availability of any specific remedy provided
for in any agreement under particular circumstances, except that we believe such remedies are, in
general, sufficient for the practical realization of the rights intended thereby;
(e) We express no opinion as to the enforceability of any indemnification, contribution,
choice of law, choice of forum, or waiver provisions contained in the Successor Agency Agreements;
(1) We disclaim any obligation to update this letter for events occurring after the date
hereof;
(g) We express no opinion concerning the application to or compliance with federal
securities law, including but not limited to the Securities Act of 1933, as amended, and the Trust
Indenture Act of 1939, as amended, any state securities or "Blue Sky" law, or any federal, state or
local tax law, of the Bonds or the issuance and sale thereof, and
(h) We express no opinion concerning the defeasance of the Refunded Bonds.
As counsel to the Successor Agency in this matter, we have not rendered financial advice to
the Successor Agency and do not represent, by this opinion or otherwise, that we have reviewed or
made any assessment about, nor do we offer any opinion about, the financial condition of the
Successor Agency, past, present or future, including any financial information contained in the
documents; nor have we reviewed the financial feasibility of this transaction, and, accordingly, we
offer no opinion whatsoever regarding such financial feasibility.
This letter is famished by us as counsel to the Successor Agency. No attomey-client
relationship has existed or exists between our firm and the Underwriter in connection with the Bonds
or by virtue of this letter. This letter is delivered to the Underwriter solely for their benefit in
connection with the transactions covered by the first paragraph of this letter and may not be relied
upon or used by, circulated, quoted or referred to, nor may copies hereof be delivered to, any other
person or for any other purpose without our prior written approval; provided, however, that copies of
this opinion may be included in the closing transcripts for the transactions covered by the first
paragraph of this letter. This letter is not intended to be relied upon by owners of Bonds.
Very truly yours,
C-3
SA -3-118
I. CII: 1 1
FORM OF OPINION OF DISCLOSURE COUNSEL
[TO COME]
D-1
SA -3-119
FORM OF ISSUE PRICE CERTIFICATE
[TO COME]
E-1
SA -3-120
EXHIBIT 4
CONTINUING DISCLOSURE CERTIFICATE
This CONTINUING DISCLOSURE CERTIFICATE (the "Disclosure Certificate") is executed and
delivered by the Successor Agency to the Former Community Redevelopment Agency of the City of Santa Ana
(the "Issuer") in connection with the issuance of its Tax Allocation Refunding Bonds, Series 2018A (Tax -
Exempt) and Tax Allocation Refunding Bonds, Series 2018B (Federally Taxable) (the `Bonds"). The Bonds are
being issued pursuant to an Indenture of Trust, dated as of 1, 2018, by and between The Bank of
New York Mellon Trust Company, N.A., as trustee (the "Trustee") and the Issuer (the "Indenture"). The Issuer
covenants and agrees as follows:
Section 1. Purpose of this Disclosure Certificate. This Disclosure Certificate is being executed and
delivered by the Issuer for the benefit of the Beneficial Owners and bondholders in order to assist the
Participating Underwriter in complying with Securities and Exchange Commission Rule 15c2-12.
Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any
capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following
capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in,
Sections 3 and 4 of this Disclosure Certificate.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through
nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income
tax purposes.
"Dissemination Agent" shall mean Urban Futures Incorporated, or any successor Dissemination Agent
designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation.
In the absence of such a designation, the Issuer shall act as the Dissemination Agent.
"EMMA" or "Electronic Municipal Market Access" means the centralized on-line repository system
located at www.emma.msrb.org for documents filed with the MSRB pursuant to the Rule, such as official
statements and disclosure information relating to municipal bonds, notes and other securities as issued by state
and local governments.
"Listed Events" shall mean any of the events listed in Section 5(a) and (b) of this Disclosure Certificate.
"MSRB" means the Municipal Securities Rulemaking Board, which has been designated by the
Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule,
or any other repository of disclosure information which may be designated by the Securities and Exchange
Commission as such for purposes of the Rule in the future.
"Participating Underwriter" shall mean Ramirez & Co., Inc., or any of the original underwriters of the
Bonds required to comply with the Rule in connection with offering of the Bonds.
"Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as the same may be' -amended from time to time.
"State" shall mean the State of California.
"State Repository" shall mean any public or private repository or entity designated by the State as a state
repository for the purpose of the Rule. As of the date of this Certificate, there is no State Repository.
55394.00019\3 12n932.1
SA -3-121
Section 3. Provision of Annual Renorts
(a) Delivery of Annual Report to MSRB. The Issuer shall, or shall cause the Dissemination
Agent to, not later than [March 311 in each year, commencing [March 31, 20191 and to file with
EMMA, in a readable PDF or other electronic format as prescribed by the MSRB, an Annual Report
that is consistent with the requirements of Section 4 of this Disclosure Certificate; provided however,
that the first Annual Report due on March 31, 2019 shall consist solely of a copy of the Official
Statement. The Annual Report may be submitted as a single document or as separate documents
comprising a package, and may cross-reference other information as provided in Section 4 of this
Disclosure Certificate; provided, that the audited financial statements of the Issuer may be submitted
separately from the balance of the Annual Report and later than the date required above for the filing of
the Annual Report if they are not available by that date.
(b) Change of Fiscal Year. If the Issuer's fiscal year changes, it shall give notice of such
change in the same manner as for a Listed Event under Section 5(d).
(c) Delivery of Annual Report to Dissemination Agent. Not later than five days prior to the
date specified in subsection (a) for providing the Annual Report to EMMA, the Issuer shall provide the
Annual Report to the Dissemination Agent (if other than the Issuer). If by such date, the Dissemination
Agent has not received a copy of the Annual Report, the Dissemination Agent shall notify the Issuer.
(d) Report of Non -Compliance. If the Issuer is unable to provide an Annual Report by the
date required in subsection (a), the Dissemination Agent shall send a notice to EMMA in a timely
manner in an electronic format prescribed by the MSRB.
(e) Annual Compliance Certification. The Dissemination Agent shall, if the Dissemination
Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been
provided pursuant to this Disclosure Certificate, stating the date it was provided.
Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by
reference the following:
(a) Audited financial statements of the Issuer for the preceding fiscal year, prepared in
accordance with the laws of the State and including all statements and information prescribed for
inclusion therein by the Controller of the State. If the Issuer's audited financial statements are not
available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual
Report shall contain unaudited financial statements in a format similar to the financial statements
contained in the final Official Statement, and the audited financial statements shall be filed in the same
manner as the Annual Report when they become available. The audited Financial Statements of the
Issuer may be included in the City of Santa Ana's Comprehensive Annual Financial Report if no
separate Financial Statement is prepared for the Issuer.
(b) To the extent not included in the audited final statement of the Issuer, the Annual
Report shall also include the following information for the prior fiscal year, insofar as available from
public records:
(i) Table No. 1 -Land Use;
(ii) Table Nos. 2 and 3 - Historical Assessed Valuations;
(iii) Table No. 4 - Ten Largest Taxpayers;
(iv) Table Nos. 6 and 7 — Projected Tax Revenues; and
55394.00019\31222932.1
SA -3-122
(v) Table No. 8 - Debt Service Coverage.
(c) Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the Issuer or related public entities, which are
available to the public on the MSRB's Internet web site or filed with the Securities and Exchange
Commission. The Issuer shall clearly identify each such other document so included by reference.
If the document included by reference is a final official statement, it must be available from
EMMA.
(d) In addition to any of the information expressly required to be provided under paragraph
(b) of this Section 4, the Issuer shall provide such further information, if any, as may be necessary to
make the specifically required statements or information (as set forth herein), in the light of the
circumstances under which they are made, not misleading.
Section 5. Reporting of Significant Events.
(a) Reportable Events_. The Issuer shall, or shall cause the Dissemination (if not the
Agency) to, give notice of the occurrence of any of the following events with respect to the Bonds (in
accordance with (e) below):
(1)
Principal and interest payment delinquencies.
(2)
Unscheduled draws on debt service reserves reflecting financial difficulties.
(3)
Unscheduled draws on credit enhancements reflecting financial difficulties.
(4)
Substitution of credit or liquidity providers, or their failure to perform.
(5)
Defeasances.
(6)
Rating changes.
(7)
Tender offers.
(8)
Bankruptcy, insolvency, receivership or similar event of the obligated person.
(9)
Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other
material notices or determinations with respect to the tax status of the security, or other material
events affecting the tax status of the security.
(b) Material
Reportable Events. The Issuer shall give, or cause to be given, notice of the
occurrence of any of the following events with respect to the Bonds, if material:
(1)
Non-payment related defaults.
(2)
Modifications to rights of security holders.
(3)
Bond calls.
(4)
The release, substitution, or sale of property securing repayment of the
securities.
SA -3-123
(5) The consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the obligated person, other
than in the ordinary course of business, the entry into a definitive agreement to undertake such
an action or the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms.
(6) Appointment of a successor or additional trustee, or the change of name of a
trustee.
(c) Determination of Materiality of Listed Events. Whenever the Issuer obtains knowledge
of the occurrence of a Listed Event listed under Section 5(b), the Issuer shall as soon as possible
determine if such event would be material under applicable federal securities laws.
(d) Notice to Dissemination Agent. If the Issuer has determined that knowledge of the
occurrence of a Listed Event listed under Section 5(b) would be material under applicable federal
securities laws, the Issuer shall promptly notify the Dissemination Agent (if other than the Issuer) in
writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to
subsection (d).
(e) Notice of Listed Events. The Issuer shall file, or cause the Dissemination Agent to file, a
notice of the occurrence of a Listed Event listed in Section 5(a), and, listed in Section 5(b), if material,
with EMMA, in a readable PDF or other electronic format as prescribed by the MSRB, in a timely
manner not in excess of ten (10) business days after the occurrence of the Listed Event. Notwithstanding
the foregoing, notice of Listed Events described in subsections (a)(5) and (b)(3) need not be given under
this subsection any earlier than the notice (if any) of the underlying event is given to Bondholders of
affected Bonds.
Section 6. Identifying Information for Filings with EMMA. All documents provided to EMMA
under this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure
Certificate shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds.
Section 8. Dissemination Agent.
(a) Appointment of Dissemination Agent. The initial Dissemination Agent shall be Urban
Futures Incorporated. The Issuer may, from time to time, appoint or engage a different Dissemination
Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any
such agent, with or without appointing a successor Dissemination Agent. If the Dissemination Agent is
not the Issuer, the Dissemination Agent shall not be responsible in any manner for the content of any
notice or report prepared by the Issuer pursuant to this Disclosure Certificate.
(b) Compensation of Dissemination Agent. The Dissemination Agent, if not the Issuer, shall
be paid compensation by the Issuer for its services provided hereunder in accordance with its schedule
of fees as agreed to between the Dissemination Agent and the Issuer from time to time and all expenses,
legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties
hereunder. The Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the
Issuer, Holders or Beneficial Owners, or any other party. The Dissemination Agent may rely and shall
be protected in acting or refraining from acting upon any direction from the Issuer or an opinion of
nationally recognized bond counsel. The Dissemination Agent may at any time resign by giving written
notice of such resignation to the Issuer.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Issuer may amend this Disclosure Certificate (and the Dissemination Agent shall agree to any
55394.00019\31222932.1
SA -3-124
amendment so requested by the Issuer that does not impose any greater duties or risk of liability on the
Dissemination Agent), and any provision of this Disclosure Certificate may be waived, provided that the
following conditions are satisfied:
(a) Change in Circumstances. If the amendment or waiver relates to the provisions of
Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises
from a change in legal requirements, change in law, or change in the identity, nature, or status of an
obligated person with respect to the Bonds, or the type of business conducted;
(b) Compliance as oflssue Date. The undertaking, as amended or taking into account such
waiver, would, in the opinion of a nationally recognized bond counsel, have complied with the
requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any
amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) Consent of Holders; Non -impairment Opinion. The amendment or waiver either (i) is
approved by the Bondholders in the same manner as provided in the Indenture for amendments to the
Indenture with the consent of Bondholders, or (ii) does not, in the opinion of nationally recognized bond
counsel, materially impair the interests of the Bondholders or Beneficial Owners.
If this Disclosure Certificate is amended or any provision of this Disclosure Certificate is waived, the
Issuer shall describe such amendment or waiver in the next following Annual Report and shall include, as
applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in
the case of a change of accounting principles, on the presentation) of financial information or operating data
being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed
in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed
Event under Section 5(d), and (ii) the Annual Report for the year in which the change is made should present a
comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as
prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting
principles.
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to
prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this
Disclosure Certificate or any other means of communication, or including any other information in any Annual
Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure
Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a
Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have
no obligation under this Disclosure Certificate to update such information or include it in any future Annual
Report or notice of occurrence of a Listed Event.
Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this
Disclosure Certificate, any Bondholder or Beneficial Owner may take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply
with its obligations under this Disclosure Certificate. The sole remedy under this Disclosure Certificate in the
event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel
performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent. All of the immunities,
indemnities, and exceptions from liability in Article IX of the Indenture insofar as they relate to the Trustee shall
apply to the Dissemination Agent in this Disclosure Certificate. The Dissemination Agent shall have only such
duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the
Dissemination Agent, and its officers, directors, employees and agents, harmless against any loss, expense and
liabilities which it may incur arising out of the disclosure of information pursuant to the Disclosure Certificate
or arising out of or in the exercise of performance of its powers and duties hereunder, including the costs and
expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to
55394.00019\31222932.1
SA -3-125
the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall have no duty of
obligation to review any information provided to it hereunder and shall not be deemed to be acting in any
fiduciary capacity for the Issuer, the owner of a Bond, or any other party. The Trustee shall have no liability to
any party for any monetary damages or other financial liability of any kind whatsoever related to or arising from
any breach of this Disclosure Certificate. No person shall have any right to commence any action against the
Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure
Certificate. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon
any written direction from the Issuer or an opinion of Special Counsel. The obligations of the Issuer under this
Section shall survive resignation or removal of the Dissemination Agent or the Trustee and payment of the
Bonds.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer,
the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of
the Bonds, and shall create no rights in any other person or entity.
Dated: 2018 SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF SANTA ANA
Lo
Francisco Gutierrez
Executive Director/Finance and
Management Services Agency
55394.00019131222932.1
SA -3-126
EXHIBIT 5
ESCROW AGREEMENT
by and between
SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF SANTA ANA
4142-5877-7620.1
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee and Escrow Agent
Dated as of 1, 2018
Relating to
the refunding and defeasance of
Community Redevelopment Agency of the City of Santa Ana
Tax Allocation Bonds (Merged Project Area), 2011 Series A
SA -3-127
ESCROW AGREEMENT
This ESCROW AGREEMENT, (the "Agreement'), made and entered into as of 1, 2018,
by and between the SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF SANTA ANA (the "Agency"), and THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the
United States of America, having a corporate trust office located in Los Angeles, California, and being
qualified to accept and administer the trusts hereby created, as trustee and acting as escrow agent hereunder
(in such capacity, the "Escrow Agent'),
WITNESSETH:
WHEREAS, the former Community Redevelopment Agency of the City of Santa Ana (the
"Former RDA") has heretofore issued and sold $66,790,000 aggregate principal amount of its Community
Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area), 2011 Series
A, of which $ aggregate principal amount is currently outstanding (the "Series 2011 Bonds"),
pursuant to an Indenture of Trust, dated as of February 1, 2011 (the "2011 Indenture"), between the Former
RDA and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), which Series
2011 Bonds are subject to refunding and defeasance in accordance with the 2011 Indenture but are not
subject to optional redemption until March 1, 2021;
WHEREAS, the interest is payable on the Series 2011 Bonds on each March 1 and September 1
and principal is payable on the Series 2011 Bonds on each September 1 as provided in the 2011 Indenture;
WHEREAS, the Agency has determined to issue its Successor Agency to the former Community
Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds, Series 2018B (Federally
Taxable) (the "Refunding Bonds") in the aggregate principal amount of $ pursuant to the terms
of an Indenture, dated as of 1, 2018 (the "2018 Indenture"), by and between the Agency and The
Bank of New York Mellon Trust Company, N.A., as trustee (the "2018 Trustee");
WHEREAS, the Refunding Bonds are being issued for the purpose of providing moneys which
will, among other things, be sufficient (together with other moneys and interest earnings thereon) (i) to
provide for the payment when due of the principal of and interest on the Series 2011 Bonds to and including
March 1, 2021, and (ii) to redeem the Series 2011 Bonds on March 1, 2021, at par without premium (the
sum of the amounts referred to in clauses (i) and (ii) of this preamble are hereinafter referred to as the
"Redemption Price");
WHEREAS, the Indenture contemplates the setting aside of a portion of the proceeds of the
Refunding Bonds, together with other funds of the Agency, in order to provide for the payment of the
Redemption Price related to the Series 2011 Bonds and that such proceeds shall be deposited in a special
escrow fund to be created hereunder to be known as the Refunding Escrow to be maintained by the Escrow
Agent (the "Refunding Escrow"); and
WHEREAS, the Agency has taken action to cause to be delivered to the Escrow Agent for deposit
in or credit to the Refunding Escrow cash in the amount of $ which has been certified by
[Verification Agent] to be sufficient to pay when and as due the Redemption Price of the Series 2011 Bonds;
4142-5877-7620.1
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NOW, THEREFORE, the Agency and the Escrow Agent hereby agree as follows:
Section 1. Establishment, Funding and Maintenance of Refunding Escrow.
(a) Pursuant to the 2018 Indenture, the Agency has caused the 2018 Trustee to transfer to the
Escrow Agent the sum of $ derived from the proceeds of the Refunding Bonds and other funds of
the Agency. The Escrow Agent hereby accepts and acknowledges receipt of $ to secure the payment
of the Redemption Price of the Series 2011 Bonds. The Escrow Agent agrees to establish and maintain
until the Redemption Price of the Series 2011 Bonds has been paid in full a fund designated as the
"Refunding Escrow," and to hold the moneys therein at all times as a special and separate trust fund (wholly
segregated from all other securities, investments or moneys on deposit with the Escrow Agent). All moneys
in the Refunding Escrow are hereby irrevocably pledged to secure the payment of the Redemption Price of
the Series 2011 Bonds.
(b) The Agency hereby directs the Escrow Agent to purchase on , 2018, and to accept
in the name of the Escrow Agent for the account of the Refunding Escrow, the $ principal amount
escrow security specified among the permitted Investment Securities listed on Schedule I hereto. The
Escrow Agent is directed to use the amount on deposit in the Refunding Escrow to make such purchase at
the then applicable purchase price, at a discount or premium, and to hold the balance on deposit in the
account of the Refunding Escrow not applied to the cost of such treasury bill uninvested, pledged as
described in Section 1(a) hereof.
(c) Upon the written direction of the Agency, but subject to the conditions and limitations
herein set forth, the Escrow Agent shall purchase substitute Investment Securities with the proceeds derived
from the sale, transfer, redemption or other disposition of Investment Securities then on deposit in the
Refunding Escrow in accordance with the provisions of this Section 1(c); provided that such substituted
Investment Securities shall be limited to the investment securities as set forth in EXHIBIT A attached
hereto. Such sale, transfer, redemption or other disposition of such Investment Securities then on deposit
in the Refunding Escrow and substitution of other Investment Securities of the Agency are permitted
hereunder but only by a simultaneous transaction and only if: (i) a nationally recognized firm of Independent
Certified Public Accountants (the "Independent Certified Public Accountants") or such other qualified firm
selected by the Agency shall certify that (A) the Investment Securities to be substituted, together with the
Investment Securities which will continue to be held in the Refunding Escrow, will mature in such principal
amounts and earn interest in such amounts and, in each case, at such times so that sufficient moneys will
be available from maturing principal and interest on such Investment Securities held in the Refunding
Escrow together with any uninvested moneys, to make all payments required by Section 2 hereof which
have not previously been made, and (B) the amounts and dates of the anticipated payments by the Escrow
Agent of the Redemption Price will not be diminished or postponed thereby; and (ii) the Escrow Agent
shall receive an opinion of nationally recognized bond counsel to the effect that the sale, transfer,
redemption or other disposition and substitution of Investment Securities will not adversely affect the
exclusion of interest on the Series 2018 Bonds or the Series 2011 Bonds from gross income for federal
income tax purposes.
(d) Upon the written direction of the Agency, but subject to the conditions and limitations
herein set forth, the Escrow Agent will apply any moneys received from the maturing principal of or interest
or other investment income on any Investment Securities held in the Refunding Escrow, or the proceeds
from any sale, transfer, redemption or other disposition of Investment Securities pursuant to Section 1(b)
not required for the purposes of said Section, as follows:
(i) to the extent such moneys will not be required at any time for the purpose of
making a payment required by Section 2 hereof, as shall be certified to the Escrow Agent by a
4142-5877-7620.1
SA -3-129
nationally recognized firm of Independent Certified Public Accountants or such other qualified
firm selected by the Agency, such moneys shall be paid over to the Agency upon the written
direction of the Agency as received by the Escrow Agent, free and clear of any trust, lien, pledge
or assignment securing the Series 2011 Bonds or otherwise existing hereunder, after provision for
payment of amounts due the Escrow Agent pursuant to Sections 5 and 12 hereof; and
(ii) to the extent such moneys will be required for such purpose at a later date, such
moneys shall, to the extent practicable and at the written direction of the Agency, be invested or
reinvested in Investment Securities maturing at times and in amounts sufficient to pay when due
the Redemption Price (provided that (A) the amount of the funds to be realized from time to time
from such investment or reinvestment shall be certified by a nationally recognized firm of
Independent Certified Public Accountants or such other qualified firm selected by the Agency, and
(B) the Agency shall deliver to the Escrow Agent an opinion of nationally recognized bond counsel
to the effect that such investment or reinvestment will not adversely affect the exclusion of interest
on the Series 2018 Bonds or the Series 2011 Bonds from gross income for federal income tax
purposes) and interest earned from such investments or reinvestment shall be retained by the
Escrow Agent for such purpose.
(e) The Escrow Agent shall not be liable or responsible for any loss resulting from any
reinvestment made pursuant to this Agreement and in full compliance with the provisions hereof.
Section 2. Payment and Redemption of the Series 2011 Bonds. The Agency hereby requests
and irrevocably instructs the Escrow Agent to transfer amounts from the Refunding Escrow to the Trustee
to pay when due the principal of and interest on the Series 2011 Bonds to and including March 1, 2021, and
to pay the redemption price of the Series 2011 Bonds on March 1, 2021. Upon payment in full of the
Redemption Price of the Series 2011 Bonds, the Escrow Agent shall transfer any moneys remaining in the
Refunding Escrow to the Tax Increment Fund established under the 2018 Indenture after provision for
payment of amounts due the Escrow Agent pursuant to Sections 5 and 12 hereof, and this Agreement shall
terminate. The Refunding Escrow cash flow is set forth in Schedule I attached hereto.
Section 3. Notice of Redemption. The Agency hereby irrevocably instructs the Escrow Agent
to take all steps required to redeem, on March 1, 2021 (the "Redemption Date"), the outstanding Series
2011 Bonds maturing on or after September 1, 2022 at a redemption price equal to the principal amount
thereof together with accrued interest thereon to the Redemption Date, without premium. The Agency
hereby irrevocably instructs the Escrow Agent at the expense of the Agency to cause a notice of redemption
of the Series 2011 Bonds maturing on or after September 1, 2022 in substantially the form attached hereto
as Exhibit B and by this reference incorporated herein, to be made in accordance with the 2011 Indenture
including by mailing such notice by first class mail, postage prepaid, at least thirty (30) but not more than
sixty (60) days prior to the Redemption Date, to (i) the Owners of any 2011 Bonds designated for
redemption at their respective addresses appearing on the Registration Books, and (ii) the Securities
Depositories and to one or more Information Services designated by the Agency, and to post notice of
redemption by reference to the applicable CUSIP Numbers for the then Outstanding Series 2011 Bonds
with the Municipal Securities Rulemaking Board (the "MSRB") through its Electronic Municipal Market
Access ("EMMA") system.
Section 4. Notice of Defeasance. The Agency hereby irrevocably instructs the Escrow Agent
at the expense of the Agency to cause a notice of defeasance of the Series 2011 Bonds, in substantially the
form attached hereto as Exhibit C and by this reference incorporated herein, to be mailed promptly
following the date of defeasance, to (i) the Owners of any 2011 Bonds designated for redemption at their
respective addresses appearing on the Registration Books, and (ii) the Securities Depositories and to one or
3
4142-5877-7620.1
SA -3-130
more Information Services designated by the Agency, and to post notice of defeasance by reference to the
applicable CUSIP Numbers for the Outstanding Series 2011 Bonds with the EMMA system.
Section 5. Fees and Costs.
(a) The Agency shall pay to the Escrow Agent from time to time reasonable compensation for
all services rendered under this Agreement. The parties hereto agree that the duties and obligations of the
Escrow Agent shall be as expressly provided herein, and no implied duties or obligations shall be read into
this Agreement against the Escrow Agent.
(b) The Agency shall pay to the Escrow Agent additional fees and reimbursements for costs
incurred, including but not limited to legal and accountants' services, involving this Agreement.
(c) The fees of and the costs incurred by the Escrow Agent shall in no event be deducted or
payable from, or constitute a lien against, the Refunding Escrow, except as otherwise provided herein.
Section 6. Merger or Consolidation. Any company into which the Escrow Agent may be
merged or converted or with which it may be consolidated or any company resulting from any merger,
conversion or consolidation to which it shall be a party or any company to which the Escrow Agent may
sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible
under this Agreement, shall be the successor of such Escrow Agent without the execution or filing of any
paper or any further act, notwithstanding anything herein to the contrary.
Section 7. Resignation of Escrow Agent. The Escrow Agent may at any time resign by giving
written notice to the Agency of such resignation. The Agency shall promptly appoint a successor Escrow
Agent upon receipt of such notice. Resignation of the Escrow Agent will be effective only upon acceptance
of appointment of a successor Escrow Agent. If the Agency does not appoint a successor, the Escrow Agent
may petition any court of competent jurisdiction for the appointment of a successor Escrow Agent, which
court may thereupon, after such notice, if required by law, appoint a successor Escrow Agent. After
receiving a notice of resignation of an Escrow Agent, the Agency may appoint a temporary Escrow Agent
to replace the resigning Escrow Agent until the Agency appoints a successor Escrow Agent. Any such
temporary Escrow Agent so appointed by the Agency shall immediately and without further act be
superseded by the successor Escrow Agent so appointed.
Section 8. Severability. If any section, paragraph, sentence, clause or provision of this
Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of
such section, paragraph, sentence, clause or provision shall not affect any of the remaining provisions of
this Agreement.
Section 9. Execution of Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall for all purposes be deemed to be an original and all of which shall together
constitute but one and the same instrument.
Section 10. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
Section 11. Definitions. Any capitalized term used but not otherwise defined in this
Agreement shall have the meaning assigned to such term in the 2011 Indenture.
Section 12. Indemnification. The Agency agrees to indemnify, hold harmless and defend the
Escrow Agent and its officers, directors, employees and agents to the maximum extent permitted by law
4
4142-5877-7620.1
SA -3-131
against any and all losses, damages, claims, actions, liabilities, costs and expenses of whatever nature, kind
or character (including, without limitation, attorneys' fees, litigation and court costs, amounts paid in
settlement and amounts paid to discharge judgments) which may be imposed on, or incurred by or asserted
against the Escrow Agent directly or indirectly arising out of or related to the acceptance and performance
by the Escrow Agent of its duties hereunder. This indemnification shall apply whether any such claim, suit,
investigation, proceeding or action is based upon (i) the interference with or breach of or alleged
interference with or alleged breach of any existing contract in connection with the Series 2011 Bonds, (ii)
any untrue statement or alleged untrue statement of a material fact or omission of a material fact required
to be stated in any offering document with respect to the Series 2011 Bonds necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading, or (iii) any
other wrongful act or alleged wrongful act of the Agency related to the redemption of the Series 2011
Bonds; provided, however, that this indemnification shall not cover any losses or expenses incurred by the
Escrow Agent as a result of its negligence or willful misconduct. In addition to the foregoing, the prevailing
party in any lawsuit shall be entitled to attorneys' fees and costs incurred in any judgment proceeding to
collect or enforce the judgment. This provision is separate and severable and shall survive the merger of
this Agreement into any judgment on this Agreement.
The agreements of the Agency hereunder shall survive termination of this Agreement.
Section 13. Immunities and Liability of Escrow Agent.
(a) The Escrow Agent undertakes to perform only such duties as are expressly and specifically
set forth in this Agreement and no implied duties or obligations shall be read into this Agreement against
the Escrow Agent.
(b) The Escrow Agent shall not have any liability hereunder except to the extent of its own
negligence or willful misconduct. In no event shall the Escrow Agent be liable for any special, indirect or
consequential damages, even if the Escrow Agent or the Agency knows of the possibility of such damages.
The Escrow Agent shall have no duty or responsibility under this Agreement in the case of any default in
the performance of the covenants or agreements contained in the 2011 Indenture. The Escrow Agent is not
required to resolve conflicting demands to money or property in its possession under this Agreement.
(c) The Escrow Agent may consult with counsel of its own choice (which may be counsel to
the Agency) and the opinion of such counsel shall be full and complete authorization to take or suffer in
good faith any action hereunder in accordance with such opinion of counsel.
(d) The Escrow Agent shall not be responsible for any of the recitals or representations
contained herein or in the 2011 Indenture, other than recitals or representations specifically made by the
Escrow Agent.
(e) The Escrow Agent may become the owner of, or acquire any interest in, any of the
Refunding Bonds with the same rights that it would have if it were not the Escrow Agent and may engage
or be interested in any financial or other transaction with the Agency.
(f) The Escrow Agent shall not be liable for the accuracy of any calculations provided as to
the sufficiency of the moneys or securities deposited with it to pay the principal of or interest or premium
on the Series 2011 Bonds.
(g) The Escrow Agent shall not be liable for any action or omission of the Agency under this
Agreement or the 2011 Indenture.
4142-5877-7620.1
SA -3-132
(h) Whenever in the administration of this Agreement the Escrow 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 negligence or willful misconduct on the part of the Escrow Agent, be deemed to be
conclusively proved and established by a certificate of any authorized representative of the Agency, and
such certificate shall, in the absence of negligence or willful misconduct on the part of the Escrow Agent,
be full warrant to the Escrow Agent for any action taken or suffered by it under the provisions of this
Agreement upon the faith thereof.
(i) The Escrow Agent may conclusively rely as to the truth and accuracy of the statements and
correctness of the opinions and the calculations provided to it in connection with this Agreement and shall
be protected in acting, or refraining from acting, upon any written notice, instruction, request, certificate,
document or opinion furnished to the Escrow Agent in connection with this Agreement and reasonably
believed by the Escrow Agent to have been signed or presented by the proper party, and it need not
investigate any fact or matter stated in such notice, instruction, request, certificate or opinion.
6) No provision of this Agreement shall require the Escrow Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder,
or in the exercise of its rights or powers.
Section 14. Termination of Aereement. Upon payment in full of the principal of and interest
on the Series 2011 Bonds and all of the fees and expenses of the Escrow Agent as described above, all
obligations of the Escrow Agent under this Agreement shall cease and terminate, except for the obligation
of the Escrow Agent to pay or cause to be paid to the owners of the Series 2011 Bonds not presented for
payment all sums due thereon and the obligation of the Agency to pay to the Escrow Agent any amounts
due and owing to the Escrow Agent hereunder; provided, however, the obligations of the Escrow Agent
with respect to the payment of the Series 2011 Bonds shall cease and terminate two years after the date on
which the same shall have become due as described hereunder and in accordance with the 2011 Indenture.
4142-5877-7620.1
SA -3-133
IN WITNESS WHEREOF, the Successor Agency to the former Community Redevelopment
Agency of the City of Santa Ana and The Bank of New York Mellon Trust Company, N.A., have caused
this Agreement to be executed each on its behalf as of the day and year first above written.
4142-5877-7620.1
SUCCESSOR AGENCY TO THE FORMER
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF SANTA ANA
[Executive Director]
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Escrow Agent
an
SA -3-134
Authorized Officer
SCHEDULEI
REFUNDING ESCROW CASH FLOW
The cash flow for the Refunding Escrow is set forth on Exhibit A to the Verification Report
prepared by [Verification Agent] attached hereto and incorporated herein by reference as though fully set
forth herein and made a part hereof, relating to the Refunding Bonds.
4142-5877-7620.1
SA -3-135
SCHEDULEII
REFUNDING ESCROW CASH FLOW
The cash flow for the Refunding Escrow is set forth on Exhibit A to the Verification Report
prepared by [Verification Agent], attached hereto and incorporated herein by reference as though fully set
forth herein and made a part hereof, relating to the Series 2018 Bonds.
4142-5877-7620.1
SA -3-136
EXHIBIT A
The Escrow Agent shall purchase only the following substituted Investment Securities:
"Defeasance Obligations" means (a) cash, (b) direct non -callable obligations of the United States
of America, (c) securities fully and unconditionally guaranteed as to the timely payment of principal and
interest by the United States of America, to which direct obligation or guarantee the full faith and credit of
the United States of America has been pledged, (d) Refcorp interest strips, (e) CATS, TIGRS, STRPS, and
(f) defeased municipal bonds rated AAA by S&P or Aaa by Moody's (or any combination of the foregoing),
and specifically, the following escrow security:
Type CUSIP Date Date Amount Rate
A-1
4142-5877-7620.1
SA -3-137
EXHIBIT B
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA
TAX ALLOCATION BONDS (MERGED PROJECT AREA)
2011 SERIES A
DATED FEBRUARY 4, 2011
NOTICE OF REDEMPTION
To holders or owners of the Community Redevelopment Agency of the City of Santa Ana Tax
Allocation Bonds (Merged Project Area), 2011 Series A, of which $56,630,000 aggregate principal amount
is currently outstanding (the "Series 2011 Bonds"), maturing on or after September 1, 2022 as detailed in
the table below (the "Redeemed Bonds"):
Maturity Date
Principal
Interest
Original Defeased
September 1,
Amount
Rate
CUSIP No. CUSIP No.
2022
$12,915,000
6.00%
801095LDO
2024
1,900,000
6.50
801095LG3
2024
14,005,000
6.25
801095LF5
2028
27,810,000
6.75
801095LK4
NOTICE IS HEREBY GIVEN that, pursuant to the applicable provisions of the Indenture of Trust
dated as of February 1, 2011 (the "Indenture") providing for the issuance of the above -captioned bonds, the
Redeemed Bonds will be redeemed on March 1, 2021 (the "Redemption Date") at the price equal to the
principal amount thereof together with interest accrued to the Redemption Date, without premium. On or
before the Redemption Date, the Redeemed Bonds are required to be surrendered at the Office of the Trustee
for redemption at the Redemption Price. From and after the Redemption Date, interest on the Redeemed
Bonds shall cease to accrue.
Pursuant to the Indenture, payment of the Redemption Price on the Redeemed Bonds called for
redemption will be paid without presentation of the Redeemed Bonds if presentment is not required and
upon presentation of the Redeemed Bonds if presentment is required. If presentment is required, surrender
thereof can be made in the following manner:
Delivery Instructions:
The Bank of New York Mellon Trust Company, N.A.
Registered or certified insured mail is suggested when submitting Redeemed Bonds for payment.
Bondholders presenting their Redeemed Bonds in person for same day payment must surrender
their Redeemed Bond(s) by 1:00 P.M. CST on the Redemption Date and a check will be available for pick
up after 2:00 P.M. CST. Checks not picked up by 4:30 P.M. CST will be mailed out to the bondholder via
first class mail. If payment of the Redemption Price is to be made to the registered owner of the Redeemed
Bond, you are not required to endorse the Redeemed Bond to collect the Redemption Price.
B-1
4142-5877-7620.1
SA -3-138
For a list of redemption requirements please visit our website at www.usbank.com/corporatetrust
and click on the `Bondholder Information" link for Redemption instructions. You may also contact
IMPORTANT NOTICE
Federal law requires the Paying Agent to withhold taxes at the applicable rate from the payment if
an IRS Form W-9 or applicable IRS Form W-8 is not provided. Please visit www.irs.gov for additional
information on the tax forms and instructions.
*The Undersigned shall not be held responsible for the selection or use of the CUSIP number in
this Redemption Notice, nor is any representation made as to its correctness. It is included solely for the
convenience of the Holders.
Dated: _, 2021
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Trustee
B-2
4142-5877-7620.1
SA -3-139
EXHIBIT C
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA
TAX ALLOCATION BONDS (MERGED PROJECT AREA)
2011 SERIES A
DATED FEBRUARY 4, 2011
NOTICE OF DEFEASANCE
To holders or owners of the Community Redevelopment Agency of the City of Santa Ana Tax
Allocation Bonds (Merged Project Area), 2011 Series A, of which $64,840,000.00 aggregate principal
amount is currently outstanding (the "Defeased Bonds"):
Maturity Date
September 1,
Principal
Amount
Interest
Rate
Defeased
CUSIP No. CUSIP No.
2019
$ 2,735,000
5.25%
801095LA6
2020
2,125,000
5.50
801095LB4
2020
3,350,000
6.00
801095LC2
2022
12,915,000
6.00
801095LDO
2024
1,900,000
6.50
801095LG3
2024
14,005,000
6.25
801095LF5
2028
27,810,000
6.75
801095LK4
The Successor Agency to the former Community Redevelopment Agency of the City of Santa Ana
(the "Successor Agency") has defeased the Defeased Bonds pursuant to [Article X] of its Indenture of Trust
dated as of February 1, 2011 (the "Indenture") providing for the issuance of the Defeased Bonds, by
depositing [federal securities] with The Bank of New York Mellon Trust Company, N.A., as escrow agent
(the "Escrow Agent'), sufficient to secure and accomplish the payment of principal of and interest on the
Defeased Bonds until March 1, 2021 (the "Redemption Date"), and on that date to redeem all the Defeased
Bonds maturing on and after September 1, 2022. Any capitalized term used but not otherwise defined in
this Notice of Defeasance shall have the meaning assigned to such term in the Indenture.
With the deposit of such federal securities with the Escrow Agent, the Owners of the Defeased
Bonds cease to be entitled to the pledge of the Tax Revenues (as defined in the Indenture) and the other
assets as provided under the Indenture, and all agreements, covenants and other obligations of the Agency
to the Owners of the Defeased Bonds under the Indenture have ceased, terminated and become void,
discharged and satisfied.
The Defeased Bonds maturing on or after September 1, 2022 will be redeemed, after the mailing
of a notice of to the Owners of the Defeased Bonds for the redemption of such bonds on the Redemption
Date, at the principal amount thereof without premium.
C-1
4142-5877-7620.1
SA -3-140
Pursuant to Article X of the Indenture, the Defeased Bonds are now secured solely by the Refunding
Fund held by the Escrow Agent, and your rights, and those of the Trustee, to the funds and accounts of the
Successor Agency established under the Indenture, other than the Refunding Fund, have terminated.
Dated: _, 2018
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Trustee
C-2
4142-5877-7620.1
SA -3-141
SA -3-142
Urban Futures, Inc. EXHIBIT 6
MEMORANDUM
TO: Successor Agency to the Community Redevelopment Agency of the City of Santa Ana
FROM: Urban Futures, Inc.
Michael Busch, CEO
Doug Anderson, Director
DATE: June 21, 2018
RE: Independent Municipal Advisor's Report: Debt Service Savings Analysis for Successor Agency
to the Community Redevelopment Agency of the City of Santa Ana, Tax Allocation Refunding
Bonds (Merged Project Area), Series 2018
Background
The Successor Agency to the Community Redevelopment Agency of the City of Santa Ana (the "Agency")
is authorized under Section 34177.5 of the State Health and Safety Code to issue refunding tax allocation
bonds ("TABs") for economic savings within the parameters set forth in Section 34177.5(a)(1) of the State
Health and Safety Code (the "Savings Parameters"). In addition, Section 34177.5 of the State Health and
Safety Code provides, in relevant part, that the Agency "...shall make use of an independent financial
advisor in developing financing proposals and shall make the work products of the financial advisor
available to the Department of Finance at its request." (State Health & Safety Code Section 34177.5(h),
effective 6/27/12) Urban Futures, Inc., has been retained by the Agency to serve as its independent
municipal advisor to determine compliance with the Savings Parameters for purposes of the issuance by
the Agency of its Tax Allocation Refunding Bonds, Series 2018 ("2018 TABS").
This report in draft form may be used in presentations to the Agency Board and Oversight Board but will
be final only after the pricing of the 2018 TABS and verification of final debt service savings. The 2018
TABS will be issued for the purpose of prepaying and defeasing certain outstanding bonds, including the
former Redevelopment Agency's 2003A & B, and 2011A Bonds (the "Prior Obligations").
Pian of Refunding
The financing goal is to maximize economic savings by reducing total debt service.
Based on market conditions as of 6/21/18, the Underwriter (Ramirez & Co, Inc.) has provided refunding
cash flows based on certain assumptions. The refunding of the Prior Obligations with proceeds of the
2018 TABS will achieve a Net PV savings of approximately $4.05 million, or 5.05% of refunded par, as
shown in Table 3. The estimates assume the use of bond insurance ana a surety policy for the debt service
reserve requirement, and the contribution of $5.8 million of unexpended bond proceeds into the
refunding escrow. The savings generated from this refunding are anticipated to result in higher property
tax distributions to the City of Santa Ana and other taxing entities in the future.
SA -3-143
Refunding Results
Table 1 below shows the estimated sources and uses for the 2018 TABS.
Sources:
Par Amount $ 73,265,000
Premium 1,646,240
$ 74,911,240
Reserve Account Release
Unspent Proceeds
Total Sources of Funds
Uses:
Refunding Escrow Deposits
Cash Deposit
SLGS Purchases
Costs of Issuance
Underwriter's Discount
Bond Insurance
Surety Policy
Total Uses of Funds
$ 6,710,261
5,800,000
$ 87,421,501
$ 15,428,975
70,710,300
$ 86,139,275
303,661
278,407
533,468
166,690
$ 87,421,501
Tables 2 and 3 below show estimated nominal debt service savings and Net PV savings based on market
conditions as of 6/21/2018.
3
SA -3-144
Proposed Refunding Complies with State Law
Based on the 2018 TABS proposed structure and the projected debt service savings according to numbers
prepared by the Underwriter, Urban Futures, Inc. concludes that the 2018 TABS comply with the Savings
Parameters as described below.
SA -3-145
Debt Service
Savings
Less: Prior Funds on Hand
(12,510,261)
Plus: Refunding Funds on Hand
Bond I
Existing
I Est. New
Net PV Savings
Year (9/1)1
Payments
I Payments I
Savings
I
2019
11,095,255
1,828,961
2020
10,730,738
_9,266,294
8,754,764
1,975,974
2021
11,045,942
9,067,701
1,978,241
2022
11,385,458
9,411,620
1,973,838
2023
11,715,337
9,738,345
1,976,992
2024
12,057,350
10,081,353
1,975,997
2025
12,401,425
10,424,756
1,976, 669
2026
13,370,650
11,397,110
1,973,540
2027
5,875,525
3,898,240
1,977,285
2028
5,255,013
3,279,844
1,975,169
2029
1,300,875
1,198,000
102,875
2030
1,299, 575
1,196, 250
103,325
2031
1,301,025
1 1,197,000
104,025
Totals
108,834,168
88,911,277
19,922,891
Proposed Refunding Complies with State Law
Based on the 2018 TABS proposed structure and the projected debt service savings according to numbers
prepared by the Underwriter, Urban Futures, Inc. concludes that the 2018 TABS comply with the Savings
Parameters as described below.
SA -3-145
PV of Savings from cash flow
16,559,567
Less: Prior Funds on Hand
(12,510,261)
Plus: Refunding Funds on Hand
3,661
Net PV Savings
4,052,967
Proposed Refunding Complies with State Law
Based on the 2018 TABS proposed structure and the projected debt service savings according to numbers
prepared by the Underwriter, Urban Futures, Inc. concludes that the 2018 TABS comply with the Savings
Parameters as described below.
SA -3-145
A. Total debt service (principal and interest) on the refunding bonds is less than total debt service on the
refunded bonds (sec. 34177.5(a)(1)(A)): Section 34177.5(a)(1)(A) requires that the total interest cost to
maturity on the refunding bonds or other indebtedness plus the principal amount of the refunding bonds
or other indebtedness shall not exceed the total remaining interest cost to maturity on the bonds or other
indebtedness to be refunded plus the remaining principal of the bonds or other indebtedness to be
refunded. Table 2 shows projected total nominal debt service savings from the refunding of the Prior
Obligations of $19.92 million, calculated as (i) total debt service on the Prior Obligations, minus (ii) total
debt service on the 2018 TABS. Net PV savings is projected to be $4.05 million or 5.05% of total refunded
par, which is above the industry standard guideline of 3% of refunded par.
B. Refunding bonds principal shall be used only for refunding purposes, not for new -money (sec.
34177.5(x) (1)(B)): Section 34177.5(a)(1)(B) requires that the principal amount of the refunding bonds or
other indebtedness shall not exceed the amount required to defease the refunded bonds or other
indebtedness, to establish customary debt service reserves, and to pay related costs of issuance. Table 1
is the projected sources and uses of funds for the 2018 TABS, showing that all proceeds are used only for
purposes associated with refundingthe Prior Obligations and to pay related costs of issuance. No proceeds
of the 2018 TABS will be used for any other purposes, including new -money purposes.
C. Agency shall make diligent efforts to ensure lowest long-term cost financing is obtained, to structure
refunding that does not provide for any bullets or spikes or variable rates, and shall hire an independent
financial advisor (sec. 34177.5(h)): Section 34177.5(h) requires the Agency to make diligent efforts to
ensure that the lowest long-term cost financing is obtained and that the financing not provide for any
bullets or spikes or use variable rates. The Agency has retained Urban Futures, Inc., an independent
financial advisor registered with the SEC and MSRB, to monitor the pricing of the 2018 TABS. In order to
achieve the lowest long-term cost of financing, thefinancing team is anticipating releasing additional cash
from the reserve account into the escrow for the Prior Obligations and replacing the cash with a surety
policy to satisfy the Reserve Requirement.
In accordance with Section 34177.5(h), the proposed refunding structure does not provide for any bullet
principal maturities, debt service spikes or variable rate debt.
SA -3-146