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Home My WebLink About01-Redevelopment Agency Redevelopment Agency · City of San Bernardino 300 North "D" Street, Fourth Floor . San Bernardino, Cllifomia 92418 (714) 384-5081 FAX (714) 888-9413 Pride .f ere~ JANUARY 17, 19,90 AUTHORIZING THE ISSUANCE OF TAX ALLOCATION BONDS, AUTHORIZING THE BORROWING OF FUNDS, AND APPROVING A SUBORDINATION AGREEMENT Synopsis of Previous Commission/Council/Committee Action: 12-18-89 Mayor and Common Council, Community Development Commission and Joint Powers Authority authorized the borrowing of funds in an amount approximately equal to $42,500,000 and the related legal documents. Recommended Motion: (MAYOR AND COMMON COUNCIL) (A) Move to adopt RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING THE TERMS OF A CERTAIN SUBORDINATION AGREEMENT TO BE ENTERED INTO IN CONNECTION WITH THE ISSUANCE OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, TAX ALLOCATION BONDS, 1990 SERIES A (SOUTH VALLE REDEVELOPMENT PROJECT). (Continued on Page 2) Respectfully Submitted, ~(..s...~ ~ {o-'VROber J. Temple, Executive Supporting data attached: Yes Funding requirements: N/A Director Ward: 1 and 3 Project: SV, SEIP Commission Notes: l196A Agenda of: January 29, 1990 Item No. i Redevelopment Agency Recommended MotIon: (ContInued) (COMMUNITY DEVELOPMENT COMMISSION) B) Move to adopt RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING, ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, THE TERMS Of A CERTAIN SUBORDINATION AGREEMENT TO BE ENTERED INTO IN CONNECTION WITH THE ISSUANCE OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, TAX ALLOCATION BONDS, 1990 SERIES A (SOUTH VALLE REDEVELOPMENT PROJECT), (JOINT POWERS FINANCING AUTHORITY) C) Move to adopt RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF AN AGGREGATE PRINCIPAL AMOUNT APPROXIMATELY EQUAL TO $6,700,000 OF TAX ALLOCATION BONDS, 1990 SERIES F (SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA), APPROVING THE FORM OF LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORMS THEREOF. (COMMUNITY DEVELOPMENT COMMISSION) D) Move to adopt RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, AUTHORIZING, ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, THE BORROWING OF FUNDS FROM THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT APPROXIMATELY EQUAL TO $6,700,000 RELATING TO THE SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA, AUTHORIZING THE FORM OF CERTAIN LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING THE PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORMS THEREOF. (MAYOR AND COMMON COUNCIL) E) Move to adopt RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING THE ISSUANCE OF CERTAIN TAX ALLOCATION BONDS, 1990 SERIES F (SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA) OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AND THE BORROWING BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OF THE PROCEEDS THEREFROM PURSUANT TO A RELATED LOAN AGREEMENT. Redevelopment Agency S T A F F R E P 0 R T The first two Resolutions approve a Subordination Agreement between the City and the Agency and authorize the subordination of a previously executed Reimbursement Agreement, and the obligations of the Agency thereunder, to the obligation of the Agency to pay certain loan payments to the Joint Powers Financing Authority from tax increment revenues derived from the South Valle Redevelopment Project Area. Such loan payments will be pledged for the payment of debt service on the San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series A (South Valle Redevelopment Project) issued in an aggregate principal amount approximately equal to $3,700,000. The last three Resolutions approve the issuance by the Authority of its Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park) issued in an aggregate principal amount approximately equal to $6,700,000, and the loan to the Agency of the proceeds derived therefrom, and authorize the form of related legal documents. The latter three Resolutions are necessary due to the restructuring of the Series F Bond issue subsequent to the approval of the transaction on December 18, 1989. The structure of the five other Bond issues (Series A through E) have remained substantially the same when they were presented to the Mayor and Common Council, the Community Development Commission and the Joint Powers Authority at the meeting held on December 18, 1989. SBEOOIOO-47/3347S/1w 01/12/90 0230 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING THE TERMS OF A CERTAIN SUBORDINATION AGREEMENT TO BE ENTERED INTO IN CONNECTION WITH THE ISSUANCE OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, TAX ALLOCATION BONDS, 1990 SERIES A (SOUTH VALLE REDEVELOPMENT PROJECT) WHEREAS, the City of San Bernardino, California (the "City") and the Redevelopment Agency of the City of San Bernardino, California (the "Agency"), a public body, corporate and politic, being a redevelopment agency, duly created and existing pursuant to the laws of the State of California, have previously undertaken actions preparatory to the incurring of certain obligations in connection with the construction, financing and acquisition of certain facilities within the City; and WHEREAS, the Agency has previously entered into a certain financing transaction with the City with respect to the execution and delivery of the $3,200,000 1987 Refunding Certificates of Participation (South Valle Public Improvements Project) (the "Certificates"), said Certificates evidencing proportionate interests of the holders thereof in certain base rental and additional rental payments to be made by the City to the Agency as the rental for certain property under a certain lease agreement (the "Lease Agreement"); and -1- WHEREAS, in connection with the execution and delivery of the Certificates the Agency and the City entered into a certain Reimbursement Agreement dated as of April I, 1987 (the "Reimbursement Agreement"), whereby the Agency agreed to reimburse the City for the base rental payments and additional rental payments paid by the City under the Lease Agreement from certain tax increment revenues available for such purpose from the South Valle Redevelopment Project located within the City of San Bernardino, California (the "Project Area"); and WHEREAS, the San Bernardino Joint Powers Financing Authority (the "Authority") proposes at this time to issue its Tax Allocation Bonds, 1990 Series A (South Valle Redevelopment Project) in an aggregate principal amount approximately equal to $3,700,000 (the "Bonds") for the purpose of providing funds to make a certain loan (the "Loan") to the Agency in an aggregate principal amount approximately equal to $3,700,000 to finance certain public capital improvements of the Agency in the Project Area; and WHEREAS, the Loan to the Agency from the Authority shall be made pursuant to and in accordance with a certain loan agreement with respect to the Project Area (the "Loan Agreement"); and WHEREAS, the Mayor and Common Council have previously adopted its resolution entitled "RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING THE -2- ISSUANCE OF CERTAIN TAX ALLOCATION BONDS, 1989 SERIES B THROUGH 1989 SERIES G, INCLUSIVE, OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AND THE BORROWING BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OF THE PROCEEDS THEREFROM PURSUANT TO CERTAIN RELATED LOAN AGREEMENTS"; and WHEREAS, pursuant to said resolution, the Mayor and Common Council have approved the issuance of the Bonds for the purpose, among others, of providing moneys for the financing of various redevelopment projects in the Project Area; and WHEREAS, pursuant to Section 2 of the Reimbursement Agreement, prior to the issuance of any bonds, loans or other indebtedness secured by tax increment revenues of the Agency (such bonds, loans or other forms of indebtedness being referred to herein and therein as "tax allocation bonds"), the City may amend the Reimbursement Agreement to provide that the pledge thereunder may be released or the Reimbursement Agreement shall be made subordinate to the rights of the holders of any such tax allocation bonds to receive the tax increment revenues attributable to the Project Area; and WHEREAS, pursuant to said Section 2, any such amendment or subordination must be duly approved and executed by the Agency and the Ci ty; and -3- WHEREAS, it is the intent and desire of the City that the Agency's obligations to the City under the Reimbursement Agreement be subordinate to the Agency's obligation to the Authority under the Loan Agreement entered into with respect to the Project Area; and WHEREAS, at this time the Agency has requested that the Mayor and Common Council consent to the subordination of the Reimbursement Agreement and the obligations of the Agency thereunder to the obligation of the Agency to make certain loan payments to the Authority pursuant to the Loan Agreement, such loan payments to be used to make debt service payments on the Bonds, and that the Mayor and Common Council approve the prior pledge of the tax increment revenues available from the Project Area and a lien thereon for the payment of such loan payments; and WHEREAS, the Mayor and Common Council deem it desirable at this time to authorize the execution of a certain Subordination Agreement in connection with the issuance of the Bonds to facilitate and finance the transaction contemplated by the Loan Agreement. NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS: -4- Section 1. The Mayor and Common Counci I hereby consent to the subordination of the obligations of the Agency under the Reimbursement Agreement and approve the form of the Subordination Agreement, by and between the City and the Agency substantially in the form as on file with the City Clerk. The Mayor and Common Counci I further authorize the execution of the final form of the Subordination Agreement when the same shall be presented for execution by the Mayor and the City Clerk or such other appropriate City official, subject to such changes, additions or deletions as may be recommended by Hawkins, Delafield & Wood ("Bond Counsel") and approved by the City Attorney for the intended transaction contemplated therein. The execution thereof by the Mayor and City Clerk or such other appropriate City official shall be deemed to be conclusive as to the approval thereof by and on behalf of the City. Section 2. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the issuance, sale and delivery of the Bonds; and otherwise to effectuate the purposes of this Resolution and any actions as previously taken by such officers in connection with the issuance of the Bonds are hereby ratified and confirmed. -5- Section 3. This Resolution shall take effect upon adoption. I HEREBY CERTIFY that the foregoing adopted by the Mayor and Cormnon Council San Bernardino at a held on the day of the following vote, to wit: resolution of the meeting was duly City of thereof, 1990, by AYES: Council Members NAYS: ABSENT: City Clerk day of The foregoing resolution is hereby approved this , 1990. Mayor of the City of San Bernardino Approved as to form and legal content: BY:~) /City Att ey -6- STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, SHAUNA CLARK, City Clerk in and for the City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached copy of San Bernardino City Resolution No. is a full, true and correct copy of that now on file in this office. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Bernardino this day of , 1990. City Clerk /33475 -7- SBEOOIOOB-45/3345S/vd 01/17190 - 2:30 SUBORDINATION AGREEMENT SOUTH VALLE REDEVELOPMENT PROJECT This Subordination Agreement (the "Agreement") entered into this 1st day of January, 1990, by and between the City of San Bernardino, California, a municipal corporation and a charter ci ty (the "City"), and the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic duly organized and existing pursuant to the Community Redevelopment Law of the State of California (the "Agency"), is entered into by the parties hereto with reference to the following facts: RECITALS WHEREAS, the City has approved and adopted a Redevelopment Plan for the redevelopment project area known and designated as the South Valle Redevelopment Project (the "Project Area"), which Redevelopment Plan is to be implemented by the Agency for a portion of the City characterized by stagnant, improperly utilized and unproductive land which requires redevelopment in the interest of the health, safety and general welfare of the people of the City; and WHEREAS, the Ci ty and the Agency have previous ly entered into that certain Reimbursement Agreement dated April 1, 1987 (the "Reimbursement Agreement"); and - 1 - WHEREAS, the Reimbursement Agreement restated and amended a certain 1984 Reimbursement Agreement; and WHEREAS, the Reimbursement Amount to be paid by the Agency to the City under the Reimbursement Agreement was less than or equal to the Agency' s obligation under the 1984 Reimbursement Agreement; and WHEREAS, under Section 1 of the Reimbursement Agreement, the Agency has agreed to pay the City certain tax increment revenues allocated and paid the Agency from the Project Area defined therein as the "Revenues"; and WHEREAS, pursuant to the terms of the Reimbursement Agreement, the Agency agreed to reimburse the City for the annual Base Rental and Additional Rental Payments made by the City under the Lease Agreement in connection with the Certificates from such Revenues of the Agency; and WHEREAS, in accordance with Section 2 of the Reimbursement Agreement, prior to the issuance of bonds, loans or other forms of indebtedness of the Agency (referred to herein and therein as "tax allocation bonds"), the City and the Agency may amend the Reimbursement Agreement to provide that the pledge thereunder be subordinated to the obligation of the Agency to pay debt service payments with respect to such tax allocation bonds; and - 2 - . WHEREAS, it is the intent of the Reimbursement Agreement that the Agency's agreement to pay the Revenues thereunder shall be subordinate to any agreement to pay tax increment revenues in connection with the Loan of the 1990 Series A Bond proceeds by the Agency pursuant to the South Valle Loan Agreement dated as of January I, 1990, by and among the San Bernardino Joint Powers Financing Authority (the "Authority"), Security Pacific National Bank, as trustee (the "Trustee") and the Agency (the "Loan Agreement"); and WHEREAS, it is the intent and desire of the City and the Agency to enter into this Subordination Agreement to provide for the amendment of the Reimbursement Agreement and the subordination of the obligation of the Agency to pay the Revenues to the City under the Reimbursement Agreement to the obligation of the Agency to pay loan repayments from tax increment revenues attributable to the Project Area to the Authority under the Loan Agreement. NOW, THEREFORE THE PARTIES IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN CONTAINED, AGREE AS FOLLOWS: Section 1. Incorporation of Basic Documents: Amendment of Reimbursement Aareement. The Reimbursement Agreement is by reference incorporated herein and made a part of this Agreement as though set forth in full herein. This Subordination Agreement shall restate and amend certain of the provisions in the Reimbursement Agreement for the purpose of clarity and in order to provide for the - 3 - superior lien and prior pledge of the tax increment attributable to the Project Area for the payment of payments to the Authority pursuant to the Loan Agreement right of the owners of the Bonds to receive debt service derived therefrom. All capitalized terms used herein otherwise defined shall have the same meaning as used Reimbursement Agreement. revenues the loan and the payments and not in the Section 2. Subordination. The City hereby agrees to amend Section 2 of the Reimbursement Agreement to provide that the pledge thereunder be made subordinate to the right of the owners of the Bonds to receive debt service payments derived from loan payments made by the Agency from tax increment revenues attributable to the Proj ect Area i and by the execution hereof the City does so subordinate any and all rights of the City to the receipt of the Revenues pledged by the Agency to the City under the terms of the Reimbursement Agreement, which Revenues have been pledged by the Agency for the payment of the amounts borrowed under the Loan Agreement in connection with the San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series A (South Valle Redevelopment Project) (the "Bonds"). The City hereby further agrees that any rights of the City to receive any Revenues shall be junior and subordinate to the Bonds and to the obligation of the Agency to make loan payments to the Authority from any Revenues so pledged in connection with the Bonds pursuant to the Loan Agreement whereby the Agency has agreed to pledge certain tax increment revenues in connection with repayment of the Loan. - 4 - The City hereby recognizes that the amendment of the Reimbursement Agreement and the subordination of the obligations of the Agency thereunder may result in the inability of the Agency to pay all or a portion of the Reimbursement Amount to the City due to the insufficiency in the Revenues available to the Agency after the payment of loan payments to the Authority under the Loan Agreement, which loan payments are to be used for the payment of debt service on the Bonds. Section 3. Interpretation. The interpretation, validity and enforcement of this Agreement shall be governed by and construed under the laws of the State of California. Section 4. Entire Aareement. This Agreement contains the sole and entire agreement and understanding between the parties with regard to the subject matter of this Agreement, and where the terms or provisions hereof are inconsistent with any term or provision of the Reimbursement Agreement, the terms hereof shall supersede any and all other oral or written agreements pertaining thereto by and among the parties. Section 5. Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective hei rs, executors, administrators, legal representatives, successors and assigns. - 5 - Section 6. Counterparts. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original. IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the day and the year first above written. CITY OF SAN BERNARDINO, CALIFORNIA By: Mayor ATTEST: By: City Clerk REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Chairman ATTEST: By: Secretary /SBEOOlOOB-45/3345S - 6 - SBEOOIOO-48/3355S/1w 01/22/90 1130 RESOLUTION NO. RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING, ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, THE TERMS OF A CERTAIN SUBORDINATION AGREEMENT TO BE ENTERED INTO IN CONNECTION WITH THE ISSUANCE OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, TAX ALLOCATION BONDS, 1990 SERIES A (SOUTH VALLE REDEVELOPMENT PROJECT) WHEREAS, the City of San Bernardino, California (the "City") and the Redevelopment Agency of the City of San Bernardino, California (the "Agency"), a public body, corporate and politic, being a redevelopment agency, duly created and existing pursuant to the laws of the State of California, have previously undertaken actions preparatory to the incurring of certain obligations in connection with the construction, financing and acquisition of certain facilities within the City; and WHEREAS, the Agency has previously entered into a certain financing transaction with the City with respect to the execution and delivery of the $3,200,000 1987 Refunding Certificates of Participation (South Valle Public Improvements Project) (the "Certificates"), said Certificates evidencing proportionate interests of the holders thereof in certain base rental and additional rental payments to be made by the City to the Agency as the rental for certain property under a certain lease agreement (the "Lease Agreement"); and -1- WHEREAS, in connection with the execution and delivery of the Certificates the Agency and the City entered into a certain Reimbursement Agreement dated as of April 1, 1987 (the "Reimbursement Agreement"), whereby the Agency agreed. to reimburse the City for the base rental payments and additional rental payments paid by the City under the Lease Agreement from certain tax increment revenues available for such purpose from the South Valle Redevelopment Project located within the City of San Bernardino, California (the "Project Area"); and WHEREAS, the San Bernardino Joint Powers Financing Authority (the "Authority") proposes at this time to issue its Tax Allocation Bonds, 1990 Series A (South Valle Redevelopment Project) in an aggregate principal amount approximately equal to $3,700,000 (the "Bonds") for the purpose of providing funds to make a certain loan (the "Loan") to the Agency in an aggregate principal amount approximately equal to $3,700,000 to finance certain public capital improvements of the Agency in the Project Area; and WHEREAS, the Loan to the Agency from the Authority shall be made pursuant to and in accordance with a certain loan agreement with respect to the Project Area (the "Loan Agreement"); and WHEREAS, the Commission has previously adopted its resolution entitled "RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OR SAN BERNARDINO, CALIFORNIA, APPROVING THE ISSUANCE OF -2- CERTAIN TAX ALLOCATION BONDS, 1989 SERIES B THROUGH 1989 SERIES G, INCLUSIVE, OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AND THE BORROWING BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OF THE PROCEEDS THEREFROM PURSUANT TO CERTAIN RELATED LOAN AGREEMENTS"; and WHEREAS, pursuant to said resolution, the Commission has approved the issuance of the Bonds for the purpose, among others, of providing moneys for the financing of various redevelopment projects in the Project Area; and WHEREAS, pursuant to Section 2 of the Reimbursement Agreement, prior to the issuance of any bonds, loans or other indebtedness secured by tax increment revenues of the Agency (such bonds, loans or other forms of indebtedness being referred to herein and therein as "tax allocation bonds"), the City may amend the Reimbursement Agreement to provide that the pledge thereunder may be released or the Reimbursement Agreement shall be made subordinate to the rights of the holders of any such tax allocation bonds to receive the tax increment revenues attributable to the Project Area; and WHEREAS, pursuant to said Section 2, any such amendment or subordination must be duly approved and executed by the Agency and the City; and -3- WHEREAS, the City has determined to authorize and approve the subordination of the Agency's obligations to the City under the Reimbursement Agreement to the Agency's obligation to the Authority under the Loan Agreement entered into with respect to the Proj ect Area; and WHEREAS, the Mayor and Common Council have consented to the subordination of the Reimbursement Agreement and the obligations of the Agency thereunder to the obligation of the Agency to make certain loan payments to the Authority pursuant to the Loan Agreement, such loan payments to be used to make debt service payments on the Bonds, and the Mayor and Common Council have approved the prior pledge of the tax increment revenues avai lable from the Project Area and a lien thereon for the payment of such loan payments; and WHEREAS, the Commission deems it desirable at this time to authorize the execution of a certain Subordination Agreement in connection with the issuance of the Bonds to facilitate and finance the transaction contemplated by the Loan Agreement. NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: -4- Section 1. The Commission hereby consents to the subordination of the obligations of the Agency under the Reimbursement Agreement and approves the form of the Subordination Agreement, by and between the City and the Agency substantially in the form as on file with the Secretary of the Commission. The Commission further authorizes the execution of the final form of the Subordination Agreement when the same shall be presented for execution by the Chairman and the Secretary of the Agency or such other appropriate Agency officer, subject to such changes, additions or deletions as may be recommended by Hawkins, Delafield & Wood ("Bond Counsel") and approved by the Agency Counsel for the intended transaction contemplated therein. The execution thereof by the Chairman and Agency Secretary or such other appropriate Agency officer shall be deemed to be conclusive as to the approval thereof by and on behalf of the Agency. Section 2. The officers of the Commission and the Agency are hereby authorized and directed, jointly and severally, to do any and all things to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the issuance, sale and delivery of the Bonds; and otherwise to effectuate the purposes of this Resolution and any actions as previously taken by such officers in connection with the issuance of the Bonds are hereby ratified and confirmed. Section 3. passage and adoption. This Resolution shall take effect upon its -5- RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING, ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, THE TERMS OF A CERTAIN SUBORDINATION AGREEMENT TO BE ENTERED INTO IN CONNECTION WITH THE ISSUANCE OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, TAX ALLOCATION BONDS, 1990 SERIES A {SOUTH VALLE REDEVELOPMENT PROJECT) I HEREBY CERTIFY adopted by the Community San Bernardino at a the day of that the foregoing resolution was duly Development Commission of the City of meeting thereof, held on , 1990, by the following vote, to wit: Commission Members: AYES NAYS ABSTAIN ESTRADA REILLY FLORES MAUDSLEY MINOR POPE-LUDLAM MILLER Secretary of The foregoing resolution is hereby approved this , 1990. day W. R. Holcomb, Chairman Community Development of the City of San Bernardino SBE00103-3/3350S/dc 01/22/90 1050 RESOLUTION NO. RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF AN AGGREGATE PRINCIPAL AMOUNT APPROXIMATELY EQUAL TO $6,700,000 OF TAX ALLOCATION BONDS, 1990 SERIES F (SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA), APPROVING THE FORM OF LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORMS THEREOF WHEREAS, the City of San Bernardino (the "City") and the Redevelopment Agency of the City of San Bernardino (the "Agency") have heretofore entered into a Joint Exercise of Powers Agreement establishing the San Bernardino Joint Powers Financing Authority (the "Authority") for the purpose of issuing its bonds to be used to make loans to any of its members to finance public capital improvements; and WHEREAS, the Authority proposes at this time to issue its Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Redevelopment Project Area), in an aggregate principal amount approximately equal to $6,700,000 (the "Bonds") pursuant to the Marks-Roos Local Bond Pooling Act of 1985, codified at Section 6584, et ~., of the California Government Code (the "Marks-Roos Act"), and pursuant to a certain Indenture of Trust dated as of March I, 1990 (the "Indenture"), by and between the Authority and Security Pacific National Bank, as trustee (the "Trustee"), a form of which is presently on file with the Secretary of the Authority; and - 1 - WHEREAS, the proceeds of the Bonds wi 11 be loaned to the Agency pursuant to and in accordance with a certain Loan Agreement with respect to the Southeast Industrial Park Redevelopment Project Area (the "Project Area") dated as of March 1, 1990 (the "Loan Agreement"), by and among the Authority, the Agency and the Trustee, a form of which is presently on file with the Secretary of the Authority; and WHEREAS, the Authority proposes to secure the Bonds with a pledge of the revenues and an assignment of its rights under the Loan Agreement; and WHEREAS, Miller & Schroeder Financial, Inc., as prospective underwriter of the Bonds (the "Underwriter") has informed the Authori ty that it intends to submit an offer to purchase the Bonds and has prepared a Preliminary Official Statement as necessary in the sale and marketing of the Bonds, a form of which is presently on file with the Secretary of the Authority; and WHEREAS, the Board has duly considered such transactions and wishes at this time to approve said transactions in the public interests of the Authority. NOW, THEREFORE, THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: - 2 - Section 1. Findinos and Determinations. Pursuant to the Marks-Roos Act, the Board hereby finds and determines that the issuance of the Bonds wi 11 result in savings in effective interest rates, bond preparation, bond underwr~ting and/or bond issuance costs and thereby will result in significant public benefits to its members wi thin the contemplation of Section 6586 of the Marks-Roos Act. Section 2. Issuance of the Bonds; Approval of Form of Indenture: Authorization and Direction of Preparation of Final Form Thereof. The Board hereby authorizes the issuance of the Bonds under and pursuant to the Marks-Roos Act and the Indenture in an aggregate principal amount approximately equal to $6,700,000 and the preparation of certain financing documents related thereto which are necessary to carry out the issuance of the Bonds, the loan of proceeds therefrom to the Agency and the financing of various redevelopment projects within the above described Project Area. The Board hereby approves the form of Indenture as presently on fi Ie with the Secretary of the Authority with such changes thereto as may be approved by the Chairman of the Authority. The Board hereby further authorizes and directs that the form of Indenture presently on file with the Secretary be converted into the final form of Indenture, together with such changes or modifications as deemed necessary or desirable by the Chairman of the Authority upon the recommendation of Bond Counselor as requested by any municipal bond rating agency or municipal bond insurance company. The Chairman, - 3 - Vice-Chairman or such other authorized officer of the Authority is hereby authorized and directed to execute and deliver, and the Secretary or Assistant Secretary is hereby authorized and directed to attest to, the final form of Indenture when the same has been prepared for and in the name of the Authority, and such execution and delivery shall be deemed to be conclusive evidence of the approval thereof. The Board hereby authorizes the delivery and performance of the Indenture. Section 3. Approval of Form of Loan Aoreement: Authorization and Direction of Preparation of Final Form Thereof. The Board hereby approves the form of Loan Agreement presently on file with the Secretary together with any changes therein or additions thereto as may be approved by the Chairman of the Authority. The Board hereby further authorizes and directs that the form of Loan Agreement presently on file with the Secretary be converted into the final form of the Loan Agreement, together with such changes or modifications as deemed necessary or desirable by the Chairman of the Authority upon the recommendation of Bond Counselor as may be requested by any municipal bond rating agency or municipal bond insurance company. The Chairman, Vice-Chairman or such other authorized officer of the Authority is hereby authorized and directed to execute and deliver, and the Secretary or Assistant Secretary is hereby authorized and directed to attest to, the final form of Loan Agreement when the same has been prepared with respect to the Project Area for and in the name of the Authority, and such - 4 - execution and delivery shall be deemed to be conclusive evidence of the approval thereof. The Board hereby authorizes the delivery and performance of the Loan Agreement. Section 4. Sale of the Bonds. The Board hereby approves the sale of the Bonds by negotiated purchase with the Underwriter, pursuant to a certain Bond Purchase Agreement a form of which is presently on file with the Secretary (the "Purchase Agreement") , and the sale of the Bonds pursuant to the Purchase Agreement is hereby approved. The Board hereby authorizes and directs the Underwriter to cause the preparation of the final Purchase Agreement of which the terms and conditions with respect to the negotiated sale to the Underwriter of the Bonds are a part, and the Chairman, the Vice-Chairman or such other authorized officer of the Authority is hereby authorized and directed to evidence the Authority's acceptance of the offer made by said Purchase Agreement by executing and delivering the Purchase Agreement in said form as on file with such changes therein as the officer or the officers executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 5. Official Statement. The Board hereby approves the form of the Preliminary Official Statement presently on file with the Secretary. The Board further authorizes the preparation and distribution of the Preliminary Official Statement as shall be necessary or required in connection with the sale of the - 5 - Bonds to prospective purchasers thereof. The Board hereby authorizes and directs that such Preliminary Official Statement be converted to a final Official Statement together with such changes or modifications as deemed desirable or necessary in the sale and marketing of the Bonds and as approved by the Chairman, upon the recommendation of Bond Counsel and the Underwriter. The Board hereby authorizes distribution of the Preliminary Official Statement and the final Official Statement with respect to the Bonds by the Underwri ter when the same have been prepared. The Chairman is hereby authorized and directed to execute the final form of said Official Statement in the name and on behalf of the Authority and to deliver the same to the Underwriter upon execution thereof, together with the changes or modifications approved by the Chairman. Execution of said final Official Statement shall be conclusive evidence of approval thereof, including any such changes and additions. Section 6. Official Action. The Chairman, the Vice-Chairman and other members of the Board, the Secretary, Authori ty Counsel and any and all other officers of the Authority are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary or advisable in order - 6 - to consummate the lawful issuance and sale of the Bonds as described herein, including, but not limited to, the submission of any and all documents to any municipal bond rating agencies and any municipal bond insurance company and the distribution of the Preliminary Official Statement to any prospective purchasers when the same shall become available for distribution. Whenever in this Resolution any officer of the Authority is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. The Board hereby appoints its Chairman as agent of the Authority for purposes of executing any and all documents and instruments which any officer of the Authority is authorized to execute hereunder. The Board hereby authorizes the Chairman, Vice-Chairman, Secretary, Assistant Secretary or such other authorized officers of the Authority to execute and deliver such additional documents, agreements and closing certificates required in connection with the issuance of the Bonds and the borrowing of the proceeds therefrom and the consummation of the transactions contemplated thereby, including, but not limited to, the submission of any and all documents to municipal bond rating agencies and municipal bond insurance companies and the distribution of any offering documents in connection with the sale of the Bonds to prospective purchasers thereof. - 7 - Section 7. Effective Date: Subiect to Aaencv Approval. This Resolution shall take effect from and after its passage and adoption. This Resolution shall be subject in all respects to the approval by the Agency of the execution and delivery of the Loan Agreement and to the issuance of the Bonds by the Authority. The foregoing resolution is hereby approved this day of , 1990. By: Chairman of the San Bernardino Joint Powers Financing Authority Approved as to form and legal content: By: /J"/l-"A....A~~J /~;:-~fMunsel SBE00103-3/3350S - 8 - STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, SHAUNA CLARK, Secretary for the San Bernardino Joint Powers Financing Authority DO HEREBY CERTIFY that the foregoing and attached copy of the Resolution of the, San Bernardino Joint Powers Financing Authority No. is a full, true and correct copy of that now on file in this office. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the San Bernardino Joint Powers Financing Authority this day of , 1990. Shauna Clark 33505 - 9 - INDENTURE OF TRUST by and between the SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY and SECURITY PACIFIC NATIONAL BANK, as Trustee Dated as of March 1, 1990 Relating to $6,625,000 San Bernardino Joint Powers Financing Authority Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Redevelopment Project Area) TABLE OF CONTENTS INDENTURE OF TRUST ARTICLE I DEFINITIONS; AUTHORIZATION AND PURPOSE OF BONDS; EQUAL SECURITY Section 1. 01. Section 1.02. Section 1. 03 . Section 1. 04. Section 2.01. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 2.06. Section 2.07. Section 2.08. Section 2.09. Section 2.10. Section 3.01. Section 3.02. Section 3.03. Section 3.04. Section 4.01. Section 4.02. Section 4.03. Section 4.04. Definitions............................... . Rules of Construction...................... Authorization and Purpose of Bonds......... Equal Security............................. ARTICLE II ISSUANCE OF BONDS Authorization of Bonds..................... Terms of the Bonds......................... Redemption of Bonds........................ Form of Bonds.............................. Execution of Bonds......................... Transfer of Bonds.......................... Exchange of Bonds.......................... Temporary Bonds............................ Registration Books......................... Bonds Mutilated, Lost, Destroyed or Stolen. .. . . .................... . .... . . . .. ARTICLE III DEPOSIT AND APPLICATION OF PROCEEDS Issuance of Bonds.......................... Application of Proceeds.................... Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Validi ty of Bonds.......................... ARTICLE IV REVENUES; FLOW OF FUNDS Pledge of Revenues; Assignment of Rights... Receipt, Deposit and Application of Revenues............................. Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation and Disposition of Investments... - i - ~ 4 17 17 18 19 19 20 21 22 22 22 22 23 23 25 25 25 27 28 28 34 34 Section 5.0l. Section 5.02. Section 5.03. Section 5.04. Section 5.05. Section 5.06. Section 5.07. Section 5.08. Section 5.09. Section 5.10. Section 5.ll. Section 5.12. Section 6. Ol. Section 6.02. Section 6.03. Section 6.04. Section 6.05. Section 6.06. Section 6.07. Section 6.08. Section 6.09. Section 6.10. Section 6.1l. Section 6.12. Section 6.12. Section 7. Ol. Section 7.02. Section 7.03. Section 7.04. ARTICLE V COVENANTS OF THE AUTHORITY Punctual Payment; Extension of Payment of Bonds................................ 35 Against Encumbrances....................... 35 Power to Issue Bonds and Make Pledge and Assignment........................... 35 Accounting Records and Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 No Additional Obligations.................. 36 No Arbi trage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Rebate of Excess Investment Earnings to United States......................... 36 Private Business Use Limitation............ 37 Private Loan Limitation.................... 38 Federal Guarantee Prohibition.............. 38 Loan Agreement........ . . . . . . . . . . . . . . . . . . . . . 38 Further Assurances......................... 39 ARTICLE VI THE TRUSTEE Appointment of Trustee..................... Acceptance of Trusts....................... Fees, Charges and Expenses of Trustee...... Notice to Bond Owners of Default........... Intervention by Trustee.................... Removal of Trustee......................... Resignation by Trustee..................... Appointment of Successor Trustee........... Merger or Consolidation.................... Concerning Any Successor Trustee........... Appointment of CO-Trustee.................. Indemnification; Limited Liability of 40 40 43 43 43 43 43 44 44 44 45 Trus tee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 46 Regarding the Bond Insurer................. ARTICLE VII MODIFICATION AND AMENDMENT OF THE INDENTURE Amendment Hereof...... II . . . . . . . . . . . . . . . . . . . . Effect of Supplemental Agreement........... Endorsement or Replacement of Bonds After Effective Date........................... Amendment by Mutual Consent................ 47 48 48 48 - ii - Section 8.0l. Section 8.02. Section 8.03. Section 8.04. Section 8.05. Section 8.06. Section 8.07. Section 8.08. Section 9.0l. Section 9.02. Section 9.03. Section 9.04. Section 9.05. Section 9.06. Section 9.07. Section 9.08. Section 9.09. Section 9.10. Section 9.11. Section 9.12. Section 9.13. Section 9.14. Section 9.15. Exhibit A ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS Events of Default.......................... 49 Remedies and Rights of Bond Owners......... 49 Application of Revenues and Other Funds After Default............................ 50 Power of Trustee to Control Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appointment of Receivers................... Non-Waiver. . ... . ........... . . . . . ... . ...... . 51 51 51 52 53 Rights and Remedies of Bond Owners......... Termination of Proceedings................. ARTICLE IX MISCELLANEOUS Limited Liability of Authority............. Benefits of Indenture Limited to Parties... Discharge of Indenture..................... Successor Is Deemed Included In All References to Predecessor................ Content of Certificates.................... Execution of Documents by Bond Owners...... Disqualified Bonds......................... Waiver of Personal Liability............... Partial Invalidity......................... Destruction of Cancelled Bonds............. Funds and Accounts......................... Payment on Business Days................... Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 54 54 55 55 56 57 57 57 57 57 58 58 59 59 Unclaimed Moneys........................... Governing Law.............................. Bond Form - Hi - SBEOOI03-5/3315S/es 01/12/90 230 INDENTURE OF TRUST THIS INDENTURE OF TRUST (this "Indenture"), made and entered into as of March 1, 1990, is by and between the San Bernardino Joint Powers Financing Authority, a joint powers authori ty organized and existing under the laws of the State of California (the "Authority") and Security Pacific National Bank, a national banking association organized and existing under the laws of the Uni ted States of America, with a principal corporate trust office in Los Angeles, California, and being qualified to accept and administer the trusts hereby created (the "Trustee"); WIT N E SSE T H WHEREAS, the Authority is a joint powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement dated August 21, 1989, by and between the City of San Bernardino (the "City") and the Redevelopment Agency of the City of San Bernardino (the "Agency") and under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Act") and is authorized pursuant to Article 4 of the Act to issue its bonds for the purpose, among others, of making loans to the Agency for the purpose of financing public capital improvements of the Agency; and WHEREAS, for the purpose of making such loans to the Agency the Authority has determined to issue its Tax Allocation Bonds, 1990 Series F in the aggregate principal amount of $6,625,000, all pursuant to and secured by this Indenture in the manner provided herein (the "1990 Series F Bonds"); and WHEREAS, a Redevelopment Plan for a redevelopment project known and designated as the "Southeast Industrial Park Redevelopment Project Area" (the "Southeast Industrial Park Project Area"), in the City of San Bernardino has been adopted on June 21, 1976 and is in compliance with all requirements of the Redevelopment Law and the Agency is proceeding with various redevelopment acti vi ties in the Southeast Industrial Park Project Area; and WHEREAS, the Community Development Commission of the City of San Bernardino (the "Community Development Commission"), has previously taken action for the Agency 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 Communi ty Redevelopment Law [Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of the State of California] (the "Redevelopment Law") and the powers of the Agency include the power to issue bonds for any of its - 1 - corporate purposes and the power to issue refunding bonds for the purpose of paying or retiring bonds previously issued by it; and WHEREAS, pursuant to Resolution No. 4149, the Agency issued $5,600,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1981, Series A," herein sometimes referred to as the "Series A Bonds", and pursuant to a concurrent Resolution No. 4150 the Agency issued $5,700,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1981, Series B," which were junior in lien to the Series A Bonds and were referred to therein and are herein referred to as the "Junior Lien Bonds"; and WHEREAS, pursuant to Resolution No. 4537, the Agency issued $11,000,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1983" (the "1983 Refunding Bonds"), for the corporate purposes of the Agency to aid in the financing of a portion of the cost of Southeast Industrial Park Redevelopment Project Area, including the refunding of the then outstanding balance of the Junior Lien Bonds by paying and retiring the same at the maturity thereof, March 1, 1984; and WHEREAS, pursuant to Resolution No. 4774, the Agency issued $2,000,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Bonds, Issue of 1985" (the "1985 Bonds"), to furnish additional financing for the Agency for its corporate purposes related to the Southeast Industrial Park Redevelopment proj ect Area, which were issued on a parity with the Series A and the 1983 Refunding Bonds; and WHEREAS, pursuant to Resolution No. 5081, as amended, the Agency issued $12,215,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1988", herein referred to as the "1988 Refunding Bonds", for the purpose of refunding the 1983 Refunding Bonds by paying and retiring the same on March 1, 1993, the earliest date prior to the March 1, 2014 maturity thereof on which the 1983 Refunding Bonds may be redeemed, such 1988 Refunding Bonds to rank on a parity with the Series A Bonds and the 1985 Bonds; and WHEREAS, pursuant to Resolution No. 5096, as amended, the Agency has issued $1,750,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Bonds, Issue of 1988", herein referred to as the "1988 Bonds", for the purpose of financing the costs of construction and acquisition of certain public improvements within the Southeast Industrial Park Project Area, such 1988 Bonds to rank on a parity with the Series A Bonds, the 1985 Bonds and the 1988 Refunding Bonds; and - 2 - WHEREAS, the Authority has determined to issue the 1990 Series F Bonds for the purpose of providing money to the Agency to finance certain public capital improvements in the Southeast Industrial Park Project Area located within the City of San Bernardino, such 1990 Series F Bonds to rank on a parity with the Series A Bonds, the 1985 Bonds, the 1988 Refunding Bonds and the 1988 Bonds; and WHEREAS, AMBAC Indemnity has issued municipal bond insurance policies insuring the payment when due of the principal and interest on the 1988 Refunding Bonds and the 1988 Bonds as provided in its policies with respect thereto and the Authority and the Trustee hereby recognize the rights of AMBAC Indemnity with respect to the 1988 Refunding Bonds and the 1988 Bonds; and WHEREAS, in order to provide for the authentication and delivery of the 1990 Series F Bonds, to establish and declare the terms and conditions upon which the 1990 Series F Bonds are to be issued and to secure the payment of the principal thereof and interest thereon, the Authority has authorized the execution and delivery of this Indenture; and WHEREAS, all requirements of Resolution No. 4149, Resolution No. 4774, Resolution No. 5081, as amended, and Resolution No. 5096, as amended, have been met so that the 1990 Series F Bonds shall rank on a parity with the Series A Bonds, the 1985 Bonds, the 1988 Refunding Bonds and the 1988 Bonds. WHEREAS, all acts and proceedings required by law necessary to make the 1990 Series F Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, having been done and taken, and the execution and delivery of the Indenture have been in all respects duly authorized; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and the interest and premium (if any) on all 1990 Series F Bonds at any time issued and Outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and condi tions 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 1990 Series F Bonds by the Owners thereof, and for other valuable considerations, the receipt whereof is hereby aCknowledged, the Authori ty does hereby covenant and agree wi th the Trustee, for the benefit of the respective Owners from time to time of the 1990 Series F Bonds, as follows: - 3 - ARTICLE I DEFINITIONS; AUTHORIZATION AND PURPOSE OF BONDS; EQUAL SECURITY Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of any Supplemental Indenture and of the Bonds and of any certificate, opinion, request or other documents herein mentioned have the meanings herein specified. In addition, any terms defined in the Loan Agreement and not otherwise defined herein shall have the respective meanings given such terms in the Loan Agreement. "Act" means Articles 1 through 4 Section 6500) of Chapter 5, Division 7, Title Code of the State, as in existence on the thereafter amended from time to time. (commencing with 1 of the Government Closing Date or as "Agency" means the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic organized under the laws of the State, and any successor thereto. "Agreement" means that certain Joint Exercise of Agreement, dated August 21, 1989, entered into under the Act between the City and the Agency together with any amendments and supplements thereto. Powers by and thereof "AMBAC Indemnity" Wisconsin-domiciled stock thereto. means AMBAC Indemnity insurance company, or Corporation, a any successor "Authority" means the San Bernardino Joint Powers Financing Authority, a joint powers authority duly organized and existing under the Agreement and the laws of the State. "Board" means the Board of Directors of the Authority. "Bond Insurance" or "Municipal Bond Insurance Policy" means the municipal bond insurance policy relating to the Bonds effective as of the date of issuance of the Bonds issued by the Bond Insurer insuring the payment when due of the principal of and interest on the Bonds as provided therein. "Bond Insurer" means Municipal Bond Corporation, a New York domiciled insurance successor thereto. Investors Assurance corporation or any "Bond Interest established and held herein. Account" means by the Trustee the account by that name pursuant to Section 3.03(b) - 4 - 1985, Section amended "Bond Law" means the Marks-Roos Local Bond Pooling Act of constituting Article 4 of the Act (commencing with 6584), as in existence on the Closing Date or as thereafter from time to time. "Bond Year" means each twelve-month period extending from March 2 in one calendar year to March 1 of the succeeding calendar year, both dates inclusive. "Bonds" or "1990 Series F Bonds" means the $6,625,000 aggregate principal amount of San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Project Area), authorized by and at any time Outstanding pursuant to the Bond Law and this Indenture. "Bonds of combined issues of Refunding Bonds, the being referred to as the Parity Issues" means the bonds of the the Series A Bonds, the 1985 Bonds, the 1988 1988 Bonds and the Bonds, such issues sometimes the "Parity Issues." "Business Day" means a day of the year on which banks in New York, New York, and Los Angeles, California, are not required or authorized to remain closed and on which The New York Stock EXChange is not closed. "Certificate of the Authority" means a certificate in writing signed by the Chairman, Secretary or Treasurer of the Authority, or by any other officer of the Authority duly authorized by the Board for that purpose. "City" means the City of San Bernardino, a municipal corporation and a charter city, duly organized and existing under its charter and the Constitution and laws of the State. "Ci ty Counci I" means the Mayor and Common Counci 1 of the City of San Bernardino, as the legiSlative body of the City. "Closing Date" means the date of delivery of the Bonds to Miller & Schroeder Financial, Inc., as the original purchaser thereof. "Costs of Issuance" means all expenses incurred in connection with the authorization, issuance, sale and delivery of the Bonds and the making of the Loan pursuant to the Loan Agreement, inClUding but not limited to all initial compensation, fees and expenses (including but not limited to fees and expenses for legal counsel) of the Authority and the Trustee, compensation to any financial consultants or underwriters, legal fees and expenses, municipal bond insurance premiums, filing and recording costs, rating agency fees, costs of preparation and reproduction of documents and costs of printing. "Costs of Issuance Fund" means the fund by that name established and held by the Trustee pursuant to Section 3.03 herein. - 5 - "Debt Service" means, during any period of computation, the amount obtained for such period by totaling (a) the principal amount of all Outstanding Bonds coming due and payable by their terms in such period, and (b) the interest which would be due during such period on the aggregate principal amount of Bonds which would be Outstanding in such period if the Bonds are retired as scheduled, but deducting and excluding from such aggregate amount the amount of Bonds no longer Outstanding. "Debt Service Account" means the fund by that name established pursuant to Section 3.03(e). "Debt Service Reserve Account" established and held hereunder by Section 3.03 (e) hereof. means the fund by that name the Trustee pursuant to "Event of Default" means any of the events described in Section 8.01 herein. "Excess Investment Earnings" following amounts: means and includes the (a) the excess of (i) the aggregate amount earned from the Closing Date on all Nonpurpose Obligations in which Gross Proceeds are invested (other than amounts attributable to an excess described in this paragraph (a)), over (ii) the amount which would have been earned if the Yield on such Nonpurpose Obligations (other than amounts attributable to an excess described in this paragraph (a)) had been equal to the Yield on the Bonds; and (b) any income attributable to the excess described in the preceding paragraph (a). "Federal Securities" means any direct, noncallable general Obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or other noncallable obligations of any entity the payment of principal of and interest on which are directly or indirectly guaranteed by the United States of America. "Fiscal Year" means any twelve-month period extending ~rom July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Authority as its official fiscal year period. amounts: "Gross Proceeds" means and includes all of the following (a) including original the proceeds remaining from the accrued interest but excluding issue discount, and excluding any sale of the Bonds, underwriter's and such proceeds which - 6 - become transferred proceeds applicable Tax Regulations) of Bonds in whole or in part; (determined in accordance with obligations issued to refund the (b) amounts received at any time from the investment of any proceeds described in the preceding clause (a), or from the investment of amounts described in this clause (b), in Nonpurpose Obligations, increased by the amount of any profits and decreased (if necessary, below zero) by the amount of any losses on such investments, excluding such amounts which become transferred proceeds (determined in accordance with applicable Tax Regulations) of obligations issued to refund the Bonds in whole or in part; (c) amounts, other than amounts described in the preceding clauses (a) and (b), which are held in the Debt Service Fund and any other fund or account which is reasonably expected to be used to pay Debt Service on the Bonds; (d) amounts in any fund established as a reasonably required reserve or replacement fund for the Loan or the Bonds; (e) Investment Property pledged as security for payment of Debt Service by an ultimate obligor, a related person or the Authority; (f) amounts received with respect to loans made from proceeds described in the preceding clause (a), financing leases entered into for property acquired with such proceeds and other obligations acquired to carry out the governmental purposes of the Authority with respect to the Bonds; (g) any amounts, other than amounts described elsewhere in this definition, used to pay Debt Service; and (h) amounts received as a result of the investment of amounts described in the preceding clauses (a) through (g). "Indenture" means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the provisions hereof. "Independent Certified Public Accountant" means any certified public accountant or firm of certified public accountants appointed and paid by the Authority, and who, or each of whom: (a) is in fact independent and not under domination of the Authority, the City or the Agency; (b) does not have any substantial interest, direct or indirect, in the Authority, the City or the Agency; and - 7 - (c) is not connected with the Authority, the City or the Agency as an officer or employee of the Authority, the City or the Agency, but who may be regularly retained to make annual or other audits of the books of or reports to the Authori ty, the City or the Agency. "Information Services" means Financial Information, Inc.' s "Daily Called Bond Service", 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services' "Called Bond Service", 65 Broad Street, 16th Floor, New York, New York 10004; Moody's Investors Service's "Municipal and Government", 99 Church Street, 8th Floor, New York, New York 10007, Attention: Municipal News Reports; Standard & Poor's Corporation "Called Bond Record", 25 Broadway, 3rd Floor, New York, New York 10004; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other services providing information with respect to called bonds as the Authority may designate in a Certificate of the Authority delivered to the Trustee. "Interest Payment Date" means September each year, commencing on September 1, 1990, thereafter so long as any Bonds remain Outstanding. 1 and March 1 in and continuing "Junior Lien Bonds" means the "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1981, Series B". "Loan" means the loan made by the Authority to the Agency under and pursuant to the Loan Agreement. "Loan Agreement" means the Southeast Industrial Park Loan Agreement relating to the 1990 Series F Bonds dated as of March 1, 1990, by and among the Authority, the Trustee and the Agency, as originally entered into or as amended or supplemented pursuant to the provisions thereof. "Low and Moderate Income Housing Fund" means the Fund by that name established pursuant to Section 3.05 of the Loan Agreement. obtained totaling "Maximum Annual Debt Service" means the largest of the sums for any Fiscal Year after the computation is made, by the following for each such Fiscal Year: (1) The principal amount of all serial Bonds of the Parity Issues and serial Parity Debt payable in such Fiscal Year; and/or (2) The amount of Minimum Sinking Fund Payments for term Bonds of the Parity Issues and term Parity Debt to be made in such Fiscal Year in accordance with the applicable schedule or schedules of Minimum Sinking Fund Payments; and - 8 - (3) The interest which would be due during such Fiscal Year on the aggregate principal amount of Bonds of the Parity Issues and Parity Debt which would be outstanding in such Fiscal Year if the Bonds of the Parity Issues and Parity Debt outstanding on the date of such computation were to mature or be redeemed in accordance with the maturity schedule or schedules for the serial Bonds of the Parity Issues and serial Parity Debt and the schedule or schedules of Minimum Sinking Fund Payments for term Bonds of the Parity Issues and term Parity Debt. At the time and for the purpose of making such computation, the amount of term Bonds of the Parity Issues and term Parity Debt already retired in advance of the above mentioned schedule or schedules shall be deducted pro rata from the remaining amounts thereon. "Minimum Rating" means a rating of Baa or BBB, or better, by any Rating Agency. In the event the rating system of any Rating Agency with respect to any particular Permitted Investment does not include a rating category of Baa or BBB, the term "Baa or BBB" as used in the preceding sentence shall mean a rating category of such Rating Agency applicable to such Permitted Investment which is considered by such Rating Agency to be an investment grade rating. "Minimum Sinking Fund Payments" means the amount of money to be deposited into the Term Bond Sinking Fund to be used to redeem term Bonds of the Parity Issues and term Parity Debt, at the principal amounts thereof, in the amounts and at the times set forth in the schedule or schedules of Minimum Sinking Fund Payments contained in Section 4.02(c) of the Indenture or in any supplemental Indenture providing for the issuance of Parity Debt. "Municipal Bond Insurance Policy" means the municipal bond insurance pOlicy issued by the Bond Insurer insuring the payment when due of the principal of and interest on the Bonds as provided therein. "Net Proceeds" means the par amount accrued interest and premium, if any, less underwri ter' s discount, less the proceeds of indirectly applied to pay Costs of Issuance. of the Bonds plus the amount of any the Bonds directly or "1983 Refunding Bonds" means the $11,000,000 principal amount "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1983," issued pursuant to Resolution No. 4537. "1985 Bonds" means the $2,000,000 principal amount "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Bonds, Issue of 1985," issued pursuant to Resolution No. 4774. - 9 - "1988 Refunding Bonds" means the $12,215,000 principal amount "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment project Area, Tax Allocation Refunding Bonds, Issue of 1988," issued pursuant to Resolution No. 5081, as amended. "1988 Bonds" means "Redevelopment Agency of the Industrial Park Redevelopment Issue of 1988," issued pursuant the $1,750,000 principal amount City of San Bernardino, Southeast Project Area, Tax Allocation Bonds, to Resolution No. 5096, as amended. "Nonpurpose Investment" means any Investment Property which is acquired with the Gross Proceeds and is not acquired in order to carry out the governmental purpose of the Bonds. "Outstanding", when used as of any reference to Bonds, means (subject to Section 9.07) all Bonds theretofore executed, by the Authority under this Indenture, except: particular time with the provisions of issued and delivered (a) Bonds theretofore cancelled by surrendered to the Trustee for cancellation; the Trustee or (b) Bonds paid or deemed to have been paid within the meaning of Section 9.03; and (c) Bonds in lieu of or in substitution for which other Bonds shall have been executed, issued and delivered pursuant to this Indenture or any Supplemental Indenture. "Owner" or "Bond Owner", when used with respect to any Bond, means the person in whose name the ownership of such Bond shall be registered on the Registration Books. "Parity Debt" means any additional tax allocation bonds (including, without limitation, bonds, notes, interim certificates, debentures or other obligations) issued by the Agency as permitted by Section 4.02 of the Loan Agreement. "Parity Issues" means the combined issues of the Series A Bonds, the 1985 Bonds, the 1988 Refunding Bonds, the 1988 Bonds and the Bonds. "Permitted Investments" means any of the fOllowing to the extent permitted by law: A. Direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. B. Bonds, debentures, indebtedness issued following federal agencies): notes or other or guaranteed by agencies (full faith evidence of any of the and credit - 10 - 1. U.S. Export-Import Bank --- Direct obligations or fully guaranteed certificates of beneficial ownership; 2. Farmers Home Administration --- Certificates of beneficial ownership; 3. Federal Financina Bank; 4. Federal Housina Administration Debentures; 5. General Services Administration ___ Participation certificates; 6. Government National Mortaaae Association ("GNMA") GNMA - guaranteed mortgage-backed bonds and GNMA - guaranteed pass-through obligations; 7. U.S. Maritime Administration ___ Guaranteed Title XI financing; 8. New Communities Debentures ___ U. S. government guaranteed debentures; 9. U.S. Public Housina Notes and Bonds ___ U. S. government guaranteed public housing notes and bonds; 10. U.S.Department of Housina and Urban Development Project Notes Local Authority Bonds C. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following U. S. government agencies (non-full faith and credit agencies): 1. Federal Home Loan Bank Svstem ___ Senior debt obligations; 2. Federal Home Loan Mortoaae Corporation Participation certificates; 3. Federal National Mortaaae Association Mortgage-backed securities and senior debt obligations; 4. Student Loan Marketina Association Senior debt obligations; D. Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of AAAm-G; AAAm; or AAm. - 11 - E. Certificates of deposit secured at all times by collateral described in (A) and/or (B) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. An opinion from a nationally recognized law firm must be delivered to the municipal entity, fiscal agent or a third party acting as agent for the fiscal agent, that the Bondholders have a perfected first security interest in the collateral and that the collateral is free and clear of all liens, claims and encumbrances, except those of the fiscal agent for the benefit of the Bondholders. In addition, the collateral should be marked-to-market daily with two percent (2%) over collateralization. With respect to the purchase or sale of a certificate of deposit issued by a commercial bank, the price at which it is purchased or sold, as the case may be, shall be the bona fide bid price quoted by a dealer who maintains an active secondary market in such certificates of deposit. If there is no active market in such certificates of deposit, the purchase or sale price of a certificate of deposit must produce a yield thereon (1) as high or higher than the yield on comparable obligations traded on an active secondary market, as certified by a dealer who maintains such a market, and (2) as high or higher than the yield available on comparable obligations offered by the United States Treasury Department. The certifications described in the preceding sentence must be executed by a dealer who maintains an active secondary market in comparable certificates of deposit and must be based upon actual trades adjusted to reflect the size and term of that certificate of deposit and the stability and reputation of the entity issuing the certificate of deposit. F. Certificates of deposit, savings accounts or deposit accounts which are fUlly insured by FDIC or FSLIC. G. Investment Agreements acceptable to the Bond Insurer, including GIC's. wi th respect to investment contracts the Agency must obtain (1) at least three (3) bids on the investment contract from persons other than those with an interest in the issue (e.g., underwriters), (2) a certification by the person whose bid is accepted stating that, based upon that person's reasonable expectations on the date that the contract is entered into, investment securities will not be purchased pursuant to the investment contract at a price in excess of their fair market value or sold pursuant to the investment contract at a price less than their - 12 - - - - - -- ---.---- ~ -- --------.-.--- -............ fair market value, (3) evidence that the yield on the investment contract is at least equal to the yield offered under the highest bid received from non-interested parties, and (4) evidence that the yield on the investment contract is at least equal to the yield offered on similar obligations under similar investment contracts. G. Uni ts of a taxable government money market portfolio restricted to obligations issued or guaranteed as to payment of principal and interest by the full faith and credit of the United States Government or repurchase agreements collateralized by such obligations. H. Commercial paper rated, "Prime - 1" by Moody's or at the time of purchase, "A-I" or better by S&P. I. Bonds or notes issued by any state or municipality which are rated by Moody's or S&P in one of the two highest rating categories assigned by such agencies. J. Federa I funds or bankers acceptances with a maximum term of one year or any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - 1" or "A3" or better by Moody's and "A-I" or "A" or better by S&P. K. Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm wi th an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal enti ty in exchange for the securities at a specified date. Repurchase Agreements must satisfy the following criteria or be approved by the Bond Insurer. 1. Repos must be between the municipal entity and a dealer bank or securities firm. a. Primary dealers on the Federal Reserve reporting dealer list, or b. Banks rated "A" or above by Standard & Poors Corporation and Moody's Investor. 2. The written repo contract must include the followina: a. Securities which are acceotable for transfer are: - 13 - - - - - - -" -..-. - - -. (1) Direct U.S. governments, or (2) Federal agencies backed by the full faith and credit of the U.S. government b. The term of the repo may be UP to 30 days c. The collateral must be delivered to the municipal entity, trustee (if trustee is not supplying the collateral) or third party acting as agent for the trustee (if the trustee is supplying the collateral) before/simul taneous with payment (perfection by possession of certificated securities). d. Valuation of Collateral ( 1) The securi ties must be valued marked-to market at current price ~ accrued interest weekly. market (a) The value of collateral must be equal to 102% of the amount of cash transferred by the municipal enti ty to the dealer bank or securi ty firm under the repo plus accrued interest. If the value of securities held as collateral slips below 102% of the value of the cash transferred by municipali ty, then additional cash and/or acceptable securities must be transferred. 3. Leaal OP1n1on which must be delivered to the municipal entity: a. Repo meets guidelines under state law for legal investment of public funds. "Project Area" means the territory within the Southeast Industrial Park Project Area described and defined in the Redevelopment Plan approved and adopted on June 21, 1976 by the City by its Ordinance No. 3583. "Purchase Price", for the purpose of computation of the Yield of the Bonds, has the same meaning as the term "issue price" in Sections 1273(b) and 1274 of the Tax Code, and, in general, means the initial offering price to the public (not including bond houses and brokers, or similar persons or organizations acting in the - 14 - capacity of underwriters or wholesalers) at which price a substantial amount of the Bonds are sold or, if the Bonds are privately placed, the price paid by the original purchaser of the Bonds or the acquisition cost of such original purchaser. The term "Purchase Price", for the purpose of computation of the Yield of Nonpurpose Investments, means the fair market value of the Nonpurpose Investments on the date of use of Gross proceeds for acquisition thereof, or if later, on the date that Investment Property constituting a Nonpurpose Investment becomes a Nonpurpose Investment of the Bonds. "Rating Agency" means, as of any date, either of the following entities which then maintains a rating on the Bonds: (a) Moody's Investors Service, its successors and assigns; (b) Standard & Poor's Corporation, its successors and assigns; and (c) Fitch Investors Service, Inc., its successors and assigns. "Rebate Account" means the account by that name established and held by the Trustee pursuant to Section "Record Date" means, with respect to any Interest Payment Date, the fifteenth (15th) calendar day of the month immediately preceding such Interest Payment Date, whether or not such day is a Business Day. "Redevelopment Fund" means the fund by that established pursuant to Section 3.04 of the Loan Agreement. name "Redevelopment Plan" means the "Redevelopment Plan for the Southeast Industrial Park Redevelopment Project Area" adopted on June 21, 1976 by the City Council of the City pursuant to Ordinance No. 3583, including any amendment thereof heretofore or hereafter made pursuant to the Redevelopment Law. "Redemption Date" means the date set for redemption of any Bonds pursuant to a notice of redemption pursuant to Section 2.03 hereof. "Refunding Bonds" means obligations issued by the Authority or all of the Outstanding Bonds, in any bonds, notes or other for the purpose of refunding any accordance with Section 5.01. "Registration Books" means the records maintained by the Trustee pursuant to Section 2.09 for the registration and transfer of ownership of the Bonds. "Request of the Authority'" means a request in writing signed by the Chairman, Secretary or Treasurer of the Authority, or by any other officer of the Authority duly authorized by the Board for that purpose. amount Year; "Reserve Requirement" means, with respect to the Bonds, an equal to Maximum Annual Debt Service on the Bonds in any Bond provided, however, that at no time shall the Reserve - 15 - Requirement exceed an amount equal to the lesser of (i) ten percent (10%) of the net proceeds available to the Authority from the sale of the Bonds, (ii) Maximum Annual Debt Service on the Bonds, or (iii) one hundred twenty-five percent (125%) of average annual debt service on the Bonds determined with respect to debt service on the Bonds Outstanding on the date of deposit of amounts in the Debt Service Reserve Fund. "Revenues" means: (a) all amounts payable by the Agency pursuant to the Loan Agreement, other than (i) administrative fees and expenses and indemnity against claims payable to the Authority and the Trustee and (ii) amounts payable to the United States of America pursuant to Section 4.11 of the Loan Agreement; (b) any proceeds of Bonds originally deposited with the Trustee and all moneys deposited and held from time to time by the Trustee in the funds and accounts established hereunder, other than the Rebate Account; and (c) income and gains with respect to the investment of amounts on deposit in the funds and accounts established hereunder or under the Loan Agreement, other than the Excess Investment Savings. "Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax - (516 227-4039 or 4190; Midwest Securities Trust Company, Capital Structures - Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax - (312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Dex (215) 496-5058; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority may designate in a Certificate of the Authority delivered to the Trustee. "Series A Bonds" means the $5,600,000 "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1981, Series A." "State" means the State of California. "Supplemental Indenture" means any indenture, agreement or other instrument hereafter duly executed by the Authority and the Trustee in accordance with the provisions of the Indenture. "Tax Code" means the Internal Revenue Code of 1986, as amended. Any reference to a provision of the Tax Code shall include the applicable Tax Regulations with respect to such provision. "Tax Regulations" means temporary and permanent regulations promulgated under or with respect to the Tax Code. "Trust Office" means the principal corporate trust office of the Trustee at Los Angeles, California, except that with respect to presentment of Bonds for payment or for registration of transfer - 16 - and exchange such term shall mean the office or agency of the Trustee at any particular time, its corporate agency business shall be conducted, or such other offices as may be specified to the Authority by the Trustee in writing. "Trustee" means Security Pacific National successors and assigns, and any other corporation which may at any time be substituted in its place Article VI. Bank and its or association as provided in "Yield" means that yield which, when used in computing the present worth of all payments of principal and interest (or other payments in the case of Nonpurpose Investments which require payments in a form not characterized as principal and interest) on a Nonpurpose Investment or on the Bonds, produces an amount equal to the Purchase Price of such Nonpurpose Investment or the Bonds, as the case may be, all computed as prescribed in the applicable Tax Regulations. Many provisions in this Indenture are restated from Resolution No. 4149, Resolution No. 4774, Resolution No. 5081, C, as amended, and Resolution No. 5096, as amended (the "Resolutions of Issuance") for the purpose of clarity and are not intended to amend any of the provisions thereof, it being the intent hereof that this Indenture and the Resolutions of Issuance be construed together. Section 1.02. Rules of Construction. All references in this Indenture to "Articles", "Sections", and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; and the words "herein", "hereof", "hereunder", and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. Section 1.03. Authorization and Purpose of Bonds. The Authority has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and hereby finds and determines that all things, conditions, and acts required by law to exist, happen and be performed precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Authority is now authorized under the Agreements and the Bond Law and each and every requirement of law, to issue the Bonds in the manner and form provided in this Indenture. Accordingly, the Authori ty hereby authorizes the issuance of the Bonds pursuant to the Bond Law and this Indenture for the purpose of providing funds to make the Loan to the Agency under the Loan Agreement. - 17 - Section 1.04. Eaual Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract between the Authori ty and the Owners from time to time of the Bonds; and the covenants and agreements herein set forth to be performed on behalf of the Authority shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. - 18 - ARTICLE II ISSUANCE OF BONDS Section 2.01. Authorization of Bonds. The Bonds authorized to be issued by the Authority under and subject to the Bond Law and the terms of this Indenture shall be designated the "San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Redevelopment Project Area)" and shall be issued in the original aggregate principal amount of $6,625,000. The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof. Section 2.02. Terms of the Bonds. The Bonds shall be part serial Bonds and part term Bonds and shall mature in the fallowing amounts on March 1 of the following years and bear interest at the rates stated below: Maturity Maturity Date Interest Date Interest March 1 Amount Rate March 1 Amount Rate 1991 $ 120,000 % 1999 $ 195,000 % 1992 130,000 2000 205,000 1993 135,000 2001 220,000 1994 145,000 2002 235,000 1995 150,000 2003 255,000 1996 160,000 2004 270,000 1997 170,000 2014 4,050,000 1998 185,000 The Bonds maturing inclusive are serial Bonds. term Bonds. March 1, 1991, to March 1, 2004, The Bonds maturing March 1, 2014 are The Bonds shall bear interest at the rates stated above but not to exceed twelve percent (12%) per annum, payable semiannually on March 1 and September 1 of each year commencing on September 1, 1990. Each Bond shall bear interest until the principal sum thereof has been paid; provided, however, that if funds are avai lable for the payment thereof in full accordance with the terms of this Resolution, said Bond shall then cease to bear interest. Interest shall be calculated on the basis of 360 days per year and twelve (12) 30-day months. The Bonds shall be numbered from R-l upward and shall be dated as of March 1, 1990. Each Bond shall bear interest from the interest payment date next preceding the date thereof unless (i) it is dated as of an interest payment date, in which event it shall bear interest from that interest payment date, or (ii) it is dated - 19 - prior to the first Record Date (as hereinafter defined), in which event it shall bear interest from the date of the Bonds, or (iii) it is dated between the sixteenth (16th) day of the month immediately preceding the interest payment date and the interest payment date, inclusive, in which case it shall bear interest commencing on such interest payment date. Interest on the Bonds shall be paid by the Fiscal Agent (out of the appropriate funds) by check or draft mailed by first class mail on the interest payment date to the registered Owner as his name and address appear on the register kept by the Fiscal Agent at the close of business on the fifteenth (15th) day of the month preceding the interest payment date (the "Record Date"). The Bonds, the interest thereon and any premiums upon the redemption thereof prior to maturity shall be payable in lawful money of the United States of America and (except for interest on the Bonds which is payable by mailed check or draft as stated herein) shall be payable at the Corporate Services Division of Security Pacific National Bank, Fiscal Agent for the Agency, in Los Angeles, California. Section 2.03. Redemption of Bonds. (a) Redemption From Optional Loan Prepayments. Bonds maturing on or prior to March 1, 2000 shall not be sUbject to call and redemption prior to maturity. Bonds maturing on or after March 1, 2001 shall be subject to redemption on and after March 1, 2000 and any Interest Payment Date thereafter as a whole, or in part by lot, from prepayments of the Loan made at the option of the Agency pursuant to Section 2.03 of the Loan Agreement, at the respective redemption prices (expressed as percentages of the principal amount of the Bonds or portions thereof to be redeemed) set forth below, together with accrued interest thereon to the date of redemption: ' Redemption Dates (all dates inclusive) Redemption Price March 1, 2000 and September 1, 2000 March 1, 2001 and September I, 2001 March 1, 2002 and September 1, 2002 and each March 1 and September 1 thereafter 102% 101% 100% (b) Sinkino Fund March I, 2014 shall be installments made by the pursuant to Section 4.02(c) years and in the amounts as Installments. The Bonds maturing redeemed from mandatory sinking fund Authority into the Principal Account hereof at par on March 1 of each of the shown in Section 4.02(c) hereof. (c) Notice of Redemption. The Trustee on behalf and at the expense of the Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, and to the Securities Depositories and to the Information Services, at least thirty (30) but not more than sixty - 20 - (60) days prior to the date fixed for redemption; provided, however, that neither failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. Such notice shall state the date of the notice, the redemption date, the redemption place and the redemption price and shall designate the CUSIP numbers, the Bond numbers and the maturity or maturities (in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Trust Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date. The Trustee shall not mail notice of redemption of Bonds pursuant to the preceding subsections (a) or (b) of this Section unless there shall then be on deposit in the Principal Account all amounts required to pay the principal of and redemption premium (if any) on such Bonds upon the redemption thereof. (d) Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for redemption, by lot in any manner which the Trustee in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000 portions and such portions shall be treated as separate Bonds which may be separately redeemed. (e) Partial Redemption of Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same series and maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed. (f) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of and interest (and premium, if any) on the Bonds so called for redemption shall have been duly provided, such Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice. All Bonds redeemed pursuant to this Section 2.03 shall be cancelled. Section 2.04. Form of Bonds. The Bonds, the form of Trustee's certificate of authentication, and the form of assignment to appear thereon, shall be substantially in the respective forms set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture. - 21 - Section 2.05. Execution of Bonds. The Bonds shall be signed in the name and on behalf of the Authority with the manual or facsimile signatures of its Chairman or Vice Chairman and attested with the manual or facsimile signature of its Secretary or any assistant duly appointed by the Board, under the printed seal of the Authority, and shall be delivered to the Trustee for authentication by it. In case any officer of the Authority who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed shall have been authenticated or delivered by the Trustee or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though the individual who signed the same had continued to be such officer of the Authority. Also, any Bond may be signed on behalf of the Authority by any individual who on the actual date of the execution of such Bond shall be the proper officer although on the nominal date of such Bond such individual shall not have been such officer. Only such of the Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture. Section 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee, duly executed. Whenever any Bond shall be surrendered for transfer, the Authority shall execute and the Trustee shall thereupon authenticate and deliver to the transferee a new Bond or Bonds of like tenor, maturity and aggregate principal amount. The Trustee shall not be required to transfer, pursuant to this Section, either (a) all Bonds during the period established by the Trustee for the selection of Bonds for redemption, or (b) any Bonds selected for redemption pursuant to Section 2.03(d). Section 2.07. Exchanae of Bonds. Bonds may be exchanged at the Trust Office of the Trustee for Bonds of the same tenor and maturi ty and of other authorized denominations. . The Trustee shall not be required to exchange, pursuant to this Section, either (a) all Bonds during the period established by the Trustee for the selection of Bonds for redemption, or (b) any Bonds selected for redemption pursuant to Section 2.03(d). Section 2.08. Temporary Bonds. ini tially in temporary form exchangeable ready for delivery. The temporary lithographed or typewritten, shall be of The Bonds may be issued for definitive Bonds when Bonds may be printed, such denominations as may - 22 - be determined by the Authority and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and be registered and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds, it will execute and furnish defini ti ve Bonds without delay, and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange therefor at the Trust Office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of defini ti ve Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder. Section 2.09. Reaistration Books. The Trustee will keep or cause to be kept at its Trust Office sufficient records for the registration and transfer of the Bonds, which shall at all times during regular business hours be open to inspection by the Authority with reasonable prior notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said records, Bonds as hereinbefore provided. The Bond Insurer shall, upon the occurrence of an Event of Default triggering an obligation to make payments under the municipal bond insurance pOlicy, be given the right to inspect said books, during regular business hours, for the transfer or registration of the Bonds at the Trustee's Trust Office. Section 2.10. Bonds Muti lated. Lost. Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like series, tenor and authorized denomination in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by it. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to it and indemnity satisfactory to it shall be given, the Authority, at the expense of the Bond Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like series and tenor, in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been called for redemption, instead of issuing a substitute Bond the Trustee may pay the same without surrender thereof upon receipt of indemnity satisfactory to the Trustee). The Authority may require payment of a reasonable fee for each new Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond issued under the provisions of this Section in - 23 - lieu of any Bond alleged to be lost, destroyed or stolen shall consti tute an original contractual obligation on the part of the Authority whether or not the Bond alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds secured by this Indenture. - 24 - ARTICLE II I DEPOSIT AND APPLICATION OF PROCEEDS Section 3.01. Issuance of Bonds. Upon the execution and delivery of this Indenture, the Authority shall execute and deliver Bonds in the aggregate principal amount of $6,625,000, and shall deliver the Bonds to the Trustee for authentication and delivery to the original purchaser thereof upon the Request of the Authority. Section 3.02. Application of Proceeds. (a) Application of Proceeds of the Bonds. Upon delivery of the Bonds on the Closing Date, the Trustee shall deposit or transfer, as applicable, the proceeds thereof, including accrued interest, if any, as follows: $ (1) To the Costs of Issuance Fund hereunder, the sum of of $ (2) To the Debt Service Reserve Account hereunder, the sum (3) To the Bond Interest Account, the sum of $ representing accr~ed interest, capitalized interest and premium, if any, on the Bonds; (4) To the Agency for deposit into the Redevelopment Fund established under the Loan Agreement, the sum of $ and (5) To the Agency for deposit into the Low and Moderate Income Housing Fund established under the Loan Agreement, the sum of $ Section 3.03. Funds. There is hereby continued a special trust fund called the "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Special Fund" (hereinafter sometimes called the "Special Fund") to be maintained by the Trustee, which was renamed and continued by Resolution No. 3564 and subsequent resolutions. The fOllowing special trust funds were established in the Special Fund by Resolution No. 4149, and continued by Resolution No. 4774 and Resolution No. 5081, as amended, and Resolution No. 5096, as amended and are hereby continued to be applicable to the Series A Bonds, the 1985 Bonds, the 1988 Refunding Bonds and the 1988 Bonds: (i) the "Bond Interest Fund," (ii) the "Serial Bond Payment Fund," (iii) the "Term Bond Sinking Fund," and (iv) the "Debt Service Reserve Fund." The Escrow Fund created by Resolution - 25 - No. 4537 in connection with the refunding of the Junior Lien Bonds and the Escrow Fund created by Resolution No. 5081, as amended, in connection with the refunding of the 1983 Refunding Bonds are also hereby continued. (b) There is hereby created the San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series F, Southeast Industrial Park Bond Interest, Account" (herein sometimes called the "Bond Interest Account"), to be held by the Trustee as a segregated account wi thin the Bond Interest Fund. The moneys in said account shall be used to pay interest on the Bonds when due. (c) There is hereby created the "San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series F, Southeast Industrial Park Serial Bond Payment Account" (herein sometimes called the "Serial Bond Payment Account") to be held by the Trustee as a segregated account wi thin the Serial Bond Payment Fund. The moneys in said account shall be used to pay principal on the serial Bonds when due. (d) There is hereby created the "San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series F, Southeast Industrial Park Term Bond Sinking Account" (herein sometimes called the "Term Bond Sinking Account"), to be held by the Trustee as a segregated account wi thin the Term Bond Sinking Fund. The moneys in said account shall be used to pay principal coming due on the Term Bonds. (e) There is hereby created the "San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series F, Southeast Industrial Park Debt Service Reserve Account" (herein sometimes called the "Debt Service Reserve Account"), to be held by the Trustee as a segregated account within the Debt Service Reserve Fund. The moneys in said account shall be used as provided in Section 4.02 (d) hereof. (f) There is hereby created a separate fund to be known as the "San Bernardino Joint Powers Financing Authority Tax Allocation Bonds, 1990 Series F, Southeast Industrial Park Costs of Issuance Fund" (herein sometimes called the "Costs of Issuance Fund"), which shall be held by the Trustee in trust solely for the purposes set forth herein. The moneys set aside and placed in the Costs of Issuance Fund shall remain therein until from time to time expended pursuant to a Written Request of the Authority solely for the purpose of paying certain costs of issuance and the necessary expenses incurred in connection with the issuance and sale of the Bonds and the fees and expenses of, the Trustee. On December 1, 1990, or upon the earlier Written Request of the Agency, all amounts (if any) remaining in the Costs of Issuance Fund shall be withdrawn therefrom by the Trustee and transferred to the Bond Interest Account to be used solely for payment of a portion of the interest on the Bonds. - 26 - So long as any of the Bonds herein authorized, or any interest thereon, remain unpaid, the moneys in the foregoing funds shall be used for no purpose other than those required or permitted by this Indenture or any resolution providing for the issuance of Parity Bonds and the Law. Section 3.04. Validity of Bonds. authorization and issuance of the Bonds shall way by any proceedings taken by the Agency application of the proceeds of the Loan, and in the Bonds that the same are issued pursuant be conclusive evidence of their validity and their issuance. - 27 - The validity of the not be affected in any with respect to the the recital contained to the Bond Law shall of the regularity of - - ARTICLE IV REVENUES; FLOW OF FUNDS Section 4.01. Pledae of Revenues: Assianment of Riahts. Subject to the prov1s10ns of Section 6.03, the Bonds shall be secured by a first lien on and pledge (which shall be effected in the manner and to the extent hereinafter provided) of all of the Revenues and a pledge of all of the moneys in the Bond Interest Account and the Principal Account, including all amounts derived from the investment of such moneys. The Bonds shall be equally secured by a pledge, charge and lien upon the Revenues and such moneys without priority for number, date of Bonds, date of execution or date of delivery; and the payment of the interest on and principal of the Bonds and any premiums upon the redemption of any thereof shall be and are secured by an exclusive pledge, charge and lien upon the Revenues and such moneys. So long as any of the Bonds are Outstanding, the Revenues and such moneys shall not be used for any other purpose; except that out of the Revenues there may be apportioned such sums, for such purposes, as are expressly permitted by Section 4.02. The Authority hereby transfers in trust and assigns to the Trustee, for the benefit of the Owners from time to time of the Bonds, all of the Revenues and all of the right, title and interest of the Authority in the Loan Agreement. The Trustee shall be entitled to and shall receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. The Trustee also shall be entitled to and shall take all steps, actions and proceedings reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of the obligations of the Agency under the Loan Agreement. Section 4.02. Receipt. Deposit and Application of Revenues. The interest on the Bonds of the Parity Issues and any Parity Debt until maturity shall be paid by the Trustee from the Special Fund; provided, however, that, for purposes of compliance with the requirements of Section 148(f) of the Code, all funds allocated from Revenues in regard to payment of interest on the Bonds, shall be deposited into and paid out of the Bond Interest Account established under this Indenture. At the maturity of the Bonds and any Parity Debt, and, after all interest then due on the Bonds and Parity Debt then outstanding has been paid or provided for, moneys in the Special Fund shall be applied to the payment of the principal of any of such Bonds and Parity Debt; provided, however, that, for purposes of compliance with the requirements of Section 148(f) of the Code, all funds allocated from Revenues in regard to payment of principal and premium, if any, on the Bonds, shall be deposited into and paid out of the segregated accounts established for such purpose under this Indenture. - 28 - wi thout limiting the generality of the foregoing and for the purpose of assuring that the payments referred to above will be made as scheduled, the Revenues accumulated in the Special Fund shall be used in the fallowing priority; provided, however, that to the extent that deposits have been made in any of the Funds referred to below from the proceeds of the sale of the Bonds or otherwise, the deposits below need not be made: (a) Bond Interest Fund. Deposits shall be made into the Bond Interest Fund, including the Bond Interest Account, so that the balance in said Fund one (1) month prior to the date of the payment of any installment of interest on the Bonds of the Pari ty Issues and Parity Debt shall be equal to the interest coming due on the next interest payment date on the then outstanding Bonds of the Parity Issues and Parity Debt. Moneys in the Bond Interest Fund shall be used for the payment of interest on the Bonds of the Parity Issues and Parity Debt as the same becomes due, and, after such payment, the Fund shall be restored by further deposits to the required balance. Only funds in the Bond Interest Account shall be used for payment of interest on the Bonds of the Parity Issues. (b) Serial Bond Pavment Fund. After the deposits have been made pursuant to subparagraph (a) above, deposits shall next be made into the Serial Bond Payment Fund, including the Serial Bond Payment Account, so that the balance in said Fund on February 1 of each year is equal to the principal coming due on the then outstanding serial Bonds of the Parity Issues and any serial Parity Debt on the next succeeding March 1. Moneys in the Serial Bond Payment Fund shall be used for the payment of the principal of such serial Bonds of the Parity Issues and any serial Parity Debt, as the same becomes due, and, after such payment, the Fund shall be restored by further deposits to the required balance. Only funds in the Serial Bond Payment Account shall be used to pay the principal of the serial Bonds. (c) Term Bond Sinkina Fund. (i) Commencing on February 1, 1997, and on each February 1 thereafter, after the deposits have been made into the Bond Interest Fund, as required in (a) above, and the Serial Bond Payment Fund, if required in (b) above, deposits shall next be made on a parity basis into the Term Bond Sinking Fund so that the balance in said Fund shall equal the Minimum Sinking Fund Payment for that year, shown below, on the then outstanding Series A Bonds. - 29 - SERIES A BONDS MINIMUM SINKING FUND PAYMENTS Year of Year of Redemption, Minimum Redemption, Minimum March 1 of Pavrnent March 1 of pavrnent 1997. . . . . . . . . . . . . $240,000 2002............ . $385,000 1998. . . . . . . . . . . . . 265,000 2003...... . ...... 425,000 1999. . . . . . . . . . . . . 290,000 2004............ . 470,000 2000. . . . . . . . . . . . . 320,000 2005. . . . . . . . . . . . . 515,000 2001. . . . . . . . . . . . . 350,000 2006..(maturity) 565,000 (ii) Commencing on February 1, 2001, and on each February 1 thereafter, after the deposits have been made into the Bond Interest Fund, as required in (a) above, and the Serial Bond Payment Fund, if required in (b) above, deposits shall be made into the Term Bond Sinking Fund so that the balance in said Fund shall equal the Minimum Sinking Fund Payments for that year, shown below, on the then outstanding 1985 Bonds. 1985 BONDS MINIMUM SINKING FUND PAYMENTS Year of Year of Redemption, Minimum Redemption, Minimum March 1 of Payment March 1 of Payment 2001.... . . ...... . $ 50,000 2009.. . ..... ... $ llO,OOO 2002.. . ......... . 55,000 2010.......... . 120,000 2003. . . . . . . . . . . . . 60,000 2011.......... . 130,000 2004..... . ....... 70,000 2012.......... . 140,000 2005. . . . . . . . . . . . . 75,000 2013. . . . . . . . . . . 155,000 2006. . .. . . ... ... . 80,000 2014. . . ........ 170,000 2007. . ..... . ..... 90,000 2015 (maturity) 185,000 2008............ . 100,000 (iii) Commencing on February 1, 2003, and on each February 1 thereafter, after the deposits have been made into the Bond Interest Fund, as required in (a) above, and the Serial Bond Payment Fund, if required in (b) above, deposits shall be made into the Term Bond Sinking Account for the 1988 Refunding Bonds so that the balance in said Account shall equal the Minimum Sinking Fund Payments for that year, shown below, on the then outstanding 1988 Refunding Bonds. . - 30 - 1988 REFUNDING BONDS MINIMUM SINKING FUND PAYMENTS Year of Year of Redemption, Minimum Redemption, Minimum March 1 of Payment March 1 of Payment 2003.. . ...... . . . $ 225,000 2009. . . . . . . . . . . $1,075,000 2004.. .... .... . . 240,000 2010.......... . 1,150,000 2005. ... . . . ..... 260,000 2011.. . . ....... 1,240,000 2006. . . . . . . . . . . . 275,000 2012. . . . . .. . . . . 1,335,000 2007. . . ... .. . . . . 965,000 2013.... . .... . . 1,435,000 2008. . . . . . . . .... 1,000,000 2014 (maturity) 1,000,000 (iv) Commencing on February 1, 2003, and on each February 1 thereafter, after the deposits have been made into the Bond Interest Fund as required in (a) above, and the Serial Bond Payment Fund as required in (b) above, deposits shall be made into the Term Bond Sinking Account for the 1988 Bonds so that the balance in said Fund on the succeeding March 1 shall equal the Minimum Sinking Fund Payment for that year, shown below, on the then outstanding 1988 Bonds. 1988 BONDS MINIMUM SINKING FUND PAYMENTS Year of Redemption, March 1 of 2003 2004 2005 2006 2007 2008 Year of Minimum Redemption, Minimum Payment March 1 of Payment $ 50,000 2009 $ 80,000 50,000 2010 85,000 50,000 2011 90,000 50,000 2012 100,000 50,000 2013 100,000 70,000 2014 400,000 (v) Commencing on February 1, 2005, and on each February 1 thereafter, after the deposits have been made into the Bond Interest Fund as required in (a) above, and the Serial Bond Payment Fund, as required in (b) above, deposits shall be made into the Term Bond Sinking Account for the Bonds so that the balance in said fund on the succeeding March 1 shall equal the minimum Sinking Fund Payment for that year, shown below, or the then outstanding Bonds. - 31 - -- - ----- ... --- BONDS MINIMUM SINKING FUND PAYMENTS / Year of Redemption March 1 of Minimum Pavrnent 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ 290,000 310,000 335,000 355,000 385,000 410,000 440,000 475,000 505,000 345,000 Moneys in the Term Bond Sinking Fund shall be used and applied by the Trustee to call and redeem the principal amount of outstanding term Bonds of the Parity Issues in accordance with the above schedules and term Parity Debt in accordance with the schedule or schedules applicable thereto. Any such call and redemption shall be made in accordance with the provisions of the resolution providing for the issuance of the bonds involved. (d) Debt Service Reserve Fund. After deposits have been made pursuant to subparagraphs (a), (b) and (c) above, deposits shall be made to the Debt Service Reserve Fund, including the Debt Service Reserve Account, to the extent necessary to maintain (i) the balance in the Debt Service Fund (other than the Debt Service Reserve Account) equal to the reserve requirement with respect to the Series A Bonds, the 1985 Bonds, the 1988 Refunding Bonds and the 1988 Bonds, and (ii) the balance in the Debt Service Reserve Account of said Fund equal to the Reserve Requirement. Moneys in the Debt Service Reserve Account shall be transferred to the Bond Interest Account, the Serial Bond Payment Account, or the Term Bond Sinking Account to pay interest on and principal of the Bonds as it becomes due to the extent Revenues are insufficient therefor. Subject to receipt by the Trustee of written instructions regarding applicable requirements for rebate of investment earnings to the Uni ted States and to the requirements of Section 5.07 hereof, any portion of the Debt Service Reserve Account which is in excess of the amount required to be maintained therein, as described above, shall be transferred to the Bond Interest Account semiannually on or before February 1 and August 1. Moneys in the Debt Service Reserve Account may be used to pay the interest and/or principal of the last outstanding maturity of the Bonds so that the Bonds will be retired. - 32 - (e) Surplus. It is the intent of this Resolution that: (i) the deposits provided for in subparagraphs (a), (b) and (c) above to the Bond Interest Fund, the Serial Bond Fund and the Term Bond Sinking Fund, respectively, shall be made, as scheduled, and (ii) that the deposits provided for in subparagraph (d) above to the Debt Service Reserve Fund, shall be made as necessary to maintain the required balances therein as described in (d) above. Any moneys remaining in the Special Fund (other than those moneys in the Bond Interest Fund, the Serial Bond Payment Fund, the Term Bond Sinking Fund or the Debt Service Reserve Fund thereof) (i) on February 1 of each year after the above transfers have been made and after any required transfers have been made to the Rebate Account and (ii) upon receipt by the Agency of a certificate of the Trustee requested by the Agency and certifying that such moneys are in excess of the amounts presently required for the foregoing Funds, may be declared "Surplus" and shall be: (1) used by the Trustee, at the direction of the Agency, for the payment of the principal of, interest and premiums, if any, on Junior Lien Obligations hereafter issued by the Agency pursuant to the Law and having a lien on the Revenues which is junior to the Bonds of the Parity Issues and Parity Debt, in accordance with the proceedings for the issuance of such Junior Lien Obligations; or (2) if and to the extent not used for the purposes set forth in (1) above, used and applied by the Trustee, at the direction of the Agency: (a) to the purchase of the Bonds of the Parity Issues and Parity Debt by the Agency; provided that such Bonds of the Parity Issues and Parity Debt shall not be purchased by the Agency at a price in excess of the then current redemption prices or in excess of the maximum redemption price if such Bonds of the Parity Issues are not then SUbject to call and redemption prior to maturity, or (b) for transfers to the Redemption Fund to be used to call and redeem Bonds of the Pari ty Issues prior to maturity, or (c) for transfers to the Agency to be used and applied by the Agency for any lawful purpose, provided that with respect to (1) and (2) above the Revenues to be received for the next Fiscal Year by the Agency, based upon the most recent assessed valuation of taxable property in the Project Area, based upon an assumed property tax rate of 1%,. are at least equal to 1.25 times the Maximum Annual Debt Service and maximum annual debt service on any Junior Lien Obligations, as the case may be, all as shown by the certificate or opinion of an Independent Financial Consultant appointed by the Agency and delivered to the Trustee For purposes of this calculation, monies received from business inventory subventions, home owner exemptions payments and supp lemen t a I revenues sha 11 be exc 1 uded. Revenues to be - 33 - received shall be further reduced by the five year average of property tax delinquencies to date in the Project Area a nd by the amoun t to be rece i ved by any ex is t i ng pass-through agreement. Section 4.03. Investments. All moneys in any of the funds or accounts established with the Trustee pursuant to this Indenture shall be invested by the Trustee solely in Permitted Investments pursuant to the written direction of the Authority given to the Trustee in advance of the making of such investments (which shall be promptly confirmed in writing, as to any such direction given orally). In the absence of any such direction from the Authority, the Trustee shall invest any such moneys in Federal Securities. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposi ted in the fund or account from which such investment was made. For purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder upon the Request of the Authority. The Trustee may act as principal or agent in the acquisition of any investment. The Trustee shall incur no liability for losses arising from any investments made pursuant to this Section. Section 4.04. Valuation and Disposition of Investments. For the purpose of determining the amount in any fund or account, the value of Permitted Investments credited to such fund shall be valued at the lesser of (a) the original cost thereof (excluding any brokerage commissions and excluding any accrued interest), or (b) the par amount thereof. - 34 - ARTICLE V COVENANTS OF THE AUTHORITY Section 5.01. Punctual PaYment: Extension of PaYment of Bonds. The Authority shall punctually payor cause to be paid the principal, interest and premium (if any) to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Revenues and other assets pledged for such payment as provided in this Indenture. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which shall not have been so extended. Nothing in this Section shall be deemed to limit the right of the Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of the Bonds. Section 5.02. Aoainst Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, including other programs under the Bond Law, and reserves the right to issue other obligations for such purposes. Section 5.03. Power to Issue Bonds and Make Pledoe and Assionment. The Authority is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues, the Loan Agreement and other assets purported to be pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provision of this Indenture are and will be the legal, valid and binding special obligations of the Authority in accordance with their terms, and the Authority and the Trustee shall at all times, to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all rights of the Bond Owners under this Indenture against all claims and demands of all persons whomsoever. - 35 - Section 5.04. Accountino Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with industry standards, in which complete and accurate entries shall be made of all transactions made by the Trustee relating to the proceeds of Bonds, the Revenues, the Loan Agreement and all funds and accounts established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Authority, the Bond Insurer and the Agency, during regular business hours with reasonable prior notice. Section 5.05. No Additional Oblioations. The Authority covenants that no additional bonds, notes or other indebtedness shall be issued or incurred which are payable out of the Revenues in whole or in part unless issued or incurred in accordance with Sections 4.02 and 4.03 of the Loan Agreement, except that the Authori ty may at any time issue Refunding Bonds in accordance with Section 5.01 hereof. Section 5.06. No Arbitraoe. The Authority shall not take, nor permit nor suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of any of the Bonds which would cause any of the Bonds to be "arbitrage bonds" or "private activity bonds" within the meaning of the Tax Code. Section 5.07. Rebate of Excess Investment Earninos to United States. (a) Oblioation to Calculate Excess Investment Earninos. The Agency (acting pursuant to Section 4.11 of the Loan Agreement) shall calculate or cause to be calculated, and shall provide or cause to be provided wri tten notice to the Trustee of, the Excess Investment Earnings in the manner and at the times required under the Tax Code. Said calculations shall exclude earnings on the Debt Service Fund. be made or caused to be made in accordance with all applicable requirements of the Tax Code. (b) Rebate to Uni ted States. As requi red under the Tax Code, the Agency shall file with the Trustee from time to time a Request of the Agency directing the payment to the United States of America, from the amounts on deposit in the Rebate Account, of all Excess Investment Earnings required to be so paid. In the event that there are amounts remaining on deposit in the Rebate Account following the final payment of such amounts, the Trustee shall, after payment of amounts due to the Trustee pursuant to this Indenture, pay such remaining amounts to the Agency to be used for any lawful purposes of the Agency. The Agency shall direct the Trustee to make payments to the United States of America at the address prescribed by the Tax Regulations, together with such reports and statements as may be prescribed by such Tax Regulations, which reports shall be furnished to the Trustee by the Agency. In the event that amounts on deposit in the Rebate Account are insufficient to make any payment to the United States of America - 36 - required pursuant to this subsection (b), the Agency shall make such payment when due hereunder, from any funds which are lawfully available for such purpose. The obligations of the Agency under this subsection (b) shall be performed by the Agency pursuant to Section 4.11 of the Loan Agreement. (c) Investment Transactions. The Authority shall assure that Excess Investment Earnings on the Bonds are not paid or disbursed except as required in this Section 5.07. To that end the Authority shall assure that investment transactions are on an arm's length basis. In the event that Nonpurpose Investments consist of certificates of deposit or investment contracts, investment in such Nonpurpose Investments shall be made in accordance with the procedures described in applicable Tax Regulations as from time to time in effect. retain Bonds, Section (d) Maintenance for a period of six records of the 5.07. of Records. The Authority shall keep, and (6) years fOllowing the retirement of the determinations made pursuant to this (e) Enaaaement of Professional Services. In order to provide for the administration of this Section 5.07, the Authority may provide for the employment of independent attorneys, accountants and consultants compensated on such reasonable basis as the Authority may deem appropriate. (f) Trustee's Reliance on Authority. The Trustee shall conclusively be entitled to rely upon all calculations and directions made and furnished by the Authority under this Section 5.07, and the Trustee shall not incur any liability whatsoever in acting upon and as instructed by such calculations and directions. Section 5.08. Private Business Use Limitation. Not more than ten percent (10%) of the Net Proceeds of the Bonds deposited in the Redevelopment Fund established under the Loan Agreement shall be used in a manner which would cause the Bonds to become "private activity bonds" under and within the meaning of Section 141(a) of the Tax Code. The Authority shall not use nor permit the use, directly or indirectly, of Gross Proceeds of the Bonds in an amount equal to or in excess of five percent (5%) of the Net Proceeds of the Bonds in one or more trades or businesses carried on by any persons other than a governmental unit (i) for any use not functionally and operationally related to the governmental use of such proceeds, (ii) for any use so related to a governmental use in any amount in excess of the portion of Net Proceeds used for such related governmental use, or (iii) for a combination of such uses. - 37 - Section 5.09. Private Loan Limitation. Not more than five percent (5\) of the Net Proceeds of the Bonds shall be used, directly or indirectly, to make or finance a loan (other than loans constituting Nonpurpose Investments or assessments) to persons other than state or local government units. Section 5.10. Federal Guarantee Prohibition. The Authority shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Tax Code. Section 5.11. Loan Aqreement. The Trustee, as assignee of the Authority's rights pursuant to Section 4.01, shall promptly collect all amounts due from the Agency pursuant to the Loan Agreement and shall diligently enforce, and take all steps, actions and proceedings reasonably necessary for the enforcement of all of the rights of the Authority thereunder and for the enforcement of all of the obligations of the Agency thereunder. The Authority, the Trustee and the Agency may at any time amend or modify the Loan Agreement pursuant to Section 6.04 thereof, but only (a) if the Trustee first obtains the written consent of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding to such amendment or modification, or (b) without the consent of any of the Bond Owners if such amendment or modification is for anyone or more of the fOllowing purposes: (a) to add to the covenants and agreements of the Agency contained in the Loan Agreement, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power therein reserved to or conferred upon the Agency; or (b) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Loan Agreement, or in any other respect whatsoever as the Agency may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not materially adversely affect the interests of the Owners of the Bonds; or (c) to amend any provision thereof relating to the Tax Code, to any extent whatsoever but only if and to. the extent such amendment will not adversely affect the exclusion from gross income of interest on any of the Bonds under the Tax Code, in the opinion of nationally-recognized bond counsel. - 38 - Section 5.12. Further Assurances. adopt, make, execute and deliver any and resolutions, instruments and assurances as necessary or proper to carry out the intention performance of this Indenture, and for the confirming unto the Owners of the Bonds the provided in this Indenture. - 39 - The Authority will all such further may be reasonably or to facilitate the better assuring and rights, and benefits ARTICLE VI THE TRUSTEE Section 6.01. Appointment of Trustee. Security Pacific National Bank, in Los Angeles, California, a national banking association is hereby appointed Trustee by the Authority for the purpose of receiving all moneys requir~d to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Authority agrees that it will maintain a Trustee having a corporate trust office in the State, with 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, so long as any Bonds are Outstanding. If such bank or trust company publishes a report of condition at least annually pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this Section 6.01 the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee is hereby authorized to pay the principal of and interest and redemption premium (if any) on the Bonds when duly presented for payment at maturity, or on redemption or purchase prior to maturity, and to cancel all Bonds upon payment thereof. The Trustee shall keep accurate records of all funds administered by it and of all Bonds paid and discharged. Section 6.02. Acceptance of accepts the trusts imposed upon it by perform said trusts, but only upon express terms and conditions: Trusts. The Trustee hereby this Indenture, and agrees to and subject to the following (a) The Trustee, prior to the occurrence of an Event of Default and after curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default hereunder has occurred (which has not been cured or waived), the Trustee may exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of care and skill and diligence in their exercise, as a prudent man or person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder. The Trustee may conclusively rely on an opinion of counsel as full and complete protection for any action taken or suffered by it hereunder. - 40 - (c) The Trustee shall not be responsible for any recital herein, or in the Bonds, or for any of the supplements thereto or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby and the Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, condi tions or agreements on the part of the Authori ty hereunder. The Trustee may conclusively rely on an opinion of counsel as full and complete protection for any action taken or suffered by it hereunder. (d) The Trustee may become the Owner of Bonds secured hereby with the same rights which it would have it not the Trustee; may acquire and dispose of other bonds or evidences of indebtedness of the Authority with the same rights it would have if it were not the Trustee; and may act as a depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Bonds, whether or not such committee shall represent the Owners of the majority in aggregate principal amount of the Bonds then Outstanding. (e) The Trustee shall be protected in acting, in good faith and without negligence, upon any notice, request, consent, certificate, order, affidavit, letter, telegram or other paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons. Any action taken or omitted to be taken by the Trustee in good faith and wi thout negligence pursuant to this Indenture upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the Owner of any Bond, shall be conclusive and binding upon all future Owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof. The Trustee shall not be bound to recognize any person as an Owner of any Bond or to take any action at his request unless the ownership of such Bond by such person shall be reflected on the Registration Books. (f) As to the existence or non-existence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a Certificate of the Authority as sufficient evidence of the facts therein contained and prior to the occurrence of an Event of Default hereunder of which the Trustee has been given notice or is deemed to have notice, as provided in Section 6.02(h) hereof, shall also be at liberty to accept a Certificate of the Authority to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound to secure the same. (g) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or - 41 - willful default. The inununi ties and exceptions from liability of the Trustee shall extend to its officers, directors, employees and agents. (h) The Trustee shall not be required to take notice or be deemed to have notice of any Event of Default hereunder except failure by the Authority to make any of the payments to the Trustee required to be made by the Authority pursuant hereto or failure by the Authority to file with the Trustee any document required by this Indenture to be so filed subsequent to the issuance of the Bonds, unless the Trustee shall be specifically notified in writing of such default by the Authority or by the Owners of at least twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding and all notices or other instruments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered at the Trust Office of the Trustee, and in the absence of such notice so delivered the Trustee may conclusively assume there is no Event of Default hereunder except as aforesaid. (i) At any and a 11 reasonable times the Trustee, and its duly authorized agents, attorneys, experts, accountants and representatives, shall have the right fully to inspect all books, papers and records of the Authority pertaining to the Bonds, and to make copies of any such books, papers and records such as may be desired but which is not privileged by statute or by law. (j) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises hereof. (k) Notwithstanding anything elsewhere in this Indenture wi th respect to the execution of any Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, as may be deemed desirable for the purpose of establishing the right of the Authority to the execution of any Bonds, the withdrawal of any cash, or the taking of any other action by the Trustee. (1) Before taking the action referred to in Section 8.02, the Trustee may require that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or wilful default in connection with any such action. (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. - 42 - Section 6.03. Fees. Charqes and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement for reasonable fees for its services rendered hereunder and all advances, counsel fees (including expenses) and other expenses reasonably and necessarily made or incurred by the Trustee in connection with such services. Upon the occurrence of an Event of Default hereunder, but only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment of any Bond upon the amounts held hereunder for foregoing fees, charges and expenses incurred by it respectively. Section 6.04. Notice to Bond Owners of Default. If an Event of Default hereunder occurs with respect to any Bonds of which the Trustee has been given or is deemed to have notice, as provided in Section 6.02(h) hereof, then the Trustee shall promptly give written notice thereof by first-class mail to the Owner of each such Bond, unless such Event of Default shall have been cured before the giving of such notice; provided, however, that unless such Event of Default consists of the failure by the Authority to make any payment when due, the Trustee may elect not to give such notice if and so long as the Trustee in good faith determines that it is in the best interests of the Bond Owners not to give such notice. Section 6.05. Intervention bv Trustee. In any judicial proceeding to which the Authority is a party which, in the opinion of the Trustee and its counsel, has a substantial bearing on the interests of Owners of any of the Bonds, the Trustee may intervene on behalf of such Bond Owners, and subject to Section 6.02(1) hereof, shall do so if requested in writing by the Owners of at least twenty-five percent (25%) in aggregate principal amount of such Bonds then Outstanding. Section 6.06. Removal of Trustee. The Owners of a majority in aggregate principal amount of the Outstanding Bonds may at any time, and the Authority may (and at the request of the Agency shall) so long as no Event of Default shall have occurred and then be continuing, remove the Trustee initially appointed, and any successor thereto, by an instrument or concurrent instruments in writing delivered to the Trustee, whereupon the Authority or such Owners, as the case may be, shall appoint a successor or successors thereto provided that any such successor shall be a bank or trust company meeting the requirements set forth in Section 6.01. Section 6.07. Resiqnation bv Trustee. The Trustee and any successor Trustee may at any time give thirty (30) days' written notice of its intention to resign as Trustee hereunder, such notice to be given to the Authority and the Agency by registered or certified mail. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the - 43 - successor Trustee. Upon such acceptance, the Authority shall cause notice thereof to be given by first class mail, postage prepaid, to the Bond Owners at their respective addresses set forth on the Registration Books. Section 6.08. Appointment of Successor Trustee. In the event of the removal or resignation of the Trustee pursuant to Sections 6.06 or 6.07, respectively, with the prior written consent of Agency, the Authority shall promptly appoint a successor Trustee. In the event the Authority shall for any reason whatsoever fail to appoint a successor Trustee within ninety (90) days fOllowing the delivery to the Trustee of the instrument described in Section 6.06 or within ninety (90) days following the receipt of notice by the Authority pursuant to Section 6.07, the Trustee may, at the expense of the Authority, apply to a court of competent jurisdiction for the appointment of a successor Trustee meeting the requirements of Section 6.01 hereof. Any such successor Trustee appointed by such court shall become the successor Trustee hereunder notwithstanding any action by the Authority purporting to appoint a successor Trustee following the expiration of such ninety-day period. Section 6.09. Meroer 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 that such company shall meet the requirements set forth in Section 6.01, shall be the successor to the Trustee and vested with all of the title to the trust estate and all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding. Section 6.10. Concernino anv Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authority an instrument in writing accepting such appointment hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fUlly vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the Request of the Authority, or of the Trustee's successor, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys held by it as the Trustee hereunder to its successor. Should any instrument in writing from the Authority be required by any successor Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested in the predecessor Trustee, any and all such instruments in writing shall, on request, be executed, aCknowledged and delivered by the Authority. - 44 - Section 6.11. Appointment of Co-Trustee. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Authority or Trustee deem that by reason of any present or future law of any jurisdiction the Trustee may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Authority or Trustee appoint an additional individual or institution as a separate co-trustee. The following provisions of this Section 6.11 are adopted to these ends. In the event that the Authority or Trustee appoint an additional individual or institution as a separate or co-trustee, each and every remedy, power, right, claim, demand, cause of action, inununity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate or co-trustee but only to the extent necessary to enable such separate or co-trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co-trustee shall run to and be enforceable by either of them. Should any instrument in writing from the Authority be required by the separate trustee or co-trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority. In case any separate trustee or co-trustee, or a successor to either, shall become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co-trustee so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee or co-trustee. Section 6.12. Indemnification: Limited Liabilitv of Trustee. The Authority further covenants and agrees to indemnify and save the Trustee and its officers, directors, agents and employees, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability, but excluding any and all losses, expenses and liabilities which are due to the negligence or intentional misconduct of the Trustee, its officers, directors, agents or employees. No provision in this Indenture shall require - 45 - the Trustee to risk or expend its own funds or otherwise incur any financial liability hereunder if it shall have reasonable grounds for believing repayment of such funds or adequate indemnity against such liability or risk is not assured to it. The Trustee shall not be liable for any action taken or omitted to be taken by it in accordance with the direction of the Owners of at least twenty-five percent (25%) in aggregate principal amount of Bonds Outstanding relating to the time, method and place of conducting any proceeding or remedy available to the Trustee under this Indenture. The obligations of the Authority under this paragraph shall survive discharge of the Bonds and the resignation or removal of the Trustee under this Indenture. Section 6.13 Reoardino the Bond Insurer. Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Bond Insurer or its designee from the Trustee or any owner of a Bond the payment of an insured amount for which is then due, that such required payment has not been made, the Bond Insurer on the due date of such payment or wi thin one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with Citibank, N.A., in. New York, New York, or its successor, sufficient for the payment of any such insured amounts which are then due. Upon presentment and surrender of such Bonds or presentment of such other proof of ownership of the Bonds, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Bonds as are paid by the Bond Insurer, and appropriate instruments to effect the appointment of the Bond Insurer as agent for such owners of the Bonds in any legal proceeding related to payment of insured amounts on the Bonds, such instruments being in a form satisfactory to Citibank, N.A., Citibank, N.A. shall disburse principal amount of any Bond, reduce the interest rate payable thereon, extend its maturi ty or the times for paying interest thereon or change the monetary medium in which principal and interest is payable, or reduce the percentage of consent required for amendment or modification; and, provided, however, further, that no such modification or amendment referred to in Section 7.01 hereof shall be made without also obtaining the written consent of the Bond Insurer. - 46 - ARTICLE VII MODIFICATION AND AMENDMENT OF THE INDENTURE Section 7.01. Amendment Hereof. This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Indenture which shall become binding upon adoption, without consent of any Bond Owners, to the extent permitted by law but only for any one or more of the following purposes: (a) to add to the covenants and agreements of the Authority in this Indenture contained, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or powers herein reserved to or conferred upon the Authority so long as such limitation or surrender of such rights or powers shall not materially adversely affect the Owners of the Bonds; or (b) to make such provisions for the purpose of curing any ambigui ty, or of curing, correcting or supplementing any defective provision contained in this Indenture, or in any other respect whatsoever as the Authority may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not materially adversely affect the interests of the Owners of the Bonds in the reasonable judgment of the Authority; or (c) to amend any provision hereof relating to the Tax Code, to any extent whatsoever but only of and to the extent such amendment will not adversely affect the exclusion from gross income of interest on any of the Bonds under the Tax Code, in the opinion of nationally-recognized bond counsel. Except as set forth in the preceding paragraph of this Section 7.01, this Indenture and the rights and obligations of the Authority and of the Owners of the Bonds may only be modified or amended at any time by a Supplemental Indenture which shall become binding when the written consent of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, are filed with the Trustee. No such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Authority to pay the principal, interest or redemption premiums at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the Owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee. - 47 - Section 7.02. Effect of Supplemental Aareement. From and after the time any Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations of the parties hereto or thereto and all Owners of Outstanding Bonds, as the case may be, shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 7.03. Endorsement or Replacement of Bonds After Effective Date. After the effective date of any action taken as hereinabove provided, the Authority may determine that the Bonds shall bear a notation, by endorsement in form approved by the Authori ty, 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 that purpose at the Trust Office of the Trustee, a suitable notation as to such action shall be made on such Bond. If the Authority shall so determine, new Bonds so modified as, in the opinion o.f the Authority, shall be necessary to conform to such Bond Owners' 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 Trust Office of the Trustee, without cost to each Bond Owner, for Bonds then Outstanding, upon surrender of such Outstanding Bonds. Section 7.04. Amendment bv Mutual Consent. The provisions of this Article VII shall not prevent any Bond Owner from accepting any amendment as to the particular Bond held by him, provided that due notation thereof is made on such Bond. - 48 - ARTICLE VI II EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS Section 8.01. Events of Default. shall be Events of Default hereunder: (a) Default in the due and punctual payment of the principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise. The following events (b) Default in the due and punctual payment installment of interest on any Bond when and interest installment shall become due and payable. of any as such (c) Failure by the Authority to observe and perform any of the covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, other than as referred to in the preceding clauses (a) and (b), for a period of sixty (60) days after written notice, specifying such failure and requesting that it be remedied has been given to the Authori ty by the Trustee, or to the Authority and the Trustee by the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Outstanding Bonds; provided, however, that if in the reasonable opinion of the Authority the failure stated in such notice can be corrected, but not within such sixty (60) day period, the Trustee and such Owners shall not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the Authority within such sixty (60) day period and diligently pursued until such failure is corrected. (d) The filing by the Authority of a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United S"tates of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Authority, 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 Authority or of the whole or any substantial part of its property. Section 8.02. Remedies and Riahts of Bond Owners. Upon the occurrence and during the continuance of an Event of Default, the Trustee may pursue any available remedy at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture. - 49 - If an Event of Default shall have occurred and be continuing and if requested so to do by the Owners of at least twenty-five percent (25%) in aggregate principal amount of Outstanding Bonds and indemnified as provided in Section 6.02(1), the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article VIII, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bond Owners. NO remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to the Bond Owners) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or to the Bond Owners hereunder or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein; such right or power may be exercised from time to time as often as may be deemed expedient. Section 8.03. Application of Revenues and Other Funds After Default. All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indenture shall be applied by the Trustee in the following order 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 _ First, to the payment of the costs and expenses of the Trustee in declaring such Event of Default and in carrying out the provisions of this Article VIII, inCluding reasonable compensation to its agents, attorneys and counsel; and Second, to the payment of the whole amount of interest on and principal of the Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds; provided, however, that in the event such amounts shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order of priority: (a) first, to the payment of all installments of interest on the Bonds then due and unpaid, on a pro rata basis in the event that the available amounts are insufficient to pay all such interest in full, - 50 - (b) second, to the payment of principal of installments of the Bonds then due and unpaid, on a pro basis in the event that the available amounts insufficient to pay all such principal in full, and all rata are (c) third, to the payment of interest on overdue installments of principal and interest, on a pro rata basis in the event that the available amounts are insufficient to pay all such interest in full. Section 8.04. Power of Trustee to Control Proceedinqs. In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been fi led with ita written request signed by the Owners of a majority in aggregate principal amount of the Outstanding Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation. Any suit, action or proceeding which any Owner of Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all owners of Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney-in-fact of the respective Owners of the Bonds for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact. Section 8.05. Appointment of Receivers. Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of jUdicial proceedings to enforce the rights of the Trustee and of the Bond Owners under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Revenues and other amounts pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer. Section 8.06. Non-Waiver. Nothing in this Article VIII or in any other provision of this Indenture, or in the Bonds, shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the interest on and principal of the Bonds - 51 - to the respective Owners of the Bonds at the respective dates of maturi ty, as herein provided, out of the Revenues and other moneys herein pledged for such payment. A waiver of any default or breach of duty or contract by the Trustee or any Bond Owners shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on such subsequent default or breach. No delay or omission of the Trustee or any Owner of any of the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein: and every power and remedy conferred upon the Trustee or Bond Owners by the Bond Law or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Bond Owners, as the case may be provided, however, that no such remedy shall be exercised, pursued, rescinded, or otherwise taken, without the written consent of the Bond Insurer being first obtained. Section 8.07. Riahts and Remedies of Bond Owners. No Owner of any Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default: (b) the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suitor proceeding in its own name: (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request: and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds. The right of any Owner of any Bond to receive payment of the principal of and interest and premium (if any) on such Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture. - 52 - Section 8.08. Termination of Proceedinas. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the Authority, the Trustee and the Bond Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken. - 53 - ARTICLE IX MISCELLANEOUS Section 9.01. Limited Liabilitv of Authoritv. Notwithstanding anything in this Indenture contained, the Authority shall not be required to advance any moneys derived from any source of income other than the Revenues for the payment of the principal of or interest on the Bonds, or any premiums upon the redemption thereof, or for the performance of any covenants herein contained (except to the extent any such covenants are expressly payable hereunder from the Revenues or otherwise from amounts payable under the Loan Agreement). The Authority may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose and may be used by the Authority for such purpose without incurring indebtedness. The Bonds shall be revenue bonds, payable exclusively from the Revenues and other funds as in this Indenture provided. The general fund of the Authority is not liable, and the credit of the Authority is not pledged, for the payment of the interest and premium (if any) on or principal of the Bonds. The Owners of the Bonds shall never have the right to compel the forfeiture of any property of the Authority. The principal of and interest on the Bonds, and any premiums upon the redemption of any thereof, shall not be a legal or equitable pledge, charge, lien or encumbrance upon any property of the Authority or upon any of its income, receipts or revenues except the Revenues and other funds pledged to the payment thereof as in this Indenture provided. Section 9.02. Benefits of Indenture Limited to Parties. Nothing in this Indenture, expressed or implied, is intended to give any person other than the Authority, the Trustee, the Agency and the Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the Trustee, the Agency and the Owners of the Bonds. Section 9.03. Discharae of shall pay and discharge any or all one or more of the following ways: Indenture. If the Authority of the Outstanding Bonds in any (a) by and well and truly paying or causing to be paid the principal of and interest and premium (if any) on such Bonds, as and when the same become due and payable; (b) by irrevocably depositing with the Trustee, in trust, at or before maturity, money which, together with the available amounts then on deposit in the funds and accounts established with the Trustee pursuant to this Indenture and the Loan Agreement, is fully sufficient to pay such Bonds, inClUding all principal, interest and redemption premiums; or - 54 - (c) by irrevocably depositing with the Trustee or any other fiduciary, in trust, Federal Securities in such amount as an Independent Certified Public Accountant shall determine will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established with the Trustee pursuant to this Indenture and the Loan Agreement, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been mailed pursuant to Section 2.03 (d) or provision satisfactory to the Trustee shall have been made for the mailing of such notice, then, at the Request of the Authority, and notwithstanding that any of such Bonds shall not have been surrendered for payment, the pledge of the Revenues and other funds provided for in this Indenture with respect to such Bonds, and all other pecuniary obligations of the Authority under this Indenture with respect to all such Bonds, shall cease and terminate, except only the obligation of the Authority to payor cause to be paid to the Owners of such Bonds not so surrendered and paid all sums due thereon from amounts set aside for such purpose as aforesaid, and all expenses and costs of the Trustee. Any funds held by the Trustee fOllowing any payment or discharge of the Outstanding bonds pursuant to this Section 9.03, which are not required for said purposes, shall be paid over to the Authority after payment of amounts due to the Trustee under this Indenture. In the event that the principal and redemption price, if applicable, and interest due on the Bonds shall be paid by the Bond Insurer, the assignment and pledge of the Revenues under the Loan Agreement and all covenants, agreements and other obligations of the Authority to the Owners shall continue to exist and the Bond Insurer shall be subrogated to the rights of such Owners. Section 9.04. Successor Is Deemed Included in All References to Predecessor. Whenever in this Indenture or any Supplemental Indenture the Authority 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 Authority, that are presently vested in the Authority, and all the covenants, agreements and provisions contained in this Indenture by or on behalf of the Authori ty shall bind and inure to the benefit of its successors whether so expressed or not. Section 9.05. Content of Certificates. Every certificate with respect to compliance with a condition or covenant provided for in this Indenture except the certificate of destruction pursuant to Section 9.10 hereof, shall include (a) a statement that the person or persons making or giving such certificate have read such covenant or condition and the definitions herein relating thereto; (b) a - 55 - brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate 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 Authority 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, on information with respect to which is in the possession of the Authority, or upon the certificate or opinion of or representations by an officer or officers of the Authority, 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 the exercise of reasonable care should have known that the same were erroneous. Section 9.06. Execution of Documents bv Bond Owners. Any . request, consent or other instrument required by this Indenture to be signed and executed by Bond Owners or the Bond Insurer may be in any number of concurrent writings of substantially similar tenor and may be signed or executed by such Bond Owners in person or by their agent or agents duly appointed in writing or by an authorized officer of the Bond Insurer. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and of the Authority if made in the manner provided in this Section 9.06. The fact and date of execution by any person of any such request, consent or other instrument or writing may be proved by the affidavi t of a witness of such execution or by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take aCknowledgements of deeds, certifying that the person signing such request, consent or other instrument or writing aCknowledged to him the execution thereof. The ownership of Bonds shall be proved by the Registration Books. Any request, consent or vote of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of any Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in pursuance of such request, consent or vote. In lieu of obtaining - 56 - any demand, request, direction, consent or waiver in writing, the Trustee may call and hold a meeting of the Bond Owners upon such notice and in accordance with such rules and obligations as the Trustee considers fair and reasonable for the purpose of obtaining such action. Section 9.07. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the Agency or the Authority (but excluding Bonds held in any employees' retirement fund) shall be disregarded and deemed not to be Outstanding for the purpose of any such determination; provided, however, . that for the purpose of determining whether the Trustee shall be protected in relying on any such demand, request, direction, consent or waiver, only Bonds which the Trustee actually knows to be so owned or held shall be disregarded. Section 9.08. Waiver of Personal Liabilitv. No officer, agent or employee of the Authority shall be individually or personally liable for the payment of the interest on or principal of the Bonds; but nothing herein contained shall relieve any such officer, agent or employee from the performance of any official duty provided by law. Section 9.09. Partial Invalidi tv. If anyone or more of the covenants or agreements, or portions thereof, provided in this Indenture on the part of the Authority (or of the Trustee) to be performed should be contrary to law, then such covenant or covenants, such agreement or agreements, or such portions thereof, shall be null and void and shall be deemed separable from the remaining covenants and agreements or portions thereof and shall in no way affect the validity of this Indenture or of the Bonds i but the Bond Owners shall retain all rights and benefits accorded to them under the Bond Law or any other applicable provisions of law. The Authority hereby declares that it would have entered into this 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 anyone or more sections, paragraphs, subdivisions, sentences, clauses or phrases of this Indenture or the application thereof to any person or circumstance may be held to be unconstitutional, enforceable or invalid. Section 9.10. Destruction of Cancelled Bonds. Whenever in this Indenture provision is made for the surrender to the Authority of any Bonds which have been paid or cancelled pursuant to the provisions of this Indenture, the Trustee shall destroy such Bonds and furnish to the Authority a certificate of such destruction. Section 9.11. Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Authori ty or the Trustee may be established and maintained in the accounting records of the Authority or the Trustee, as the case may - 57 - be, either as a fund or an account, and may, for the purpose of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account. All such records with respect to all such funds and accounts held by the Authority shall at all times be maintained in accordance with generally accepted accounting principals and all such records with respect to all such funds and accounts held by the Trustee shall be at all times maintained in accordance :with industry practices; in each case with due regard for the protection of the security of the Bonds and the rights of every Owner thereof. Section 9.12. Payment on Business Days. Whenever in this Indenture any amount is required to be paid on a day which is not a Business Day, such payment shall be required to be made on the Business Day immediately following such day. Section 9.13. Notices. Any notice, request, complaint, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, postage prepaid, or sent by telegram, addressed as follows: If to the Authority: San Bernardino Joint Powers Financing Authority 300 North "0" Street San Bernardino, California 92418 Attention: Chairman If to the Agency: Redevelopment Agency of the City of San Bernardino 300 North "0" Street San Bernardino, California 92418 Attention: Executive Director If to the Trustee: Security Pacific National Bank 333 South Beaudry Avenue 24th Floor Los Angeles, California 90017 Attention: Corporate Services Division W24-30 If to the Bond Insurer: Municipal Bond Investors Assurance Corporation 445 Hamilton Avenue White Plains, New York 10601 Attention: The Authority and the Trustee may different addresses to which subsequent other communications shall be sent. designate any further or notices, certificates or - 58 - Section 9.14. Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of the Bonds which remain unclaimed for two (2) years after the date when such Bonds have become due and payable, either at thei r stated maturi ty dates or by call for earlier redemption, if such moneys were held by the Trustee at such date, or for two (2) years after the date of deposit of such moneys if deposited with the Trustee after said date when such Bonds become due and payable, shall, at the Request of the Authority, be repaid by the Trustee to the Authority, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bond Owners shall look only to the Authority for the payment of such Bonds; provided, however, that before being required to make any such payment to the Authority, the Trustee shall, at the expense of the Authority, cause to be mailed to the Owners of all such Bonds, at their respective addresses appearing on the Registration Books, a notice that said moneys remain unclaimed and that, after a date named in said notice, which date shall not be less than thirty (30) days after the date of mailing of such notice, the balance of such moneys then unclaimed will be returned to the Authority. Section 9.15. Governino Law. This Agreement shall be construed and governed in accordance wi th the laws of the State of California. - 59 - IN WITNESS WHEREOF, the SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY has caused this Indenture to be signed in its name by its Chairman and Secretary and SECURITY PACIFIC NATIONAL BANK, in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by its officer identified below, all as of the day and year first above written. SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY By: Chairman Attest: By: Secretary APPROVED AS TO FORM: SECURITY PACIFIC NATIONAL BANK, as Trustee By: Ti tle 3315S EXHIBIT A [FORM OF BOND] No. $ $6,625,000 San Bernardino Joint Powers Financing Authority Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Redevelopment Project Area) RATE OF INTEREST: MATURITY DATE: ORIGINAL ISSUE DATE: March 1, 1990 CUSIP: REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the "Authority"), for value received, hereby promises to pay (but only out of the Revenues and other moneys and securi ties hereinafter referred to) to the Registered Owner identified above or registered assigns (the "Registered Owner"), on the Maturity Date identified above, the Principal Amount, identified above in lawful money of the United States of America; and to pay interest thereon at the rate of interest set forth above, in like lawful money from the date hereof, which date shall be the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the fifteenth (15th) calendar day of the month preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to June 15, 1990, A-I -- in which event it shall bear interest from the Original Issue Date identified above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or made available for payment), payable semiannually on September 1 and March 1 in each year, commencing September 1, 1990 (the "Interest Payment Dates") until payment of such Principal Amount in full. The Principal Amount hereof is payable upon presentation and surrender hereof at the corporate trust office (the "Principal Office") of Security Pacific National Bank, as trustee (the "Trustee") in Los Angeles, California. Interest hereon is payable by check or draft of the Trustee mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the registration books of the Trustee as of the close of business on the fifteenth (15th) calendar day of the month preceding such Interest Payment Date (a "Record Date"); provided, however, that at the written request of the owner of at least $1,000,000 in aggregate principal amount of the outstanding Bonds filed with the Trustee prior to any Record Date, interest on such Bonds shall be paid to such owner on each succeeding Interest Payment Date by wire transfer of immediately available funds to an account in the continental United States designated in such written request. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE SAME EFFECT AS IF FULLY SET FORTH HEREIN. It is hereby certified that all things, conditions and acts required to exist, to have happened and 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 the Constitution and statutes of the State of California and by the Act, and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Constitution or statutes of the State of California or by the Act. This Bond shall not be entitled to any benefit under the Indenture, or become valid or Obligatory for any purpose, until the certificate of authentication hereon shall have been manually signed by the Trustee. A - 2 - ~ -....,. ~ - -- IN WITNESS WHEREOF, the Authority has caused this Bond to be executed in its name and on its behalf by the facsimile signature of its Chairman and attested to by the facsimile signature of its Secretary and its seal to be reproduced hereon, all as of the Original Issue Date identified above. SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY By: Chairman Attest: By: Secretary A - 3 - - -.......-- TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within-mentioned Indenture and registered on the Registration Books of the Trustee. Date: SECURITY PACIFIC NATIONAL BANK, as Tru::;tee By: Authorized Signatory A - 4 -- [FORM OF REVERSE SIDE OF BOND] This Bond is one of a duly authorized issue of bonds of the Authority designated the San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Redevelopment Project Area) (the "Bonds"), limited in principal amount to Six Million Six Hundred Twenty-Five Thousand Dollars ($6,625,000), secured by an Indenture of Trust dated as of March 1, 1990 (the "Indenture"), by and between the Authority and the Trustee. Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of the rights thereunder of the owners of the Bonds, of the nature and extent of the Revenues (as that term is defined in the Indenture), of the rights, duties and immunities of the Trustee and of the rights and obligations of the Authority thereunder; and all of the terms of the Indenture are hereby incorporated herein and constitute a contract between the Authority and the Registered Owner hereof, and to all of the provisions of which Indenture the Registered Owner hereof by acceptance hereof assents and agrees. The Bonds are authorized to be issued pursuant to the prov1s1ons of the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title I of the Government Code of the State of California (the "Act"). The Bonds are special obligations of the Authority and, as and to the extent set forth in the Indenture, are payable solely from and secured by a first lien and pledge of the Revenues and certain other moneys and securities held by the Trustee (except the amounts on deposit in the Rebate Account established under the Indenture) as provided in the Indenture. All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Revenues and such other moneys and securities, and the Revenues and such other moneys and securities constitute a trust fund for the security and payment of the principal of and interest on the Bonds. The full faith and credit of the Authority is not pledged for the payment of the principal of or interest or redemption premiums (if any) on the Bonds. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the Authority or any of its income or receipts, except the Revenues and such other moneys and securities as provided in the Indenture. The Bonds have been issued to provide funds to make a loan (the "Loan") to the Redevelopment Agency of the City of San Bernardino (the "Agency") in the aggregate principal amount of Six Million Six Hundred Twenty-Five Thousand Dollars ($6,625,000) relating to the Southeast Industrial Park Redevelopment Project Area of the Agency located within the City of San Bernardino, all as more particularly described in the Indenture. The Loan has been made by the Authority to the Agency pursuant to a Loan Agreement dated as of March 1, 1990 (the "Loan Agreement"), by and among the Agency, the Authority and the Trustee. A - 5 --- The Bonds maturing on March 1, 2015 are subject to mandatory redemption in part on March 1 of each year shown below at the principal amount thereof plus accrued interest to the date of redemption thereof from sinking fund installments which are required to be made in amounts sufficient to redeem (or pay at maturity in the case of the final sinking fund installment) the Bonds in principal amounts as follows: March 1 Sinkina Fund Installments 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (final maturity) $ 290,000 310,000 335,000 355,000 385,000 410,000 440,000 475,000 505,000 345,000 The Bonds maturing on or after March 1, 2001 are subject to redemption in whole or in part by lot, and prior to their respective maturities at the option of the Authority, on each Interest Payment Date on and after March 1, 2000, from prepayments of the Loan made at the option of the Agency pursuant to the Loan Agreement, at the following redemption price (expressed as percentages of the principal amount of the Bonds to be redeemed) set forth below, plus accrued interest to the redemption date: Date Redemption Price March 1, 2000 and September 1, 2000 March 1, 2001 and September 1, 2001 March 1, 2002 and September 1, 2002 and each March 1 and September 1 thereafter 102% 101% 100% The Bonds are also subject to mandatory redemption in whole, or in part by lot, on any date, from amounts credited towards the payment of principal of the Loan coming due and payable solely by reason of acceleration of the Loan pursuant to the Loan Agreement, at a redemption price equal to one hundred percent (100%) of the principal amount of the Bonds to be redeemed, without premium, together with accrued interest thereon to the redemption date. A - 6 -- The Trustee, on behalf and at the expense of the Authority, shall mail (by first class mai 1) notice of any redemption to the respective owners of any Bonds designated for redemption, at their respective addresses appearing on the registration books maintained by the Trustee, to the Securities Depositories and to the Information Services (as such terms are defined in the Indenture), at least thirty (30) but not more than sixty (60) days prior to the redemption; provided, however, that neither failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. Such notice shall state the date of the notice, the redemption date, the redemption place and the redemption price and shall designate the CUSIP numbers, the serial numbers of each maturity or maturities (except that if the event of redemption is of all of the Bonds of any maturity in whole, the Trustee shall designate such maturity without referencing each individual number) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date. The Bonds are issuable as fully registered Bonds without coupons in denominations of $5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, fully registered Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount and maturity of fully registered Bonds of other authorized denominations. A - 7 - - - -.........-...- This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. The Trustee shall not be required to register the transfer or exchange of any Bond (1) wi thin fifteen (15) days prior to selection of Bonds for redemption and (2) selected for redemption. The Indenture and the rights and obligations of the Authority and of the owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall (a) extend the maturi ty of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Authority to pay the principal, interest or redemption premiums (if any) at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee, all as more fully set forth in the Indenture. A - 8 ASSIGNMENT For value received the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within-mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises. Dated: Signature Guarantee: Note: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. A - 9 [STATEMENT OF INSURANCE] 3315S/ A - 10 $5,785,000 SAN BBRNARDlNO JOINT POWBRS FINANCING AUTHORITY TAX ALLOCATION BONDS, 1990 SERIBS F (SOUTHBAST INDUSTRIAL PARK RBDEVELOPMBNT PROJBCT ARBA) BOND PURCHASB AGRBBMBNT February _, 1990 San Bernardino Joint Powers Financing Authority 300 North D Street San Bernardino, California 92418 Ladies and Gentlemen: Miller &: Schroeder Financial, Inc. (the "Underwriter") hereby offers to purchase upon the terms and conditions hereinafter specified, $5,785,000 aggregate principal amount of San Bernardino Joint Powers Financing Authority Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Redevelopment Project Area) (the "Bonds") to be issued by the San Bernardino Joint Powers Financing Authority (the "Authority"). The Authority will issue the Bonds pursuant to a resolution adopted on January 29, 1990 (the "Resolution"). The Bonds are described on Exhibit A attached hereto and will be offered and sold pursuant to an Official Statement (the "Official Statement"). If and when accepted by you, this document shall constitute our Bond Purchase Agreement (the "Agreement"). It is our understanding that the Bonds are to be issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985 contituting Article 4 (commencing with Section 6584), Chapter 5, Division 3 Title 1 of the Government Code of the State and the California Community Redevelopment Law (Part I, Division 24, commencing with Section 33000 of the Health and Safety Code of the State of California (collectively, the "Act") and under the Resolution. The proceeds of the Bonds will be used to make a loan to the Redevelopment Agency of the City of San Bernardino (the "Agency") pursuant to a Loan Agreement between the Agency and the Authority. The proceeds of the loan will be applied by the Agency to finance public capital improvements in the Southeast Industrial Park Redevelopment Project Area located within the City of San Bernardino. The Bonds are payable from the repayments of the Agency Loan, which are secured by a pledge of the Tax Revenues (as defined in the Loan Agreement). The payment of the principal of and interest on the Bonds will be secured by a municipal bond insurance policy issued by Municipal Bond Investors Assurance Corporation ("MBIA"). The Bonds will be sold by the Underwriter as described in the Official Statement. All capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Indenture of Trust dated as of January 1, 1990 (the "Indenture"). 1. Representations of the Authority. The Authority hereby represents, warrants and agrees that both at the date hereof and at the date of closing that: -1- (a) The Authority is a public entity of the State of California, duly organized and existing under and pursuant to the Constitution and laws of the State of California. The Act authorizes the Authority to adopt the Resolution and to enter into the Loan Agreement and the Indenture. (b) To the best of its knowledge the Authority has complied with all provisions of California law, including the Act, in connection with the authorization and issuance of the Bonds, and has full power and authority to adopt the Resolution and to execute and deliver this Agreement, the Resolution, the Indenture, the Loan Agreement, and any and all other agreements relating thereto and to carry out the terms thereof. (c) The Resolution has been duly and validly adopted. This Agreement and any other documents related to the Bonds, when executed and delivered as contemplated by this Agreement, will have been duly and validly authorized, executed and delivered, will be in full force and effect and will be valid and binding obligations of the Authority enforceable in accordance with their terms, except to the extent that the enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally. The Resolution, the Indenture, the Loan Agreement, and this Agreement shall be in the form heretofore submitted to us and approved by us with only such changes as mutually agreed upon by us and the Authority. (d) The Authority has duly authorized all necessary action to be taken by it for (i) the authorization, and sale of the Bonds upon the terms set forth herein and in the Resolution; (ii) the execution and delivery by it of the Resolution and the Indenture providing for the issuance of and security for the Bonds and the pledge by the Authority of Revenues sufficient to pay the principal and interest on the Bonds; and (iii) the execution, delivery, receipt and due performance of this Agreement, the Bonds, the Resolution, the Indenture, the Loan Agreement, and any and all such other agreements and documents as may be required to be executed, delivered and received by the Autho;ity in order to carry out, give effect to and consummate the transactions contemplated hereby. Executed counterparts of the Resolution, the Indenture, the Loan Agreement, and this Agreement, will be delivered by the Authority at the Closing Time as hereinafter defined. (e) The Bonds when issued and delivered as provided herein and in the Resolution and Indenture, will have been duly and validly authorized and issued and will be entitled to the benefits and security of the Resolution and the Indenture which among other things provide that the Bonds and the interest thereon are payable solely from Tax Revenues (except to the extent paid out of moneys attributable to the Bonds or refunding bond proceeds or the income from the temporary investment thereof) and not from any other fund or source and do not constitute a debt of the Authority within the meaning of any constitutional or statutory limitation. -2- (f) The information relating to the Authority, the Agency, the City of San Bernardino, the Project Area and the Security for the Bonds in the Official Statement is correct, and such information does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein in order to make the statements contained therein not misleading. (g) The Authority will cause the proceeds from the sale of the Bonds to be utilized as specified in the Resolution and the Indenture. So long as any of the Bonds are outstanding and except as may be authorized by the Resolution, the Indenture, or the Loan Agreement, the Authority will not issue or sell any bonds or other obligations, other than the Bonds sold thereby and additional bonds permitted to be issued and sold as provided in the Resolution, the Indenture, or the Loan Agreement, the interest and premium, if any, or principal of which will be payable from the Revenues (as defined in the Indenture) and will not pledge the Revenues other than to the payment of the Bonds and additional bonds permitted to be sold as provided in the Resolution, the Indenture, or the Loan Agreement, and the interest thereon, except as provided in the Resolution, the Indenture, or the Loan Agreement. (h) There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board, or body pending or, to the knowledge of the Authority, threatened against or affecting the Authority (or any basis therefor) wherein an unfavorable decision, ruling or finding would have a material adverse effect on the validity or security of the Bonds, the Resolution, this Agreement, the Indenture, or the Loan Agreement, or the transactions contemplated thereby, or the tax exempt status of the Bonds. (i) The adoption of the Resolution and the execution and delivery of the Indenture, the Loan Agreement, or this Agreement, and the other agreements contemplated hereby and by the Official Statement, and the substantial compliance with the provisions thereof, will not conflict with or result in a material breach of any of the terms and provisions of, or constitute a material default under, any existing law, court or administrative regulation, decree or order, or any agreement, indenture, mortgage, lease or other instrument to which the Authority is subject or by which it is or may be bound. (j) Any certificates signed by an authorized officer of the Authority and delivered to the Underwriter at closing shall be deemed a representation and warranty by the Authority to the statements made therein. (k) On or before the execution of this Agreement, the Authority has provided to the Underwriter an Official Statement which the Authority deems final as of its date, except for certain omissions specified in Section 240.15c 2-12(b)(l) of Title 17 of the Code of Federal Regulations. 2. Purchase, Sale and Delivery of the Bonds. -3- On the basis of the representations and warranties and subject to the terms and conditions set forth herein, the Authority agrees to sell, and the Underwriter agrees to purchase at the Closing Time and at the Closing Date (as hereafter defined), the total principal amount of the Bonds at a purchase price of $5,676,242.00 plus interest accrued from the date of the Bonds to the Closing Date. Payment for the Bonds shall be made in same day funds by a wire transfer of those funds at the offices of Bond Counsel, or some other mutually agreeable place at ten o'clock a.m. prevailing time on March 1, 1990, or at such other date, time and place agreed upon by appropriate officers of the Authority and the Underwriter against delivery of the Bonds to the Underwriter. The date of such payment and delivery is herein called the "Closing Date" and the hour and date of such delivery and payment is herein called the "Closing Time". The Bonds will be delivered in fully registered form, bearing CUSIP numbers (provided neither the printing of a wrong number nor the failure to print a number shall constitute cause to refuse delivery of any Bond). 3. Covenants of the Authoritv. The Authority shall: (a) cooperate in qualifying the Bonds for offer and sale under the Blue Sky laws of California, provided that the Authority shall not be required to consent to service of process or qualify to do business in any state or jurisdiction; (b) at the Underwriter's request, refrain from taking any action, or permitting any action to be taken with regard to which the Authority may exercise control, or take any action reasonably necessary to assure or maintain the exclusion of interest on the Bonds from gross income of the Owners thereof for federal income tax purposes pursuant to the Internal Revenue Code of 1986, as amended; (c) if, at any time for a period of ninety (90) days after the date of the Official Statement, an event pertaining to the Authority, the Agency, the City of San Bernardino, the Project Area or the Tax Revenues shall have occurred as a result of which it is necessary to amend or supplement the Official Statement or to make the statements therein not untrue nor misleading or to make the Official Statement comply with any state Blue Sky law (subject to 3(a) above), and the Authority shall have received actual notice of such event, the Authority will notify the Underwriter promptly thereof and cooperate with the Underwriter in preparing an appropriate amendment or a supplement that will correct the statements in the Official Statement in order to make the statements therein not untrue or misleading; (d) fully comply with and assume all expenses incurred in fully complying with all regulatory requirements imposed by the State of California or any federal regulatory authority as may have jurisdictions herein, including, but not limited to. all expenses incurred and required in the preparation and filing of such interim and annual financial information and reports as may be required to maintain the registration of the Bonds, or exemptions from registration, as the case may be, copies of all of which the Authority agrees to promptly -4- furnish to the Underwriter at such time as the same may be filed in the office of any such state or federal regulatory authority. (e) deliver to the Underwriter within seven business days of this Agreement sufficient quantities as requested by the Underwriter of the Official Statement. 4. Conditions of Underwriter's Oblig-ations. The obligations of the Underwriter to purchase and pay for the Bonds are subject to the following conditions: (a) The representations and warranties of the Authority contained herein shall be true and correct as of the date hereof and the Closing Date. (b) At the Closing Date, the Authority shall have performed all of its obligations hereunder theretofore to be performed. (c) At the Closing Date, there shall be delivered to the Underwriter: (i) an opinion of Hawkins, Delafield &: Wood, Bond Counsel, in the form set forth in Appendix D to the Official Statement, together with a reliance letter addressed to the Underwriter, and an opinion of Hawkins, Delafield &: Wood in the form set forth in Exhibit B hereto; (ii) an opinion of the counsel to the Authority, addressed to the Authority, the Underwriter, counsel to the Underwriter, and Bond Counsel in form and substance satisfactory to the Underwriter; and (iii) an opinion of the counsel to the Agency, addressed to the Authority, the Underwriter, counsel to the Underwriter, and Bond Counsel in form and substance satisfactory to the Underwriter; and (iv) an opinion of the counsel to the City, addressed to the Authority, the Underwriter, counsel to the Underwriter, and Bond Counsel in form and substance satisfactory to the Underwriter; and (v) an opinion of Underwriter's counsel, Holmes &: Graven, Chartered, addressed to the Underwriter, in form and substance satisfactory to the Underwriter, covering such legal phases of the transactions contemplated by this Agreement as the Underwriter may reasonably require. In rendering the above opinions, counsel may rely upon customary certificates. (d) The Bonds, the Resolution, the Indenture, the Joint Powers Agreement, the Loan Agreement, in substantially the forms existing on the date hereof, with such changes therein as may be mutually -5- - -- --- - ---- ...... agreed upon by the parties thereto and the Underwriter, shall have been duly authorized, executed and delivered by the respective parties thereto and such agreements and the Resolution shall be in full force and effect on the Closing Date. (e) All proceedings and related matters in connection with the authorization, issue, sale and delivery of the Bonds shall have been satisfactory to Bond Counsel and counsel for the Underwriter, and such counsel shall have been furnished with such papers and information as they may have reasonably requested to enable them to pass upon the matters referred to in this subparagraph. (f) The Authority shall have furnished or caused to be furnished to the Underwriter on the Closing Date certificates satisfactory to the Underwriter as to the accuracy of its representations and warranties contained herein as of the date hereof and as of the Closing Date and as to the performance by it of its obligations hereunder to be performed at or prior to the Closing Date. (g) The Bonds shall be exempt from registration pursuant to the Securities Act of 1933, as amended; and the Resolution and the Indenture and related security instruments shall be exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended. (h) The Bonds shall be registered or exempt from registration for sale in the State of California. (i) The Authority shall have delivered to the Underwriter all documentation requested by the Underwriter relating to the City of San Bernardino, the Authority and the Project or any documents required by the Underwriter to secure the interests of the holders of the Bonds. (j) A policy of insurance, in form and substance satisfactory to the Underwriter, issued by MBIA, shall be in force and effect. (k) Written evidence that Standard &: Poor's Corporation and Moody's Investors' Service, Inc. have issued ratings of "AAA" and "Aaa", respectively, on the Bonds. (I) a letter from Eadie and Payne, certified public accountants, consenting to the use of the audit report prepared by them as Appendix B to the Official Statement. (m) a letter from Rosenow Spevacek Group, Inc. consenting to the use of their report and reference to them in the Official Statement. All proceedings taken at or prior to the Closing Date in connection with the authorization, issue and sale of the Bonds shall be satisfactory in form and substance to the Underwriter and counsel to the Underwriter, and the Underwriter and counsel to the Underwriter shall have been furnished with all such documents, certificates and opinions as the Underwriter and counsel to the Underwriter may -6- - -- ....- - ..... .....-.......... -----..,.- request to evidence the accuracy and completeness of any of the representations, warranties or statements, the performance of any covenants of the Authority, or the compliance with any of the conditions herein contained. All such opinions, certificates, letters and documents will be in compliance with the provisions hereof only if they are in all material respects satisfactory to the Underwriter and to counsel for the Underwriter, as to which both the Underwriter and such counsel shall act reasonably. If any conditions of the Underwriter's obligation hereunder to be satisfied prior to the Closing Date are not so satisfied, this Agreement may be terminated by the Underwriter by notice in writing or by telegram to the Authority. The Underwriter may waive in writing compliance by the Authority of any one or more of the foregoing conditions or extend the time for its performance. 5. Offerinp; by Underwriter. It is understood that the Underwriter proposes to offer the Bonds for sale to the public (which may include selected dealers) as set forth in the Official Statement. Concessions from the public offering price may be allowed to selected dealers. It is understood that the initial public offering price and concessions set forth in the Official Statement may vary after the initial public offering. It is further understood that the Bonds may be offered to the public at prices other than the par value thereof. The net premium on the sale of the Bonds, if any, shall accrue to the benefit of the Underwriter. The Authority hereby confirms the authority and use by the Underwriter of the Official Statement. 6. Representations, Warranties and Ag'!'eements to Survive Delivery. The representations, warranties, indemnities, agreements and other statements of the Authority and the Underwriter or their officers set forth in, or made pursuant to, this Agreement will remain operative and in full force and effect regardless of any investigation made by or on behalf of the Authority or the Underwriter or any controlling person and will survive delivery of and payment for the Bonds. 7. Payment of Costs and Expenses. All costs and expenses incident to the execution and performance of this Agreement and to the sale and delivery of the Bonds to the Underwriter shall be payable by the Authority from Bond proceeds, including, but not limited to the following costs and expenses: (i) the fees and expenses of the Authority's counsel; (ii) the fees and expenses of the Authority's accountants; (iii) the fees and expenses of Bond Counsel and Underwriter's Counsel; (iv) all costs and expenses incurred in connection with the printing and distribution of the Official Statement; (v) all costs and expenses incurred in connection with the preparation and printing of the Bonds; (vi) fees and disbursements of counsel incurred in connection with the qualification of the Bonds for sale and determination of the eligibility for investment under the laws of such jurisdictions as the Underwriter may designate including preparation of Blue Sky Memoranda and (vii) expenses of preparation of the Tax Increment Revenue Verification included in the Official Statement. -7- -- - -- -~ -- . ... ......... ... --- ,.., 8. Termination of Aln'eement. The Underwriter shall have the right to terminate this Agreement and thereupon be relieved of its obligations hereunder to purchase the Bonds, by written notice or by telegram to the Authority of its election so to do between the date hereof and the Closing Date, if at any time hereafter and prior to the Closing Date: (a) legislation shall be introduced, or a tentative decision with respect to legislation shall be reached by a committee of the House 0f 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 enacted 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 a decision by a court established under Article III of the Constitution of the United States, shall be rendered, or a ruling, regulation or order of the Treasury Department of the United States or the Internal Revenue Service shall be made or proposed having the purpose or effect of imposing Federal income taxation, or any other event shall have occurred which results in the imposition of Federal income taxation, upon revenues or other income of the general character to be derived by the Authority or by any similar body or upon interest received on obligations of the general character of the Bonds, or the Bonds, which, in the Underwriter's opinion, materially adversely affects the market price of the Bonds; (b) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency in the State of California, or a decision by any court of competent jurisdiction within the State of California shall be rendered which, in the Underwriter's opinion, materially adversely affects the market price of the Bonds; (c) legislation shall be introduced, by amendment or otherwise, in, or be enacted by the House of Representatives or the Senate of the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the Bonds, contemplated hereby or by the Official Statement, is or would be in violation of any provision of the Securities Act of 1933, as amended and as then in effect, or 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 with the purpose or effect of otherwise prohibiting the issuance, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement; (d) any event shall have occurred, or information become known, which, in the Underwriter's opinion, makes untrue, incorrect or misleading in -8- -- - - - any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains an untrue, incorrect or misleading statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; (e) 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; (f) the New York Stock Exchange or other national securities exchange, or any governmental 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, underwriters; (g) trading in securities on the New York Stock Exchange or the American Stock Exchange shall have been suspended or limited or minimum prices have been established on either such exchange; (h) a general banking moratorium shall have been established by Federal or applicable State authorities; (i) a default shall have occurred with respect to the obligations of, or proceedings have been instituted under the Federal bankruptcy laws or any similar state laws by or against, any state of the United States or any city located in the United States having a population in excess of one million persons or any entity issuing obligations on behalf of such a city or state; (j) any action shall have been taken by any government in respect of its monetary affairs which, in the opinion of the Underwriter, has a material adverse effect on the United States securities market; (k) a war involving the United States shall have been declared, or any conflict involving the armed forces of the United States shall have escalated, or any other national emergency relating to the effective operation of government or the financial community shall have occurred, which, in the Underwriter's opinion, materially adversely affects the market price of the Bonds; (1) a default shall ocur under any of the terms, conditions or requirements of this Agreement; or (m) general political, economic and market conditions, in the sole judgment of the Underwriter, shall not be satisfactory to permit the sale of the Bonds. If this Agreement shall be terminated pursuant to Section 4 or this Section 8, or if the purchase provided for herein is not consummated because any condition to the Underwriter's obligation hereunder is not satisfied or because of any refusal, -9- inability or failure on the part of the Authority to comply with any of the terms or. to fulfill any of the conditions of this Agreement, or if for any reason the Authority shall be unable to perform all of its obligations under this Agreement, the Authority shall not be liable to the Underwriter for damages on account of loss of anticipated profits arising out of the transactions covered by this Agreement. However, the Authority shall remain liable to the extent provided in Section 7 hereof, if the Authority should terminate the financing contemplated hereby, and the Authority shall pay all of the costs and expenses incurred by the Underwriter in contemplation of the performance by it of its obligations hereunder, including, but not limited to, all fees and expenses specified in Section 7 hereof, as well as all traveling expenses and postage, telegraph and telephone charges. 9. Notice and Governin~ Law. All communications hereunder shall be in writing and, except as otherwise provided, shall be delivered at, or mailed or telegraphed to, the following addresses: If to the Underwriter: !\1iller &: Schroeder Financial, Inc. 505 Lomas Santa Fe Drive, Suite 100 Solana Beach, California 92075 If to the Authority: San Bernardino Joint Powers Financing Authority 300 North D Street San Bernardino, California 92418 This Agreement shall be governed by and construed in accordance with the laws of the State of California. 10. Parties in Interest. This Agreement shall be binding upon and shall inure to the benefit of the Underwriter, the Authority, and, to the extent expressed, any person controlling the Authority, or the Underwriter and their respective executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. The term "successors and assigns" shall not include any purchaser, as such, from the Underwriter of the Bonds. 11. Time. Time shall be of the essence of this Agreement. 12. Counterparts. This Agreement may be executed in any number of counterparts. -10- If the foregoing is in accordance with your understanding of the Agreement, kindly sign and return to us the enclosed duplicate copies hereof, whereupon it will become a binding agreement between the Authority and the Underwriter in accordance with its terms. Very truly yours, MILLER & SCHROEDER FINANCIAL, INC. By: Its Authorized Representative Confirmed and accepted as of the date first above written. SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY By Its -11- BXHlBIT A Maturity Date (March 1) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2014 Principal Amount Interest Rate -12- EXHIBIT B [Supplemental Opinion of Bond Counsel] -13- SBE00103-2/3349S/lw 01/12/90 0230 RESOLUTION NO. RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, AUTHORIZING, ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, THE BORROWING OF FUNDS FROM THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT APPROXIMATELY EQUAL TO $6,700,000 RELATING TO THE SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA, AUTHORIZING THE FORM OF CERTAIN LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING THE PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORMS THEREOF WHEREAS, the City of San Bernardino (the "City") and the Redevelopment Agency of the City of San Bernardino (the "Agency") have heretofore entered into a Joint Exercise of Powers Agreement establishing the San Bernardino Joint Powers Financing Authority (the "Authority") for the purpose of issuing its bonds to be used to make loans to any of its members to finance public capital improvements; and WHEREAS, the Authority proposes at this time to issue its Tax Allocation Bonds, 1989 Series F (Southeast Industrial Park Redevelopment Project Area), in an aggregate principal amount approximately equal to $6,700,000 (the "Bonds") for the purpose of providing funds to make a certain loan (the "Loan") to the Agency in an aggregate principal amount approximately equal to $6,700,000 to finance certain pUblic capital improvements of the Agency in the redevelopment of the Southeast Industrial Park Redevelopment Project Area located within the City of San Bernardino, California (the "Project Area"); and - 1 - WHEREAS, the Loan to the Agency from the Authority shall be made pursuant to and in accordance with a certain Loan Agreement with respect to the Project Area dated as of March 1, 1990 (the "Loan Agreement"), by and among the Agency, the Authority and Securi ty Pacific National Bank, as trustee (the "Trustee"), a form of which has been prepared and is presently on file with the Secretary of the Commission; and WHEREAS, Miller & Schroeder Financial, Inc., as prospective underwriter of the Bonds (the "Underwriter") has informed the Authori ty that it intends to submit an offer to purchase the Bonds and has prepared a Preliminary Official Statement as necessary in the sale and marketing of the Bonds, a form of which is presently on file with the Secretary of the Authority; and WHEREAS, the Agency is authorized pursuant to Section 33601 of the Health and Safety Code of the State of California to borrow moneys for redevelopment purposes; and WHEREAS, the Commission has determined to approve the borrowing by the Agency of certain amounts representing proceeds of the sale of the Bonds pursuant to the Loan Agreement for the purpose of paying the costs of acquisition, construction and installation of its various redevelopment projects; and - 2 - WHEREAS, the Commission has duly considered such transactions and wishes at this time to approve said transactions in the public interests of the Agency; NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Determinations. The Commission hereby finds and determines that the issuance of the Bonds by the Authority will result in significant public benefits, consisting of demonstrable savings in any and all of the following: effective interest rates, bond preparation, bond underwriting and/or bond issuance costs. Section 2. Authorization of Loan: Approval of Loan Aareement. The Commission hereby authorizes and approves the Loan to be made to the Agency by the Authority in an aggregate principal amount approximately equal to $6,700,000 pursuant to and in accordance with the terms of the Loan Agreement for the purpose of financing certain public capital improvement projects of the Agency and certain other costs related thereto wi thin or benefitting the Project Area. The Commission hereby approves the form of the Loan Agreement as presently on file with the Secretary of the Commission, together with any changes therein or additions thereto as may be approved by the Chairman. The Commission hereby further authorizes and directs that the form of the Loan Agreement be converted into - 3 - the final Loan Agreement with respect to the Loan to be made for the Project Area. The Chairman, Vice-Chairman or such other members of the Commission are hereby authorized and directed to execute and deliver, and the Secretary or Assistant Secretary is hereby authorized and directed to attest to and affix the seal of the Commission to, the final form of the Loan Agreement when the same has been prepared for and in the name of and on behalf of the Agency and such execution and delivery shall be deemed to be conclusive evidence of the approval thereof. The proceeds of the Loan shall be applied by the Agency to finance certain redevelopment projects for the Project Area specified therein and for the purposes and in the amounts as set forth in the Loan Agreement. The Commission hereby authorizes the delivery and performance of the Loan Agreement. Section 3. Official Actions. The Chairman, Vice-Chairman and other members of the Commission, the Secretary, Assistant Secretary, counsel to the Commission, the Executive Director of the Agency, Agency Counsel and any and all other members and officers of the Commission and the Agency are hereby authorized and directed, for and in the name and on behalf of the Agency, to do any and all things and to take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents which they, or any of them, may deem necessary or advisable in connection with the execution and delivery of the Loan Agreement and the consummation of the transactions described herein and therein. - 4 - The Commission hereby aCknowledges that, in connection with the authorization of the issuance of the Bonds by the Authority pursuant to the Indenture, a form of which is presently on file with the Secretary of the Authority, the Underwriter has submitted the proposed bond transaction to a certain municipal bond insurance company for consideration in connection with the issuance of municipal bond insurance policy insuring payment of the principal of and interest on the Bonds and to certain municipal bond rating agencies for consideration in connection with the rating of the Bonds. The Commission hereby approves and authorizes revisions in the form of Loan Agreement presently on file with the Secretary of the Commission and the preparation of the final form of Loan Agreement for the Bonds, as such revisions and preparation of the final form thereof are approved by the Chairman upon the recommendation of Bond Counsel; such revisions including, but not limi ted to, additions, changes or deletions as may be requested by the municipal bond insurance company, any nationally recognized municipal bond rating agencies and as required for the marketing and sale of the Bonds by the Underwriter. The Commission hereby authorizes the Chairman, the Vice-Chairman, the Secretary, the Assistant Secretary, the Executive Director or such other authorized officers of the Commission and the Agency to execute and deliver such additional documents, agreements and closing certificates required in connection with the issuance of the Bonds and the borrowing of the proceeds therefrom and the - 5 - consummation of the transactions contemplated thereby, including, but not limited to, the submission of any and all documents to municipal bond rating agencies and municipal bond insurance companies and the distribution of any offering documents in connection with the sale of the Bonds to prospective purchasers thereof. Section 4. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. - 6 - RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING, ON BEHALF OF THE REDEVELOPMENT AGENCY OF' THE CITY OF SAN BERNARDINO, THE BORROWING OF FUNDS FROM THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT APPROXIMATELY EQUAL TO $6,700,000 RELATING TO THE SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA, AUTHORIZING THE FORM OF CERTAIN LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING THE PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORMS THEREOF. I HEREBY CERTIFY adopted by the Community San Bernardino at a the day of that the foregoing resolution was duly Development Commission of the City of meeting thereof, held on , 1990, by the following vote, to wit: Commission Members: AYES NAYS ABSTAIN ESTRADA REILLY FLORES MAUDSLEY MINOR POPE-LUDLAM MILLER Secretary of The foregoing resolution is hereby approved this , 1990. day W. R. Holcomb, Chairman Community Development of the City of San Bernardino - 7 - SOUTHEAST INDUSTRIAL PARK LOAN AGREEMENT Dated as of March 1, 1990 by and among the SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO and SECURITY PACIFIC NATIONAL BANK, as Trustee Relating to $6,625,000 San Bernardino Joint Powers Financing Authority Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Redevelopment Project Area) The amounts payable to the SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY (the "Authority") and certain other rights of the Authority under this Loan Agreement have been pledged and assigned to Security Pacific National Bank, as trustee (the "Trustee"), under the Indenture of Trust dated as of March 1, 1990, between the Authority and the Trustee. -- - Section 1. 01. Section 1. 02. Section 2.01. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 3.01. Section 3.02. Section 3.03. Section 3.04. Section 3.05. Section 3.06. Section 4.01. Section 4.02. Section 4.03. Section 4.04. Section 4.05. Section 4.06. Section 4.07. Section 4.08. Section 4.09. Section 4.10. TABLE OF CONTENTS LOAN AGREEMENT ARTICLE I DEFINITIONS Definitions ................................ Rules of Construction ...................... ARTICLE II THE LOAN; REPAYMENT; APPLICATION OF PROCEEDS Authorization .............................. Repayment of Loan .......................... Optional Prepayment ........................ Application of Loan Proceeds ............... Reserve Fund................................ ARTICLE III SECURITY FOR LOAN; APPLICATION OF FUNDS Pledge of Pledged Revenues ................. Special Fund; Deposit of Pledged Revenues .. Transfer of Tax Revenues From Spec i a 1 Fund ............................. Redevelopment Fund ......................... Low and Moderate Income Housing Fund........ Investment of Moneys; Valuation of Investments .............................. ARTICLE IV OTHER COVENANTS OF THE AGENCY Punctua 1 Payment ........................... Limitation on Superior or Parity Debt ...... Limitations on Issuance of Subordinate Debt ..................................... Payment of Claims .......................... Books and Accounts; Financial Statement .... Protection of Security and Rights .......... Payments of Taxes and Other Charges ........ Disposition of Property.................... Maintenance of Tax Revenues ................ Payment of Expenses; Indemnification ....... - i - Paae -- - Section 4.11. Section 4.12. Section 4.13 Section 4.14. Section 5.01. Section 5.02. Section 5.03. Section 5.04. Section 6.01. Section 6.02. Section 6.03. Section 6.04. Section 6.05. Section 6.06. Section 6.07. Section 6.08. Section 6.09. Compliance With Arbitrage Requirements; Payment of Rebatable Amounts ............. Redevelopment of the Southeast Industrial Park Project Area ........................ Deposit of Portion of Surplus in Project Area Low and Moderate Income Housing Fund ..................................... Further Assurances ......................... ARTICLE V EVENTS OF DEFAULT AND REMEDIES Events of Default and Acceleration of Maturi ties ............................... Application of Funds Upon Default .......... No Wa i ver .................................. Remedies Not Exclusive ..................... ARTICLE VI MISCELLANEOUS Benefits Limited to Parties ................ Successor is Deemed Included in All References to Predecessor ................ Discharge of Loan Agreement ................ Amendmen t .................................. Waiver of Personal Liability............... Payment of Business Days ................... Notices .................................... Partial Invalidity......................... Governing Law .............................. - ii - ~ - SBEOOI03-4/3309S/es 01/12/90 110 SOUTHEAST INDUSTRIAL PARK LOAN AGREEMENT THIS LOAN AGREEMENT is made and entered into as of March 1, 1990, by and among the SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the "Authority"), the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and poli tic duly organized and existing under the laws of the State of California (the "Agency") and SECURITY PACIFIC NATIONAL BANK, a national banking association organized and existing under the laws of the United States of America, as trustee (the "Trustee"); WIT N E SSE T H: WHEREAS, the Authority is a joint powers authority, duly established and authorized to transact business and exercise powers under and pursuant to a Joint Exercise of Powers Agreement between the City of San Bernardino and the Agency which established the Authority for the purpose of permitting the Authority to issue bonds the proceeds of which may be used to make loans to or acquire obligations of any of its members or any other local agencies of the State of California to finance public capital improvements of such members or local agencies; and WHEREAS, the Authority is authorized by the provisions of the Marks-Roos Local Bond Pooling Act of 1985 (the "Bond Law") consti tuting Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, as amended, and a resolution adopted by the Authority on December 18, 1989 (the "Resolution") to issue $6,625,000 aggregate principal amount of its Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Redevelopment Project Area) (the "1990 Series F Bonds"); and WHEREAS, the Agency is a public bOdy, politic, duly established and authorized to transact exercise powers under and pursuant to the provisions Division 24 of the Health and Safety Code of the State (the "Redevelopment Law"); and corporate and business and of Part 1 of of California WHEREAS, a Redevelopment Plan for a redevelopment project known and designated as the "Southeast Industrial Park Redevelopment Project Area" (the "Project Area"), in the City of San Bernardino has been adopted on June 21, 1976 and is in compliance with all requirements of the Redevelopment Law and the Agency is proceeding with various redevelopment activities in the Project Area; and - 1 - WHEREAS, the Community Development Commission of the City of San Bernardino (the "Community Development Commission"), has previously taken action for the Agency 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 Community Redevelopment Law [Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of the State of California] (the "Redevelopment Law") and the powers of the Agency include the power to issue bonds for any of its corporate purposes and the power to issue refunding bonds for the purpose of paying or retiring bonds previously issued by it; and WHEREAS, pursuant to Resolution No. 4149, the Agency issued $5,600,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1981, Series A," herein sometimes referred to as the "Series A Bonds", and pursuant to a concurrent Resolution No. 4150 the Agency issued $5,700,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1981, Series B," which were junior in lien to the Series A Bonds and were referred to therein and are herein referred to as the "Junior Lien Bonds"; and WHEREAS, pursuant to Resolution No. 4537, the Agency issued $11,000,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1983" (the "1983 Refunding Bonds"), for the corporate purposes of the Agency to aid in the financing of a portion of the cost of Southeast Industrial Park Redevelopment Project Area, including the refunding of the then outstanding balance of the Junior Lien Bonds by paying and retiring the same at the maturity thereof, March 1, 1984; and WHEREAS, pursuant to Resolution No. 4774, the Agency issued $2,000,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Bonds, Issue of 1985" (the "1985 Bonds"), to furnish additional financing for the Agency for its corporate purposes related to the Southeast Industrial Park Redevelopment Project Area, which were issued on a parity with the Series A and the 1983 Refunding Bonds; and WHEREAS, pursuant to Resolution No. 5081, as amended, the Agency issued $12,215,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1988", herein referred to as the "1988 Refunding Bonds", for the purpose of refunding the 1983 Refunding Bonds by paying and retiring the same on March 1, 1993, the earliest date prior to the March 1, 2014 maturity thereof on which the 1983 Refunding Bonds may be redeemed, such 1988 Refunding Bonds to rank on a parity with the Series A Bonds and the 1985 Bonds; and - 2 - WHEREAS, pursuant to Resolution No. 5096, as amended, the Agency has issued $1,750,000 principal amount of "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Bonds, Issue of 1988", herein referred to as the "1988 Bonds", for the purpose of financing the costs of construction and acquisition of certain public improvements within the Project Area, such 1988 Bonds to rank on a parity with the Series A Bonds, the 1985 Bonds and the 1988 Refunding Bonds; and WHEREAS, AMBAC Indemnity has issued municipal bond insurance policies insuring the payment when due of the principal and interest on the 1988 Refunding Bonds and the 1988 Bonds as provided in its policies with respect thereto and the Authority and the Trustee hereby recognize the rights of AMBAC Indemnity with respect to the 1988 Refunding Bonds and the 1988 Bonds; and WHEREAS, all requirements of Resolution No. 4149, Resolution No. 4537, Resolution No. 4774, Resolution No. 5081, as amended, and Resolution No. 5096, as amended, have been met so that the 1983 Series F Bonds shall rank on a parity with the Series A Bonds, the 1985 Bonds, the 1988 Refunding Bonds and the 1988 Bonds. WHEREAS, the Agency desires to borrow money for the purpose of financing certain pUblic capital improvements in the Project Area located in the City of San Bernardino; WHEREAS, concurrent with the execution and delivery of this Loan Agreement the Authority has issued its 1990 Series F Bonds for the purpose of providing funds to make certain loans to the Agency with respect to the Park Project Area; and WHEREAS, in order to establish and declare the terms and conditions upon which the Loan with respect to the Project Area is to be made and secured, the Agency and the Authority wish to enter into this Loan Agreement; and WHEREAS, all acts and proceedings required by law necessary to make this Loan Agreement, when executed by the Agency, the Trustee and the Authority, the valid, binding and legal obligation of the Agency, the Trustee and the Authority, and to constitute this Loan Agreement a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Loan Agreement have been in all respects duly authorized; NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties agree as follows: premises and the hereto do hereby - 3 - ARTICLE I DEFINITIONS Section 1.01. Definitions. Unless the context clearly otherwise requires or unless otherwise defined -herein, the capitalized terms in this Loan Agreement shall have the respective meanings which such terms have in Section 1.01 of the Indenture. In addi tion, the following terms defined in this Section 1.01 shall, for all purposes of this Loan Agreement, have the respective meanings herein specified. "Act" means Articles 1 through 4 Section 6500) of Chapter 5, Division 7, Title Code of the State, as in existence on the thereafter amended from time to time. (commencing with 1 of the Government Closing Date or as "AMBAC Indemnity" means AMBAC Indemnity Corporation, a Wisconsin-domiciled stock insurance company. "Authority Debt" Refunding Bonds. means: (a) the Bonds; and (b) any "Bond Insurer" Corporation, a New York successor thereto. means Municipal Bond domiciled insurance Investors Assurance corporation or any "Bond Law" means the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of the Act (commencing with Section 6584), as in existence on the Closing Date or as thereafter amended from time to time. "Bonds" or "1990 Series F Bonds" means the $6,625,000 aggregate principal amount of San Bernardino Joint Powers Financing Authority, Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Redevelopment Project Area), issued and at any time Outstanding under the Indenture. "Bonds of combined issues of Refunding Bonds, the being referred to as the Parity Issues" means the bonds of the the Series A Bonds, the 1985 Bonds, the 1988 1988 Bonds and the Bonds, such issues sometimes the "Parity Issues." "Certificate of the Agency" means a certificate in writing signed by the Chairman, Vice Chairman, Executive Director, Assistant Executive Director, Treasurer or Secretary of the Agency or by any other officer of the Agency duly authorized by the Agency for that purpose. "City" means the City of San Bernardino, a charter city and municipal corporation organized and existing under its charter and the Constitution and laws of the State. - 4 - "Ci ty Counci 1" means the Mayor and Common Counci 1 of the City of San Bernardino, as the legislative body of the City. "County" means the County of San Bernardino, a county duly organized and existing under the Constitution and laws of the State. "Event of Default" means any of the events described in Section 5.01. "Fiscal Year" means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Agency (pursuant to a Certificate of the Agency filed with the Trustee) as its official fiscal year period. "Independent Accountant" means any accountant or firm of such accountants duly licensed or registered or entitled to practice and practicing as such under the laws of the State, appointed by the Agency, and who, or each of whom: (a) is in fact independent and not under the domination of the Agency; (b) does not have any substantial interest, direct or indirect, with the Agency; and (c) is not connected with the Agency as an officer or employee of the Agency, but who may be regularly retained to make reports to the Agency. "Independent Financial Consultant" means any consultant or firm of such consultants appointed by the Agency, and who, or each of whom: (a) is judged by the Agency to have experience in matters relating to the collection of Tax Revenues or otherwise with respect to the financing of redevelopment projects; (b) is in fact independent and not under the domination of the Agency; (c) does not have any substantial interest, direct or indirect, with the Agency, other than as the Underwriter or as the original purchaser of any Authority Debt; and (d) is not connected with the Agency as an officer or employee of the Agency, but who may be regularly retained to make reports to the Agency. "Indenture" dated as of March 1, Trustee, authorizing supplemented. means the 1990 Series F Indenture of Trust 1990, by and between the Authority and the the issuance of the Bonds as amended and "Junior Lien Bonds" means the "Redevelopment Agency of. the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1981, Series B". "Loan Agreement" means this Loan Agreement by and among the Agency, the Trustee and the Authority, as originally entered into or as amended or supplemented pursuant to the provisions hereof. - 5 - "Low and Moderate Income Housing Fund" means the Fund by that name established pursuant to Section 3.05 hereof. "Maximum Annual Debt Service" means the largest of the sums obtained for any Fiscal Year after the computation is made, by totaling the following for each such Fiscal Year: (1) The principal amount of all serial Bonds of the Parity Issues and serial Parity Debt payable in such Fiscal Year; and/or (2) The amount of Minimum Sinking Fund Payments for term Bonds of the Parity Issues and term Parity Debt to be made in such Fiscal Year in accordance with the applicable schedule or schedules of Minimum Sinking Fund Payments; and (3) The interest which would be due during such Fiscal Year on the aggregate principal amount of Bonds of the Parity Issues and Parity Debt which would be outstanding in such Fiscal Year if the Bonds of the Parity Issues and Parity Debt outstanding on the date of such computation were to mature or be redeemed in accordance with the maturity schedule or schedules for the serial Bonds of the Parity Issues and serial Parity Debt and the schedule or schedules of Minimum Sinking Fund Payments for term Bonds of the Pari ty Issues and term Parity Debt. At the time and for the purpose of making such computation, the amount of term Bonds of the Parity Issues and term Parity Debt already retired in advance of the above mentioned schedule or schedules shall be deducted pro rata from the remaining amounts thereon. "Minimum Sinking Fund Payments" means the amount of money to be deposited into the Debt Service Fund to be used to redeem term Bonds and term Parity Debt, at the principal amounts thereof, in the amounts and at the times set forth in the schedule or schedules of Minimum Sinking Fund Payments contained in Section 2.03 (d) of the Indenture or in any supplemental Indenture providing for the issuance of Parity Debt. "Municipal Bond Insurance Policy" means the municipal bond insurance pOlicy issued by the Bond Insurer insuring the payment when due of the principal of and interest on the Bonds as provided therein. "1983 Refunding Bonds" means the $11,000,000 principal amount "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1983," issued pursuant to Resolution No. 4537. - 6 - "1985 Bonds" means the $2,000,000 principal amount "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Bonds, Issue of 1985," issued pursuant to Resolution No. 4774. "1988 Refunding Bonds" means the $12,215,000 principal amount "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1988," issued pursuant to Resolution No. 5081, as amended. "1988 Bonds" means "Redevelopment Agency of the Industrial Park Redevelopment Issue of 1988," issued pursuant the $1,750,000 principal amount City of San Bernardino, Southeast Project Area, Tax Allocation Bonds, to Resolution No. 5096, as amended. "Parity Debt" means any tax allocation bonds (including, wi thout limitation, bonds, notes, interim certificates, debentures or other obligations) issued by the Agency as permitted by Section 4.02 of this Loan Agreement. "Pledged Revenues" means, with respect to any Fiscal Year, all Tax Revenues received by the Agency during such Fiscal Year from the Project Area. Pledged Revenues shall not include (a) Excess Investment Earnings, (b) any amounts required to be paid to any governmental bOdy, agency, authority or officer, under any agreement entered into pursuant to Section 6.08, but only in the event and to the extent such amounts are not subordinated to the obligations of the Agency hereunder and (c) amounts permitted to be treated as surplus pursuant to Section 3.03 hereof. "Project Area" means the designated by the Redevelopment Plan. redevelopment project area "Redevelopment Fund" means the established pursuant to Section 3.04 hereof. Fund by that name "Redevelopment Law" means the Communi ty Redevelopment Law of the State, constituting Part 1 of Division 24 of the Health and Safety Code of the State, and the acts amendatory thereof and supplemental thereto. "Redevelopment Plan" means the "Redevelopment Plan for the Southeast Industrial Park Redevelopment Project Area" adopted on June 21, 1976 by the City Council of the City pursuant to Ordinance No. 3583, including any amendment thereof heretofore or hereafter made pursuant to the Redevelopment Law. "Redevelopment Project" means the undertaking of the Agency of certain redevelopment projects pursuant to the Redevelopment Plan and the Redevelopment Law for the redevelopment of the Project Area. - 7 - "Report" means a document in writing signed by an Independent Financial Consultant and including: (a) a statement that the person or firm making or g1v1ng such Report has read the pertinent provisions of this Loan Agreement to which such Report relates i (b) a brief statement as to the nature and scope of the examination or investigation upon which the Report is based; and (c) a statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is ~ecessary to enable said consultant to express an informed opinion with respect to the subject matter referred to in the Report. "Request of the Agency" means a request in writing signed by the Chairman, Vice Chairman, Executive Director, Assistant Executive Director, Treasurer or Secretary of the Agency or by any other officer of the Agency duly authorized by the Agency for that purpose. "Reserve Fund" means the fund by that name established and held by the Trustee pursuant to Section 3.04 of the Indenture. "Reserve Requirement" means, with respect to the Bonds, an amount equal to Maximum Annual Debt Service on the Bonds in any Bond Year; provided, however, that at no time shall the Reserve Requirement exceed an amount equal to the lesser of (i) ten percent (10%) of the net proceeds available to the Authority from the sale of the Bonds, (ii) Maximum Annual Debt Service on the Bonds, or (iii) one hundred twenty-five percent (125%) of average annual debt service on the Bonds determined with respect to debt service on the Bonds Outstanding on the date of deposit of amounts in the Reserve Fund. "Series A Bonds" means the $5,600,000 "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Project Area, Tax Allocation Refunding Bonds, Issue of 1981, Series A." "Southeast Industrial Park Redevelopment Project Area" means the territory within the Project Area described and defined in the Redevelopment Plan approved and adopted on June 21, 1976 by the City by its Ordinance No. 3583. "Special Fund" means the Fund established and held hereunder by the Trustee pursuant to Section 3.02 hereof. "Subordinate Debt" means any loans, advances or indebtedness issued or incurred by the Agency, pursuant to and in accordance with the provisions of Section 4.03, which are either: (a) payable from, but not secured by a pledge or or lien upon, any Pledged Revenues; or (b) secured by a pledge of or lien upon the Pledged Revenues which is subordinate to the pledge of and lien upon the Pledged Revenues hereunder for the security of the Loan. - 8 - "Tax Revenue Certificate" means a Certificate of the Agency identifying the amount of all Tax Revenues received or to be received by the Agency in the then current Fiscal Year, based on assessed valuation of property in the Project Area as evidenced in a written document from an appropriate official of the County. "Tax Revenues" means moneys allocated or paid to the Agency derived from each of the following sources: (a) that portion of taxes levied upon assessable property within the Project Area allocated to the Agency pursuant to Article 6 of Chapter 6 of the Redevelopment Law and Section 16 of Article XVI of the Constitution of the State of California; and (b) reimbursements, subventions, including payments to the Agency with respect to personal property within the Project Area pursuant to Section 16110, .e..t.s..e..g., of the Government Code of the State of California, or other payments made by the State with respect to any property taxes that would otherwise be due on real or personal property but for an exemption of such property from such taxes. Section 1.02. Rules of Construction. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Loan Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import refer to this Loan Agreement as a whole and not to any particular Article, Section or subdivision hereof. - 9 - ARTICLE II THE LOAN; REPAYMENT; APPLICATION OF PROCEEDS Section 2.01. Authorization. The Authority hereby agrees to lend to the Agency the aggregate principal amount of Six Million Six Hundred Twenty-Five Thousand Dollars ($6,625,000) under and subj ect to the terms of this Loan Agreement, the Bond Law and the Redevelopment Law. This Loan Agreement constitutes a continuing agreement with the Authority to secure the full and final payment of the Loan, subject to the covenants, agreements, provisions and conditions herein contained. The proceeds of the Loan shall be disbursed to the Agency and shall be applied by the Agency as set forth in Section 2.04. Section 2.02. Repavment of Loan. The Loan shall be payable in installments of principal, interest and premium which shall be due and payable by the Agency on each Redemption Date and Interest Payment Date in an amount equal to the aggregate amount of the principal of and interest and premium (if any) coming due and payable on the outstanding Authority Debt on such Redemption Date or Interest Payment Date. Principal of and interest and premium (if any) on the Loan shall be payable by the Agency to the Trustee, as assignee of the Authority under the Indenture, in immediately available funds which constitute lawful money of the United States of America. Payment of such principal and interest shall be secured, and amounts for the payment thereof shall be deposited with the Trustee in the amounts and at the times, as set forth in Article III herein. Section 2.03. Optional Prepavment. The Agency shall have the right to prepay the Loan on any date on which the Authority Debt is subject to optional redemption pursuant to the Indenture, by depositing with the Trustee an amount sufficient to pay the principal of and interest and premium (if any) on the outstanding Authori ty Debt to be so redeemed pursuant to the Indenture. The Authority agrees that upon payment by the Agency to the Trustee of such amount, the Authority shall take or cause to be taken any and all steps required under the Indenture to redeem such outstanding Authority Debt on the redemption date designated pursuant to a Request of the Agency filed with the Authority and the Trustee; provided, however, that such redemption date shall be a date for which notice of redemption of Authority Debt has been timely given pursuant to the Indenture. Section 2.04. Application of Loan Proceeds. the Loan, on the Closing Date the Authority shall disbursed the proceeds of sale of the Bonds as Section 3.02 of the Indenture. For and as cause to be provided in - 10 - ARTICLE In SECURITY FOR LOAN; APPLICATION OF FUNDS Section 3.01. Pledae of Pledaed Revenues. The Loan shall be equally secured by a first pledge of and lien on all of the Pledged Revenues. The Loan shall be additionally secured by a first and exclusive pledge of and lien upon all of the moneys in the Reserve Fund. The Pledged Revenues are hereby allocated in their entirety to the payment of the principal of and interest on the Loan as provided herein. Except for the Pledged Revenues, the Reserve Fund and the Loan Fund, no funds or properties of the Agency shall be pledged to, or otherwise liable for, the payment of principal of or interest or premium (if any) on the Loan. Section 3.02. Special Fund: Deposit of Pledaed Revenues. In accordance with Section 3.03 of the Indenture, there is established a special fund to be known as the "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Special Fund", which shall be held by the Trustee in trust for the benefit of the owners of all outstanding Authority Debt. The Agency shall deposit all of the Pledged Revenues received in any Fiscal Year in the Special Fund, until such time (if any) during such Fiscal Year as the amounts on deposit in the Special Fund may be withdrawn from the Special Fund and transferred to the Agency in accordance with Section 4.02 (e) of the Indenture. Any Pledged Revenues so received during such Fiscal Year shall be released from the pledge and lien hereunder and may be used for any lawful purposes of the Agency. Prior to the payment in full of the principal of and interest and prepayment premium (if any) on the Loan and the payment in full of all other amounts payable hereunder, the Agency shall not have any beneficial right or interest in the moneys on deposit in the Special Fund, except as provided in this Loan Agreement, and such moneys shall be used and applied as set forth herein. Section 3.03. Transfer of Pledaed Revenues From Special ~. In the event that for any reason whatsoever any amounts shall remain on deposit in the Special Fund on any March 2 after the Trustee has made all of the transfers theretofore required to be made pursuant to clauses (a), (b), (c) and (d) of Section 4.02 of the Indenture amounts and, after payments of amounts due the Trustee pursuant to Section 4.10 hereof, Trustee Shall transfer such amounts to the Agency. The Agency shall use eighty percent (80%) of such amounts for any lawful purposes of the Agency and twenty per:cent (20%) of such amounts for deposit to the low and moderate income housing fund created by the Agency in connection with the Proj ect Area. Section 3.04. Redevelopment Fund. There is created with the Agency a special trust fund called the "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Redevelopment Fund". The moneys set aside and placed in the Redevelopment Fund - 11 - shall remain therein until from time to time expended solely for the purpose of financing a portion of the cost of the Redevelopment Projects and other costs related thereto, and also including in such costs: (1) The payment, in any year during which the Agency owns any property in the Project Area, to any city, county, city and county, district or other public corporation which would have levied a tax upon such property had it not been exempt, an amount of money in lieu of taxes as authorized by Section 33401 of the Law i and (2) The cost of any lawful purposes in connection with the applicable Redevelopment Project, including, without limitation, those purposes authorized by Section 33445 of the Redevelopment Law; and (3) The necessary expenses in connection with the issuance and sale of the Bonds and fees of the Trustee. If any sum remains in the above-described accounts of the Redevelopment Fund after the full accomplishment of the object and purposes for which the Bonds were issued, said sum shall be transferred to the Special Fund. All of the above uses as set forth in this Section 3.04 consti tute a "redevelopment acti vi ty" as such term is defined in Section 33678 of the Redevelopment Law. Section 3.05. Low and Moderate Income Housina Fund. There is hereby created with the Agency a special trust fund called the "Redevelopment Agency of the City of San Bernardino, Southeast Industrial Park Low and Moderate Income Housing Fund". The moneys set aside and placed in the Low and Moderate Income Housing Fund shall remain therein until from time to time expended by the Agency sOlely for the purposes and in accordance with the provisions of Section 33334.2 and Section 33334.3 of the Redevelopment Law. In addition to the above, the moneys in the Low and Moderate Income Housing Fund may be used in the proportionate amounts set forth in an Order of the Agency for (i) transfer of investment earnings to the Special Fund; (ii) payment of costs of issuance; and (iii) transfer to the Redemption Fund, all as provided in the Indenture. If any sum remains in the Low and Moderate Income Housing Fund after the full accomplishment of the object and purposes for which the Bonds were issued, said sum shall be transferred to the Special Fund. Section 3.06. Investment of Monevs: Valuation of Investments. All moneys in the Special Fund, the Redevelopment Fund and the Low and Moderate Income Housing Fund shall be invested by the Agency. All moneys in the Reserve Fund shall be invested by the - 12 - Trustee solely in Permitted Investments pursuant to the written direction of the Agency given to the Trustee 1n advance of the making of such investments (and promptly confirmed in writing as to any such direction given orally); provided, however, that in the absence of any such direction from the Agency, the Trustee shall invest any such moneys solely in Permitted Investments set forth in (f) of the definition thereof. Obligations purchased as an investment of moneys in any fund or account established hereunder shall be credited to and deemed to be part of such fund. The Trustee may commingle any amounts in any of the funds held hereunder wi th any other amounts held by the Trustee for purposes of making any investment at the direction of the Agency, provided that the Trustee shall maintain separate accounting procedures for the investment of all funds held hereunder. All interest, prof i ts and other income received f rom the investment of moneys in any fund established hereunder shall be deposi ted in such fund. Notwithstanding anything to the contrary contained in this paragraph, an amount of interest received with respect to any investment equal to the amount of accrued interest, if any, paid as part of the purchase price of such investment shall be credited to the fund from which such accrued interest was paid. For the purpose of determining the amount in any fund established hereunder, the value of Permitted Investments credited to such fund shall be calculated at the lesser of (a) the original cost thereof (excluding brokerage commissions and accrued interest, if any), or (b) the par amount thereof. - 13 - - ARTICLE IV OTHER COVENANTS OF THE AGENCY Section 4.01. Punctual Pavrnent. The Agency will punctually payor cause to be paid the principal of and interest on the Loan together with any prepayment premiums thereon in strict conformity with the terms of this Loan Agreement, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Loan Agreement. Section 4.02. Limitation on Superior or Pari tv Debt. The Agency may issue or incur debt on a parity with the Loan in such principal amount as shall be determined by the Agency. The Agency may issue and deliver any Parity Debt subject to the following specific conditions which are made conditions precedent to the issuance and delivery of such Parity Debt issued in accordance with this Loan Agreement: (a) No event of default shall have occurred and be continuing, and the Agency shall otherwise be in compliance with all covenants set forth in this Loan Agreement. (b) The Tax Revenues received or to be received for the then current Fiscal Year based on the most recent taxable valuation of property in the applicable Project Area as evidenced in a written document from an appropriate official of the County, exclusive of State subventions and taxes levied to pay outstanding bonded indebtedness, shall be at least equal to one hundred twenty-five percent (125%) of Maximum Annual Debt Service in connection with the Parity Issues and Parity Debt which will be Outstanding immediately following the issuance of such Parity Debt and that the Agency is entitled under the Law and the Redevelopment Plan to receive taxes under Section 33670. (c) The Tax Revenues received by the Agency for the current Fiscal Year during which the calculation is made or to be received by the Agency for the Fiscal Year following the date on which the calculation is made, based upon the most recent assessed valuation of taxable property in the Project Area and a presumed tax rate of one percent are at least equal to 1.25 times the Maximum Annual Debt Service and maximum annual debt service on any loans, advances or indebtedness payable from Tax Revenues pursuant to Section 33670 of the Law, which wi 11 be outstanding following the issuance of such Parity Debt. For purposes of this calculation, monies received from business inventory subventions, home owner exemptions payments and supplemental revenues shall be excluded. Tax Revenues to be received shall be further reduced by the five year average of property tax delinquencies to date (excluding interest and penalties thereon) in the Project Area and by the amount to be received by any existing pass-through agreement. - 14 - ... (d) The Agency shall deliver to the Trustee and the Bond Insurer a Certificate of the Agency certifying that the condi tions precedent to the issuance of such Parity Debt set forth in subsections (a), (b) and (c) above have been satisfied. Section 4.03. Limitations on Issuance of Subordinate Debt. In addition to the Loan, the Agency may issue or incur Subordinate Debt in accordance with this Section 4.03. The Agency may issue or incur Subordinate Debt in such principal amount as shall be determined by the Agency, subject to the following specific conditions precedent: (a) The Agency shall be in compliance with all covenants set forth in this Loan Agreement and any loan agreements to which the Agency is a party with respect to any Parity Debt. (b) The Agency shall certify that the issuance of such Subordinate Debt shall not cause the aggregate amount of the principal of and interest on the Loan to exceed the maximum amount of Tax Revenues permitted under the Redevelopment Plan to be allocated and paid to the Agency following the issuance of such Subordinate Debt. (c) The Agency shall deliver to the Trustee a written certificate of the Agency certifying that the condi tions precedent to the issuance of such Subordinate Debt set forth in subsections (a) and (b) of this Section 4.03 have been satisfied. Section 4.04. Payment of Claims. The Agency will pay and discharge, or cause to be paid and discharged, any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the properties owned by the Agency or upon the Tax Revenues or any part thereof, or upon any funds in the hands of the Trustee, or which might impai r the security of the Loan. Nothing herein contained shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of said claims. Section 4.05. Books and Accounts: Financial Statement. The Agency will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Agency and the City, in which complete and correct entries shall be made of all transactions relating to the Redevelopment Projects and the Tax Revenues. Such books of record and accounts shall at all times during business hours be subject, upon prior written request, to the reasonable inspection of the Authority, the Trustee and the owners of any outstanding Authori ty Debt, or their representatives authorized in writing. The Agency wi 11 cause to be prepared and fi led with the Trustee annually, within one hundred and eighty (180) days after the close of each Fiscal Year so long as any of the Authority Debt is - 15 - outstanding, complete audi ted financial statements. wi th respect to such Fiscal Year showing the Tax Revenues, all d1sbursements from the Redevelopment Fund and the financial condition of the Redevelopment Projects, including the balances in all funds and accounts relating to the Redevelopment Projects, as of the end of such Fiscal Year. The Agency will furnish a copy of such statements, upon reasonable request, to the owner of any Authority Debt. Section 4.06. Protection of Security and Riahts. The Agency wi II preserve and protect the security of the Loan and the rights of the Trustee and the owners of outstanding Authority Debt with respect to the Loan. From and after the Closing Date, the Loan shall be incontestable by the Agency. Section 4.07. Payments of Taxes and Other Charaes. The Agency will pay and discharge, or cause to be. paid and discharged, all taxes, service charges, assessments and other governmental charges which may hereafter be lawfully imposed upon the Agency or the properties then owned by the Agency in the Proj ect Area, when the same shall become due. Nothing herein contained shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of said taxes, assessments or charges. The Agency will duly observe and conform with all valid requirements of any governmental authority relative to the Redevelopment Projects or any part thereof. Section 4.08. Disposition of Property. The Agency will not participate in the disposition of any land or real property in the Project Area to anyone which will result in such property becoming exempt from taxation because of public ownership or use or otherwise (except property dedicated for public right-of-way and except property planned for public ownership or use by the Redevelopment Plan in effect on the date of this Loan Agreement) so that such disposition shall, when taken together with other such dispositions, aggregate more than ten percent (10%) of the land area in the Project Area unless such disposition is permitted as hereinafter provided in this Section 4.08. If the Agency proposes to participate in such a disposition, it shall thereupon appoint an Independent Financial Consultant to report on the effect of said proposed disposition. If the Report of the Independent Financial Consultant concludes that the security of the Loan or the rights of the Authority, the owners of Authority Debt and the Trustee hereunder will not be materially impaired by said proposed disposi tion, the Agency may thereafter make such disposition. If said Report concludes that such security will be materially impaired by said proposed disposition, the Agency shall disapprove said proposed disposition. Section 4.09. Maintenance of Tax Revenues. The Agency shall comply with all requirements of the Redevelopment Law to insure the allocation and payment to it of the Tax Revenues, inClUding without limitation the timely filing of any necessary - 16 - statements of indebtedness with appropriate officials of the County and (in the case of supplemental revenues and other amounts payable by the State) appropriate officials of the State, and shall forward information copies of each such filing to the Trustee. The Agency shall not enter into any agreement with the County or any other governmental unit, which would have the effect of -reducing the amount of Pledged Revenues available to the Agency for payment of the Loan, unless the Agency shall first obtain the Report of an Independent Financial Consultant stating the amount of Pledged Revenues estimated to be received in the current Fiscal Year and in each of the three (3) succeeding Fiscal Years shall be at least equal to one hundred twenty-five percent (125%) of Average Annual Debt Service. Section 4.10. Payment of Expenses; Indemnification. The Agency shall pay to the Trustee from time to time all compensation for all services rendered under this Loan Agreement and the Indenture, including but not limited to all reasonable expenses, charges, legal and consulting fees and other disbursements and those of its attorneys, agents and employees, incurred in and about the performance of its powers and duties hereunder and thereunder. Upon the occurrence of an Event of Default, the Trustee shall have a first lien on the Pledged Revenues and the Reserve Fund to secure the payment to the Trustee of all fees, costs and expenses, including reasonable compensation to its experts, attorneys and counsel incurred in declaring such Event of Default and in exercising the rights and remedies set forth in Article V. The Agency further covenants and agrees to indemnify and save the Trustee and its officers, directors, agents and employees, harmless against any losses, expenses and liabi li ties which it may incur arising out of or in the exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability, but excluding any and all losses, expenses and liabilities which are due to the negligence or intentional misconduct of the Trustee, its officers, directors, agents or employees. The obligations of the Agency under this paragraph shall survive the resignation or removal of the Trustee under the Indenture, this Loan Agreement and payment of the Loan and the discharge of this Loan Agreement. Section 4.11. Compliance With Arbitraae Reauirements; PaYment of Rebatable Amounts. The Agency shall not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the Loan which if such action had been reasonably expected to have been takenj or had been deliberately and intentionally taken, on the Closing Date would have caused any of the Bonds to be "arbitrage bonds" within the meaning of Section l48(a) of the Tax Code or to be "private activity bonds" within the meaning of Section 141 of the Tax Code. The Agency agrees to furnish all information to, and cooperate fully with, the Authority, the Trustee and their respective officers, employees, agents and attorneys, in order to - 17 - assure compliance with the prOV1S1ons of Section 5.07 of the Indenture. In the event that the Authority shall determine, pursuant to Section 5.07 of the Indenture, that any amounts are due and payable to the United States of America thereunder and that nei ther the Authori ty nor the Trustee has on deposit an amount of available moneys (excluding moneys on deposit in the Interest Account, the Principal Account or the Reserve Fund and excluding any other moneys required to pay the principal of or interest or redemption premium, if any, on the outstanding Authority Debt) to make such payment, the Authority shall promptly notify the Agency of such fact. Upon receipt of any such notice, the Agency shall promptly pay to the Trustee from available Pledged Revenues or any other source of legally available funds, for deposit into the Rebate Account, the sum of (a) one hundred percent (100%) of the amounts determined by the Authority to be due and payable to the United States of America as a result of the investment of amounts on deposi t in any fund or account established hereunder, plus (b) all other amounts due and payable to the United States of America. Section 4.12. Redevelopment of the Southeast Industrial Park Proiect Area. The Agency shall ensure that all activities undertaken by the Agency with respect to the redevelopment of the Project Area are undertaken and accomplished in conformity with all applicable requirements of the applicable Redevelopment Plan and the Redevelopment Law. Section 4.13. Deposit of Portion of Surplus in proiect Area Low and Moderate Income Housina Fund. As provided in Section 3.03(c) of this Loan Agreement, the Agency shall use twenty percent (20%) of all surplus amounts for deposit to the low and moderate income housing fund created by the Agency in connection with the Project Area. Section 4.14. Further Assurances. The Agency will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Loan Agreement and for the better assuring and confirming unto the Trustee, the Authority and the owners of the Authority Debt of the rights and benefits provided in this Loan Agreement. - 18 - ARTICLE V EVENTS OF DEFAULT AND REMEDIES Section 5.01. Events of Default and Acceleration of Maturities. The fOllowing events shall constitute Events of Default hereunder. (a) Failure by the Agency to pay the principal of or interest or prepayment premium (if any) on the Loan when and as the same shall become due and payable. (b) Failure by the Agency to observe and perform any of the covenants, agreements or conditions on its part contained in this Loan Agreement, other than as referred to in the preceding clause (a), for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied has been given to the Agency by the Trustee; provided, however, that if in the reasonable opinion of the Agency the failure stated in such notice can be corrected, but not within such sixty (60) day period, the Trustee shall not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the Agency within such sixty (60) days period and diligently pursued until such failure is corrected. (c) The filing by the Agency of 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 wi thout 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. If an Event of Default has occurred and is continuing, the Trustee may, and at the written direction of the Owners of a majority in aggregate principal amount of the Outstanding Bonds the Trustee shall, (a) declare the principal of the Loan, together with the accrued interest on all unpaid installments thereof, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in this Loan Agreement to the contrary notwithstanding, and (b) exercise any other remedies available to the Trustee in law or at equity. Immediately upon becoming aware of the occurrence of an Event of Default, the Trustee shall give notice of such Event of Default to the Agency by telephone, telecopier or other telecommunication device, promptly confirmed in writing. This provision, however, is - 19 - sUbject to the condition that if, at any time after the principal of the Loan shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Agency shall deposit with the Trustee a sum sufficient to pay all installments of principal of the Loan matured prior to such declaration and all accrued interest thereon, with interest on such overdue installments of principal and interest at the net effective rate then borne by the Outstanding Bonds, and the reasonable expenses of the Trustee (including but not limited to attorneys fees), and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Loan due and payable solely by reason of such declaration) shall have been made good or cured to the satisfa~tion 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 a majority in aggregate principal amount of the Outstanding Bonds may, by written notice to the Trustee and the Agency, rescind and annual such declaration and its consequences. However, no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. Section 5.02. Application of Funds Upon Default. All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the prov1s1ons of this Loan Agreement, or otherwise held by the Trustee upon the occurrence of an Event of Default, shall be applied by the Trustee in the following order: Fi rst, to the payment of the costs and expenses of the Trustee in declaring such Event of Default and in carrying out the provisions of this Article V, including reasonable compensation to its agents, attorneys and counsel; and Second, to the payment of the whole amount of interest on and principal of the Loan then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds; provided, however, that in the event such amounts shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order of priority: (a) to the payment of all installments of interest on the Loan then due and unpaid, on a pro rate basis in the event that the available amounts are insufficient to pay all such interest in full. (b) to the payment of principal of all installments of the Loan then due and unpaid, other than principal having come due and payable solely by - 20 - reason of acceleration pursuant to Section 5.01, on a pro rata basis in the event that the available amounts are insufficient to pay all such principal in full. (c) to the payment of principal of the Loan then due and unpaid and having come due and payable solely by reason of acceleration pursuant to Section 5.01, on a pro rata basis in the event that the available amounts are insufficient to pay all such principal in full, and (d) to the payment of interest on overdue installments of principal and interest, on a pro rata basis in the event that the available amounts are insufficient to pay all such interest in full. Section 5.03. No Waiver. Nothing in this Article V or in any other provision of this Loan Agreement, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay from the Pledged Revenues and other amounts pledged hereunder, the principal of and interest and premium (if any) on the Loan to the Trustee as herein provided, or affect or impair the right of action, which is also absolute and unconditional, of the Trustee to institute sui t to enforce such payment by vi rtue of the contract embodied in this Loan Agreement. A waiver of any default by the Trustee shall not affect any subsequent default or impair any rights or remedies on the subsequent default. No delay or omission of the Trustee 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 Trustee by the Redevelopment Law or by this Article V may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee. If a suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned or determined adversely to the Trustee, the Agency and the Trustee shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. Section 5.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee 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 wi thout regard to any other remedy conferred by the Redevelopment Law or any other law. - 21 - ARTICLE VI MISCELLANEOUS Section 6.01. Benefits Limited to Parties. Nothing in this Loan Agreement, expressed or implied, is intended to give to any person other than the Agency, the Trustee and the Authority, any right, remedy or claim under or by reason of this Loan Agreement. All covenants, stipulations, promises, or agreements in this Loan Agreement contained by and on behalf of the Agency shall be for the sole and exclusive benefit of the Authority and of the Trustee acting as trustee for the benefit of the Owners of the Bonds. Section 6.02. Successor is Deemed Included in All References to Predecessor. Whenever in this Loan Agreement either the Agency, the Authority or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Loan Agreement contained by or on behalf of the Agency, the Authority or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 6.03. Discharae of Loan Aareement. If the Agency shall pay and discharge the entire indebtedness on the Loan in any one or more of the following ways: (a) by well and truly paying or causing to be paid the principal of and interest and prepayment premiums (if any) on the Loan, as and when the same become due and payable; (b) by irrevocably depositing with the Trustee, in trust, at or before maturity, cash in an amount which, together with the available amounts then on deposit in any of the funds and accounts established pursuant to the Indenture or this Loan Agreement, is fully sufficient to pay all principal of and interest and prepayment premiums (if any) on the Loan; or (c) by irrevocably depositing with the Trustee or any other fiduciary, in trust, Federal Securities in such amount as an Independent Certified Public Accountant shall determine will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established pursuant to the Indenture or pursuant to this Loan Agreement, be fully sufficient to pay and discharge the indebtedness on the Loan (including all principal, interest and prepayment premiums) at or before maturity; then, at the election of the Agency but only if all other amounts then due and payable hereunder shall have been paid or provision for their payment made, the pledge of a lien upon the Pledged Revenues - 22 - and other funds provided for in this Loan Agreement and all other Obligations of the Trustee, the Authority and the Agency under this Loan Agreement with respect to the Loan shall cease and terminate, except only the obligation of the Agency to payor cause to be paid to the Trustee, from the amounts so deposited with the Trustee or such other fiduciary, all sums due with respect to the Loan and all expenses and costs of the Trustee. Notice of such election shall be filed with the Authority and the Trustee. Any funds thereafter held by the Trustee hereunder, which are not required for said purpose, shall be paid over to the Agency. Section 6.04. Amendment. This Loan Agreement may be amended by the parties hereto but only (a) with any effect whatsoever upon the issuance of any Refunding Bonds, or (b) otherwise, only with the effect and under the circumstances set forth in the Indenture. The Authority and the Trustee covenant that the Indenture shall not be amended without the prior written consent of the Agency. Section 6.05. Waiver of Personal Liability. No member, officer, agent or employee of the Agency shall be individually or personally liable for the payment of the principal of or interest on the Loan; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. Section 6.06. Payment of Business Days. Whenever in this Loan Agreement any amount is required to be paid on a day which is not a Business Day, such payment shall be required to be made on the Business Day immediately following such day. Section 6.07. Notices. All written notices to be given under this Loan Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective 48 hours after deposit in the United States mail, postage prepaid or, in the case of any notice to the Trustee or in the case of personal delivery to any person, upon actual receipt at the address set forth below: If to the Authority: San Bernardino Joint Powers Financing Authority 300 North "D" Street San Bernardino, California 92418 Attention: Chairman If to the Agency: Redevelopment Agency of the City of San Bernardino 300 North "D" Street San Bernardino, California 92418 Attention: Executive Director - 23 - If to the Trustee: Security Pacific National Bank 333 South Beaudry Avenue 24th Floor Los Angeles, California 90017 Attention: Corporate Trust Division W24-30 Reference: 11-7-25160 Section 6.08. Partial Invaliditv. If any Section, paragraph, sentence, clause or phrase of this Loan Agreement shall for any reason be held illegal, invalid or enforceable, such holding shall not affect the validity of the remaining portions of this Loan Agreement. The Agency hereby declares that it would have adopted this Loan Agreement and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the Loan irrespective of the fact that anyone or more Sections, paragraphs, sentences, clauses, or phrases of this Loan Agreement may be held illegal, invalid or unenforceable. Section 6.09. Governina Law. This Agreement shall be construed and governed in accordance with the laws of the State. - 24 - IT WITNESS WHEREOF, the Redevelopment Agency of the City of San Bernardino, Security Pacific National Bank and the San Bernardino Joint Powers Authority, have caused this Loan Agreement to be signed by their respective officers, all as of the day and year first above written. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Chairman ATTEST: By: Secretary APP~ BY: ~ ./ Agency C nsel SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY By: Chairman ATTEST: By: Secretary AP~~ BY: _ I Authorit Counsel- SECURITY PACIFIC NATIONAL BANK, as Trustee By: Authorized Officer 3309S SBEOOl03-l/3346S/dc 01122/90 1020 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING THE ISSUANCE OF CERTAIN TAX ALLOCATION BONDS, 1990 SERIES F (SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA) OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AND THE BORROWING BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OF THE PROCEEDS THEREFROM PURSUANT TO A RELATED LOAN AGREEMENT WHEREAS, the Redevelopment Agency of the Ci ty of San Bernardino (the "Agency") is a redevelopment agency (a public body, corporate and politic) duly created and existing pursuant to the Community Redevelopment Law (Part 1 of Division 24, commencing with Section 33000) of the Health and Safety Code of the State of California (the "Community Redevelopment Law"); and WHEREAS, the City of San Bernardino (the "City") and the Redevelopment Agency of the City of San Bernardino ( the "Agency") have heretofore entered into a Joint Exercise of Powers Agreement establishing the San Bernardino Joint Powers Financing Authority (the "Authority") for the purpose of issuing its bonds to be used to make loans to any of its members to finance public capital improvements; and -1- WHEREAS, the Authority proposes at this time to issue its Tax Allocation Bonds, 1990 Series F (Southeast Industrial Park Redevelopment Project Area) in an aggregate principal amount approximately equal to $6,700,000 (the "Bonds") for the purpose of providing funds to make a certain loan (the "Loan") to the Agency in an aggregate principal amount approximately equal to $6,700,000 to finance certain public capital improvements of the Agency in the redevelopment of the Southeast Industrial Park Redevelopment Project Area located within the City of San Bernardino, California (the "Project Area"); and WHEREAS, the Loan will be made by the Authority to the Agency pursuant to a certain Loan Agreement with respect to the Project Area dated as of March 1, 1990 (the "Loan Agreement"), by and among the Agency, the Authority and Security Pacific National Bank, as trustee (the "Trustee"), a form of which is presently on file with the Secretary of the Agency; and WHEREAS, pursuant to the Community Redevelopment Law, the Agency has the power and authority to borrow moneys for redevelopment purposes; and WHEREAS, pursuant to the Community Redevelopment Law, the Agency now desires to borrow certain amounts under the Loan Agreement for the purpose of paying the costs of acquisition, construction and installation of its various redevelopment projects; and -2- - --- WHEREAS, the Mayor and Common Council have duly considered such transactions and documentation and wish at this time to approve said transactions and documentation in the public interests of the City. NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Approval of the Authori tv Bonds. The Mayor and Common Council hereby approve the issuance by the Authority of its Bonds in an aggregate principal amount approximately equal to $6,700,000 for the purpose of providing funds to make a certain loan (the "Loan") to the Agency in an aggregate principal amount approximately equal to $6,700,000 to finance certain public capital improvement projects and certain other costs related thereto within or benefitting the Project Area. The Mayor and Common Council hereby further approve the Loan to the Agency and the borrowing of funds by the Agency for the purpose of financing certain redevelopment projects within the Southeast Industrial Park Redevelopment Project Area pursuant to the terms of the Loan Agreement to be entered into by the Agency for the Project Area. -3- - - -- Section 2. Official Actions. The Mayor and Common Council, ~he City Clerk, and any and all other officers of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and to take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, warrants and other documents which they, or any of them, may deem necessary or advisable in connection with the execution and delivery of the Bonds and the borrowing by the Agency of the proceeds derived therefrom pursuant to the Loan Agreement and any related closing documents, as required, and the consummation of the transactions described herein and therein. -4- - Section 3. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. I HEREBY CERTIFY that the foregoing adopted by the Mayor and Common Council San Bernardino at a held on the day of the following vote, to wit: resolution of the meeting AYES: Council Members was duly Ci ty of thereof, 1990 , by NAYS: ABSENT: City Clerk day of The foregoing resolution is hereby approved this , 1990. Mayor of the City of San Bernardino Approved as to form and legal content: BY~) City At ney -5- STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, SHAUNA CLARK, City Clerk in San Bernardino, DO HEREBY CERTIFY that, the copy of San Bernardino City Resolution No. true and correct copy of that now on file in this office. and for the foregoing and is City of attached a full, IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Bernardino this day of , 1990. City Clerk /3310S -6-