HomeMy WebLinkAboutReso 57-1997 RESOLUTION NO. 57-97
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOUTH
SAN FRANCISCO APPROVING THE ISSUANCE BY THE
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
OF NOT TO EXCEED $13,000,000 PRINCIPAL AMOUNT OF BONDS
RELATING TO THE DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT
WHEREAS, the Redevelopment Agency of the City of South San
Francisco (the "Agency") has authorized the issuance of its 1997
Tax Allocation Bonds in an aggregate principal amount of not to
exceed $13,000,000 (the "Bonds") for the purpose of providing
funds to finance redevelopment activities in the Downtown/Central
Redevelopment Project; and
WHEREAS, in accordance with the requirements of Section 33640
of the California Health and Safety Code, the City Council wishes
at this time to approve the issuance of the Bonds by the Agency;
WHEREAS, the City and the Agency have previously entered into
a Loan and Repayment Agreement (Downtown/Central Redevelopment
Project) dated April 26, 1989 (the "City Loan Agreement") pursuant
to which the City has provided certain financial assistance to the
Agency with respect to the Redevelopment Project and the Agency
has agreed to repay such amounts from tax increment funds as such
funds become available;
WHEREAS, the Agency's obligations under the City Loan
Agreement are subordinate to the Bonds;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of South San Francisco that the issuance of the Bonds by the
Agency be and is hereby approved.
I hereby certify that the foregoing Resolution was regularly
introduced and adopted by the City Council of the City of South
San Francisco at a regular meeting held on the 28th
day of May , 1997 by the following vote:
AYES:
£n,Jnr. ilmpmh~r~ ,lamm.~ I . Datyman, Eugene R. Mullin, Robert Yee
~nd ~4aynr ,]n~pph A. F~rnpkm~
NOES: None
ABSTAIN: Councilmember John R. Penna
ABSENT: None
City Clerk ~/
29071-07 JHHW:DJO:bff 5/16/97
EXHIBIT TO RESOLUTION,NO. 57-97
Marked to Show Changes
INDENTURE OF TRUST
Dated as of June 1, 1997
by and between the
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
and
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION,
as Trustee
Relatingto
$
Redevelopment Agency of the City of South San Francisco
Downtown/Central Redevelopment Project
1997 Tax Allocation Bonds
Global Change:
May to June
TABLE OF CONTENTS
Page
Section 1.01.
Section 1.02.
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 2.11.
Section 3.01.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
Section 3.06.
Section 3.07.
Section 4.01.
Section 4.02.
Section 4.03.
Section 4.04.
Section 5.01.
Section 5.02.
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Definitions ........................................................................................................... 2
Rules of Construction ............................................................................................ 9
ARTICLE II
AUTHORIZATION AND TERMS OF 1997 BONDS
Authorization and Purpose of 1997 Bonds ............................................................ 10
Terms of the 1997 Bonds ..................................................................................... 10
Redemption of 1997 Bonds .................................................................................. 11
Book-Entry System ............................................................................................. 13
Form of 1997 Bonds ............................................................................................ 14
Execution and Authentication of 1997 Bonds ........................................................ 14
Transfer of 1997 Bonds ........................................................................................ 15
Exchange of 1997 Bonds ...................................................................................... 15
Registration Books .............................................................................................. 15
Temporary Bonds ............................................................................................... 15
1997 Bonds Mutilated, Lost, Destroyed or Stolen .................................................. 16
ARTICLE III
DEPOSIT AND APPLICATION OF PROCEEDS OF 1997
BONDS; ISSUANCE OF PARITY DEBT
Issuance of 1997 Bonds ........................................................................................ 17
Deposit and Application of Proceeds .................................................................... 17
Costs of Issuance Fund ........................................................................................ 17
Redevelopment Fund ......................................................................................... 17
Issuance of Parity Debt ....................................................................................... 18
Issuance of Subordinate Debt .............................................................................. 18
Validity of Bonds ................................................................................................ 18
ARTICLE IV
SECURITY OF BONDS; FLOW OF FUNDS; INVESTMENTS
Security of Bonds; Equal Security ........................................................................19
Special Fund; Deposit of Tax Revenues ............................................................... 19
Debt Service Fund; Transfer of Amounts to Trustee ............................................. 19
Investment of Moneys in Funds .......................................................................... 21
ARTICLE V
OTHER COVENANTS OF THE AGENCY
Punctual Payment .............................................................................................. 23
Limitation on Additional Indebtedness; Compliance With Plan Limitations ........... 23
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 5.11.
Section 5.12.
Section 5.13.
Section 5.14.
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.
Section 7.01.
Section 7.02.
Section 7.03.
Section 7.04.
Section 7.05.
Section 8.01.
Section 8.02.
Section 8.03.
Section 8.04.
Section 8.05.
Section 8.06.
Section 8.07.
Section 9.01.
Section 9.02.
Section 9.03.
Section 9.04.
Extension of Payment of Bonds ............................................................................ 23
Payment of Claims ............................................................................................. 23
Books and Accounts; Finandal Statements ........................................................... 23
Protection of Security and Rights of Owners ......................................................... 24
Payments of Taxes and Other Charges ................................................................ 24
Disposition of Property ....................................................................................... 24
Maintenance of Tax Revenues ............................................................................. 24
Tax Covenants Relating to 1997 Bonds ................................................................. 24
Maintenance of Tax Exemption ............................................................................ 25
Further Assurances ............................................................................................. 25
Compliance with the Law ................................................................................... 25
Continuing Disclosure ........................................................................................ 25
ARTICLE VI
THE TRUSTEE
Duties, Immunities and Liabilities of Trustee ....................................................... 26
Merger or Consolidation ..................................................................................... 27
Liability of Trustee ............................................................................................. 27
Right to Rely on Documents ............................................................................... 28
Preservation and Inspection of Documents ........................................................... 29
Compensation and Indemnification ..................................................................... 29
Accounting Records and Financial Statements ...................................................... 29
Appointment of Co-Trustee ................................................................................. 29
Acquisition, Disposition and Valuation of Investments ......................................... 30
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Amendment ....................................................................................................... 31
Effect of Supplemental Indenture ......................................................................... 31
Endorsement or Replacement of Bonds After Amendment ...................................32
Amendment by Mutual Consent ......................................................................... 32
Trustee's Reliance ............................................................................................... 32
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
Events of Default and Acceleration of Maturities .................................................. 33
Application of Funds Upon Acceleration .............................................................. 34
Power of Trustee to Control Proceedings .............................................................. 34
Limitation on Owners' Right to Sue ..................................................................... 34
Non-waiver ........................................................................................................ 35
Actions by Trustee as Attorney-in-Fact ................................................................ 35
Remedies Not Exclusive ...................................................................................... 35
ARTICLE IX
MISCELLANEOUS
Benefits Limited to Parties ................................................................................... 36
Successor is Deemed Included in All References to Predecessor ............................ 36
Defeasance of Bonds ........................................................................................... 36
Execution of Documents and Proof of Ownership by Owners ................................ 37
Section 9.05.
Section 9.06.
Section 9.07.
Section 9.08.
Section 9.09.
Section 9.10.
Section 9.11.
Section 9.12.
EXHIBIT A
Disqualified Bonds ............................................................................................. 37
Waiver of Personal Liability ................................................................................ 37
Destxuction of Cancelled Bonds ........................................................................... 37
Notices ............................................................................................................... 37
Partial Invalidity ................................................................................................ 38
Unclaimed Moneys ............................................................................................. 38
Execution in Counterparts ................................................................................... 38
Governing Law .................................................................................................. 38
FORM OF 1997 BONDS .................................................................................... A-1
-111-
· ]
,,' INDENTURE OF TRUST
THIS INDENTURE OF TRUST (this "Indenture") is made and entered into as of June 1,
1997, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN
FRANCISCO, a public body corporate and politic duly organized and existing under the laws
of the State of California, (the "Agency"), and FIRST TRUST OF CALIFORNIA, NATIONAL
ASSOCIATION, a national banking association organized and existing under the laws of the
United States of America, as Trustee (the "Trustee");
WITNE S SETH:
WHEREAS, the Agency is a public body, corporate and politic, duly established and
authorized to transact business and exercise powers under and pursuant to the provisions of
the Community Redevelopment Law of the State of California, constituting Part 1 of Division
24 of the Health and Safety Code of the State of California (the "Law"), including the power to
issue bonds for any of its corporate purposes; and
WHEREAS, a Redevelopment Plan for the South San Francisco Downtown/Central
Redevelopment Project (the "Redevelopment Project"), has been adopted in compliance with all
requirements of the Law; and
WHEREAS, the Agency wishes at this time to issue its $ aggregate principal
amount of Redevelopment Agency of the City of South San Francisco Downtown/Central
Redevelopment Project 1997 Tax Allocation Bonds (the "1997 Bonds") pursuant to the Law for
the purpose of providing funds to finance redevelopment activities in the Redevelopment
Project; and
WHEREAS, in order to provide for the authentication and delivery of the 1997 Bonds
and any obligations issued on a parity therewith (collectively, the "Bonds"), to establish and
declare the terms and conditions upon which the Bonds are to be issued and secured and to
secure the payment of the principal thereof and interest and redemption premium (if any)
thereon, the Agency and the Trustee have duly authorized the execution and delivery of this
Indenture; and
WHEREAS, all acts and proceedings required by law necessary to make the 1997
Bonds, when executed by the Agency, authenticated and delivered by the Trustee and duly
issued, the valid, binding and legal special obligations of the Agency, and to constitute this
Indenture a valid and binding agreement for the uses and purposes herein set forth in
accordance with its terms, have been done or taken;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of and the interest and redemption premium (if any) on all the
Outstanding Bonds under this Indenture according to their tenor, and to secure the performance
and observance of all the covenants and conditions therein and herein set forth, and to declare
the terms and conditions upon and subject to which the Bonds are to be issued and received,
and in consideration of the premises and of the mutual covenants herein contained and of the
purchase and acceptance of the Bonds by the Owners thereof, and for other valuable
considerations, the receipt of which is hereby acknowledged, the Agency and the Trustee do
hereby covenant and agree with one another, for the benefit of the respective Owners from time
to time of the Bonds, as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01. Definitions;. Unless the context otherwise requires, the terms defined in
this Section 1.01 shall for all purposes of this Indenture, of any Supplemental Indenture, and of
any certificate, opinion or other document herein mentioned, have the meanings herein specified.
"Additional Revenues" means, as of the date of calculation, the amount of Tax Revenues
which, as shown in the Report of an Independent Redevelopment Consultant, are estimated to
be receivable by the Agency within the Fiscal Year following the Fiscal Year in which such
calculation is made as a result of increases in the assessed valuation of taxable property in the
Project Area due to transfer of ownership or any other interest in real property which has been
recorded but which is not then reflected on the tax rolls. For purposes of this definition, the
term "increases in the assessed valuation" means the amount by which the assessed valuation of
taxable property in the Project Area is estimated to increase above the assessed valuation of
taxable property in the Project Area (as evidenced in the written records of the County) as of
the date on which such calculation is made.
"Agency" means the Redevelopment Agency of the City of South San Francisco, a public
body corporate and politic duly organized and existing under the Law.
"Annual Debt Service" means, for each Bond Year, the sum of (a) the interest payable on
the Outstanding Bonds in such Bond Year, and (b) the principal amount of the Outstanding
Bonds scheduled to be paid in such Bond Year upon the maturity or mandatory Sinking
Account redemption thereof.
"Bond Counsel" means (a) Jones Hall Hill & White, A Professional Law Corporation, or
(b) any other attorney or firm of attorneys appointed by or acceptable to the Agency of
nationally-recognized experience in the issuance of obligations the interest on which is
excludable from gross income for federal income tax purposes under the Code.
"Bond Year" means any twelve-month period beginning on September 2 in any year and
extending to the next succeeding September 1, both dates inclusive.
"Bonds" means the 1997 Bonds, and, to the extent required by the context or by any
Supplemental Indenture, means any Parity Obligations, authorized by, and at any time
Outstanding pursuant to, this Indenture or this Indenture and such Supplemental Indenture.
"Business Day" means a day of the year (other than a Saturday or Sunday) on which
banks in California, are not required or permitted to be closed, and on which The New York
Stock Exchange is open.
"Certificate of the Agency" means a certificate in writing signed by the Executive
Director, Finance Director, Treasurer or Secretary of the Agency, or any other officer of the
Agency duly authorized by the Agency for that purpose.
"City" means the City of South San Francisco, a general law city and municipal
corporation organized and existing under the Constitution and laws of the State.
"Closing Date" means the date on which the 1997 Bonds are delivered by the Agency to
the Original Purchaser.
"Code" means the Internal Revenue Code of 1986 as in effect on the Closing Date (or
except as otherwise referenced herein) as it may be amended to apply to obligations issued on
the Closing Date, together with applicable temporary and final regulations promulgated under
the Code.
"Continuing Disclosure Certificate" shall mean that certain Continuing Disclosure
Certificate relating to the 1997 Bonds executed by the Agency and dated the date of issuance
and delivery of the 1997 Bonds, as originally executed and as it may be amended form time to
time in accordance with the terms thereof.
"Costs of Issuance" means all items of expense directly or indirectly payable by or
reimbursable to the Agency relating to the authorization, issuance, sale and delivery of the 1997
Bonds, including but not limited to, printing expenses, rating agency fees, municipal bond
insurance fees, filing and recording fees, initial fees, expenses and charges of the Trustee, and its
respective counsel, including the Trustee's first annual administrative fee, fees, charges and
disbursements of attorneys, financial advisors, accounting firms, consultants and other
professionals, fees and charges for preparation, execution and safekeeping of the 1997 Bonds
and any other cost, charge or fee in connection with the original issuance of the 1997 Bonds.
"Costs of Issuance Fund" means the fund by that name established and held by the
Agency pursuant to Section 3.03.
"County" means the County of San Mateo, a county duly organized and existing under
the Constitution and laws of the State.
"Debt Service Fund" means the fund by that name established and held by the Trustee
pursuant to Section 4.03.
"Depository." means (a) initially, DTC, and (b) any other Securities Depository acting as
Depository pursuant to Section 2.04.
"Depository System Participant" means any participant in the Depository's book-entry
system.
"DTC" means The Depository Trust Company, New York, New York, and its successors
and assigns.
"Event of Default" means any of the events described in Section 8.01.
"Fair Market Value" means the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm's length transaction (determined as of the
date the contract to purchase or sell the investment becomes binding) if the investment is traded
on an established securities market (within the meaning of section 1273 of the Code) and,
otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length
transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired
in accordance with applicable regulations under the Code, (ii) the investment is an agreement
with specifically negotiated withdrawal or reinvestment provisions and a specifically
negotiated interest rate (for example, a guaranteed investment contract, a forward supply
contract or other investment agreement) that is acquired in accordance with applicable
regulations under the Code, (iii) the investment is a United States Treasury Security-State and
Local Government Series that is acquired in accordance with applicable regulations of the
United States Bureau of Public Debt, or (iv) any commingled investment fund in which the
Agency and related parties do not own more than a ten percent (10%) beneficial interest therein
if the return paid by the fund is without regard to the source of the investment.
"Federal Securities" means: (a) any direct general obligations of the United States of
America (including obligations issued or held in book entry form on the books of the
Department of the Treasury of the United States of America), the payment of principal of and
interest on which are unconditionally and fully guaranteed by the United States of America; (b)
obligations of any agency or department of the United States of America which represent the
full faith and credit of the United States of America or the timely payment of the principal of
and interest on which are secured or guaranteed by the full faith and credit of the United States
of America; and (c) any obligations issued by the State or any political subdivision thereof the
payment of the principal of and interest and premium (if any) on which are fully secured by
Federal Securities described in the preceding clauses (a) or (b), as verified by an Independent
Accountant.
"Fiscal Year" means any twelve-month period beginning on July 1 in any year and
extending to the next succeeding June 30, both dates inclusive, or any other twelve-month period
selected and designated by the Agency as its official fiscal year period pursuant to a Certificate
of the Agency filed with the Trustee.
"Indenture" means this Indenture of Trust by and between the Agency and the Trustee,
as amended or supplemented from time to time pursuant to any Supplemental Indenture
entered into pursuant to the provisions hereof.
"Independent Accountant" means any accountant or firm of such accountants duly
licensed or registered or entitled to practice and practicing as such under the laws of the State,
appointed by or acceptable to the Agency, and who, or each of whom: (a) is in fact
independent and not under domination of the Agency; (b) does not have any substantial
interest, direct or indirect, with the Agency; and (c) is not connected with the Agency as an
officer or employee of the Agency, but who may be regularly retained to make reports to the
Agency.
"Independent Redevelopment Consultant" means any consultant or firm of such
consultants appointed by or acceptable to 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 domination of the Agency; (c) does not have any substantial interest, direct or
indirect, with the Agency other than as the Original Purchaser; 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.
"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 Broadway, 16th Floor, New York, New York
10006; Moody's Investors Service "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 the
redemption of bonds as the Agency may designate in a Request of the Agency delivered to the
Trustee.
"Interest Account" means the account by that name established and held by the Trustee
pursuant to Section 4.03(a).
"Interest Payment Date" means September 1, 1997, and March 1 and September 1 in
each year thereafter so long as any of the Bonds remain unpaid.
"Law" means the Community 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.
"Low and Moderate Income Housing Fund" means the fund of the Agency established
by the Agency pursuant to Section 33334.3 of the Law.
"Maximum Annual Debt Service" means, as of the date of calculation, the largest amount
of Annual Debt Service on all bonds with respect to which the calculation is being made for the
current or any future Bond Year. For purposes of such calculation with respect to Section 3.05
of this Indenture, there shall be excluded a pro rata portion of each installment of principal of
any Parity Debt, together with the interest to accrue thereon, in the event and to the extent that
the proceeds of such Parity Debt are deposited in an escrow fund from which amounts may not
be released to the Agency unless the Tax Revenues for the current Fiscal Year (as evidenced in
the written records of the County), plus at the option of the Agency the Additional Revenues, at
least equal one hundred twenty percent (120%) of the amount of Maximum Annual Debt
Service.
"Minimum Rating" means,,with respect to any Permitted ..... Investment, a long-term rating
of A or better from S&P or Moody s or a short-term rating which is in the highest general rating
category of S&P and Moody's, in any event determined without regard to any refinement or
gradation of such rating by a numerical modifier, a plus or a minus sign, or otherwise.
"Moody's" means Moody's Investors Service and its successors.
"1997 Bonds" means the Redevelopment Agency of the City of South San Francisco
Downtown/Central Redevelopment Project 1997 Tax Allocation Bonds authorized by and at
any time Outstanding pursuant to this Indenture.
"Original Purchaser" means the original purchaser of the 1997 Bonds.
"Outstanding", when used as of any particular time with reference to Bonds, means
(subject to the provisions of Section 9.05) all Bonds except: (a) Bonds theretofore canceled by
the Trustee or surrendered to the Trustee for cancellation; (b) Bonds paid or deemed to have
been paid within the meaning of Section 9.03; and (c) Bonds in lieu of or in substitution for
which other Bonds shall have been authorized, executed, issued and delivered by the Agency
pursuant hereto.
"Owner" means, with respect to any Bond, the person in whose name the ownership of
such Bond shall be registered on the Registration Books.
"Parity Debt" means any bonds, notes, loans, advances or other indebtedness issued or
incurred by the Agency on a parity with the 1997 Bonds pursuant to Section 3.05.
"Participating Underwriter" shall have the meaning ascribed thereto in the Continuing
Disclosure Certificate.
"Pass-Through Agreements" means, collectively, the four separate Agreements To
Alleviate Financial Burden or Detriment From the South San Francisco Downtown-Central
Redevelopment Project by and between the Agency and each of the San Mateo County
Community College District, the South San Francisco Unified School District, San Mateo
County Board of Education, and the County of San Mateo dated April 12, 1989, April 13,
1989, May 9, 1989, and June 20, 1989, respectively.
"Permitted Investments" means any of the following which at the time of investment are
legal investments under the laws of the State for the moneys proposed to be invested therein:
(a) Federal Securities;
(b) any obligations or indebtedness (other than Federal Securities)
issued or guaranteed by any federal agencies and entities which have a Minimum
Rating;
(c) interest-bearing demand or time deposits (including certificates of
deposit) in federal or state chartered savings and loan associations or in national
or State banks (including the Trustee) provided that either: (i) the long-term
obligations of such association or bank or the long-term obligations of the holding
company of such association or bank have a Minimum Rating; or (ii) such
deposits are fully insured by the Federal Deposit Insurance Corporation;
(d) obligations issued by any corporation organized and operating
within the United States of America, which obligations have a Minimum Rating;
(e) commercial paper which has a Minimum Rating or which is backed
by a letter of credit or line of credit which has a Minimum Rating;
(f) money market funds either (i) the policy of which is to invest solely
in Permitted Investments, or (ii) which have a Minimum Rating, including funds
for which the Trustee or its parent, affiliates or subsidiaries provide investment
or other management services;
(g) bills of exchange or time drafts drawn on and accepted by a
commercial bank (including the Trustee), otherwise known as bankers
acceptances, which are eligible for purchase by the Federal Reserve System and
the long-term obligations of which commercial bank or the long-term obligations
of the holding company of which has a Minimum Rating;
(h) obligations the interest on which is excludable from gross income for
federal income tax purposes, and which have a Minimum Rating;
(i) shares in a California common law trust established pursuant to
Title 1, Division 7, Chapter 5 of the California Government Code which invests
exclusively in investments permitted by Section 53635 of Title 5, Division 2,
Chapter 4 of the Government Code of the State of California, provided the
Trustee has access to, and control over withdrawals from and deposits to, such
trust; and
(j) any guaranteed investment agreement or similar investment which is
the obligation of, or which is secured or guaranteed by the obligations of, a
financial institution whose long-term obligations at the time of such investment
have a Minimum Rating, by the terms of which the Trustee is authorized to
withdraw all amounts therefrom in the event such Minimum Rating ceases to be
maintained.
"Plan Limitations" means the limitations contained or incorporated in the
Redevelopment Plan on (a) the aggregate principal amount of indebtedness payable from Tax
Revenues which may be outstanding at any time, (b) the aggregate amount of taxes which may
be divided and allocated to the Agency pursuant to the Redevelopment Plan, and (c) the period
of time for establishing or incurring indebtedness payable from Tax Revenues.
"Principal Account" means the account by that name established and held by the Trustee
pursuant to Section 4.03(b).
"Principal Office" means the corporate trust office of the Trustee in San Francisco,
California, or at such other address as may be designated by the Trustee from time to time in
written notice filed with the Agency, except that for registration, transfer, exchange or payment
of Bonds, such term shall mean the principal corporate trust office of First Trusty National
Association in St. Paul Minnesota.
"Oualified Reserve Fund Credit Instrument" means an irrevocable standby or direct-pay
letter of credit or surety bond issued by a commercial bank or insurance company and
deposited with the Trustee pursuant to Section 4.03(d), provided that all of the following
requirements are met: (a) the long-term credit rating of such bank or insurance company is in the
highest rating category by the Rating Agency, or the claims paying ability of such insurance
company is rated in the highest rating category by A.M. Best & Company; (b) such letter of
credit or surety bond has a term of at least twelve (12) months; (c) such letter of credit or surety
bond has a stated amount at least equal to the portion of the Reserve Requirement with respect
to which funds are proposed to be released pursuant to Section 4.03(d); and (d) the Trustee is
authorized pursuant to the terms of such letter of credit or surety bond to draw thereunder an
amount equal to any deficiencies which may exist from time to time in the Interest Account or
the Principal Account for the purpose of making payments required pursuant to Section 4.03(a)
or (b).
"Record Date" means, with respect to any Interest Payment Date, the close of business
on the fifteenth (15th) calendar day of the month preceding such Interest Payment Date,
whether or not such fifteenth (15th) calendar day is a Business Day.
"Redemption Account" means the account by that name established and held by the
Trustee pursuant to Section 4.03(e).
"Redevelopment Fund" means the fund by that name established and held by the Agency
pursuant to Section 3.04.
"Redevelopment Plan" means the Redevelopment Plan for the South San Francisco
Downtown/Central Redevelopment Project, approved by Ordinance No. 1056-89 enacted by
the City Council of the City on July 12, 1989, together with any amendments thereof heretofore
or hereafter duly enacted pursuant to the Law.
"Redevelopment Project" means the project area described in the Redevelopment Plan.
"Registration Books" means the records maintained by the Trustee pursuant to Section
2.09 for the registration and transfer of ownership of the 1997 Bonds.
"Report" means a document in writing signed by an Independent Accountant or an
Independent Redevelopment Consultant and including: (a) a statement that the person or firm
making or giving such Report has read the pertinent provisions of this Indenture to which such
Report relates; (b) a brief statement as to the nature and scope of the examination or
investigation upon which the Report is based; and (c) a statement that, in the opinion of such
person or firm, sufficient examination or investigation was made as is necessary to enable such
person or firm 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 Executive Director,
Finance Director, Treasurer or Secretary of the Agency, or any other officer of the Agency duly
authorized by the Agency for that purpose.
"Reserve Account" means the account by that name established and held by the Trustee
pursuant to Section 4.03 (d).
"Reserve Requirement" means, as of ~.cany date of any-calculation, the lesser of (a)
Maximum Annual Debt Service on the 1997 Bonds, or (b) 10% of the proceeds of the 1997
Bonds as referenced in Section 3.02 hereof.
"S&P" means Standard & Poor's Corporation, of New York, New York, and its
successors.
"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 Agency may
designate in a Request of the Agency delivered by the Agency to the Trustee.
"Sinking Account" means the account by that name established and held by the Trustee
pursuant to Section 4.03(c).
"Special Fund" means the fund by that name established and held by the Agency
pursuant to Section 4.02.
"State" means the State of California.
"Subordinate Debt" means any loans, advances or indebtedness issued or incurred by
the Agency in accordance with the requirements of Section 3.06, which are either: (a) payable
from, but not secured by a pledge of or lien upon, the Tax Revenues; or (b) secured by a pledge
of or lien upon the Tax Revenues which is subordinate to the pledge of and lien upon the Tax
Revenues hereunder for the security of the Bonds.
"Supplemental Indenture" means any resolution, agreement or other instrument which
amends, supplements or modifies this Indenture and which has been duly adopted or entered
into by the Agency; but only if and to the extent that such Supplemental Indenture is
specifically authorized hereunder.
"Tax Revenues" means, except as provided below, moneys allocated within the Plan
Limitations and paid to the Agency which are derived from (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 Law and Section 16 of Article XVI of the Constitution of the State, or
pursuant to other applicable State laws, and (b) reimbursements, subventions, including
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, and including
that portion of such taxes otherwise required by Section 33334.3 of the Law to be deposited in
the Low and Moderate Income Housing Fund, but only to the extent necessary to repay that
portion of any Parity Debt Obligations (including applicable reserves and financing costs)
attributed to amounts deposited into the Low and Moderate Income Housing Fund for use
pursuant to Section 33334.2 of the Law to increase, improve or preserve the supply of low and
moderate income housing within or of benefit to the Project Area; but excluding (i) all other
amounts of such taxes (if any) required to be deposited into the Low and Moderate Income
Housing Fund of the Agency pursuant to Section 33334.3 of the Law, (ii) amounts payable by
the State to the Agency under and pursuant to Chapter 1.5 of Part 1 of Division 4 of Title 2
(commencing with Section 16110) of the California Government Tax Code, and (iii) amounts
payable by the Agency pursuant to the Pass-Through Agreement, unless and to the extent that
such amounts are payable on a basis subordinate to the Bonds, including any Parity Debt
Obligatiom.
"Term Bonds" means, collectively, (a) the 1997 Bonds maturing on September 1, ,
and (b) any maturity of Parity Debt which is subject to mandatory Sinking Account redemption
pursuant to the Supplemental Indenture authorizing the issuance thereof.
"Trustee" means First Trust of California, National Association, as Trustee hereunder, or
any successor thereto appointed as Trustee hereunder in accordance with the provisions of
Article VI.
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 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.
ARTICLE II
AUTHORIZATION AND TERMS OF 1997 BONDS
SECTION 2.01. Authorization and Purpose of 1997 Bonds. The Agency has reviewed all
proceedings heretofore taken and has found, as a result of such review, and hereby finds and
determines that all things, conditions and acts required by law to exist, happen or be performed
precedent to and in connection with the issuance of the 1997 Bonds do exist, have happened
and have been performed in due time, form and manner as required by law, and the Agency is
now duly empowered, pursuant to each and every requirement of law, to issue the 1997 Bonds
in the manner and form provided in this Indenture.
The 1997 Bonds in the aggregate principal amount of Dollars
($ ) are hereby authorized to be issued by the Agency for the purpose of repaying a
portion of a loan to the Agency. The 1997 Bonds shall be authorized and issued under and
subject to the terms of this Indenture and the Law. The 1997 Bonds shall be designated the
"Redevelopment Agency of the City of South San Francisco Downtown/Central Redevelopment
Project 1997 Tax Allocation Bonds."
SECTION 2.02. Terms of the 1997 Bonds. The 1997 Bonds shall be issued in fully
registered form without coupons in denominations of $5,000 or any integral multiple thereof, so
long as no Bond shall have more than one maturity date. The 1997 Bonds shall mature on
September 1 in each of the years and in the respective principal amounts, and shall bear interest
(calculated on the basis of a 360-day year comprised of twelve 30-day months) at the
respective rates per annum, as set forth in the following table:
Maturity Date Principal Interest Maturity Date Principal Interest
(September 1) Amount Rate (September 1) Amount Rate
Interest on the 1997 Bonds shall be payable from the Interest Payment Date next
preceding the date of authentication thereof unless (i) a 1997 Bond is authenticated on or before
an Interest Payment Date and after the close of business on the preceding Record Date, in which
event it shall bear interest from such Interest Payment Date, (ii) a 1997 Bond is authenticated
on or before the first Record Date, in which event interest thereon shall be payable from June 1,
1997, or (iii) interest on any 1997 Bond is in default as of the date of authentication thereof, in
which event interest thereon shall be payable from the date to which interest has been paid in
full, payable on each Interest Payment Date. Interest shall be paid on each Interest Payment
Date to the persons in whose names the ownership of the 1997 Bonds is registered on the
Registration Books at the close of business on the immediately preceding Record Date, except as
provided below. Interest on any 1997 Bond which is not punctually paid or duly provided for
on any Interest Payment Date shall be payable to the person in whose name the ownership of
such 1997 Bond is registered on the Registration Books at the close of business on a special
record date for the payment of such defaulted interest to be fixed by the Trustee, notice of
which shall be given to such Owner not less than ten (10) days prior to such special record date.
Interest on the 1997 Bonds shall be paid by check of the Trustee mailed by first class
marl, postage prepaid, on each Interest Payment Date to the Owners of the 1997 Bonds at their
respective addresses shown on the Registration Books as of the close of business on the
preceding Record Date; provided, however, that at the written request of the Owner of 1997
Bonds in an aggregate principal amount of at least $1,000,000, which written request shall
contain such account information as the Trustee may require and shall be on file with the
Trustee prior to any Record Date, interest on such 1997 Bonds shall be paid on each succeeding
Interest Payment Date by wire transfer in immediately available funds to such account within
the United States of America as shall be specified in such written request. The principal of and
premium (if any) on the 1997 Bonds shall be payable in lawful money of the United States of
America by check of the Trustee upon presentation and surrender thereof at the Principal Office
of the Trustee.
SECTION 2.03. Redemption of 1997 Bonds.
(a) Optional Redemption. The 1997 Bonds shall be subject to redemption in whole, or
in part at the Request of the Agency either on a pro rata basis among maturities or in inverse
order of maturity, and in any case by lot within a maturity, at the option of the Agency, on any
date on or after September 1, , at the option of the Agency from any available source of
funds, at a redemption price equal to the principal amount thereof to be redeemed together with
accrued interest to the redemption date plus a premium (expressed as percentages of the
principal amount of Bonds or portions thereof to be redeemed) as set forth in the following
table:
Redemption Dates
Premium
Redemption
September 1, __ through August 31, __ 2%
September 1, __ through August 31, __ 1%
September 1, __ and thereafter 0
The Agency shall be required to give the Trustee written notice of its intention to redeem
1997 Bonds under this subsection (a), and the manner of selecting such 1997 Bonds for
redemption from among the maturities thereof, at least sixty (60) days prior to the date fixed
for such redemption.
(b) Mandatory Sinking Account Redemption of 1992 Bonds. The 1997 Bonds maturing
on September 1, , shall also be subject to redemption in whole, or in part by lot, on
September 1, __ and on September 1 in each year thereafter as set forth in the following table,
from Sinking Account payments made by the Agency pursuant to Section 4.03(c), at a
redemption price equal to the principal amount thereof to be redeemed together with accrued
interest thereon to the redemption date, without premium, or in lieu thereof shall be purchased
pursuant to the succeeding paragraph of this subsection (b), in the aggregate respective
principal amounts and on the respective dates as set forth in the following tables; provided,
however, that if some but not all of such 1997 Bonds have been redeemed pursuant to subsection
(a) above, the total amount of all future Sinking Account payments pursuant to this subsection
(b) shall be reduced by the aggregate principal amount of such 1997 Bonds so redeemed, to be
allocated among such Sinking Account payments on a pro rata basis in integral multiples of
$5,000 as determined by the Agency (written notice of which determination shall be given by the
Agency to the Trustee) at least 60 days prior to the next Sinking Fund Redemption Date.
-11-
Sinking Fund
Redemption Date
(September 1)
Principal Amount
To Be Redeemed
In lieu of redemption of the 1997 Bonds maturing on September 1, 2018 pursuant to the
preceding paragraph, amounts on deposit in the Special Fund (to the extent not required to be
transferred to the Trustee pursuant to Section 4.03 during the current Bond Year) may also be
used and withdrawn by the Agency at any time for the purchase of such 1997 Bonds at public
or private sale as and when and at such prices (including brokerage and other charges and
including accrued interest) as the Agency may in its discretion determine. The par amount of
any of such 1997 Bonds so purchased by the Agency and deposited by the Agency with the
Trustee with written direction to cancel such 1997 Bonds in any twelve-month period ending on
July 1 in any year shall be credited towards and shall reduce the par amount of 1997 Bonds
required to be redeemed pursuant to this subsection (b) on September 1 in such year.
(c) Notice of Redemption. The Trustee on behalf and at the expense of the Agency shall
mail (by first class mail, postage prepaid) notice of any redemption at least thirty (30) but not
more than sixty (60) days prior to the redemption date, to (i) the Owners of any 1997 Bonds
designated for redemption at their respective addresses appearing on the Registration Books,
and (ii) the Securities Depositories and to one or more Information Services designated in a
Request of the Agency delivered to the Trustee; provided, however, that such mailing shall not be
a condition precedent to such redemption and neither failure to receive any such notice nor any
defect therein shall affect the validity of the proceedings for the redemption of such 1997 Bonds
or the cessation of the accrual of interest thereon. Such notice shall state the redemption date
and the redemption price, shall designate the CUSIP number of the 1997 Bonds to be redeemed,
shall state the individual number of each 1997 Bond to be redeemed or state that all 1997
Bonds between two stated numbers (both inclusive) or shall state that all of the 1997 Bonds
Outstanding of one or more maturities are to be redeemed, and shall require that such 1997
Bonds be then surrendered at the Principal Office of the Trustee for redemption at the said
redemption price, giving notice also that further interest on the 1997 Bonds to be redeemed will
not accrue from and after the date fixed for redemption.
The Trustee shall have no responsibility for a defect in the CUSIP number that appears
on any Bonds or in the redemption notice. The redemption notice may provide that the CUSIP
numbers have been assigned by an independent service and are included in the notice solely for
the convenience of Owners and that the Trustee and the Agency shall not be liable in any way
for inaccuracies in said numbers.
(d) Partial Redemption of 1997 Bonds. In the event only a portion of any 1997 Bond is
called for redemption, then upon surrender thereof the Agency shall execute and the Trustee
shall authenticate and deliver to the Owner thereof, at the expense of the Agency, a new 1997
Bond or Bonds of the same interest rate and maturity, of authorized denominations in aggregate
principal amount equal to the unredeemed portion of the 1997 Bond to be redeemed.
(e) Effect of Redemption. From and after the date fixed for redemption, if funds
available for the payment of the redemption price of and interest on the 1997 Bonds so called
for redemption shall have been duly deposited with the Trustee, such 1997 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 accrued interest to the redemption date, and no interest
shall accrue thereon from and after the redemption date specified in such notice.
(f) Manner of Redemption. Whenever provision is made in this Indenture for the
redemption of less than all of the 1997 Bonds, the Trustee shall select the 1997 Bonds to be
redeemed by lot in any manner which the Trustee in its sole discretion shall deem appropriate
and fair. For purposes of such selection, all 1997 Bonds shall be deemed to be comprised of
separate $5,000 denominations and such separate denominations shall be treated as separate
1997 Bonds which may be separately redeemed.
SECTION 2.04. Book-Entry System.
(a) Original Delivery. The 1997 Bonds shall be initially delivered in the form of
a separate single fully registered Bond (which may be typewritten) for each maturity of
the 1997 Bonds. Upon initial delivery, the ownership of each such Bond shall be
registered on the Registration Books in the name of Cede & Co. (the "Nominee"). Except
as provided in subsection (c), the ownership of all of the Outstanding 1997 Bonds shall
be registered in the name of the Nominee on the Registration Books.
With respect to 1997 Bonds the ownership of which shall be registered in the
name of the Nominee, the Agency and the Trustee shall have no responsibility or
obligation to any Depository System Participant or to any person on behalf of which the
Depository holds an interest in the 1997 Bonds. Without limiting the generality of the
immediately preceding sentence, the Agency and the Trustee shall have no responsibility
or obligation with respect to (i) the accuracy of the records of the Depository, the
Nominee or any Depository System Participant with respect to any ownership interest
in the 1997 Bonds, (ii) the delivery to any Depository System Participant or any other
person, other than an Owner as shown in the Registration Books, of any notice with
respect to the 1997 Bonds, including any notice of redemption, (iii) the selection by the
Depository of the beneficial interests in the 1997 Bonds to be redeemed in the event the
Agency elects to redeem the 1997 Bonds in part, (iv) the payment to any Depository
System Participant or any other person, other than an Owner as shown in the
Registration Books, of any amount with respect to principal, premium, if any, or interest
on the 1997 Bonds or (v) any consent given or other action taken by the Depository as
Owner of the 1997 Bonds. The Agency and the Trustee may treat and consider the
person in whose name each Bond is registered as the absolute owner of such Bond for
the purpose of payment of principal, premium and interest on such Bond, for the
purpose of giving notices of redemption and other matters with respect to such Bond,
for the purpose of registering transfers of ownership of such Bond, and for all other
purposes whatsoever. The Trustee shall pay the principal of and interest and premium,
if any, on the 1997 Bonds only to the respective Owners or their respective attorneys
duly authorized in writing, and all such payments shall be valid and effective to fully
satisfy and discharge all obligations with respect to payment of principal of and interest
and premium, if any, on the 1997 Bonds to the extent of the sum or sums so paid. No
person other than an Owner shall receive a Bond evidencing the obligation of the Agency
to make payments of principal, interest and premium, if any, pursuant to this Indenture.
Upon delivery by the Depository to the Nominee of written notice to the effect that the
Depository has determined to substitute a new nominee in its place, and subject to the
provisions herein with respect to Record Dates, such new nominee shall become the
Nominee hereunder for all purposes; and upon receipt of such a notice the Agency shall
promptly deliver a copy of the same to the Trustee.
(b) Representation Letter. In order to qualify the 1997 Bonds for the
Depository's book-entry system, the Agency and the Trustee shall execute and deliver to
such Depository a letter representing such matters as shall be necessary to so qualify the
1997 Bonds. The execution and delivery of such letter shall not in any way limit the
provisions of subsection (a) above or in any other way impose upon the Agency or the
Trustee any obligation whatsoever with respect to persons having interests in the 1997
Bonds other than the Owners. The Trustee agrees to comply with all provisions in such
letter with respect to the giving of notices thereunder by the Trustee. In addition to the
execution and delivery of such letter, the Agency may take any other actions, not
inconsistent with this Indenture, to qualify the 1997 Bonds for the Depository's book-
entry program.
(c) Transfers Outside Book-Entry System. In the event that either (i) the
Depository determines not to continue to act as Depository for the 1997 Bonds, or (ii)
the Agency determines to terminate the Depository as such, then the Agency shall
thereupon discontinue the book-entry system with such Depository. In such event, the
Depository shall cooperate with the Agency and the Trustee in the issuance of
replacement 1997 Bonds by providing the Trustee with a list showing the interests of the
Depository System Participants in the 1997 Bonds, and by surrendering the 1997 Bonds,
registered in the name of the Nominee, to the Trustee on or before the date such
replacement 1997 Bonds are to be issued. The Depository, by accepting delivery of the
1997 Bonds, agrees to be bound by the provisions of this subsection (c). If, prior to the
termination of the Depository acting as such, the Agency fails to identify another
Securities Depository to replace the Depository, then the 1997 Bonds shall no longer be
required to be registered in the Registration Books in the name of the Nominee, but shall
be registered in whatever name or names the Owners transferring or exchanging 1997
Bonds shall designate, in accordance with the provisions of this Article 2. Prior to its
termination, the Depository shall furnish the Trustee with the names and addresses of
the Participants and respective ownership interests thereof.
(d) Payments to the Nominee. Notwithstanding any other provision of this
Indenture to the contrary, so long as any Bond is registered in the name of the Nominee,
all payments with respect to principal of and interest and premium, if any, on such
Bond and all notices with respect to such Bond shall be made and given, respectively, as
provided in the letter described in subsection (b) of this Section or as otherwise
instructed by the Depository.
SECTION 2.05. Form of 1997 Bonds. The 1997 Bonds, the form of Trustee's certificate of
authentication, and the form of assignment to appear thereon, shall be substantially in the
respective forms set forth in Exhibit A attached hereto and by this reference incorporated
herein, with necessary or appropriate variations, omissions and insertions, as permitted or
required by this Indenture.
SECTION 2.06. Execution and Authentication of 1997 Bonds. The 1997 Bonds shall be
executed on behalf of the Agency by the signature of its Chairman and the signature of its
Secretary who are in office on the date of execution and delivery of this Indenture or at any time
thereafter. Either or both of such signatures may be made manually or may be affixed by
facsimile thereof. If any officer whose signature appears on any 1997 Bond ceases to be such
officer before the Closing Date, such signature shall nevertheless be as effective as if the officer
had remained in office until the Closing Date. Any 1997 Bond may be signed and attested on
behalf of the Agency by such persons as at the actual date of the execution of such 1997 Bond
shall be the proper officers of the Agency, duly authorized to execute debt instruments on
behalf of the Agency, although on the date of such 1997 Bond any such person shall not have
been such officer of the Agency.
Only such of the 1997 Bonds as shall bear thereon a certificate of authentication in the
form set forth in Exhibit A, manually executed and dated by the Trustee, shall be valid or
obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of
the Trustee shall be conclusive evidence that such 1997 Bonds have been duly authenticated
and delivered hereunder and are entitled to the benefits of this Indenture.
SECTION 2.07. Transfer of 1997 Bonds. Any 1997 Bond may, in accordance with its
terms, be transferred, upon the Registration Books, by the person in whose name it is registered,
in person or by a duly authorized attorney of such person, upon surrender of such 1997 Bond to
the Trustee at its Principal Office for cancellation, accompanied by delivery of a written
instrument of transfer in a form acceptable to approved by the Trustee, duly executed. The
Trustee may require the payment of any tax or other governmental charge on the transfer of any
1997 Bonds pursuant to this Section 2.07. Whenever any 1997 Bond or Bonds shall be
surrendered for transfer, the Agency shall execute and the Trustee shall authenticate and deliver
to the transferee a new 1997 Bond or Bonds of like maturity and aggregate principal amount.
The Trustee may refuse to transfer, under the provisions of this Section 2.07, any 1997 Bonds
selected by the Trustee for redemption pursuant to Section 2.03 and during the period
established by the Trustee for selection of Bonds for redemption.
SECTION 2.08. Exchange of 1997 Bonds. The 1997 Bonds may be exchanged at the
Principal Office of the Trustee for a like aggregate principal amount of 1997 Bonds of other
authorized denominations and of the same maturity. The Trustee may require the payment of
any tax or other governmental charge on the exchange of any 1997 Bonds pursuant to this
Section 2.08. The Trustee may refuse to exchange, under the provisions of this Section 2.08, any
1997 Bonds selected by the Trustee for redemption pursuant to Section 2.03 and during the
period established by the Trustee for selection of Bonds for redemption.
SECTION 2.09. Registration Books. The Trustee will keep or cause to be kept, at its
Principal Office in Los Angeles, California, sufficient records for the registration and
registration of transfer of the 1997 Bonds, which shall at all times during normal business hours,
and upon reasonable notice, be open to inspection by the Agency; and, upon presentation for
such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register
or transfer or cause to be registered or transferred, on the Registration Books, 1997 Bonds as
hereinbefore provided.
SECTION 2.10. Temporary Bonds. The 1997 Bonds may be initially issued in temporary
form exchangeable for definitive 1997 Bonds when ready for delivery. The temporary 1997
Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be
determined by the Agency, and may contain such reference to any of the provisions of this
Indenture as may be appropriate. Every temporary 1997 Bond shall be executed by the Agency
upon the same conditions and in substantially the same manner as the definitive 1997 Bonds. If
the Agency issues temporary 1997 Bonds it will execute and furnish definitive 1997 Bonds
without delay, and thereupon the temporary 1997 Bonds shall be surrendered, for cancellation,
in exchange therefor at the Principal Office of the Trustee, and the Trustee shall deliver in
exchange for such temporary 1997 Bonds an equal aggregate principal amount of definitive
1997 Bonds of authorized denominations. Until so exchanged, the temporary 1997 Bonds shall
be entitled to the same benefits pursuant to this Indenture as definitive 1997 Bonds
authenticated and delivered hereunder.
SECTION 2.11. 1997 Bonds Mutilated, Lost, Destroyed or Stolen. If any 1997 Bond shall
become mutilated, the Agency, at the expense of the Owner of such 1997 Bond, shall execute,
and the Trustee shall thereupon authenticate and deliver, a new 1997 Bond of like tenor in
exchange and substitution for the 1997 Bond so mutilated, but only upon surrender to the
Trustee of the 1997 Bond so mutilated. Every mutilated 1997 Bond so surrendered to the
Trustee shall be canceled by it and upon destruction of such 1997 Bond and upon request of the
Agency a certificate of destruction delivered to, or upon the order of, the Agency. If any 1997
Bond 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 and indemnity satisfactory to the
Trustee shall be given, the Agency, at the expense of the Owner, shall execute, and the Trustee
shall thereupon authenticate and deliver, a new 1997 Bond of like tenor in lieu of and in
substitution for the 1997 Bond so lost, destroyed or stolen. The Trustee may require payment
of a sum not exceeding the actual cost of preparing each new 1997 Bond issued under this
Section and of the expenses which may be incurred by the Trustee in connection therewith. Any
1997 Bond issued under the provisions of this Section in lieu of any 1997 Bond alleged to be
lost, destroyed or stolen shall constitute an original additional contractual obligation on the
part of the Agency whether or not the 1997 Bond so alleged to be lost, destroyed or stolen be at
any time enforceable by anyone, and shall be equally and proportionately entitled to the
benefits of this Indenture with all other 1997 Bonds issued pursuant to this Indenture.
Notwithstanding any other provision of this Section 2.11, in lieu of delivering a new
Bond for which principal has or is about to become due for a Bond which has been mutilated,
lost, destroyed or stolen, the Trustee may make payment of such Bond in accordance with its
terms upon receipt of indemnity satisfactory to it.
-16-
ARTICLE III
DEPOSIT AND APPLICATION OF PROCEEDS OF 1997 BONDS;
ISSUANCE OF PARrrY DEBT
SECTION 3.01. Issuance of 1997 Bonds. Upon the execution and delivery of this
Indenture, the Agency shall execute and deliver 1997 Bonds in the aggregate principal amount of
Dollars ($ ) to the Trustee and the Trustee
shall authenticate and deliver the 1997 Bonds to the Original Purchaser upon receipt of a
Request of the Agency therefor.
SECTION 3.02. Deposit and Application of Proceeds.
(a) 1997 Bond Proceeds. On the Closing Date, the proceeds of sale of the 1997 Bonds
shall be paid to the Trustee and deposited by the Trustee as follows: ~
(i) The Trustee shall deposit the amount of $ in the Interest
Account, constituting the amount of accrued interest received on the sale of the
1997 Bonds.
(ii) The Trustee shall transfer to the Agency for deposit in the Costs of
Issuance Fund the amount of $
(iii) The Trustee shall deposit the amount of $
Reserve Account, constituting the amount of the Reserve Requirement.
in the
(iv) The Trustee shall transfer to
Redevelopment Fund the amount of $
of such proceeds.
the Agency for deposit into the
constituting the remainder
SECTION 3.03. Costs of Issuance Fund. There is hereby established a separate fund to be
known as the "Costs of Issuance Fund", which shall be held by the Agency in trust. The moneys
in the Costs of Issuance Fund shall be used and withdrawn by the Agency from time to time to
pay the Costs of Issuance upon submission of a Request of the Agency stating (a) the person to
whom payment is to be made, (b) the amount to be paid, (c) the purpose for which the
obligation was incurred, (d) that such payment is a proper charge against the Costs of Issuance
Fund, and (e) that such amounts have not been the subject of a prior Request of the Agency; in
each case together with a statement or invoice for each amount requested thereunder. On the
earlier of (a) the date which is three (3) months following the Closing Date, or (b) the date of
receipt of a Request of the Agency therefor, all amounts (if any) remaining in the Costs of
Issuance Fund shall be withdrawn therefrom by the Agency and transferred to the Trustee and
deposited into the Interest Account.
SECTION 3.04. Redevelopment Fund. There is hereby established a separate fund to be.
known as the "Redevelopment Fund," which shall be held by the Agency in trust. The moneys in
the Redevelopment Fund shall be used in the manner provided by the Law solely for the
purpose of aiding in financing the Redevelopment Project, including payment of any Costs of
Issuance to the extent not paid from amounts on deposit in the Costs of Issuance Fund. The
Agency shall pay, from time to time, moneys from the Redevelopment Fund upon receipt of
claims thereon. The Agency warrants that no funds paid by the Agency from the
Redevelopment Fund shall be applied for any purpose not authorized by the Law and this
Indenture.
SECTION 3.05. Issuance of Parity Debt. In addition to the 1997 Bonds, the Agency may
issue or incur Parity Debt in such principal amount as shall be determined by the Agency,
pursuant to a Supplemental Indenture adopted or entered into by the Agency. The Agency may
issue or incur such Parity Debt subject to the following specific conditions precedent:
(a) The Agency shall be in compliance with all covenants set forth in this
Indenture and all Supplemental Indentures.
(b) The Tax Revenues estimated to be received for the then current Bond
Year, plus the Additional Revenues, shall be at least equal to one hundred
twenty percent (120%) of Maximum Annual Debt Service on all Bonds which will
be Outstanding immediately following the issuance of such Parity Debt.
(c) The Supplemental Indenture providing for the issuance of such Parity
Debt shall provide that interest thereon shall not be payable on any dates other
than September 1 and March 1, and principal thereof shall be payable on
September 1 in any year in which principal is payable.
(d) The Supplemental Indenture providing for the issuance of such Parity
Debt shall provide for the deposit into the Reserve Account of an amount
required to cause the balance therein to equal the full amount of the Reserve
Requirement (which may be maintained in whole or in part in the form of a
Qualified Reserve Fund Credit Instrument as provided herein).
(e) The issuance of such Parity Debt shall not cause the Agency to exceed
any applicable Plan Limitations.
(f) The Agency shall deliver to the Trustee a Certificate of the Agency
certifying, and an opinion of Bond Counsel stating, that the conditions precedent
to the issuance of such Parity Debt set forth in the foregoing subsections (a), (b),
(c), (d) and (e) of this Section 3.05 have been satisfied.
SECTION 3.06. Issuance of Subordinate Debt. In addition to the Bonds and any Parity
Debt, from time to time the Agency may issue or incur Subordinate Debt in such principal
amount as shall be determined by the Agency, provided that the issuance of such Subordinate
Debt shall not cause the Agency to exceed any applicable Plan Limitations.
SECTION 3.07. Validity of Bonds. The validity of the authorization and issuance of the
Bonds shall not be dependent upon the completion of the Redevelopment Project or upon the
performance by any person of its obligation with respect to the Redevelopment Project.
.ARTICLE IV
SECURITY OF BONDS; FLOW OF FUNDS;
INVESTMENTS
SECTION 4.01. Securit~ of Bonds; Equal Security. The Bonds shall be secured by a first
pledge of and lien on all of the Tax Revenues and all of the moneys on deposit in the Special
Fund. In addition, the Bonds shall be secured by a first and exclusive pledge of and lien upon
all of the moneys in the Debt Service Fund, the Interest Account, the Principal Account, the
Sinking Account, the Reserve Account and the Redemption Account. Such pledges and liens
shall be for the equal security of the Outstanding Bonds without preference or priority for series,
issue, number, dated date, sale date, date of execution or date of delivery. Except for the Tax
Revenues and such moneys, no funds or properties of the Agency shall be pledged to, or
otherwise liable for, the payment of principal of or interest or redemption premium (if any) on
the Bonds.
In consideration of the acceptance of the Bonds by those who shall hold the same from
time to time, this Indenture shall be deemed to be and shall constitute a contract among the
Trustee, the Agency and the Owners from time to time of the Bonds, and the covenants and
agreements herein set forth to be performed on behalf of the Agency shall be for the equal and
proportionate benefit, security and protection of all Owners of the Bonds without preference,
priority or distinction as to security or otherwise of any of the Bonds over any of the others by
reason of the number or date thereof or the time of sale, execution and delivery thereof, or
otherwise for any cause whatsoever, except as expressly provided therein or herein.
SECTION 4.02. Special Fund; Deposit of Tax Revenues. There is hereby established a
special fund to be known as the "Special Fund", which shall be held by the Agency. The Agency
shall deposit all of the Tax Revenues received in any Bond Year in the Special Fund promptly
upon receipt thereof by the Agency, until such time during such Bond Year as the amounts on
deposit in the Special Fund equal the aggregate amounts required to be transferred to the
Trustee for deposit into the Interest Account, the Principal Account, the Sinking Account, the
Reserve Account and the Redemption Account in such Bond Year pursuant to this Section 4.02
and to Section 4.03, and for deposit in such Bond Year into the funds and accounts established
with respect to Parity Debt, as provided in any Supplemental Indenture.
All Tax Revenues received by the Agency during any Bond Year in excess of the amount
required to be deposited in the Special Fund during such Bond Year pursuant to the preceding
paragraphs of this Section 4.02 shall be released from the pledge and lien hereunder for the
security of the Bonds and may be applied by the Agency for any lawful purposes of the
Agency, including but not limited to the payment of any amounts due and owing to the United
States of America pursuant to Section 5.10(c). Prior to the payment in full of the principal of
and interest and redemption premium (if any) on the Bonds, and the payment in full of all other
amounts payable hereunder and under any Supplemental Indentures, the Agency shall not have
any beneficial right or interest in the moneys on deposit in the Special Fund, except as may be
provided in this Indenture.
SECTION 4.03. Debt Service Fund; Transfer of Amounts to Trustee. There is hereby
established a special trust fund to be known as the "Debt Service Fund", which shall be held by
the Trustee hereunder in trust. Moneys in the Special Fund shall be transferred by the Agency to
the Trustee in the following amounts at the following times, for deposit by the Trustee in the
following respective special accounts within the Debt Service Fund, which accounts are hereby
established with the Trustee, in the following order of priority:
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(a) Interest Account. On or before the second (2nd) Business Day
preceding each date on which interest on the Bonds becomes due and payable,
the Agency shall withdraw from the Special Fund and transfer to the Trustee for
deposit in the Interest Account an amount which, when added to the amount
then on deposit in the Interest Account, will be equal to the aggregate amount of
the interest becoming due and payable on the Outstanding Bonds on such date.
All moneys in the Interest Account shall be used and withdrawn by the Trustee
solely for the purpose of paying the interest on the Bonds as it shall become due
and payable (including accrued interest on any Bonds purchased or redeemed
prior to maturity pursuant to this Indenture).
(b) Principal Account. On or before the second (2nd) Business Day
preceding each date on which principal of the Bonds becomes due and payable
at maturity, the Agency shall withdraw from the Special Fund and transfer to the
Trustee for deposit in the Principal Account an amount which, when added to
the amount then on deposit in the Principal Account, will be equal to the amount
of principal coming due and payable on such date on the Outstanding Bonds.
All moneys in the Principal Account shall be used and withdrawn by the Trustee
solely for the purpose of paying the principal of the Bonds upon the maturity
thereof.
(c) Sinking Account. On or before the second (2nd) Business Day
preceding each date on which any Outstanding Term Bonds become subject to
mandatory Sinking Account redemption, the Agency shall withdraw from the
Special Fund and transfer to the Trustee for deposit in the Sinking Account an
amount which, when added to the amount then contained in the Sinking
Account, will be equal to the aggregate principal amount of the Term Bonds
required subject to mandatory Sinking Account redemption on such date. All
moneys on deposit in the Sinking Account shall be used and withdrawn by the
Trustee for the sole purpose of paying the principal of the Term Bonds as it shall
become due and payable upon the mandatory Sinking Account redemption
thereof.
(d) Reserve Account. In the event that the amount on deposit in the
Reserve Account at any time becomes less than the Reserve Requirement, the
Trustee shall, upon knowledge thereof, promptly notify the Agency of such fact.
Promptly upon receipt of any such notice, the Agency shall withdraw from the
Special Fund and transfer to the Trustee an amount sufficient to maintain the
Reserve Requirement on deposit in the Reserve Account. Amounts in the Reserve
Account shall be used and withdrawn by the Trustee solely for the purpose of
making transfers to the Interest Account, a~.d the Principal Account and Sinking
Account, in such order of priority, on any date which the principal of or interest
on the Bonds becomes due and payable hereunder, in the event of any deficiency
at any time in any of such accounts, or at any time for the retirement of all the
Bonds then Outstanding. So long as no Event of Default shall have occurred and
be continuing, any amount in the Reserve Account in excess of the Reserve
Requirement on the second (2nd) Business Day preceding each Interest Payment
Date shall be withdrawn from the Reserve Account by the Trustee and deposited
in the Interest Account.
The Agency shall have the right at any time to release funds from the
Reserve Account, in whole or in part, by tendering to the Trustee: (1) a Qualified
Reserve Fund Credit Instrument, and (2) an opinion of Bond Counsel stating that
such release will not, of itself, cause interest on the Bonds to become includable
in gross income for purposes of federal income taxation. Upon tender of such
items to the Trustee, the Trustee shall transfer such funds from the Reserve
Account to .the Agency for deposit into the Redevelopment Fund established for
the Redcvclopmcnt Project. Upon the expiration of any Qualified Reserve Fund
Credit Instrument, the Agency shall be obligated either (a) to replace such
Qualified Reserve Fund Credit Instrument with a new Qualified Reserve Fund
Credit Instrument, or (b) to deposit or cause to be deposited with the Trustee an
amount of funds equal to the Reserve Requirement, to be derived from the first
available Tax Revenues.
The Reserve Account may, upon written direction of the Agency to the
Trustee, be maintained in the form of one or more separate sub-accounts which
are established for the purpose of holding the proceeds of separate issues of the
Bonds in conformity with applicable provisions of the Code.
(e) Redemption Account. On or before the second (2nd) Business Day
preceding any date on which Bonds are subject to redemption, other than
mandatory Sinking Account redemption of Term Bonds, the Agency shall
withdraw from the Special Fund and transfer to the Trustee for deposit in the
Redemption Account an amount required to pay the principal of and premium, if
any, on the Bonds to be so redeemed on such date. All moneys in the
Redemption Account shall be used and withdrawn by the Trustee solely for the
purpose of paying the principal of and premium, if any, on the Bonds upon the
redemption thereof, on the date set for such redemption, other than mandatory
Sinking Account redemption of Term Bonds.
SECTION 4.04. Investment of Moneys in Funds. Moneys in the Debt Service Fund, the
Interest Account, the Principal Account, the Sinking Account, the Reserve Account, and the
Redemption Account, shall be invested by the Trustee in Permitted Investments specified in the
Request of the Agency delivered to the Trustee at least two (2) Business Days in advance of the
making of such investments; provided, however, that in the absence of any such direction from
the Agency, the Trustee shall invest any such moneys solely in Permitted Investments described
in clause (f) of the definition thereof. Moneys in the Special Fund, the Redevelopment Fund and
the Costs of Issuance Fund shall be invested by the Agency in any obligations in which the
Agency is legally authorized to invest funds within its control. For the purpose of acquiring any
investments hereunder, the Agency may commingle funds held by it hereunder with other funds
that it holds. Obligations purchased as an investment of moneys in any fund shall be deemed
to be part of such fund or account. Whenever in this Indenture any moneys are required to be
transferred by the Agency to the Trustee, such transfer may be accomplished by transferring a
like amount of Permitted Investments (valued at the market value thereof). All interest or gain
derived from the investment of amounts in any of the funds or accounts held by the Trustee
hereunder shall be retained in the respective fund or account from which such investment was
made; provided, however, that all interest or gain from the investment of amounts in the Reserve
Account shall be deposited by the Trustee in the Interest Account to the extent not required to
cause the balance in the Reserve Account to equal the Reserve Requirement. For purposes of
acquiring any investments hereunder, the Trustee may in its sole discretion commingle funds
held by it hereunder. The Trustee may act as principal or agent in the acquisition or disposition
of any investment and may impose its customary charges therefor. The Trustee shall incur no
liability for losses arising from any investments made pursuant to this Section. So long as no
Event of Default shall have occurred and be continuing, all interest or gain on investments of
amounts in the Special Fund shall be released from the pledge hereof and used by the Agency
for any lawful purposes.
The Agency acknowledges that to the extent regulations of the Comptroller of the
Currency or other applicable regulatory entity grant the Agency the right to receive brokerage
confirmations of security transactions as they occur, the Agency specifically waives receipt of
such confirmations to the extent permitted by law. The Trustee will furnish the Agency periodic
cash transaction statements which include detail for all investment transactions made by the
Trustee hereunder.
ARTICLE V
OTHER COVENANTS OF THE AGENCY
SECTION 5.01. Punctual Payment. The Agency shall punctually pay or cause to be paid
the principal, premium (if any) and interest to become due in respect of all the Bonds in strict
conformity with the terms of the Bonds and of this Indenture. The Agency shall faithfully
observe and perform all of the conditions, covenants and requirements of this Indenture and all
Supplemental Indentures. Nothing herein contained shall prevent the Agency from making
advances of its own moneys howsoever derived to any of the uses or purposes referred to
herein.
SECTION 5.02. Limitation on Additional Indebtedness; Compliance With Plan Limitations.
The Agency hereby covenants that it shall not issue any bonds, notes or other obligations, enter
into any agreement or otherwise incur any indebtedness, which is in any case payable from all
or any part of the Tax Revenues, excepting only the 1997 Bonds, any Parity Debt, any
Subordinate Debt, and any obligations entered into pursuant to Section 5.09. The Agency shall
take no action, including but not limited to the issuance of its bonds, notes or other obligations,
which causes or which, with the passage of time, would cause any of the Plan Limitations to be
exceeded or violated.
SECTION 5.03. Extension of Payment of Bonds. The Agency 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 Outstanding Bonds 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 Agency
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 5.04. Payment of Claims. The Agency shall 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 held by the Trustee pursuant hereto, or
which might impair the security of the Bonds. Nothing herein contained shall require the Agency
to make any such payment so long as the Agency in good faith shall contest the validity of said
claims.
SECTION 5.05. Books and Accounts; Financial Statements. The Agency shall 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 Project, the Tax Revenues and the Special Fund.
Such books of record and accounts shall at all times during business hours be subject to the
inspection of the Owners of not less than ten percent (10%) in aggregate principal amount of the
Bonds then Outstanding, or their representatives authorized in writing.
The Agency will cause to be prepared, within one hundred and eighty (180) days after
the close of each Fiscal Year so long as any of the Bonds are Outstanding, complete audited
financial statements with respect to such Fiscal Year showing the Tax Revenues, all
disbursements from the Special Fund and the financial condition of the Redevelopment Project,
including the balances in all funds and accounts relating to the Redevelopment Project, as of the
end of such Fiscal Year, and shall furnish the Trustee a Certificate of the Agency stating that the
Agency is in compliance with its obligations hereunder. The Agency shall furnish a copy of such
statements to any Owner upon reasonable request and at the expense of such Owner.
SECTION 5.06. Protection of Security and Rights of Owners. The Agency will preserve and
protect the security of the Bonds and the rights of the Owners. From and after the date of
issuance of any Bonds, such Bonds shall be incontestable by the Agency.
SECTION 5.07. Payments of Taxes and Other Charges. The Agency will pay and
discharge, or cause to be paid and discharged, all taxes, service charges, assessments and other
governmental charges which may hereafter be lawfully imposed upon the Agency or the
properties then owned by the Agency in the Redevelopment Project, 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 Project or any part thereof.
SECTION 5.08. Disposition of Property. The Agency will not participate in the
disposition of any land or real property in the Redevelopment Project 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 Indenture) so
that such disposition shall, when taken together with other such dispositions, aggregate more
than ten percent (10%) of the land area in the Redevelopment Project unless such disposition is
permitted as hereinafter provided in this Section 5.08. If the Agency proposes to participate in
such a disposition, it shall thereupon appoint an Independent Redevelopment Consultant to
report on the effect of said proposed disposition. If the Report of the Independent
Redevelopment Consultant concludes that the security of the Bonds or the rights of the Owners
will not be materially adversely impaired by said proposed disposition, the Agency may
thereafter make such disposition. If said Report concludes that such security will be materially
adversely impaired by said proposed disposition, the Agency shall not approve said proposed
disposition.
SECTION 5.09. Maintenance of Tax Revenues. The Agency shall comply with all
requirements of the Law to insure the allocation and payment to it of the Tax Revenues,
including without limitation the timely filing of any necessary statements of indebtedness with
appropriate officials of the County and the State. The Agency shall not enter into any
agreement with the County or any other governmental unit, other than the Pass-Through
Agreement, which would have the effect of reducing the amount of Tax Revenues unless the
Agency shall first obtain the Report of an Independent Redevelopment Consultant stating that
the Tax Revenues remaining after the entering into of such agreement, estimated to be received in
each of the three (3) succeeding Bond Years, plus the Additional Revenues, are at least equal to
one hundred twenty percent (120%) of average Annual Debt Service on the Bonds during such
three Bond Years.
SECTION 5.10. Tax Covenants Relating to 1997 Bonds.
(a) Private Activity Bond Limitation. The Agency shall assure that the proceeds
of the 1997 Bonds are not so used as to cause the 1997 Bonds to satisfy the private
business tests of section 141(b) of the Code or the private loan financing test of section
141(c) of the Code.
(b) Federal Guarantee Prohibition. The Agency shall not take any action or
permit or suffer any action to be taken if the result of the same would be to cause any of
the 1997 Bonds to be "federally guaranteed" within the meaning of section 149(b) of the
Code.
(c) Rebate Requirement. The Agency shall take any and all actions necessary to
assure compliance with section 148(f) of the Code, relating to the rebate of excess
investment earnings, if any, to the federal government, to the extent that such section is
applicable to the 1997 Bonds.
(d) No Arbitrage. The Agency shall not take, or permit or suffer to be taken by
the Trustee or otherwise, any action with respect to the proceeds of the 1997 Bonds
which, if such action had been reasonably expected to have been taken, or had been
deliberately and intentionally taken, on the date of issuance of the 1997 Bonds would
have caused the 1997 Bonds to be "arbitrage bonds" within the meaning of section 148 of
the Code.
SECTION 5.11. Maintenance of Tax Exemption. The Agency shall take all actions
necessary to assure the exclusion of interest on the Bonds from gross income of the Owners of
the Bonds to the same extent as such interest is permitted to be excluded from gross income
under the Code as in effect on the Closing Date.
SECTION 5.12. Further Assurances. The Agency will adopt, make, execute and deliver
any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Indenture,
and for the better assuring and confirming unto the Owners of the rights and benefits provided
in this Indenture.
SECTION 5.13. Compliance with the Law; Low and Moderate Income Housing Fund.
(a) 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 Redevelopment Plan and the Law,
including without limitation, duly noticing and holding any public hearing required by
either Section 33445 or 33679 of the Law prior to application of proceeds of the Bonds
to any portion of the Project subject to either Section 33445 or 33679 of the Law.
(b) The Agency further covenants that it shall deposit or cause to be deposited
in the Low and Moderate Income Housing Fund established pursuant to Section 33334.3
of the Law, such amounts when, as and if required to be deposited therein pursuant to
the Law and shall expend amounts deposited in the Low and Moderate Income Housing
Fund, including, if applicable, proceeds of the Bonds and of any Parity Obligations
deposited therein, solely in accordance with Section 33334.2 of the Law.
SECTION 5.14. Continuing Disclosure. The Agency hereby covenants and agrees that it
will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Indenture, failure of the Agency to comply with the
Continuing Disclosure Certificate shall not be considered an Event of Default; however, any
Participating Underwriter or any holder or beneficial owner of the 1997 Bonds may take such
actions as may be necessary and appropriate, including seeking specific performance by court
order, to cause the Agency to comply with its obligations under this Section 5.14.
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Duties, Immunities and Liabilities of Trustee.
(a) The Trustee shall prior to the occurrence of an Event of Default, and after the curing
of all Events of Default which may have occurred, perform such duties and only such duties as
are specifically set forth in this Indenture and no implied covenants or duties shall be read into
this Indenture against the Trustee. The Trustee shall, during the existence of any Event of
Default (which has not been cured), exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a prudent person would
exercise or use in the conduct of such person's own affairs.
(b) The Agency may remove the Trustee at any time, unless an Event of Default shall
have occurred and then be continuing, and shall remove the Trustee (i) if at any time requested
to do so by an instrument or concurrent instruments in writing signed by the Owners of not less
than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys
duly authorized in writing) or (ii) if at any time the Trustee shall cease to be eligible in
accordance with subsection (e) of this Section, or shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Truste6 or its property shall be
appointed, or any public officer shall take control or charge of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation. In each case such removal
shall be accomplished by the giving of 30 days' written notice of such removal by the Agency to
the Trustee, whereupon the Agency shall appoint a successor Trustee by an instrument in
writing.
(c) The Trustee may at any time resign by giving written notice of such resignation to the
Agency and by giving the Owners notice of such resignation by first class marl, postage prepaid,
at their respective addresses shown on the Registration Books. Upon receiving such notice of
resignation, the Agency shall promptly appoint a successor Trustee by an instrument in writing.
(d) Any removal or resignation of the Trustee and appointment of a successor Trustee
shall become effective upon acceptance of appointment by the successor Trustee. If no
successor Trustee shall have been appointed and have accepted appointment within forty-five
(45) days following giving notice of removal or notice of resignation as aforesaid, the resigning
Trustee or any Owner (on behalf of himself and all other Owners) may petition any court of
competent jurisdiction for the appointment of a successor Trustee, and such court may
thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee.
Any successor Trustee appointed under this Indenture shall signify its acceptance of such
appointment by executing and delivering to the Agency and to its predecessor Trustee a written
acceptance thereof, and to the predecessor Trustee an instrument indemnifying the predecessor
Trustee for any costs or claims arising during the time the successor Trustee serves as Trustee
hereunder, and after payment by the Agency of all unpaid fees and expenses of the predecessor
Trustee, such successor Trustee, without any further act, deed or conveyance, shall become
vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of
such predecessor Trustee, with like effect as if originally named Trustee herein; but,
nevertheless, upon the receipt by the predecessor Trustee of the Request of the Agency or the
request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all
instruments of conveyance or further assurance and do such other things as may reasonably be
required for more fully and certainly vesting in and confirming to such successor Trustee all the
right, title and interest of such predecessor Trustee in and to any property held by it under this
Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or
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other property subject to the trusts and conditions herein set forth. Upon request of the
successor Trustee, the Agency shall execute and deliver any and all instruments as may be
reasonably required for more fully and certainly vesting in and confirming to such successor
Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations.
Upon acceptance of appointment by a successor Trustee as provided in this subsection, the
Agency shall marl or cause the successor Trustee to marl, by first class mail postage prepaid, a
notice of the succession of such Trustee to the trusts hereunder to each rating agency then rating
the Bonds and to the Owners at the addresses shown on the Registration Books. If the Agency
fails to mail such notice within fifteen (15) days after acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be marled at the expense of
the Agency.
(e) Any Trustee appointed under the provisions of this Section in succession to the
Trustee shall be a trust company or bank having the powers of a trust company having a
combined capital and surplus of at least Fifty Million Dollars ($50,000,000), and subject to
supervision or examination by federal or state authority. If such bank or trust company
publishes a report of condition at least annually, pursuant to law or to the requirements of any
supervising or examining authority above referred to, then for the purpose of this subsection the
combined capital and surplus of such bank or trust company shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the provisions of this
subsection (e), the Trustee shall resign immediately in the manner and with the effect specified
in this Section.
SECTION 6.02. Merger or Consolidation. Any bank or trust company into which the
Trustee may be merged or converted or with which either of them may be consolidated or any
bank or trust company resulting from any merger, conversion or consolidation to which it shall
be a party or any bank or trust company to which the Trustee may sell or transfer all or
substantially all of its corporate trust business, provided such bank or trust company shall be
eligible under subsection (e) of Section 6.01, shall be the successor to such Trustee without the
execution or filing of any paper or any further act, anything herein to the contrary
notwithstanding.
SECTION 6.03. Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as statements
of the Agency, and the Trustee shall not assume responsibility for the correctness of the same,
nor make any representations as to the validity or sufficiency of this Indenture or any
supplement or amendment hereto or of the Bonds nor shall incur any responsibility in respect
thereof, other than as expressly stated herein. The Trustee shall, however, be responsible for its
representations contained in its certificate of authentication on the Bonds. The Trustee shall not
be liable in connection with the performance of its duties hereunder, except for its own
negligence or willful misconduct. The Trustee may act through agents, receivers or attorneys
hereunder and shall not be liable for the acts of any agents receivers or attorneys of the Trustee
selected by it with due care. The Trustee may become the Owner of any Bonds with the same
rights it would have if they were not Trustee and, to the extent permitted by law, may act as
depository 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 the Owners, whether or
not such committee shall represent the Owners of a majority in principal amount of the Bonds
then Outstanding.
(b) The Trustee shall not be liable for any error of judgment made in good faith by a
responsible officer.
(c) The Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Owners of not less than a
majority in aggregate principal amount of the Bonds at the time Outstanding relating to the
time, method and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee under this Indenture.
(d) The Trustee shall not be liable for any action taken by it in good faith and believed
by it to be authorized or within the discretion or rights or powers conferred upon it by this
Indenture, except for actions arising from the negligence or willful misconduct of the Trustee.
The permissive right of the Trustee to do things enumerated hereunder shall not be construed as
a mandatory duty.
(e) The Trustee shall not be deemed to have knowledge of any Event of Default
hereunder unless and until it shall have actual knowledge thereof, or shall have received written
notice thereof at its Principal Office in San Francisco, California. Except as otherwise expressly
provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or of any of the
documents executed in connection with the Bonds, or as to the existence of an Event of Default
hereunder or thereunder. The Trustee shall not be responsible for the validity or effectiveness of
any collateral given to or held by it. Without limiting the generality of the foregoing, the Trustee
shall not be responsible for reviewing the contents of any financial statements and may rely
conclusively on the Certificate of the Agency to establish the Agency's compliance with its
financial covenants hereunder, including, without limitation, its covenants regarding the deposit
of Tax Revenues into the Special Fund and the investment and application of moneys on
deposit in the Special Fund (other than its covenants to transfer such moneys to the Trustee
when due hereunder).
(f) No provision in this Indenture shall require the Trustee to risk or expend its own
funds or otherwise incur any financial liability hereunder.
(g) The Trustee shall have no responsibility with respect to any information, statement,
or recital in any official statement, offering memorandum or any other disclosure material
prepared or distributed with respect to the Bonds.
(h) Before taking any action under Article VIII hereof, the Trustee may require indemnity
satisfactory to the Trustee be furnished from any expenses and to protect it against any liability
it may incur hereunder.
(i) The immunities extended to the Trustee also extend to its directors, officers,
employees and agents.
SECTION 6.04. Right to Rely on Documents. The Trustee shall be protected in acting
upon any notice, resolution, request, consent, order, certificate, report, opinion or other paper or
document believed by it to be genuine and to have been signed or presented by the proper party
or parties, in the absence of negligence or willful misconduct by the Trustee. The Trustee may
consult with counsel, including, without limitation, Bond Counsel or other counsel of or to the
Agency, with regard to legal questions, and in the absence of negligence or willful misconduct by
the Trustee the opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken or suffered by the Trustee hereunder in accordance therewith.
The Trustee shall not be bound to recognize any person as the Owner of a Bond unless
such ownership is reflected on the Registration Books.
Whenever in the administration of the trusts imposed upon it by this Indenture the
Trustee shall deem it necessary or desirable that a matter be proved or established prior to
taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and established by a
Certificate of the Agency, which shall be full warrant to the Trustee for any action taken or
suffered in good faith under the provisions of this Indenture in reliance upon such Certificate,
but in its discretion the Trustee may (but shall have no duty to), in lieu ~hereof, accept other
evidence of such matter or may require such additional evidence as to it may deem reasonable.
The Trustee may conclusively rely on any certificate or Report of any Independent Accountant
or Independent Redevelopment Consultant appointed by the Agency.
SECTION 6.05. Preservation and Inspection of Documents. All documents received by the
Trustee under the provisions of this Indenture shall be retained in its possession and shall be
subject during normal business hours, and upon reasonable prior written notice, to the
inspection of the Agency and any Owner, and their agents and representatives duly authorized
in writing.
SECTION 6.06. Compensation and Indemnification. The Agency shall pay to the Trustee
from time to time compensation for all services rendered under this Indenture and also all
expenses, charges, legal and consulting fees and other disbursements and those of its attomeys,
agents and employees, incurred in and about the performance of its powers and duties under
this Indenture. The Trustee shall have a first lien on the Tax Revenues and all funds and
accounts held by the Trustee hereunder to secure the payment to the Trustee of all fees, costs
and expenses, including 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 VIII.
The Agency further covenants and agrees to indemnify and save the Trustee and its
officers, directors, agents and employees, harmless against any loss, expense and liabilities
which it may incur arising out of or in the exercise and performance of its powers and duties
hereunder, including without limitation fees and expenses of its attorneys and the costs and
expenses of defending against any claim of liability and of enforcing any remedies hereunder
and under any related documents, but excluding any and all losses, expenses and liabilities
which are due to the negligence or willful misconduct of the Trustee, its officers, directors,
agents or employees. The obligations of the Agency under this Section 6.06 shall survive
resignation or removal of the Trustee under this Indenture and payment of the Bonds and
discharge of this Indenture.
SECTION 6.07. Accounting Records and Financial Statements. The Trustee shall at all times
keep, or cause to be kept, proper books of record and account, prepared in accordance with
industry standards, in which complete and accurate entries shall be made of all transactions
made by it relating to the proceeds of the Bonds and all funds and accounts established and
held by the Trustee pursuant to this Indenture. Such books of record and account shall be
available for inspection by the Agency at reasonable hours, during regular business hours, with
reasonable prior notice and under reasonable circumstances. The Trustee shall furnish to the
Agency, at least monthly, an accounting (which may be in the form of its customary statements)
of all transactions relating to the proceeds of the Bonds and all funds and accounts held by the
Trustee pursuant to this Indenture.
SECTION 6.08. Appointment of Co-Trustee. It is the purpose of this Indenture that there
shah be no violation of any law of any jurisdiction (including particularly the law of the State)
denying or restricting the right of national banking associations 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 Trustee deems that by reason of any present or future law of any jurisdiction it
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 Trustee appoint an additional
individual or institution as a separate co-Trustee. The following provisions of this Section 6.08
are adopted to these ends.
In the event that the Trustee appoints an additional individual or institution as a
separate or co-Trustee, each and every remedy, power, right, claim, demand, cause of action,
immunity, 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 Agency 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 Agency. 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.
The Trustee may perform any of its obligations or duties hereunder and under any
related documents through agents or attorneys and shall not be responsible for the acts of any
such agents or attorneys appointed by it with due care.
SECTION 6.09. Acquisition, Disposition and Valuation of Investments.
(a) Except as otherwise provided in subsection (b) of this Section, the Agency
and thc Trustee covenant=s that all investments of amounts deposited in any fund or
account created by or pursuant to this Indenture, or otherwise containing gross proceeds
of the Bonds (within the meaning of section 148 of the Code solely for purposes of the
Code) shall be acquired, disposed of, and valued (as of the date that valuation is
required by this Indenture or the Code solely for purposes of the Code) at Fair Market
Value. The Trustee shall have no duty in connection with the determination of Fair
Market Value other than to follow the investment directions of the Agency.
(b) Investments in funds or accounts (or portions thereof) that are subject to a
yield restriction under applicable provisions of the Code and (unless valuation is
undertaken at least annually) investments in the Reserve Fund shall be valued solely for
purposes of the Code at their present value (within the meaning of section 148 of the
Code) provided that the Agency shall inform the Trustee which funds are subject to a
yield restriction and the Agency shall provide the Trustee with any necessary valuation
criteria or formulae.
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
SECTION 7.01. Amendment . This Indenture and the rights and obligations of the
Agency and of the Owners may be modified or amended at any time by a Supplemental
Indenture which shall become binding upon adoption, without the consent of any Owners, to
the extent permitted by law and only for any one or more of the following purposes -
(a) to add to the covenants and agreements of the Agency contained in
this Indenture, other covenants and agreements thereafter to be observed, or to
limit or surrender any rights or power herein 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 this
Indenture, 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 in
the opinion of Bond Counsel;
(c) to provide for the issuance of Parity Debt pursuant to Section 3.05,
and to provide the terms and conditions under which such Parity Debt may be
issued, including but not limited to the establishment of special funds and
accounts relating thereto and any other provisions relating solely thereto, subject
to and in accordance with the provisions of Section 3.05; or
(d) to make such additions, deletions or modifications as may be
necessary or desirable in the opinion of Bond Counsel to assure exemption from
federal income taxation of interest on the Bonds.
Except as set forth in the preceding paragraph, this Indenture and the rights and
obligations of the Agency and of the Owners may be modified or amended at any time by a
Supplemental Indenture which shall become binding when the written consents of the Owners of
a majority in aggregate principal amount of the Bonds then Outstanding are delivered to 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 Agency to pay the
principal, interest or redemption premium (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.
Promptly following the adoption of any Supplemental Indenture pursuant to this Section
7.01, the Agency shall deliver a copy of the executed Supplemental Indenture to each rating
agency then rating the Bonds.
SECTION 7.02. Effect of Supplemental Indenture. From and after the time any
Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall be
deemed to be modified and amended in accordance therewith, the respective rights, duties and
obligations of the parties hereto or thereto and all Owners, 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 Amendment. After the
effective date of any amendment or modification hereof pursuant to this Article VII, the Agency
may determine that any or all of the Bonds shall bear a notation, by endorsement in form
approved by the Agency, as to such amendment or modification and in that case upon demand
of the Agency the Owners of such Bonds shall present such Bonds for that purpose at the
Principal Office of the Trustee and thereupon a suitable notation as to such action shall be
made on such Bonds. In lieu of such notation, the Agency may determine that new Bonds shall
be prepared and executed in exchange for any or all of the Bonds and in that case upon
demand of the Agency the Owners of the Bonds shall present such Bonds for exchange at the
Principal Office of the Trustee, without cost to such Owners.
SECTION 7.04. Amendment by Mutual Consent. The provisions of this Article VII shall
not prevent any Owner from accepting any amendment as to the particular Bond held by such
Owner, provided that due notation thereof is made on such Bond.
SECTION 7.05. Trustee's Reliance. The Trustee may rely, and shall be protected in
relying, upon a Certificate of the Agency and an opinion of counsel stating that all requirements
of this Indenture relating to the amendment or modification hereof have been satisfied and that
such amendments or modifications do not materially adversely affect the interests of the
Owners.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
SECTION 8.01. Events of Default and Acceleration of Maturities. The following events shall
constitute Events of Default hereunder:
(a) Failure to pay any installment of the principal of any Bonds when
and as the same shall become due and payable, whether at maturity as therein
expressed, by proceedings for redemption, by acceleration, or otherwise.
(b) Failure to pay any installment of interest on any Bonds when and as
the same shall become due and payable.
(c) Failure by the Agency to observe and perform any of the other
covenants, agreements or conditions on its part in this Indenture or in the Bonds
contained, if such failure shall have continued for a period of sixty (60) days
after written notice thereof, specifying such failure and requiring the same to be
remedied, shall have been given to the Agency by the Trustee; provided, however,
if in the reasonable opinion of the Agency the failure stated in the notice can be
corrected, but not within such sixty (60) day period, such failure shall not
constitute an Event of Default if corrective action is instituted by the Agency
within such sixty (60) day period and the Agency shall thereafter diligently and
in good faith cure such failure in a reasonable period of time.
(d) The Agency shall commence a voluntary case under Title 11 of the
United States Code or any substitute or successor statute.
If an Event of Default has occurred and is continuing, the Trustee may, and if requested
in writing by the Owners of a majority in aggregate principal amount of the Bonds then
Outstanding the Trustee shall, (a) declare the principal of the Bonds, together with the accrued
interest thereon, to be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable, anything in this Indenture or in the Bonds to the
contrary notwithstanding, and (b) upon receipt of indemnity from any loss or liability exercise
any other remedies available to the Trustee and the Owners in law or at equity.
Immediately upon becoming aware of the occurrence of an Event of Default, the Trustee
shall give notice of such Event of Default to the Agency by telephone confirmed in writing. Such
notice shall also state whether the principal of the Bonds shall have been declared to be or have
immediately become due and payable. With respect to any Event of Default described in
clauses (a) or (b) above the Trustee shall, and with respect to any Event of Default described in
clause (c) above the Trustee in its sole discretion may, also give such notice to the Owners in the
same manner as provided herein for notices of redemption of the Bonds
This provision, however, is subject to the condition that if, at any time after the
principal of the Bonds shall have been so declared due and payable, and before any judgment
or decree for the payment of the moneys due shall have been obtained or entered, the Agency
shall deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior
to such declaration and all matured installments of interest (if any) upon all the Bonds, with
interest on such overdue installments of principal and interest (to the extent permitted by law)
at the respective rates then borne by such Bonds, and the fees and expenses of the Trustee,
including any fees and expenses of its attorneys, and any and all other defaults known to the
Trustee (other than in the payment of principal of and interest on the Bonds due and payable
solely by reason of such declaration) shall have been made good or cured to the satisfaction of
the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor,
then, and in every such case, the Owners of a majority in aggregate principal amount of the
Bonds then Outstanding, by written notice to the Agency and to the Trustee, may, on behalf of
the Owners of all of the Bonds, rescind and annul such declaration and its consequences.
However, no such rescission and annulment shall extend to or shall affect any subsequent
default, or shall impair or exhaust any right or power consequent thereon.
SECTION 8.02. Application of Funds Upon Acceleration. All of the Tax Revenues and all
sums in the funds and accounts established and held by the Trustee hereunder upon the date of
the declaration of acceleration as provided in Section 8.01, and all sums thereafter received by
the Trustee hereunder, shall be applied by the Trustee as follows and in the following order:
(a) To the payment of any fees, costs and expenses incurred by the
Trustee to protect the interests of the Owners of the Bonds; payment of the fees,
costs and expenses of the Trustee (including fees and expenses of its counsel)
incurred in and about the performance of its powers and duties under this
Indenture and the payment of all fees, costs and expenses owing to the Trustee
pursuant to Section 6.06 hereof;
(b) To the payment of the whole amount then owing and unpaid upon
the Bonds for interest and principal with interest on such overdue amounts at the
respective rates of interest borne by the Outstanding Bonds, and in case such
moneys shall be insufficient to pay in full the whole amount so owing and unpaid
upon the Bonds, then to the payment of such interest, principal and interest on
overdue amounts without preference or priority among such interest, principal
and interest on overdue amounts ratably to the aggregate of such interest,
principal and interest on overdue amounts.
SECTION 8.03. Power of Trustee to Control Proceedings. In the event that the Trustee,
upon the happening of an Event of Default, shall have taken any action, by judicial proceedings
or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the
request of the Owners of a majority in principal amount of the Bonds then Outstanding, it shall
have full power, in the exercise of its discretion for the best interests of the Owners of the
Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or
other disposal of such action; provided, however, that the Trustee shall not, unless there no longer
continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise
dispose of any litigation pending at law or in equity, if at the time there has been filed with it a
written request signed by the Owners of a majority in principal amount of the Outstanding
Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other
disposal of such litigation.
SECTION 8.04. Limitation on Owners' Right to Sue. No Owner of any Bond issued
hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for
any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to
the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority
in aggregate principal amount of all the Bonds then Outstanding shall have made written
request upon the Trustee to exercise the powers hereinbefore granted or to institute such action,
suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee
indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to
comply with such request for a period of sixty (60) days after such written request shall have
been received by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby
declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy
hereunder; it being understood and intended that no one or more Owners shall have any right in
any manner whatever by his or their action to enforce any right under this Indenture, except in
the manner herein provided, and that all proceedings at law or in equity to enforce any
provision of this Indenture shall be instituted, had and maintained in the manner herein
provided and for the equal benefit of all Owners of the Outstanding Bonds.
The right of any Owner of any Bond to receive payment of the principal of and
premium, if any, and interest on such Bond as herein provided, shall not be impaired or
affected without the written consent of such Owner, notwithstanding the foregoing provisions
of this Section or any other provision of this Indenture.
SECTION 8.05. Non-waiver. Nothing in this Article VIII or in any other provision of this
Indenture or in the Bonds, shall affect or impair the obligation of the Agency, which is absolute
and unconditional, to pay from the Tax Revenues and other amounts pledged hereunder, the
principal of and interest and redemption premium (if any) on the Bonds to the respective
Owners when due and payable as herein provided, or affect or impair the right of action, which
is also absolute and unconditional, of the Owners to institute suit to enforce such payment by
virtue of the contract embodied in the Bonds.
A waiver of any default by any Owner shall not affect any subsequent default or impair
any rights or remedies on the subsequent default. No delay or omission of any Owner to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver of any such default or an acquiescence therein, and every
power and remedy conferred upon the Owners by the Law or by this Article VIII may be
enforced and exercised from time to time and as often as shall be deemed expedient by the
Owners.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be
abandoned or determined adversely to the Owners, the Agency and the Owners shall be
restored to their former positions, rights and remedies as if such suit, action or proceeding had
not been brought or taken.
SECTION 8.06. Actions by Trustee as Attorney-in-Fact. Any suit, action or proceeding
which any Owner shall have the right to bring to enforce any right or remedy hereunder may be
brought by the Trustee for the equal benefit and protection of all Owners similarly situated and
the Trustee is hereby appointed (and the successive respective Owners by taking and holding
the Bonds shall be conclusively deemed so to have appointed it) the true and lawful attorney-
in-fact of the respective Owners 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
as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such
attorney-in-fact, subject to the provisions of Article VI.
SECTION 8.07. Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Owners is intended to be exclusive of any other remedy. Every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now or hereafter
existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting
and without regard to any other remedy conferred by the Law or any other law.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Benefits Limited to Parties. Nothing in this Indenture, expressed or
implied, is intended to give to any person other than the Agency, the Trustee and the Owners,
any right, remedy, claim under or by reason of this Indenture. Any covenants, stipulations,
promises or agreements in this Indenture contained by and on behalf of the Agency shall be for
the sole and exclusive benefit of the Trustee and the Owners.
SECTION 9.02. Successor is Deemed Included in All References to Predecessor. Whenever in
this Indenture or any Supplemental Indenture either the Agency or the Trustee is named or
referred to, such reference shall be deemed to include the successors or assigns thereof, and all
the covenants and agreements in this Indenture contained by or on behalf of the Agency or the
Trustee shall bind and inure to the benefit of the respective successors and assigns thereof
whether so expressed or not.
SECTION 9.03. Defeasance of Bonds. If the Agency shall pay and discharge the entire
indebtedness on any Bonds in any one or more of the following ways:
(a) by paying or causing to be paid the principal of and interest on such
Bonds, as and when the same become due and payable;
(b) by irrevocably depositing with the Trustee or another fiduciary, in
trust, at or before maturity, money which, together with the available amounts
then on deposit in the funds and accounts established pursuant to this Indenture,
in the opinion or report of an Independent Accountant is fully sufficient to pay
such Bonds, including all principal, interest and redemption premium, if any;
(c) by irrevocably depositing with the Trustee or another fiduciary, in
trust, Federal Securities in such amount as an Independent Accountant shall
determine will, together with the interest to accrue thereon and available moneys
then on deposit in any of the funds and accounts established pursuant to this
Indenture, be fully sufficient to pay and discharge the indebtedness on such
Bonds (including all principal, interest and redemption premium, if any) at or
before maturity; or
(d) by purchasing such Bonds prior to maturity and tendering such
Bonds to the Trustee for cancellation;
and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption
shall have been duly given or provision satisfactory to the Trustee shall have been made for the
giving of such notice, then, at the election of the Agency, and notwithstanding that any such
Bonds shall not have been surrendered for payment, the pledge of the Tax Revenues and other
funds provided for in this Indenture and all other obligations of the Trustee and the Agency
under this Indenture with respect to such Bonds shall cease and terminate, except only (a) the
obligations of the Agency under Section 5.10(c); (b) the obligation of the Trustee to transfer and
exchange Bonds hereunder, (c) the obligation of the Agency to pay or cause to be paid to the
Owners of such Bonds, from the amounts so deposited with the Trustee, all sums due thereon,
and (d) the obligations of the Agency to compensate and indemnify the Trustee pursuant to
Section 6.06. Notice of such election shall be filed with the Trustee. Any funds thereafter held
by the Trustee, which are not required for said purpose, shall be paid over to the Agency.
SECTION 9.04. Execution of Documents and Proof of Ownership by Owners. Any request,
declaration or other instrument which this Indenture may require or permit to be executed by
any Owner may be in one or more instruments of similar tenor, and shall be executed by such
Owner in person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by
any Owner or his attorney of such request, declaration or other instrument, or of such writing
appointing such attorney, may be proved by the certificate of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded in the state in which he purports
to act, that the person signing such request, declaration or other instrument or writing
acknowledged to him the execution thereof, or by an affidavit of a witness of such execution,
duly sworn to before such notary public or other officer.
The ownership of Bonds and the amount, maturity, number and date of ownership
thereof shall be proved by the Registration Books.
Any request, declaration or other instrument or writing of the Owner of any Bond shall
bind all future Owners of such Bond in respect of anything done or suffered to be done by the
Agency or the Trustee in good faith and in accordance therewith.
SECTION 9.05. 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 City (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
knows to be so owned or held shall be disregarded.
SECTION 9.06. 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
or any premium on the Bonds; but nothing herein contained shall relieve any such member,
officer, agent or employee from the performance of any official duty provided by law.
SECTION 9.07. Destruction of Cancelled Bonds. Whenever in this Indenture provision is
made for the surrender to the Agency of any Bonds which have been paid or cancelled pursuant
to the provisions of this Indenture, upon receipt by the Trustee of the Request of the Agency a
certificate of destruction duly executed by the Trustee shall be deemed to be the equivalent of
the surrender of such canceled Bonds and the Agency shall be entitled to rely upon any
statement of fact contained in any certificate with respect to the destruction of any such Bonds
therein referred to. The Agency shall pay all costs of microfilming the Bonds to be destroyed.
SECTION 9.08. Notices. All written notices to be given under this Indenture 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 either (a) upon transmission by facsimile transmission or other
form of telecommunication, to the extent telephone notice of such transmission is given by the
sender to the recipient, (b) 48 hours after deposit in the United States marl, postage prepaid, or
(c) in the case of personal delivery to any person, upon actual receipt. The Agency or the
Trustee may, by written notice to the other parties, from time to time modify the address or
number to which communications are to be given hereunder.
-- If to the Agency: of South San
If to the Trustee:
Redevelopment Agency of the City
Francisco
City HaH
400 Grand Avenue
South San Francisco, California 94080
Attention: Executive Director
Fax: (415) 871-7318
First Trust of California, National Association
One California Street, Suite 400
San Francisco, California 94111
Attention:
Fax: (415) 273-4592
SECTION 9.09. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase
of this Indenture shah for any reason be held illegal, invalid or unenforceable, such holding shah
not affect the validity of the remaining portions of this Indenture. The Agency and the Trustee
hereby declare that they would have entered into this Indenture and each and every other
Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds
pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences,
clauses, or phrases of this Indenture may be held illegal, invalid or unenforceable.
SECTION 9.10. Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding, any money held by the Trustee in trust for the payment and discharge of the
interest or premium (if any) on or principal of the Bonds which remains unclaimed for two (2)
years after the date when the payments of such interest, premium and principal have become
payable, if such money was held by the Trustee at such date, or for two (2) years after the date
of deposit of such money if deposited with the Trustee after the date when the interest and
premium (if any) on and principal of such Bonds have become payable, shah upon receipt by
the Trustee of the Request of the Agency be repaid by the Trustee to the Agency as its absolute
property free from trust, and the Trustee shall thereupon be released and discharged with
respect thereto and the Owners shall look only to the Agency for the payment of the principal
of and interest and redemption premium (if any) on of such Bonds.
SECTION 9.11. Execution in Counterparts. This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
SECTION 9.12. Governing Law. This Indenture shall be construed and governed in
accordance with the laws of the State.
IN WITNESS WHEREOF, the REDEVELOPMENT AGENCY OF THE CITY OF SOUTH
SAN FRANCISCO has caused this Indenture to be signed in its name by its Acting Executive
Director and attested to by its Agency Clerk, and FIRST TRUST OF CALIFORNIA,
NATIONAL ASSOCIATION in token of its acceptance of the trusts created hereunder, has
caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized,
all as of the day and year first above written.
REDEVELOPMENT AGENCY OF
CITY OF SOUTH SAN FRANCISCO
THE
(S E A L)
Attest:
By
Executive Director
By
Agency Clerk
FIRST TRUST OF CALIFORNIA,
NATIONAL ASSOCIATION,
as Trustee
Attest:
By
Authorized Officer
By
Authorized Officer
-39-
EXHIBIT A
FORM OF 1997 Bonds
No. R-
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
REDEVELOPMENT AGENCY OF THE
CITY OF SOUTH SAN FRANCISCO
DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT
1997 TAX ALLOCATION BOND
RATE OF INTEREST:
MATUR1TY DATE:
ORIGINAL ISSUE DATE:
Junel, 1997
CUSW:
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
The REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, a
public body, corporate and politic, duly organized and existing under the laws of the State of
California (the "Agency"), for value received, hereby promises to pay (but only out of the Tax
Revenues and other moneys and securities 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 identified above in like lawful money from 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 calendar day of the month preceding such Interest Payment Date (a "Record Date"), in
which event it shall bear interest from such Interest Payment Date, or unless this Bond is
authenticated on or prior to August 15, 1997, 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, 1997 (the "Interest Payment Dates") until payment of such Principal Amount in
full. The Principal Amount hereof is payable upon presentation hereof at the principal
corporate trust office (the "Principal Office") of First Trust of California, National Association,
as Trustee (the "Trustee"). Interest hereon is payable by check of the Trustee mailed by first
class mail on each Interest Payment Date to the Registered Owner hereof at the address of such
Registered Owner as it appears on the registration books of the Trustee as of the preceding
Record Date; provided that at the written request of the owner of at least $1,000,000 aggregate
principal amount of Bonds which written request is on file with the Trustee prior to any Record
Date specifying such account information as the Trustee may require, interest on such Bonds
A-1
shall be paid to such owner on the succeeding Interest Payment Date by wire transfer to such
account within the United States of America as shall be specified in such written request.
This Bond is one of a duly authorized issue of bonds of the Agency designated as the
"Redevelopment Agency of the City of South San Francisco Downtown/Central Redevelopment
Project 1997 Tax Allocation Bonds" (the "Bonds") of an aggregate principal amount of
Dollars ($ ), all of like tenor and date
(except for such variation, if any, as may be required to designate varying numbers, maturities,
interest rates or redemption provisions) and all issued pursuant to the provisions of the
Community Redevelopment Law, being Part 1 (commencing with Section 33000) of Division 24
of the Health and Safety Code of the State of California (the "Law") and pursuant to an
Indenture of Trust dated as of 1, 1997, by and between the Agency and the Trustee
(the "Indenture"). The Bonds have been authorized to be issued by the Agency pursuant to a
resolution of the Agency adopted on ,1997. The Agency may issue or incur
additional obligations on a parity with the Bonds, but only subject to the terms of the Indenture.
Reference is hereby made to the Indenture (copies of which are on file at the office of the
Agency) and all supplements thereto and to the Law for a description of the terms on which the
Bonds are issued, the provisions with regard to the nature and extent of the Tax Revenues, as
that term is defined in the Indenture, and the rights thereunder of the owners of the Bonds and
the rights, duties and immunities of the Trustee and the rights and obligations of the Agency
thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance
hereof, assents and agrees.
The Bonds have been issued by the Agency to finance redevelopment activities in
connection with the South San Francisco Downtown/Central Redevelopment Project (the
"Project Area"), a duly designated redevelopment project area under the laws of the State of
California.
This Bond and the interest hereon and all other parity obligations and the interest
thereon (to the extent set forth in the Indenture) are payable from, and are secured by a charge
and lien on the Tax Revenues derived by the Agency from the Project Area, on a parity with any
parity debt at any time issued by the Agency under and in accordance with the Indenture. As
and to the extent set forth in the Indenture, all of the Tax Revenues are exclusively and
irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture and
the Law, to the payment of the principal of and interest and premium (if any) on the Bonds and
any such parity obligations. Notwithstanding the foregoing, certain amounts out of Tax
Revenues may be applied for other purposes as provided in the Indenture.
This Bond is not a debt of the City of South San Francisco, the State of California, or
any of its political subdivisions, and neither said City, said State, nor any of its political
subdivisions, is liable hereon nor in any event shall this Bond be payable out of any funds or
properties other than the Tax Revenues.
The rights and obligations of the Agency and the owners of the Bonds may be modified
or amended at any time in the manner, to the extent and upon the terms provided in the
Indenture, but no such modification or amendment shall permit a change in the terms of
redemption or maturity of the principal of any outstanding Bond or of any installment of
interest thereon or a reduction in the principal amount or the redemption price thereof or in the
rate of interest thereon without the consent of the owner of such Bond, or shall reduce the
percentages of the owners required to effect any such modification or amendment.
Bonds maturing on or before September 1,
maturity. Bonds maturing on or after September 1, __
, are not subject to redemption prior to
, are subject to optional redemption
A-2
in whole, or in part at the request of the Agency either on a pro rata basis among maturities or
in inverse order of maturity, and in any case by lot within a maturity, at the option of the
Agency, on any date on or after September 1, , from any available source of funds, at a
redemption price equal to the principal amount thereof to be redeemed together with accrued
interest to the redemption date plus a premium (expressed as percentages of the principal
amount of Bonds or portions thereof to be redeemed) as set forth in the following table:
Redemption Dates
Redemption
Prices
September 1, __ through August 31, __ ~ 102%
September 1, __ through August 31, __ 101
September 1, __ and thereafter 100
Bonds maturing on September 1, , are subject to mandatory redemption from
sinking account payments made by the Agency, in whole or in part by lot, on each September 1
on or after September 1, , at a redemption price equal to 100% of the principal amount
thereof to be redeemed together with accrued interest thereon to the redemption date, without
premium, as set forth in the following table:
Sinking Account
Redemption Date
(September 1)
Principal Amount to be
Redeemed or Purchased
Sinking Account
Redemption Date
(September 1)
Principal Amount to be
Redeemed or Purchased
If some but not all of the Bonds have been redeemed pursuant to the optional
redemption provisions set forth above, the total amount of all future sinking account payments
shall be reduced by the aggregate principal amount of the Bonds so redeemed, to be allocated
among such sinking account payments in integral multiples of $5,000 on a pro rata basis.
As provided in the Indenture, notice of redemption shall be mailed by the Trustee by
first class mail not less than thirty (30) nor more than sixty (60) days prior to the redemption
date to the respective owners of any Bonds designated for redemption at their addresses
appearing on the registration books of the Trustee, but neither failure to receive such notice nor
any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption.
If this Bond is called for redemption and payment is duly provided therefor as specified
in the Indenture, interest shall cease to accrue hereon from and after the date fixed for
redemption.
If an Event of Default, as defined in the Indenture, shall occur, the principal of all
outstanding Bonds shall be declared due and payable upon the conditions, in the manner and
with the effect provided in the Indenture, but such declaration and its consequences may be
rescinded and annulled as further provided in the Indenture.
This Bond is transferable by the Registered Owner hereof, in person or by his attorney
duly authorized in writing, at the Principal Office of the Trustee, but only in the manner, subject
A-3
to the limitations and upon payment of the charges provided in the Indenture, and upon
surrender and cancellation of this Bond. Upon registration of such transfer a new Bond or
Bonds, of authorized denomination or denominations, for the same aggregate principal amount
and of the same maturity will be issued to the transferee in exchange therefor.
The Agency and the Trustee may treat the Registered Owner hereof as the absolute
owner hereof for all purposes, and the Agency and the Trustee shall not be affected by any
notice to the contrary.
It is hereby certified that all of the things, conditions and acts required to exist, to have
happened or to have been performed precedent to and in the issuance of this Bond do exist,
have happened or have been performed in due and regular time, form and manner as required
by the Law and the laws of the State of California and that the amount of this Bond, together
with all other indebtedness of the Agency, does not exceed any limit prescribed by the Law or
any laws of the State of California, and is not in excess of the amount of Bonds permitted to be
issued under the Indenture.
This Bond shall not be entitled to any benefit under the Indenture or become valid or
obligatory for any purpose until the certificate of authentication hereon endorsed shall have
been manually signed by the Trustee.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to Ic~c~',:cr Agency or its agent the Trustee for
registration of transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
A-4
IN WITNESS WHEREOF, the Redevelopment Agency of the City of South San Francisco
has caused this Bond to be executed in its name and on its behalf with the facsimile signature of
its Chairman and its seal to be reproduced hereon in facsimile and attested to by the facsimile
signature of its Agency Clerk, all as of the Original Issue Date specified above.
REDEVELOPMENT AGENCY OF THE CITY
OF SOUTH SAN FRANCISCO
Chairman
ATTEST:
Agency Clerk
TRUSTEE~S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture.
Dated:
FIRST TRUST OF CALIFORNIA,
NATIONAL ASSOCIATION, as Trustee
By
Authorized Signatory
A-5
ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within-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 Guaranteed:
Note: Signature(s) must be guaranteed by an
eligible guarantor.
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-6
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and
delivered by the South San Francisco Redevelopment Agency of the City of South San Francisco
(the "Agency") in connection with the issuance of $ aggregate principal amount of
bonds of the Agency designated the Downtown/Central Redevelopment Project 1997 Tax
Allocation Bonds (the "Bonds"). The Bonds are being issued pursuant to an Indenture of Trust
dated as of ~4t-June 1, 1997 (the "Indenture"), between the Agency and First Trust of
California, National Association, as trustee (the "Trustee"). The Agency covenants and agrees
as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the Agency for the benefit of the holders and beneficial owners of the
Bonds, in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-
12(b)(5).
Section 2. Definitions. In addition to the definitions set forth in the Indenture and the
definitions set forth above in this Disclosure Certificate, which apply to any capitalized term
used in this Disclosure Certificate unless otherwise defined in this Section, the following
capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the Agency pursuant to,
and as described in, Sections 3 and 4 of this Disclosure Certificate.
"Dissemination Agent" shall mean initially the Agency, or any successor Dissemination
Agent designated in writing by the Agency and which has filed with the Agency a written
acceptance of such designation.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure
Certificate.
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule.
"Participating Underwriter" shall mean any of the original underwriters of any issue of
Bonds, who is required to comply with the Rule in connection with an offering of Bonds.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended from time
to time.
"State Repository" shall mean any public or private repository or entity designated by the
State of California as a state repository for the purpose of the Rule and recognized as such by
the Securities and Exchange Commission. As of the date of this Disclosure Certificate, there is
no State Repository.
Section 3. Provision of Annual Reports.
(a) The Agency shall, or shall direct the Dissemination Agent to, not
later than nine months after the end of the Agency's fiscal year (which currently
would be Api4tMarch 1), commencing with the report for the 199-~6/978 fiscal
year, provide to each Repository an Annual Report which is consistent with the
requirements of Section 4 of this Disclosure Certificate. Not later than fifteen
(15) Business Days prior to said date, the Agency shall provide the Annual
Report to the Dissemination Agent (if other than the Agency). The Annual
Report may be submitted as a single document or as separate documents
comprising a package, and may include by reference other information as
provided in Section 4 of this Disclosure Certificate; provided that the audited
financial statements of the Agency may be submitted separately from the balance
of the Annual Report, and later than the date required above for the filing of the
Annual Report if not available by that date. If the Agency's fiscal year changes,
it shah give notice of such change in the same manner as for a Listed Event under
Section 5(c).
(b) If the Agency is unable to provide to the Repositories an Annual
Report by the date required in subsection (a), the Agency shah send a notice to
the Municipal Securities Rulemaking Board and the appropriate State
Repository, if any, in substantially the form attached as Exhibit A.
(c) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the
Annual Report the name and address of each National Repository and
each State Repository, if any; and
(ii) if the Dissemination Agent is other than the Agency, file a
report with the Agency certifying that the Annual Report has been
provided pursuant to this Disclosure Certificate, stating the date it was
provided and listing all the Repositories to which it was provided.
Section 4. Content of Annual Reports. The Agency's Annual Report shall contain or
incorporate by reference the following:
(a) Audited Financial Statements prepared in accordance with generally
accepted accounting principles as promulgated to apply to governmental entities
from time to time by the Governmental Accounting Standards Board. If the
Agency's audited financial statements are not available by the time the Annual
Report is required to be filed pursuant to Section 3(a), the Annual Report shall
contain unaudited financial statements, and the audited financial statements
shall be filed in the same manner as the Annual Report when they become
available.
(b) The Annual Report shah contain information showing:
(i) the total amount of assessed valuations of properties within
the Downtown/Central Redevelopment Project of the Agency (the
"Project Area") for the most recent completed fiscal year (actual) and for
the current fiscal year (budgeted), in each case showing the total secured
value and the total unsecured value, total utility or unitary property
value, and deduction of base year value to produce total net incremental
value;
-2-
(ii) the total tax increment revenues allocated to the Agency from
such Project Area for the most recent completed fiscal year (actual) and
for the current fiscal year (budgeted), in each case showing gross tax
increment revenues and appropriate deductions for payments under the
tax sharing agreements (if any), deposits into the Agency's low and
moderate income housing fund, and any other deductions required to be
made to compute net tax increment revenues which are pledged to the
Bonds; and
(iii) in the event that the Agency has actual knowledge of any
appeals of assessed valuation of property within the Project Area which,
if granted in the full amount requested, would reduce the tax increment
revenues described in the foregoing clause (ii) to such an extent that the
Agency could not then meet the coverage requirements for issuing the
Bonds as parity obligations under the Indenture, then the Annual Report
shall contain the following information: (A) the aggregate amount by
which such assessed value would be reduced if all such appeals were
granted in the amount requested, and (B) the identity of each property
owner whose appeals, if granted for properties owned by such owner,
would cause the total tax increment revenues in the Project Area to be
reduced by more than five percent (5%).
(c) In addition to any of the information expressly required to be
provided under paragraphs (a) and (b) of this Section, the Agency shall provide
such further information, if any, as may be necessary to make the specifically
required statements, in the light of the circumstances under which they are made,
not misleading.
Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the Agency or related public entities,
which have been submitted to each of the Repositories or the Securities and Exchange
Commission. If the document included by reference is a final official statement, it must be
available from the Municipal Securities Rulemaking Board. The Agency shall clearly identify
each such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Agency shall give, or
direct to be given, notice of the occurrence of any of the following events with
respect to the Bonds, if material:
(1_) Principal and interest payment delinquencies.
(2_) Non-payment related defaults.
(3_) Unscheduled draws on debt service reserves reflecting
financial difficulties.
(4_) Unscheduled draws on credit enhancements reflecting
financial difficulties.
(5__) Substitution of credit or liquidity providers, or their
failure to perform.
(6_) Adverse tax opinions or events affecting the tax-exempt
status of the security.
(7__) Modifications to rights of security holders.
(8_) Contingent or unscheduled bond calls.
(9__) Defeasances.
-3-
(l_tO
Release, substitution, or sale of property securing
repayment of the securities.
Rating changes.
(b) In addition, the Agency shall give, or cause to be given, notice of the
occurrence of any of the foregoing events 4, 5 or 11 with respect to any
obligations of the Agency which are on a parity with the Bonds, if material.
(c) Whenever the Agency obtains knowledge of the occurrence of a
Listed Event, the Agency shall as soon as possible determine if such event would
be material under applicable Federal securities law.
(d) If the Agency determines that knowledge of the occurrence of a
Listed Event would be material under applicable Federal securities law, the
Agency shall promptly file a notice of such occurrence with the Municipal
Securities Rulemaking Board and each State Repository. Notwithstanding the
foregoing, notice of Listed Events described in subsections (a)(8) and (9) need
not be given under this subsection any earlier than the notice (if any) of the
underlying event is given to holders of affected Bonds pursuant to the Indenture.
Section 6. Termination of Reporting Obligation. The Agency's obligations under this
Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in
full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the
Agency shall give notice of such termination in the same manner as for a Listed Event under
Section 5(c).
Section 7. Dissemination Agent. The Agency may, from time to time, appoint or engage
a Dissemination Agent to assist it in carrying out its obligations under this Disclosure
Certificate, and may discharge any such Agent, or the Dissemination Agent may resign upon
thirty (30) days' prior written notice to the Agency, with or without the appointment of a
successor Dissemination Agent by the Agency. The initial Dissemination Agent shall be the
Agency.
Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Agency may amend this Disclosure Certificate, and any provision of this
Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a),
4 or 5(a), it may only be made in connection with a change in circumstances that
arises from a change in legal requirements, change in law, or change in the
identity, nature, or status of an obligated person with respect to the Bonds, or
type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived,
would, in the opinion of nationally recognized bond counsel, have complied with
the requirements of the Rule at the time of the primary offering of the Bonds,
after taking into account any amendments or interpretations of the Rule, as well
as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders
of the Bonds in the manner provided in the Indenture for amendments to the
Indenture with the consent of holders, or (ii) does not, in the opinion of the
Trustee or nationally recognized bond counsel, materially impair the interests of
the holders or beneficial owners of the Bonds.
-4-
If the annual financial information or operating data to be provided in the Annual
Report is amended pursuant to the provisions hereof, the first annual financial information filed
pursuant hereto containing the amended operating data or financial information shall explain,
in narrative form, the reasons for the amendment and the impact of the change in the type of
operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be
followed in preparing financial statements, the annual financial information for the year in
which the change is made shall present a comparison between the financial statements or
information prepared on the basis of the new accounting principles and those prepared on the
basis of the former accounting principles. The comparison shall include a qualitative discussion
of the differences in the accounting principles and the impact of the change in the accounting
principles on the presentation of the financial information, in order to provide information to
investors to enable them to evaluate the ability of the Agency to meet its obligations. To the
extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the
accounting principles shall be sent to the Repositories in the same manner as for a Listed Event
under Section 5(c).
Section 9. Additional Information. Nothing in this Disclosure Certificate shall be
deemed to prevent the Agency from disseminating any other information, using the means of
dissemination set forth in this Disclosure Certificate or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event,
in addition to that which is required by this Disclosure Certificate. If the Agency chooses to
include any information in any Annual Report or notice of occurrence of a Listed Event in
addition to that which is specifically required by this Disclosure Certificate, the Agency shall
have no obligation under this Disclosure Certificate to update such information or include it in
any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the Agency to comply with any
provision of this Disclosure Certificate, any holder or beneficial owner of the Bonds may take
such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the Agency to comply with its obligations under this
Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event
of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the
event of any failure of the Agency to comply with this Disclosure Certificate shall be an action
to compel performance.
Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Certificate, and the Agency agrees to indemnify and save the Dissemination Agent, its officers,
directors, employees and agents, harmless against any loss, expense and liabilities which it may
incur arising out of or in the exercise or performance of its powers and duties hereunder,
including the costs and expenses (including attorneys fees) of defending against any claim of
liability, but excluding liabilities due to the Dissemination Agent's negligence or willful
misconduct. The obligations of the Agency under this Section shall survive resignation or
removal of the Dissemination Agent and payment of the Bonds.
-5-
Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the Agency, the Trustee, the Dissemination Agent, the Participating Underwriters and holders
and beneficial owners from time to time of the Bonds, and shall create no rights in any other
person or entity.
Date: , 1997
$OUTII SAN FRANCISCO
REDEVELOPMENT AGENCY OF THE
CITY OF SOUTH SAN FRANCISCO
By:
Treasurer
-6-
EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Redevelopment Agency of the City of South San Francisco
Name of Bond Issue: Downtown/Central Redevelopment Project, 1997 Tax Allocation Bonds
Date of Issuance: ,1997
NOTICE IS HEREBY GIVEN that the Agency has not provided an Annual Report with
respect to the above-named Bonds as required by Section __ of the Indenture of Trust dated
:Apr-it-June 1, 1997 between the Agency and First Trust of California, National Association, as
trustee. The Agency anticipates that the Annual Report will be filed by
Dated:
By
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EXHIBIT TO RESOLUTION NO. 57-97
O'M&M DRAFT
OF 5/12/97
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT
1997 TAX ALLOCATION BONDS
BOND PURCHASE AGREEMENT
,1997
Redevelopment Agency of the
City of South San Francisco
315 Maple Avenue
South San Francisco, California 94080
Ladies and Gentlemen:
The undersigned, the Capital Improvements Financing Authority, City of South
San Francisco (the "Authority"), hereby offers to enter into this Bond Purchase Agreement
(this "Agency Purchase Agreement") with the Redevelopment Agency of the City of South
San Francisco, California (the "Agency"), for the purchase by the Authority of the Agency's
Downtown/Central Redevelopment Project 1997 Tax Allocation Bonds (the "Bonds"). This
offer is made subject to written acceptance by the Agency at or prior to 5:00 p.m., California
time, on the date set forth above and, if not so accepted, will be subject to withdrawal by
the Authority upon notice delivered to the Agency at any time prior to the acceptance
hereof by the Agency. Upon the Agency's written acceptance of this offer, the Agency
Purchase Agreement shall be in full force and effect in accordance with its terms and shall
be binding upon the Agency and the Authority. The Authority has been authorized to
execute this Agency Purchase Agreement and to take any action hereunder by and on behalf
of the Authority. All capitalized terms used herein not otherwise defined herein shall have
the respective meanings ascribed thereto in the Trust Agreement hereinafter described.
Section 1. Purchase and Sale. Upon the terms and conditions and in
reliance on the representations, warranties and agreements set forth herein, the Authority
hereby agrees to purchase from the Agency, and the Agency hereby agrees to cause the
Trustee (as hereinafter defined) to authenticate and deliver to the Authority, all (but not
less than all) of the Bonds in an aggregate principal amount indicated on Schedule I hereto,
consisting of serial and term bonds, all at the principal amounts indicated on Schedule I, at
a purchase price of $ The date of payment for and delivery of the Bonds
and the other actions contemplated hereby to take place at the time of such payment and
delivery, shall hereinafter be called the "Closing".
SF1-260452.V2
The Bonds are being issued (i) to finance the acquisition of certain land and
improvements to the Agency's Downtown/Central Redevelopment Project (ii) to fund a
reserve fund for the Bonds and (iii) to pay the costs of issuance of the Bonds (the "Project").
Section 2. The Bonds. The Bonds will be described in and will be
executed, delivered and secured under and pursuant to a indenture of trust dated as of April
1, 1997 (the "Indenture"), by and among the Agency and First Trust of California, National
Association, as trustee (the "Trustee").
The execution and delivery of the Bonds, the Indenture and the Continuing
Disclosure Certificate relating to the Bonds (the "Continuing Disclosure Certificate") have
been authorized by resolution of the Agency (the "Agency Resolution"). The sale of the
Bonds which have been issued by the Agency to the Underwriter has been authorized by
resolution of the Authority (the "Authority Resolution"). The Bonds shall be payable and
shall be subject to prepayment as provided in the Indenture.
The Indenture, the Continuing Disclosure Certificate, the Agency Resolution,
the Authority Resolution, the Purchase Agreement dated as of ,1997, between
Authority and PaineWebber Incorporated (the "Underwriter")(the "Authority Purchase
Agreement"), and this Agency Purchase Agreement are collectively referred to herein as the
"Legal Documents".
Section 3. Official Statement and Other Documents.
(a) The Agency has delivered or will deliver to the Underwriter, without
charge, copies of the Preliminary Official Statement dated , 1997 (including all
documents incorporated by reference therein) and any amendment or supplement thereto
(the "Preliminary Official Statement"), in such quantities as the Underwriter has requested
or may hereafter reasonably request.
(b) The Agency agrees to deliver to the Underwriter, within seven (7)
business days after the date of this Agency Purchase Agreement, copies of the Official
Statement dated , in final form (including all documents incorporated by
reference therein) and any amendment or supplement thereto (as supplemented and
amended from time to time, the "Final Official Statement"), in such quantities as the
Underwriter may reasonably request in order to comply with the obligations of the
Underwriter pursuant to the rules of the Municipal Securities Rulemaking Board and Rule
15c2-12(b)(4) under the Securities Exchange Act of 1934 (the "Rule").
(c) The Agency hereby authorizes the approval of the Final Official
Statement by execution thereof by a duly authorized officer of the Agency. By execution
of this Agency Purchase Agreement, the Agency confirms that the Preliminary Official
Statement was deemed final for purposes of the Rule on the date thereof. The Preliminary
Official Statement and the Final Official Statement are herein collectively referred to as the
"Official Statement".
SF1-260452.V2 2
(d) Prior to the earlier of (i) the end of the period during which the
Underwriter is obligated to deliver the Final Official Statement in accordance with the Rule
or (ii) twenty-five (25) days after the Closing, the Agency shall provide the Underwriter with
such information regarding the Agency, its current financial condition and ongoing
operations as the Underwriter may reasonable request.
(e) The Agency hereby authorizes the use by the Underwriter of the Legal
Documents to which the Agency is a party and the Official Statement, including any
supplements or amendments thereto, and the information contained in each of such
documents, and all other documents, certificates and statements furnished by the Agency
and the Underwriter, in connection with the public offering and sale of the Bonds. The
Agency consents to the use by the Underwriter prior to the date hereof of the Preliminary
Official Statement in connection with the public offering of the Bonds.
Section 4. Closing. At 8:00 a.m., California time, on , 199_,
or at such other time or on such earlier or later date as may be mutually agreed upon by
the Agency, the Authority and the Underwriter (the "Closing Date"), the Agency will, subject
to the terms and conditions hereof, deliver or cause to be delivered to the Authority the
duly executed Bonds in book-entry form through the facilities of The Depository Trust
Company ("DTC") and the other documents hereinafter mentioned. The Authority will
accept the delivery of the Bonds and pay the purchase price of the Bonds as set forth in
Section 1 hereof by check payable in clearinghouse funds to the order of the Trustee.
Delivery and payment as aforesaid shall be made at the offices of Jones Hall Hill & White,
A Professional Law Corporation ("Bond Counsel") in San Francisco, California, or such
other place as shall have been mutually agreed upon by the Agency, the Authority and the
Underwriter.
Section 5. Public Offering. It shall be a condition to the Agency's
obligations to sell and deliver the Bonds to the Authority and to the Authority's obligations
to purchase, to accept delivery of and to pay for the Bonds that the entire principal amount
of the Bonds shall be executed by the Trustee, sold and delivered by the Agency and
purchased, accepted and paid for by the Authority at the Closing.
Section 6. Representations. Warranties and Aereements of the Agency.
The Agency hereby represents, warrants and agrees as follows:
(a) Due Organization and Authority: Legal. Valid and Binding Obligations.
The Agency is and will be on the Closing Date a redevelopment agency duly
organized and existing pursuant to the Constitution and laws of the State of
California, and has all necessary power and authority to enter into and perform its
duties under the Legal Documents to which the Agency is a party, and, when
executed and delivered by the respective parties thereto, such Legal Documents will
constitute legal, valid and binding obligations of the Agency enforceable in
accordance with their respective terms, except as enforcement may be limited by
SFI-260452.V2 3
bankruptcy, insolvency, moratorium or other similar laWs or equitable principles
relating to or limiting creditors' right generally.
(b) No Conflict. The execution and delivery of the Legal' Documents to
which the Agency is a party, and compliance with the provisions thereof, have been
duly authorized by all necessary official action on the part of the Agency and will not
conflict with or constitute a breach of or default under any law, administrative
regulation, court decree, resolution, charter, bylaw or any agreement to which the
Agency is subject or by which it is bound or by which its properties may be affected,
a conseqUence of which could be to materially and adversely affect the ability of the
Agency to perform its obligations under the Legal Documents to which it is a party.
(c) No Litigation. To the best knowledge of the Agency, except as
disclosed in the Official Statement, no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, regulatory agency, or public
board or body is pending or threatened against the Agency, or seeking to restrain or
to enjoin the execution, sale or delivery of the Bonds, the pledge of the Tax
Revenues (as defined in the Indenture), the application of the proceeds thereof in
accordance with the Indenture, or in any way contesting or affecting the validity or
enforceability of the Bonds, the Legal Documents, any other applicable agreements,
or any action of the Agency contemplated by any of said documents, or in any way
contesting the completeness or accuracy of the Official Statement or the powers of
the Agency or its authority with respect to the Bonds, the Legal DOcuments, any
other applicable agreements, or any action of the Agency contemplated by any of
said documents, or which would adversely affect the exclusion of interest paid with
respect to the Bonds from gross income for purposes of federal income taxation, or
which if determined adversely to the Agency would have a material and adverse
effect upon the Agency's ability to make the debt service payments on the Bonds.
(d) Official Statement Correct and Complete. The Official Statement
pertaining to the Bonds has been duly authorized by the Agency. The information
contained in the Preliminary Official Statement as of its date was, and the Official
Statement is, true and correct in all material respects and such information (including
any financial and statistical data) does not and will not contain any untrue or
misleading statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under they were made,
not misleading.
(e) Due Approval of Official Statement Distribution. By official action of
the Agency prior to or concurrently with the execution hereof, the Agency has duly
approved the distribution of the Preliminary Official Statement and the distribution
of the Official Statement, and has duly authorized and approved the execution and
delivery of, and the performance by the Agency of the obligations on its part
contained in the Legal Documents to which the Agency is a party and the
consummation by it of all other transactions contemplated by the Official Statement
SFI-260452.V2 4
and the Legal Documents to which the Agency is a party, including this Agency
Purchase Agreement.
(f) Agreement to Notify UnderWriter Regarding Official Statement. The
Agency will advise the Underwriter promptly of any proposal to amend or
supplement the Official Statement and will not effect any such amendment or
supplement without the consent of the Underwriter, which consent shall not be
unreasonably withheld. The Agency will advise the Underwriter promptly of the
institution of any proceedings known to it seeking to prohibit or otherwise affect the
use of the Official Statement in connection with the offering, sale or distribution of
the Bonds.
(g) Agreement to Amend Official Statement. If at any time between the
date of this Agency Purchase Agreement and up to twenty-five (25) days following
the "end of the underwriting period" (as defined in Section 14 hereof) an event
occurs, of which the Agency has knowledge, which might or would cause the
information relating to the Agency, its functions, duties and responsibilities contained
in the Official Statement, as then supplemented or amended, to contain an untrue
statement of a material fact or to omit to state a material fact required to be stated
therein or necessary to make the information therein, in the light of the
circumstances under which it was presented, not misleading, the Agency will notify
the Underwriter, and if in the reasonable opinion of the Underwriter, such event
requires the preparation and publication of a supplement or amendment to the
Official Statement, the Agency will cooPerate with the Underwriter in the
preparation of an amendment or supplement to the Official Statement in a form and
in a manner approved by the Underwriter, provided all expenses thereby incurred
will be paid for by the Agency.
(h) Amendments to Official Statement Correct and Complete. If the
information relating to the Agency, its functions, duties and responsibilities contained
in the Official Statement is amended or supplemented pursuant to the immediately
preceding paragraph, at the time of each supplement or amendment thereto and
(unless subsequently supplemented or amended pursuant to such paragraph) at all
times subsequent thereto up to and including the date twenty-five (25) days after the
end of the underwriting period, the portions of the Official Statement so
supplemented or amended (including any financial and statistical date contained
therein) will be true and correct in all material respects, and such information will
not contain any untrue or misleading statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make such information
therein, in the light of the circumstances under which it was presented, not
misleading.
(i) Blue Sky Cooperation. The Agency will furnish such information,
execute such instruments and take such other action in cooperation with the
Underwriter as the Underwriter may reasonably request in order (1) to qualify the
SF1-260452.V2 5
Bonds for offer and sale under the Blue Sky or other securities laws and regulations
of such states and other jurisdictions of the United States as the Underwriter may
designate and (2) .to determine the eligibility of the Bonds for investment under the
laws of such states and other jurisdictions, and will use its best efforts to continue
such qualification in effect so long as required for distribution of the Bonds;
provided, however, that the Agency shall not be required to execute a special or
general consent to service of process in any jurisdiction in which it is not now so
subject or to qualify to do business in any jurisdiction where it is not now so
qualified.
(j) No Breach or Default. The Agency is not, and at the Closing Date will
not be, in breach of or default under any law or administrative rule or regulation of
the State of California, the United States of America, or of any department, division,
agency or instrumentality of either thereof, or any applicable court or administrative
decree or order or any loan agreement, note, bond, resolution, indenture, contract,
agreement or other instrument to which the Agency is a party or is otherwise subject
or bound and which would materially impair the ability of the Agency to perform its
obligations under the Legal Documents to which the Agency is a party.
(k) Approvals and Authorization. All approvals, consents, authorizations,
elections and orders of or filings or registrations with any governmental authority,
board, agency or commission having jurisdiction which would constitute a condition
precedent to, or the absence of which would materially adversely affect, the
performance by the Agency of its obligations hereunder and under the Legal
Documents t°which the Agency is a party and any other applicable agreements, have
been obtained and are in full force and effect.
(1) No Action. The Agency will take no action and will cause no action
to be taken that would cause the interest with respect to the Bonds to be includable
in gross income for federal income tax purposes.
(m) No Violation of Debt Limitations. The Agency has not been, is not
presently and as a result of the sale and delivery of the Bonds will not be in violation
of any debt limitation, appropriation limitation or any other provision of the
California Constitution.
(n) No Issuance of Obligations. Between the date hereof and the Closing
Date, without the prior written consent of the Underwriter, the Agency will not have
issued any bonds, notes or other obligations for borrowed money on behalf of the
Agency except for such borrowings as may be described in or contemplated by the
Official Statement.
(o) No Listing as Bond Issuer. The Agency has not been notified of any
listing or proposed listing by the Internal Revenue Service to the effect that the
Agency is a bond issuer whose non-arbitrage certificates may not be relied upon.
SFI-260452. V2 6
(p) Certificates of Agency Officers. Any certificate signed by any
authorized officer of the Agency and delivered to the Authority on or prior to the
Closing in connection with the execution, sale and delivery of the Bonds and the
execution and delivery of the Legal Documents shall be deemed a representation and
warranty by the Agency to the Authority as to the statements made therein but not
of the person signing the same.
Section 7. Closine Conditions. The Authority has entered into this Agency
Purchase Agreement in reliance upon the representations and warranties of the Agency
contained herein, the representations, warranties and agreements to be contained in the
documents and instruments to be delivered at the Closing, the performance by the Agency
of its obligations hereunder, and the opinions of Bond Counsel, counsel to the Trustee, and
the City Attorney, described hereafter. Accordingly, the Authority's obligations under this
Agency Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds
shall be conditioned upon and subject to (i) the performance by the Agency, the Authority
and the Trustee of their obligations to be performed hereunder and under such documents
and instruments at or prior to the Closing, (ii) the accuracy in all material respects, in the
reasonable judgment of the Authority, of the representations and warranties of the Agency
herein as of the date hereof and of the time of the Closing and the accuracy in all material
respects of the representations, warranties and agreements to be contained in the documents
· and instruments to be delivered at the Closing as of the time of the Closing, and (iii) shall
also be subject to the following additional conditions:
(a) Purchase of Bonds. The Bonds shall have been purchased by the
Underwriter pursuant to the Authority Purchase Agreement.
(b) Bring-down of Representations. The representations and warranties
of the Agency contained herein and of the Authority contained in the Authority
Purchase Agreement shall be true, complete and correct on the date hereof and on
and as of the date of the Closing, as if made on the date of the Closing (the "Closing
Date").
(c) Authorization. Execution and Delivery of Documents. As of the
Closing Date, the Bonds, the Legal Documents and the Official Statement shall have
been duly authorized, executed and delivered by the respective parties thereto, in
substantially the forms heretofore submitted to the Authority with only such changes
as shall have been agreed to in writing by the Underwriter, and said agreements shall
be in full force and effect and not have been amended, modified or supplemented,
except as may have been agreed to in writing by the Underwriter, and there shall
have been taken in connection therewith, with the issuance of the Bonds and with the
transactions contemplated thereby and by this Agency Purchase Agreement, all such
actions as Bond Counsel shall deem to be necessary and appropriate to render the
opinion set forth in Appendix __ to the Official Statement.
SF1-260452.V2 7
(d) No Amendment of Official Statement. At the Closing, the Official
statement shall not have been amended, modified or supplemented, except as may
have been agreed in writing by the Underwriter.
(e) On or prior to the Closing Date, the Underwriter shall have received
copies of the following documents, in each case satisfactory in form and substance
to the Underwriter and its counsel:
(1) Agreements. The Indenture, the Continuing Disclosure
Certificate, the Authority Purchase Agreement and this Agency Purchase
Agreement, each duly executed and delivered by the respective parties
thereto, with such amendments, qualifications or supplements as may have
been agreed to in writing by the Underwriter;
(2) Official Statement. The Official Statement duly executed and
delivered on behalf of the Agency by the Executive Director of the Agency,
with such amendments, qualifications or supplements as may have been
agreed to in writing by the Underwriter;
(3) Opinion of Bond Counsel. An approving opinion satisfactory
to the Underwriter, dated the Closing Date and addressed to the Agency and
to the Authority, of Bond Counsel, in substantially the form attached as.
Appendix _ to the Official Statement, together with an opinion of such Bond
Counsel satisfactory in form and substance to the Underwriter, dated the
Closing Date and addressed to the Trustee and the Underwriter, to the effect
that such opinion addressed to the Agency and to the Authority may be relied
upon by the Underwriter and the Trustee to the same extent as if such
opinion was addressed to them.
(4) Supplemental Opinion of Bond Counsel. A supplemental
opinion of Bond Counsel in form and substance satisfactory to the
Underwriter, dated the Closing Date, addressed to the Agency, the Authority
and the Underwriter to the effect that:
(i) Specified Sections of Official Statement Correct
and Complete The statements set forth under the captions
"INTRODUCTION," "THE BONDS," "SECURITY FOR THE
BONDS," "CONTINUING DISCLOSURE" and "TAX EXEMPTION"
and in Appendix - "SUMMARY OF PRINCIPAL LEGAL
DOCUMENTS" insofar as such statements purport to summarize
certain provisions of the Bonds, the Indenture, Continuing Disclosure
Certificate and such counsel's opinion concerning certain federal tax
matters relating to the Bonds, are accurate in all material respects;
SF1-260452.V2 8
(ii) Due Authorization. Execution and Delivery: Legal
Valid and Binding Agreement - This Agency Purchase Agreement has
been duly authorized, executed and delivered by the Agency and,
assuming due authorization and execution thereof by the Authority,
constitutes a legal, valid and binding obligation of the Agency,
enforceable against the Agency, in accordance with its terms, except as
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or limiting creditors'
rights generally and that the enforceability of the Legal Documents is
subject to the effect of general principles of equity including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or
injunctive relief, regardless of whether considered a proceeding in
equity or at law; and
(iii) The Bonds are secured by a pledge of the Tax
Revenues (as defined in the Indenture) for the exclusive benefit of the
Bonds and any parity obligations and such pledge is irrevocable until
the Bonds have been defeased in accordance with the Indenture.
(5) Opinion of City Attorney. An opinion of the City
Attorney, dated the date of Closing, in form and substance satisfactory to the
Authority, addressed to the Agency, the Trustee, the Underwriter and the
Authority, to the effect that:
(i) Due Organization and Existence - The Agency is
a redevelopment agency duly organized and validly existing under the
Constitution and the laws of the State of California;
(ii) Agency Resolution The Agency Resolution
approving and authorizing the execution and delivery of the Legal
Documents to which the Agency is a party and approving the Official
Statement was duly adopted at a meeting of the Agency which was
called and held pursuant to law and with all public notice required by
law and at which a quorum was present and acting throughout;
(iii) No Litigation - Except as disclosed in the Official
Statement, to the best of such counsel's knowledge, there is no action,
suit, proceeding or investigation at law or in equity before or by any
court, public board or body, pending or threatened against or affecting
the Agency, which would materially and adversely impact the Agency's
ability to complete the transactions described in and contemplated by
the Official Statement, to restrain or enjoin the pledge of Tax
Revenues or payment of debt service on the Bonds or in any way
contesting or affecting the validity of the Legal Documents to which
SF1-260452.V2 9
the Agency is a party or the Bonds or the transactions relating to the
Project as described in the Official Statement;
(iv) No Conflict - The execution and delivery of the
Legal Documents to which the Agency is a party and the approval of
the Official Statement, and compliance with the provisions thereof and
hereof, under the circumstances contemplated thereby, do not and will
not in any material respect conflict with or constitute on the part of
the Agency a breach of or default under any agreement or other
instrument to which the Agency is a party or by which it is bound or
any existing law, regulation, court order or consent decree to which the
Agency is subject, a consequence of which could be to materially and
adversely affect the ability of the Agency to perform its obligations
under the Legal Documents to which it is a party;
(v) Due Authorization, Execution and Delivery. Legal
Valid and Binding Agreements - The Legal Documents to which the
Agency is a party have been duly authorized, executed and delivered
by the Agency, and, assuming due authorization, execution and delivery
by the other parties thereto constitute legal, valid and binding
agreements of the Agency enforceable in accordance with their
respective terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors rights generally and
by the application of equitable principles if equitable remedies are
sought and by the limitations on legal remedies imposed on actions
against redevelopment agencies in the State of California;
(vi) Execution and Delivery of Bonds - The Bonds
have been validly authorized, executed and delivered by the Agency;
(vii) No Consents Required- Official Statement. Legal
Documents - No authorization, approval, consent, or other order of the
State of California or any other governmental authority or agency
within the State of California, other than the Agency Council, is
required for the valid authorization, execution and delivery of the
Legal Documents to which the Agency is a party and the approval of
the Official Statement;
(viii) Official Statement - Based upon examinations
which the City Attorney has made and the City Attorney's discussions
in conferences with certain officials of the Agency and others with
respect to the Official Statement and without having undertaken to
determine independently the accuracy, completeness or fairness of the
statements contained in the Official Statement (including the
sw-26o~2.v2 10
Appendices attached thereto), nothing has come to the City Attorney's
attention which would lead the City Attorney to believe that the
Official Statement (other than (i) financial and statistical data therein
and incorporated therein by reference, as to which no opinion need be
expressed and (ii) information concerning the book-entry-only system)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(ix) Due Organization and Existence - The Authority
is a joint powers authority duly organized and validly existing under the
Constitution and the laws of the State of California;
(x) Authority Resolution - The Authority Resolution
approving and authorizing the execution and delivery of the Legal
Documents to which the Authority is a party and approving the Official
Statement was duly adopted at a meeting of the Authority which was
called and held pursuant to law and with all public notice required by
law and at which a quorum was present and acting throughout;
(xi) No Litigation - Except as disclosed in the Official
Statement, to the best of such counsel's knowledge, there is no action,
suit, proceeding or investigation at law or in equity before or by any
court, public board or bOdy, pending or threatened against or affecting
the Authority, which would materially and adversely impact the
Authority's ability to complete the transactions described in and
contemplated by the Official Statement, to restrain or enjoin the
pledge of Tax Revenues or payment of debt service on the Bonds or
in any way contesting or affecting the validity of the Legal Documents
to which the Authority is a party or the Bonds or the transactions
relating to the Project as described in the Official Statement;
(xii) No Conflict - The execution and delivery of the
Legal Documents to which the Authority is a party and the approval
of the Official Statement, and compliance with the provisions thereof
and hereof, under the circumstances contemplated thereby, do not and
will not in any material respect conflict with or constitute on the part
of the Authority a breach of or default under any agreement or othel:
instrument to which the Authority is a party or by which it is bound or
any existing law, regulation, court order or consent decree to which the
Authority is subject, a consequence of which could be to materially and
adversely affect the ability of the Authority to perform its obligations
under the Legal'Documents to which it is a party; and'
SF1-260452.V2 1 1
(xiii) Due Authorization. Execution and Delivery. Legal
Valid and Binding Agreements - The Legal Documents to which the
Authority is a party have been duly authorized, executed and delivered
by the Authority, and, assuming due authorization, execution and
delivery by the other parties thereto constitute legal, valid and binding
agreements of the Authority enforceable in accordance with their
respective terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors rights generally and
by the application of equitable principles if equitable remedies are
sought and by the limitations on legal remedies imposed on actions
against redevelopment agencies in the State of California; and
(xiii) No Consents Required - Legal Documents - No
authorization, approval, consent, or other order of the State of
California or any other governmental authority or agency within the
State of California is required for the valid authorization, execution
and delivery of the Legal Documents to which the Authority is a party.
(6) Opinion of Counsel to Trustee. An opinion, satisfactory
in form and substance to the Underwriter, of counsel to the Trustee, dated
the Closing Date and addressed to the Underwriter, the Agency and the
Authority, to the effect that:
(i) Due Organization and Existence - The Trustee is
a duly organized and validly existing banking corporation in good
standing under the laws of the State of California and has full power
and authority to undertake the trust of the Indenture and to enter into
the Continuing Disclosure Certificate;
(ii) Corporate Action The Trustee has duly
authorized, executed and delivered the Indenture and the Continuing
Disclosure Certificate and by all proper corporate action has
authorized acceptance of the duties of the Trustee under of the
Indenture and the Continuing Disclosure Certificate and has
authorized in such capacity the execution and delivery of the Bonds;
(iii) Due Authorization. Execution and Delivery -
Assuming the corporate power and legal authority of, and the due
authorization, execution and delivery by the other parties to the Legal
Documents, the Indenture and Continuing Disclosure Certificate are
valid, legal and binding obligations of the Trustee, enforceable against
the Trustee in accordance with their terms, except as enforcement may
be limited by bankruptcy, insolvency, moratorium, reorganization or
SF1-260452.V2 12
other similar laws or equitable principles relating to or limiting
creditors' rights generally;
(iv) Authentication of Bonds - The Bonds have been
validly authenticated and delivered by the Trustee pursuant to
direction from the Agency;
(v) Consents - Exclusive of federal or state securities
laws and regulations, other than routine filings required to be made
with governmental agencies in order to preserve the Trustee's authority
to perform a trust business (all of which routine filings counsel
believes, after reasonable inquiry and investigation, to have been
made), no consent, approval, authorization or other action by any
governmental or regulatory authority having jurisdiction over the
Trustee is or will be required for the execution and delivery by the
Trustee of the Indenture or Continuing Disclosure Certificate or the
execution and delivery of the Bonds; and
(vi) No Litigation - There is no litigation pending or,
to the best of its knowledge, threatened against or affecting the
Trustee to restrain or enjoin the Trustee's participation in, or in any
way contesting the powers of the Trustee with respect to the
transactions contemplated by the Bonds, the Indenture and the
Continuing Disclosure Certificate.
(7) Opinion of Underwriter's Counsel. The opinion of
O'Melveny & Myers LLP, San Francisco, California, counsel for the
Underwriter, dated the date of Closing and addressed to the Underwriter, to
the effect that (i) the Bonds are exempt from registration pursuant to the
Securities Act of 1933, as amended, and the Indenture is exempt from
qualification as an indenture pursuant to the Trust Indenture Act of 1939, as
amended, and (ii) based upon discussions in conferences with certain officials
of the Agency and others with respect to the Official Statement and without
having undertaken to determine independently the accuracy, completeness or
fairness of the statements contained in the Official Statement (including the
cover page and the Appendices attached thereto), nothing has come to the
attention of the attorneys providing legal services in connection with the
transaction which would lead them to believe that the Official Statement
(other than information pertaining to DTC, financial and statistical data
therein and incorporated therein by reference and the appendices thereto, as
to which no opinion need be expressed) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
' SF1-260452.V2 13
(8) Agency Certificate. A certificate, dated the Closing Date
and signed by a duly authorized official of the Agency, in form and substance
satisfactory to the Underwriter, to the effect that:
(i) Representations and Warranties The
representations and warranties of the Agency contained herein are true
and correct in all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date;
(ii) Complied with All Agreements - The Agency has
complied with all agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to the Closing Date under the
Legal Documents to which the Agency is a party and the Official
Statement;
(iii) No Litigation - To the best of such official's
knowledge, no action, suit or proceeding is pending or threatened
against the Agency (a) to restrain or enjoin the execution or delivery
of any of the Bonds or the Legal Documents or the payment of debt
service payments on the Bonds, (b) in any way contesting or affecting
the validity of the Bonds, the Legal Documents or the authority of the
Agency to enter into the Legal Documents to which the Agency is a.
party or (c) in any way contesting or affecting the powers of the
Agency in connection with any action contemplated by the Official
Statement or this Agency Purchase Agreement;
(iv) No Change in Events - To the best knowledge of
said individual, no event has occurred since the date of the Official
Statement which should be disclosed in the Official Statement for the
purpose for which it is to be used or which it is necessary to be
disclosed therein in order to make the statements and information
therein not misleading in any material respect; and
(v) No Untrue or Misleadine Statements - The
information contained in the Official Statement pertaining to the
Agency is true and correct and does not contain any untrue statement
of a material fact or omit 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 in any
material respect.
(9) Authority Certificate. A certificate, dated the Closing
Date and signed by a duly authorized official of the Authority, in form and
substance satisfactory to the Underwriter, to the effect that:
SF1-260452.V2 14
(i) Representations and Warranties - The
representations and warranties of the Authority contained herein are
true and correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date;
(ii) Complied with All Agreements - The Authority
has complied with all agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing Date under
the Legal Documents to which the Authority is a party; and
(iii) No Litigation - To the best of such official's
knowledge, no action, suit or proceeding is pending or threatened
against the Authority (a) to restrain or enjoin the execution or delivery
of any of the Bonds or the Legal Documents or the payment of debt
service payments on the Bonds, (b) in any way contesting or affecting
the validity of the Bonds, the Legal Documents or the authority of the
Authority to enter into the Legal Documents to which the Authority
is a party or (c) in any way contesting or affecting the powers of the
Authority in connection with any action contemplated by the Official
Statement or the Authority Purchase Agreement.
(10) Trustee Certificate. A certificate of the Trustee dated
the Closing Date, signed by a duly authorized officer of the Trustee, in form
and substance satisfactory to the Underwriter, to the effect that:
(i) Due Organization and Existence - The Trustee is
a banking corporation duly organized and in good standing under the
laws of the State of California and has all necessary power and
authority to enter into and perform its duties under the Indenture and
Continuing Disclosure Certificate;
(ii) Corporate Action - The Trustee is duly authorized
to enter into the Indenture and Continuing Disclosure Certificate and
to authenticate and deliver the Bonds [ ] pursuant to the terms
of the Indenture and, when executed by the other parties thereto, the
Indenture and Continuing Disclosure Certificate will constitute legal,
valid and binding obligations of the Trustee enforceable in accordance
with their terms;
(iii) Execution and Delivery of Bonds - The Bonds
have been duly executed and delivered to the Authority pursuant to
direction from the Agency and duly executed and delivered to the
Underwriter pursuant to direction from the Authority;
m-26o452.v2 15
(iv) No Breach or Default- The TruStee is not in
breach of or default under any law or administrative rule or regulation
of the United States of America or of any department, division, agency
or instrumentality thereof, or any applicable court or administrative
decree or order, or any other instrument to which the Trustee is a
party or is otherwise subject or bound and which would materially
impair the ability of the Trustee to perform its obligations under the
Indenture and Continuing Disclosure Certificate; provided, however,
that the Trustee need not certify to compliance with any federal or
state securities laws;
(v) No Litigation - No action, suit, proceeding, inqUiry
or investigation, at law or in equity, before or by any court, regulatory
agency, public board or body, is pending or, to the best of its
knowledge, threatened in any way affecting the existence of the
Trustee or the titles of its directors or officers to their respective
offices, or seeking to restrain or enjoin the execution, sale or delivery
of the Bonds, the application of the proceeds thereof in accordance
with the Indenture, or in any way contesting or affecting the validity or
enforceability of the Bonds; and
(vi) No Conflict - The execution and delivery by the
Trustee of Indenture and Continuing Disclosure certificate, and
compliance with the terms thereof will not, in any material respect,
conflict with, or result in a violation or breach of, or constitute a
default under, any loan agreement, indenture, bond, note, resolution
or any other agreement or instrument to which the Trustee is a party
or by which it is bound, or any law or any rule, regulation, order or
decree of any court or governmental agency or body having jurisdiction
over the Trustee or any of its activities or properties, or (except with
respect to the lien of the Indenture) result in the creation or
imposition of any lien, charge or other security interest or
encumbrance of any nature whatsoever upon any of the property or
assets of the Trustee.
(11) Trustee Resolution. Certified copies of the general
resolution of the Trustee authorizing the execution and delivery of certain
documents by certain officers of the Trustee, which resolution authorizes the
authentication and delivery of the Bonds and the Indenture;
(12) City Resolution. Certified copies of resolution adopted
by the City Council approving the issuance of the Bonds by the Agency;
SF1-260452.V2 16
(13) Agency Resolution(s). Certified copies of resolutions(s)
adopted by the Agency Council of the Agency authorizing the execution and
delivery of the Legal Documents to which the Agency is a party;
(14) AuthorityResolution(s). Certified copies of resolution(s)
by the Authority authorizing the execution and delivery of the Legal
Documents to which the Authority is a party;
(15) Non-Arbitrage Certificate. A non-arbitrage certificate in
form satisfactory to Bond Counsel;
(16) IRS Form 8038-G. Internal Revenue Service Form 8038-
G, executed by an authorized officer of the Agency;
(17) Ratings. Evidence from Moody's Investors Service and
Standard & Poor's Ratings Group that the Bonds have been rated" "and
"," respectively; and
(18) Miscellaneous. Such additional legal opinions,
certificates, proceedings, instruments and other documents as Co-Bond
Counsel or counsel for the Underwriter may reasonably request to evidence
compliance with legal requirements, the truth and accuracy, as of the time of
Closing, of the representations and warranties contained herein, in the Legal
Documents and in the Official statement and the due performance or
satisfaction by the Trustee, the Authority and the Agency at or prior to such
time of all agreements then to be performed and all conditions then to be
satisfied.
[(f) The required fees shall have been paid for the Insurance issued by the
Insurer with respect to the Bonds, and such Insurance shall be in full force and
effect.]
(g) All matters relating to this Agency Purchase Agreement, the Bonds and
the sale thereof, the Official Statement, the Legal Documents and the consummation
of the transactions contemplated by this Agency Purchase Agreement shall have been
approved by the Underwriter and counsel for the Underwriter, such approval not to
be unreasonably withheld.
If the Agency shall be unable to satisfy the conditions to the obligations of the
Authority to purchase, to accept delivery of and to pay for the Bonds contained in this
Agency Purchase Agreement, or if the obligations of the Authority to purchase, to accept
delivery of and to pay for the Bonds shall be terminated for any reason permitted by this
Agency Purchase Agreement, this Agency Purchase Agreement shall terminate and neither
the Authority nor the Agency shall be under any further obligation hereunder, except that
sw-26o452.v2 17
the respective obligations of the Agency and the Authority set forth in Sections 9 and 1 1
hereof shall continue in full force and effect.
Section 8. Termination. The Authority shall have the right to terminate
its obligations under this Agency Purchase Agreement to purchase, to accept delivery of and
to pay for the Bonds by notifying the Agency of their election to do so if, between the date
hereof and the Closing Date, the market price or marketability, at the initial offering prices
set forth in the Official Statement, of the Bonds has been materially adversely affected in
the reasonable judgment of the Authority by reason of any of the following:
(a) Legislation. Judicial Decisions or Rulings. An amendment to the
Constitution of the United States or the constitution of the State of California shall
have been passed or legislation enacted or introduced in the Congress or
recommended for passage by the President of the United States, or a decision
rendered by a court established under Article III of the Constitution of the United
States or by the United States Tax Court with any of the effects listed in clauses (i),
(ii), (iii) or (iv) below, or an order, ruling, regulation (final, temporary or proposed)
or official statement issued or made:
(i) by or on behalf of the United States Treasury Department, or
by or on behalf of the Internal Revenue Service, with the purpose or effect, directly
or indirectly, of imposing federal income taxation upon payments of the general
character as such interest as would be received by the Owners of the Bonds; or
(ii) by or on behalf of the State of California or the California
Franchise Tax Board, with the purpose or effect, directly or indirectly, of imposing
California personal income taxation upon payments of the general character of
interest as would be received by the Owners of the Bonds; or
(iii) by or on behalf of the Treasury Department of the United States
or the Internal Revenue Service or by or on behalf of the State of California or the
California Franchise Tax Board, with the purpose or effect, directly or indirectly, of
changing the federal or State of California income tax rates, respectively; or
(iv) by or on behalf of the Securities and Exchange Commission, or
any other governmental agency having jurisdiction over the subject matter thereof,
to the effect that the Bonds, or obligations of the general character of the Bonds,
including any and all underlying arrangements, are not exempt from registration
under the Securities Act of 1933, as amended, or the Indenture is not exemPt from
qualifications under the Trust Indenture Act of 1939, as amended;
(b) War. The declaration of war or engagement in major military
hostilities by the United States or the occurrence of any other national emergency
or calamity relating to the effective operation of the government or the financial
community in the United States;
m-2~52.v2 18
(c) Banking Moratorium. The declaration of a general banking
moratorium by federal, New York or California authorities, or the general suspension
of trading on any national securities exchange;
(d) Securities Exchange Restrictions. The imposition by the New York
Stock Exchange, other national securities exchange, or any governmental authority,
of any material restrictions not now in force with respect to the Bonds, or obligations
of the general character of the Bonds or the material increase of any such restrictions
now in force, including those relating to the extension of credit by, or the charge to
the net capital requirements of, underwriters;
(e) Changes to Federal Securities Law. An order, decree or injunction of
any court of competent jurisdiction, or order, filing, regulation or official statement
by the Securities and Exchange Commission, or any other governmental agency
having jurisdiction over the subject matter thereof, issued or made to the effect that
the issuance, offering or sale of obligations of the general character of the Bonds,
including any or all underlying obligations, as contemplated hereby or by the Official
Statement, is or would be in violation of any federal securities law as amended and
then in effect;
(f) Amendment to Federal or State Constitution. Any amendment to the
federal or California Constitution or action by any federal or California court,
legislative body, regulatory body or other authority materially adversely affecting the
tax status of the Agency, its property, income, securities (or interest thereon) or the
validity or enforceability of the Bonds;
(g) Official Statement Untrue or Incomplete. Any event occurring, or
information becoming known which, in the reasonable judgment of the Underwriter,
makes untrue in any material adverse respect any statement or information contained
in the Official Statement, or has the effect that the Official Statement contains any
untrue 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;
(h) Certain Amendments to the Official Statement. An event described
in Section 6(h) hereof occurs prior to the Closing which, in the reasonable judgment
of the Underwriter, requires or has required a supplement or amendment to the
Official Statement; or
(i) Action by Rating Agencies. Any downgrading, suspension or
withdrawal, or any official statement as to a possible downgrading, suspension or
withdrawal, of any rating by Moody's Investors Service or Standard & Poor's Ratings
Group or Fitch Investors Service of any obligations of the Agency (excluding
obligations for which the Agency acts merely as a conduit issuer), including the
Bonds.
SF1-260452.V2 19
Section 9. Expenses. (a) The Authority shall be under no obligation to pay,
and the Agency shall pay, any expenses incident to the performance of the Agency's
obligations hereunder, including, but not limited to, (i) the cost of preparation, printing and
delivery of the Preliminary Official Statement and of preparation, printing and delivery of
the Official Statement; (ii)the cost of preparation of the Bonds; (iii)the fees and
disbursements of Bond Counsel; (iv) the fees and disbursements of the Trustee; (v) the fees
and disbursements of Coopers & Lybrand LLP for their services as the Independent
Auditors of the Agency; (vi) the fees and disbursements of any other engineers, accountants,
and other experts, consultants or advisers retained by the Agency; (vii) the fees for the Bond
ratings; and (viii) the Insurance fees referred to in paragraph (e) of Section 7.
(b) The Authority shall pay (i) the cost of preparation and printing of this
Agency Purchase Agreement and the Blue Sky and Legal Investment Surveys; (ii)all
advertising expenses in connection with the public offering of the Bonds; (iii) the California
Debt Advisory Commission fee; and (iv) all other expenses incurred by them or any of them
in connection with the public offering of the Bonds, including the fees and disbursements
of counsel retained by them.
Section 10. Notices. Any notice or other communication to be given to a
party under this Agency Purchase Agreement may be given by delivering the same in writing
by mail to the party entitled thereto at its address set forth below, or at such other address
as such party may provide to the other parties in writing from time to time, namely:
.(a)
If to the Agency:
Redevelopment Agency of
the City of South San Francisco
315 Maple Avenue
South San Francisco, CA 94080
(b) If to the Trustee:
(c)
If to the Authority:
Capital Improvement Financing Authority,
City of South San Francisco
315 Maple Avenue
South San Francisco, CA 94080
Section 11. Parties in Interest. This Agency Purchase Agreement is made
solely for the benefit of the Agency and the Authority (including successors or assigns of the
Authority) and no other person shall acquire or have any right hereunder or by virtue
hereof, with the exception of the Underwriter, who shall be entitled to all of benefits
described in this Agency Purchase Agreement, including but not limited to the
representations and warranties of the Agency in Section 6 thereof. All of the Agency's
representations, warranties and agreements contained in this Agency Purchase Agreement
shall remain operative and in full force and effect, regardless of (i) any investigations made
by or on behalf of any of the Authority; (ii) delivery of any payment for the Bonds pursuant
m-26o452.v2 20
to this Agency Purchase Agreement; and (iii) any termination of this Agency Purchase
Agreement..
Section 12. Governing Law. This Agency Purchase Agreement shall be
governed by the laws of the State of California.
Section 13. Entire Agreement. This Agency Purchase Agreement when
accepted by you in writing as heretofore specified shall constitute the entire agreement
between us and is made solely for the benefit of the City and the Authority (including the
successors or assigns thereof). No other person shall acquire or have any right hereunder
or by virtue hereof.
Section 14. Determination of Underwriting Period. The term "end of the
underwriting period" means such time as the Authority no longer retain, directly or as a
member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public.
Unless the Authority gives notice to the contrary, the "end of the underwriting period" shall
be deemed the date of the Closing. Any notice delivered pursuant to this Section shall be
written notice, delivered to the Agency at or prior to the Closing, and shall specify a date,
other than the date of the Closing (or other date specified by notice delivered pursuant to
this section), to be deemed the "end of the underwriting period."
Section 15. Counterparts. This Agency Purchase Agreement may be
executed in any number of counterparts, and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.
Section 16. Headings. The headings of the sections of this Agency Purchase
Agreement are inserted for convenience only and shall not be deemed to be a part hereof.
[Remainder of page intentionally left blank]
SFI-260452.V2 21
Section 17.. Effectiveness. This Agency Purchase Agreement shall become
effective upon the acceptance hereof by the authorized officer of the Agency or his or her
designee and shall be valid and enforceable at the time of such acceptance and
acknowledgment.
Very truly yours,
CAPITAL IMPROVEMENTS FINANCING
AUTHORITY, CITY OF SOUTH SAN
FRANCISCO,
Title:
Accepted this ~ day
of 1997
REDEVELOPMENT AGENCY OF
THE CITY OF SOUTH SAN FRANCISCO, CALIFORNIA
APPROVED AS TO FORM:
CITY ATI'ORNEY
SF1-260452.V2 S-1
SCHEDULE I
Maturity
Date
Principal
Amount
Bonds
Interest
Rate
Price
or
Yield
SFI-260452.V2 I'1
PRELIMINARY OFFICIAL STATEMENT DATED
,1997
New Issue - Full Book Entry Only
Ratings:
In the opinion of Jones Hall Hill & White, ,4 Professional Law Corporation, San Francisco, California, Bond
Counsel, subjecg however to certain qualifications described herein, under existing law, the interest on the Bonds
is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for
purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purpose
of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in
determining certain income and earnings. In the further opinion of Bond Counsel, such interest is exempt from
California personal income taxes. See "TAX MA TTERS" herein.
$
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
Downtown/Central Redevelopment Project
1997 Tax Allocation Bonds
Dated: June 1, 1997
Due: as shown below
The Redevelopment Agency of the City of South San Francisco (the "Agency") is issuing its Downtown/Central
Redevelopment Project 1997 Tax Allocation Bonds (the "Bonds") in order to finance certain activities of the
Agency pursuant to the Redevelopment Law.
The Bonds will be issued in fully registered form and when issued, will be registered in the name of Cede & Co.,
as the nominee of The Depository Trust Company, New York, New York CDTC"). DTC will act as securities
depository for the Bonds. Individual purchases of the Bonds will be made in book-entry form only, in the
denominations of $5,000 or any integral multiple thereof. Interest on the Bonds will be payable on March 1 and
September 1 of each year (each, an "Interest Payment Date") commencing September 1, 1997. Principal and
interest will be payable directly to Cede & Co., as the nominee of DTC by First Trust of California, National
Association, as trustee (the "Trustee"). Upon receipt of payments of principal and interest, DTC is obligated
to remit such principal and interest to the DTC Participants for subsequent disbursement to the Beneficial
Owners (as hereinafter defined) of the Bonds. See "Appendix F - Book-Entry Only System" herein. Purchasers
will not receive certificates from the Agency or the Trustee representing the Bonds purchased.
The Bonds are subject to redemption as described herein.
The Bonds are limited obligations of the Agency and are payable exclusively from Tax Revenues and from
amounts on deposit in the Reserve Account as described herein. The Tax Revenues are to be derived from a
portion of taxes to be levied in the Agency's Downtown/Central Redevelopment Project (the "Project Area").
See "SECURITY FOR THE BONDS." The ownership of the Bonds is subject to certain risks and limitations.
See "RISK FACTORS" and "LIMITATIONS OF TAX REVENUES" herein.
THE BONDS ARE NOT A DEBT OF THE CITY OF SOUTH SAN FRANCISCO, THE STATE OF
CALIFORNIA, OR ANY OF ITS POLITICAL SUBDIVISIONS OTHER THAN THE AGENCY, AND
NEITHER THE COUNTY, THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS OTHER THAN
THE AGENCY IS LIABLE THEREFOR. THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST
ON THE BONDS ARE PAYABLE SOLELY FROM TAX REVENUES. THE BONDS DO NOT
CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR
STATUTORY DEBT LIMITATION OR RESTRICTION. NEITHER THE MEMBERS OF THE AGENCY
NOR ANY PERSONS EXECUTING THE BONDS ARE LIABLE PERSONALLY ON THE BONDS BY
REASON OF THEIR ISSUANCE.
sF~-259~8~.v3 lcoverl
This cover page contains certain information for quick reference only. It is not intended to be a summary of
all factors relating to an investment in the Bonds. Investors should review the entire Official Statement before
making any investment decision.
MATURITY SCHEDULE
Maturity Date Principal Interest Yield/ MatUrity Date Principal Interest Yield/
(September 1) Amount Rate Price (September 1) Amount Rate Price
The Bonds are offered when, as and if issued, delivered to and received by the Underwriter, subject to approval
as to legality by Jones Hall Hill & White, A Professional Law Corporation, Bond Counsel, and subject to certain
other conditions. Certain legal matters will be passed on for the Underwriter by their counsel, O'Melveny &
Myers LLP, San Francisco, California, and for the Agency by the City Attorney of the City of South San
Francisco. It is anticipated that the Bonds in book-entry form will be available for delivery on or about
,1997.
PAINEWEBBER INCORPORATED
Dated: , 1997
s~-2~958~.v3 [coverI
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
Joseph A. Fcrnekes, Chair
Eugene R. Mullin
Jm~ DatTman
John R. Penna
Robert D. Yec
CITY/AGENCY STAFF
Michael Wilson
City Manngcr/Exccud~c Director of thc A~ncy
Stcven D. Mittas
City Attorney
Mike Brooks
Director of Finance
Barb~ra A. Batlaya
City Clerk
Bewrly BoBalan.a Ford
City Treasurer
Marry Van Duyn
Director o~ Economic and Community Dcvr~opmcnt
SPECIAL SERVICES
B~nd Counsd
Jones Hall Hill & White
A Pt~emonal Law Corporation
First Trust of Cnliforn~,
National As~oc~t k~n
Redevelopment Consultant
Robcrt Bcycrs
8F1-259~81.V3
No dealer, broker, salesperson or other person has been authorized to give any information or to make
any representations, other than those contained in this Official Statement, and, d given or made, such other
information or representations must not be relied upon as having been authorized by the Agency. This Official
'Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale
of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer,
solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Bonds.
Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether
or not expressly so described herein, are intended solely as such and are not to be construed as a representation
of facts.
The information contained in this Official Statement has been furnished by the Agency and other sources
which are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be
construed as a representation by, either the Trustee or the Underwriter. Summaries and references to statutes
and documents in this Official Statement do not purport to be comprehensive or definitive and are qualified in
their entireties by reference to each such statute or document. Statements contained in this Official Statement
which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are
intended solely as such and are not to be construed as representations of facts. The information and expressions
of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any
sale made hereunder shall, under any circumstances, create any implication that there has been no change in the
affairs of the City since the date hereof. This Official Statement does not constitute a contract between any
purchaser of the Bonds and the Agency, the Trustee or the Underwriter.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT
'TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL ON THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
SFI-259581.V3
TABLE OF CONTENTS
Page
INTRODUCTION ................................................................ 1
THE FINANCING PLAN .......................................................... 3
Proposed Use of Proceeds .................................................... 3
THE BONDS ................................................................... 3
Authority for Issuance ....................................................... 3
Description of the Bonds ..................................................... 3
Optional Redemption ........................................................ 4
Mandatory Sinking Account Redemption ......................................... 4
Notice of Redemption ....................................................... 5
Partial Redemption .........................................................
Book-Entry Only System .....................................................
Debt Service Schedule ....................................................... 6
SECURITY FOR THE BONDS ...................................................... 7
Tax Revenues ............................................................. 7
Allocation of Taxes ................................................... 7
Tax Revenues Defined/Housing Set Aside .................................. 7
Parity Debt of the Agency .............................................. 8
Reserve Account ........................................................... 9
Investment of Bond Proceeds and Tax Revenues .................................... 9 ·
RISK FACTORS ................................................................. 9
Concentration of Revenue Sources .............................................. 9
Tax Revenue Projections ..................................................... 9
Plan Limit Risk ............................................................ 10
Reduction in Taxable Value ................................................... 10
Reduction in Inflationary Rate ................................................. 10
Levy and Collection ......................................................... 10
State Budget .............................................................. 10
Environmental Liabilities ..................................................... 11
Loss of Tax Exemption ...................................................... 11
Risks of Book-Entry System ................................................... 11
Permitted Investments .............................. : ........................ 11
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO ................ 12
DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT ................................ ' 14
Downtown/Central ......................................................... 14
General Project Goals and Objectives ............................................ 15
Bond and Tax Increment Limitations ............................................ 16
History and Recent Growth ................................................... 16
Tax Assessment Appeals ..................................................... 20
Projection of Tax Revenues ................................................... 20
Debt Service Coverage ....................................................... 22
Background and Assumptions .................................................. 22
Taxing Entity Pass-Through Payments ............................................ 23
Low and Moderate Income Housing Set-Aside ...................................... 23
Unitary Property ........................................................... 23
SF1-259581.V3 i
Special Subventions ......................................................... 24
Property Tax Collection Procedures . ................ 24
Limitations on Indebtedness and Receipt of Tax Increment ............................ 25
Change in Project Area Boundaries ............................................. 25
Assembly Bill 1290 .......................................................... 25
LIMITATIONS OF TAX REVENUES ................................................. 26
Property Tax Rate and Appropriation Limitations ................................... 26
Limitation of Tax Revenues From Certain Increased Tax Rates ......................... 27
Limitation on Tax Imposition .................................................. 27
Future Initiatives .................................. - ......................... 28
Education Revenue Augmentation Fund .......................................... 28
Property Assessment Appeals .................................................. 28
LITIGATION ................................................................... 29
TAX MATTERS 29
CERTAIN LEGAL MATTERS ...................................................... 30
CONTINUING DISCLOSURE ...................................................... 30
UNDERWRITING ............................................................... 30
RATINGS ...................................................................... 30
MISCELLANEOUS ............................................................... 31
APPENDIX A -
APPENDIX B -
APPENDIX C -
APPENDIX D -
APPENDIX E -
APPENDIX F -
APPENDIX G -
Economic and Demographic Information Regarding the City of South San Francisco
Redevelopment Consultant's Report
Audited Finandal Statements for Fiscal Year Ended June 30, 1996
Summary of Legal Documents
Form of Bond Counsel Opinion
DTC Full Book Entry Only System
Form of Continuing Disclosure Certificate
sm-2~9~8~.v3 ii
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
Downtown/Central Redevelopment Project
1997 Tax Allocation Bonds
INTRODUCTION
This Official Statement, including the cover page and appendices hereto, is provided to furnish
information in connection with the sale by the Redevelopment Agency of the City of South San Francisco (the
"Agency") of its $ * aggregate principal amount of Downtown/Central Redevelopment Project 1997
Tax Allocation Bonds (the "Bonds"). This Introduction contains a brief summary of certain information
contained in this Official Statement. It is not intended to be complete and is qualified by the more detailed
information contained elsewhere in this Official Statement. Definitions of certain terms used in this Official
Statement and not otherwise defined are set forth in Appendix _ - "SUMMARY OF LEGAL DOCUMENTS -
Definitions."
The Bonds are being issued under the authority granted to the Agency by the Community
Redevelopment Law of the State of California (the "State"), constituting Part 1 of Division 24 (commencing with
Section 33000) of the California Health and Safety Code, as amended (the "Redevelopment Law"). The Bonds
will be issued pursuant to and will be secured by the terms of an Indenture of Trust dated as of June 1, 1997
(the "Indenture") between the Agency and First Trust of California, National Association, San Francisco,
California, as trustee (the "Trustee").
The Bonds are limited obligations of the Agency payable exclusively from Tax Revenues and from
amounts on deposit in the funds and accounts held pursuant to the Indenture, as described herein. The Tax
Revenues derived from a portion of taxes levied in the Agency's Downtown/Central Redevelopment Project Area
(the "Project Area"). See "SECURITY FOR THE BONDS" herein.
The proceeds of the Bonds will be used to fmance land acquisition, parking improvements and public
infrastructure improvements by the Agency in connection with the Project Area, to fund a reserve fund for the
Bonds and to pay the issuance costs relating to the Bonds. See "THE FINANCING PLAN - Proposed Use of
Proceeds."
The Redevelopment Law provides a means for £mancing redevelopment projects based upon an
allocation of a portion of the taxes collected within a redevelopment project area. The taxable valuation of a
redevelopment project area last equalized prior to adoption of the redevelopment plan, or base roll, is established
and, except for any period during which the taxable valuation drops below the base year level, the taxing agencies
thereafter receive the taxes produced by the levy of the then current tax rate upon the base roll. Taxes collected
upon any increase in taxable valuation over the base roll are allocated to a redevelopment agency and may be
pledged by a redevelopment agency to the repayment of any indebtedness incurred in financing or refinancing
a redevelopment project. Redevelopment agencies themselves have no authority to levy property taxes. See
"SECURITY FOR THE BONDS - Tax Revenues."
On July 12, 1989, the City Council of the City of South San Francisco adopted the Redevelopment Plan
for the Project Area (the "Redevelopment Plan") by Ordinance No. 1056-89 and established the boundaries of
the Downtown/Central Redevelopment Project Area (the "Project Area"). The downtown,, portions of the
shoreline area, the Bayshore Freeway overpass and Colma Creek are included within the boundaries of the
Project Area. The Project Area is comprised of nine subareas, five of which are contiguous, and encompasses
approximately 550 acres. The Project Area consists of approximately 450 separate parcels with industrial,
commercial, residential and public uses. Estimated future land use includes 150 acres of commercial use, 187
acres of industrial use, 72 acres used for residential purposes, 16 acres of public and institutional uses, 66 acres
* Preliminary, subject to change.
SF1-259581.V3
of streets and 'freeway right-of-way and approximately 40 undeveloped acres. See "DOWNTOWN/CENTRAL
REDEVELOPMENT PROJECT."
Assessed valuation of taxable property within the :Project Area for Fiscal Year 1996/97 totaled
approximately $437,213,988, which was approximately $206,253,091 greater than the Fiscal Year 1989/90 base
year valuation. Taken together, the ten properties having the greatest assessed valuation represented
approximately 59.7% of the total assessed value of the Project Area for the 1996/97 Fiscal Year. See "THE
DOWNTOWN/CENTRAL DEVELOPMENT PROJECT" for additional information on land use within the
Project Area. See "APPENDIX B - RedeveloPment Consultant's Report," for the Agency's projection of the
assessed value expected to be added to the Project Area during the next ten years.
The Agency may at any time issue additional debt ("Parity Debt") payable from the Tax Revenues and
secured by a lien and charge upon the Tax Revenues equal to the lien and charge securing the Bonds subject
to certain conditions precedent set forth in the Indenture. The Agency currently has no bonded indebtedness
outstanding. See "SECURITY FOR THE BONDS - Parity Debt of the Agency."
The projections of Tax Revenues contained in this Official Statement are based on assessed valuations
for Fiscal Year 1996/97 and assumptions on future growth which are discussed in the Redevelopment
Consultant's Report in Appendix B. Any decrease in the receipt of taxes, the assessed valuation of the Project
Area, the applicable tax rates or the economic stability of the Project Area could reduce the Tax Revenues
allocated to the Agency and, correspondingly, could have an adverse impact on the ability of the Agency to pay
debt service on the Bonds. See "RISK FACTORS" and "LIMITATIONS OF TAX REVENUES."
The Agency has covenanted to provide annual financial information and operating data and to file
notices of material events as required by the Securities Exchange Commission ("SEC"). See "CONTINUING'
DISCLOSURE" for a description of the specific nature of the notices of material events. These covenants have
been made in order to assist the Underwriter in complying with Rule 15c2-12 (the "Rule") promulgated by the
SEC under the Securities Exchange Act of 1934.
This Official Statement contains brief descriptions of the Bonds, Security for the Bonds, Risk Factors,
Limitations of Tax Revenues, the Agency, the Project Area and certain other information relevant to the issuance
of the Bonds. All references herein to the Indenture and the Continuing Disclosure Agreement are qualified
in their entirety by reference to such documents and all references to the Bonds are further qualified by
reference to the def'mitive Bonds and to the terms thereof which are contained in the Indenture.
THE BONDS ARE NOT A DEBT OF THE CITY OF SOUTH SAN FRANCISCO, THE STATE OF
CALIFORNIA, OR ANY OF ITS POLITICAL SUBDIVISIONS OTHER THAN THE AGENCY, AND
NEITHER THE COUNTY, THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS OTHER THAN
THE AGENCY IS LIABLE THEREFOR. THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST
ON THE BONDS ARE PAYABLE SOLELY FROM TAX REVENUES. THE BONDS DO NOT
CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR
STATUTORY DEBT LIMITATION OR RESTRICTION. NEITHER THE MEMBERS OF THE AGENCY
NOR ANY PERSONS EXECUTING THE BONDS ARE LIABLE PERSONALLY ON THE BONDS BY
REASON OF THEIR ISSUANCE.
Copies of documents referred to herein and information concerning the Bonds are available from the
Redevelopment Agency of the City of South San Francisco, P.O. Box 771, South San Francisco, California 94080.
The Agency may impose a charge for copying, mailing and handling.
SFI-259581.V3 2
THE FINANCING PLAN
The net proceeds of the Bonds will be deposited into the funds or accounts established under and as
described in the Indenture. The aggregate proceeds deposited in the Redevelopment Fund are expected to be
used for various capital projects of the Agency including, but not limited to, those described under "Proposed
Use of Proceeds" below.
The anticipated sources and uses of funds relating to the Bonds, are as follows:
Sources
Principal Amount of the Bonds $
Less: Underwriter's Discount
TOTAL $
Uses
Interest Account (1)
Costs of Issuance Fund
Reserve Account (2)
Redevelopment Fund
TOTAL $
(2)
Represents accrued interest on the Bonds
Represents Reserve Requirement for the Bonds
Proposed Use of Proceeds
The Agency expects to use a substantial portion of the proceeds deposited in the Redevelopment Fund
to finance the construction of public improvements including land acquisition, parking improvements and public
infrastructure improvements. See "THE DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT."
THE BONDS
Authority for Issuance
The Bonds have been authorized by, and are being issued pursuant to the Indenture and in accordance
with the Redevelopment Law and other applicable laws and the Constitution of the State of California.
Description of the Bonds
The Bonds will be issued in the aggregate principal amount of $ * The Bonds will be dated
as of June 1, 1997, will bear interest at the rates per annum (calculated on the basis of a 360-day year of twelve
30-day months) and will mature on the dates and in the amounts, set forth on the cover page of this Official
Statement. The Bonds will be issued in fully registered form without coupons, in denominations of $5,000 and
any integral multiples thereof.
* Preliminary; subject to change
SFI-259581.V3
Interest on the Bonds will be paid commencing September 1, 1997 and on March 1 and September 1 each
year thereafter. The principal of the Bonds will be payable at the principal office of the Trustee in
San Francisco, California. Interest on the Bonds will be paid by check of the Trustee mailed to the persons
· whose names appear on the registration books as the registered owner of such Bonds at such persons' addresses
as they appear on such registration books on each interest payment date.
Beneficial ownership interests in the Bonds will be available in book-entry form only. Purchasers of
beneficial ownership interests in the Bonds will not receive certificates representing their interests in the Bonds.
The Bonds will be issued as one fully registered Bond for each maturity without coupons and, when issued, will
be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York
CDTC"). DTC will act as securities depository of the Bonds. So long as DTC is the securities depository for
the Bonds, all payments of principal and interest with respect to the Bonds shall be made to Cede & Co., as
nominee of DTC. See Appendix F "DTC FULL BOOK-ENTRY ONLY SYSTEM."
Optional Redemption
The Bonds maturing on or after September 1, ~ shall be subject to redemption as a whole, or in part,
either on a pro rata basis among maturities or in inverse order of maturity, as shall be designated by the Agency,
and by lot within a maturity, at the option of the Agency, on any date on or after September 1, , from any
available source of funds, at a redemption price equal to the principal amount thereof to be redeemed together
with accrued interest to the redemption date, plus a premium (expressed as percentages of the principal amount
of Bonds to be redeemed) as follows:
Redemption Dates
Redemption Prices
Mandatory Sinking Account Redemption
The Bonds maturing on September 1, ~ shall be subject to redemption in whole, or in part, by lot, on
September 1, ~ and on September 1 each year thereafter from sinking account payments made by the Agency
pursuant to the Indenture, at a redemption price equal to the principal amount thereof to be redeemed together
with accrued interest thereon to the redemption date, without premium, on the respective dates as set forth in
the following table:
Sinking Account
Redemption Date
(September 1)
Principal Amount to Be
Redeemed Or Purchased
The Bonds maturing on September 1, may, in lieu of redemption, be used and withdrawn by the
Agency at any time for the purchase of such Bonds at public or private sale as and when and at such prices as
determined by the Agency.
'SF1-259581.V3 4
Notice of Redemption
Notice of redemption shall be given by the Trustee for and on behalf of the Agency, by first-class mail,
not less than thirty (30) and not more than sixty (60) days prior to the redemption date, to the respective
registered owners of each Bond called for redemption, at their address as it appears on the registration books
for that purpose. Notice of redemption is also required to be provided to securities depositories and information
services as designated by the Agency. Neither failure to mail such notice to any owner of a Bond nor any defect
in any notice so mailed shall affect the sufficiency of the proceedings for the redemption of any of the Bonds
with respect to which such failure or defect shall have occurred. Each notice of redemption shall state the
redemption date and the redemption price, shall designate the CUSIP number of the Bonds to be redeemed,
shall state the distinctive numbers of the Bonds to be redeemed, and shall give notice that further interest on
the said Bonds will not accrue from and after the redemption date.
Partial Redemption
In the event that only a portion of any Bond is called for redemption, then upon surrender thereof the
Agency shall execute and the Trustee shall authenticate and deliver to such Bond's owner a new Bond of the
same interest rate and maturity, of a denomination in aggregate principal amount equal to the unredeemed
portion of the Bond to be redeemed.
Book-Entry Only System
The information in this section concerning DTC and DTC's book-entry system has been obtained from
sources that the Agency believes to be reliable, but the Agency and the Trustee takes no responsibility for the
accuracy thereof.
DTC will act as securities depository for the Bonds. The Bonds will, when issued, be registered in the
name of Cede & Co. (DTC's partnership nominee). One or more fully registered Bonds will be issued for each
maturity of Bonds and will be deposited with DTC. See Appendix F for a detailed description of DTC and the
book-entry system.
SF1-259581.V3 5
Debt Service Schedule
Scheduled debt service on the Bonds, without regard to any optional redemption of the Bonds, is shown
in the following table:
TABLE 1
'REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT
1997 TAX ALLOCATION BONDS
Debt Service Schedule
Year Ending Total
September 1 Principal Interest Debt Service
SF1-259581.V3 6
SECURITY FOR THE BONDS
Tax Revenues
Allocation of Taxes
As provided in the Redevelopment Plan and pursuant to Article 6 of Chapter 6 of the Redevelopment Law
and Section 16 of Article XVI of the Constitution of the State, taxes levied upon taxable property in the Project
Area each year by or for the benefit of the State, any city, county, city and county or other public corporation
(the "taxing agencies") for fiscal years beginning after the effective date of the ordinance adopting the
Redevelopment Plan for the Project Area shall be divided as follows:
The portion equal to the mount of taxes produced by the then current tax rate, applied to the
assessed valuation of taxable property in~ the Project Area as shown on the applicable base year
assessment role as last equalized prior to the establishment of the Project Area shall be, when
collected, paid into the funds of those respective taxing agencies;
Except as provided in subparagraph (3) below, that portion of such levied taxes each year in excess
of such amount, shall be allocated to, and when collected, shall be paid into the Special Fund of
the Agency, to the extent required to pay the principal of and interest on loans advanced to, or
indebtedness (whether funded, refunded, assumed or otherwise) incurred by the Agency to finance,
in whole or in part, the Agency's redevelopment projects within the Project Area;
That portion of the taxes identified in subparagraph (2) which are attributable to a tax rate levied
by a taxing agency for the purpose of producing revenues in an amount sufficient to make annual
repayments of principal of, and the interest on, any bonded indebtedness for the acquisition or
improvement of real property approved by the voters of the taxing agency on or after January 1,
1989, shall be allocated to, and when collected shall be paid into, the fund of the taxing agency; and
Legislation enacted in 1990, SB 2557 (Chapter 466, Statutes of 1990) and in 1992, SB 1559 (Chapter
697, Statutes of 1992) authorized county auditors to determine property tax administrative costs
proportionately attributable to local jurisdictions and, for the 1990-91 and 1991-92 Fiscal Years, to
invoice the jurisdictions for such costs. Commencing in the 1992-93 Fiscal Year, the amounts due
as local agencies contribution to covering county administrative costs have been allocated to the
county as part of the overall system for the redistribution of property taxes (as opposed to being
paid pursuant to invoices).
With respect to the portion of taxbs deposited in paragraph 3 above, no such tax rate for voter-approved
bonds is currently being applied in the Project Area.
Tax Revenues Defined/Housing Set Aside
Pursuant to the Indenture, Tax Revenues means, except as provided below, moneys allocated within the
Plan Limit and paid to the Agency which are derived from (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 Law and
Section 16 of Article XVI of the Constitution of the State, or pursuant to other applicable State laws, and (b)
reimbursements, subventions, including 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, and
including that portion of such taxes, and including that portion of such taxes otherwise required by Section
33334.3 of the Redevelopment Law to be deposited in the Low and Moderate Income Housing Fund, but only
to the extent necessary to repay that portion of the Bonds and any Parity Debt (including applicable reserves and
financing costs) attributed to amounts deposited into the Low and Moderate Income Housing Fund for use
pursuant to Section 33334.2 of the Redevelopment Law to increase, improve or preserve the supply of low and
moderate income housing within or of benefit to the Project Area; but excluding (i) all other amounts of such
SFI-259581.V3 7
taxes (if any) required to be deposited into the Low and Moderate Income Housing Fund of the Agency pursuant
to Section 33334.3 of the Redevelopment Law, (ii) amounts payable by the State to the Agency under and
pursuant to Chapter 1.5 of Part ! of Division 4 of Title 2 (commencing with Section 16110) of the California
Government Tax Code, and (iii) amounts payable by the Agency pursuant to the Pass-Through Agreement,
unless and to the extent that such amounts are payable on a basis subordinate to the Bonds, including any Parity
Debt.
As noted above, the definition of "Tax Revenues" includes amounts required to be deposited in the Low
and Moderate Income Housing Fund of the Agency, but only to the extent necessary to repay that portion of
the Bonds and. any Parity Debt attributable to projects which increase, improve or preserve the supply of low
and moderate income housing. The Redevelopment Law requires a redevelopment agency to set aside twenty
percent (20%) of the tax increment revenues allocated to an agency into a special fund for the purpose of
improving and expanding the supply of housing available for persons or households of low and moderate income,
unless certain annual findings are made pursuant to Section 33334.2 of the Redevelopment Law, as it was
amended.
Parity Debt of the Agency
The Agency currently has no outstanding bonded indebtedness. The Agency may at any time issue
additional parity debt payable from the Tax Revenues and secured by a lien and charge upon the Tax Revenues
equal to the lien and charge securing the Bonds and any other Parity Debt theretofore issued, but only subject
to the following specific conditions, which are conditions precedent to the issuance of any such Parity Debt:
(a) The Agency shall be in compliance with all covenants set forth in this Indenture and all supplemental
indentures.
(b) The Tax Revenues estimated to be received for the then current Bond Year, plus the Additional
Revenues, shall be at least equal to one hundred twenty percent (120%) of Maximum Annual Debt Service on
all Bonds which will be Outstanding immediately following the issuance of such Parity Debt.
(c) The Supplemental Indenture providing for the issuance of such Parity Debt shall provide that interest
thereon shall not be payable on any dates other than September 1 and March 1, and principal thereof shall be
payable on September 1 in any year in which principal is payable.
(d) The Supplemental Indenture providing for the issuance of such Parity Debt shall provide for the
deposit into the Reserve Account of an amount required to cause the balance therein to equal the full amount
of the Reserve Requirement (which may be maintained in whole or in part in the form of a Qualified Reserve
Fund Credit Instrument as provided herein).
(e) The issuance of such Parity Debt shall not cause the Agency to exceed any applicable Plan Limitations.
(f) The Agency shall deliver to the Trustee a Certificate of the Agency certifying, and an opinion of Bond
Counsel stating, that the conditions precedent to the issuance of such Parity Debt set forth above have been
satisfied.
The Agency has no power to levy and collect property taxes, and any property tax limitation, legislative
measure, voter initiative or provisions of additional sources of income to taxing agencies having the effect of
reducing the property tax rate, could reduce the amount of Tax Revenue that would otherwise be available to
pay debt service on the Bonds and, consequently, the principal of, and interest on, the Bonds. Likewise,
broadened property tax exemptions could have a similar effect. See "RISK FACTORS" and "LIMITATIONS
OF TAX REVENUES" herein.
SF1-259581.V3 8
Reserve Account
The Bonds are a~tditionally secured by a Reserve Account established'pursuant to the Indenture, to be
maintained in an mount equal to the Reserve Requirement, which is defined in the Indenture to equal the lessor
of (i) Maximum Annual Debt Service on the Bonds, or (ii) 10% of proceeds of the Bonds.
Money in the Reserve Fund shall be transferred by the Trustee to the Debt Service Fund to pay interest
on and principal of the Bonds as they become due to the extent monies on deposit therein are insufficient
therefor. So long as no event of default shall have occurred and be continuing, any portion of the Reserve Fund
in excess of the Reserve Requirement may be deposited into the interest account.
Investment of Bond Proceeds and Tax Revenues
The Indenture establishes the funds and accounts in which the proceeds of the Bonds and Tax Revenues
shall be held.
All monies held by the Trustee in any of the funds or accounts established by the Indenture shall be
invested at the written direction of the Agency in Permitted Investments. The Agency presently intends to direct
investment of all proceeds of the Bonds and all Tax Revenues in certificates of deposit and treasury notes. See
"APPENDIX A - The City of South San Francisco" for a description of the Pool and the investment policy of
the San Mateo County Treasurer.
RISK FACTORS
The following information should be considered by prospective investors in evaluating the Bonds.
However, the following does not purport to be an exhaustive listing of risks and other considerations which may
be relevant to investing in 'the Bonds. In addition, the order in which the following information is presented is
not intended to reflect the relative importance of any such risks.
Concentration of Revenue Sources
A substantial portion of both Tax Revenues are derived from the top ten property owners in the Project
Area. In 1996/97, Tax Revenues derived from property taxes on such properties were projected by the Agency
to be $2,610,337 (inclusive of the 20% housing set-aside). The assessed valuation of the property held by the
10 largest landowners in the Project Area was $261,033,716 which amounted to approximately 60% of the total
secured valuation in 1996/97 of $437,213,988. One of the appeals filed in 1996 was filed by the largest taxpayer
within the Project Area. A successful appeal by such taxpayer could result in a decrease in the amount of Tax
Revenues received by the Agency. See "DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT - Tax
Assessment Appeals."
Tax Revenue Projections
To estimate the revenues available to pay debt service on the Bonds, the Agency has made certain
assumptions with regard to the assessed valuation in the Project Area, future tax rates and the percentage of
taxes collected. The Agency believes these assumptions to be reasonable, but to the extent that the assessed
valuation, the tax rates, or the percentage of taxes collected are less than the Agency's assumptions, the Tax
Revenues available to pay debt service on the Bonds will, in all likelihood, be less than those projected herein.
See "DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT - Projection of Tax Revenues."
SF1-259581.V3 9
Plan Limit Risk
Section 33333.2 of the Redevelopment Law requires that any redevelopment plan adopted on or after
October 1, 1976 contain, among other things, a limit on the number of dollars of taxes which may be divided and
.allocated to any such redevelopment agency pursuant to its redevelopment plan. With respect to the Project
Area the "Plan Limit,M as defined in the Redevelopment Plan, provides that the amount of tax increment revenue
which may be allocated to the Agency shall not exceed $240 million (including amounts previously allocated to
the Agency). As of fiscal year 1995-96, the Agency had received approximately $5,428,881 in tax increment
revenue. Assuming that the assessed value in the Project Area will grow at the rate of 2% annually, the Agency
will receive tax increment revenue in sufficient amounts and in a timely manner to enable it to meet its
obligations with respect to the Bonds. In the event the assessed value grows at a rate higher than 2% then the
Agency will receive tax increment revenue earlier than anticipated and may reach the Plan Limit.
Reduction in Taxable Value
Tax Revenues allocated to the Agency are determined by the amount of incremental taxable value in the
Project Area and the current rate or rates at which property in the Project Area is taxed. The reduction of
taxable values of property caused by economic factors beyond the Agency's control, such as a relocation out of
· the Project Area by one or more major lessees of property, or the complete or partial destruction of property
caused by an earthquake, flood or other natural disaster, could cause a reduction in the Tax Revenues securing
the Bonds. In addition, taxable values may be reduced pursuant to successful appeals of assessed valuation.
Such a reduction of assessed valuations and the resulting decline in Tax Revenues could impair the Agency's
ability to make timely payments of principal of and interest on the Bonds. The Agency does not expect any
reductions from the appeals currently in process to materially affect its ability to pay debt service on the Bonds
on a timely basis.
Reduction in Inflationary Rate
As described in greater detail below, Article XIII A of the California Constitution provides that the full
cash value base of real property used in determining taxable value may be adjusted from year to year to reflect
the inflationary rate, not to exceed a 2% increase for any given year, or may be reduced to reflect a reduction
in the consumer price index or comparable local data. Such measure is computed on a calendar year basis. It
is possible that because of the present or future economic recessions, the County Assessor could determine that
taxable values should not be increased, or increased at a rate lower than 2%, for a given year or years. See
"LIMITATIONS OF TAX REVENUES" herein.
Levy and Collection
The Agency has no independent power to levy and collect property taxes. Any reduction in the tax rate
or the implementation of any constitutional or legislative property tax decrease could reduce the Tax Revenues,
and accordingly, could have an adverse impact on the ability of the Agency to pay debt service on the Bonds.
The County currently allocates tax revenues in accordance with the Teeter Plan, distributing to the taxing
agencies 100% of the amount levied. See DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT -
Property Tax Collection Procedures."
State Budget
In prior fiscal years, as part of the California State Legislature's Budget implementation package the
Legislature has required a transfer of redevelopment funds to the Educational Revenue Augmentation Fund (the
"Fund"). Currently, The Agency is not required to deposit moneys in the Fund for 1996/97. There can be no
SF1-259581.V3 10
assurance, however, that the Legislature will not require similar deposits in future years to deal with budget
deficits.
Environmental Liabilities
There are areas of environmental contamination within the Project Area as a result of prior property uses
such as dismantling yards and other industrial uses. The contamination is primarily of the surface nature. The
Agency is not aware of any sub-surface or underground water contamination within the Project. Any current
remediation programs are monitored by the San Mateo County Department of Environmental Health.
Loss of Tax Exemption
In order to maintain the exclusion from gross income for federal income tax purposes of the interest on
the Bonds, the Agency has covenanted in the Indenture to comply with each applicable requirement of the
Internal Revenue Code of 1986 (the "Code"). The interest on the Bonds could become includable in gross
income for purposes of federal income taxation retroactive to the date of issuance of the Bonds as a result of
acts or omissions of the Agency in violation of this or other covenants in the Certificate as to Arbitrage. The
Bonds are not subject to redemption or any increase in interest rates should an event of taxability occur and
could remain outstanding until maturity or prior redemption in accordance with the provisions contained in the
Indenture. See "TAX MATTERS" herein.
Risks of Book. Entry System
Neither the Agency nor the Trustee makes any assurances, and neither the Agency nor the Trustee shall
incur any liability, regarding the fulfillment by DTC of its obligations under the book-entry system with respect
to the Bonds.
In addition, the Beneficial Owners of the Bonds may experience some delay in their receipt of distribution
of principal of, and interest on, the Bonds since such distribution will be forwarded by the Trustee to DTC and
DTC will credit such distributions to the accounts of the Direct Participants which will thereafter credit them
to the accounts of the Beneficial Owners either directly or through Indirect Participants.
Delivery of the Bonds in book-entry form may also reduce the liquidity of the Bonds in the secondary
trading market since investors may be unwilling to purchase bonds for which they cannot obtain physical
certificates. In addition, since transactions in the Bonds can be effected only through DTC, Direct Partidpants,
Indirect Participants and certain banks, the ability of a Beneficial Owner to pledge the Bonds to persons or
entities that do not participate in the DTC system, or otherwise to take actions in respect of such Bonds, may
be limited due to lack of a physical certificate. Beneficial Owners will not be recognized by the Trustee as
registered holders for purposes of the Indenture, and Beneficial Owners will be permitted to exercise the rights
of registered holders indirectly through DTC and its DTC Participants.
Permitted Investments
Pursuant to the terms of the Indenture, moneys in the funds and accounts will be invested by the Trustee
in Permitted Investments. The Trustee's investment in Permitted Investments is subject to normal credit risk
and market risk. Credit risk is the risk of non-payment of interest and principal by the obligor and market risk
is the risk that interest rates and other factors such as changes in the market's perception of the obligor's
creditworthiness will cause the value of the Permitted Investment to decline. The Agency currently plans to
invest the proceeds of the Bonds and amounts needed to pay debt service on the Bonds in certificates of deposit
and treasury notes.
SFI-259581.V3 11
REDEVELOPMENT AGENCY OF THE CITY OF SOUTii SAN FRANCISCO
The A~ncy was formcd on July 12, 1989 by Ordinance No. 1056-89 of thc City Council. Pursuant to thc
Rcdevek)pment Law, the Ci~/Council dcsignatcd itsclf as the governing board for thc Agency. Thc A~.ncy is
a scMtr~le public body which pJan~ and implements projects in acc'or'dance with thc rcqulremcnts of the
Redevelopment Law, The Downtown/Ccntral Rcdcvclopment Projccl for which tlu: 9onds arc
one of the Asency's four redevelopment projc~'t
All powers of the Agency arc legally vcstcd in its five mcmbcrs, who arc elected to the City Council for
four ycar terms. The Agency exercises govcrnmeutai functions in carrTin~ out projects and 'has suffJctently broad
authority to ocquirc, develop, ndmin~stcr and sell or lease property.
Thc currcnt chair of thc A~cncy is $oscph A. Fcrnekcs, who was elected to thc City Council in 1994.
Other mcmbcrs of thc City and Agency Board arc shown below. Thc Mayor of thc City serves a.q thc Chei~ o!
the AScncy.
Joseph A. Fernekes 1999
Eugene R. Mullin 1999
James Datzman 1997
John a. Penna 1997
Robert D. Ycc 1997
Br~f biographies of key A~ency staff and consultants follow below:
Michacl W'dson, Escculivc Director
Marly Van Duyn, DJrcctor of Economic and Community Devclopmcnt
Robert Beyers, Redevelopment Consultant
[lV[AP]
sF~-2s~ss~.w ~3
DOWNTO~/CENT~ REDEVELOPMENT PROJECT
The Redevelopment Plan for the Downtown/Central Redevelopment Project Area (the "Project Area")
was adopted by Ordinance No. 1056-89 on July 12, 1989. The Project Area consists of both contiguous and non-
contiguous areas encompassing approximately 550 acres located in the City of South San Francisco.
Downtown/Central
The Downtown Central Redevelopment Project was created in 1989 for the purpose of giving new life to
the City's downtown and to several non-contiguous areas whose value and use could be increased through
redevelopment. The downtown area of the City had not experienced the resurgence like other city downtown's
on the San Francisco Peninsula during [the mid-1980's]. In response, the City formed the Project Area to
revitalize this area and several other areas with commercial potential through the Agency's activities.
The Agency has been active in leveraging its funds with private capital to facilitate the improvements of
over forty different buildings within the Project Area. In addition,the Agency has committed over $3 million
dollars in low interest rate loans for seismic retrofitting four historic buildings and hotels, enabling the retention
of over 100 residential units in the Downtown area. For example ]describe one or two large projects.] The
Agency is in the process of undertaking an aggressive retail attraction program to entice new retailers to the area.
The Project Area is composed of nine subareas. Five of the subareas are contiguous. The Project Area
boundaries include the downtown, portions of the shoreline area, the.Bayshore Freeway overpass, and Colma
Creek. The Project Area consists of approximately 550 acres which have been subdivided into approximately
450 separate parcels with industrial, commercial, residential and public uses. The Project Area includes a
number of large parcels, resulting from an earlier industrial subdivision system. Estimated existing land uses
include: 154 acres of commercial use; 187 acres of industrial use; 72 acres of residential use; 16 acres of public
and institutional uses and 66 acres of street and freeway right-of-way. Approximately 50 acres of the Project
Area are vacant.
The sub-areas are as follows [add description of agency activities or plans with respect to each sub-area
including expansion plans of pre-existing business parks]:
Sub-area 1 consists of . The Agency plans to use a portion of the Bond proceeds to implement
certain improvements to the fu'e station, streets, and landscaping. The Agency currently offers low interest loans
for building improvements to attract retailers to this area.
Sub-area 2A consists of a 26 acre contaminated parcel and freeway right-of-way. The large parcel has
remained undeveloped due, in part to the contamination and access to the parcel.
Sub-area 2B is an area between the Southern Pacific railroad tracks and the US 101 Freeway where a
small train station is located. The Agency is considering relocating the train station, or acquiring some adjacent
property to make it more accessible for persons using Cai-Train.
Sub-area 2C consists of three parcels and some public right-of-way. Two of the parcels are developed with
non-compatible uses, a drilling firm and a waste disposal transfer station. The third is a sloping parcel, which,
to date has remained undeveloped. Development in the adjacent business parks has created pressure on these
companies to relocate thereby creating the opportunity for expansion of the business parks. In the event of such
expansion, there will be need for additional infrastructure improvements on those parcels.
Sub-area 3 consists of an older part of the City near the downtown area historically used for industrial
purposes such as There is need for infrastructure up-grading as these properties are used for
rather than the older uses.
SF1-259581.V3 14
Sub-area 4 contains some of the older area presently consisting of old junk yards that have long been
productive and a mixture of manufacturing uses in the East of 101 Area. The Agency is presently in discussions
with two potential developers interested in creating a new biotechnology development in the area between East
Grand Avenue and the railroad tracks. There is some toxic remediation required on some of these properties.
Sub-area 5 consists mainly of the City's waste treatment facility, oil storage tanks and several undeveloped
parcels. The City and Agency are presently negotiating an agreement to develop a five story parking garage to
serve long term parking for the San Francisco International Airport. The Agency will also be leasing some land
to the project for surface parking.
Sub-area 6 represents some of the larger undeveloped parcels in the Project Area. Several are adjacent
to San Francisco Bay and are now facing increased pressures for new development [due to their proximity to
existing business parks].
General Project Goals and Objectives
The Project Area was established with the goal of alleviating deterioration and economic stagnation of the
Project Area attributable primarily to inadequate public improvements. A major goal of the Project Area is to
facilitate industrial and commercial development which will generate a substantial number of permanent jobs.
The Redevelopment Plan identifies the following specific objectives (among others):
'To expand the retail component of the Downtown, providing diversification of offerings and
encouraging major outlets as a draw to new shoppers.
To promote the area as the fmancial hub, encouraging existing institutions to expand both physically
and with related services.
To replan, redesign and develop areas which are stagnant or improperly used.
To expand and upgrade the housing opportunities in the community to eliminate blight and improve
housing stock and standards for the present population.
To retain and expand as many existing businesses as possible by means of rehabilitation activities
and by encouraging and assisting the cooperation and participation of owners, businesses and public
agendes in the revitalization of the Project Area.
To promote new and continuing private sector investment within the Project Area to prevent the
loss of and to facilitate commercial and industrial activity.
To create a pedestrian environment to encourage multiple stops by visitors and more frequent visits
to Downtown.
To achieve an environment reflecting a high level of concern for architectural, landscape, and urban
design and land use principles appropriate to attainment of the objectives of the Redevelopment
Plan.
To emphasize and highlight the existing architectural style and scale through rehabilitation and
renovation of historic structures and encouraging in-fill developments that relate to existing
structures.
To eliminate blight through abatement or code compliance, reconstruction and assembly of parcels
into more .develoPable sites for more desirable uses.
SF1-259581.V3 15
To improve public parking, other public facilities, services, utility lines, lighting, public safety and
public transportation.
To create and develop local job opportunities and to preserve the area's existing employment base.
Bond and Tax Increment Limitations
The Redevelopment Law requires the Agency to establish limits on the amount of tax increment which
may be divided and allocated to the Agency, a time limit on establishing loans, advances, and indebtedness and
a limit on the amount of bonded indebtedness which may be outstanding at any one time. The Redevelopment
Plan for the Project Area (the "Plan") provides for tax increment limit of $248 million net of any tax increment
which is paid directly or indirectly to an affected taxing agency pursuant to Redevelopment Law Section 33401
and/or Section 33676 and a bonded indebtedness limit of $90,000,000. The Plan provides that the Plan shall be
effective for 40 years from the date of adoption of the ordinance approving the Plan. Additionally, for 10 years
following the date when the effectiveness of the Plan terminates, the Agency shall retain the authority to pay
previously incurred indebtedness or obligations, to receive property taxes to pay such indebtedness or obligations,
and to enforce any existing covenants, contracts, or other obligations. The Plan, as amended, provides for a 15-
year limit for incurring debt (through 2009).
History and Recent Growth
[Describe retrofitting, retail attraction, other growth in detail]
Table 3 below shows the ten largest taxpayers for fiscal year 1996/97 in the Project Area based on an
aggregation of their fee interests in various parcels.
TABLE 3
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT AREA
Top Ten Taxpayers (Secured Roll Only)
Fiscal Year 1996/97
Total Assessed
Taxpayer Valuation
Percent Total Secured
Assessed Valuation (1)
Genetech
N.C. Land Associates Limited Partnership
Kashiwa Fudosan America, Inc.
Sierra Point Associates
Kaiser Foundation Hospitals
Elbert P. & Leslie B. Bressie
Speiker Properties L.P.
L.Q. Cigna II
Fuller O'Brien Corp.
Traverse Corporation
Total
(1) Total 1996/97 Secured Assessed Value was $437,213,988
$141,735,362 32.42%
23,047,199 5.27%
19,439,508 4.45%
15,153,081 3.47%
14,401,085 3.29%
12,600,000 2.88%
10,321,307 2.36%
10,196,207 2.33%
8,455,705 1.93%
5,684,262 1.30%
$261,033,716 59.70%
' SF1-259581.V3 16
SOIIICC:
San Mateo County Assessor
SFI-259581.V3 17
As shown in Table 4 on the following page, the total assessed valuation of the Project Area has increased
by approximately $206,253,111 since 1991/92 for an average annUal growth rate of approximately 9%. Actual
tax increment revenues actually received during the five years shown ranged from -42% to 8.22% of estimated
tax increment revenues based on the assessed valuation of the Project Area. The figures shown in Table 4 for
net tax increment revenues do not reflect the amounts which must be passed through to other taxing agencies
nor the 20% housing set-aside.
SF1-259581.V3 18
TABLE 4
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT AREA
Historical Assessed Valuation and Tax Increment Received
Project Area
Secured
Unsecured
Public Utility
Total Assessed Valuation
Less Base Year Value
Incremental Assessed Valuation
Tax Rate
Estimated Tax Levy
Estimated Tax Increment
Actual Tax Increment Received
Less: 20% Housing Set Aside
Less: Taxing Agency Pass-throughs
San Mateo Co. Board of Education
San Mateo Community College Dist.
South San Francisco Unified School Dist.
Less: Educ. Rev. Alloc. Fund Transfer
Net Tax Increment Received
1991-92 1992-93 % 1993-94 % 1994-95
Actual AV Actual AV Change Actual AV Change Actual AV
$251,594,439 $288,440,625 14.65 $340,463,527 18.04 $356,990,747
40,505,158 44,496,128 9.85 43,463,340 (2.32) 47,230,895
0 0 0 0
292,09%597 332,936,753 13.98 383,926,867 15.32 404,221,642
(230,960,897) (230,960,897) (230,960,897) (230,960,897)
61,138,700 101,975,856 66.79 152,965,970 50.00 173,260,745
1.00% 1.00% 1.00% 1.00%
1.0012% 1.0012% 1.0012% 1.0012%
$914,310 $676,160 $1,406,400 $1,360,900
642,990 701,359 9.08 1,300,000 85.35 1,329,500
%
Change
4.85
8.67
5.29
13.27
2.27
1995-96.
Actual AV
% 1996-97 %
Change Estimated Change
AV
$380,329,237 6.54 $384,656,382 1.14
46,306,810 2.28 52~557,626 8.80
0 0
427,905,389 5.86 437,214,008 2.18
(230,960,897) (230,960,897)
196,944,492 13.67 206,253,111 4.73
1.00% 1.00%
1.0012%
~ $1,541,800 $1,537,000
1,679,850
26.35
128,598 140,272 260,000 265,900 335,970 307,400
5,818 6,668 8,905 10,494 12,116
11,179 14,115 17,110 20,160 23,280
66,559 84,039 101,868 120,955 136,605
0 67,882 135,763 135,779 0 0
$1,192,271
0.10
$430,836 $409,649 -5.00 $799,415 95.00 $799,938
49.00
$1,055,599 -11.00
SFI-259581.V3 19
Tax Assessment Appeals
The Agency's review of the secured roll property assessment appeals for the Project Area found a total
of two appeals filed in 1996 with the County of San Mateo. Of the two appeals, both are still pending.
The two pending appeals are requesting a total reduction in assessed valuation of $65,316,049. These two
appeals are for properties owned by two of the 1996 top ten property owners. A significant appeal requesting
a total reduction of $64,430,769 is by Genetech, the top property owner. The appeal is based on an accelerated
depredation of laboratory equipment. Each of Genetech's projects requires different types of research
equipment, once a research project is terminated, the equipment is disposed of and new laboratory equipment
is acquired for the new research projects. This results in accelerated depreciation of the equipment. When the
new equipment is acquired, it appears on the unsecured roll and increases the value of that roll. Eventually the
value of the equipment is transferred to the secured roll. The Agency expects that this process will normalize
and will not have a significant impact on the overall assessment roll with reductions on the secured roll offset
by increases on the unsecured roll. The Agency c~nnot predict the outcome of the appeals and to the extent that
the appeals are successful, Tax Revenues could be reduced. The Agency, however, does not expect any such
reductions to materially affect its ability to pay principal and interest on the Bonds on a timely basis.
Projection of Tax Revenues
The purpose of the Agency's projections is to substantiate the availability of tax increment revenue
generated by the Project Area to secure a portion of the debt service requirements for the Bonds. The Agency
believes the Tax Revenue projections have been conservatively estimated in order to reduce the possibility of
overstating future Tax Revenues. See "APPENDIX C - Redevelopment Consultant's Report."
While the Agency believes it has taken precautions to assure the accuracy of the data used in the
formulation of their projections, there can be no assurance that projected valuations will, in fact, be realized
because actual values may be affected by future events and conditions that cannot be controlled or predicted with
certainty.
SF1-259581.V3 20
Secured Unsecured
Year Fiscal Assessed Assessed New
(N) Year Valuation Valuation Develop-
(@3.00%) (@0.00% ment
Base Year
I 1996/97 $384,656,362 $52,557,626 0
2 1997198 396,196,053 52,557,626 $2,919,980
3 1998199 408,081,934 52,557,626 4,881,395
4 1999/2Q00 420,324,392 52,557,626 76,011,781
5 2000101 432,934,124 52,557,626 46,528,267
6 2001102 445,922,148 52,557,626 10,000,000
7 2002103 459,299,812 52,557,626 0
8 2003/04 473,078,807 52,557,626 0
9 2004105 487.271,171 52,557.626 0
10 2005/06 501.889,306 52,557,626 0
11 2006/07 516.945.985 52,557,626 0
12 2007/08 532,454.365 52,557,626 0
13 2008/09 548.427.996 52,557,626 0
14 2009/10 564,880.836 52,557.626 0
15 2010/11 581.827.261 52,557.626 0
16 2011/12 599.282.079 52.557.626 0
17 2012/13 617.260,541 52.557.626 0
18 2013/14 635.778.357 52.557,626 0
19 2014/15 654.851.708 52.557,626 0
20 2015/16 674,497.259 52,557.626 0
21 2016/17 694.732.177 52,557,626 0
22 2017/18 715.574.142 52,557,626 0
23 2018/19 737.041.366 52.557,626 0
24 2019/20 759.152.607 52.557,626 0
25 2020/21 781.927,186 52,557,626 0
26 2021/22 805,385.001 52.557.626 0
27 2022/23 829,546.551 52,557.626 0
28 2023/24 854.432,948 52,557.626 0
29 2024/25 880.065.936 52.557.626 0
30 2025/26 906,467.914 52.557,626 0
31 2026/27 933.661.952 52.557.626 0
32 2027/28 961.671.810 52,557.626 0
33 2028/29 990.521.965 52,557.626 0
34 2029/30 1,020.237.624 52,557.626 0
REDEVELOPMENT AGENCY OF ]ITY OF SOUTH SAN FRANCISCO
DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT AREA
Tax Increment Projections
Assessment Annual
Appeals Total Frozen Incremental Incremental Estimated Total
Assessed Assessed Base Value Revenue Unitary Agency
Valuation Valuation Value (@1.00%) Revenue Revenue
Total
Cumulative 20% Housing
Agency Set-Aside and
Revenue Pass-Through
Payment(s)
IIncrement accrued between 1991 and 1995-96
$437,213,988 $230,960,897 $206,253.091
451.673.659 230.960,897 220,712.762
465.520.955 230.960.897 234,56O.058
548.893.799 230,960.897 317.932,902
532,020.017 230.960.897 301,059.120
508.479.774 230.960.897 277,518.877
511.857.438 230.960.897 280.896.541
525.636.433 230.960,897 294,675,536
539,828.797 230.960.897 308,867.900
554,446,932 230.960,897 323.486.035
569,503.611 230,960.897 338.542.714
585,011,991 230,960,897 354.051.094
600,985,622 230.960,897 370.024.725
617.438,462 230.960.897 386.477.565
634,384,887 230,960,897 403.423.990
651.839,705 230.960.897 420.878.808
669.818,167 230,960.897 438.857,270
688.335.983 230.960.897 457.375.086
707.409,334 230.960.897 476.448,437
727,054,885 230,960,897 496.093.988
747.289,803 230.960,897 516.328.906
768.131.768 230.960,897 537,170.871
789,598.992 230,960,897 558,638.095
811.710.233 230,960,897 580,749,336
834.484,812 230,960,897 603.523,915
857,942.627 230.960,897 626.981,730
882,104,177 230.960.897 651,143,280
906.990.574 230,960,897 676,029,677
932.623,562 230,960,897 701.662.665
959,025.540 230,960.897 728.064.643
986,219,578 230,960.897 755.258,681
1,014.229.436 230.960,897 783.268,539
1.043,079.591 230,960.897 812,118,694
1.072.795.250 230,960.897 841.834.353
$5,428,8811
$2,062,531 0
2,207,128 0
2,345,601 0
3,179,329 0
3,010,591 0
2,775,189 0
2,808,965 0
2,946,755 0
3,088,679 0
3.234.860 0
3,385.427 0
3,540.511 0
3.700,247 0
3.864.776 0
4.034.240 0
4.208,788 0
4,388,573 0
4,573,751 0
4.764,484 0
4.960,940 0
5.163,289 0
5,371.709 0
5~586,381 0
5,807,493 0
6,035,239 0
6,269,817 0
6,511,433 0
6,760,297 0
7,016,627 0
7,280,646 0
7,552,587 0
7,832.685 0
8.121.187 0
8.418,344 0
$2.062.531 $2.062,531
2.207.128 4,269,659
2.345.601 6.615.259
3,179.329 9.794,588
3.010,591 12.805.179
2.775.189 15,580.368
2,808.965 18,389.334
2.946,755 21,336.089
3.088.679 24.424.768
3.234.860 27,659.628
3.385.427 31,045.055
3.540.511 34.585.566
3,700,247 38.285,814
3.864.776 42.150.589
4.034,240 46.184.829
4.208,788 50.393.617
4.388.573 54,782.790
4.573,751 59.355,941
4.764,484 64.120,425
4.960.940 69,081,365
5,163.289 74.244,654
5.371.709 79,616,363
5,586,381 85.202.744
5.807.493 91,010.237
6.035.239 97,045,476
6,269,817 103,315.294
6,511,433 109,826.726
6.760.297 116.587,023
7,016,627 123,603,650
7.280.646 130,884,296
7.552.587 138.436.883
7,832,685 146,269.568
8.121,187 154,390.755
8,418,344 162,809,099
$412,506
441.426
469.120
635.866
602.118
555.038
561,793
589.351
617.736
646.972
677.085
708.102
740.049
772,955
806,848
841,758
877.715
914.750
952.897
992.188
1.032.658
1,074.342
1.117.276
1,161.499
1,207,048
1.253,963
1,302,287
1.352.059
1,403.325
1.456.129
1,510.517
1,566.537
1,624,237
1.683.669
Remaining Net
Revenue Cumulative
For Agency
Agency Revenue
$1,650.025 $1.650.025
1.765,702 3.828.233
1,8761480 6,146,139
2,543.463 9.158,722
2.408,473 12.203.061
' 2,220.151' 15.025.330
2,247,172 17.827,540
2,357.404 20.746.738
2.470,943 23.807.032
2,587,888 27.012,656
2.708.342 30.367,970
2.832.409 33.877,464
2,960.198 37,545,764
3.091.821 41,377.634
3,227,392 45.377,981
3,367.030 49.551.86O
3.510,858 53.904.475
3,659,001 58,441,191
3,811,587 63,167,528
3,968,752 68,089,177
4,130,631 73,211,996
4,297,367 78,542,021
4,469,105 84,085,468
4,645,995 89,848,738
4,828,191 95,838,428
5.015.854 102,061,330
5,209,146 108.524,440
5.408.237 115,234.964
5.613.301 122.200,324
5,824,517 129.428,167
6,042.069 136,926,366
6.266.148 144.703.031
6.496,950 152,766,518
6.734,675 161.125.430
SFI-259581.V3 21
[Debt Service Coverage]
[to come]
Background and Assumptions
[to come]
SF1-259581.V3 22
Taxing Entity Pass-Through Payments
The Agency has four pass-through Payment Agreements with taxing agencies for the Project Area. The
agencies are the County of San Mateo (the "County"), South San Francisco Unified School District, San Mateo
County Community College District and the San Mateo County Schools Services District. There are two
different pass-through formulas applied to these taxing agencies; one for the County of San Mateo and one for
the three school-related districts.
Under the County's formula, the County does not receive any pass-through tax increment funds until the
Agency has received a cumulated amount of $38 million with respect to the Project Area, excluding amounts
annually deposited into the Low and Moderate Income Housing Fund. After the Agency's tax increment
allocations shall have equaled $38 million, the Agency shall pay to the County a sum equal to 25.653% of tax
increment.
The three school-related districts have a different formula from which their tax increment pass-through
is calculated. Each district is entitled to a percentage of the tax increment generated by 2% growth in assessed
value over the base year assessment roll, after the deposit into the Low and Moderate Income Housing Fund.
[The districts take their proportionate share of the basic $1.00 rate.] The percentages are as follows: South San
Francisco Unified School District (43.70%), San Mateo County Community College District (7.34%) and San
Mateo County School Services District (3.82%).
Low and Moderate Income Housing Set-Aside
The Redevelopment Law requires the Agency to set aside 20% of the tax revenues allocated to the Agency
into a special fund for the purpose of improving and expanding the supply of housing available for persons or
households of low and moderate income, unless certain findings are made pursuant to Section 33334.2 of the ·
California Community Redevelopment Law. See "SECURITY FOR THE BONDS - Tax Revenues
Defined/Housing Set Aside." To the extent proceeds on the Bonds are used to increase, improve or preserve
the supply of low income housing in accordance with the Redevelopment Law, low and moderate income housing
set aside moneys will be available to pay debt service on the Bonds. However, for the purposes of its report,
the Agency's tax increment projections reduce gross revenues by the 20% low and moderate income housing set
aside. Bondowners should not assume that such set aside will be available to pay debt service on the Bonds.
See "APPENDIX C - Redevelopment Consultant's Report" for a more detailed discussion of the
assumptions and conclusions of the Redevelopment Consultant's Report.
Unitary Property
AB 454 (Chapter 921, Statutes of 1987) provides that revenues derived from most utility property assessed
by the State Board of Equalization ("Unitary Property"), commencing with the 1989 Fiscal Year, will be allocated
as follows: (1) each jurisdiction, including the Project Area, will receive up to 102% of its prior year
State-assessed revenue; and (2) if county-wide revenues generated from Unitary Property are less than the
previous year's revenues or greater than 102% of the previous year's revenues, each jurisdiction will share the
burden of the shortfall or excess revenues by a specified formula. This provision applies to all Unitary Property
except railroads, whose valuation will continue to be allocated to individual tax rate areas.
The provisions of AB 454 do not constitute an elimination of the assessment of any State-assessed
properties nor a revision of the method of assessing utilities by the State Board of Equalization. Generally, AB
454 allows valuation growth or decline of Unitary Property to be shared by all jurisdictions in a county. The
Agency does not currently receive any revenue from Unitary Property.
SF1-259581.V3 23
Special Subventions
Prior to the Fiscal Year 1991-92, the Agency, like many other redevelopment agencies, received annual
subventions from the State ("Special Subventions"). Legislative changes in 1990, however, significantly altered
the statutory scheme for payment of these Special Subventions and prohibited redevelopment agencies from
pledging Special Subventions as security for bonds issued after July 31, 1990. The Budget Act for Fiscal Year
1991-92 further reduced appropriations for Special Subventions and established the intent of the State Legislature
to ultimately phase out these payments to redevelopment agencies. Tax Revenues, as defined in the Indenture
and as numerically presented in this Official Statement, do not include any amounts received by the Agency as
Special Subventions, nor are any such amounts pledged to pay debt service on the Bonds.
Property Tax Collection Procedures
For assessment and collection purposes, property is classified either as "secured" or "unsecured" and is
listed accordingly on separate parts of the assessment roll. The "secured roll" is that part of the assessment roll
containing state-assessed public utilities property and property the taxes on which are a lien on real property
sufficient, in the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed on
the "unsecured roll." A tax levied on unsecured property does not become a lien against the unsecured property
but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on
secured property has a priority over all other liens arising pursuant to State law on the secured property,
regardless of the time of creation of the other liens.
Property taxes on the secured roll are due in two installments,, on November 1 and February 1 of each
Fiscal Year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10%
penalty attaches to any delinquent payment. In addition, property on the secured roll with respect to which taxes
are delinquent is sold to the State on or about June 30 of the Fiscal Year. Such property may thereafter be
redeemed by payment of the delinquent taxes and delinquent penalty, plus a redemption penalty of 1-1/2% per
month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded
to the State and then is subject to sale by the County Tax Collector.
Historically, taxes were levied for each Fiscal Year on taxable real and personal property situated in the
County as of the preceding March 1. A bill enacted in 1983, SB 813 (Statutes of 1983, Chapter 498), however,
provided for the supplemental assessment and taxation of property as of the occurrence of a change of ownership
or completion of new construction. Thus, this legislation eliminated delays in the realization of increased
property taxes from new assessments. As amended, SB 813 provided increased revenue to redevelopment
agencies to the extent that supplemental assessments of new construction or changes of ownership occur within
the boundaries of redevelopment project areas subsequent to the March 1 lien date.
Property taxes on the unsecured roll are due as of the March 1 lien date and become delinquent, if unpaid,
on the following August 31. A 10% penalty attaches to delinquent taxes on property on the unsecured roll, and
an additional penalty of 1-1/2% per month begins to accrue on the first day of the third month following the
delinquency date. The taxing authority has four ways of collecting unsecured personal property taxes: (i) a civil
action against the taxpayer; (ii) filing a certificate in the office of the County Clerk specifying certain facts in
order to obtain a judgment lien on certain property of the taxpayer; (iii) fding a certificate of delinquency for
recording in the County Recorder's office, in order to obtain a lien on certain property of the taxpayer; and
(iv) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the
assessee.
The County of San Mateo (the "County") and other taxing agencies (including the Agency) which have
elected to participate, will operate under the Teeter Plan as set forth in Sections 4701-4717 of the California
Revenue and Taxation Code. Under the Teeter Plan, accounts of all public entities that levy taxes on the County
tax roll and which elect to participate or are required to participate in the County's Teeter Plan, such as the
Agency, will be credit and apportioned in each fiscal year 100% of their respective tax levies, regardless of actual
SFI-259581.V3 24
payments and delinquencies. In return for advancing 100% of the taxes levied, the County retains all delinquent
tax payments including penaltie~ and interest received in respect of the participating agencies' delinquent taxes.
Current tax payment practices by the County provide for payment to the Agency of approximately 45% of the
secured taxes ia December of each year, followed by the balance of the secured tax collections by the end of
August of each year. ~ percent of the unsecured taxes are paid to the Agency in one payment in October
of each year. For Fiscal Year 1995-96, the delinquency rate for secured tax payments in the County was %.
The delinquency rate for the Project Area is unavailable.
Limitations on Indebtedness and Receipt of Tax Increment
Section 33333.2 of the Redevelopment Law requires that any redevelopment plan adopted on or after
October 1, 1976 contain certain provisions, including a limit on the number of dollars of taxes which may be
divided and allocated to the redevelopment agency pursuant to its redevelopment plan, a time limit on the
establishing of loans, advances and indebtedness to finance, in whole or in part, the redevelopment project, and
a time limit not to exceed 12 years for commencement of eminent domain proceedings to acquire property within
the project area.
With respect to the Project Area, Ordinance No. 1056-89 adopted by the City, provides that the amount
of tax increment revenue which may be allocated to the Agency shall not exceed $248 million, which sum includes
amounts previously allocated to the Agency. See "RISK FACTORS - Plan Limit Risk."
Change in Project Area Boundaries
Under certain circumstances, the Agency may elect to reduce the boundaries of the Project Area. In the
Indenture, however, the Agency has covenanted not to enter into any agreement with any other governmental
unit which would have the effect of reducing the amount of Tax Revenues available to the Agency for payment
of the Bonds, unless in the written opinion of an Independent Financial Consultant filed with the Trustee such
reduction will not adversely affect the interests under the Indenture of or the security granted to Owners of the
Bonds, and in no event shall the amount of Tax Revenues be reduced below an amount equal to 1.25 times
Maximum Annual Debt Service on the Bonds.
Assembly Bill 1290
Assembly Bill 1290 ("AB 1290") has been adopted by the California Legislature and has been signed by
the Governor.
AB 1290 contains several significant changes in the Redevelopment Law, including the following:
(1) AB 1290 contains limitations on the use of the proceeds of loans, advances and indebtedness for
auto malls and other sales tax generating redevelopment activities, as well as for city and county administrative
buildings. However, AB 1290 does confirm the authority of a redevelopment agency to make loans to
rehabilitate commercial structures and to assist in the financing of facilities or capital equipment for industrial
and manufacturing purposes.
(2) AB 1290 contains provisions affecting the housing set-aside requirements of an agency, including
severe limitations on the amount of money that is permitted to accumulate in the agency's housing set-aside fund.
However, these limitations are such that an agency will be able (with reasonable diligence) to avoid the severe
penalties for having "excess surplus" in its housing set-aside fund.
(3) AB 1290 also contains provisions relating primarily to the formation of new redevelopment project
areas, including (i) changes in the method of allocation of tax increment revenues to other taxing entities affected
by the formation of redevelopment project areas, (ii) restrictions on the £mding of "blight" for purposes of
SF1-259581.V3 25
[
formation of a redevelopment project area and (iii) new limitations with respect to the incurrence and repayment
of debt and the duration of the new redevelopment plan.
The Agency is of the opinion that the provisions of AB 1290 will not have an adverse impact on the
payment of debt service on the Bonds and the Agency does not expect that the provisions of AB 1290 will have
an adverse impact on the undertaking by the Agency of future redevelopment actions with the Project Area.
LIMITATIONS OF TAX REVENUES
Property Tax Rate and Appropriation Limitations
Article XIII.A of the State Constitution. On June 6, 1978, State voters approved Proposition 13, which
added Article XIII A to the State Constitution ("Article XIII A"). Article XIII A limits the amount of any ad
valorem tax on real property to one percent of the full cash value thereof, except that additional ad valorem taxes
may be levied to pay debt service on indebtedness approved by the voters prior to July 1, 1978 and (as a result
of an amendment to Article XIII A approved by State voters on June 3, 1986) on bonded indebtedness for the
acquisition or improvement of real property which has been approved on or after July 1, 1978 by two-thirds of
the voters voting on such indebtedness. Article XIII A defines full cash value to mean "the county assessor's
valuation of real property as shown on the 1975/76 tax bill under 'full cash value,' or thereafter, the appraised
value of real property when purchased, newly constructed, or a .change in ownership has occurred after the 1975
assessment." This full cash value may be increased at a rate not to exceed 2% per year to account for inflation.
Article XIII A has subsequently been amended to permit reduction of the "full cash value" base in the
event of declining property values caused by damage, destruction or other factors, to provide that there would
be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in
a disaster and in various other minor or technical ways.
The Agency has no power to levy and collect taxes. Any further reduction in the tax rate or the
implementation of any constitutional or legislative property tax de-emphasis will reduce Tax Revenues, and,
accordingly, would have an adverse impact on the ability of the Agency to pay principal and interest with respect
to the Bonds.
Legislation Implementing Article XIII A. Legislation has been enacted and amended a number of times
since 1978 to implement Article XIII A. Under current law, local agencies are no longer permitted to levy
directly any property tax (except to pay voter-approved indebtedness). The 1% property tax is automatically
levied by the county and distributed according to a formula among taxing agencies. The formula apportions the
tax roughly in proportion to the relative shares of taxes levied prior to 1978.
Increases of assessed valuation resulting from reappraisals of property due to new construction, changes
in ownership or the 2% annual adjustment are allocated among the jurisdictions in the taxing area on a "situs"
basis, except for certain utility property assessed by the State Board of Equalization. Any such allocation made
to a local agency continues as part of its allocation in future years.
Article XIII B of the State Constitution. An initiative to amend the California Constitution entitled
"Limitation of Government Appropriations" was approved on September 6, 1979, thereby adding Article XIII B
to the California Constitution CArtide XIII B"). Article XIII 15 was substantially modified by Propositions 98
and 111 adopted in 1988 and 1990, respectively. Under Article XIII B, state and local governmental entities have
an annual "appropriations limit" and are not permitted to spend certain moneys which are called "appropriations
subject to limitation" (consisting of tax revenues, state subventions and certain other funds) in an amount higher
than the "appropriations limit." Article XIII B does not affect the appropriations of moneys which are excluded
from the definition of "appropriations subject to limitation," including debt service on indebtedness existing or
authorized as of January 1, 1979, or bonded indebtedness subsequently approved by the voters. As originally
enacted in 1979, the "appropriations limit" was based on certain Fiscal Year 1979 expenditures, and was adjusted
SF1-259581.V3 26
annually to reflect changes in cost of hying, population, and where applicable, for transfer of financial
responsibility for providing services to or from units of government. Proposition 111 revised the method (using
different definitions of cost of living and population) for making annual adjustments to the appropriations limit.
Beginning in the 1991 Fiscal Year, the appropriations limit is recalculated by taking the actual 1987 limit and
applying the annual adjustments as d Proposition 111 had been in effect.
As amended by Proposition 111, the appropriations limit is tested over consecutive two-year periods. If
an entity's revenues in any two-year period exceed the mounts permitted to be spent over such period, the
excess has to be returned by revising tax rates or fee schedules over the subsequent two years. Although
provisions of law result in redevelopment agencies being held harmless in the event such excess revenues are
returned by revising tax rates or fee schedules, it is possible that the adjustment of tax rates may affect the Tax
Revenues of the Agency.
The California State Legislature, by Statutes of 1980, Chapter 1342 enacted, a provision of the
Redevelopment Law (Health and Safety Code Section 33678) providing that the allocation and payment of taxes
to a redevelopment agency for the purpose of paying principal of or interest on loans, advances or indebtedness
incurred for redevelopment activity as defined in the statute shall not be deemed the receipt by the Agency of
proceeds of taxes levied by or on behalf of a redevelopment agency within the meaning or for the purpose of
Article XIII B of the State Constitution, nor shall such portion of taxes be deemed receipt of proceeds of taxes
by, or an appropriation subject to the limitation of, any other public body within the meaning or for the purposes
of Article XIII B or any statutory provision enacted in implementation thereof.
Articles XIII C and XIII D of the State Constitution
On November 5, 1996, the voters of the State approved Proposition 218 - the "Right to Vote on Taxes
Act." Proposition 218 added Articles XIII C and XIII D to the State Constitution, imposing certain vote
requirements and other limitations on the imposition of new or increased taxes, assessments and property-related
fees and charges. Tax Revenues securing the Bonds are derived from property taxes which are outside the scope
of taxes, assessments and property-related fees and charges which were limited by Articles XIII C and XIII D.
Limitation of Tax Revenues From Certain Increased Tax Rates
An initiative to amend the California Constitution entitled "Property Tax Revenues-Redevelopment
Agendes" was approved by California voters in 1988. This initiative amended the California Constitution to allow
the California Legislature to prohibit redevelopment agencies from receiving any of the property tax revenue
raised by increased property tax rates imposed by local governments to make payments on their bonded
indebtedness. The initiative applies to tax rates levied to finance bonds approved by the voters on or after
January 1, 1989. The Agency does not currently project receiving any Tax Revenues as a result of general
obligation bonds which may be approved on or after January 1, 1989.
Limitation on Tax Imposition
On November, 1986, California voters approved Proposition 62, an initiative statute limiting the imposition
of new or higher taxes by local agencies. The statute requires (a) new or higher general taxes to be approved
by two-thirds of the local agency's governing body and a majority of its voters; (b) requires the inclusion of
specific information in all local ordinances or resolutions proposing new or higher general or special taxes; (c)
penalizes local agencies that fail to comply with the foregoing; and (d) requires local agencies to stop collection
of any new or higher general tax adopted between July 31, 1985, and November 4, 1986, unless a majority of the
voters approved the tax by .November 3, 1988. In November 1988, a California appellate court held that the
effective date of Proposition 62 (described in (d) above) was unconstitutional. A second appellate court decision
SF1-259581.V3 27
held unconstitutional both the effective date and majority-vote provisions of Proposition 62. However, the
California Supreme Court has ordered that the latter decision not be published (making it unavailable for citation
as precedent), thus creatin~g uncertainty as to the voter-approval requirement of Proposition 62.
· Future Initiatives
Article XIII A, Article XIII B, Article XIII C, Article XIII D, Proposition 62 and Proposition 87 were each
adopted as measures that qualified for the ballot pursuant to California's initiative process. From time to time
other initiative measures could be adopted, further affecting Agency revenues or the Agency's ability to expend
revenues.
Education Revenue Augmentation Fund
On September 2, 1992, the State Legislature adopted Senate Bill 844 which provides for a contribution,
on a one-time basis, by (or on behalf of) redevelopment agencies to the Educational Revenue Augmentation
Fund (the "Fund"). The Fund was established to provide financial assistance to school districts in Fiscal Year
1992/93. For Fiscal Year 1992/93, the amount contributed by each agency was a percentage applied to the
amount of tax increment revenues apportioned to each redevelopment agency in Fiscal Year 1990/91. The
percentage was determined by dividing $205 million by an amount equal to total tax increment revenues
apportioned State-wide in 1990/91. This percentage was approximately 16%. In order to make this allocation,
an agency could use any funds legally available and not legally obligated for other uses, including but not limited
to reserves, proceeds of land sales, bond proceeds, lease revenues, interest and other earned income.
For fiscal year 1993/94, SB 1135 was adopted on June 25, 1993 as enabling legislation shifting
approximately 5.675% of agencies' tax increment, net of amounts passed through to other taxing entities, to
schools for the next two fiscal years. The Agency was billed $135,763 in each of fiscal years 1993/94 and 1994/95
for the Project Area. While SB 1135 requires redevelopment agencies to make this payment only in the 1993/94
and 1994/95 fiscal years, the State Budget Act of 1992 imposed substantially the same requirement on each
redevelopment agency in the 1992/93 fiscal years and future State budget legislation may impose similar or even
more burdensome requirements on redevelopment agencies. The Agency has not been required to make any
such transfers since fiscal year 1994/95, however, the Agency cannot predict the effect of any future State budget
or other legislation on the tax allocation revenues to be received by it in any future fiscal year.
Property Assessment Appeals
An assessee of locally-assessed or state-assessed property may contest the taxable value enrolled on the
tax rolls by the county assessor or by the State Board of Equalization ("SBE"), respectively. The assessee of
SBE-assessed property or locally-assessed personal property, the valuations of which are subject to annual
reappraisal, actually contests the determination of the full cash value of property when filing an assessment
appeal. Because of the limitations to the determination of the full cash value of locally-assessed real property
by Article XIII A, an assessee of locally assessed real property generally contests the original determination of
the base assessment value of the parcel, i.e. the value assigned after a change of ownership or completion of new
construction. In addition, the assessee of locally-assessed real property may contest the current assessment value
(the base assessment value plus the compounded annual inflation factor) when specified conditions have caused
the full cash value to drop below the current assessment value.
At the time of reassessment, after a change of ownership (or leasehold interest in real property) or
completion of new construction, the assessee may appeal the base assessment value of the property. Under an
appeal of a base assessment value, the assessee appeals the actual underlying market value of the sale transaction
or the recently completed improvement. A base assessment appeal has significant future revenue impact because
a reduced base year assessment will then reduce the compounded value of the property prospectively. Except
SF1-259581.V3 28
for the 2 percent inflation factor, the value of the property cannot be increased until a change of ownership
occurs or additional improvements are added.
Pursuant to Section 51(b) of the Revenue and Taxation Code, the assessor may place a value on the tax
roll lower than the compounded base assessment value, if the full cash value of real property has been reduced
by damage, destruction, depreciation, obsolescence, removal of property or other factors causing a decline in the
value. Reductions in value pursuant to Section 51(b), commonly referred to as Proposition B appeals, can be
achieved either by formal appeal or administratively by assessor staff appraising the property. A reduced full
cash value placed on the tax roll does not change the base assessment value. The future impact of a parcel
subject to a Proposition B appeal is dependent upon a change in the conditions which caused the drop in value.
In fiscal years subsequent to a successful Proposition B appeal, the assessor may determine that the value of the
property has increased as a result of corrective actions or improved market conditions and enroll a value on the
tax roll up to the parcel's compounded base assessment value.
The taxable value of utility property may be contested by utility companies and railroads to the SBE.
Generally, the impact of utility appeals is on the State-wide value of a utility determined by SBE. As a result,
the successful appeal of a utility may not impact the taxable value of the Project Area but could impact a project
area's allocation of unitary property taxes.
The actual impact to tax increment is dependent upon the actual revised value of assessments resulting
from values determined by the San Mateo County Assessment Appeals Board or through litigation and the
ultimate timing of successful appeals. Because the San Mateo County Auditor and Controller adjusts revenues
to the Agency to reflect roll corrections from successful appeals, the Agency may bear the burden of appeals.
The actual valuation impact to the Project Area from successful assessment appeals will occur on the assessment
roll prepared after the actual valuation reduction cannot be predicted.
LITIGATION
There is no litigation pending or, to the County's or the Agency's knowledge, threatened in any way to
restrain or enjoin the issuance, execution or delivery of the Bonds, to contest the validity of the Bonds, the
Indenture or any proceedings of the County or the Agency with respect thereto. In the opinion of the County
and the Agency and their counsel, there are no lawsuits or claims pending against the County or the Agency
which will materially affect the County's or the Agency's finances so as to impair the ability to pay principal of
and interest on the Bonds when due.
TAX MATYERS
In the opinion of Jones Hall Hill & White, a Professional Law Corporation, San Francisco, California,
Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the
Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax
preference for purposes of the federal alternative minimum tax imposed on individuals and corporations,
provided, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as
defined for federal income tax purposes), such interest is taken into account in determining certain income and
earnings.
The opinions set forth in the preceding paragraph are subject to the condition that the City comply with
all requirements of the Internal Revenue Code of 1986 (the "Code") that must be satisfied subsequent to the
issuance of the Bonds in order that such interest be, or continue to be, excluded from gross income for federal
income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with
certain of such requirements may cause the inclusion of such interest in gross income for federal income tax
purposes to be retroactive to the date of issuance of the Bonds.
SF1-259581.V3 29
In the further opinion of Bond CoUnsel, interest on the Bonds is exempt from California personal income
taxes.
Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt
of interest on, the Bonds may have federal or state tax consequences other than as described above. Bond
Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Bonds
other than as expressly described above.
CERTAIN LEGAL MA'I'rERS
The legal opinion of Bond CoUnsel, approving the validity of the Bonds, in substantially the form attached
hereto as Appendix F, will be made available to purchasers at the time of original delivery of the Bonds, and
a copy thereof will be printed on each Bond. Certain matters will be passed upon for the Underwriter by its
counsel, O'Melveny & Myers LLP, San Francisco, and for the Agency by the City Attorney.
CONTINUING DISCLOSURE
The Agency covenanted for the benefit of the Owners of the Bonds to provide certain financial information
and operating data relating to the Agency within a specified time period following the end of the Agency's fiscal
year (the "Annual Report"), commencing with the report for the 1996-1997 fiscal year, and to provide notices
of the occurrence of certain enumerated events, if material. The Agency shall, or shall cause to be fded with
each Nationally Recognized Municipal Securities Information Repository and each State Repository an Annual
Report. The notices of material events will be fried by the Trustee on behalf of the Agency with the Municipal
Securities Rulemaking Board and each State Repository. The covenants have been made in order to assist the
Underwriter in complying with SEC Rule 15c2-12C0)(5). See "APPENDIX G - Form Of Continuing Disclosure
Certificate."
UNDERWRITING
The Bonds are being purchased through negotiation by PaineWebber Incorporated (the "Underwriter").
The Underwriter has agreed to purchase the Bonds at an aggregate purchase price equal to $
(which represents the aggregate principal amoUnt of Bonds originally sold and delivered, less original issue
discount of $ , less an Underwriter's discount of $ , plus accrued interest from ~ 1,
1997 to the date of delivery thereof in the amount of $ ). The Purchase Agreement by and between the
City and the Underwriter provides that the Underwriter will purchase all of the Bonds if any are purchased, the
obligation to make such purchase being subject to certain terms and conditions set forth in such Purchase
Agreement, the approval of certain legal matters by counsel and certain other conditions.
The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public
offering prices set forth on the inside cover hereof. The offering prices may be changed from time to time by
the Underwriter.
RATINGS
Moody's Investors Service and Standard & Poor's Ratings Group have assigned a rating of .... and ". ....... "
respectively to the Bonds. Such ratings reflects the view of such rating agencies and any explanation of the
significance of the rating should be obtained directly from such rating agencies. There is no assurance that the
ratings will not subsequently be revised or withdrawn entirely if, in the judgment of such rating agencies,
circumstances so warrant. The City and the Underwriter undertake no responsibility to bring to the attention
of the owners of the Bonds any downward revision or withdrawal of such rating and any such downward revision
or withdrawal could have an adverse effect on the market price of the Bonds. Maintenance of the rating will
require periodic review of current financial data and other updating information by assigning agencies.
SF1-259581.V3 30
MISCELLANEOUS
Any statements made in this Official Statement involving matters of opinion or of estimates, whether or
not expressly stated, are set forth as such and not as representations of fact, and no representation is made that
any of the estimates will be realized.
The execution and delivery of this Official Statement has been duly authorized by the County and Agency.
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH
SAN FRANCISCO
By:
Executive Direct&
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