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Home My WebLink AboutAG RPTS 1999 0421 RDA REGESTABLISHED �"� Resolution No. 99 -80 k4m it I"? ft1' OF MOORPARK REDEVELOPMENT AGENCY REGULAR MEETING AGENDA WEDNESDAY, APRIL 21, 1999 7:00 P.M. Moorpark Community Center 1. 2. 3. 4. 5. CALL TO ORDER: ROLL CALL: PUBLIC COMMENT: PUBLIC HEARINGS: PRESENTATION /ACTION /DISCUSSION: 799 Moorpark Avenue A. Consider Resolution No. 99- Authorizing Issuance and Sale of Tax Allocation Bonds for Refunding of the Moorpark Redevelopment Agency's 1993 Tax Allocation Bonds and Related Actions. Staff Recommendation: 1) Adopt Resolution No. 99- authorizing the issuance and sale of Tax Allocation Bonds to refund the Agency's outstanding Moorpark Redevelopment Project 1993 Tax Allocation Bonds and approving related documents and actions therein; 2) Engage the firm of Christensen, Bacigalupi and Barris as Disclosure Counsel; 3) Authorize the Executive Director to execute the Bond Purchase Agreement immediately after the pricing of the Bonds, subject to the following conditions: 1. The interest rate on the Bonds shall not exceed 5.10 percent, and 2. The Agency financial adviser, Urban Futures, Inc., shall supply the Executive Director with a "Fairness Opinion" prior to the execution of the Bond Purchase Agreement. (ROLL CALL VOTE REQUIRED) Redevelopment Agency Agenda April 21, 1999 Page 2 5. PRESENTATION /ACTION /DISCUSSION: (Continued) B. Consider Approving an Agreement with Katz Hollis for a Downtown Revitalization Analysis and Plan and Consider Resolution No. 99- Approving a Budget Amendment for the Project. Staff Recommendation: 1) Approve agreement with Katz Hollis for a Downtown Revitalization Analysis and Plan and authorize the Executive Director to execute the agreement, and 2) Adopt Resolution No. 99- amending the 1998/1999 budget by appropriating $34,000 from the Moorpark Redevelopment Agency Reserve Fund. (ROLL CALL VOTE REQUIRED) 6. CONSENT CALENDAR: 7. CLOSED SESSION: 6 . ADJOURNMENT: ---------------------------------------------------------------------------------------------- Any member of the public may address the Agency during the Public Comments portion of the Agenda, unless it is a Public Hearing or a Presentation /Action /Discussion item. Speakers who wish to address the Agency concerning a Public Hearing or Presentations /Action /Discussion item must do so during the Public Hearing or Presentations /Action /Discussion portion of the Agenda for that item. Speaker cards must be received by the City Clerk for Public Comment prior to the beginning of the Public Comments portion of the meeting and for Presentation /Action /Discussion items prior to the beginning of the first item of the Presentation /Action /Discussion portion of the Agenda. Speaker Cards for a Public Hearing must be received prior to the beginning of the Public Hearing. A limitation of three minutes shall be imposed upon each Public Comment and Presentation /Action /Discussion item speaker. Written statement Cards may be submitted in lieu of speaking orally for open Public Hearings and Presentation /Action /Discussion items. Copies of each item of business on the agenda are on file in the office of the City Clerk and are available for public review. Any questions concerning any agenda item may be directed to the City Clerk at 529 -6864. In compliance with the Americans with Disabilities Act, if you need assistance to participate in this meeting, please contact the City Clerk's Department at (805) 529- 6864. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting (CFR 35.102- 35.104 ADA Title II). STATE OF CALIFORNIA ) COUNTY OF VENTURA ) ss CITY OF MOORPARK ) AFFIDAVIT OF POSTING I, Deborah S. Traffenstedt, declare as follows: That I am the City Clerk of the City of Moorpark and that an agenda for a Regular meeting of the Moorpark Redevelopment Agency held on April 21, 1999, at 7:00 p.m. in the Council Chambers of the Moorpark Community Center, 799 Moorpark Avenue, Moorpark, California, was posted on April 16, 1999, at a conspicuous place at the Moorpark Community Center, 799 Moorpark Avenue, Moorpark, California. I declare under penalty of perjury that the foregoing is true and correct. Executed on April 23, 1999. �• Lere#70-±j±— Deborah S. Traffenstedt, City Clerk TO: FROM: DATE: MOORPARK REDEVELOPMENT AGENDA REPORT Honorable Board of Directors ITEM CITY OF MOORPARK, CALIFORINIA Redevelopment Agency Meeting of y- )- I - el-I AGENCY AA CTION: App ro 1 Goa fL _re(ornme,�A'atian t John E. Nowak, Assistant Executive Director Prepared by: Urban Futures, Inc. April 2, 1999 (Agency Meeting April 21, 1999) SUBJECT: Consider Resolution No. 99- Authorizing Issuance and Sale of Tax Allocation Bonds for Refunding of the Moorpark Redevelopment Agency's 1993 Tax Allocation Bonds and Related Actions BACKGROUND: At the March 17, 1999 Agency meeting, members of the Board of Directors were presented various options related to the refunding /restructuring of the Agency's 1993 Tax Allocation Bonds. As has been previously discussed in prior staff reports, in 1993 the Moorpark Redevelopment Agency issued $10,000,000 of Tax Allocation Bonds (the `Bonds') to finance various projects and related costs associated with the implementation and administration of the Moorpark Redevelopment Plan adopted in 1989. The Bonds are rated "A -" by Standard & Poor's and carry a term bond rate of 6.125 percent with the serial Bonds ranging in rate from 3.30 percent to 6.125 percent. In 1993, when the Bonds were first issued, the Agency did not qualify for bond insurance and its related "AAA" rating; therefore, the Agency applied for a rating from Standard & Poor's. Standard & Poor's awarded an "A -" rating to the Bonds with a condition that any additional bonds issued on a parity with the existing Bonds could only be issued after a parity test of 135 percent had been met on the 1993 Bonds. This requirement -006601 Tax Allocation Bonds Meeting of 21 April 1999 Page 02 has not been onerous to the Agency, as additional bonds have not been issued. As stated above, various refunding /restructuring options were presented to the Board of Directors at the March 17th meeting. These options ranged from refunding the existing bonds with a new money component and bond insurance to refunding the existing Bonds with no new money and no bond insurance. The Board of Directors selected the option in which the 1993 Bonds would be refunded at an insured level, thus obtaining a "AAA" rating, without a new money component. By selecting this option, the Agency accomplishes the following: 1. A "AAA" rating will lower the Agency's annual debt service; 2. A "AAA" rating will lower the parity test to 125 percent, which is the normal test for "AAA" rated securities; 3. A "AAA" rating, coupled with a traditional 125 percent parity test, will not only make it easier for the Agency to issue additional bonds in the future, but will also enable the Agency to issue parity debt at the "AAA" rating. This ensures the Agency's ability to issue additional debt at the lowest possible cost. In Moorpark's case, lowering the cost of additional debt is most important as the Agency's Board of Directors have expressed an interest in issuing taxable debt in the future to be used for economic development (private activity) projects. In addition to selecting a financing option at the March 17th meeting, the Agency also took the following actions: 1. Entered into an agreement with the law firm of Quint & Thimmig LLP to provide Bond Counsel services; 2. Entered into an agreement with Miller & Schroeder Financial, Inc. to serve as Underwriter; Tax Allocation Bonds Meeting of 21 April 1999 Page 03 3. Directed staff and the financing team to take those actions necessary to bring the refunding /restructuring to the Agency /City Council for future actions. DISCUSSION: Presented for the Board's review and consideration are a number of documents and an Agency resolution approving said documents. In addition, the City Council will also consider a resolution approving the issuance and sale of the Bonds. State law requires the City Council's authorization for any Agency bond sale. Presented below is a summary of the documents you are being asked to approve. 1. Agency Resolution No. 99- : The Resolution provides for the issuance and sale of the Agency's 1999 Tax Allocation Refunding Bonds, the proceeds of which will be used to refund [redeem] the Agency's outstanding 1993 Tax Allocation Bonds. By adopting the Resolution, the Agency will also be approving the form of the following documents: A. Indenture of Trust: The Indenture is an agreement between the Redevelopment Agency and the Trustee setting forth the terms and conditions of the 1999 Bonds (principal amount, maturity date, interest rate, call provision, etc.), provisions designed to secure their payment, procedural and administrative matters concerning the Trustee, amendments, remedies on default, and the form of the Bonds. The Indenture will be completed in final form, signed and delivered following the sale of the Bonds and prior to the closing date. B. Continuing Disclosure Certificate: Pursuant to Securities and Exchange Commission (SEC) Regulations, the Certificate states that the Agency will agree to provide certain financial information and operating data relating to the Agency within nine (9) months of the end of the Agency's fiscal year. The information will be Tax Allocation Bonds Meeting of 21 April 1999 Page 04 filed with the various federal and state depositories for the benefit of the bondholders. C. Preliminary Official Statement: This is the principal offering document utilized by the Underwriter in marketing the Bonds. It describes the terms and the security of the issue and discloses material information concerning the operations and financial condition of the Agency. The preliminary Official Statement will be distributed by the Underwriter to potential investors in the Bonds. Following the sale of the Bonds, the Official Statement will be put in final form and the Underwriter will deliver copies to the purchasers of the Bonds. D. Bond Purchase Agreement: Pursuant to the Bond Purchase Agreement, the Bonds will be sold to Miller & Schroeder Financial, Inc. (the Underwriter). The Purchase Agreement will be presented to the appropriate officers of the Redevelopment Agency for approval and execution as soon as the Underwriter has completed the process of offering and then pricing the Bonds in the market. Prior to execution, the Agency's Financial Adviser will check the pricing with other underwriting firms and render a "fairness opinion" that the pricing actually reflects market conditions. In addition to the above, the Board is requested to approve the engagement of Christensen, Bacigalupi & Barris as Disclosure Counsel. This agreement was inadvertently left out of your March 17th packet. It is anticipated that the Bonds will be priced either on the 22nd and 23rd of April, or on the 26th and 27th of April. It is anticipated that the refunding will be concluded [closed] by mid - May 1999. ?s r� . '1 Tax Allocation Bonds Meeting of 21 April 1999 Page 05 STAFF RECOMMENDATION; (ROLL CALL VOTE) Staff recommends that the Agency Board of Directors: 1. Adopt Resolution No. 99- authorizing the issuance and sale of Tax Allocation Bonds to refund the Agency's outstanding Moorpark Redevelopment Project 1993 Tax Allocation Bonds and approving related documents and actions therein; 2. Engage the firm of Christensen, Bacigalupi & Barris as Disclosure Counsel; 3. Authorize the Executive Director to execute the Bond Purchase Agreement immediately after the pricing of the Bonds, subject to the following conditions: 1. The interest rate on the Bonds shall not exceed 5.10 percent. 2. The Agency financial adviser, Urban Futures, Inc., shall supply the Executive Director with a "Fairness Opinion" prior to the execution of the Bond Purchase Agreement. Attached: Resolution No. 99- Bond Purchase Contract (separate cover) Preliminary Official Statement (separate cover) Indenture of Trust (separate cover) Escrow Deposit and Trust Agreement (separate cover) RESOLUTION NO. 99- A RESOLUTION OF THE CITY OF MOORPARK REDEVEIOPME'N -1 AGENCY, CALIFORNIA, AUTHORIZING THE ISSUANCE AND SALE OF TAX ALLOCATION BONDS TO REFUND THE AGENCY'S OUTSTANDING MOORPARK REDEVELOPMENT PROJECT 1993 TAX ALLOCATION, AND APPROVING RELATED DOCUMENTS AND ACTIONS WHEREAS, the Agency is undertaking the redevelopment of the Moorpark Redevelopment Project (the "Redevelopment Project ") pursuant to the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the California. Health and Safety Code; and WHEREAS, the Agency has determined at -this time, due to prevailing interest rates in the municipal bond market, to issue its Redevelopment Agency of the City of Moorpark, Redevelopment Project 1999 Tax Allocation Refunding Bonds (the "Bonds "), under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code (the "Bond Law "), the principal of and interest on which will be payable from the tax increment revenues from the Redevelopment Project, to firiance redevelopment activities within or of benefit to the Redevelopment Project and specifically to refund its Moorpark Redevelopment Project 1993 Tax Allocation Bonds issued pursuant to an indenture of trust, dated as of June 1, 1993, in the aggregate principal amount of $10,000,OCC, o-f which $8,910,000 remains outstanding (the "1993 Bonds "); and WHEREAS, the Agency has duly considered such transactions and wishes at this time to authorize proceedings for the issuance and sale of the Bonds. NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE CITY OF MOORPARK REDEVELOPMENT AGENCY DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Authorization. The Agency hereby authorizes the issuance of the Bonds for the purpose of refunding the 1993 Bonds. Section 2. Issuance of the Bonds; Approval of the Indenture. The Bonds shall be issued pursuant to the Bond Law and pursuant to an Indenture of Trust, dated as of May 1, 1999, by and between the Agency and BINY Western Trust Company, as trustee (the "Indenture "). The Agency hereby approves the Indenture in substantially the form on file with the Secretary, together with such additions thereto and changes therein as the Chairman, the Vice - Chairman, the Executive Director or the Treasurer shall deem Resolution No. 99- Page 2 necessary, desirable or appropriate, and the execution thereof by the Chairman, the Vice- Chairmar_, the Executive Director or the Treasurer shall be conclusive evidence of the approval of any such additions and changes. The Chairman, the Vice Chairman, the Executive Director or the Treasurer is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest and affix the seal of the Agency to, the final form of the Irrderiture for and in the name and on behalf of the Agency. The Agency hereby authorizes the delivery and performance of the Indenture. Section 3. Refunding of the 1993 Bonds. A portion of the proceeds of the Bonds shall be applied to refund the 1993 Bonds pursuant to an escrow deposit and trust Agreement, dated the date of issuance of the Bonds, by and between the Agency and BNY Western Trust Company, as escrow bank (the "Escrow Agreement ") . The Agency hereby approves the Escrow Agreement in substantially the form on file with the Secretary, together with such additions thereto and changes therein as the Chairman_, the Vice Chairman, the Executive Director or the Treasurer shall deem necessary, desirable or appropriate, and the execution thereof by the Chairman, the Vice Chairman, the Executive Director or the Treasurer shall be conclusive evidence of the approval of any such additions and changes. The Chairman, the Vice Chairman, the Executive Director or the Treasurer is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest and affix the seal of the Agency to, the final form of the Escrow Agreement for and in the name and on behalf of the Agency. The Agency hereby authorizes the de'i'very anal performance of the Escrow Agreement:. Section 4. Sale of the Bonds. The Agency he -eby approves the bond purchase agreement, by and between Miller Schroeder Financial Iric . , as underwrites (t}'_e "Urnderwr. i ter ") and the Agency, in substartially the forin on ffile with the Secretary (-he "Bond Purchase Agreement "), together with such additions thereto and changes therein as the Chairman, the Vice Cl--airman, t`ie Executive Director or the Treasurer shall deem necessary, desirable or appropriate, and the execution thereof by the Chairman, the Vice Chairman, the Executive Director or L-he Treasurer shall. be conclusive evidence of the approval of any such additions and changes. The Chairman, the Vice Chairman, the Executive Director or the Treasurer is hereby authorized and directed to oxecute the final form of the Bond Purchase Agreement for and in the name and on behalf of the Agency. The Agency hereby apprcves 'she negotiatod sale of the Bonds to the Underwriter pursuant to the Bored Purchase Agreement so long as ,�la'�✓ ij a Resolution_ No. 99- Page 3 the Underwriter's discount, excluding original issue discount which does not constitute compensation to the Underwriter, with respect to the Bonds does not exceed 1.5 Section S. Official Statement. The Agency hereby approves and deems final within the meaning of Rule 15c-2-12 o the Securities Exchange Act of 1934 except for permitted omissions, a pre - iminary form of Official Statement describing the Bonds in the form on file with the Secretary. Distributicri of such preliminary Official Statement by the underwriter to prospective purchasers of the Bonds is hereby approved. The Chairman, the Vice Chairman, the Executive Director or, the Treasurer is hereby authorized to execu -e the final form of the Official. Statement, including as it may be modified by such additio..is thereto and changes therein as the Chairman, the Nice Chairman, the Executive Director or he Treasurer shall deem necessary, desirable or appropriate, and the execution_ of the final Official Statement by the Chairman, the Vice Chairman, the Executive Director or the Treasurer shalom be conclusive evidence of the approval of any such additions and charges. The Agency hereby authorizes the distribution of the final. Official Statemenr_ by the Ur_derwriter. The final Official Statement shall be executed in the name and on behalf of the Agency by the Chairman, the Vice- Chairman, the Executive Director or the 'Treasurer. Section 6. 0:ficiai Actions. The Chairman, the Vice Chairman, the Executive Director, the Treasurer and the Secretary of the Agency, and any and all other officers of the Agency, are hereby authorized and directed, for and in the name and on behalf of the Agency, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, cert:.ificates, requisitions, agreements, notices, consen�s, instruments of conveyance, warrants and other documents which they, or any of them, may deem necessary or advisable in order to consummate the lawfui issuance and sale of �.he Bonds as described herein.. whenever in ti:is Resolution any officer of the Agency is authorized to execute or countersigr_ any document or take anv action, such execution, countersigning or action may be taken on behalf of Bach officer oy any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. Section_ 7. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. Vole; �sy Resolution. No. 99- Page 4 Section 8. The Agency Secretary shall certify to the adoption of this Resolution and shall_ cause a certified Resolution to be filed in the nook of oriain.al. Resolutions. PASSED AND ADOPTED this 21` day April, 1999. Patrick hunter, Chairman ATTEST: Deborah S. Traffenstedt, Agency Secretary 0 � �+ ITEM 5A $998409000* REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK MOORPARK REDEVELOPMENT PROJECT 1999 TAX ALLOCATION REFUNDING BONDS Bond Purchase Contract April _, 1999 Redevelopment Agency of the City of Moorpark 799 Moorpark Avenue Moorpark, CA 93021 Ladies and Gentlemen: Miller & Schroeder Financial, Inc. (the "Underwriter "), acting not as fiduciary or agent for you, but on behalf of itself, hereby offers to enter into this Bond Purchase Contract (the "Purchase Contract ") with the Redevelopment Agency of the City of Moorpark (the "Issuer ") for the purchase and sale by the Issuer, of the Issuer's Moorpark Redevelopment Project, 1999 Tax Allocation Refunding Bonds (the "Bonds "). This offer is made subject to acceptance thereof by the Issuer prior to 9:00 p.m., California time, on the date hereof, and upon such acceptance, as evidenced by the signature of the Executive Director of the Issuer in the space provided below, this Purchase Contract shall be in full force and effect in accordance with its terms and shall be binding upon the Issuer and the Underwriter. 1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basis of the representations and agreements herein set forth, the Issuer hereby agrees to sell to the Underwriter, and the Underwriter hereby agrees to purchase from the Issuer for offering to the public, all (but not less than all) of the Issuer's $9,840,000* aggregate principal amount of Moorpark Redevelopment Project, 1999 Tax Allocation Refunding Bonds, at a discount of % and original issue discount of $ , plus accrued interest, if any, to the Closing Date (as such term is hereinafter defined). The Bonds will mature and bear interest at the interest rates as shown in Appendix A herein and will be subject to redemption according to the terms set forth in the Indenture. The Bonds will be authorized and issued pursuant to an Indenture of Trust (the "Indenture "), by and between the Issuer and BNY Western Trust Company, as trustee (the "Trustee "), approved by a resolution adopted by the Issuer on April _, 1999 (the "Resolution "), and in accordance with the Community Redevelopment Law (Part 1 of Division 24 of the California Health and Safety Code) (the "Law "), and the Constitution and other applicable laws of the State of California (the "State "). The Underwriter agrees to make a bona fide public offering of the Bonds at the initial offering price set forth in the Official Statement; however, the Underwriter reserves the right to make concessions to dealers and to change such initial offering price as the Underwriter shall deem necessary in connection with the marketing of the Bonds. The Underwriter agrees that, in Preliminary, subject to change. connection with the public offering and initial delivery of the Bonds to the purchasers thereof from the Underwriter, the Underwriter will deliver or cause to be delivered to each purchaser a copy of the Official Statement prepared in connection with the Bonds. Terms defined in the Official Statement are used herein as so defined. 2. Ofcial Statement. The Issuer shall deliver, or cause to be delivered, to the Underwriter two (2) executed copies of the final Official Statement prepared in connection with the Bonds, in such form as shall be approved by the Issuer and the Underwriter and such additional conformed copies thereof as the Underwriter may reasonably request. The Issuer deems the Preliminary Official Statement (the "Preliminary Official Statement ") to be "final' as of its date for purposes of Rule 15c2 -12 promulgated pursuant to the Securities Exchange Act of 1934. By acceptance of this Purchase Contract, the Issuer hereby authorizes the use of copies of the Official Statement in connection with the public offering and sale of the Bonds, and ratifies and approves the distribution by the Underwriter of the Preliminary Official Statement. 3. Delivery of the Bonds. At approximately 9:00 a.m., California time, on May _, 1999, or at such earlier or later time or date, as shall be agreed upon by the Issuer and the Underwriter (such time and date herein referred to as the "Closing Date "), the Issuer shall deliver to the Underwriter, through the facilities of the Depository Trust Company, the Bonds. The Underwriter, acting on its own behalf, shall accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by same day funds (such delivery and payment being herein referred to as the "Closing'). that: 4. Representations and Agreements of the Issuer. The Issuer represents and agrees (a) The Issuer is a public body, corporate and politic, duly organized and existing, and authorized to transact business and exercise powers, under and pursuant to the Constitution and laws of the State, including the Law, and has, and at the date of the Closing will have, full legal right, power and authority (i) to enter into this Purchase Contract, (ii) to issue, sell and deliver the Bonds to the Underwriter, acting on its own behalf, as provided herein, (iii) to adopt the Indenture, and (iv) to carry out and to consummate the transactions contemplated by this Purchase Contract, the Indenture, the escrow deposit and trust agreement (the "Escrow Agreement "), the Continuing Disclosure Certificate (the "Disclosure Certificate ") and the Official Statement; (b) The Preliminary Official Statement, as of its date, was true, correct and complete in all material respects and did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading; (c) The Official Statement is, and will be, as of the Closing Date, true, correct and complete in all material respects and does not, and will not, as of the Closing Date, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading; (d) The Issuer to the best of its knowledge has complied, and will at the Closing Date be in compliance, in all respects with the Law and any other applicable laws of the State; (e) By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized and approved the Preliminary Official Statement and the Official Statement, and has duly authorized and approved the 2 execution and delivery of, and the performance by the Issuer of the obligations on its part contained in, the Indenture, the Bonds, the Escrow Agreement, the Disclosure Certificate and this Purchase Contract, and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded; (f) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Issuer to the best of its knowledge is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State of the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, indenture, resolution, ordinance, agreement or other instrument to which the Issuer is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; the execution and delivery of the Indenture, the Bonds, the Escrow Agreement, the Disclosure Certificate and this Purchase Contract, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note, indenture, resolution, agreement or other instrument to which the Issuer is a party or is otherwise subject; and, except as described in the Official Statement, the Issuer has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the revenues and amounts pledged pursuant to, or subject to the lien of, the Indenture; (g) To the best of its knowledge all approvals, consents and orders of any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to execution and delivery by the Issuer of the Indenture, the Escrow Agreement, the Disclosure Certificate and this Purchase Contract and the issuance, sale and delivery of the Bonds have been obtained or will be obtained prior to the Closing; (h) The Bonds when issued, authenticated and delivered in accordance with the Indenture will be validly issued, and will be valid and binding, obligations of the Issuer; (i) To the best of its knowledge the terms and provisions of the Indenture comply in all respects with the requirements of the Law and the Indenture, the Escrow Agreement, the Disclosure Certificate and this Purchase Contract, when properly executed and delivered by the respective parties thereto and hereto, will constitute the valid, legal and binding obligations of the Issuer enforceable in accordance with their respective terms, except as enforcement may by limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and general rules of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity); (j) To the best of its knowledge there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Issuer, threatened, against the Issuer, affecting the existence of the Issuer or the titles of its members or officers, or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the payment or collection of any amounts pledged or to be pledged to pay the principal of, redemption premium, if any, and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Certificate or this Purchase Contract or the consummation of the transactions contemplated thereby and hereby, or contesting in any 3 way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the power or authority of the Issuer to issue the Bonds, to adopt the Resolution approving the Indenture or to execute and deliver the Indenture, the Escrow Agreement, the Disclosure Certificate or this Purchase Contract, nor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the Issuer or the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Certificate or this Purchase Contract; (k) Any certificate signed by an authorized officer or official of the Issuer and delivered to the Underwriter shall be deemed a representation of the Issuer to the Underwriter as to the statements made therein; (1) Each of the Bonds shall be secured in the manner and to the extent set forth in the Indenture under which each such Bond is to be issued; (m) During the period commencing on the date hereof and ending on the date ninety (90) days following the Closing Date, if any event shall occur of which the Issuer has knowledge and as a result of which it may be necessary to supplement the Official Statement in order to make the statements therein, in light of the circumstances existing at such time, not misleading, the Issuer shall forthwith notify the Underwriter thereof and, if in the opinion of the Underwriter such event requires an amendment or supplement to the Official Statement, the Issuer will at no expense to the Underwriter amend or supplement the Official Statement in a form and manner jointly approved by the Issuer and Underwriter. The Issuer's obligation pursuant to this section (m) shall terminate on the earlier of (i) ninety (90) days from the end of the "underwriting period ", as defined in Rule 15c2 -12, or (ii) the time when the Official Statement is available to any person from a nationally recognized municipal securities information repository, but in no case less than twenty-five (25) days following the end of the underwriting period; (n) The Issuer will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, that the Issuer shall not be required to consent to service of process outside of California; (o) The Issuer will apply the proceeds of the Bonds in accordance with the Indenture and all other applicable documents and as described in the Official Statement; (p) The Issuer shall provide or cause to be provided to the Underwriter not more than 300 copies of the Preliminary Official Statement in order to satisfy the Underwriter's obligation under Rule 15c2 -12 with respect to the distribution to each potential customer, upon request, of a copy of a Preliminary Official Statement; (q) The Issuer shall provide to the Underwriter, not later than seven (7) business days after the date of this Purchase Contract, but in any event in sufficient time to accompany any confirmation sent by the Underwriter to a purchaser of the Bonds, 300 copies of the Official Statement to satisfy the Underwriter's obligation under Rule 15c2- 12 with respect to the distribution of the Official Statement; 4 (r) The Underwriter agrees to notify the Issuer in writing following the occurrence of the "end of the underwriting period" as defined in Rule 15c2 -12 for the Bonds. Unless otherwise notified in writing by the Underwriter on or prior to the Closing Date, the Underwriter can assume that the "end of the underwriting period" for the Bonds for all purposes of Rule 15c2 -12 is the Closing Date; (s) The Issuer will not invest or otherwise use proceeds of the Bonds in any manner which would cause the Bonds to be considered arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code "); and (t) The Issuer will, at the Underwriter's request, take any action reasonably necessary to assure or maintain the exclusion from gross income for purposes of federal income taxes of interest on the Bonds and will not take any action, or permit any action to be taken with respect to which it may exercise control, which would result in the loss of that exclusion. 5. Representations of the Underwriter. The Underwriter represents that it has full right, power, and authority to enter into this Purchase Contract. 6. Covenants. The Issuer covenants with the Underwriter that so long as the Underwriter, or dealers, if any, are participating in the distribution of the Bonds which constitute the whole or a part of their unsold participations, if an event known to the Issuer occurs affecting the Issuer or the transactions contemplated by the Indenture and the issuance of the Bonds, which could cause the Official Statement to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Issuer shall notify the Underwriter and if in the opinion of the Issuer, the Underwriter or Bond Counsel, such event requires an amendment or supplement to the Official Statement, the Issuer will amend or supplement the Official Statement in a form and in a manner jointly approved by the Issuer and the Underwriter, and the Issuer will bear the cost of making and printing such amendment or supplement to the Official Statement and distributing such amendment or supplement to Owners of the Bonds. The obligations of the Issuer under this Section 6 shall terminate on the earlier of (a) ninety (90) days from the "end of the underwriting period," as defined in Rule 15c2 -12, or (b) the time when the Official Statement is available to any person from a nationally recognized municipal securities information repository, but in no case less than twenty -five (25) days following the end of the underwriting period. 7. Conditions to Obligations of Underwriter. The Underwriter has entered into this Purchase Contract in reliance upon the representations and agreements of the Issuer contained herein and upon the accuracy of the statements to be contained in the documents, opinions, and instruments to be delivered at the Closing. Accordingly, the Underwriter's obligation under this Purchase Contract to purchase, accept delivery of, and pay for the Bonds on the Closing Date is subject to the performance by the Issuer of its obligations hereunder at or prior to the Closing. The following additional conditions precedent relate to the Closing, in connection with the Underwriter's obligation to purchase the Bonds: (a) At the time of the Closing, (i) the representations of the Issuer contained herein to the best of its knowledge shall be true, complete and correct; and (ii) the Indenture shall be in full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter; (b) The Underwriter shall have the right to cancel its obligation to purchase the Bonds if between the date hereof and the Closing, (i) legislation shall have been 5 enacted (or indenture or resolution passed) by or introduced or pending legislation amended in the Congress of the United States or the State or shall have been reported out of committee or be pending in committee, or a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling shall have been made or indenture shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or State authority, with respect to State taxation upon interest on obligations of the general character of the Bonds or with respect to the security pledged to pay debt service on the Bonds, that, in the Underwriter's reasonable judgment, materially adversely affects the market for the Bonds, or the market price generally of obligations of the general character of the Bonds or (ii) there shall exist any event that, in the Underwriter's reasonable judgment, either (A) makes untrue or incorrect in any material respect any statement or information in the Official Statement or (B) is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect, or (iii) there shall have occurred any outbreak of hostilities or other local, national or international calamity or crisis, or a default with respect to the debt obligations of, or the institution of proceedings under the federal bankruptcy laws, the effect of which on the financial markets of the United States will be such as in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (iv) there shall be in force a general suspension of trading on the New York Stock Exchange, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices of securities shall have been required and be in force on the New York Stock Exchange, whether by virtue of determination by that Exchange or by order of the Securities and Exchange Commission of the United States or any other governmental authority having jurisdiction that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (v) a general banking moratorium shall have been declared by federal, New York or State authorities having jurisdiction and be in force that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (vi) legislation shall be enacted or be proposed or actively considered for enactment, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the Securities and Exchange Commission of the United States or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that the Bonds or any obligations of the general character of the Bonds are not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, or of the Trust Indenture Act of 1939, as amended and as then in effect, or otherwise are or would be in violation of any provision of the federal securities laws, or (vii) the New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or materially increase any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, Underwriter, or (viii) there shall have been any materially adverse change in the affairs of the Issuer which in the Underwriter's reasonable judgment materially adversely affects the market for the Bonds, or (ix) general political, economic or market conditions which, in the sole opinion of the Underwriter, shall not be satisfactory to permit the sale of the Bonds; and (c) At or prior to the Closing, the Underwriter, the Issuer and Disclosure Counsel shall receive the following: n (1) The unqualified approving opinion of Quint & Thimmig LLP, San Francisco, California, bond counsel (the "Bond Counsel "), in form and substance acceptable to the Underwriter, addressed to the Issuer, dated the date of the Closing; (2) A supplemental opinion of Bond Counsel, addressed to the Underwriter, the Issuer and Disclosure Counsel in form and substance acceptable to each of them, dated the date of Closing, to the following effect: (i) The Issuer has duly authorized, executed and delivered the Indenture and the Purchase Contract. The Indenture and the Purchase Contract constitute the legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, to the application of equitable principles when equitable remedies are sought and to the exercise of judicial discretion in appropriate cases; (ii) The Official Statement has been duly authorized, executed and delivered by the Issuer; (iii) The statements and information contained or summarized in the Preliminary Official Statement and Official Statement under the headings "THE BONDS," "SECURITY FOR THE BONDS," "THE INDENTURE," "CONCLUDING INFORMATION - Legal Opinion" and "Tax Matters," the Cover Page and "INTRODUCTORY STATEMENT," in so far as the Cover Page and "INTRODUCTORY STATEMENT" describe the Bonds, security for the Bonds, the Indenture, and the legal opinion of Bond Counsel concerning certain federal and State tax matters relating to the Bonds, and "APPENDIX A - Definitions" (but not including any statistical or financial information set forth under such headings, as to which no opinion need be expressed) insofar as such statements purport to summarize certain provisions of the Law, the Bonds the Indenture and the opinion of such Bond Counsel concerning certain federal and State tax matters relating to the Bonds, are accurate in all material respects; (iv) The Bonds are exempt from registration under the Securities Act of 1933, as amended; (v) The Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (vi) The lien of the 1993 Bonds with respect to the Tax Revenues has been discharged; (3) The opinion of counsel to the Issuer, addressed to the Underwriter, the Issuer and Disclosure Counsel, in form and substance acceptable to each of them, dated the date of the Closing, to the following effect: (i) The Issuer is a public body, corporate and politic, duly organized and validly existing under and by virtue of the Constitution and the laws of the State; 7 (ii) The Indenture has been duly approved by a resolution of the Issuer adopted at a regular meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the members of the Issuer was continuously present; (iii) Except as described in the Official Statement, there is no litigation pending or, to the best of such counsel's knowledge after due inquiry, threatened, which: (a) challenges the right or title of any member or officer of the Issuer to hold his or her respective office or exercise or perform the powers and duties pertaining thereto; (b) challenges the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Certificate or the Purchase Contract; (c) seeks to restrain or enjoin the issuance and sale of the Bonds or the execution and delivery by the Issuer of, or the performance by the Issuer of its obligations under the Bonds, the Indenture, the Escrow Agreement, the Disclosure Certificate or the Purchase Contract; or (d) if determined adversely to the Issuer or its interests, would have a material and adverse affect upon the financial condition, assets, properties or operations of the Issuer; (iv) The Bonds, the Indenture, the Escrow Agreement, the Disclosure Certificate and the Purchase Contract have each been duly authorized, executed and delivered by the Issuer, and constitute the valid and binding legal obligations of the Issuer enforceable in accordance with their respective terms except as such enforceability may be limited or otherwise affected by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws or general principles of equity limiting or otherwise affecting the enforcement of creditors' rights, whether now existing or hereafter enacted; (v) The execution and delivery by the Issuer of, and the performance by the Issuer of its obligations under, the Bonds, the Indenture, the Escrow Agreement, the Disclosure Certificate and the Purchase Contract, do not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the Issuer is a party or by which it is bound; (vi) The Issuer has obtained all authorizations, approvals, consents or other orders of the State or any other governmental authority or agency within the State having jurisdiction over the Issuer for the valid authorization, issuance and delivery by the Issuer of the Bonds; and (vii) The statements and information contained in the Preliminary Official Statement and Official Statement under the headings, "THE AGENCY," "PROPERTY TAXATION IN CALIFORNIA," "MOORPARK REDEVELOPMENT PROJECT," "TAX REVENUES," "CONCLUDING INFORMATION - No Litigation," "Legality for Investment in California" and "SUPPLEMENTAL INFORMATION - The City of Moorpark" (excluding therefrom any financial statements and statistical data as to which no opinion need be expressed) are accurate in all material respects; and 0 (4) A report of a certified public accountant as to (i) the sufficiency of the Escrow Fund and such other opinions and certificates reasonably required to demonstrate that the lien of the 1993 Bonds with respect to the Tax Revenues has been discharged and (ii) the "yield" on the Bonds, the "yield" on certain obligations in the Escrow Fund and other related matters considered by Bond Counsel in support of the conclusion that the Bonds are not "arbitrage bonds" within the meaning of the Code; (5) A certificate dated the date of the Closing, signed by the Executive Director or appropriate officer of the Issuer, to the effect that to the best of his knowledge: (i) the representations and covenants of the Issuer contained herein are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of Closing; (ii) the Issuer has complied with all the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the Closing; (iii) no event affecting the Issuer has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; and (iv) the Indenture remains in full force and effect and has not been amended in any respect, except as approved in writing by the Underwriter, since the date of the Indenture; (6) ' A certificate of the Trustee and Escrow Bank dated the date of the Closing, to the effect that: (i) the Trustee is organized and existing as a national banking association under and by the virtue of the laws of the United States of America, having full power and being qualified and duly authorized to perform the duties and obligations of the Trustee and Escrow Bank under and pursuant to the Indenture and the Escrow Agreement, respectively; (ii) the Trustee has agreed to perform the duties and obligations of the Trustee and Escrow Bank as set forth in the Indenture and the Escrow Agreement, respectively; (iii) to the best of its knowledge, compliance with the provisions on the Trustee's part contained in the Indenture and the Escrow Agreement, will not conflict with or constitute a breach of or default under any material law, administrative regulation, judgment, decree, loan agreement, indenture, resolution, bond, note, agreement or other instrument to which the Trustee is a party or is otherwise subject, as a result of which the Trustee's ability to perform its obligations under the Indenture and the Escrow Agreement would be impaired, nor will any such compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the Indenture and the Escrow Agreement under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, agreement or other instrument, except as provided by the Indenture or the Escrow Agreement; and (iv) to the best of the knowledge of the Trustee, the Trustee has not been served in any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending nor is any such action, suit, proceeding, inquiry or investigation threatened against the Trustee, affecting the existence of the Trustee, or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the delivery of the Bonds issued under the Indenture or the collection of revenues pledged or to be pledged to pay the principal of, premium, if any, and interest on the Bonds issued under the Indenture, or the pledge thereof, or in any way contesting the powers of the Trustee or its authority to enter into or perform its obligations under the Indenture, the Disclosure Certificate and the Escrow Z Agreement, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Indenture, the Disclosure Certificate or the Escrow Agreement; (7) Two (2) copies of this Purchase Contract duly executed and delivered by the parties thereto; (8) Two (2) copies of the Official Statement, executed on behalf of the Issuer by the Executive Director of the Issuer; (9) One (1) certified copy of the Indenture, the Escrow Agreement and all resolutions of the Issuer and the City relating to the issuance of the Bonds; (10) An opinion of counsel to the Bond Insurer to the effect that (i) the Insurance Policy is valid, binding and enforceable against the Bond Insurer in accordance with its terms, except as such enforceability may be limited by laws affecting the enforcement of creditors' rights generally, and (ii) the statements and information contained in the Official Statement under the headings "BOND INSURANCE" and "APPENDIX C - Specimen Municipal Bond Insurance Policy" are accurate in all material respects; (11) A certificate dated the date of the Closing, signed by the Underwriter, to the effect that statements and information contained in the Preliminary Official Statement and the Official Statement under the headings "CONCLUDING INFORMATION - Underwriting" and "CONCLUDING INFORMATION - Ratings" are accurate in all material respects; (12) A certificate dated the date of the Closing, signed by the President of Urban Futures, Inc., Financial Advisor, to the effect that (i) the Preliminary Official Statement, as of its date, was true, correct and complete in all material respects and did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading and (ii) the Official Statement is, and will be, as of the Closing Date, true, correct and complete in all material respects and does not, and will not, as of the Closing Date, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading; (13) A letter, dated the date of the Closing and addressed to the Underwriter and the Issuer, of Disclosure Counsel, stating that based upon its participation in the preparation of the Official Statement and without having undertaken to determine independently the accuracy or completeness of the statements. in the Official Statement such Counsel has no reason to believe that, as of the date of Closing, the Official Statement (except for financial, statistical and numerical data included in the Official Statement, as to which no view need be expressed) contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (14) A copy of the report or reports of Urban Futures, Inc. with respect to Tax Revenues for the Moorpark Redevelopment Project; 10 (15) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter, Bond Counsel or Disclosure Counsel may reasonably request to evidence compliance by the Issuer with this Purchase Contract, legal requirements, and the performance or satisfaction by the Issuer at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Issuer; (16) Rating letters from Standard & Poor's Ratings Group and Moody's Investors Service, Inc. confirming the ratings on the Bonds; and (17) All pertinent documents relating to the Municipal Bond Insurance Policy including the Specimen Municipal Bond Insurance Policy. The Issuer will furnish the Underwriter with such conformed copies of such opinions, certificates, letters and documents as the Underwriter may reasonably request. If the Issuer is unable to satisfy the conditions to the obligations of the Underwriter contained in this Purchase Contract, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriter or the Issuer shall have any further obligations hereunder, except as provided in Section 9 hereof. However, the Underwriter may in its discretion waive one or more of the conditions imposed by this Purchase Contract for the protection of the Underwriter and proceed with the related Closing. Expenses. The Underwriter shall be under no obligation to pay, and the Issuer shall pay from its available funds or from the proceeds of the Bonds, certain expenses set forth in this Section, including but not limited to: (i) all expenses in connection with the preparation, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto, (ii) all expenses in connection with the printing, issuance and delivery of the Bonds, (iii) the fees and disbursements of Bond Counsel in connection with the Bonds, (iv) the fees and disbursements of counsel to the Issuer in connection with the Bonds, (v) the disbursements of the Issuer in connection with the issuance of the Bonds, (vi) the fees and disbursements of Disclosure Counsel, and (vii) the fees and disbursements of the Trustee, and (viii) rating agency fees and bond insurance premium. The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds and all other expenses incurred by it in connection with its public offering and distribution of the Bonds. 9. Notice. Any notice or other communication to be given to the Issuer or the Authority under this Purchase Contract may be given by delivering the same in writing at the address set forth above. Any such notice or communication to be given to the Underwriter may be given by delivering the same in writing to: Miller & Schroeder Financial, Inc. 505 Lomas Santa Fe Drive, Suite 100 Solana Beach, California 92075 -0819 Attention: Ms. Robin M. Thomas 10. Governing Law. This Purchase Contract shall be governed by the laws of the State of California. This Purchase Contract may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 11 11. Parties in Interest. This Purchase Contract is made solely for the benefit of the signatories hereto (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof except as provided in Section 11 hereof. All representations and agreements in this Purchase Contract shall remain operative and in full force and effect, regardless of (a) delivery of and payment for any of the Bonds and (b) any termination of this Purchase Contract. Respectfully submitted, MILLER & SCHROEDER FINANCIAL, INC. By Its: Senior Vice President Accepted as of the date first stated above: REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK By Its: Executive Director 12 APPENDIX A $998409000" Redevelopment Agency of the City of Moorpark Moorpark Redevelopment Project 1999 Tax Allocation Refunding Bonds Maturity Date October 1 of 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2018 Total Preliminary, subject to change. Principal Interest Amount* Rate $ 290,000.00 340,000.00 355,000.00 365,000.00 380,000.00 395,000.00 405,000.00 420,000.00 435,000.00 455,000.00 6.000.000.00 $9.840.000.00 A -1 Yield (OL J0 Preliminary Official Statement dated April_, 1999 NEW ISSUE - BOOK -ENTRY ONLY Standard & Poon " or Moody's "-99 Insured - See "Ratings" Herein) In the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, subject, 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 "CONCL UDING INFORMATION —Tax Matters" herein. $9,8409000* REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK MOORPARK REDEVELOPMENT PROJECT 1999 TAX ALLOCATION REFUNDING BONDS Dated: May 1, 1999 Due: October 1, as shown below The Bonds will be delivered as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ( "DTC "), and will be available to ultimate purchasers ( "Beneficial Owners ") in the denomination of $5,000 or any integral multiple thereof, under the book -entry system maintained by DTC. Beneficial Owners will not be entitled to receive delivery of bonds representing their ownership interest in the Bonds. The principal of, premium if any, and semiannual interest (due April 1 and October 1 of each year, commencing October 1, 1999) on the Bonds will be payable by BNY Western Trust Company, Los Angeles, California, as Trustee, to DTC for subsequent disbursement to DTC participants, so long as DTC or its nominee remains the registered owner of the Bonds. The Term Bonds maturing on October 1, 2018 are subject to mandatory redemption from minimum Sinking Account Payments in part, by lot, on October 1, 2009 and on each October 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. The Bonds maturing after October 1, 2008 are subject to optional redemption prior to maturity, in whole or in part, on October 1, 2008, and on each Interest Payment Date thereafter at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date, plus a premium, as described herein. Capitalized terms used and not otherwise defined herein are defined in the Indenture (as hereinafter defined). MATURITY SCHEDULE* Maturity Date Principal Interest Maturity Date Principal Interest October 1 Amount Rate Yield October 1 Amount Rate Yield 1999 $290,000 2004 $395,000 2000 340,000 2005 405,000 2001 355,000 2006 420,000 2002 365,000 2007 435,000 2003 380,000 2008 455,000 S6,000,000 - % Term Bonds due October 1, 2018 - % Yield (Plus accrued interest) The Bonds are being issued pursuant to an Indenture of Trust dated as of May 1, 1999 (the "Indenture "), by and between the Redevelopment Agency of the City of Moorpark (the "Agency ") and the Trustee, to advance refund the Agency's previously issued $10,000,000 Moorpark Redevelopment Project, 1993 Tax Allocation Bonds, of which $8,910,000 are currently outstanding (the "1993 Bonds "). The Bonds are payable from and secured by the Tax Revenues to be derived from the Project Area Taxes levied on the property within the Project Area on that portion of the taxable valuation over and above the taxable valuation of the base year property tax roll (1988 -89), to the extent they constitute Tax Revenues, will be deposited in the Special Fund and transferred to the Trustee. Payment of the principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy (the "Municipal Bond Insurance Policy ") to be issued by (" " or the "Bond Insurer") simultaneously with the delivery of the Bonds. The Bonds are not an obligation of the City of Moorpark, the State of California or any of its political subdivisions (except the Agency), and neither said City, said State nor any of its political subdivisions (except the Agency) is liable therefor. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt provision, limitation or restriction. Attention is hereby directed to certain Risk Factors more fully described herein. The purchase of the Bonds should not be made without thorough investigation and knowledge of the security for the Bonds and the availability and source of payment for the Bonds. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Bonds are offered when, as and if issued, subject to the approval of Quint & Thimmig LLP, San Francisco, California, Bond Counsel. Certain legal matters will be passed on for the Agency by its Disclosure Counsel, Bacigalupi, Neufeld & Ehat, Fresno, California. It is anticipated that the Bonds will be available for delivery in New York, New York, through the facilities of DTC, on or prior to May 1999. ItMiler& Schroeder Financial, Inc. The date of this Official Statement is May _,1999. Preliminary, subject to change. REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK Patrick Hunter, Chairman Christopher Evans, Vice Chairman Clint D. Harper, Ph.D., Member Debbie Rogers, Member John E. Wozniak, Member Steven Kueny, Agency Executive Director John Nowak, Agency Treasurer Cheryl J. Kane, Esq., Agency Attorney Deborah S. Traffenstedt, Agency Secretary CITY COUNCIL Patrick Hunter, Mayor Christopher Evans, Mayor Pro Tem Clint D. Harper, Ph.D., Councilman Debbie Rogers, Councilman John E. Wozniak, Councilman Steven Kueny, City Manager John Nowak, Assistant City Manager Deborah S. Traffenstedt, City Clerk Cheryl J. Kane, Esq., City Attorney SPECIAL SERVICES Bond Counsel Quint & Thimmig LLP San Francisco, California Trustee BNY Western Trust Company Los Angeles, California Redevelopment and Financial Advisor Urban Futures, Inc. Orange, California Underwriter Miller & Schroeder Financial, Inc. Solana Beach, California Disclosure Counsel Bacigalupi, Neufeld & Ehat Fresno, California (This Page Left Intentionally Blank) OFFICIAL STATEMENT $9,840,000 REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK MOORPARK REDEVELOPMENT PROJECT 1999 TAX ALLOCATION REFUNDING BONDS I N T R O D U C T O R Y S TA T E ME N T 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 Moorpark (the "Agency ") of $9,840,000* aggregate principal amount of the Agency's Moorpark Redevelopment Project, 1999 Tax Allocation Refunding Bonds (the "Bonds "). The Bonds are being issued pursuant to the Constitution and laws of the State of California (the "State "), including the California Community Redevelopment Law (Part 1, Division 24, commencing with Section 33000, of the California Health and Safety Code, as amended) (the "Law ") and an Indenture of Trust dated as of May 1, 1999 (the "Indenture "), by and between the Agency and BNY Western Trust Company, Los Angeles, California, as trustee (the "Trustee "). The City of Moorpark, California (the "City"), is located approximately 50 miles northwest of the City of Los Angeles, in the southeast portion of Ventura County (the "County"). The City is a general law city incorporated on July 1, 1983 and provides for a Council- Manager form of government consisting of five Council Members elected to four -year overlapping terms. The City encompasses an area of approximately 12.44 square miles with an average elevation of 160 feet. The 1998 population of the City is estimated to be 29,300. The Agency was established on March 18, 1987 by the City Council of the City with the adoption of Ordinance No. 87, pursuant to the Law. The five members of the City Council serve as the governing body of the Agency, and exercise all rights, powers, duties and privileges of the Agency. The Mayor serves as Chairman of the Agency. The Redevelopment Plan (the "Redevelopment Plan") for the Moorpark Redevelopment Project (the "Project Area ") was approved by Ordinance No. 110 adopted by the City Council on July 5, 1989, and effective August 4, 1989. The Project Area consists of approximately 1,217 acres and is comprised of primarily commercial and industrial land uses. The Law authorizes the financing of redevelopment projects through the use of tax increment revenues. This method provides that the taxable valuation of the property within a defined redevelopment project area on the property tax roll that was last equalized prior to the effective date of the enabling ordinance which adopts the redevelopment plan becomes the "base year" valuation. Assuming the taxable valuation never drops below the base year level, the taxing agencies thereafter receive that portion of the taxes produced by applying then current tax rates to the base year valuation, and the redevelopment agency is allocated the remaining portion (except for that portion representing taxes levied to pay debt service on any bonds approved by the voters of any such taxing agency on or after January 1, 1989) produced by applying then * Preliminary, subject to change. current tax rates to the increase in valuation over the base year. Such incremental tax revenues allocated to a redevelopment agency may be pledged to the payment of agency obligations. Redevelopment agencies have no power to levy property taxes and must look specifically to the allocation of taxes as described above. See "RISK FACTORS" and "MOORPARK REDEVELOPMENT PROJECT— Limitations and Requirements of the Redevelopment Plan." The Bonds are being issued to advance refund the Agency's previously issued $10,000,000 Moorpark Redevelopment Project, 1993 Tax Allocation Bonds, of which $8,910,000 are currently outstanding (the "1993 Bonds "). The Bonds are payable from and secured by a pledge of the Tax Revenues from the Project Area (all as described under the section entitled "SECURITY FOR THE BONDS "). In addition, payment of the principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy (the "Municipal Bond Insurance Policy ") to be issued by (" Of or the "Bond Insurer ") simultaneously with the delivery of the Bonds. In the opinion of Quint & Thimmig, LLP, San Francisco, California, Bond Counsel, subject, 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 adjusted current earnings, subject,' however, to certain qualifications described herein. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See "CONCLUDING INFORMATION —Tax Exemption" herein. Brief descriptions of the Bonds and the Indenture are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Indenture, the Law, the Constitution and the laws of the State, the proceedings of the Agency and the City are qualified in their entirety by reference to such documents. References herein to the Bonds are qualified in their entirety by reference to the form thereof, included in the Indenture and the information with respect thereto included herein, copies of which are all available for inspection at the offices of the Agency. During the period of the offering of the Bonds, copies of the forms of all documents will be available at the offices of Miller & Schroeder Financial, Inc., 505 Lomas Santa Fe Drive, Solana Beach, California 92075 and thereafter from the City Clerk's office, City of Moorpark, 799 Moorpark Avenue, Moorpark, California 93021. Pa SOURCES AND USES OF PROCEEDS The sources and uses of the proceeds of the Bonds, excluding accrued interest, is summarized as follows: ources: Principal Amount of the Bonds .......................... 1993 Bonds Special Fund and Accounts ........... Total Sources .............. ............................... Uses: Underwriter's Discount ....... ............................... Original Issue Discount ....... ............................... Debt Service Reserve Account (1) ..................... Costs of Issuance Fund ( 2) .. ............................... Escrow Fund ( 3) .................. ............................... TotalUses ................... ............................... (1) An amount equal to the lesser of (i) Maximum Annual Debt Service on the Bonds or (ii) the maximum amount permitted to be deposited in the Debt Service Reserve Account by the Code (the "Reserve Requirement "). (2) Includes the Bond insurance premium. (3) An amount to be used to purchase Federal Securities which will be sufficient, together with other moneys in the Escrow Fund and interest earnings thereon, to provide for the payment of the principal of, premium and interest on the 1993 Bonds through October 1, 2003. PLAN OF REFUNDING A portion of the proceeds from the sale of the Bonds, together with certain funds made available through the defeasance of the 1993 Bonds, will be deposited in trust with BNY Western Trust Company (the "Escrow Bank ") pursuant to an escrow deposit and trust agreement (the "Escrow Agreement "). The funds deposited with the Escrow Bank will be applied to the purchase of direct obligations of the United States of America (the "Federal Securities "). The Federal Securities, including interest thereon, together with other moneys held in trust by the Escrow Bank, will be sufficient to pay principal and interest coming due on the 1993 Bonds through October 1, 2003, and to redeem all of the then outstanding 1993 Bonds in full on October 1, 2003, together with a redemption premium of 2 %. The foregoing deposit with the Escrow Bank will result in the defeasance of the 1993 Bonds, pursuant to the provisions of the financing documents under which they were issued, as of the date of issuance of the Bonds. See "VERIFICATION OF MATHEMATICAL ACCURACY" herein. The Federal Securities and other moneys held by the Escrow Bank under the Escrow Agreement are pledged to the payment of the 1993 Bonds. Neither the principal of the Federal Securities deposited with the Escrow Bank nor the interest thereon will be available for the payment of the Bonds. 3 THE BONDS Authority for Issuance The Bonds are authorized for issuance pursuant to a resolution adopted by the Agency on April _, 1999 (the "Resolution ") and the Indenture. Description of the Bonds The Bonds will be issued as one fully registered Bond for each maturity, in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ( "DTC "), as registered owner of all Bonds. See "Book -Entry System" below. The initially issued Bonds will be dated May 1, 1999 and mature on October 1 in the years and in the amounts shown on the cover page of this Official Statement. The Bonds will bear interest at the rates shown on the cover page of this Official Statement, payable semiannually on April 1 and October 1 in each year, commencing on October 1, 1999, by check mailed by first class mail on each Interest Payment Date to the registered owners thereof or upon the request of the Owners of $1,000,000 or more in principal amount of Bonds, by wire transfer to an account which shall be designated by such Owner to the Trustee on or before the Regular Record Date preceding the Interest Payment Date. Book Entry System DTC will act as securities depository for the Bonds. The Bonds will be issued as fully - registered bonds registered in the name of Cede & Co. (DTC's partnership nominee). One fully - registered Bond will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited - purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants (the "Participants ") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book -entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities bonds. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants "). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchasers of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ( "Beneficial Owners ") is in turn recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the H books of Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive bonds representing their ownership interests in the Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such securities are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to an issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Principal, sinking fund and interest payments with respect to the Bonds will be made to DTC. DTC's practice is to credit Participants' accounts on payment dates in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the date payable. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, the Agency or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Agency or the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. The Agency cannot and does not give any assurances that DTC, DTC Participants or others will distribute payments of principal, interest or premium with respect to the Bonds paid to DTC or its nominee.. as the registered owner, or any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. The Agency is not responsible or liable for the failure of DTC or any DTC Participant to make any payment or give any notice to Beneficial Owners with respect to the Bonds or an error or delay relating thereto. The foregoing description of the procedures and record - keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in such Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no 5 representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be. Discontinuance of Book- Entry. DTC may discontinue providing its services with respect to the Bonds at any time by giving notice to the Trustee and discharging its responsibilities with respect thereto under applicable law or the Agency may terminate participation in the system of book -entry transfers through DTC or any other securities depository at any time. In the event that the book -entry system is discontinued, the Agency will execute, and the Trustee will authenticate and make available for delivery, replacement Bonds in the form of registered bonds. In addition, the following provisions would apply: the principal of and redemption premium, if any, on the Bonds will be payable at the principal corporate trust office of the Trustee, and interest on the Bonds will be payable by check mailed on each Interest Payment Date to the Owners thereof as shown on the registration books of the Trustee as of the close of business on the fifteenth day of the calendar month immediately preceding the applicable Interest Payment Date, or by wire transfer to Owners of $1,000,000 or more in aggregate principal amount of Bonds, upon request, as provided in the Indenture. The Bonds will be transferable and exchangeable on the terms and conditions provided in the Indenture. Transfer Fees. For every transfer and exchange of Bonds, Owners may be charged a sum sufficient to cover any tax, governmental charge or transfer fees that may be imposed in relation thereto, which charge may include transfer fees imposed by the Trustee, DTC or the DTC Participant in connection with such transfers or exchanges. Redemption and Purchase of Bonds 4Rtional Redemption. The Bonds maturing on or before October 1, 2008 are not subject to optional redemption prior to maturity. The Bonds maturing after October 1, 2008 will be subject to redemption, at the option of the Agency on any date on or after October 1, 2008, as a whole or in part, by such maturities as shall be determined by the Agency, and by lot within a maturity, from any available source of funds, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed) together with accrued interest thereon to the date fixed for redemption. Redemption Date Redemption Price October 1, 2008 through April 1, 2009 102% October 1, 2009 through April 1, 2010 101 October 1, 2010 and thereafter 100 Fl Sinking Account Redemption. The Bonds maturing on October 1, 2018, shall also be subject to mandatory sinking fund redemption in part by lot on October 1, 2008, and on October 1 in each year thereafter to and including October 1, 2018, 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, or in lieu thereof shall be purchased in whole or in part pursuant to the last paragraph of this subsection, in the aggregate respective principal amounts and on the respective dates as set forth in the following table; provided, however, that if some but not all of the Bonds have been redeemed pursuant to the paragraph above, the total amount of all future Sinking Account payments shall be reduced by the aggregate principal amount of Bonds so redeemed, to be allocated among the Sinking Account payments as are thereafter payable on a pro rata basis in integral multiples of $5,000 as determined by the Agency (notice of which determination shall be given by the Agency to the Trustee). Year Year (October 1) Amount' (October 1) Amount* 2008 $455,000 2014 $610,000 2009 475,000 2015 640,000 2010 500,000 2016 670,000 2011 525,000 2017 710,000 2012 550,000 2018 (maturity) 740,000 2013 580,000 In lieu of redemption of Bonds pursuant to this subsection, amounts on deposit as Sinking Account payments may also be used and withdrawn by the Trustee, at the written direction of the Agency, at any time for the purchase of Bonds otherwise required to be redeemed on the following October 1 at public or private sale as and when and at such prices, but not greater than par (including brokerage and other charges and including accrued interest), as the Agency may in its discretion determine. The par amount of any of the Bonds so purchased by the Agency and surrendered to the Trustee for cancellation in any twelve -month period ending on October 1 in any year shall be credited towards and shall reduce the par amount of the Bonds otherwise required to be redeemed on the following October 1. Notice o 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 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 Written Request of the Agency filed with the Trustee; but 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 Bonds or the cessation of the accrual of interest thereon. Such notice shall state the redemption date and the redemption price, shall state that such redemption is conditioned upon the timely delivery of the redemption price by the Agency to the Trustee for deposit in the Redemption Account, shall designate the CUSIP number of the Bonds to be redeemed, shall state the individual number of each Bond to be redeemed or shall state that all Bonds between two stated numbers (both inclusive) or all of the Bonds Outstanding are to be redeemed, and shall require that such Bonds be then surrendered at the Principal Corporate Trust Office for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date. Preliminary, subject to change. 7 SECURITY FOR THE BONDS Tax Revenues Tax Allocations. The Law provides a means for financing redevelopment projects based upon an allocation of taxes collected within a project area. The taxable valuation of a project area last equalized prior to adoption of the redevelopment plan, or base roll, is established in the base year. Thereafter, except for any period during which the taxable valuation drops below the base year level, the taxing bodies 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 (with the exception of taxes derived from increases in the tax rate imposed by taxing agencies to support new bonded indebtedness) are allocated to the redevelopment agency and may be pledged to the repayment of any indebtedness incurred in financing or refinancing redevelopment. Redevelopment agencies themselves have no authority to levy property taxes and must look exclusively to such allocation of taxes. Currently, such taxes are collected by the County of Ventura (the "County") and paid to the affected entities. As provided in the Redevelopment Plan for the Project Area, and pursuant to Article 6 of Chapter 6 of the Law and Section 16 of Article XVI of the State Constitution, taxes levied upon taxable property in the Project Area each year by or for the benefit of the State, cities, counties, districts or other public corporations (collectively, the "Taxing Agencies "), for fiscal years beginning after the effective date of the Redevelopment Plan, will be divided as follows: (1) To taxing agencies: The portion equal to the amount of those taxes which would have been produced by the current tax rate, applied to the taxable valuation of such property in the redevelopment project area as last equalized prior to the establishment of the redevelopment project, or base roll, is paid into the funds of those respective taxing agencies as taxes by or for said taxing agencies; and (2) To the Agency: The portion of said levied taxes each year in excess of the amount referred to in (1) above is allocated to, and when collected, is paid into the Special Fund of the Agency; provided that portion of the taxes identified in (1) above which are attributable to a tax rate levied by a taxing agency to pay indebtedness approved by the voters of that taxing agency on or after January 1, 1989, shall be allocated to, and when collected shall be paid into, the fund of such taxing agency. Such excess is referred to as "Tax Increment Revenues." Housing Set -Aside Amounts. The Law requires generally that, unless a specified finding is made, redevelopment agencies set aside 20% of all Tax Increment Revenues (as described above) derived from redevelopment project areas into a low and moderate income housing fund (the "Low and Moderate Income Housing Fund "), to be used for the purpose of increasing, improving and or preserving the supply of low and moderate income housing. sections 33334.2 and 33334.6 of the Law dictate the low and moderate income housing set -aside requirement for the Project Area. Pledge of Tax Revenues Pursuant to the Indenture, all right, title and interest of the Agency in Tax Revenues (as defined below) payable to or receivable by the Agency under the California Constitution, the Law and other applicable laws, are assigned and pledged to secure the payment of principal of and interest on the Bonds. The Indenture defines the teL Tax Revenues as all taxes annually allocated to the Agency with respect to the Project Area following the Closing Date pursuant to Article 6 of Chapter 6 (commencing with section 33670) of the Law and section 16 of Article XVI of the Constitution of the State of California and as provided in the Redevelopment Plan, 0 including all payments, subventions and reimbursements (if any) to the Agency specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limitations; but excluding (a) all amounts of such taxes required to be paid by the Agency to other taxing agencies pursuant to pass - through agreements or similar tax - sharing agreements entered into pursuant to section 33401 of the Law existing on the Closing Date and (b) all amounts of such taxes required to be deposited into the Low and Moderate Income Housing Fund of the Agency in any Fiscal Year pursuant to section 33334.3 of the Law. Except as may be otherwise provided in any Supplemental Indenture, the Agency is not obligated to transfer to the Trustee for deposit in the Special Fund in any Bond Year an amount of Tax Revenues which, together with other available amounts in the Special Fund, exceeds the amounts required in such Bond Year pursuant to the Indenture. In the event that, for any reason whatsoever, any amounts remain on deposit in the Special Fund on any September 2 after making all of the transfers theretofore required to be made to the Interest Account, the Principal Account and the Reserve Account pursuant to the Indenture and pursuant to any Supplemental Indenture, the Trustee will withdraw such amounts from the Special Fund and transfer such amounts to the Agency to be used for any lawful purpose of the Agency. The Agency has no power to levy and collect property taxes, and any property tax limitation, legislative measure, voter initiative or provision of additional sources of income to taxing agencies having the effect of reducing the property tax rate or collections, could reduce the amount of Tax Revenues that would otherwise be available to pay the principal of, and interest on the Bonds. Likewise, broadened property tax exemptions could have a similar effect. Limited Obligations THE PRINCIPAL OF AND INTEREST AND PREMIUM, IF ANY, ON THE BONDS ARE PAYABLE SOLELY FROM TAX REVENUES AND FROM AMOUNTS IN CERTAIN FUNDS AND ACCOUNTS HELD BY THE TRUSTEE UNDER AND PURSUANT TO THE INDENTURE. THE BONDS ARE NOT A DEBT OF THE CITY, THE STATE OR ANY OF THE POLITICAL SUBDIVISIONS OF THE STATE, AND NEITHER THE CITY NOR THE STATE, NOR ANY OF ITS POLITICAL SUBDIVISIONS, IS LIABLE THEREFOR, NOR IN ANY EVENT WILL THE BONDS BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THE TAX REVENUES OF THE AGENCY AS SET FORTH IN THE INDENTURE. THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR RESTRICTION. NEITHER THE MEMBERS OF THE AGENCY NOR ANY PERSON RESPONSIBLE FOR THE EXECUTION OF THE BONDS IS LIABLE PERSONALLY FOR THE BONDS BY REASON OF THE ISSUANCE THEREOF. Reserve Account Pursuant to the Indenture, a reserve account (the "Reserve Account ") has been established and is held by the Trustee in trust for the benefit of the Agency and the registered owners of the Bonds. The amount on deposit in the Reserve Account is required to be maintained at an amount equal to the Reserve Requirement. The term "Reserve Requirement" means, as of any calculation date, an amount, calculated by or on behalf of the Agency and certified to the Trustee in writing, equal to Maximum Annual Debt Service on all Outstanding Bonds and any Parity Debt. The Reserve Requirement as of the Closing Date is $ E In the event that the amount on deposit in the Reserve Account at any time becomes less than the Reserve Requirement, the Trustee will promptly notify the Agency of such deficiency. Promptly upon receipt of any such notice, the Agency will transfer to the Trustee an amount of available Tax Revenues 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, the Principal Account and the Sinking Account established under the Indenture, in such order of priority, on any date on which Bonds are payable in the event of any deficiency at any time in any of such accounts. So long as no Event of Default (as defined in the Indenture) shall have occurred and be continuing, any amount in the Reserve Account in excess of the Reserve Requirement preceding each Interest Payment Date will be withdrawn from the Reserve Account by the Trustee and deposited in the Interest Account established under the Indenture on or before the Interest Payment Date. THE INDENTURE The following is a summary of certain provisions of the Indenture and does not purport to be complete. Reference is hereby made to the Indenture which is available from the Agency upon request, and to Appendix A for the definition of certain terms used herein. Any capitalized terms not otherwise defined herein and in Appendix A are as defined in the Indenture. Disposition of Bond Proceeds Issuance of Bonds. Upon the execution and delivery of the Indenture, the Agency shall execute and deliver to the Trustee Bonds in the aggregate principal amount of dollars ($ ) and the Trustee shall authenticate and deliver the Bonds upon the Written Request of the Agency. Application of Proceeds of Sale. On the Closing Date the net proceeds of sale of the Bonds in the amount of $ , including accrued interest shall be paid to the Trustee and applied as follows: (a) The Trustee shall deposit $ accrued interest received on the sale of the Bonds in the Interest Account; (b) The Trustee shall deposit in the Reserve Account the amount of $ , which, equals the Reserve Requirement; (c) The Trustee shall deposit the amount of $ in the Costs of Issuance Fund; and (d) The Trustee shall transfer the amount of $ to the Escrow Bank for deposit in the_ Escrow Fund. The Trustee may establish, as it deems necessary, a temporary fund or account on its records to facilitate the deposits and transfers set forth in the Indenture. Costs of Issuance Fund. There is established a separate fund to be known as the "Costs of Issuance Fund," which shall be held by the Trustee in trust. The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay the Costs of Issuance upon submission of a Written Request of the Agency stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund. On the date six months following the Closing Date, IM or upon the earlier Written Request of the Agency stating that all known Costs of Issuance have been paid, all amounts, if any, remaining in the Costs of Issuance Fund shall be withdrawn therefrom by the Trustee and transferred to the Agency for deposit into the Debt Service Fund. Special Fund: Deposit of Tax Revenues. There is established a special fund to be known as the "Special Fund," which shall be held by the Agency. The Agency shall transfer all of the Tax Revenues received in any Bond Year to 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 the Indenture. Except as provided in the 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 paragraph, including delinquent amounts if any, shall be released from the pledge and lien 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 Subordinate Debt, or the payment of any amounts due and owing to the United States of America pursuant to the Indenture. 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 under the Indenture 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 the Indenture and in any Supplemental Indenture. Deposit of Amounts by Trustee. There is established a trust fund to be known as the Debt Service Fund, which shall be held by the Trustee in trust. Moneys in the Special Fund shall be transferred by the Agency to the Trustee in the following amounts, at the following times, and deposited by the Trustee in the following respective special accounts, which are established in the Debt Service Fund, and in the following order of priority: (a) Interest Account. On or before the fifth Business Day preceding each Interest Payment Date, 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 contained in the Interest Account on that date, will be equal to the aggregate amount of the interest becoming due and payable on the Outstanding Bonds on such Interest Payment Date. No such transfer and deposit need be made to the Interest Account if the amount contained therein is at least equal to the interest to become due on the next succeeding Interest Payment Date upon all of the Outstanding Bonds. 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 redeemed prior to maturity pursuant to the indenture). (b) Principal Account. On or before the fifth Business Day preceding October 1 in each year beginning October 1, 1999, 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 contained in the Principal Account, will be equal to the principal becoming due and payable on the Outstanding Serial Bonds and maturing Term Bonds on the next October 1. No such transfer and deposit need be made to the Principal Account if the amount contained therein is at least equal to the principal to become due on the next October 1 on all of the Outstanding Serial Bonds and maturing Term 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 Serial Bonds and maturing Term Bonds as it shall become due and payable. 11 (c) Sinking Account. No later than the fifth Business Day preceding each October 1 on which any Outstanding Term Bonds are subject to mandatory redemption, or otherwise for purchases of Term Bonds, 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 to be redeemed on such October 1. 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 redemption or purchase. (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 (to the extent known to it) shall promptly notify the Agency of such fact. Promptly upon receipt of any such notice, the Agency shall transfer to the Trustee an amount of available Tax Revenues 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, the Principal Account and the 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 preceding each Interest Payment Date shall be withdrawn from the Reserve Account by the Trustee and deposited in the Interest Account on or before the Interest Payment Date. 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: (i) a Qualified Reserve Account Credit Instrument, (ii) an opinion of Bond Counsel stating that neither the release of such funds nor the acceptance of such Qualified Reserve Account Credit Instrument will 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, and upon delivery by the Agency to the Trustee of written calculation of the amount permitted to be released from the Reserve Account (upon which calculation the Trustee may conclusively rely), the Trustee shall transfer such funds from the Reserve Account to the Agency free and clear of the lien of the indenture. The Trustee shall comply with all documentation relating to a Qualified Reserve Account Credit Instrument as shall be required to maintain such Qualified Reserve Account Credit Instrument in full force and effect and as shall be required to receive payments thereunder in the event and to the extent required to make any payment when and as required under this subsection (d). At least fifteen (15) days prior to the expiration of any Qualified Reserve Account Credit Instrument, the Agency shall be obligated either (i) to replace such Qualified Reserve Account Credit Instrument with a new Qualified Reserve Account Credit Instrument, or (ii) to deposit or cause to be deposited with the Trustee an amount of funds such that the amount on deposit in the Reserve Account is equal to the Reserve Requirement (without taking into account such expiring Qualified Reserve Fund Credit Instrument). In the event that the Agency shall fail to take action as specified in clause (i) or (ii) of the preceding sentence, the Trustee shall, prior to the expiration thereof, draw upon the Qualified Reserve Account Credit Instrument in full and deposit the proceeds of such draw in the Reserve Account. 12 In the event that the Reserve Requirement shall at any time be maintained in the Reserve Account in the form of a combination of cash and a Qualified Reserve Account Credit Instrument, the Trustee shall apply the amount of such cash to make any payment required to be made from the Reserve Account before the Trustee shall draw any moneys under such Qualified Reserve Account Credit Instrument for such purpose. In the event that the Trustee shall at any time draw funds under a Qualified Reserve Account Credit Instrument to make any payment then required to be made from the Reserve Account, the Tax Revenues thereafter received by the Trustee, to the extent remaining after making the other deposits (if any) then required to be made pursuant to Section 4.03(a), (b) and (c), shall be used to reinstate the Qualified Reserve Account Credit Instrument. The Reserve Account may 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 fifth Business Day preceding any date on which Bonds are to be redeemed, the Trustee shall withdraw from the Debt Service Fund and deposit in the Redemption Account an amount required to pay the principal of and premium, if any, on the Bonds to be redeemed on such date, taking into account any funds then on deposit in the Redemption Account. The Trustee shall also deposit in the Redemption Account any other amounts received by it from the Agency designated by the Agency in writing to be deposited in the Redemption Account. 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 to be redeemed on the respective dates set for such redemption. Investment of Moneys in Funds and Accounts Moneys in the Debt Service Fund, the Interest Account, the Principal Account, the Sinking Account, the Reserve Account, the Redemption Account and the Costs of Issuance Fund shall be invested by the Trustee in Permitted Investments as directed by the Agency in the Written Request of the Agency filed with the Trustee at least two (2) Business Days in advance of the making of such investments. In the absence of any such Written Request of the Agency, the Trustee shall invest any such moneys in Permitted Investments described in clause (d) of the definition thereof, which by their terms mature prior to the date on which such moneys are required to be paid out under the Indenture. Investments purchased with moneys deposited in the Reserve Account shall have an average aggregate weighted term to maturity not greater than five years. The Trustee shall be entitled to rely conclusively upon the written instructions of the Agency directing investments in Permitted Investments as to the fact that each such investment is permitted by the laws of the State, and shall not be required to make further investigation with respect thereto. With respect to any restrictions set forth in the above list which embody legal conclusions (e.g., the existence, validity and perfection of security interests in collateral), the Trustee shall be entitled to rely conclusively on an opinion of counsel or upon a representation of the provider of such Permitted Investment obtained at the Agency's expense. Moneys in the Special Fund may be invested by the Agency in any obligations in which the Agency is legally authorized to invest its funds. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. All interest or gain derived from the investment of amounts in any of the funds or accounts held by the Trustee shall be deposited in the Interest Account; 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. The Trustee may act as principal or agent in the acquisition or disposition of any investment and may 13 impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made at the direction of the Agency or otherwise made pursuant to the Indenture. All moneys held by the Trustee shall be held in trust, but need not be segregated from other funds unless specifically required by the Indenture. Except as specifically provided in the Indenture, the Trustee shall not be liable to pay interest on any moneys received by it, but shall be liable only to account to the Agency for earnings derived from funds that have been invested. (a) Except as otherwise provided in subsection (b) below, all investments of amounts deposited in any fund or account created by or pursuant to the Indenture, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by the Indenture or the Code) at Fair Market Value. (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 Account shall be valued at their present value (within the meaning of section 148 of the Code). (c) The Trustee shall have no responsibility to determine Fair Market Value or present value at the time of initial investment in a Permitted Investment, and may rely upon any determination made by or on behalf of the Agency. Issuance of Parity Debt In addition to the Bonds, the Agency may, by Supplemental Indenture, issue or incur Parity Debt payable from Tax Revenues on a parity with the Bonds to finance the Project Area in such principal amount as shall be determined by the Agency. The Agency may issue and deliver any such other Parity Debt subject to the following specific conditions precedent to the issuance and delivery of such Parity Debt: (i) The Agency shall be in compliance with all covenants set forth in the Indenture and all Supplemental Indentures. (ii) The Tax Revenues for the then current Bond Year, based on the most recent assessed valuation of property in the Project Area as evidenced in written documentation from an appropriate official of the County, plus, at the option of the Agency, the Additional Allowance, shall be at least equal to one hundred twenty-five percent (125 %) of Maximum Annual Debt Service on all Bonds and Parity Debt which will be Outstanding following the issuance of such Parity Debt. (iii) The Supplemental Indenture providing for the issuance of such Parity Debt shall provide that; (A) Interest on said Parity Debt shall be payable on April 1 and October 1 in each year of the term of such Parity Debt except the first twelve month period, during which interest may be payable on any April 1 or October 1; and (B) The principal of such Parity Debt shall be payable on October 1 in any year in which principal is payable. (iv) The Supplemental Indenture providing for the issuance of such Parity Debt may provide for the establishment of separate funds and accounts; 14 (v) The aggregate amount of the principal of and interest on all Outstanding Bonds and Subordinate Debt coming due and payable following the issuance of such Parity Debt shall not exceed the maximum amount of Tax Revenues permitted under the Plan Limit to be allocated and paid to the Agency following the issuance of such Parity Debt; and (vi) An opinion of Bond Counsel stating (i) that the Supplemental Indenture relating to the Parity Debt is valid and enforceable in accordance with its terms (ii) that such Supplemental Indenture creates a valid pledge of that which it purports to pledge, and (iii) that the total principal amount of Parity Debt to be issued or incurred and then Outstanding will not exceed any limit imposed by law. (vii) 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 or shall make provision for a Qualified Reserve Account Credit Instrument in lieu of cash - funding the Reserve Account, or a combination of cash and a Qualified Reserve Account Credit Instrument. (viii) The Agency shall deliver to the Trustee a Written Certificate of the Agency certifying that the conditions precedent to the issuance of such Parity Debt set forth above have been satisfied. Issuance of Subordinate Debt. In addition to the Bonds, the Agency may issue or incur Subordinate Debt in such principal amount as shall be determined by the Agency. The Agency may issue or incur such Subordinate Debt subject to the following specific conditions precedent: (a) The Agency shall be in compliance with all covenants set forth in the Indenture and all Supplemental Indentures; (b) If, and to the extent, such Subordinate Debt is payable from Tax Revenues within the Plan Limit on the amount of Tax Revenues, then all Outstanding Bonds, Parity Debt and Subordinate Debt coming due and payable following the issuance or incurrence of such Subordinate Debt shall not exceed the maximum amount of Tax Revenues permitted within the Plan Limit. Covenants of the Agency As long as the Bonds are Outstanding and unpaid, the Agency will (through its proper members, officers, agents or employees) faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Indenture or in any Bond, including the following covenants and agreements for the benefit of the Bondowners which are necessary, convenient and desirable to secure _.the Bonds and will tend to make them more marketable; provided, however, that said covenants will not require the Agency to expend any funds other than funds on deposit in the Special Fund, the Redevelopment Fund and the investment earnings thereon. Covenant 1. Punctual Payment. The Agency shall punctually pay or cause to be paid the principal and interest to become due in respect of all the Bonds together with the premium thereon, if any, in strict conformity with the terms of the Bonds and of the Indenture. The Agency shall faithfully observe and perform all of the conditions, covenants and requirements of the Indenture and all Supplemental Indentures and the Bonds. Nothing therein contained shall prevent the Agency from making advances of its own moneys howsoever derived to any of the uses or purposes referred to therein. I Covenant 2. Limitation on Additional Indebtedness: Against Encumbrances. The Agency covenants that, so long as the Bonds are Outstanding, the Agency shall not issue any bonds, notes or other obligations, enter into any agreement or otherwise incur any indebtedness, for which all or any part of the Tax Revenues are pledged as security for payment, excepting only the Bonds, any Parity Debt and any Subordinate Debt. The Agency will not otherwise encumber, pledge or place any charge or lien upon any of the Tax Revenues or other amounts pledged to the Bonds superior to the pledge and lien created for the benefit of the Bonds. Covenant 3. Extension of Payment. The Agency will not, directly or indirectly, extend or consent to the extension of the time for the payment of any Bond or claim for interest on any of the Bonds and will not, directly or indirectly, be a party to or approve any such arrangement by purchasing or funding the Bonds or claims for interest in any other manner. In case the maturity of any such Bond or claim for interest shall be extended or funded, whether or not with the consent of the Agency, such Bond or claim for interest so extended or funded shall not be entitled, in case of default under the Indenture, to the benefits of the Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded. Covenant 4. Payment of Claims. The Agency shall promptly 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 other amounts pledged to the payment of the Bonds, or any part thereof, or upon any funds in the hands of the Trustee, or which might impair the security of the Bonds. Nothing in the contained Indenture shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of said claims. Covenant 5. 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 the Bonds are Outstanding, complete audited financial statements with respect to such Fiscal Year showing the Tax Revenues, all disbursements of Tax Revenues 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. The Agency shall furnish a copy of such financial statements to any Owner upon reasonable request and at the expense of such Owner. Covenant 6. 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 Closing Date, the Bonds shall be incontestable by the Agency. Covenant 7. Payments of Taxes and Other Charges. Except as otherwise provided in the Indenture, the Agency will pay and discharge, or cause to be paid and discharged, all taxes, service charges, assessments and other governmental charges which may be lawfully imposed upon the Agency or the properties then owned by the Agency in the Project Area, or upon the revenues therefrom when the same shall become due. Nothing contained in the Indenture 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 16 with all valid requirements of any governmental authority relative to the Redevelopment Project or any part thereof. Covenant 8. Taxation of Leased Property. All amounts derived by the Agency pursuant to section 33673 of the Law with respect to the lease of property for redevelopment shall be treated as Tax Revenues for all purposes of the Indenture. Covenant 9. Disposition of Property. The Agency will not participate in the disposition of any land or real property in the Project Area to anyone which will result in such property becoming exempt from taxation because of public ownership or use or otherwise (except property dedicated for public right -of -way and except property planned for public ownership or use by the Redevelopment Plan in effect on the date of the Indenture), if such disposition, when taken together with other such dispositions, would either (a) aggregate more than ten percent (10 %) of the land area in the Project Area, or (b) aggregate more than ten percent (10 %) of the most recent assessed valuation of the property in the Project Area. Covenant 10. 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, in the case of amounts payable by the State, appropriate officials of the State. Covenant 11. 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 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 Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. Covenant 12. Private Activity Bond Limitation. The Agency shall assure that the proceeds of the Bonds are not so used as to cause the 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. Covenant 13. Federal Guarantee. 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 Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code. Covenant 14. 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 Bonds. Covenant 15. Maintenance of Tax - Exemption. The Agency shall take all actions necessary to assure the exclusion of interest on the Bonds from the 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 date of issuance of the Bonds. Covenant 16. CoWliance with the Law: Low and Moderate Income Housing Fund. 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 section 33679 of the Law prior to application of proceeds of the Bonds to any portion of the Redevelopment Project. Without limiting the generality of the foregoing, the Agency covenants that it shall deposit or cause to be deposited in the Low and Moderate Income Housing Fund established 17 pursuant to section 33334.3 of the Law, all amounts when, as and if required to be deposited therein pursuant to the Law; provided, however, that the Agency may reduce or eliminate such requirement if it makes the fmdings as set forth in section 33334.2 of the Law. Covenant 17. Management and Operations of Properties. The Agency will manage and operate all properties owned by the Agency and comprising any part of the Redevelopment Project, in a sound and businesslike manner, and will keep such properties, insured at all times in conformity with sound business practice. Covenant 18. Plan Limit. The Agency agrees that the aggregate amount of Annual Debt Service remaining to be paid on all Outstanding Bonds shall at no time exceed ninety -five percent (95 %) of the aggregate amount of Tax Revenues which the Agency is permitted to receive under the Plan Limit. In the event that such limit is reached or exceeded, the Agency shall (a) deposit into and retain in the Special Fund all Tax Revenues not used to pay current debt service, to be applied for the sole purpose of paying the principal of and interest on the Bonds as they become due and payable, notwithstanding anything in the Indenture to the contrary, and (b) not later than July 1 of each succeeding Fiscal Year, cause to be prepared and filed with the Trustee an accounting which shows the aggregate amount of Annual Debt Service remaining to be paid on all Outstanding Bonds, and the amount of Tax Revenues which the Agency is permitted to receive under the Plan Limit. Covenant 19. Continuing Disclosure. The Agency 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 the Indenture, failure of the Agency to comply with the Continuing Disclosure Certificate shall not be an Event of Default thereunder. However, any Participating Underwriter or any holder or beneficial owner of the 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 the Indenture. Covenant 20. Further Assurances. The Agency will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Indenture, and for the better assuring and confirming unto the Owners of the Bonds the rights and benefits provided in the Indenture. Events of Default and Remedies The following events shall constitute Events of Default under the Indenture: (a) if default shall be made by the Agency in the due and punctual payment of the principal of or interest or redemption premium (if any) on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) if default shall be made by the Agency in the observance of any of the covenants, agreements or conditions on its part in the Indenture or in the Bonds contained, other than a default described in the preceding clause (a), and such default shall have continued for a period of sixty (60) days following receipt by the Agency of written notice from the Trustee or any Owner of the occurrence of such default provided that if in the reasonable opinion of the Agency the failure stated in the notice can be corrected, but not within such 60 day period, such failure will not constitute an event of default if corrective action is instituted by the Agency within such 60 day period and the Agency thereafter diligently and in good faith cures such failure within 120 days; or 18 (c) if the Agency files a petition seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction will approve a petition seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or, if under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction will approve a petition, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or, if under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction will assume custody or control of the Agency or of the whole or any substantial part of its property. If an Event of Default has occurred under the Indenture and is continuing, the Trustee may, and, subject to the Indenture, 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 the Indenture or in the Bonds to the contrary notwithstanding, and (b) the Trustee shall, subject to the provisions of the Indenture, exercise any other remedies available to the Trustee and the Bond Owners in law or at equity. Immediately upon receiving written notice or actual knowledge (of a Responsible Officer) 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. With respect to any Event of Default described in clauses (a) or (c) above the Trustee shall, and with respect to any Event of Default described in clause (b) above the Trustee in its sole discretion may, also give such notice to the Owners by mail, which shall include the statement that interest on the Bonds shall cease to accrue from and after the date, if any, on which the Trustee shall have declared the Bonds to become due and payable pursuant to the preceding paragraph (but only to the extent that principal and any accrued, but unpaid, interest on the Bonds is actually paid on such date). 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), and the reasonable expenses of the Trustee, (including the allocated costs and disbursements of its in- house counsel) to and any and all other defaults of which the Trustee has notice (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, with the prior written approval of the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Agency and to the 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. Application of Funds Upon Acceleration. All of the Tax Revenues and all sums in the funds and accounts established and held by the Trustee under the Indenture upon the date of the declaration of acceleration as provided in the Indenture, and all sums thereafter received by the Trustee thereunder, shall be applied by the Trustee in the following order upon presentation of the several Bonds, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid: M First, to the payment of the fees, costs and expenses of the Trustee in declaring such Event of Default and in exercising the rights and remedies set forth in the Indenture, including reasonable compensation to its agents, attorneys (including the allocated costs and disbursements of its in -house counsel to the extent such services are not redundant with those provided by outside counsel) and counsel and any outstanding fees, expenses of the Trustee; and Second, to the payment of the whole amount then owing and unpaid upon the Bonds for principal and interest, with interest on the overdue principal and installments of interest at the net effective rate then borne by the Outstanding Bonds (to the extent that such interest on overdue installments of principal and interest shall have been collected), and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such principal and interest without preference or priority of principal over interest, or interest over principal, or of any installment of interest over any other installment of interest, ratably to the aggregate of such principal and interest. Limitation on Owner's Right to Sue. No Owner of any Bond issued under the Indenture shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon the 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 granted in the Indenture 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 declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy under the Indenture; 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 the Indenture, except in the manner therein provided, and that all proceedings at law or in equity to enforce any provision of the Indenture shall be instituted, had and maintained in the manner 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 provided in the Indenture, shall not be impaired or affected without the written consent of such Owner, notwithstanding any other provision of the Indenture. Amendment. The 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 in the Indenture contained, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or powers reserved in the Indenture to or conferred upon the Agency; or Fill (b) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the indenture, or in any other respect whatsoever as the Agency may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not, in the reasonable determination of the Agency, materially adversely affect the interests of the Owners; or (c) to provide for the issuance of Parity Debt in accordance with the Indenture; or (d) to amend any provision relating to the requirements of or compliance with the Code, to any extent whatsoever but only if and to the extent such amendment will not adversely affect the exemption from federal income taxation of interest on any of the Bonds, in the opinion of nationally recognized bond counsel; Except as set forth in the preceding paragraph, the 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 consent of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding are filed with the Trustee. No such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Agency to pay the principal, interest or redemption premiums (if any) at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the Owner of such Bond, or (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification. In no event shall any Supplemental Indenture modify any of the rights or obligations of the Trustee without its prior written consent. In addition, the Trustee shall be entitled to an opinion of counsel concerning the Supplemental Indenture's lack of any material adverse effect on the Owners and that all conditions precedent for any supplement or amendment has been satisfied. Effect of Supplemental Indenture. From and after the time any Supplemental Indenture becomes effective pursuant to the Indenture, the Indenture shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations of the parties thereto and all Owners, as the case may be, shall thereafter be determined, exercised and enforced 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 the Indenture for any and all purposes. 21 THE AGENCY The Agency was established on March 18, 1987, with the adoption of Ordinance No. 87 pursuant to the Law. The five members of the City Council serve as the governing body of the Agency and exercise all rights, powers, duties and privileges of the Agency. The Mayor serves as the Agency Chairman. Members and Officers The current members and officers of the Agency and the expiration of their terms are as follows: Expiration Member of Term Patrick Hunter, Chairman November, 2000 Christopher Evans, Vice Chairman November, 2000 Clint D. Harper, Ph.D., Member November, 2002 Debbie Rogers, Member November, 2000 John E. Wozniak, Member November, 2002 Agency Powers All powers of the Agency are vested in its governing body. Pursuant to the Law, the Agency is a separate public body which may exercise broad governmental functions and authority to accomplish its purposes, including, but not limited to, the right of eminent domain, the right to issue bonds or notes and expend their proceeds and the right to acquire, sell, rehabilitate, develop, administer or lease property. The Agency may demolish buildings, clear land and cause to be constructed certain improvements including streets, sidewalks, and public utilities. The Agency may not construct or develop buildings, with the exception of public facilities and housing, but must sell or lease cleared property to redevelopers for construction and development in accordance with the Redevelopment Plan. Financial and Redevelopment Consultant Urban Futures, Inc. ( "Urban Futures "), formed in the early 1970's, provides services in the areas of planning, redevelopment and finance to both governmental and private sector clients. Urban Futures is currently engaged in consulting activities for a number of cities and redevelopment agencies in the State. Over the past five years, Urban Futures has completed planning, economic and financial consulting assignments for over 75 government and 100 private sector clients in the State. Urban Futures has acted as financial consultant to the Agency concerning the Bonds. As financial consultant, Urban Futures will receive compensation contingent upon the sale and delivery of the Bonds. 22 Tax Increment Financing The Law authorizes the financing of redevelopment projects through the use of tax increment revenues. This method provides that the taxable valuation of the property within a redevelopment project area on the property tax roll last equalized prior to the effective date of the ordinance which adopts the redevelopment plan becomes the base year valuation. Assuming the taxable valuation never drops below the base year level, the taxing agencies thereafter receive that portion of the taxes produced by applying then current tax rates to the base year valuation, and the redevelopment agency is allocated the remaining portion produced by applying then current tax rates to the increase in valuation over the base year. Such incremental tax revenues allocated to a redevelopment agency may be pledged to the payment of agency obligations. Generally, tax increment revenues from one project area may not be used to repay indebtedness incurred for another project area. Redevelopment agencies have no power to levy property taxes and must look specifically to the allocation of taxes as described above. See "RISK FACTORS." Housing Set Aside In accordance with Section 33334.2 of the Law, not less than twenty percent (20 %) of all taxes which are allocated to the Agency shall be used by the Agency for purposes of improving, increasing and preserving the City's supply of housing for persons and families of low or moderate income. This requirement is applicable unless the Agency makes the finding that: 1. No need for such housing exists in the City; 2. Less than twenty percent (20 %) is sufficient to meet such housing needs of the City; or 3. A substantial effort is presently being carried out with other funds (either local, State or Federal) and that such efforts are equivalent in impact to twenty percent (20 %) of all taxes which are allocated to the Agency. Both the "no need" finding (item 1 above) and the "less than 20% finding" (item 2 above) must apply to very low income as well as low and moderate income households, must be consistent with the housing element of the community's general plan and the annual report of its planning agency, and do not become effective until after certain filings have been made with the State Department of Housing and Community Development ( "HCD "). Neither finding can be made unless the housing element is in proper form and up to date and has been filed with HCD. The "equivalent effort" finding (item 3 above) must apply to the community's share of regional housing needs as well as its own existing and projected needs. After June 30, 1993, no agency may make this finding unless it can show evidence that it is required in order to meet contractual obligations to bondholders or other private entities incurred prior to May 1, 1991 and made in reliance on the ability to make the finding. Funds available from the twenty percent (20 %) requirement may be used outside the Project Area on a finding by the Agency and the City Council that such use will be of benefit to the Project Area. See "THE PROJECT AREA - Limitations and Requirements of the Redevelopment Plan." The Law also permits agencies with more than one project area to set aside less than twenty percent (20 %) of the taxes allocated to the agency from one project area if the difference is made up from another project area in the same year and if the agency and the legislative body of the community find that such use of funds will benefit such other project area. 23 The Law authorizes redevelopment agencies to make payments to school districts and other taxing agencies to alleviate any financial burden or detriments to such taxing agencies caused by a redevelopment project. The Agency has entered into a number of agreements for this purpose. See "THE PROJECT AREA - Agreements with Various Taxing Agencies." AB 1290 In 1993, the California Legislature enacted Assembly Bill 1290 ( "AB 1290 ") which contained several significant changes in the Law. Among the changes made by AB 1290 was a provision which limits the period of time for incurring and repaying of loans, advances and indebtedness which are payable from tax increment revenues. In general, a redevelopment plan may terminate not more than 40 years following the date of original adoption, and loans, advances and indebtedness may be repaid during a period extending not more than 10 years following the date of termination of the redevelopment plan. The final maturity of the Bonds is within the limitations of AB 1290 as applied to the Project Area. Factors Affecting Redevelopment Agencies Generally Other features of California law which bear on redevelopment agencies include general provisions which require public agencies to let contracts for construction only after competitive bidding. The Law provides that construction in excess of $5,000 undertaken by the Agency shall be done only after competitive bidding. California statutes also provide for offenses punishable as felonies which involve direct or indirect interest of a public official in a contract made by such official in his official capacity. In addition, the Law prohibits any Agency or City official or employee who, in the course of his duties, is required to participate in the formulation or approval of plans or policies, from acquiring any interest in property in the Project Area. Under a State initiative enacted in 1974, public officials are required to make extensive disclosures regarding their financial interests by filing such disclosures as public records. As of the date of this Official Statement, the members of the City Council and the Agency, and other City and Agency officials have made the required filings. California also has strict laws regarding public meetings (!mown as the Ralph M. Brown Act) which generally makes all Agency and City meetings open to the public. Filing of Statement of Indebtedness. Section 33675 of the Law provides for the filing not later than the first day of October of each year with the County Auditor of a statement of indebtedness certified by the chief fiscal officer of the Agency for each redevelopment plan which provides for the allocation of taxes. The statement of indebtedness is required to contain the date on which the bonds were delivered, the principal amount, term, purposes and interest rate of the bonds and the outstanding balance and amount due on the bonds. Similar information must be given for each loan, advance or indebtedness that the Agency has incurred or entered into which is payable from tax increment. Section 33675 also provides that payments of tax increment revenues from the County Auditor to the Agency may not exceed the amounts shown on the Agency's statement of indebtedness. The Section further provides that the statement of indebtedness is prima facie evidence of the indebtedness of the Agency, but that the County Auditor may dispute the amount of indebtedness shown on the statement in certain cases and the disputed amount may be withheld from allocation and payment to the Agency. Provision is made for time limits under which the dispute can be made by the County Auditor as well as provisions for a determination by the Superior Court in a declaratory relief action of the proper disposition of the matter. The issue in any such action shall involve only the amount of the indebtedness and not the validity of any contract or debt instrument, or any expenditures pursuant thereto. Payments to a trustee 24 under a bond resolution or indenture or payments to a public agency in connection with payments by such public agency pursuant to a bond issue shall not be disputed in any action under Section 33675. RISK FACTORS Reduction of Tax Revenues Tax Revenues allocated to the Agency (which constitute the ultimate source of payments of principal and interest on the Bonds, as discussed herein) are determined by the amount of incremental valuation of taxable property in the Project Area, the current rate or rates at which property in the Project Area is taxed and the percentage of taxes collected in the Project Area. The information contained under the heading "TAX REVENUES" assumes an annual cost of living, growth and change in ownership adjustment to assessed valuation will be made in the Project Area. Although the Agency believes these assumptions to be reasonable, several types of events which are beyond the control of the Agency could occur and cause a reduction in available Tax Revenues. First, a reduction of taxable values of property or tax rates in the Project Area or a reduction of the rate of increase in taxable values of property in the Project Area caused by economic or other factors beyond the Agency's control (such as a relocation out of the Project Areas by one or more major property owners, successful appeals by property owners for a reduction in a property's assessed value, a reduction of the general inflationary rate, a reduction in transfers of property, construction activity or other events that permit reassessment of property at lower values, or the destruction of property caused by natural or other disasters, including earthquake) could occur, thereby causing a reduction in Tax Revenues. The risk increases in proportion to the percent of total assessed value attributable to any single assessee in a Project Area. Second, the California electorate or Legislature could adopt limitations with the effect of reducing Tax Revenues payable to the Agency. Third, a reduction in the tax rate applicable to property in a Project Area by reason of discontinuation of certain override tax levies in excess of the 1% basic levy, will reduce Tax Revenues available to pay debt service. Such override can be expected to decline over time until it reaches the 1% basis levy and may be discontinued at any time, which may cause a reduction in Tax Revenues. Fourth, delinquencies in the payment of property taxes by the owners of land in the Project Area could have an adverse effect on the Agency's ability to make timely debt service payments. The Agency believes the historical delinquency experience in the Project Area has not been greater than the City -wide historical experience. (See "SUPPLEMENTAL INFORMATION —THE CITY OF MOORPARK- Secured Tax Charges and Delinquencies" herein.) Tax Revenues allocated to the Agency are distributed throughout the year in installments, with a first main installment in December, a second main installment in April of the succeeding year and a final payment by the end of May in that year. The payments are adjusted to reflect actual collections. Any reduction in Tax Revenues, whether for any of the foregoing reasons or any other reason, could have an adverse effect on the Agency's ability to pay the principal of and interest on the Bonds or to issue refunding bonds to refund the Bonds at or prior to maturity. Limited Obligations The Bonds are special obligations of the Agency secured by and solely payable from amounts on deposit in the Special Fund established under the Indenture. The Bonds are not a debt of the City of Moorpark, the State or any political subdivisions thereof and neither the City 25 of Moorpark, the State nor any political subdivisions thereof are liable for payment on the Bonds. The Bonds do not constitute an indebtedness within the meaning of any State constitutional or statutory debt limitation Development Risks The Agency's collection of Tax Revenues is directly affected by the economic strength of the Project Area. Projected additional development within the Project Area will be subject to all the risks generally associated with real estate development projects, including unexpected delays, disruptions and changes. Real estate development operations may be adversely affected by changes in general economic conditions, fluctuations in real estate market and interest rates, unexpected increases in development costs and other similar factors. Further, real estate development operations within the Project Area could be adversely affected by future governmental policies, including governmental policies to restrict or control development. If projected development in the Project Area is delayed or halted, the economy of the Project Area could be affected, causing a reduction in Tax Revenues available to pay debt service on the Bonds. Levy and Collection The Agency has no 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 effect on the ability of the Agency to pay debt service on the Bonds. Likewise, delinquencies in the payment of property taxes could have an adverse effect on the Agency's ability to make timely debt service payments. 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. In January 1995, the State Board of Equalization reported an actual annual inflation rate of 1.19 %. This marked only the second time since the adoption of Article NM A in 1978 that the actual inflation rate has been less than 2 %. Due to the rarity of this occurrence, the Financial Advisor has projected the secured assessed value with respect to the Project Area to increase by a 2% inflationary and growth factor in each fiscal year. Should the assessed value of secured property not increase at the estimated annual rate of 2 %, the Agency's receipt of future Tax Revenues may be adversely affected. Property Held By FDIC The ability of the Agency to receive Tax Revenues derived from delinquent taxes may be limited in certain respects with regard to properties in which the Federal Deposit Insurance Corporation ( "FDIC ") has or obtains an interest. In the event that any financial institution making any loan which is secured by real property within the Project Area is taken over by the FDIC and prior thereto or thereafter, the tax installments go into default, the ability of the County to collect interest and penalties specified by state law and to foreclose the lien of a delinquent unpaid taxes may be limited. The FDIC's policy statement regarding the payment of state and local real property taxes (the "Policy Statement ") provides that the FDIC intends to pay valid real property taxes, interest and penalties, in accordance with state law, on property which at the time of the tax levy is owned by institutions in an FDIC receivership, unless abandonment of the FDIC interest is determined to be appropriate. 26 Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, it will not permit its lien to be foreclosed out by a taxing authority without its specific consent, nor will it pay or recognize liens for any penalties, fines, or similar claims imposed for the nonpayment of taxes. The Agency is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency on a parcel within the Project Area in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Year 2000" Compliance The "Year 2000" issue arises because most computer software programs allocate two digits to the date field for "year" on the assumption that the first two digits will be "19." Such programs will thus interpret the year 2000 as the year 1900, the year 2001 as the year 1901, etc., absent reprogramming. The year 2000 issue affects both computer hardware (i.e., the embedded logic of computer chips) and computer software, and could impact both the ability to enter data into computer programs and the ability of such programs to correctly process data. The following information has been gathered by the Agency from the parties named below but has not been independently verified. The Agency currently has no plans to test or verify such parties' Year 2000 compliance and no contingency plan to deal with possible failures by such parties or others in becoming Year 2000 compliant. The City. The City is in the process of verifying Year 2000 compliance with all major vendors and operations within the City. The City prepared an inventory of its computer systems and has completed testing of each to determine Year 2000 compliance upgrades and/or modifications that are necessary. Based on this study, upgrades for Year 2000 compliance for both hardware and software have been purchased by the City, and will be fully operational by July 1, 1999. DTC. DTC management is aware that some computer applications, systems and the like for processing data ( "Systems ") that are dependent upon calendar dates, including dates before, on, and after January 1, 2000, may encounter "Year 2000 problems." DTC has informed its Participants and other members of the financial community (the "Industry") that it has developed and is implementing a program so that its Systems, as the same relate to the timely payment of distributions (including principal and income payments) to securityholders, book -entry deliveries, and settlement of trades within DTC ( "DTC Services ") continue to function appropriately. This program includes a technical assessment and a remediation plan, each of which is complete. Additionally, DTC's plan includes a testing phase, which is expected to be completed within appropriate time frames. However, DTC's ability to perform properly DTC Services is also dependent upon other parties, including but not limited to issuers and their agents, as well as third party vendors from whom DTC licenses software and hardware, and third party vendors on whom DTC relies for information or the provision of services, including telecommunication and electrical utility service providers, among others. DTC has informed the Industry that it is contacting (and will continue to contact) third party vendors from whom DTC acquires services to: (i) impress upon them the importance of such services being Year 2000 compliant; and (ii) determine the extent of their efforts for Year 2000 remediation (and, as appropriate, testing) of their services. In addition, DTC is in the process of developing such contingency plans as it deems appropriate. 27 According to DTC, the foregoing information with respect to DTC has been provided to the Industry for informational purposes only and is not intended to serve as a representation, warranty, or contract modification of any kind. The Trustee. (INFORMATION TO COME) The above dates are based on best estimates, which were derived utilizing numerous assumptions of future events, including the continued availability of resources and other factors. However, there can be no guarantee that these estimates will be achieved and actual results could differ materially from those anticipated. Specific factors that might cause such material differences include, but are not limited to, the availability and cost of personnel trained in this area, the ability to locate and correct all relevant computer codes, and similar uncertainties. Failure of any of the parties named above, as well as their vendors or contractors, to fully implement computer and software changes to make their computer systems Year 2000 compliant by January 1, 2000 could adversely affect Bondholders by delaying accurate payments of debt service on the Bonds. Bankruptcy and Foreclosure On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in a bankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad valorem property taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on the property. Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid taxes imposed after the filing of the bankruptcy petition were declared to be "administrative expenses" of the bankruptcy estate, payable after all secured creditors. As a result, the secured creditor was able to foreclosure on the property and retain all the proceeds of the sale except the amount of the pre- petition taxes. According to the court's ruling, as administrative expenses, post - petition taxes would have to be paid, assuming that the debtor had sufficient assets to do so. In certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise) it would at that time become subject to current ad valorem taxes. To the extent the rule of Glasply is applied to properties within the Project Area, any resultant reduction or delay in the collection of property taxes could reduce the amount of Pledged Tax Revenues available to the Agency to make timely payments of debt service on the Bonds. Seismic Factors The City is located in an area of seismic activity and, therefore, could be subject to potentially destructive earthquakes. Numerous active and inactive fault lines pass through, or near, the area in which the City is located. The occurrence of severe seismic activity in the City could result in substantial damage to property located in the Project Area, and could lead to successful appeals for reduction of assessed values of such property. Such a reduction could result in a decrease in Tax Revenues received by the Agency. 28 Other Changes in Law There can be no assurance that the California electorate will not at some future time adopt initiatives or that the Legislature will not enact legislation that will amend the Law or other laws or the Constitution of the State of California resulting in a reduction of Gross Tax Increment or Tax Revenues, and consequently, have an adverse effect on the Agency's ability to pay debt service on the Bonds. PROPERTY TAXATION IN CALIFORNIA Property Tax Collection Procedures In California, property which is subject to ad valorem taxes is classified as "secured" or "unsecured." The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the taxed 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 priority over all other liens arising pursuant to State law, on the secured property, regardless of the time of the creation of other liens. Secured and unsecured property are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property. The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes to the State for the amount of taxes which are delinquent. The taxing authority has four ways of collecting unsecured personal property taxes: (i) initiating 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) filing a certificate of delinquency for record in the county recorder's office to obtain a lien on certain property of the taxpayer, and (iv) seizing and selling personal property, improvements or possessory interests belonging or assessed to the assessee. A 10% penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, property on the secured roll on which taxes are delinquent is sold to the State on or about March 30 of the fiscal year. Such property may thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1.5% 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. A 10% penalty also applies to delinquent taxes with respect to property on the unsecured roll, and further, an additional penalty of 1.5% per month accrues with respect to such taxes beginning the first day of the third month following the delinquency date. The valuation of property is determined as of March 1 each year and installments of taxes levied upon secured property become delinquent on the following December 10 and April 10. Taxes on unsecured property are due March 1 and become delinquent August 31 and such taxes are levied at the prior year's secured tax rate. Recent legislation changed the lien date, from March 1 to January 1, commencing with January 1, 1997 lien date. The valuation of State assessed property is determined on January 1 of each year. Supplemental Assessments California Revenue and Taxation Code Section 75.70 provides for the supplemental assessment and taxation of property as of the occurrence of a change of ownership or completion of new construction. Prior to the enactment of this law, the assessment of such changes was 29 permitted only as of the next tax lien date following the change and this delayed the realization of increased property taxes from the new assessments for up to 14 months. This statute provides increased revenue to redevelopment agencies to the extent that supplemental assessments of new construction or changes of ownership occur within the boundaries of redevelopment projects subsequent to the lien date. To the extent such supplemental assessments occur within the Project Area, Tax Revenues may increase. Property Tax Administrative Costs In 1990, the Legislature enacted SB 2557 (Chapter 466, Statutes of 1990) which allows counties to charge for the cost of assessing, collecting and allocating property tax revenues to local government jurisdictions in proportion to the tax - derived revenues allocated to each. SB 1559 (Chapter 697, Statutes of 1992) explicitly includes redevelopment agencies among the jurisdictions which are subject to such charges. Unitary Property AB 454 (Statutes of 1987, Chapter 921) provides the method of reporting and allocating property tax revenues generated from most State - assessed unitary properties. Under AB 454, the State reports to each county auditor - controller only the county -wide unitary taxable value of each utility, without an indication of the distribution of the value among tax rate areas. AB 454 provides two formulas for auditor - controllers to use in order to determine the allocation of unitary property taxes generated by the county-wide unitary value, which are: (i) for revenue generated from the 1% tax rate, each jurisdiction is to receive up to 102% of its prior year unitary property tax increment revenue; however, if county-wide revenues generated from unitary properties are greater that 102% of prior year revenues, each jurisdiction receives a percentage share of the excess unitary revenues equal to the percentage of each jurisdiction's share of secured property taxes; (ii) for revenue generated from the application of the debt service tax rate to county-wide unitary taxable value, each jurisdiction is to receive a percentage share of revenue based on the jurisdiction's annual debt service requirements and the percentage of property taxes received by each jurisdiction from unitary property taxes. The provisions of AB 454 apply to all State - assessed property, except railroads and non - unitary properties the valuation of which will continue to be allocated to individual tax rate areas. AB 454 allows, generally, valuation growth or decline of State - assessed unitary property to be shared by all jurisdictions within a county. Article XIII A of the State Constitution Article XIII A limits the amount of ad valorem taxes on real property to 1% of "full cash value" of such property, as determined by the county assessor. Article NM 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." Furthermore, the "full cash value" of all real property may be increased to reflect the rate of inflation, as shown by the consumer price index, not to exceed 2% per year or may be reduced. 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 substantial damage, destruction or other factors, and 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 other special circumstances. M7 Article XIII A exempts from the 1% tax limitation taxes to pay debt service on (a) indebtedness approved by the voters prior to July 1, 1978 or (b) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two- thirds of the votes cast by the voters voting on the proposition, requires a vote of two- thirds of the qualified electorate to impose special taxes, or certain additional ad valorem taxes; and requires the approval of two- thirds of all members of the State Legislature to change any State tax laws resulting in increased tax revenues. The validity of Article XIII A has been upheld by both the California Supreme Court and the United States Supreme Court. Appropriations Limitation - Article XIII B Article XIII B limits the annual appropriations of the State and its political subdivisions to the level of appropriations for the prior fiscal year, as adjusted for changes in the cost of living, population and services rendered by the government entity. The "base year" for establishing such appropriations limit is the 1978/79 fiscal year, and the limit is to be adjusted annually to reflect changes in population, consumer prices and certain increases in the cost of services provided by these public agencies. Section 33678 of the Law provides that the allocation of taxes to a redevelopment agency for the purpose of paying principal of, or interest on, loans, advances, or indebtedness shall not be deemed the receipt by an agency of proceeds of taxes levied by or on behalf of an agency within the meaning of Article X M B, 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 purpose of the Constitution and laws of the State, including Section 33678 of the Law. The constitutionality of Section 33678 has been upheld in two California appellate court decisions. On the basis of these decisions, the Agency has not adopted an appropriations limit. Appeals of Assessed Values Pursuant to California law, a property owner may apply for a reduction of the property tax assessment for such owner's property by filing a written application, in a form prescribed by the State Board of Equalization, with the appropriate county board of equalization or assessment appeals board. In the County of Ventura (the "County"), a property owner desiring to reduce the assessed value of such owner's property in any one year must submit an application to the County Assessment Appeals Board (the "Appeals Board "). Applications for any tax year must be submitted by September 15 of such tax year. Following a review of each application by the staff of the County Assessor's Office, the staff makes a recommendation to the Appeals Board on each application which has not been rejected for incompleteness or untimeliness or withdrawn. The Appeals Board holds a hearing and either reduces the assessment or confirms the assessment. The Appeals Board generally is required to determine the outcome of appeals within two years of each appeal's filing date. Any reduction in the assessment ultimately granted applies only to the year for which application is made and during which the written application is filed. The assessed value increases to its pre - reduction level for fiscal years following the year for which the reduction application is filed. However, if the taxpayer establishes through proof of comparable values that the property continues to be overvalued (known as "ongoing hardship "), the Assessor has the power to grant a reduction not only for the year for which application was originally made, but also for the then current year as well. Appeals for reduction in the "base year" value of an assessment, which generally must be made within three years of the date of change in ownership or completion of new construction that determined the base year, if 31 successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter. Moreover, in the case of any reduction in any one year of assessed value granted for "ongoing hardship" in the then current year, and also in any cases involving stipulated appeals for prior years relating to base year and personal property assessments, the Agency's tax increment attributable to such properties will be reduced in the then current year. In practice, such a reduced assessment may remain in effect beyond the year in which it is granted. See "THE PROJECT AREA— Largest Local Secured Taxpayers" for information regarding the assessed valuations of the top twenty property owners within the Project Area. Personal Property Tax Special Subventions Government Code Section 16112.7 generally provides that on or after July 31, 1990, no redevelopment agency shall pledge special subvention payments as security for payment of the principal and interest on bonds. MOORPARK REDEVELOPMENT PROJECT The Project Area consists of one large contiguous area consisting of approximately 1,217 acres. The Project Area is subdivided into Areas "A ", "B" and "C" and is comprised of a mixture of residential, commercial, industrial and institutional land uses along with parcels that are undeveloped and/or underutilized, parking areas, and public rights -of -way. The central portion of Area "A" contains the City Hall, Community Center, Public Library and the former Moorpark Union High School site, and the City's Central Business District (CBD) that exists along High Street. The eastern portion of Area "A" is dominated by industrial land uses, undeveloped parcels and single family housing along Los Angeles Avenue (State Highway 118). The Project Area's only park/recreation area is located in Area "A" and is included as a part of the City Hall/Community Center complex. Area "B" consists of a large residential area at its mid- section, which includes single family and multifamily units, as well as the City's largest retail shopping center and two public schools. The residential area is immediately flanked by new business/industrial development to the east and west. The western section of Area "B," the area west of Gabbert Road, is currently being used for agricultural uses and a Southern California Edison Sub - station. Area "C" is, to a large degree, composed of undeveloped parcels and a substantial number of multifamily dwelling units in the area east of Moorpark Avenue and south of Los Angeles Avenue. The area is also marked with various industrial, commercial and residential uses along Los Angeles Avenue. Since the adoption of the Redevelopment Plan for the Moorpark Redevelopment Project, substantial economic development within the Project Area has occurred. Some of the major projects include: a 91,549 square foot Kavlico manufacturing facility with a valuation of $3,201,923; a 140,770 square foot K -Mart discount store with a valuation of $5,771,302; and a 3,200 square foot McDonalds franchise restaurant. The Agency has also pledged an active role in commercial and housing development in the community. The Agency recently assisted in the expansion of the Mission Bell Plaza shopping center. Through Agency financial support, 118,350 square feet of gross floor area was added to the center. Ninety-six percent (96 %) of the new shopping area generates sales tax for the City. Major tenants include Albertson (50,320 square feet) and Regal Cinema 8 (35,000 square feet). The current assessed value of the additional shopping center area is $21,585,877. 32 The Agency has been active in promoting the development of affordable housing in Moorpark. Through Agency financial assistance, beginning in 1999, fifty -nine single family homes will begin development -- eighteen percent of those homes will be offered to low income families; six percent to very low income families. The Agency has also been active in promoting the elimination of blight in residential neighborhoods through its Housing Rehabilitation Program. Last year the Agency coordinated the completion of three housing rehabilitation projects within the City. These projects totaled $41,933 in loans to low /moderate income homeowners. Limitations and Requirements of the Redevelopment Plan Pursuant to the Redevelopment Plan the total tax increment revenues received by the Agency over the life of the Redevelopment Project cannot exceed a combined total of $180,000,000 and the total amount of outstanding bonded indebtedness incurred by the Agency payable from tax increment revenues which can be outstanding at any one time cannot exceed $60,000,000. In compliance with the Law, not less than 20% of the tax increment revenues received from the Project Area shall be used for the purpose of increasing and improving the supply of housing for families of low and moderate income. The Redevelopment Plan provides that no loan, advance or indebtedness to finance, in whole or in part the Project Area shall be established or incurred after twenty-five (25) years from the date of adoption of the ordinance approving the Redevelopment Plan (July 5, 1989), except that such loan, advance or indebtedness may be repaid over a period of time longer than such time limit or the duration of the Redevelopment Plan. Except for the nondiscrimination and nonsegregation provisions (which run in perpetuity) and the obligation to repay Agency indebtedness, the provisions of the Redevelopment Plan and of other documents formulated pursuant to the Redevelopment Plan may be made effective for forty-five (45) years from the date of adoption of the Redevelopment Plan by the City Council (i.e., until July 5, 2034). Agreements with Various Taxing Agencies The Agency has entered into five (5) agreements for allocation and distribution of tax increment revenues. The Agency has entered into an agreement with the County of Ventura, Ventura County Library District, Ventura County Fire Protection District, and Ventura County Flood Control District (collectively, the "County Taxing Entities ") which provides for the Agency to retain 100% of the County Taxing Entities share (55.82 %) of annual tax increment revenues up to $1,750,000. For annual tax increment revenue in excess of $1,750,000, the Agency shall distribute 55.82% of such revenues to the County on behalf of the County Taxing Entities. The County Taxing Entities have agreed to defer payments in the initial years of the Redevelopment Plan, and consequently, the parties agree that the County Taxing Entities may receive payments in any single fiscal year in excess of the amount of tax revenues the County Taxing Entities would otherwise be entitled to, but for the adoption of the Redevelopment Plan. Additionally, the agreement calls for the Agency to receive a $1,000,000 payment from the tax increment disbursed to the County pursuant to the agreement, by December 31, 2008, if and only if the Agency's annual debt statements which are filed with the County Auditor - Controller from fiscal year 1993 -94 to fiscal year 2008 -09 list debts in an amount equal to or in excess of the maximum tax increment available to the Agency in each of such fiscal years. 33 The second agreement is with the Moorpark Mosquito Abatement District (the "Mosquito Abatement District "), and states that the Mosquito Abatement District shall receive 87.5% of its share (1.53 %) of annual tax increment revenue. The Mosquito Abatement District has agreed to contribute its pro rata share of the Agency's required annual payment to the Agency's Low and Moderate Income Housing Account. The third agreement is with the Moorpark Unified School District (the "School District "), and states that the School District shall receive, after the Agency has satisfied debt service payments to bond or note holders or to the holder of any other instruments of Agency indebtedness (provided such indebtedness is not reasonably foreseeable to impair the Agency's obligation under the agreement), the School District's share (33.31 %) of tax increment revenues generated by an annual 2% increase in assessed valuation, and, beginning in fiscal year 1995 -96, 14% of the School District's share of annual tax increment revenue. Additionally, the agreement calls for the Agency to make a $750,000 payment to the School District as a contribution to a new School District maintenance facility. The fourth agreement is with the Ventura County Community College District (the "Community College District "), and states that the Community College District will receive, after the Agency has satisfied debt service payments to bond or note holders or to the holders of any other instruments of Agency indebtedness (provided such indebtedness is not reasonably foreseeable to impair the Agency's obligation under the agreement), the Community College District's share (5.80 %) of tax increment revenues generated by an annual 2% increase in assessed valuation, and, beginning in fiscal year 1993 -94, 14% of the Community College District's share of annual tax increment revenue. The fifth agreement is with the Ventura County Superintendent of Schools Office (the "Superintendent "), and states that the Superintendent shall receive its share (10.28 %) of tax increment revenues generated by an annual 2% increase in assessed valuation. Largest Local Secured Taxpayers Set forth below are the ten largest local secured taxpayers in the Project Area based on the 1998 -99 secured property tax roll. These taxpayers represent approximately 32.94% of the total taxable valuation in the Project Area. Taxpayer 1. Security Capital Pacific Trust 2. Kavli, Fred 3. Litton Systems Inc. 4. Mission Bell Plaza Phase II LLC 5. Teledyne Industries Inc. 6. Ventura Pacific Capital 7. Birkenshaw, James 8. Rose Leonard Trust 9. Moorpark Plaza LLC 10 Pars Calif. Dev. Corp. Total Land Use Multifamily Residential Industrial Industrial Shopping Center Industrial Shopping Center Shopping Center Multifamily Residential Shopping Center Shopping Center 1998 -99 Assessed Valuation $29,899,000 21,612,721 15,653,600 15,065,102 14,025,000 13,770,809 12,037,306 9,571,679 6,030,200 5.483.000 143.148.417 (1) Based on total 1998 -99 Project Area assessed valuation of $434,514,943. Source: Urban Futures, Inc. 34 % of Total Valuation (1) 6.88% 4.97 3.60 3.47 3.23 3.17 2.77 2.20 1.39 1.26 32 TAX REVENUES Tax Revenues (as described in the section "SECURITY FOR THE BONDS" herein) are to be deposited in the Special Fund, administered by the Trustee and applied to the payment of the principal of and interest on the Bonds. Historical Tax Revenues The following is a schedule of the taxable valuation and resulting Tax Revenues in the Project Area for fiscal years 1995 -96 through 1998 -99. MOORPARK REDEVELOPMENT PROJECT TAXABLE VALUATION AND TAX REVENUES Source: Urban Futures, Inc. Tax Levies Set forth below is a breakdown of the typical tax rate in the Project Area. Proposition 13 Maximum 1% Tax County Flood Zone #3 Debt Service Metropolitan Water Total Levy Source: County of Ventura. 35 1997 -98 1998 -99 1.000000 1.000000 .007009 .005084 .008900 .008900 1.015909 1.013984 1995 -96 1996 -97 1997 -98 1998 -99 Assessed Valuation $352,139,613 $408,915,260 $415,327,260 $434,514,943 Less: Base Year Valuation 1264,798,9871 (264.798.987) (264,798,987) (264.798.9871 Incremental Valuation $ 87,340,626 $144,116,273 $150,528,273 $169,715,956 Typical Tax Rate ( #10067) 1.017144 1.016327 1.015909 1.013984 Tax Increment Revenues $ 888,380 $ 1,464,693 $ 1,529,230 $ 1,720,893 Less: Pass - Through Revenues (79.9431 _(132.015) (140.986) _(158,9451 Tax Revenues $ 808,437 $ 1.332.678 $ 1. 388,244 1.561,948 Source: Urban Futures, Inc. Tax Levies Set forth below is a breakdown of the typical tax rate in the Project Area. Proposition 13 Maximum 1% Tax County Flood Zone #3 Debt Service Metropolitan Water Total Levy Source: County of Ventura. 35 1997 -98 1998 -99 1.000000 1.000000 .007009 .005084 .008900 .008900 1.015909 1.013984 Projected Taxable Valuation and Tax Revenues The following table sets forth the projections of taxable valuation and Tax Revenues from developments in the Project Area. The Agency believes the assumptions (set forth in the footnotes below) upon which the projections are based are reasonable; however, some assumptions may not materialize and unanticipated events and circumstances may occur (see "RISK FACTORS "). Therefore, the actual Tax Revenues received during the forecast period may vary from the projections and the variations may be material. A summary of the projected taxable valuation and Tax Revenues is as follows: Fiscal Taxable Incremental Year Valuation (1) Valuation ( ) 1999 -00 $447,550,391 $182,751,404 2000 -01 460,976,903 196,177,916 2001 -02 474,806,210 210,007,223 2002 -03 489,050,396 224,251,409 2003 -04 503,721,908 238,922,921 2004 -05 518,833,566 254,034,579 2005 -06 534,398,573 269,599,586 Incremental Pass - Through Tax Revenues (3) Payments Revenues $1,827,514 $212,752 $1,614,762 1,961,779 300,151 1,661,629 2,100,072 390,171 1,709,901 2,242,514 482,892 1,759,622 2,389,229 578,395 1,810,834 2,540,346 676,763 1,863,583 2,695,996 778,082 1,917,914 (1) Taxable valuation increased each year by a 2% inflationary and a 1% growth factor in the Project Area. (2) Incremental valuation consists of the assessed valuation less the base year valuation of $264,798,987. (3) Incremental revenues based on the incremental valuation times a tax rate of 1.00 %. Source: Urban Futures, Inc. 36 Annual Debt Service Set forth below is the annual debt service (assuming minimum Sinking Account Payments and projected interest rates) for the term of the Bonds. MOORPARK REDEVELOPMENT PROJECT ANNUAL DEBT SERVICE (1) Based on an estimated net interest cost of 4.941 %. 37 Total October 1 Principal Interest Debt Service (1) 1999 $ 290,000.00 $ 220,692.50 $ 510,692.50 2000 340,000.00 432,395.00 772,395.00 2001 355,000.00 421,175.00 776,175.00 2002 365,000.00 408,750.00 773,750.00 2003 380,000.00 395,610.00 775,610.00 2004 395,000.00 381,550.00 776,550.00 2005 405,000.00 366,540.00 771,540.00 2006 420,000.00 350,745.00 770,745.00 2007 435,000.00 333,945.00 768,945.00 2008 455,000.00 316,110.00 771,110.00 2009 475,000.00 297,000.00 772,000.00 2010 500,000.00 273,487.50 773,487.50 2011 525,000.00 248,737.50 773,737.50 2012 550,000.00 222,750.00 772,750.00 2013 580,000.00 195,525.00 775,525.00 2014 610,000.00 166,815.00 776,815.00 2015 640,000.00 136,620.00 776,620.00 2016 670,000.00 104,940.00 774,940.00 2017 710,000.00 71,775.00 781,775.00 2018 740.000.00 36.630.00 776.630.00 Total $9.840.000.00 $5.381.792.50 $15.221.792.50 (1) Based on an estimated net interest cost of 4.941 %. 37 Debt Service Coverage The debt service coverage on the Bonds is estimated to be as follows: Fiscal Year 1998 -99 1999 -00 2000 -01 2001 -02 2002 -03 2003 -04 2004 -05 2005 -06 Tax Revenues $1,561,948 1,614,762 1,661,629 1,709,901 1,579,622 1,810,834 1,863,583 1,917,914 Reserve Account Earnings (1) $39,089 39,089 39,089 39,089 39,089 39,089 39,089 39,089 Total Revenues $1,601,037 1,653,851 1,700,718 1,748,990 1,798,711 1,849,923 1,902,672 1,957,003 Maximum Annual Debt Service (2) $781,775 781,775 781,775 781,775 781,775 781,775 781,775 781,775 Debt Service Coverage 2.05x 2.12x 2.18x 2.24x 2.30x 2.37x 2.43x 2.50x (1) Assumes moneys on deposit in the Reserve Account invested at an annual rate of five percent (5.00 %). (2) Payable in the year 2017. See "Annual Debt Service" herein. BOND INSURANCE (Information to Come) CONCLUDING INFORMATION Underwriting The Bonds have been sold at a net interest rate of %. The original purchase price to be paid for the Bonds is $ . The Underwriter intends to offer the Bonds to the public initially at the prices set forth on the cover page of this Official Statement, plus accrued interest from May 1, 1999 which prices may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering prices, and such dealers may reallow any such discounts on sales to other dealers. In reoffering Bonds to the public, the Underwriter may overallocate or effect transactions which stabilize or maintain the market prices for Bonds at levels above those which might otherwise prevail. Such stabilization, if commenced, may be discontinued at any time. Legal Opinion All of the legal proceedings in connection with the authorization and issuance of the Bonds are subject to the approval of Quint & Thimmig LLP, San Francisco, California, Bond Counsel. Bond Counsel will receive compensation contingent in part upon the sale and delivery 9T of the Bonds. Copies of the opinion of Bond Counsel as to the validity of the Bonds and stating that interest on the Bonds is excluded from gross income for purposes of federal income taxation and exempt from State of California personal income taxes under existing statutes, regulations, rulings and court decisions, will be provided to the original purchaser without charge. Bond Counsel's review of this Official Statement has been limited to the statements of law and legal conclusions set forth herein under the captions "THE BONDS," "SECURITY FOR THE BONDS" and "THE INDENTURE." Bond Counsel's employment is limited to a review of the legal proceedings required for the authorization of the Bonds and to rendering opinions as to the validity of the Bonds and the exemption of interest on the Bonds from personal income taxation. The opinion of Bond Counsel will not consider or extend to any documents, agreements, representations, offering circulars or other material of any kind covering the Bonds, including portions of this Official Statement, not mentioned in this paragraph. A copy of such opinion, certified by an officer of the Agency by facsimile signature, will be printed on the back of each definitive bond. No charge will be made to the original purchaser for such printing or certification. Tax Matters In the opinion of Quint & Thimmig LLP, 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 Agency 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 Agency 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. 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. In addition, certain legal matters will be passed on by Bacigalupi, Neufeld & Ehat, Fresno, California, as Disclosure Counsel. The payment of compensation to Disclosure Counsel is contingent upon the issuance and sale of the Bonds. Continuing Disclosure The Agency has covenanted for the benefit of holders and beneficial owners of the Bonds to provide certain financial information and operating data relating to the Agency by not later than nine months following the end of the Agency's fiscal year (which currently would be March 31), commencing with the report for the 1998 -99 Fiscal Year (the "Annual Report"), and 39 to provide notices of the occurrence of certain enumerated events, if material. The Annual Report will be filed by the Agency with each Nationally Recognized Municipal Securities Information Repository, and with the appropriate State information depository, if any. The notices of material events will be filed by the Agency with the Municipal Securities Rulemaking Board (and with the appropriate State information depository, if any). The specific nature of the information to be contained in the Annual Report or the notices of material events is set forth below under the caption APPENDIX D —Form of Continuing Disclosure Certificate. These covenants have been made in order to assist the Underwriters in complying with S.E.C. Rule 15c2- 12(b)(5). The Agency has never failed to comply in all material respects with any previous undertakings with regard to said Rule to provide annual reports or notices of material events. Absence Of Litigation At the time the Bonds are delivered, Burke, Williams & Sorenson, Los Angeles, California, counsel to the Agency, will provide an opinion to the effect that, to the best knowledge of such counsel, there is no litigation pending or overtly threatened against the Agency in any court or other tribunal of competent jurisdiction, State or federal, which seeks to enjoin or challenges the authority of the Agency to participate in the transactions contemplated by this Official Statement, the Bonds or the Indenture. Verification Of Mathematical Accuracy Upon delivery of the Bonds, the arithmetical accuracy of certain computations included in the schedules provided by the Underwriter on behalf of the Agency relating to the (a) adequacy of forecasted receipts of principal and interest on the Federal Securities and cash to be held pursuant to the Escrow Agreement, (b) forecasted payments of principal and interest with respect to the 1993 Bonds on and prior to their projected maturity and/or redemption dates, and (c) yields with respect to the Bonds and on the Federal Securities to be deposited pursuant to the Escrow Agreement upon the delivery of the Bonds, will be verified by McGladrey & Pullen LLP, Minneapolis, Minnesota, independent certified public accountants. Such verification shall be based solely upon information and assumptions supplied to McGladrey & Pullen by the Underwriter. McGladrey & Pullen has restricted its procedures to examining the arithmetical accuracy of certain computations and has not made a study or evaluation of the information and assumptions on which such computations are based and, accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions or the achievability of the forecasted outcome. Legality for Investment in California The Law provides that obligations authorized and issued under the Law shall be legal investments for all banks, trust companies and savings banks, insurance companies, and various other financial institutions, as well as for trust funds. The Bonds are also authorized security for public deposits under the Law. The Superintendent of Banks of the State has previously ruled that obligations of a redevelopment agency are eligible for savings bank investment in the State. 40 Miscellaneous All of the preceding summaries of the Indenture, the Law, the Redevelopment Plan, agreements and other documents are made subject to the provisions of such documents, respectively, and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Agency for further information in connection therewith. The Official Statement does not constitute a contract with the purchasers of the Bonds. Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so 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 by its Executive Director has been duly authorized by the Agency. REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK By: /s/ Executive Director 41 SUPPLEMENTAL INFORMATION THE CITY OF MOORPARK The following information concerning the City of Moorpark, California (the "City') and surrounding areas is included for the purpose of supplying general information regarding the community. The Bonds are not a debt of the City, the State of California (the State') or any of its political subdivisions, and neither the City, the State nor any of its political subdivisions is liable therefor. General Description The City is a general law city incorporated on July 1, 1983. Located in the southeastern part of Ventura County (the "County "), the City consists of approximately 12.44 square miles and is located 50 miles northeast of downtown Los Angeles. Government The City adopted a Council- Manager form of government consisting of five Council Members elected to four -year overlapping terms. The Mayor is determined through an annual election. Population The City's population, as of January 1, 1998 was approximately 29,300. A historical summary of the City's population (as of January 1 of each year except where noted) is shown below. City of Moorpark 1990 .................... 25,252 1991 .................... 35,050 1992 .................... 26,173 1993 .................... 26,450 1994 .................... 26,950 1995 .............. 27,100 1996 .............. 27,650 1997 .............. 28,550 1998 .............. 29,300 (1) Population at incorporation. Source: City of Moorpark - Public Relations Department and the Demographic Research Unit, California State Department of Finance. Assessed Valuation and Property Taxes Property in the City is assessed by the County Assessor. All ad valorem taxes levied on property in the City by the County, schools and special districts are due at the same time as and are based on the same rolls as county taxes. The valuation of secured property is established as of March 1 of each year and is equalized for purposes of establishing tax rates in August. Ad valorem taxes on secured and utility property are payable on November 1 and March 1 of each fiscal year and become delinquent on December 10 and April 10, respectively. Taxes on unsecured property (personal property and leasehold) are due on April 13 of each year based on the preceding year's tax rate. 42 A summary of the City's assessed valuation is as follows: Year 1988 -89 1989 -90 1990 -91 1991 -92 1992 -93 1993 -94 1994 -95 1995 -96 1996 -97 1997 -98 1998 -99 Before Redevelopment Increment $1,148,114,425 1,355,937,275 1,554,307,389 1,651,201,206 1,727,086,526 Source: California Municipal Statistics, Inc. Secured Tax Charge and Delinquencies After Redevelopment Increment $1,148,114,425 1,355,937,275 1,500,696,198 1,546,007,069 1,601,028,104 The City's secured tax charges and delinquencies for fiscal years 1986 -87 through 1997- 98 are as follows: Fiscal Year 1987 -88 1988 -89 1989 -90 1990 -91 1991 -92 1992 -93 1993 -94 1994 -95 1995 -96 1996 -97 1997 -98 Secured Tax Charge (1) $ 9,022,825.32 11,944,361.78 14,314,423.14 16,331,371.38 17,045,384.04 Amount Delinquent June 30 $173,030.61 217,794.06 468,577.36 739,882.20 863,582.02 (1) All taxes collected by the County within the City. Source: California Municipal Statistics, Inc. 43 Percent Delinquent June 30 1.92% 1.82 3.27 4.53 5.07 Commerce The number of establishments selling merchandise subject to sales tax and the valuation of taxable transactions is presented in the following table. Taxable Retail Sales Number of Permits and Valuation of Taxable Transactions Source: State Board of Equalization. 44 Total All Outlets No. of Retail Stores Permits No. of Taxable Year Permits Transactions 1993 132 $46,470,000 1994 133 63,365,000 1995 133 64,086,000 1996 138 68,613,000 1997 139 77,312,000 Source: State Board of Equalization. 44 Total All Outlets No. of Taxable Permits Transactions 640 $ 76,373,000 692 97,431,000 665 103,082,000 689 119,727,000 687 125,312,000 Employment and Industry The City is located in Ventura County and is part of the Ventura labor market area. The distribution of employment in the Ventura labor market is as follows: Employment by Industry Ventura Labor Market Area (1) 1996 1997 1998 Manufacturing 30,700 32,800 34,500 Wholesale & retail trade 59,100 59,200 60,000 Services 71,000 72,400 76,500 Government 43,400 43,300 43,000 Finance, insurance & real estate 11,700 12,600 13,500 Transportation & public utilities 9,700 9,700 10,300 Construction 10,500 11,100 12,300 Mining 1,700 1,500 1,300 Agriculture 17.500 17.300 16.700 Total All Industries 255.300 260.000 268.100 Total Civilian Labor Force (2) 377,800 381,500 387,400 Total Unemployment 26,900 25,000 21,600 Unemployment Rate (3) 7.1% 6.6% 5.6% (1) Average employment reported for the years indicated by place of work excluding self - employed, unpaid families and workers involved in labor disputes. Columns may not add due to rounding. (2) Annual average total labor force (and components) by location of residence; includes workers involved in trade disputes. (3) The unemployment rate is computed from unrounded data; therefore, it may differ from rates using rounded figures. Source: State Development Department, Employment and Data Research. 45 Major Employers The following is a list of the major manufacturing and non - manufacturing employers in the community area. Employer Kavlico Litton Aero Products Egg City Tandon Moorpark College Moorpark Unified School Dist. KDI American Products Foster Enterprises Parker -Metal Bellows Teledyne/Laars Terminal Data Corp. Blue Star Ready Mix Micom Variflex Boething Tree Farms Hughes Market Air Dry Corporation General Optics Coloroll Airlesco/Durotek QMA/Bend Pak Semiconductor Equipment Corp. G. T. Water Products Iron Fabricators Prudential Overall Supply Ca1Mat Company City of Moorpark M.G.I. Conejo Ready Mix Product/Service Employment Aerospace /Auto. Electronics 600 Navigation Systems Research 600 Egg Ranch 460 Computer Design & Mfg. 420 Education 400 Education 388 Swimming Pool Equipment 250 Egg Ranch 200 Aerospace Metal Fabrication 200 Swimming Pool Equipment 200 Information Management Systems 175 Concrete, Sand & Gravel 150 Data Communications Equipment 150 Skateboard Mfg. 100 Wholesale Nursery 99 Major Supermarket 75 Dehydrator Mfg. 70 Industrial Optics 60 Wallpaper Distribution 58 Mfg. /Airless Sprayer 50 Hydraulic Equipment 40 Electronic Equipment Mfg. 34 Drainage Devices Mfg. 32 Welding/Metal Fabrication 30 Industrial Laundry 28 Ready Mixed Concrete 25 City Government 25 Machine Shop 25 Ready Mixed Concrete 24 Source: Employment Data and Research Employment Development Department, State of California. M Construction Activity The following table is a five year summary of the valuation of building permits issued in the City. No. of New Dwelling Units Single - dwelling Multi- dwelling Total Units 1998 $2,358 650 0 $3,008 162 City of Moorpark 110 66 Building Permit Valuation 43 (Valuation in Thousands of Dollars) 68 6 1994 1995 1996 1997 Residential 134 17 New single - dwelling $35,226 $27,161 $21,477 $14,098 New multi - dwelling 11,767 4,621 6,496 7,272 Additions, alterations 236 422 0 0 Total Residential 14Z,2--2-9- 122.,204 $27,973 $21,370 No. of New Dwelling Units Single - dwelling Multi- dwelling Total Units 1998 $2,358 650 0 $3,008 162 130 110 66 11 43 6$ 68 6 256 173 178 134 17 Source: "California Building Permit Activity," Economic Sciences Corporation. 47 Direct and Overlapping Bonded Debt The following table shows the direct and overlapping bonded debt for the City. 1998 -99 Assessed Valuation: $ (after deducting tax allocation increment) redevelopment Last Percent Year of DIRECT AND OVERLAPPING BONDED DEBT: Applicable Debt 4/1/99 Maturity Ventura County Authorities Ventura County Superintendent of Schools Certificates of Participation Ventura County Flood Control District, Zone #3 Metropolitan Water District Calleguas Municipal Water District Ventura County Community College District Certificates of Participation Conejo Valley Unified School District (Various Issues) Conejo Valley Unified School District Certificates of Participation Moorpark Unified School District Certificates of Participation City of Moorpark Camrosa Water District Certificates of Participation Moorpark County Sanitation District Ventura County Waterworks District #1 (Various Issues) Ventura County Library District Authority TOTAL GROSS DIRECT AND OVERLAPPING BONDED DEBT Less: Camrosa Water District Certificates of Participation Moorpark County Sanitation District Ventura County Waterworks District #1 TOTAL NET DIRECT AND OVERLAPPING BONDED DEBT Ratios to Assessed Valuation: Direct Debt ---- Total Gross Debt 0.72% Total Net Debt 0.58% State School Building Aid Repayable as of 6/30/98: $0 (1) Excludes issue to be sold. (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non - bonded capital lease obligations. Source: California Municipal Statistics, Inc. Utilities Gas is provided._by Southern California Gas Company. Southern California Edison Company provides electric power. Telephone service is provided by General Telephone. 48 Community Facilities Three banks, medical groups, chiropractors, dentists, orthodontists, physical therapists, podiatrists, doctors, and three hospitals are within 4 to 7 miles of the City and three pharmacies are located in and around the City of Moorpark. Education within the City include five elementary schools, one middle school, one high school, one continuation high school and one community college. The University of California, Los Angeles and the University of Southern California are within 50 miles of the City. Cultural and recreational activities in Moorpark include 20 churches and one library. The City is also served by a weekly and a daily newspaper, two cable television systems, seven neighborhood parks, one community center, four 5 -7 mile golf courses and one dramatic theater. 49 (This Page Left Intentionally Blank) APPENDIX A DEFINITIONS (This Page Left Intentionally Blank) APPENDIX A DEFINITIONS The following are definitions of certain terms contained in the Indenture and used in this Official Statement. "Additional Allowance" means, as of the date of calculation, the sum of the following: (a) the amount of Tax Revenues which, as shown in the Report of an Independent Redevelopment Consultant, are estimated to be receivable by the Agency in the next succeeding Fiscal Year as a result of increases in the assessed valuation of taxable property in the Project Area due to either (i) construction which has been completed but has not yet been reflected on the tax roll, or (ii) transfer of ownership or any other interest in real property, which is not then reflected on the tax rolls; and (b) the amount of Tax Revenues which, as shown in the Report of an Independent Redevelopment Consultant, are estimated to be receivable by the Agency in the next succeeding Fiscal Year as a result of increases in the assessed valuation of taxable property in the Project Area due to inflation at an assumed annual inflation rate equal to the lesser of (i) the annual rate of inflation for the preceding twelve -month period for which figures are available or (ii) two percent (2 %), but only if the rate of inflation had increased by at least two percent (2 %) in each of the preceding five Fiscal Years. 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 in the next succeeding Fiscal Year is estimated to exceed the assessed valuation of taxable property in the Project Area (as reported by the County Auditor - Controller) in the Fiscal Year in which such calculation is made. "Agency" means the Redevelopment Agency of the City of Moorpark, 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, assuming that the Outstanding Serial Bonds are retired as scheduled and that the Outstanding Term Bonds are redeemed from mandatory Sinking Account payments as scheduled, (b) the principal amount of the Outstanding Serial Bonds payable by their terms in such Bond Year, and (c) the principal amount of the Outstanding Term Bonds scheduled to be paid or redeemed from mandatory Sinking Account payments in such Bond Year. "Responsible Officer" or "Responsible Officers" means the Chairman, Executive Director or any officer of the Agency designated from time to time as a Responsible Officer of the Agency, and when used with reference to any act or document also means any other person authorized by the Agency to perform the act or sign the document in question. "Bond" or 'Bonds" means, collectively, the 1999 Bonds, and, when the context requires, any Parity Debt. "Bond Insurer" means "Bond Law" means the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with section 53570 of said Code, as in effect on the Closing Date or as thereafter amended W11 "Bond Year" means any twelve -month period beginning on October 2 in any year and ending on the next succeeding October 1, both dates inclusive, except that the first Bond Year shall begin on the Closing Date, and end on October 1, 1999. "Business Day" means a day of the year on which banks in Los Angeles and San Francisco, California, are not required or permitted to be closed and on which the New York Stock Exchange is not closed. "Chairman" means the Chairman of the Agency appointed pursuant to section 33113 of the Law, or other duly appointed officer of the Agency authorized by the Agency by resolution or by -law to perform the functions of the Chairman in the event of the Chairman's absence or disqualification. "CCi " means the City of Moorpark, a general law city and municipal corporation organized and existing under and pursuant to the laws of the State. "Closing Date" means the date on which the Bonds are delivered by the Agency to the original purchaser thereof. "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the 1999 Bonds, together with applicable temporary and final regulations promulgated, and applicable official public guidance published, under the Code. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Agency dated as of the Closing Date, as originally executed and as it may be amended from 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 Bonds, including but not limited to printing expenses, operating expenses, rating agency fees, filing and recording fees, initial fees and charges and first annual administrative fee of the Trustee and fees and expenses of its counsel, fees, charges and disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals, fees and charges for preparation, execution and safekeeping of the Bonds and any other cost, charge or fee in connection with the original issuance of the Bonds. "Coon " means Ventura County, a county duly organized and existing under the laws of the State. "Defeasance Obligations" means any of the following, or any combination thereof. (a) cash, (b) non - callable direct obligations of the United States of America ( "Treasuries "), (c) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (d) pre- refunded municipal obligations rated "AAA" and "Aaa" by S &P and Moody's, respectively (or any combination thereof), or (e) Federal Securities. "Dg2ository" means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to the Indenture. A -2 "DT " means the Depository Trust Company, New York, New York, and its successors and assigns. "Escrow Agreement" means that certain Escrow Deposit and Trust Agreement, dated the Closing Date, by and between the Agency and the Escrow Bank, as originally entered into or as it may be amended or supplemented pursuant to the provisions thereof, created to provide for the payment of the 1993 Bonds. "Escrow Bank" means BNY Western Trust Company, as escrow bank under the 1993 Bonds Indenture and under the Escrow Agreement, or any successor thereto appointed as escrow bank thereunder in accordance with the provisions thereof. "Executive Director" means the executive director of the Agency, or any other duly appointed officer of the Agency authorized by the Agency by resolution or bylaw to perform the functions of the Executive Director. "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). "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 to the Trustee in writing as its official fiscal year period. "Indenture" means the Indenture of Trust by and between the Agency and the Trustee, as originally entered into or as it may be amended or supplemented by any Supplemental Indenture. "Independent Accountant" means any accountant or firm of such accountants duly licensed or registered or entitled to practice and practicing as such under the laws of the State, appointed by the Agency, and who, or each of whom: (a) is in fact independent and not under domination of the Agency; (b) does not have any substantial interest, direct or indirect, with the Agency; and (c) is not connected with the Agency as an officer or employee of the Agency, but who may be regularly retained to make reports to the Agency. "Independent Financial Consultant" means any financial consultant or firm of such consultants appointed by 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, other than as original purchaser of the Bonds or any Parity Debt; 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 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; and (d) A -3 is not connected with the Agency as an officer or employee of the Agency, but who may be regularly retained to make reports to the Agency. "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service ", 30 Montgomery Street, 10th Floor, Jersey City, NJ 07302, Attention: Editor; Kenny Information Services' "Called Bond Service," 65 Broadway, 16th Floor, New York, NY 10004; Moody's "Municipal and Government," 5250 77 Center Drive, Suite 150, Charlotte, NC 28217, Attention: Municipal News Reports; S &P's "Called Bond Record," 65 Broadway, 16th Floor, New York, NY 10004; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other information services providing information with respect to called bonds as the Agency may designate in a Written Certificate of the Agency delivered to the Trustee. "Interest Payment Date" means April 1 and October 1 in each year, commencing October 1, 1999, or, if such day is not a Business Day, on the next succeeding Business Day, so long as any of the Bonds remain Outstanding. "Law" means the Community Law of the State, constituting Part 1 of Division 24 of the California Health and Safety Code, and the acts amendatory thereof and supplemental thereto. "Maximum Annual Debt Service" means, as of the date of calculation, the largest Annual Debt Service for the current or any future Bond Year following the anticipated issuance of Bonds, plus at the option of the Agency the Additional Allowance, as certified in writing by the Agency to the Trustee. For purposes of such calculation, 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) at least equal one hundred twenty -five percent (125 %) of the amount of Maximum Annual Debt Service. " Moody's" means Moody's Investors Service, its successors and assigns. "Municipal Boni Insurance Policy." means the municipal bond insurance policy issued by the Bond Insurer insuring the payment when due of the principal of and interest on the Bonds as provided therein. "1993 Bonds" means the Agency's Moorpark Redevelopment Project 1993 Tax Allocation Bonds issued pursuant to an indenture of trust, dated as of June 1, 1993, in the aggregate principal amount of $10,000,000, of which $8,910,000 remains outstanding as of the Closing Date. "1999 Bonds" the $9,840,000 Redevelopment Agency of the City of Moorpark (Moorpark Redevelopment Project) 1999 Tax Allocation Refunding Bonds. "Original Purchaser" means the original purchaser of the Bonds upon their delivery by the Trustee on the Closing Date. "Outstanding" when used as of any particular time with reference to Bonds, means (subject to the provisions of the Indenture) 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 the Indenture; 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 thereto. A -4 " caner" or "Bondowner" means, with respect to any Bond, the person in whose name the ownership of such Bond shall be registered on the Registration Books. "Parijy Debt" means any loans, advances or indebtedness issued or incurred by the Agency on a parity with the Bonds pursuant to the Indenture. "Participating Underwriter" has the meaning ascribed thereto in the Continuing Disclosure Certificate. "Pass- Through Aueements" means those certain pass - through agreements by and between the Agency and (a) Moorpark Mosquito Abatement District, dated June 5,1992, (b) Moorpark Unified School District, dated January 26, 1993, (c) County of Ventura, Ventura County Library District, Ventura County Fire Protection District and Ventura County Flood Control District, dated January 27, 1993, (d) Ventura County Community College District, dated February 11, 1993, and (e) Ventura County Superintendent of Schools Office, dated January 23, 1991, such agreements having been entered into by the Agency pursuant to section 33401 of the Law, together with any amendments thereof hereafter duly authorized pursuant to the Law. "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 and are consistent with the Agency's investment policies, but only to the extent that the same are acquired at Fair Market Value: (a) Obligations of, or guaranteed as to the payment of principal and interest by, or by any agency or instrumentality thereof hereinafter designated when such obligations are backed by the full faith and credit of the United States of America; however obligations described in this clause (a) are limited to U.S. Treasury notes, bonds and bills. (b) Obligations (excluding stripped obligations) issued by the following instrumentalities or agencies: (i) Federal Home Loan Bank; (ii) Tennessee Valley Authority; (iii) Federal National Mortgage Association; (iv) Federal Farm Credit Bank; (v) Federal Home Loan Mortgage Corporation; and (vi) Student Loan Marketing Association. (c) Commercial paper, payable in the United States of America, having original maturities of not more than 92 days and which are rated in the highest rating category by S &P and Moody's. (d) Interest bearing demand or time deposits issued by commercial banks or savings and loan associations, the deposits of which are insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or any successors thereto. These deposits must be continuously and fully insured by the Bank Insurance Fund or the Savings Association Insurance Fund. (e) Money market funds or portfolios investing in short-term US Treasury securities rated AAAm or AAAm -G by S &P and Aaa by Moody's, including funds for which the Trustee or its affiliates or subsidiaries provide investment advisory or other management services. (f) Investment Agreement consisting of (1) investment agreements or contracts issued by entities the long -term securities of which are rated (i) in one of the two highest long -term rating categories (without regard to gradations of plus and minus within such categories) by Moody's and by S &P or (ii) in the highest short-term rating LWI category of either of such rating agencies (without regard to gradations of plus and minus within such categories) by S &P and Moody's at the time of investment or purchase, or (2) one or more agreements between the Trustee and an entity which is rated as of the date of such agreement in either of the two highest categories (without regard to gradations of plus and minus within such categories) by S &P and Moody's, or (3) one or more agreements which are collateralized with obligations of the type described in subparagraph (a) of the definition of Permitted Investments, the principal amount of which is at least equal to one hundred two percent (102 %) of the principal amount invested under such agreement marked to market no less of ten than quarterly. (g) The Local Agency Investment Fund of the State of California, created pursuant to Section 16429.1 of the California Government Code, to the extent the Trustee is authorized to register such investment in its name. "Plan Limitations" means the limitations contained or incorporated in the Redevelopment Plan on (a) the aggregate principal amount of indebtedness payable from Tax Revenues derived under the Redevelopment Plan 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, incurring or repaying indebtedness payable from Tax Revenues derived under the Redevelopment Plan. "Principal Corporate Trust Office" means such principal corporate trust office of the Trustee as may be designated from time to time by written notice from the Trustee to the Agency, initially being at 700 South Flower, Suite 500, Los Angeles, CA 90017. "Project Area" means the territory within the Redevelopment Project, as described in the Redevelopment Plan. "Qualified Reserve Account 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 the Indenture, provided that all of the following requirements are met: (a) the long -term credit rating or claims paying ability of such bank or insurance company is in one of the two highest rating categories by S &P and Moody's; (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 the Indenture; 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, the Principal Account or the Sinking Account for the purpose of making payments required pursuant to the Indenture. "Rating_ Catggorv" means any generic rating category of S &P, without regard to any refinement of such category by plus or minus sign or by numerical or other qualifying designation. "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. "Redevelopment Plan" means the Redevelopment Plan for the Moorpark Redevelopment Project, approved by Ordinance No. 110 enacted by the City Council of the City on July 5, 1989, together with any amendments thereof at any time duly authorized pursuant to the Law. A -6 "Redevelopment Project" means the Moorpark Redevelopment Project as described in the Redevelopment Plan. "Report" means a document in writing signed by an Independent Financial Consultant 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 the 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 said consultant to express an informed opinion with respect to the subject matter referred to in the Report. "Reserve Requirement" means, as of the date of any calculation, the lesser of (i) Maximum Annual Debt Service on all Outstanding Bonds, or (ii) the maximum amount permitted to be deposited in the Debt Service Reserve Account under the Code, as certified to the Trustee by the Agency. "Responsible Officer" means any Vice President, Assistant Vice President or Trust Officer of the Trustee with responsibility for matters related to the Indenture. ",S&P" means Standard & Poor's Ratings Services, a division of The McGraw -Hill Companies, Inc., New York, New York, or its successors. "Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue, Garden City, NY 11530, Fax (516) 227 -4171 or 4190; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, PA 19103, Attention: Bond Department, Fax (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 Written Certificate of the Agency delivered to the Trustee. "Serial Bonds" means all Bonds other than Term Bonds. "State" means the State of California. "Subordinate Debt" means any loans, advances or indebtedness issued or incurred by the Agency pursuant to the Indenture, which are either: (a) by its terms 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 expressly subordinate to the pledge of and lien upon the Tax Revenues for the security of the Bonds. "Supplemental Indenture" means any resolution, agreement or other instrument 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 under the Indenture. "Tax Revenues" means all taxes pledged and annually allocated within the Plan Limit, following the Closing Date, and paid to the Agency with respect to the Project Area pursuant to Article 6 of Chapter 6 (commencing with section 33670) of the Law and section 16 of Article XVI of the Constitution of the State, or pursuant to other applicable State laws, and as provided in the Redevelopment Plan, and all payments, subventions and reimbursements, if any, to the Agency specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limitations, 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 the Bonds, if any, and that portion of any Parity Debt (including applicable reserves and financing costs) issued to finance amounts deposited in the A -7 Low and Moderate Income Housing Fund for use pursuant to section 33334.2 of the Law to increase or improve the supply of low and moderate income housing within or of benefit to the Project Area; but excluding all other amounts of such taxes (if any) (i) beginning in Fiscal Year 1999 -99 which are required to be deposited into the Low and Moderate Income Housing Fund of the Agency as a repayment of amounts transferred therefrom pursuant to sections 33681 and 33681.5 of the Law for deposit in the Educational Revenue Augmentation Fund created pursuant to section 97.03 of the California Revenue and Taxation Code, (ii) required to be deposited into the Low and Moderate Income Housing Fund of the Agency pursuant to section 33334.3 of the Law for increasing and improving the supply of low and moderate income housing, (iii) 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 Code, and (iv) payable by the Agency under the Pass - Through Agreements except and to the extent that any amounts so payable are payable on a basis subordinate to the payment of the Bonds or to the payment of Parity Debt, as applicable. "Term Bonds" means the 1999 Bonds maturing on October 1, 2018, and that portion of any Parity Debt payable from mandatory Sinking Account payments. "Trustee" means BNY Western Trust Company, as trustee, or any successor thereto appointed as trustee in accordance with the provisions of the Indenture. "Written Request of the Agmncy" or "Written Certificate of the Agency" means a request or certificate, in writing signed by the Executive Director, Secretary or Treasurer of the Agency or by any other officer of the Agency duly authorized by the Agency for that purpose. A -8 (This Page Left Intentionally Blank) • w , l AGENCY FINANCIAL STATEMENTS YEAR ENDED JUNE 309 1998 (This Page Left Intentionally Blank) APPENDIX C SPECIMEN MUNICIPAL BOND INSURANCE POLICY (This Page Left Intentionally Blank) APPENDIX D FORM OF CONTINUING DBISCLOSURE CERTIFICATE (This Page Left Intentionally Blank) Quint & Thimmig LLP ESCROW DEPOSIT AND TRUST AGREEMENT by and between the REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK and BNY WESTERN TRUST COMPANY, as Escrow Bank Dated May 19,1999 Relating to Refunding of the Outstanding $10,000,000 Redevelopment Agency of the City of Moorpark Moorpark Redevelopment Project 1993 Tax Allocation Bonds �iOL i`1 03/26/99 03/31/99 13014.01 ESCROW DEPOSIT AND TRUST AGREEMENT This ESCROW DEPOSIT AND TRUST AGREEMENT is made and entered into this 19th day of May, 1999, by and between the REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK, a public body corporate and politic, organized and existing under the laws of the State of California (the "Agency "), and BNY WESTERN TRUST COMPANY, a corporation organized and existing under the laws of the State of California, with a corporate trust office in Los Angeles, California, and being qualified to accept and administer the trusts hereby created, as escrow bank hereunder (the "Escrow Bank "); WITNESSETH: WHEREAS, the Agency has heretofore issued its $10,000,000 Redevelopment Agency of the City of Moorpark Moorpark Redevelopment Project 1993 Tax Allocation Bonds (the "1993 Bonds "), the total principal amount of $8,910,000 of which is currently outstanding; WHEREAS, the 1993 Bonds were issued for the purpose, among others, of financing and refinancing redevelopment activities within or of benefit to the Agency's Moorpark Redevelopment Project; WHEREAS, the 1993 Bonds were issued pursuant to an indenture of trust, dated as of June 1, 1993 (the "1993 Indenture "), by and between the Agency and First Interstate of California, as trustee, subsequently succeeded by BNY Western Trust Company, as trustee (the "1993 Trustee "); WHEREAS, the 1993 Indenture provides that if the Agency shall pay and discharge the entire indebtedness on all or any portion of the 1993 Bonds by irrevocably depositing with the Trustee, in trust, direct obligations of the United States, or obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest, in such amount as an Independent Certified Public Accountant (as defined in the 1993 Indenture) shall determine will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established pursuant to the 1993 Indenture, be fully sufficient to pay and discharge the indebtedness on all or such portion of the 1993 Bonds (including all principal, interest and redemption premiums) at or before maturity, and if the 1993 Bonds are to be redeemed prior to the maturity thereof, and notice of such redemption is given pursuant to the 1993 Indenture 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 Bonds shall not have been surrendered for payment, the pledge of the Pledged Tax Revenues (as defined in the 1993 Indenture) and other funds provided for in the 1993 Indenture and all other obligations of the Trustee and the Agency under the 1993 Indenture with respect to all or such portion of the 1993 Bonds shall cease and terminate, except only the obligation of the Trustee to transfer and exchange the 1993 Bonds thereunder and except the obligation of the Agency to pay or cause to be paid to the owners of the 1993 Bonds not so surrendered and paid all sums due thereon and all expenses and costs of the Trustee; and thereafter Pledged Tax Revenues shall not be payable to the Trustee; WHEREAS, the Agency has determined to provide for the refunding of the 1993 Bonds; WHEREAS, for the purpose of providing funds for the refunding of the 1993 Bonds, the Agency has determined to issue its $ Redevelopment Agency of the City of Moorpark Moorpark Redevelopment Project 1999 Tax Allocation Refunding Bonds (the "1999 Bonds "), pursuant to and secured by an indenture of trust, dated as of May 1, 1999 (the "Indenture "), by and between the Agency and BNY Western Trust Company, as trustee (the "Trustee "); WHEREAS, the Agency wishes to make such a deposit with the Escrow Bank and to enter into this Escrow Deposit and Trust Agreement for the purpose of providing the terms and conditions for the deposit and application of amounts so deposited; and WHEREAS, the Escrow Bank has full powers to act with respect to the irrevocable escrow and trust created herein and to perform the duties and obligations to be undertaken pursuant to this Escrow Deposit and Trust Agreement; NOW, THEREFORE, in consideration of the above premises and of the mutual promises and covenants herein contained and for other valuable consideration, the parties hereto do hereby agree as follows: Section 1. Definition of Federal Securities. As used herein, the term "Federal Securities" shall mean non - callable, direct obligations of the United States, or obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest. Section 2. Appointment of Escrow Bank. The Agency hereby appoints the Escrow Bank as escrow bank for all purposes of this Escrow Deposit and Trust Agreement and in accordance with the terms and provisions of this Escrow Deposit and Trust Agreement, and the Escrow Bank hereby accepts such appointment. Section 3. Establishment of Escrow Fund. There is hereby created by the Agency with, and to be held by, the Escrow Bank, as security for the payment of the principal of and interest on the 1993 Bonds as hereinafter set forth, an irrevocable escrow to be maintained in trust by the Escrow Bank on behalf of the Agency and for the benefit of the owners of the 1993 Bonds, said escrow to be designated the "Escrow Fund." All moneys and Federal Securities deposited in the Escrow Fund shall constitute a special fund for the payment of the principal of and interest on the 1993 Bonds in accordance with the provisions of the 1993 Indenture. If at any time the Escrow Bank shall receive actual knowledge that the moneys and Federal Securities in the Escrow Fund will not be sufficient to make any payment required by Section 5 hereof, the Escrow Bank shall notify the Agency of such fact and the Agency shall immediately cure such deficiency. Section 4. Deposit into Escrow Fund: Investment of Amounts. Concurrently with delivery of the 1999 Bonds, the Agency shall cause to be transferred to the Escrow Bank for deposit into the Escrow Fund the amount of $ in immediately available funds, derived as follows: (a) from the proceeds of sale of the 1999 Bonds in the amount of $ (b) from the special fund established pursuant to the 1993 Indenture (the "1993 Special Fund ") in the amount of $ pursuant to Section 8 hereof. Of the amounts deposited in the Escrow Fund pursuant to the preceding paragraph, the Escrow Bank shall invest the sum of $ in the Federal Securities set forth in Exhibit A attached hereto and by this reference incorporated herein (the "Escrowed Federal Securities ") and shall hold the remaining amount ($ ) in cash, uninvested. The Escrowed Federal Securities shall be deposited with and held by the Escrow Bank in the Escrow Fund solely for the uses and purposes set forth herein. -2- The Escrow Bank may rely upon the conclusion of ' independent certified public accountants, as contained in its opinion and accompanying schedules (the "Report ") dated May , 1999, concerning the 1993 Bonds, that the Escrowed Federal Securities mature and bear interest payable in such amounts and at such times as, together with cash on deposit in the Escrow Fund, will be sufficient to pay the principal of and interest on the 1993 Bonds through October 1, 2003, and to provide for the redemption of the 1993 Bonds in full on October 1, 2003, at the redemption price of 102% of the principal amount thereof, plus accrued interest. The Escrow Bank shall not be liable or responsible for any loss resulting from any investment or reinvestment made pursuant to this Escrow Deposit and Trust Agreement and in full compliance with the provisions hereof. Section 5. Instructions as to Application of Deposit. The total amount of Escrowed Federal Securities and uninvested moneys deposited in the Escrow Fund pursuant to Section 4 shall be applied by the Escrow Bank for the sole purpose of paying the principal of and interest on the 1993 Bonds as the same shall become due and payable, to and including October 1, 2003, and to redeem all outstanding 1993 Bonds in full on October 1, 2003, at the price of 102% of the principal amount thereof, plus accrued interest, as more particularly set forth in Exhibit B attached hereto and hereby made a part hereof. Following the final payment of the 1993 Bonds, together accrued interest to the payment date, the Escrow Bank shall transfer any remaining amounts relating to the 1993 Bonds to the Trustee for deposit in the Debt Service Fund created and maintained by the Trustee pursuant to the Indenture and applied as a credit against payments of principal of and interest on the 1999 Bonds. Section 6. Investment of Any Remaining Moneys. At the written direction of the Agency Treasurer, the Escrow Bank shall invest and reinvest the proceeds received from any of the Escrowed Federal Securities, and the cash originally deposited into the Escrow Fund, for a period ending not later than the next succeeding interest payment date relating to the 1993 Bonds, in Federal Securities; provided, however, that (a) such written directions of the Agency Treasurer shall be accompanied by an opinion of nationally recognized bond counsel ('Bond Counsel') that investment in accordance with such directions will not affect, for Federal income tax purposes, the exclusion from gross income of interest due with respect to the 1993 Bonds or the 1999 Bonds, and (b) if the Agency Treasurer directs such investment or reinvestment to be made in United States Treasury Securities —State and Local Government Series, the Agency shall, at its cost, cause to be prepared all necessary subscription forms therefor in sufficient time to enable the Escrow Bank to acquire such securities. In the event that the Agency Treasurer shall fail to file any such written directions with the Escrow Bank concerning the reinvestment of any such proceeds, such proceeds shall be held uninvested by the Escrow Bank. Any interest income resulting from investment or reinvestment of moneys pursuant to this Section 6 and not required for the purposes set forth in Section 5 shall be transferred to the Trustee for deposit in the Debt Service Fund created and maintained by the Trustee pursuant to the Indenture and applied as a credit against payments of principal of and interest on the 1999 Bonds. The Escrow Bank may utilize any of its corporate affiliates as a depository to hold any uninvested moneys on behalf of the Escrow Bank in accordance with this Escrow Deposit and Trust Agreement. Section 7. Substitution or Withdrawal of Federal Securities, The Agency Treasurer may, at any time, direct the Escrow Bank in writing to substitute Federal Securities for any or all of the Escrowed Federal Securities then deposited in the Escrow Fund, or to withdraw and transfer to the Agency any portion of the Federal Securities then deposited in the Escrow Fund, provided that any such direction and substitution or withdrawal shall be simultaneous and shall be accompanied by: (a) a certification of an independent certified public accountant or -3- firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions that the Federal Securities then to be so deposited in the Escrow Fund together with interest to be derived therefrom, or in the case of withdrawal the Federal Securities to be remaining in the Escrow Fund following such withdrawal together with the interest to be derived therefrom, shall be in an amount at all times at least sufficient to make the payments specified in Section 5 hereof; and (b) an opinion of Bond Counsel that the substitution or withdrawal will not affect, for Federal income tax purposes, the exclusion from gross income of interest due with respect to the 1993 Bonds or the 1999 Bonds. In the event that, following any such substitution of Federal Securities pursuant to this Section 7, there is an amount of moneys or Federal Securities in excess of an amount sufficient to make the payments required by Section 5 hereof, such excess shall be transferred to the Trustee for deposit in the Debt Service Fund created and maintained by the Trustee pursuant to the Indenture and applied as a credit against payments of principal of and interest on the 1999 Bonds. Section 8. Application of Surplus Funds. On the date of original delivery of the 1999 Bonds and the deposit of a portion of the proceeds thereof in the Escrow Fund pursuant to Section 4, the Agency shall direct the Trustee to withdraw the amounts on deposit in the 1993 Special Fund ($ ) and transfer such amounts to the Escrow Fund. Any amounts remaining on deposit in any fund or account established under the 1993 Indenture, including any investment earnings received after the date of original delivery of the 1999 Bonds, shall be transferred by the Escrow Bank, as Trustee, to the Trustee for deposit in the Debt Service Fund created and maintained by the Trustee pursuant to the Indenture and applied as a credit against payments of principal of and interest on the 1999 Bonds. Section 9. Application of Certain Terms of 1993 Indenture. All of the terms of the 1993 Indenture relating to the making of payments of principal of and interest on the 1993 Bonds are incorporated in this Escrow Deposit and Trust Agreement as if set forth in full herein. The provisions of the 1993 Indenture affording protections and limitations of liability to the Trustee and relating to the resignation and removal of the Trustee are also incorporated in this Escrow Deposit and Trust Agreement as if set forth in full herein and shall be the procedure to be followed with respect to any resignation or removal of the Escrow Bank hereunder. Section 10. Compensation to Escrow Bank. The Agency shall pay the Escrow Bank full compensation for its duties under this Escrow Deposit and Trust Agreement, including out -of- pocket costs such as publication costs, legal fees and other costs and expenses relating hereto and, in addition, fees, costs and expenses relating to the purchase of any Federal Securities after the date hereof, pursuant to a separate agreement between the Agency and the Escrow Bank. Under no circumstances shall amounts deposited in the Escrow Fund be deemed to be available for said purposes. Section 11. Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no obligation to make any payment or disbursement of any type or incur any financial liability in the performance of its duties under this Escrow Deposit and Trust Agreement unless the Agency shall have deposited sufficient funds with the Escrow Bank. The Escrow Bank may rely and shall be protected in acting upon the written or oral instructions of the Agency or its agents relating to any matter or action as Escrow Bank under this Escrow Deposit and Trust Agreement. The protections, immunities and limitations from liability provided to the Trustee under the 1993 Indenture shall be afforded the Escrow Bank hereunder and are incorporated herein by reference. The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the C! execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the Escrow Fund, the acceptance of the moneys or any securities deposited therein, the purchase of the securities to be purchased pursuant hereto, the retention of such securities or the proceeds thereof, the sufficiency of the securities or any uninvested moneys held hereunder to accomplish the defeasance of the 1993 Bonds, or any payment, transfer or other application of moneys or securities by the Escrow Bank in accordance with the provisions of this Escrow Deposit and Trust Agreement or by reason of any non - negligent act, non - negligent omission or non - negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the "whereas" clauses herein shall be taken as the statement of the Agency, and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank make no representations as to the sufficiency of the securities to be purchased pursuant hereto and any uninvested moneys to accomplish the payment of the 1993 Bonds pursuant to the 1993 Indenture or to the validity of this Escrow Deposit and Trust Agreement as to the Agency and, except as otherwise provided herein, the Escrow Bank shall incur no liability in respect thereof. The Escrow Bank shall not be liable in connection with the performance of its duties under this Escrow Deposit and Trust Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined by the express provisions of this Escrow Deposit and Trust Agreement. The Escrow Bank may consult with counsel, who may or may not be counsel to the Agency, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Deposit and Trust Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of counsel) may be deemed to be conclusively established by a written certification of the Agency. The Agency hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated), to the extent permitted by law, to indemnify, protect, save and hold harmless the Escrow Bank and its respective successors, assigns, agents and servants from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any time, the Escrow Bank (whether or not also indemnified against by any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the Escrow Fund, the retention of the moneys therein and any payment, transfer or other application of moneys or securities by the Escrow Bank in accordance with the provisions of this Escrow Deposit and Trust Agreement, or as may arise by reason of any act, omission or error of the Escrow Bank made in good faith in the conduct of its duties; provided, however, that the Agency shall not be required to indemnify the Escrow Bank against its own negligence or willful misconduct. The indemnities contained in this Section 11 and the compensation and reimbursement of expenses set forth in Section 10 shall survive the termination of this Escrow Deposit and Trust Agreement. Whenever, in the administration of this Escrow Deposit and Trust Agreement, the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Escrow Bank, be deemed to be conclusively proved and established by a certificate of an authorized representative of the Agency, and such certificate shall, in the absence of negligence or willful misconduct on the part of the Escrow Bank, be full warrant to the Escrow Bank for any action taken or suffered in good faith by it under the provisions of this Escrow Deposit and Trust Agreement. -5- The Escrow Bank may consult with counsel of its own choice (which may be counsel to the Agency) and the opinion of such counsel shall be full and complete authorization to take or suffer in good faith any action in accordance with such opinion of counsel. The Escrow Bank shall not be responsible for any of the recitals or representations contained herein. Section 12. Amendment. This Escrow Deposit and Trust Agreement may be modified or amended at any time by a supplemental agreement which shall become effective when the written consents of the owners of one hundred percent (100 %) in aggregate principal amount of the 1993 Bonds then outstanding shall have been filed with the Escrow Bank. This Escrow Deposit and Trust Agreement may be modified or amended at any time by a supplemental agreement, without the consent of any such owners, but only (1) to add to the covenants and agreements of any party, other covenants to be observed, or to surrender any right or power herein or therein reserved to the Agency, (2) to cure, correct or supplement any ambiguous or defective provision contained herein, (3) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable and which, in the opinion of counsel, shall not materially adversely affect the interests of the owners of the 1993 Bonds or the 1999 Bonds, and that such amendment will not cause interest on the 1993 Bonds or the 1999 Bonds to become subject to federal income taxation. Section 13. Severability. If any section, paragraph, sentence, clause or provision of this Escrow Deposit and Trust Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, sentence, clause or provision shall not affect any of the remaining provisions of this Escrow Deposit and Trust Agreement. Section 14. Notice of Escrow Bank: Agency. . Any notice to or demand upon the Escrow Bank may be served and presented, and such demand may be made, at the principal corporate trust office of the Escrow Bank at BNY Western Trust Company, 700 South Flower, Suite 500, Los Angeles, CA 90017, Attention: Corporate Trust Department (or such other address as may have been filed in writing by the Escrow Bank with the Agency). Any notice to or demand upon the Agency shall be deemed to have been sufficiently given or served for all purposes by being mailed by registered or certified mail, and deposited, postage prepaid, in a post office letter box, addressed to such party, at 799 Moorpark Avenue, Moorpark, CA 93021, Attention: Executive Director (or such other address as may have been filed in writing by the Agency with the Escrow Bank). Section 15. Merger or Consolidation of Escrow Bank. Any company into which the Escrow Bank may be merged or converted or with which may it be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Escrow Bank may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible to act as trustee under the 1993 Indenture, shall be the successor hereunder to the Escrow Bank without the execution or filing of any paper or any further act. Section 16. Execution of Counterparts. This Escrow Deposit and Trust Agreement may be executed in any number of counterparts, each of which shall for all purposes be deemed to be an original and all of which shall together constitute but one and the same instrument. Section 17. Governing Law. This Escrow Deposit and Trust Agreement shall be construed and governed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK has caused this Escrow Deposit and Trust Agreement to be signed in its name by its Chairman and its seal to be affixed hereon and attested to by its Secretary, and BNY WESTERN TRUST COMPANY, in token of its acceptance of the trust created hereunder, has caused this Escrow Deposit and Trust Agreement to be signed in its corporate name by its officer identified below, all as of the day and year first above written. [SEAL] Attest: Secretary -7- REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK M Chairman BNY WESTERN TRUST COMPANY, as Escrow Bank Authorized Officer EXHIBIT A SCHEDULE OF ESCROWED FEDERAL SECURITIES Maturity TT3= Date Coupon Par Amount Price Exhibit A cost Accrued Total Cost EXHIBIT B PAYMENT SCHEDULE OF 1993 BONDS Interest Payment Maturing Called Total Date Princil2al Interest Princil2al Premium Pa men 10/01/99 $250,000 $266,679.38 — — $ 516,679.38 04/01/00 — 260,304.38 — — 260,304.38 10 /01 /00 260,000 260,304.38 — — 520,304.38 04/01/01 — 253,479.38 — — 253,479.38 10/01/01 275,000 253,479.38 — — 528,479.38 04/01/02 — 246,054.38 — — 246,054.38 10/01/02 290,000 246,054.38 — — 536,054.38 06/01/03 — 238,006.88 — — 238,006.88 10/01/03 305,000 238,006.88 $7,530,000 $150,600 8,223,606.88 Exhibit B Quint & Thimmig LLP INDENTURE OF TRUST Dated as of May 1, 1999 by and between the REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK and BNY WESTERN TRUST COMPANY, as Trustee Relating to Redevelopment Agency of the City of Moorpark Moorpark Redevelopment Project 1999 Tax Allocation Refunding Bonds 03/26/99 03/31/99 13014.01 TABLE OF CONTENTS Payee ARTICLE I DETERMINATIONS; DEFINITIONS Section 1.01. Findings and Determinations ...................................................... ............................... 3 Section1.02. Definitions .................................................................................. ............................... 3 Section 1.03. Rules of Construction .................................................................... .............................10 ARTICLE II AUTHORIZATION AND TERMS Section 2.01. Authorization of Bonds ................................................................. .............................11 Section 5.02. Section2.02. Terms of Bonds ............................................................................ .............................11 Section 5.03. Section 2.03. Redemption of Bonds ................................................................... .............................12 Payment of Claims ....................................................................... .............................24 Section2.04. Form of Bonds .............................................................................. .............................14 Section 5.06. Section 2.05. Execution of Bonds ....................................................................... .............................14 Payments of Taxes and Other Charges .......................................... .............................25 Section 2.06. Transfer of Bonds ......................................................................... .............................14 .............................25 Section2.07. Exchange of Bonds ....................................................................... .............................14 Section 5.10. Section 2.08. Registration of Bonds .................................................................... .............................15 Section2.09. Temporary Bonds ......................................................................... .............................15 Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen .................................... .............................15 Section2.11. CUSIP Numbers ........................................................................... .............................15 Section 2.12. Use of Depository ......................................................................... .............................15 ARTICLE III DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS; PARITY DEBT Section 3.01. Issuance of Bonds ......................................................................... .............................18 Section 3.02. Application of Proceeds of Sale ...................................................... .............................18 Section 3.03. Costs of Issuance Fund .................................................................. .............................18 Section 3.04. Issuance of Parity Debt ................................................................. .............................18 Section 3.05. Issuance of Subordinate Debt ........................................................ .............................19 Section3.06. Validity of Bonds .......................................................................... .............................20 ARTICLE IV SECURITY OF BONDS; FLOW OF FUNDS Section 4.01. Security of Bonds; Equal Security .................................................. .............................21 Section 4.02. Special Fund; Deposit of Tax Revenues ......................................... .............................21 Section 4.03. Deposit of Amounts by Trustee ..................................................... .............................21 ARTICLE V OTHER COVENANTS OF THE AGENCY Section 5.01. Punctual Payment ........................................................................ .............................24 Section 5.02. Limitation on Additional Indebtedness; Against Encumbrances ..... .............................24 Section 5.03. Extension of Payment ................................................................... .............................24 Section 5.04. Payment of Claims ....................................................................... .............................24 Section 5.05. Books and Accounts; Financial Statements ..................................... .............................24 Section 5.06. Protection of Security and Rights of Owners .................................. .............................25 Section 5.07. Payments of Taxes and Other Charges .......................................... .............................25 Section 5.08. Taxation of Leased Property .......................................................... .............................25 Section 5.09. Disposition of Property ................................................................. .............................25 Section 5.10. Maintenance of Tax Revenues ....................................................... .............................25 -i- Section5.11. No Arbitrage ............................................................................... .............................25 Section 5.12. Private Activity Bond Limitation ................................................... .............................25 Section 5.13. Federal Guarantee Prohibition ...................................................... .............................25 Section 5.14. Rebate Requirement .................................................................... .............................25 Section 5.15. Maintenance of Tax - Exemption ..................................................... .............................26 Section 5.16. Compliance with the Law; Low and Moderate Income Housing Fund .......................... 26 Section 5.17. Management and Operations of Properties .................................... .............................26 Section5.18. Plan Limit .................................................................................... .............................26 Section 5.19. Continuing Disclosure .................................................................. .............................26 Section 5.20. Further Assurances ...................................................................... .............................26 ARTICLE VI THE TRUSTEE Section 6.01. Duties, Immunities and Liabilities of Trustee ................................. .............................27 Section 6.02. Merger or Consolidation ............................................................... .............................28 Section 6.03. Liability of Trustee ....................................................................... .............................28 Section 6.04. Right to Rely on Documents and Opinions .................................... .............................30 Section 6.05. Preservation and Inspection of Documents ..................................... .............................30 Section 6.06. Compensation and Indemnification ............................................... .............................30 Section 6.07. Deposit and Investment of Moneys in Funds ................................. .............................31 Section 6.08. Accounting Records and Financial Statements ............................... .............................32 Section 6.09. Appointment of Co-Trustee or Agent ............................................ .............................32 Section 6.10. Other Transactions with Agency ................................................... ........................:....33 i N go. "I, v I a Wt., Section7.01. Amendment ................................................................................ .............................34 Section 7.02. Effect of Supplemental Indenture .................................................. .............................34 Section 7.03. Endorsement or Replacement of Bonds After Amendment ............. .............................34 Section 7.04. Amendment by Mutual Consent ................................................... .............................35 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF OWNERS Section 8.01. Events of Default and Acceleration of Maturities ............................ .............................36 Section 8.02. Application of Funds Upon Acceleration ....................................... .............................37 Section 8.03. Limitation on Owner's Right to Sue ............................................... .............................37 Section8.04. Non - Waiver ................................................................................. .............................38 Section 8.05. Actions by Trustee as Attorney -in- Fact .......................................... .............................38 Section 8.06. Remedies Not Exclusive ............................................................... .............................38 Section 8.07. Parties Interested Herein .............................................................. .............................38 Qip ARTICLE IX MISCELLANEOUS Section 9.02. Benefits Limited to Parties ............................................................ .............................40 Section 9.03. Successor is Deemed Included in All References to Predecessor ...... .............................40 Section 9.04. Discharge of Indenture ................................................................. .............................40 Section 9.05. Execution of Documents and Proof of Ownership by Owners ......... .............................41 Section 9.06. Disqualified Bonds ....................................................................... .............................41 Section 9.07. Waiver of Personal Liability ......................................................... .............................41 Section 9.08. Destruction of Canceled Bonds ...................................................... .............................41 Section9.09. Notices ......................................................................................... .............................42 Section9.09. Partial Invalidity .......................................................................... .............................42 Section9.10. Unclaimed Moneys ...................................................................... .............................42 Section 9.11. Execution in Counterparts ............................................................. .............................42 Section9.12. Governing Law ............................................................................ .............................42 EXHIBIT A: FORM OF BOND -iii- INDENTURE OF TRUST THIS INDENTURE OF TRUST (this "Indenture ") is made and entered into as of May 1, 1999, by and between the REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK, a public body corporate and politic, duly organized and existing under the laws of the State of California (the "Agency "), and BNY WESTERN TRUST COMPANY, a corporation organized and existing under the laws of the State of California, as trustee (the "Trustee "); WITNESSETH: 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 California Health and Safety Code (the "Law "), including the power to issue bonds for any of its corporate purposes; WHEREAS, a redevelopment plan for the Moorpark Redevelopment Project in the City of Moorpark, California (the "Redevelopment Project "), has been adopted and, from time to time, amended in compliance with all requirements of the Law; WHEREAS, the Agency has determined at this time, due to prevailing interest rates in the municipal bond market, to issue $ aggregate principal amount of its Redevelopment Agency of the City of Moorpark Moorpark Redevelopment Project 1999 Tax Allocation Refunding Bonds (the "Bonds "), under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with section 53570 of said Code (the 'Bond Law "), the principal of and interest on which will be payable from the tax increment revenues from the Redevelopment Project, to finance redevelopment activities within or of benefit to the Redevelopment Project and specifically to refund its Moorpark Redevelopment Project 1993 Tax Allocation Bonds issued pursuant to an indenture of trust, dated as of June 1, 1993, in the aggregate principal amount of $10,000,000, of which $8,910,000 remains outstanding (the "1993 Bonds "); WHEREAS, in order to provide for the authentication and delivery of 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 Bonds when executed by the Agency, and authenticated and delivered by the Trustee, the valid, binding and legal special obligations of the Agency, and to constitute this Indenture a legal, 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 Bonds issued and Outstanding 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 13014.01 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: -2- ARTICLE I DETERMINATIONS; DEFINITIONS Section 1.01. Findings and Determinations. 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 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 Bonds in the manner and form provided in this Indenture. Section 1.02. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.02 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 Allowance" means, as of the date of calculation, the sum of the following: (a) the amount of Tax Revenues which, as shown in the Report of an Independent Redevelopment Consultant, are estimated to be receivable by the Agency in the next succeeding Fiscal Year as a result of increases in the assessed valuation of taxable property in the Project Area due to either (i) construction which has been completed but has not yet been reflected on the tax roll, or (ii) transfer of ownership or any other interest in real property, which is not then reflected on the tax rolls; and (b) the amount of Tax Revenues which, as shown in the Report of an Independent Redevelopment Consultant, are estimated to be receivable by the Agency in the next succeeding Fiscal Year as a result of increases in the assessed valuation of taxable property in the Project Area due to inflation at an assumed annual inflation rate equal to the lesser of (i) the annual rate of inflation for the preceding twelve -month period for which figures are available or (ii) two percent (2 %), but only if the rate of inflation had increased by at least two percent (2 %) in each of the preceding five Fiscal Years. 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 in the next succeeding Fiscal Year is estimated to exceed the assessed valuation of taxable property in the Project Area (as reported by the County Auditor - Controller) in the Fiscal Year in which such calculation is made. "Agency" means the Redevelopment Agency of the City of Moorpark, 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, assuming that the Outstanding Serial Bonds are retired as scheduled and that the Outstanding Term Bonds are redeemed from mandatory Sinking Account payments as scheduled, (b) the principal amount of the Outstanding Serial Bonds payable by their terms in such Bond Year, and (c) the principal amount of the Outstanding Term Bonds scheduled to be paid or redeemed from mandatory Sinking Account payments in such Bond Year. "Bond" or "Bonds" means, collectively, the 1999 Bonds, and, when the context requires, any Parity Debt. -3- "Bond Law" means the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with section 53570 of said Code, as in effect on the Closing Date or as thereafter amended. "Bond Year" means any twelve -month period beginning on October 2 in any year and ending on the next succeeding October 1, both dates inclusive, except that the first Bond Year shall begin on the Closing Date, and end on October 1, 1999. "Business Day" means a day of the year on which banks in Los Angeles and San Francisco, California, are not required or permitted to be closed and on which the New York Stock Exchange is not closed. "Chairman" means the Chairman of the Agency appointed pursuant to section 33113 of the Law, or other duly appointed officer of the Agency authorized by the Agency by resolution or by -law to perform the functions of the Chairman in the event of the Chairman's absence or disqualification. "City" means the City of Moorpark, a general law city and municipal corporation organized and existing under and pursuant to the laws of the State. "Closing Date" means the date on which the Bonds are delivered by the Agency to the original purchaser thereof. "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the 1999 Bonds, together with applicable temporary and final regulations promulgated, and applicable official public guidance published, under the Code. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Agency dated as of the Closing Date, as originally executed and as it may be amended from 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 Bonds, including but not limited to printing expenses, operating expenses, rating agency fees, filing and recording fees, initial fees and charges and first annual administrative fee of the Trustee and fees and expenses of its counsel, fees, charges and disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals, fees and charges for preparation, execution and safekeeping of the Bonds and any other cost, charge or fee in connection with the original issuance of the Bonds. "Costs of Issuance Fund" means the fund by that name established and held by the Trustee pursuant to Section 3.03. "County" means Ventura County, a county duly organized and existing under the laws of the State. "Debt Service Fund" means the fund by that name established and held by the Trustee pursuant to Section 4.03. "Defeasance Obligations" means any of the following, or any combination thereof: (a) cash, (b) non - callable direct obligations of the United States of America ( "Treasuries "), (c) evidences of ownership of proportionate interests in future interest and principal payments on 51 Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (d) pre - refunded municipal obligations rated "AAA" and "Aaa" by S &P and Moody's, respectively (or any combination thereof), or (e) Federal Securities. "Escrow Agreement" means that certain Escrow Deposit and Trust Agreement, dated the Closing Date, by and between the Agency and the Escrow Bank, as originally entered into or as it may be amended or supplemented pursuant to the provisions thereof, created to provide for the payment of the 1993 Bonds. "Escrow Bank" means BNY Western Trust Company, as escrow bank under the Escrow Agreement, or any successor thereto appointed as escrow bank thereunder in accordance with the provisions thereof. "Escrow Fund" means the fund by that name created and maintained by the Escrow Bank pursuant to the Escrow Agreement. "Event of Default" means any of the events described in Section 8.01. "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). "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 to the Trustee in writing as its official fiscal year period. "Indenture" means this Indenture of Trust by and between the Agency and the Trustee, as originally entered into or as it may be amended or supplemented by 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 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 Financial Consultant" means any financial consultant or firm of such consultants appointed by 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, other than as original purchaser of the Bonds or any Parity Debt; 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. -5- "Independent Redevelopment Consultant" means any consultant or firm of such consultants appointed by the Agency, and who, or each of whom: (a) is judged by the Agency to have experience in matters relating to the collection of Tax Revenues or otherwise with respect to the financing of redevelopment projects; (b) is in fact independent and not under domination of the Agency; (c) does not have any substantial interest, direct or indirect, with the Agency; 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, NJ 07302, Attention: Editor; Kenny Information Services' "Called Bond Service," 65 Broadway, 16th Floor, New York, NY 10004; Moody's "Municipal and Government," 5250 77 Center Drive, Suite 150, Charlotte, NC 28217, Attention: Municipal News Reports; S &P's "Called Bond Record," 65 Broadway, 16th Floor, New York, NY 10004; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and /or such other information services providing information with respect to called bonds as the Agency may designate in a Written Certificate 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 April 1 and October 1 in each year, commencing October 1, 1999, or, if such day is not a Business Day, on the next succeeding Business Day, so long as any of the Bonds remain Outstanding hereunder. "Law" means the Community Redevelopment Law of the State, constituting Part 1 of Division 24 of the California Health and Safety Code, 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 Annual Debt Service for the current or any future Bond Year following the anticipated issuance of Bonds, plus at the option of the Agency the Additional Allowance, as certified in writing by the Agency to the Trustee. For purposes of such calculation, 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) at least equal one hundred twenty -five percent (125 %) of the amount of Maximum Annual Debt Service. " Moody's" means Moody's Investors Service, its successors and assigns. "1993 Bonds" means the Agency's Moorpark Redevelopment Project 1993 Tax Allocation Bonds issued pursuant to an indenture of trust, dated as of June 1, 1993, in the aggregate principal amount of $10,000,000, of which $8,910,000 remains outstanding as of the Closing Date. "1999 Bonds" the $ Redevelopment Agency of the City of Moorpark Moorpark Redevelopment Project 1999 Tax Allocation Refunding Bonds. "Original Purchaser" means the original purchaser of the Bonds upon their delivery by the Trustee on the Closing Date. 0 "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 9.04; 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" or "Bondowner" 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 loans, advances or indebtedness issued or incurred by the Agency on a parity with the Bonds pursuant to Section 3.05. "Participating Underwriter" has the meaning ascribed thereto in the Continuing Disclosure Certificate. "Pass- Through Agreements" means those certain pass- through agreements by and between the Agency and (a) Moorpark Mosquito Abatement District, dated June 5,1992, (b) Moorpark Unified School District, dated January 26, 1993, (c) County of Ventura, Ventura County Library District, Ventura County Fire Protection District and Ventura County Flood Control District, dated January 27, 1993, (d) Ventura County Community College District, dated February 11, 1993, and (e) Ventura County Superintendent of Schools Office, dated January 23, 1991, such agreements having been entered into by the Agency pursuant to section 33401 of the Law, together with any amendments thereof hereafter duly authorized pursuant to the Law. "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 and are consistent with the Agency's investment policies, but only to the extent that the same are acquired at Fair Market Value: (a) Obligations of, or guaranteed as to the payment of principal and interest by, or by any agency or instrumentality thereof hereinafter designated when such obligations are backed by the full faith and credit of the United States of America; however obligations described in this clause (a) are limited to U.S. Treasury notes, bonds and bills. (b) Obligations (excluding stripped obligations) issued by the following instrumentalities or agencies: (i) Federal Home Loan Bank; (ii) Tennessee Valley Authority; (iii) Federal National Mortgage Association; (iv) Federal Farm Credit Bank; (v) Federal Home Loan Mortgage Corporation; and (vi) Student Loan Marketing Association. (c) Commercial paper, payable in the United States of America, having original maturities of not more than 92 days and which are rated in the highest rating category by S &P and Moody's. (d) Interest bearing demand or time deposits issued by commercial banks or savings and loan associations, the deposits of which are insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or any successors thereto. These deposits must be continuously and fully insured by the Bank Insurance Fund or the Savings Association Insurance Fund. -7- (e) Money market funds or portfolios investing in short -term US Treasury securities rated AAAm or AAAm -G by S &P and Aaa by Moody's, including funds for which the Trustee or its affiliates or subsidiaries provide investment advisory or other management services. (f) Investment Agreement consisting of (1) investment agreements or contracts issued by entities the long -term securities of which are rated (i) in one of the two highest long -term rating categories (without regard to gradations of plus and minus within such categories) by Moody's and by S &P or (ii) in the highest short -term rating category of either of such rating agencies (without regard to gradations of plus and minus within such categories) by S &P and Moody's at the time of investment or purchase, or (2) one or more agreements between the Trustee and an entity which is rated as of the date of such agreement in either of the two highest categories (without regard to gradations of plus and minus within such categories) by S &P and Moody's, or (3) one or more agreements which are collateralized with obligations of the type described in subparagraph (a) of the definition of Permitted Investments, the principal amount of which is at least equal to one hundred two percent (102 %) of the principal amount invested under such agreement marked to market no less of ten than quarterly. (g) The Local Agency Investment Fund of the State of California, created pursuant to Section 16429.1 of the California Government Code, to the extent the Trustee is authorized to register such investment in its name. "Plan Limitations" means the limitations contained or incorporated in the Redevelopment Plan on (a) the aggregate principal amount of indebtedness payable from Tax Revenues derived under the Redevelopment Plan 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, incurring or repaying indebtedness payable from Tax Revenues derived under the Redevelopment Plan. "Principal Account" means the account by that name established and held by the Trustee pursuant to Section 4.03(b). "Principal Corporate Trust Office" means such principal corporate trust office of the Trustee as may be designated from time to time by written notice from the Trustee to the Agency, initially being at 700 South Flower, Suite 500, Los Angeles, CA 90017. "Project Area" means the territory within the Redevelopment Project, as described in the Redevelopment Plan. "Qualified Reserve Account 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 or claims paying ability of such bank or insurance company is in one of the two highest rating categories by S &P and Moody's; (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, the Principal Account or the Sinking Account for the purpose of making payments required pursuant to Section 4.03. "Rating Category" means any generic rating category of S &P, without regard to any refinement of such category by plus or minus sign or by numerical or other qualifying designation. L "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 Plan" means the Redevelopment Plan for the Moorpark Redevelopment Project, approved by Ordinance No. 110 enacted by the City Council of the City on July 5, 1989, together with any amendments thereof at any time duly authorized pursuant to the Law. "Redevelopment Project" means the Moorpark Redevelopment Project as described in the Redevelopment Plan. "Registration Books" means the records maintained by the Trustee pursuant to Section 2.08 for the registration and transfer of ownership of the Bonds. "Report" means a document in writing signed by an Independent Financial Consultant 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 said consultant to express an informed opinion with respect to the subject matter referred to in the Report. "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 any calculation date, an amount, calculated by or on behalf of the Agency and certified to the Trustee in writing, equal to Maximum Annual Debt Service on all Outstanding Bonds and any Parity Debt. The Reserve Requirement as of the Closing Date is $ "Responsible Officer" means any Vice President, Assistant Vice President or Trust Officer of the Trustee with responsibility for matters related to this Indenture. "S &P" means Standard & Poor's Ratings Services, a division of The McGraw -Hill Companies, Inc., New York, New York, or its successors. "Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue, Garden City, NY 11530, Fax (516) 227 -4171 or 4190; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, PA 19103, Attention: Bond Department, Fax (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 Written Certificate of the Agency delivered to the Trustee. "Serial Bonds" means all Bonds other than Term Bonds. "Sinking Account" means the account by that name established and held by the Trustee pursuant to Section 4.03(c). In "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 pursuant to Section 3.06, which are either: (a) by its terms 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 expressly 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 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 all taxes pledged and annually allocated within the Plan Limit, following the Closing Date, and paid to the Agency with respect to the Project Area pursuant to Article 6 of Chapter 6 (commencing with section 33670) of the Law and section 16 of Article XVI of the Constitution of the State, or pursuant to other applicable State laws, and as provided in the Redevelopment Plan, and all payments, subventions and reimbursements, if any, to the Agency specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limitations, 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 the Bonds, if any, and that portion of any Parity Debt (including applicable reserves and financing costs) issued to finance amounts deposited in the Low and Moderate Income Housing Fund for use pursuant to section 33334.2 of the Law to increase or improve the supply of low and moderate income housing within or of benefit to the Project Area; but excluding all other amounts of such taxes (if any) (i) beginning in Fiscal Year 1999 -99 which are required to be deposited into the Low and Moderate Income Housing Fund of the Agency as a repayment of amounts transferred therefrom pursuant to sections 33681 and 33681.5 of the Law for deposit in the Educational Revenue Augmentation Fund created pursuant to section 97.03 of the California Revenue and Taxation Code, (ii) required to be deposited into the Low and Moderate Income Housing Fund of the Agency pursuant to section 33334.3 of the Law for increasing and improving the supply of low and moderate income housing, (iii) 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 Code, and (iv) payable by the Agency under the Pass - Through Agreements except and to the extent that any amounts so payable are payable on a basis subordinate to the payment of the Bonds or to the payment of Parity Debt, as applicable. "Term Bonds" means the 1999 Bonds maturing on October 1, , and that portion of any Parity Debt payable from mandatory Sinking Account payments. "Trustee" means BNY Western Trust Company, as trustee hereunder, or any successor thereto appointed as trustee hereunder in accordance with the provisions of Article VI. "Written Request of the Agency" or "Written Certificate of the Agency" means a request or certificate, in writing signed by the Executive Director, Secretary or Treasurer of the Agency or by any other officer of the Agency duly authorized by the Agency for that purpose. Section 1.03. 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. -10- ARTICLE II AUTHORIZATION AND TERMS Section 2.01. Authorization of Bonds. 1999 Bonds in the aggregate principal amount of dollars ($ ) are hereby authorized to be issued by the Agency under and subject to the terms of this Indenture and the Bond Law. This Indenture constitutes a continuing agreement with the Owners of all of the 1999 Bonds issued or to be issued hereunder and then Outstanding to secure the full and final payment of principal and redemption premiums (if any) and the interest on all 1999 Bonds which may from time to time be executed and delivered hereunder, subject to the covenants, agreements, provisions and conditions herein contained. The 1999 Bonds shall be designated the "Redevelopment Agency of the City of Moorpark Moorpark Redevelopment Project 1999 Tax Allocation Refunding Bonds." Section 2.02. Terms of Bonds. (a) The 1999 Bonds shall be issued in fully registered form without coupons in the denomination of $5,000 or any integral multiple thereof. The 1999 Bonds shall mature on the dates and shall bear interest (calculated on the basis of a 360 -day year of twelve 30 -day months) at the rates per annum as follows: Maturity Date Principal Interest Rate Maturity Date Principal Interest Rate (October 1) Amount Per Annum (October 1) Amount Per Annum (b) Interest on the Bonds (including the final interest payment upon maturity or earlier redemption) shall be payable on each Interest Payment Date to the person whose name appears on the Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check of the Trustee mailed by first class mail, postage prepaid, on the Interest Payment Date, to such Owner at the address of such Owner as it appears on the Registration Books as of such Record Date; provided however, that payment of interest may be by wire transfer to an account in the United States of America to any registered owner of Bonds in the aggregate principal amount of $1,000,000 or more who shall furnish written wire instructions to the Trustee on or before the applicable Record Date. Principal of and redemption premium (if any) on any Bond shall be paid upon presentation and surrender thereof, at maturity or redemption, at the Principal Corporate Trust Office. Both the principal of and interest and premium (if any) on the Bonds shall be payable in lawful money of the United States of America. (c) Each 1999 Bond shall be dated as of May 1, 1999, and shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) a Bond is authenticated on or before November 15, 1999, in which event it shall bear interest from May 1, 1999; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. -11- Section 2.03. Redemption of Bonds. (a) Optional Redemption of 1999 Bonds. The 1999 Bonds maturing on or before October 1, are not subject to optional redemption prior to maturity. The 1999 Bonds maturing on or after October 1, shall be subject to redemption, at the option of the Agency on any date on or after October 1, as a whole or in part, by such maturities as shall be determined by the Agency, and by lot within a maturity, from any available source of funds, at the following redemption prices (expressed as percentages of the principal amount of the 1999 Bonds to be redeemed) together with accrued interest thereon to the date fixed for redemption. Redemption Periods Price October 1, through September 30, 102% October 1, through September 30, 101 October 1, and thereafter 100 The Agency shall be required to give the Trustee written notice of its intention to redeem 1999 Bonds under this subsection (a) with a designation of the maturities to be redeemed at least sixty (60), but not more than ninety (90) days, prior to the date fixed for such redemption, and shall transfer to the Trustee for deposit in the Debt Service Fund all amounts required for such redemption at least five (5) Business Days prior to the date fixed for such redemption. (b) Sinking Account Redemption of 1999 Bonds. The 1999 Bonds maturing on October 1, shall also be subject to mandatory sinking fund redemption in part by lot on October 1, and on October 1 in each year thereafter to and including October 1, , 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 in whole or in part pursuant to the last paragraph of this subsection (b), in the aggregate respective principal amounts and on the respective dates as set forth in the following table; provided, however, that if some but not all of the 1999 Bonds have been redeemed pursuant to subsection (a) above, the total amount of all future Sinking Account payments shall be reduced by the aggregate principal amount of 1999 Bonds so redeemed, to be allocated among the Sinking Account payments as are thereafter payable on a pro rata basis in integral multiples of $5,000 as determined by the Agency (notice of which determination shall be given by the Agency to the Trustee). Sinking Account Redemption Date (October 1) t Maturity. Principal Amount Sinking Account Principal Amount To Be Redeemed Redemption Date To Be Redeemed or Purchased (October 1) or Purchased In lieu of redemption of 1999 Bonds pursuant to this subsection (c), amounts on deposit as Sinking Account payments may also be used and withdrawn by the Trustee, at the written direction of the Agency, at any time for the purchase of 1999 Bonds otherwise required to be -12- redeemed on the following October 1 at public or private sale as and when and at such prices, but not greater than par (including brokerage and other charges and including accrued interest), as the Agency may in its discretion determine. The par amount of any of the 1999 Bonds so purchased by the Agency and surrendered to the Trustee for cancellation in any twelve -month period ending on October 1 in any year shall be credited towards and shall reduce the par amount of the 1999 Bonds otherwise required to be redeemed on the following October 1 pursuant to this subsection (c). (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 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 Written Request of the Agency filed with the Trustee; but 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 Bonds or the cessation of the accrual of interest thereon. Such notice shall state the redemption date and the redemption price, shall state that such redemption is conditioned upon the timely delivery of the redemption price by the Agency to the Trustee for deposit in the Redemption Account, shall designate the CUSIP number of the Bonds to be redeemed, shall state the individual number of each Bond to be redeemed or shall state that all Bonds between two stated numbers (both inclusive) or all of the Bonds Outstanding are to be redeemed, and shall require that such Bonds be then surrendered at the Principal Corporate Trust Office for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. (d) Partial Redemption of Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the Agency shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Agency, a new Bond or Bonds of the same interest rate and maturity, of authorized denominations, in aggregate principal amount equal to the unredeemed portion of the 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 Bonds so called for redemption shall have been duly deposited with the Trustee, such Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price and 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 any Bonds or portions thereof are to be selected for redemption by lot, the Trustee shall make such selection, in such manner as the Trustee shall deem appropriate, and shall notify the Agency thereof. In the event of redemption by lot of Bonds, the Trustee shall assign to each Bond then Outstanding a distinctive number for each $5,000 of the principal amount of each such Bond. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected, but only so much of the principal amount of each such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. All Bonds redeemed or purchased pursuant to this Section 2.03 shall be canceled. 5192 Section 2.04. Form of Bonds. The 1999 Bonds, the form of Trustee's Certificate of Authentication, and the form of Assignment to appear thereon, shall be substantially in the form set forth in Exhibit A, which is attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture. Section 2.05. Execution of Bonds. The Bonds shall be executed on behalf of the Agency by the signature of its Executive Director 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 Bond ceases to be such officer before delivery of the Bonds to the purchaser, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bonds to the purchaser. Any Bond may be signed and attested on behalf of the Agency by such persons as at the actual date of the execution of such Bond shall be the proper officers of the Agency although on the date of such Bond any such person shall not have been such officer of the Agency. Only such of the Bonds as shall bear thereon a Certificate of Authentication in the form hereinafter set forth, 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 shall be conclusive evidence that such Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture. In the event temporary Bonds are issued pursuant to Section 2.09 hereof, the temporary Bonds may bear thereon a Certificate of Authentication executed and dated by the Trustee, may be initially registered by the Trustee, and, until so exchanged as provided under Section 2.09 hereof, the temporary Bonds shall be entitled to the same benefits pursuant to this Indenture as definitive Bonds authenticated and delivered hereunder. Section 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, upon surrender of such Bond to the Trustee at its Principal Corporate Trust Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Whenever any Bond or Bonds shall be surrendered for registration of transfer, the Agency shall execute and the Trustee shall deliver a new Bond or Bonds, of like series, interest rate, maturity and principal amount of authorized denominations. The Trustee shall collect from the Owner any tax or other governmental charge on the transfer of any Bonds pursuant to this Section 2.06. The cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer shall be paid by the Agency. The Trustee may refuse to transfer, under the provisions of this Section 2.06, either (a) any Bonds during the period fifteen (15) days prior to the date established by the Trustee for the selection of Bonds for redemption, or (b) any Bonds selected by the Trustee for redemption. Section 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Corporate Trust Office for a like aggregate principal amount of Bonds of other authorized denominations of the same series, interest rate and maturity. The Trustee shall collect any tax or other governmental charge on the exchange of any Bonds pursuant to this Section 2.07. The cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange shall be paid by the Agency. The. Trustee may refuse to exchange, under the provisions of this Section 2.07, either (a) any Bonds during the fifteen (15) days prior to the date established by the Trustee for the selection of Bonds for redemption or (b) any Bonds selected by the Trustee for redemption. -14- Section 2.08. Registration of Bonds. The Trustee will keep or cause to be kept, at its Principal Corporate Trust Office, sufficient records for the registration and registration of transfer of the Bonds, which shall at all times during normal business hours be open to inspection by the Agency, upon reasonable prior notice to the Trustee; 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 Bonds as hereinbefore provided. Section 2.09. Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Agency, and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Agency upon the same conditions and in substantially the same manner as the definitive Bonds. If the Agency issues temporary Bonds, it will execute and furnish definitive Bonds without delay, and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange therefor at the Principal Corporate Trust Office, and the Trustee shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations, interest rates and like maturities. Until so exchanged, the temporary Bonds shall be entitled to the same benefits pursuant to this Indenture as definitive Bonds authenticated and delivered hereunder. Section 2.10. Bonds Mutilated. Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Agency, at the expense of the Owner of such Bond, shall execute, and the Trustee shall thereupon deliver, a new Bond of like tenor and amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Agency and the Trustee and, if such evidence be satisfactory to both and indemnity satisfactory to them shall be given, the Agency, at the expense of the Owner, shall execute, and the Trustee shall thereupon deliver, a new Bond of like tenor and amount in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond has matured or has been called for redemption, instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof upon receipt of indemnity satisfactory to the Trustee and the Agency). The Agency may require payment by the Owner of a sum not exceeding the actual cost of preparing each new Bond issued under this Section 2.10 and of the expenses which may be incurred by the Agency and the Trustee in the premises. Any Bond issued under the provisions of this Section 2.10 in lieu of any 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 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 Bonds issued pursuant to this Indenture. Section 2.11. CUSIP Numbers. The Trustee and the Agency shall not be liable for any defect or inaccuracy in the CUSIP number that appears on any Bond, check, advise of payment or redemption notice and any such document may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Agency nor the Trustee shall be liable for any inaccuracy in such numbers. Section 2.12. Use of Degosi� Notwithstanding any provision of this Indenture to the contrary: (a) At the request of the Original Purchaser, the Bonds shall be initially issued registered in the name of "Cede & Co.," as nominee of The Depository Trust Company, the depository -15- designated by the Original Purchaser, and shall be evidenced by one Bond for each maturity, as set forth in Section 2.02. Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (i) to any successor of The Depository Trust Company or its nominee, or of any substitute depository designated pursuant to paragraph (ii) of this subsection (a) ( "substitute depository "); provided that any successor of The Depository Trust Company or substitute depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; (ii) to any substitute depository designated in a Written Request of the Agency, upon (i) the resignation of The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository or (ii) a determination by the Agency that The Depository Trust Company or its successor is no longer able to carry out its functions as depository; provided that any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (iii) to any person as provided below, upon (A) the resignation of The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository or (B) a determination by the Agency that The Depository Trust Company or its successor is no longer able to carry out its functions as depository; provided that no substitute depository which is not objected to by the Agency and the Trustee can be obtained. (b) In the case of any transfer pursuant to paragraph (i) or paragraph (ii) of subsection (a) of this Section 2.12, upon receipt of all Outstanding Bonds by the Trustee, together with a Written Request of the Agency to the Trustee, a single new Bond shall be executed and delivered, registered in the name of such successor or such substitute depository or their nominees, as the case may be, all as specified in such Written Request of the Agency. In the case of any transfer pursuant to paragraph (iii) of subsection (a) of this Section 2.12, upon receipt of all Outstanding Bonds by the Trustee together with a Written Request of the Agency, new Bonds shall be executed and delivered in such denominations and registered in the names of such persons as are requested in a Written Request of the Agency provided the Trustee shall not be required to deliver such new Bonds within a period less than sixty (60) days from the date of receipt of such a Written Request of the Agency. (c) In the case of partial redemption or an advance refunding of any Bonds evidencing all of the principal maturing in a particular year, The Depository Trust Company shall deliver the Bonds to the Trustee for cancellation and re- registration to reflect the amounts of such reduction in principal. (d) The Agency and the Trustee shall be entitled to treat the person in whose name any Bond is registered as the absolute Owner thereof for all purposes of this Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the Agency; and the Agency and the Trustee shall have no responsibility for transmitting payments to, communication with, notifying or otherwise dealing with any beneficial owners of the Bonds. Neither the Agency nor the Trustee will have any responsibility or obligations, legal or otherwise, to the beneficial owners or to any other party including The Depository Trust Company or its successor (or substitute depository or its successor), except for the registered owner of any Bond. (e) So long as all outstanding Bonds are registered in the name of Cede & Co. or its registered assign, the Agency and the Trustee shall reasonably cooperate with Cede & Co., as -16- sole registered Owner, or its registered assign in effecting payment of the principal and interest due with respect to the Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due. (f) So long as all Outstanding Bonds are registered in the name of Cede & Co. or its registered assign (hereinafter, for purposes of this paragraph (f), the "Owner "): (i) All notices and payments addressed to the Owners shall contain the Bonds' CUSIP number. (ii) Notices to the Owner shall be forwarded in the manner set forth in the form of Blanket Issuer Letter of Representations executed by the Agency and received and accepted by The Depository Trust Company. -17- ARTICLE III DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS; PARITY DEBT Section 3.01. Issuance of Bonds. Upon the execution and delivery of this Indenture, the Agency shall execute and deliver to the Trustee 1999 Bonds in the aggregate principal amount of dollars ($ ) and the Trustee shall authenticate and deliver the 1999 Bonds upon the Written Request of the Agency. Section 3.02. Application of Proceeds of Sale. On the Closing Date the net proceeds of sale of the 1999 Bonds in the amount of $ including accrued interest shall be paid to the Trustee and applied as follows: (a) The Trustee shall deposit $ accrued interest received on the sale of the 1999 Bonds in the Interest Account; (b) The Trustee shall deposit in the Reserve Account the amount of $ , which, equals the Reserve Requirement; (c) The Trustee shall deposit the amount of $ in the Costs of Issuance Fund; and (d) The Trustee shall transfer the amount of $ to the Escrow Bank for deposit in the Escrow Fund. The Trustee may establish, as it deems necessary, a temporary fund or account on its records to facilitate the deposits and transfers set forth herein. 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 Trustee in trust. The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay the Costs of Issuance upon submission of a Written Request of the Agency stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund. On the date six months following the Closing Date, or upon the earlier Written Request of the Agency stating that all known Costs of Issuance have been paid, all amounts, if any, remaining in the Costs of Issuance Fund shall be withdrawn therefrom by the Trustee and transferred to the Agency for deposit into the Debt Service Fund. Section 3.04. Issuance of Parity Debt. In addition to the Bonds, the Agency may, by Supplemental Indenture, issue or incur Parity Debt payable from Tax Revenues on a parity with the Bonds to finance the Project Area in such principal amount as shall be determined by the Agency. The Agency may issue and deliver any such other Parity Debt subject to the following specific conditions precedent to the issuance and delivery of such Parity Debt issued under this Section 3.04: (i) The Agency shall be in compliance with all covenants set forth in this Indenture and all Supplemental Indentures. (ii) The Tax Revenues for the then current Bond Year, based on the most recent assessed valuation of property in the Project Area as evidenced in written documentation from an appropriate official of the County, plus, at the option of the -18- Agency, the Additional Allowance, shall be at least equal to one hundred twenty -five percent (125 %) of Maximum Annual Debt Service on all Bonds and Parity Debt which will be Outstanding following the issuance of such Parity Debt. (iii) The Supplemental Indenture providing for the issuance of such Parity Debt under this Section 3.04 shall provide that: (A) Interest on said Parity Debt shall be payable on April 1 and October 1 in each year of the term of such Parity Debt except the first twelve month period, during which interest may be payable on any April 1 or October 1; and (B) The principal of such Parity Debt shall be payable on October 1 in any year in which principal is payable. (iv) The Supplemental Indenture providing for the issuance of such Parity Debt may provide for the establishment of separate funds and accounts; (v) The aggregate amount of the principal of and interest on all Outstanding Bonds and Subordinate Debt coming due and payable following the issuance of such Parity Debt shall not exceed the maximum amount of Tax Revenues permitted under the Plan Limit to be allocated and paid to the Agency following the issuance of such Parity Debt; and (vi) An opinion of Bond Counsel stating (i) that the Supplemental Indenture relating to the Parity Debt is valid and enforceable in accordance with its terms (ii) that such Supplemental Indenture creates a valid pledge of that which it purports to pledge, and (iii) that the total principal amount of Parity Debt to be issued or incurred and then Outstanding will not exceed any limit imposed by law. (vii) 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 or shall make provision for a Qualified Reserve Account Credit Instrument in lieu of cash - funding the Reserve Account, or a combination of cash and a Qualified Reserve Account Credit Instrument. (viii) The Agency shall deliver to the Trustee a Written Certificate of the Agency certifying that the conditions precedent to the issuance of such Parity Debt set forth in subsections (i), (ii), (iii), (iv), (v), (vi) and (vii) subsection (a) of this Section 3.04 have been satisfied. Section 3.05. Issuance of Subordinate Debt. In addition to the Bonds, the Agency may issue or incur Subordinate Debt in such principal amount as shall be determined by the Agency. The Agency may issue or incur such Subordinate 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) If, and to the extent, such Subordinate Debt is payable from Tax Revenues within the Plan Limit on the amount of Tax Revenues, then all Outstanding Bonds, Parity Debt and Subordinate Debt coming due and payable following the issuance or incurrence of such SO Subordinate Debt shall not exceed the maximum amount of Tax Revenues permitted within the Plan Limit. Section 3.06. 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 his obligation with respect to the Redevelopment Project. -20- ARTICLE IV SECURITY OF BONDS; FLOW OF FUNDS Section 4.01. Security of Bonds: Equal Security. Except as provided in Section 6.06, the Bonds shall be equally secured by a pledge of, security interest in and a first and exclusive lien on all of the Tax Revenues, and a first and exclusive pledge of, security interest in and lien upon all of the moneys in the Special Fund, the Debt Service Fund, the Interest Account, the Principal Account, the Sinking Account, the Reserve Account and the Redemption Account, 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 between 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 transfer all of the Tax Revenues received in any Bond Year to 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 Section 4.03. Except as provided in Section 5.18, 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 paragraph of this Section 4.02, including delinquent amounts if any, 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 Subordinate Debt, or the payment of any amounts due and owing to the United States of America pursuant to Section 5.14. 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 and in any Supplemental Indenture. Section 4.03. Deposit of Amounts by Trustee. There is hereby established a 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, and deposited by the Trustee in the following respective special accounts, which are hereby established in the Debt Service Fund, and in the following order of priority: (a) Interest Account. On or before the fifth Business Day preceding each Interest Payment Date, 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 contained in the Interest 5VA e Account on that date, will be equal to the aggregate amount of the interest becoming due and payable on the Outstanding Bonds on such Interest Payment Date. No such transfer and deposit need be made to the Interest Account if the amount contained therein is at least equal to the interest to become due on the next succeeding Interest Payment Date upon all of the Outstanding Bonds. 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 redeemed prior to maturity pursuant to this Indenture). (b) Principal Account. On or before the fifth Business Day preceding October 1 in each year beginning October 1, 1999, 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 contained in the Principal Account, will be equal to the principal becoming due and payable on the Outstanding Serial Bonds and maturing Term Bonds on the next October 1. No such transfer and deposit need be made to the Principal Account if the amount contained therein is at least equal to the principal to become due on the next October 1 on all of the Outstanding Serial Bonds and maturing Term 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 Serial Bonds and maturing Term Bonds as it shall become due and payable. (c) Sinking Account. No later than the fifth Business Day preceding each October 1 on which any Outstanding Term Bonds are subject to mandatory redemption, or otherwise for purchases of Term Bonds, 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 to be redeemed on such October 1. 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 redemption or purchase. (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 (to the extent known to it) shall promptly notify the Agency of such fact. Promptly upon receipt of any such notice, the Agency shall transfer to the Trustee an amount of available Tax Revenues 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, the Principal Account and the 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 preceding each Interest Payment Date shall be withdrawn from the Reserve Account by the Trustee and deposited in the Interest Account on or before the Interest Payment Date. 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: (i) a Qualified Reserve Account Credit Instrument, (ii) an opinion of Bond Counsel stating that neither the release of such funds nor the acceptance of such Qualified Reserve Account Credit Instrument will 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, and upon delivery by the Agency to the Trustee of written calculation of the amount permitted to be released from the Reserve Account (upon which calculation the Trustee may conclusively rely), the Trustee shall transfer such funds from the Reserve Account to the Agency free and clear of the lien of this Indenture. The Trustee shall comply with all documentation relating to a Qualified Reserve Account Credit Instrument as shall be required to maintain such Qualified Reserve Account Credit Instrument in full force and -22- effect and as shall be required to receive payments thereunder in the event and to the extent required to make any payment when and as required under this subsection (d). At least fifteen (15) days prior to the expiration of any Qualified Reserve Account Credit Instrument, the Agency shall be obligated either (i) to replace such Qualified Reserve Account Credit Instrument with a new Qualified Reserve Account Credit Instrument, or (ii) to deposit or cause to be deposited with the Trustee an amount of funds such that the amount on deposit in the Reserve Account is equal to the Reserve Requirement (without taking into account such expiring Qualified Reserve Account Credit Instrument). In the event that the Agency shall fail to take action as specified in clause (i) or (ii) of the preceding sentence, the Trustee shall, prior to the expiration thereof, draw upon the Qualified Reserve Account Credit Instrument in full and deposit the proceeds of such draw in the Reserve Account. In the event that the Reserve Requirement shall at any time be maintained in the Reserve Account in the form of a combination of cash and a Qualified Reserve Account Credit Instrument, the Trustee shall apply the amount of such cash to make any payment required to be made from the Reserve Account before the Trustee shall draw any moneys under such Qualified Reserve Account Credit Instrument for such purpose. In the event that the Trustee shall at any time draw funds under a Qualified Reserve Account Credit Instrument to make any payment then required to be made from the Reserve Account, the Tax Revenues thereafter received by the Trustee, to the extent remaining after making the other deposits (if any) then required to be made pursuant to Section 4.03(a), (b) and (c), shall be used to reinstate the Qualified Reserve Account Credit Instrument. The Reserve Account may 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 fifth Business Day preceding any date on which Bonds are to be redeemed pursuant to Section 2.03(a), the Trustee shall withdraw from the Debt Service Fund and deposit in the Redemption Account an amount required to pay the principal of and premium, if any, on the Bonds to be redeemed on such date pursuant to Section 2.03(a), taking into account any funds then on deposit in the Redemption Account. The Trustee shall also deposit in the Redemption Account any other amounts received by it from the Agency designated by the Agency in writing to be deposited in the Redemption Account. 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 to be redeemed pursuant to Section 2.03(a) on the respective dates set for such redemption. ARTICLE V OTHER COVENANTS OF THE AGENCY Section 5.01. Punctual Payment. The Agency shall punctually pay or cause to be paid the principal and interest to become due in respect of all the Bonds together with the premium thereon, if any, 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 and the Bonds. Nothing herein contained shall prevent the Agency from making advances of its own moneys howsoever derived to any of the uses or purposes referred to herein. Section 5.02. Limitation on Additional Indebtedness: Against Encumbrances. The Agency hereby covenants that, so long as the Bonds are Outstanding, the Agency shall not issue any bonds, notes or other obligations, enter into any agreement or otherwise incur any indebtedness, for which all or any part of the Tax Revenues are pledged as security for payment, excepting only the Bonds, any Parity Debt and any Subordinate Debt. The Agency will not otherwise encumber, pledge or place any charge or lien upon any of the Tax Revenues or other amounts pledged to the Bonds superior to the pledge and lien herein created for the benefit of the Bonds. Section 5.03. Extension of Payment. The Agency will not, directly or indirectly, extend or consent to the extension of the time for the payment of any Bond or claim for interest on any of the Bonds and will not, directly or indirectly, be a party to or approve any such arrangement by purchasing or funding the Bonds or claims for interest in any other manner. In case the maturity of any such Bond or claim for interest shall be extended or funded, whether or not with the consent of the Agency, such Bond or claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded. Section 5.04. Payment of Claims. The Agency shall promptly 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 other amounts pledged to the payment of the Bonds, or any part thereof, or upon any funds in the hands of the Trustee, 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 the Bonds are Outstanding, complete audited financial statements with respect to such Fiscal Year showing the Tax Revenues, all disbursements of Tax Revenues 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. The -24- Agency shall furnish a copy of such financial 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 Closing Date, the Bonds shall be incontestable by the Agency. Section 5.07. Payments of Taxes and Other Charges. Except as otherwise provided herein, the Agency will pay and discharge, or cause to be paid and discharged, all taxes, service charges, assessments and other governmental charges which may hereafter be lawfully imposed upon the Agency or the properties then owned by the Agency in the Project Area, or upon the revenues therefrom 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. Taxation of Leased Property. All amounts derived by the Agency pursuant to section 33673 of the Law with respect to the lease of property for redevelopment shall be treated as Tax Revenues for all purposes of this Indenture. Section 5.09. Disposition of Propel The Agency will not participate in the disposition of any land or real property in the Project Area to anyone which will result in such property becoming exempt from taxation because of public ownership or use or otherwise (except property dedicated for public right -of -way and except property planned for public ownership or use by the Redevelopment Plan in effect on the date of this Indenture), if such disposition, when taken together with other such dispositions, would either (a) aggregate more than ten percent (10 %) of the land area in the Project Area, or (b) aggregate more than ten percent (10 %) of the most recent assessed valuation of the property in the Project Area. Section 5.10. 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, in the case of amounts payable by the State, appropriate officials of the State. Section 5.11. 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 1999 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 1999 Bonds would have caused the 1999 Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. Section 5.12. Private Activity Bond Limitation. The Agency shall assure that the proceeds of the 1999 Bonds are not so used as to cause the 1999 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. Section 5.13. 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 1999 Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code. Section 5.14. 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 -25- earnings, if any, to the federal government, to the extent that such section is applicable to the 1999 Bonds. Section 5.15. Maintenance f Tax-Exemption. The Agency shall take all actions necessary to assure the exclusion of interest on the 1999 Bonds from the gross income of the Owners of the 1999 Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the 1999 Bonds. Section 5.16. Compliance with the Law; Low and Moderate Income Housing Fund. 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 section 33679 of the Law prior to application of proceeds of the Bonds to any portion of the Redevelopment Project. Without limiting the generality of the foregoing, the Agency 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, all amounts when, as and if required to be deposited therein pursuant to the Law; provided, however, that the Agency may reduce or eliminate such requirement if it makes the findings as set forth in section 33334.2 of the Law. Section 5.17. Management and Operations of Properties. The Agency will manage and operate all properties owned by the Agency and comprising any part of the Redevelopment Project, in a sound and businesslike manner, and will keep such properties insured at all times in conformity with sound business practice. Section 5.18. Plan Limit. The Agency hereby agrees that the aggregate amount of Annual Debt Service remaining to be paid on all Outstanding Bonds shall at no time exceed ninety -five percent (95 %) of the aggregate amount of Tax Revenues which the Agency is permitted to receive under the Plan Limit. In the event that such limit is reached or exceeded, the Agency shall (a) deposit into and retain in the Special Fund all Tax Revenues not used to pay current debt service, to be applied for the sole purpose of paying the principal of and interest on the Bonds as they become due and payable, notwithstanding anything herein to the contrary, and (b) not later than July 1 of each succeeding Fiscal Year, cause to be prepared and filed with the Trustee an accounting which shows the aggregate amount of Annual Debt Service remaining to be paid on all Outstanding Bonds, and the amount of Tax Revenues which the Agency is permitted to receive under the Plan Limit. Section 5.19. 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 an Event of Default hereunder. However, any Participating Underwriter or any holder or beneficial owner of the 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 5.21. Section 5.20. 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 Bonds the rights and benefits provided in this Indenture. -26- 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, duties or obligations 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 reasonable person would exercise or use under the circumstances in the conduct of its 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 Agency has knowledge that the Trustee shall cease to be eligible in accordance with subsection (e) of this Section 6.01, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee 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 written notice of such removal by the Agency to the Trustee, whereupon the Agency shall immediately 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 mail, 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 of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Owner (on behalf of such Owner and all other Owners) may petition any court of competent jurisdiction at the expense of the Agency 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, acknowledging and delivering to the Agency and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Agency or 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 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 -27- 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 mail a notice of the succession of such Trustee to the trusts hereunder to each rating agency which then has a current rating on the Bonds and to the Owners at their respective 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 mailed at the expense of the Agency. (e) Any Trustee appointed under the provisions of this Section 6.01 in succession to the Trustee shall be a financial institution having a trust office in the State, having (or in the case of a corporation or trust company included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least $75,000,000, and subject to supervision or examination by federal or state authority. If such financial institution 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 financial institution 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 6.01. 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 of the security for the Bonds or the tax status of interest thereon 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 intentional misconduct. The Trustee shall not be liable for the acts of any agents of the Trustee selected by it with due care. The Trustee and its officers and employees 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 by a responsible employee or officer, unless the Trustee shall have been negligent in ascertaining the pertinent facts. (c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the Owners of not less than a majority (or other percentage provided for herein) in aggregate principal amount of the Bonds at the time -28- 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 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 intentional 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 a Responsible Officer shall have actual knowledge thereof, or shall have received written notice thereof from the Agency at its Principal Corporate Trust Office. In the absence of such actual knowledge or notice, the Trustee may conclusively assume that no default has occurred and is continuing under this Indenture. 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 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 may rely conclusively on the Agency's certificates 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). The Trustee shall have no liability or obligation to the Bond Owners with respect to the payment of debt service by.the Agency or with respect to the observance or performance by the Agency of the other conditions, covenants and terms contained in this Indenture, or with respect to the investment of any moneys in any fund or account established, held or maintained by the Agency pursuant to this Indenture or otherwise. No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. The Trustee shall be entitled to interest on all amounts advanced by it at the maximum rate permitted by law. The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys or receivers and shall be entitled to opinion and advice of counsel concerning all matters of trust and its duties hereunder. The Trustee shall not be responsible for any action taken or not taken on the part of any agent, attorney or receiver appointed with due care by it hereunder. The Trustee shall have no responsibility, opinion, or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of these Bonds. Before taking any action under Article VIII or this Article at the written request of a majority of the Owners, the Trustee may require that a satisfactory indemnity bond be furnished by the Owners for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or willful misconduct in connection with any action so taken. -29- Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds. The Trustee shall not be accountable for the use or application by the Agency or any other party of any funds which the Trustee has released in accordance with the terms of this Indenture. The immunities and exceptions from liability of the Trustee shall extend to its officers, directors, employees, agents and attorneys. Whether or not expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of the Trustee shall be subject to the provisions of this Article VI. Section 6.04. Right to Rely on Documents and Opinions. 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 prescribed by the proper party or parties, and shall not be required to make any investigation into the facts or matters contained thereon. The Trustee may consult with counsel, including, without limitation, counsel of or to the Agency, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection 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 and until such Bond is submitted for inspection, if required, and such person's title thereto is established to the satisfaction of the Trustee. 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 Written Certificate of the Agency, which shall be full warrant to the Trustee for any action taken or suffered under the provisions of this Indenture in reliance upon such Written Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may 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 at all reasonable times upon reasonable notice to the inspection of the Agency and any Owner, and their agents and representatives duly authorized in writing, during regular business hours and under reasonable conditions. Section 6.06. Compensation and Indemnification. The Agency shall pay to the Trustee from time to time reasonable compensation for all services rendered under this Indenture in accordance with the letter proposal from the Trustee approved by the Agency and also all reasonable expenses, charges, legal and consulting fees and other disbursements and those of its attorneys (including the allocated costs and disbursement of in -house counsel to the extent such services are not redundant with those provided by outside counsel), 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 reasonable compensation to its experts, attorneys and counsel (including the allocated costs and disbursement of in -house counsel to the extent such services are not redundant with those provided by outside counsel). The Agency further covenants and agrees to indemnify, defend and save the Trustee and its officers, directors, agents and employees, harmless against any loss, expense and liabilities, including legal fees and expenses, which it may incur arising out of or in connection with the Ma exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability, but excluding any and all losses, expenses and liabilities which are due to the negligence or intentional misconduct of the Trustee, its officers, directors, agents or employees. The obligations of the Agency and the rights of the Trustee 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. Deposit and Investment of Moneys in Funds. Moneys in the Debt Service Fund, the Interest Account, the Principal Account, the Sinking Account, the Reserve Account, the Redemption Account and the Costs of Issuance Fund shall be invested by the Trustee in Permitted Investments as directed by the Agency in the Written Request of the Agency filed with the Trustee at least two (2) Business Days in advance of the making of such investments. In the absence of any such Written Request of the Agency, the Trustee shall invest any such moneys in Permitted Investments described in clause (d) of the definition thereof, which by their terms mature prior to the date on which such moneys are required to be paid out hereunder. Investments purchased with moneys deposited in the Reserve Account shall have an average aggregate weighted term to maturity not greater than five years. The Trustee shall be entitled to rely conclusively upon the written instructions of the Agency directing investments in Permitted Investments as to the fact that each such investment is permitted by the laws of the State, and shall not be required to make further investigation with respect thereto. With respect to any restrictions set forth in the above list which embody legal conclusions (e.g., the existence, validity and perfection of security interests in collateral), the Trustee shall be entitled to rely conclusively on an opinion of counsel or upon a representation of the provider of such Permitted Investment obtained at the Agency's expense. Moneys in the Special Fund may be invested by the Agency in any obligations in which the Agency is legally authorized to invest its funds. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. All interest or gain derived from the investment of amounts in any of the funds or accounts held by the Trustee hereunder shall be deposited in the Interest Account; 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. 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 at the direction of the Agency or otherwise made pursuant to this Section 6.07. All moneys held by the Trustee shall be held in trust, but need not be segregated from other funds unless specifically required by this Indenture. Except as specifically provided in this Indenture, the Trustee shall not be liable to pay interest on any moneys received by it, but shall be liable only to account to the Agency for earnings derived from funds that have been invested. (a) Except as otherwise provided in subsection (b) of this Section, 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) shall be acquired, disposed of, and valued (as of the date that valuation is required by this Indenture or the Code) at Fair Market Value. (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 Account shall be valued at their present value (within the meaning of section 148 of the Code). (c) The Trustee shall have no responsibility to determine Fair Market Value or present value at the time of initial investment in a Permitted Investment, and may rely upon any -31- determination made by or on behalf of the Agency. This Section 4.05(c) shall in no way limit the Trustee's obligations under Section 6.07 hereof. The Agency acknowledges that, to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grants 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. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. Section 6.08. 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 relating to the proceeds of the Bonds made by it and all funds and accounts held by the Trustee established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Agency upon reasonable prior notice, at reasonable hours and under reasonable circumstances. The Trustee shall furnish to the Agency, at least monthly, an accounting of all transactions in the form of its customary statements relating to the proceeds of the Bonds and all funds and accounts held by the Trustee pursuant to this Indenture. The Trustee shall maintain and store such records for a period of one year after the stated maturity of the Bonds. Section 6.09. Appointment of Co- Trustee or Agent. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the 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 trustee or co- trustee. The following provisions of this Section 6.09 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; provided, however, in no event shall the Trustee be responsible or liable for the acts or omissions of any co- trustee. 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 -32- Trustee until the appointment of a new trustee or successor to such separate trustee or co- trustee. Section 6.10. Other Transactions with Agency. The Trustee, either as principal or agent, may engage in or be interested in any financial or other transaction with the Agency. -33- 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 in this Indenture contained, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or powers herein reserved to or conferred upon the 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, in the reasonable determination of the Agency, materially adversely affect the interests of the Owners; or (c) to provide for the issuance of Parity Debt in accordance with Section 3.04; or (d) to amend any provision hereof relating to the requirements of or compliance with the Code, to any extent whatsoever but only if and to the extent such amendment will not adversely affect the exemption from federal income taxation of interest on any of the Bonds, in the opinion of nationally recognized bond counsel; 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 consent of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding are filed with the Trustee. No such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Agency to pay the principal, interest or redemption premiums (if any) at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the Owner of such Bond, or (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification. In no event shall any Supplemental Indenture modify any of the rights or obligations of the Trustee without its prior written consent. In addition, the Trustee shall be entitled to an opinion of counsel concerning the Supplemental Indenture's lack of any material adverse effect on the Owners and that all conditions precedent for any supplement or amendment has been satisfied. 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 -34- of the Agency, the Owners of such Bonds shall present such Bonds for that purpose at the Principal Corporate Trust Office, 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 at the expense of the Agency 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 Corporate Trust Office, 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. -35- 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) if default shall be made by the Agency in the due and punctual payment of the principal of or interest or redemption premium (if any) on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) if default shall be made by the Agency in the observance of any of the covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, other than a default described in the preceding clause (a), and such default shall have continued for a period of sixty (60) days following receipt by the Agency of written notice from the Trustee or any Owner of the occurrence of such default provided that if in the reasonable opinion of the Agency the failure stated in the notice can be corrected, but not within such 60 day period, such failure will not constitute an event of default if corrective action is instituted by the Agency within such 60 day period and the Agency thereafter diligently and in good faith cures such failure within 120 days; or (c) if the Agency files a petition seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction will approve a petition seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or, if under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction will approve a petition, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or, if under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction will assume custody or control of the Agency or of the whole or any substantial part of its property. If an Event of Default has occurred under this Section 8.01 and is continuing, the Trustee may, and, subject to Section 9.06(a), 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) the Trustee shall, subject to the provisions of Section 8.06, exercise any other remedies available to the Trustee and the Bond Owners in law or at equity. Immediately upon receiving written notice or actual knowledge (of a Responsible Officer) 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. With respect to any Event of Default described in clauses (a) or (c) above the Trustee shall, and with respect to any Event of Default described in clause (b) above the Trustee in its sole discretion may, also give such notice to the Owners by mail, which shall include the statement that interest on the Bonds shall cease to accrue from and after the date, if any, on which the Trustee shall have declared the Bonds to become due and payable pursuant to the preceding paragraph (but only to the extent that principal and any accrued, but unpaid, interest on the Bonds is actually paid on such date). 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 ST2 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), and the reasonable expenses of the Trustee, (including the allocated costs and disbursements of its in -house counsel) to and any and all other defaults of which the Trustee has notice (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, with the prior written approval of the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Agency and to the 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 in the following order upon presentation of the several Bonds, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid: First, to the payment of the fees, costs and expenses of the Trustee in declaring such Event of Default and in exercising the rights and remedies set forth in this Article VIII, including reasonable compensation to its agents, attorneys (including the allocated costs and disbursements of its in -house counsel to the extent such services are not redundant with those provided by outside counsel) and counsel and any outstanding fees, expenses of the Trustee; and Second, to the payment of the whole amount then owing and unpaid upon the Bonds for principal and interest, with interest on the overdue principal and installments of interest at the net effective rate then borne by the Outstanding Bonds (to the extent that such interest on overdue installments of principal and interest shall have been collected), and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such principal and interest without preference or priority of principal over interest, or interest over principal, or of any installment of interest over any other installment of interest, ratably to the aggregate of such principal and interest. Section 8.03. Limitation on Owner's 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 -37- 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 8.03 or any other provision of this Indenture. Section 8.04. 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 on the respective Interest Payment Dates, as herein provided, or affect or impair the right of action, which is also absolute and unconditional, of the Owners or the Trustee to institute suit to enforce such payment by virtue of the contract embodied in the Bonds. A waiver of any default by any Owner or the Trustee 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 and the Trustee 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 and the Trustee. If a suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned or determined adversely to the Owners or the Trustee, the Agency, the Trustee 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 8.05. 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 or Parity Debt 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, provided, however, the Trustee shall have no duty or obligation to exercise any such right or remedy unless it has been indemnified to its satisfaction from any loss, liability or expense (including fees and expenses of its outside counsel and the allocated costs and disbursements of its in -house counsel). Section 8.06. 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. Section 8.07. Parties Interested Herein. Nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the Agency, the Trustee, their officers, employees and agents, and the Owners any right, remedy or claim under or by reason of this Indenture, or any covenant, condition or stipulation hereof, and W3 all covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Agency shall be for the sole and exclusive benefit of the Agency, the Trustee, their officers, employees and agents, and the Owners. -39- ARTICLE IX MISCELLANEOUS Section 9.02. 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 or claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of the Agency shall be for the sole and exclusive benefit of the Trustee and the Owners. Section 9.03. 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 9.04. Discharge of Indenture. If the Agency shall pay and discharge the entire indebtedness on all Bonds or any portion thereof in any one or more of the following ways: (a) by well and truly paying or causing to be paid the principal of and interest and premium (if any) on all or the applicable portion of Outstanding 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, is fully sufficient to pay all or the applicable portion of Outstanding Bonds, including all principal, interest and redemption premiums, or; (c) by irrevocably depositing with the Trustee or another fiduciary, in trust, Defeasance Obligations in such amount as an Independent Accountant shall determine will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established pursuant to this Indenture, be fully sufficient to pay and discharge the indebtedness on all Bonds or the applicable portion of (including all principal, interest and redemption premiums) at or before maturity; and, if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given pursuant to Section 2.03(c) 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 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 shall cease and terminate with respect to all Outstanding Bonds or, if applicable, with respect to that portion of the Bonds which has been paid and discharged, except only (a) the covenants of the Agency hereunder with respect to the Code, (b) the obligation of the Trustee to transfer and exchange Bonds hereunder, (c) the obligations of the Agency under Section 6.06 hereof, and (d) the obligation of the Agency to pay or cause to be paid to the Owners, from the amounts so deposited with the Trustee, all sums due thereon and to pay the Trustee all fees, expenses and costs of the Trustee. In the event the Agency shall, pursuant to the foregoing provision, pay and discharge any portion or all of the Bonds then Outstanding, the Trustee shall be authorized to take such actions and execute and deliver to the Agency all such instruments as may be necessary or desirable to evidence such discharge, including, without limitation, selection by lot of Bonds of any maturity of the Bonds that the Agency has determined to pay and discharge in part. -40- In the case of a defeasance or payment of all of the Bonds Outstanding, any funds thereafter held by the Trustee which are not required for said purpose or for payment of amounts due the Trustee pursuant to Section 6.06 shall be paid over to the Agency. To accomplish defeasance the Agency shall cause to be delivered (i) a Report of an Independent Accountant verifying the sufficiency of the escrow established to pay the Bonds in full on the maturity or earlier redemption date ( "Verification "), (ii) an escrow deposit agreement, and (iii) an opinion of nationally recognized bond counsel to the effect that the Bonds are no longer "Outstanding" under this Indenture; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the Agency and the Trustee. Section 9.05. 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 and in accordance therewith, provided, however, that the Trustee shall not be deemed to have knowledge that any Bond is owned by or for the account of the Agency unless the Agency is the registered Owner or the Trustee has received written notice that any other registered Owner is such an affiliate. Section 9.06. 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. Section 9.07. 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 9.08. Destruction of Canceled Bonds. Whenever in this Indenture provision is made for the surrender to the Trustee of any Bonds which have been paid or canceled pursuant to the provisions of this Indenture, the Trustee shall destroy such bonds and upon request of the Agency provide the Agency a certificate of destruction. 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. -41- Section 9.09. Notices. Any notice, request, complaint, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by first class, registered or certified mail, postage prepaid, or sent by telegram, addressed as follows: If to the Agency: Redevelopment Agency of the City of Moorpark 799 Moorpark Avenue Moorpark, CA 93021 Attention: Executive Director Telephone: (805) 529 -6864 Telecopier: (805) 529 -8270 If to the Trustee: BNY Western Trust Company 700 South Flower, Suite 500 Los Angeles, CA 90017 Attention: Corporate Trust Department Telephone: (213) 630 -6229 Telecopier: (213) 630 -6215 Section 9.09. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of this Indenture shall for any reason be held illegal, invalid or unenforceable. such holding shall not affect the validity of the remaining portions of this Indenture. The Agency hereby declares that it would have adopted 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. If, by reason of the judgment of any court, the Trustee is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Trustee hereunder shall, pending appointment of a successor Trustee in accordance with the provisions of Section 6.01 hereof, be assumed by and vest in the Treasurer of the Agency in trust for the benefit of the Owners. The Agency covenants for the direct benefit of the Owners that its Treasurer in such case shall be vested with all of the rights and powers of the Trustee hereunder, and shall assume all of the responsibilities and perform all of the duties of the Trustee hereunder, in trust for the benefit of the Bonds, pending appointment of a successor Trustee in accordance with the provisions of Section 6.01 hereof. 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, shall 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 Bond 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. cya IN WITNESS WHEREOF, the REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK, has caused this Indenture to be signed in its name by its Chairman and attested by its Secretary, and BNY WESTERN TRUST COMPANY, 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. Attest: Secretary 5 x3 REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK M Chairman BNY WESTERN TRUST COMPANY, as Trustee Authorized Officer Quint & Thimmig LLP EXHIBIT A FORM OF BOND United States of America State of California Ventura County REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK Moorpark Redevelopment Project 1999 Tax Allocation Refunding Bond 03/26/99 03/31/99 INTEREST RATE MATURITY DATE DATED DATE CUSIP % October 1, May 1, 1999 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: DOLLARS The REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK, a public body, corporate and politic, duly organized and existing under and by virtue of the laws of the State of California (the "Agency'), for value received hereby promises to pay to the Registered Owner stated above, or registered assigns (the "Registered Owner "), on the Maturity Date stated above (subject to any right of prior redemption hereinafter provided for), the Principal Sum stated above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond, unless (i) this Bond is authenticated on or before an Interest Payment Date and after the close of business on the fifteenth (15th) day of the month immediately preceding an Interest Payment Date (the "Record Date "), in which event it shall bear interest from such Interest Payment Date, or (ii) this Bond is authenticated on or before September 15, 1999, in which event it shall bear interest from the Dated Date 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 has previously been paid or made available for payment on this Bond, until payment of such Principal Sum in full, at the Interest Rate per annum stated above, payable semiannually on each April 1 and October 1, commencing October 1, 1999, or, if such day is not a Business Day (as such term is defined in the Indenture, hereinafter defined), on the next succeeding Business Day (each an "Interest Payment Date "), calculated on the basis of 360 -day year comprised of twelve 30 -day months. Principal hereof and premium, if any, upon early redemption hereof are payable upon surrender of this Bond at the Principal Corporate Trust Office (as such term is defined in the Indenture) of BNY Western Trust Company, as trustee (the "Trustee "), or at such other place as designated by the Trustee. Interest hereon (including the final interest payment upon maturity or earlier redemption) is payable by check of the Trustee mailed by first class mail, postage prepaid, on the Interest Payment Date to the Registered Owner hereof at the Registered Owner's address as it appears on the registration books maintained by the Trustee as of the Record Date for which such Interest Payment Date occurs; provided however, that payment of interest may be by wire transfer to an account in the United States of America to any registered owner of Exhibit A 13014.01 Page 1 Bonds in the aggregate principal amount of $1,000,000 or more upon written instructions of any such registered owner filed with the Trustee for that purpose on or before the Record Date preceding the applicable Interest Payment Date. This Bond is one of a duly authorized issue of bonds of the Agency designated as "Redevelopment Agency of the City of Moorpark Moorpark Redevelopment Project 1999 Tax Allocation Refunding Bonds" (the "Bonds "), of an aggregate principal amount of dollars ($ ), all of like tenor and date (except for such variation, if any, as may be required to designate varying series, numbers, maturities, interest rates, or redemption and other provisions) and all issued pursuant to the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with section 53570 of said Code (the "Law "), and pursuant to Resolution No. of the Agency, adopted April 21, 1999, and an Indenture of Trust, dated as of May 1, 1999, entered into by and between the Agency and the Trustee (the "Indenture "), authorizing the issuance of the Bonds. Additional bonds, or other obligations may be issued 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 indentures supplemental 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 registered 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 Indenture the Registered Owner of this Bond, by acceptance hereof, assents and agrees. The Bonds have been issued by the Agency for the purpose of providing funds to refinance redevelopment activities with respect to its Moorpark Redevelopment Project (the "Project Area "), to fund a reserve account for the Bonds and to pay certain expenses of the Agency in issuing the Bonds. The Bonds are special obligations of the Agency and this Bond and the interest hereon and on all other Bonds and the interest thereon (to the extent set forth in the Indenture), are payable from, and are secured by a pledge of, security interest in and lien on the Tax Revenues (as defined in the Indenture) derived by the Agency from the Project Area. There has been created and will be maintained by the Agency, the Special Fund (as defined in the Indenture) into which Tax Revenues shall be deposited and from which the Agency shall transfer amounts to the Trustee for payment of the principal of and the interest and redemption premium, if any, on the Bonds when due. As and to the extent set forth in the Indenture, all such Tax Revenues are exclusively and irrevocably pledged to and constitute a trust fund, in accordance with the terms hereof and the provisions of the Indenture and the Law, for the security and payment or redemption of, including any premium upon early redemption, and for the security and payment of interest on, the Bonds. In addition, the Bonds shall be additionally secured at all times by a first and exclusive pledge of, security interest in and lien upon all of the moneys in the Special Fund, the Debt Service Fund, the Interest Account, the Principal Account, the Sinking Account, the Reserve Account, and the Redemption Account (as such terms are defined in the Indenture). 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. The Bonds maturing on or after October 1, , are subject, at the option of the Agency, to call and redemption prior to their stated maturity on any date commencing October 1, , as a whole or in part by such maturities as shall be determined by the Agency and by lot within a maturity, at the following redemption prices (expressed as percentages of the Exhibit A Page 2 principal amount of Bonds called for redemption) together with interest accrued thereon to the date fixed for redemption: .! -!l• •l •- USTI k October 1, through September 30, October 1, through September 30, October 1, and thereafter The Bonds shall also be subject to mandatory redemption in part by lot on October 1, and on October 1 in each year thereafter to and including October 1, , 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, or in lieu thereof shall be purchased in whole or in part pursuant to the Indenture, in the aggregate respective principal amounts and on the respective dates as set forth in the following table; provided, however, that if some but not all of the Bonds have been redeemed at the option of the Agency, as described above, the total amount of all future Sinking Account payments shall be reduced by the aggregate principal amount of Bonds so redeemed, to be allocated among the Sinking Account payments as are thereafter payable on a pro rata basis in integral multiples of $5,000 as determined by the Agency (notice of which determination shall be given by the Agency to the Trustee). Sinking Account Principal Amount Sinking Account Principal Amount Redemption Date To Be Redeemed Redemption Date To Be Redeemed (October 1) or Purchased (October 1) or Purchased t Maturity. As provided in the Indenture, notice of redemption shall be given by first class mail no less than thirty (30) nor more than sixty (60) days prior to the redemption date to the respective registered owners of any Bonds designated for redemption at their addresses appearing on the Bond registration books maintained by 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 Bonds may 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. Exhibit A Page 3 The Bonds are issuable as fully registered Bonds without coupons in denominations of $5,000 and any integral multiple thereof. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Indenture, Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations and of the same maturity. This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Corporate Trust Office of the Trustee, but only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of this Bond. Upon registration of such transfer a new fully registered Bond or Bonds, of any authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. The Trustee may refuse to transfer or exchange (a) any Bonds during the fifteen (15) days prior to the date established for the selection of Bonds for redemption, or (b) any Bonds selected for redemption. 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. The rights and obligations of the Agency and the registered 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 (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 premiums (if any) at the time and place and at the rate and in the currency provided herein of any Bond without the express written consent of the registered 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. Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ( "DTC"), to the Agency or the Trustee for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. This Bond is not a debt of the City of Moorpark, 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 those of the Agency. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. THE BONDS HAVE BEEN DESIGNATED BY THE AGENCY AS "QUALIFIED TAX - EXEMPT OBLIGATIONS" WITHIN THE MEANING OF SECTION 265(B)(3) OF THE INTERNAL REVENUE CODE OF 1986. 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 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 Exhibit A Page 4 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 Trustee's Certificate of Authentication hereon shall have been manually signed by the Trustee. Exhibit A Page 5 IN WITNESS WHEREOF, the Redevelopment Agency of the City of Moorpark has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Executive Director and its seal to be reproduced hereon and attested by the facsimile signature of its Secretary, all as of Dated Date stated above. ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK Secretary Executive Director TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within - mentioned Indenture. Authentication Date: BNY WESTERN TRUST COMPANY, Trustee LIN Exhibit A Page 6 Authorized Signatory ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within Certificate and do(es) hereby irrevocably constitute and appoint attorney, to transfer the same on the registration books of the Trustee, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution (banks, stock brokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program) pursuant to Securities and Exchange Commission Rule 17 Ad -15. NOTICE: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Certificate in every particular, without alteration or enlargement or any change whatsoever. Exhibit A Page 7 FROM: DATE: Moorpark Redevelopment Agenda Report Honorable Board of Directors UEW CTTV OF N'TOORPARK, CALIFORNIA Redevelopment Agency Meeting of q -,), (.:!I ACTION: `4 of I Agenc reCCn�tro�en� a�iDh Gid Ut�}Pr� f�esal�c�- an Nd• qa -�f BY: Graham Mitchell, Senior Management Analyst(:,�- Vv-\, March 31, 1999 (April 21, 1999, Agency Board Meeting) SUBJECT: Consider Approving an Agreement with Katz Hollis for a Downtown Revitalization Analysis and Plan and Consider Resolution 99- Approving a Budget Amendment for the Project BACKGROUND On October 21, 1998, the Moorpark City Council approved the Fiscal Year 1998/1999 Goals and Objectives. The 1998/1999 Goals and Objectives directed staff to conduct a market feasibility study for the revitalization of High Street and devise a plan to develop the Moorpark Redevelopment Agency owned property in the Downtown. To meet this objective, the Agency approved the release of a Request for Proposal with six firms responding. The City Council Economic Development Committee has reviewed the proposals and has made a recommendation for the Agency's consideration. DISCUSSION On November 20, 1998, the Agency released a Request for Proposal (RFP) for a downtown revitalization study. The RFP sought proposals from firms to provide two phases of work. Phase I products to be delivered include: 1) Downtown Market Feasibility Study - This report will determine the commercial uses deficient in the region and the businesses that the Agency should target in its Downtown recruitment effort. R w Honorable Board of Directors Page 2 March 31, 1999 2) Downtown Assessment Study - This report will identify and describe each Downtown property and identify the properties most appropriate for initial development. It will also address strengths, weaknesses, and barriers to development in the Downtown. 3) Best Use Study - Using the Market Feasibilty and Assessment Studies, this study will determine best uses for the various sections of the Downtown. For each proposed development option, the study will address the feasibility and the potential Agency costs to actualize development and the resultant benefits to the City. 4) Incentive Options - The consultant will develop incentive options to potentially be used to actualize the proposed development options. 5) Developer /Business Recruitment Strategy - This strategy will identify options, designate specific tasks of the Agency and the consulting firm, and develop a timeline to accomplish each task. The strategy will also identify associated costs for each task. Phase II of the RFP requested that the firms propose how they would assist the Agency in implementing the Developer /Business Recruitment Strategy and assist in the evaluation of developer and business proposals in the developer section process. Six firms responded to the RFP. These firms and their proposed costs include: Bay Area Economics Economic Development Systems Ernst & Young Kenneth Leventhal Katz Hollis Mundie and Associates Urban Futures /Robert C. Lessor $53,200 $67,680 R.E. Group $150,563 $34,000 $67,500 & Company $63,700 The City Council Economic Development Committee critiqued RFP responses based on redevelopment and revitalization experience, completeness of the proposals, understanding of Moorpark and the ��?.,'' 3 Honorable Board of Directors Page 3 March 31, 1999 surrounding commercial market, references, and cost. Staff contacted references and reported the results to the Committee. Based on the completeness of the RFP responses and the positive reference comments, the Committee did not feel it necessary to interview firms. After reviewing the RFPs, the City Council Economic Development Committee recommended that the Agency consider Katz Hollis to perform the scope of work described in the RFP. The recommendation of Katz Hollis was made based on the firm's vast experience with Southern California cities, knowledge of redevelopment and downtown revitalization, positive remarks from references, and a low bid to complete the project. Katz Hollis, over the past twenty years, has assisted nearly two hundred government agencies— mostly in California —with revitalization efforts. In the RFP, Katz Hollis indicated that to accomplish the project it will enter a joint venture with Stanley R. Hoffman Associates and Rodino Associates. Stanley R. Hoffman Associates will primarily be used in the quantitative analysis phase and Rodino Associates will be involved in developer attraction activities. The RFP also indicated that Katz Hollis can accomplish Phase I scope of work within 120 days of the awarding of the contract. The Agency has the ability to initially enter into a contract for Phase I of the project only; Phase II contract can be entered into after the completion of Phase I if the Agency decides to do so at that time. The cost to complete Phase I is $28,000. The cost to complete Phase II is $6,000. To fund the project, the 1998/1999 budget must be amended by appropriating $34,000 from the Agency Reserve Fund to retain Katz Hollis for the completion of the Downtown Revitalization Analysis and Plan. RECOMMENDATION (ROLL CALL VOTE) That the Moorpark Redevelopment Agency (1) approve agreement with Katz Hollis for a Downtown Revitalization Analysis and Plan and authorize the Executive Director to execute the agreement, and (2) adopt Resolution 99- amending the 1998/1999 budget by appropriating $34,000 from the Moorpark Redevelopment Agency Reserve Fund. RESOLUTION NO. 99- A RESOLUTION OF THE CITY OF MOORPARK REDEVELOPMENT AGENCY, CALIFORNIA, AMENDING THE FY 1998/99 BUDGET TO APPROPRIATE RESERVE FUNDS FOR THE DOWNTOWN MARKETING STUDY. WHEREAS, on July 15, 1998, the Redevelopment Agency Board of Directors adopted the Budget for Fiscal Year 1998- 1999; and WHEREAS, the Redevelopment Agency Board of Directors has approved a contract for a downtown marketing study in the amount of $34,000; and WHEREAS, the Agency needs to appropriate said amount from the Agency's Reserve Fund; and WHEREAS, Exhibit "A" hereto describes said budget amendment and resultant impacts to the current budget. NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE CITY OF MOORPARK REDEVELOPMENT AGENCY DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. A budget amendment in the amount of $34,000 be appropriated from the Agency's Reserve Fund, as more particularly described in Exhibit "A" attached hereto and made a part hereof. SECTION 2. The Agency Secretary shall certify to the adoption of this Resolution and shall cause a certified Resolution to be filed in the book of original Resolutions. PASSED AND APPROVED this 21st day of April 1999. ATTEST: Deborah S. Traffenstedt, Secretary Patrick Hunter, Chairman Resolution No. 99- Exhibit "A" Current Proposed Revised Account Appropriation Adjustment Budget Capital Reserve Fund ($34,000) 410.000.0000.000.5101 Other Contractual Services $27,500 $34,000 $61,500 410.510.0000.000.9191 rr� rA -, . . KatzHollis Redevelopment Consultants December 22,1998 865 South Figueroa Suite 1300 Los Angeles, CA 90017 -2543 (2T3) 629 -3065 John E. Nowak Assistant Executive Director San Francisco, CA Moorpark Redevelopment Agency (415) 399 -6889 799 Moorpark Avenue Sacramento Area Moorpark, California 93021 (916) 774 -6453 RE: Downtown Moorpark Revitalization Analysis and Plan Dear Mr. Nowak: Katz Hollis and the firm of Stanley R. Hoffman Associates are pleased to have received an invitation from the Moorpark Redevelopment Agency (Agency) to respond to the Request for Proposals regarding the revitalization of downtown Moorpark. Our firms are very interested in this opportunity. We have established reputations for the timely delivery of quality services. The work would utilize the substantial experience and broad -based perspective of each firm. Katz Hollis, over the past twenty years, has assisted almost two hundred cities and counties, primarily in California, with their revitalization efforts. SRHA has specialized in fiscal and economic impact studies and on market feasibility studies since 1981. We would like to call your attention to the fact that Robert Rodino of Rodino Associates will be a member of our team. Mr. Rodino's background includes the creation and operation of numerous central business district and neighborhood revitalization projects and studies. He is a retail- marketing specialist and brings a working knowledge of the tenant's perspective. We look forward to the opportunity to assist you in your efforts to make the Old Town Commercial District successful and livable in its unique context within the region. Very truly yours, KATZ HOLLIS Z' A .ticen� Lawrence J. Arceneaux r� President 8218/prpAtr 0 V V3 I—' I 122298/gn KatzHollis PROPOSAL FOR SERVICES PRESENTED TO THE MOORPARK REDEVELOPMENT AGENCY FOR THE CITY OF MOORPARK DOWNTOWN REVITALIZATION ANALYSIS, PLAN AND ACTUALIZATION PROJECT Submitted December 22, 1998 M. Katz Hollis Stanley R. Hoffman Associates Rodino Associates 8218mrp 122198fjw TABLE OF CONTENTS Paae I. SUBMITTAL FORM ............................................................................. ..............................1 II. QUALIFICATIONS OF FIRM AND PRINCIPALS ................................ ..............................3 III. PROJECTS AND REFERENCES LIST ............................................... ..............................6 IV. SCOPE OF WORK AND FEE .............................................................. ..............................7 Attachments I. Qualifications of Joint Venture Firms (Stanley R. Hoffman Associates and Rodino Associates) II. Projects and References Lists of Joint Venture Finns 0 J' M ) � Lt ',- - " SECTION 6 CITY OF MOORPARK REDEVELOPMENT AGENCY DOWNTOWN REVITALIZATION ANALYSIS, PLAN & ACTUALIZATION PROJECT NAME OF FIRM: KATZ HOLLIS ADDRESS: 865 S. Figueroa Street, Suite 1300 Los Angeles, California 90017 -2543 TELEPHONE: C_213 ) 629 -3065 FACSIMILE: ( 213 ) 623 -9105 CONTACT PERSON: Lawrence J. Arceneaux, President JOINT VENTURE/ SUBCONTRACTED FIRMS Stanley R. Hoffman Associates (SRHA) Rodin Associates SRHA 11661 San Vicente Blvd., Suite 505 Los Angeles, California 90049 Rodin Associates 3651 Malibu Vista Drive Malibu, California 90265 STAFF ASSIGNED: Katz Hollis -Mr. Arceneaux, Ms. Lane Ms Lovette SRHA -Mr. Stanley Hoffman Rodino Associates -Mr. Rodino 1 CITY OF MOORPARK REDEVELOPMENT AGENCY DOWNTOWN REVITALIZATION ANALYSIS, PLAN & ACTUALIZATION PROJECT (cont.) COMPENSATION: PHASE 1 $ 28,000 PHASE II $ 6,000 SIGNATURE: "'L d ' TITLE: �, ��, 4 DATE: 2 H. Qualifications of Firm and Principals Katz Hollis Katz Hollis is an established and well- respected consulting firm that specializes in real estate, redevelopment, financial, planning, and legislative services to public entities. Since its founding in 1978, the firm has successfully assisted over 200 client organizations throughout California and several other states. Katz Hollis is a California corporation and a certified Minority Owned Business Enterprise. The firm provides services to clients throughout California from two offices: a home office in downtown Los Angeles and an office in the San Francisco Bay area. Katz Hollis' services are structured to provide clients strategic and technical support over the full span of a development effort, and the following general categories are brief descriptions of services available. real estate development services - assistance with a full range of project development services beginning with preliminary analysis of site feasibility and culminating in land transfer and implementation of the construction of improvements. financial services - ongoing involvement in the planning and execution of the financial and fiscal aspects of a revitalization effort andlor the coordination of other ongoing and periodic components of agency operations. financial advisory services - revenue estimates, including analysis of liabilitieslobligations and of fiscal /structural elements of bond issuance. Preparation of marketing documents, rating agencylinsurer presentations, ongoing disclosure services. Pricing analysis/verification for negotiated sales and soliciting, analyzing and awarding bids for competitive sales. property tax analysis services - monitoring, verification and projection of reported taxable values and tax revenue, tax sharing agreements and developer payments, and assessment appeals analysis. plan adoption services - various levels of assistance in project formation: from preparation of speck documents to full coordination and staffing of a redevelopment plan adoptionlamendment process environmental services - full environmental assessment services including preparation of negative declarations, environmental impact reports, and mitigation monitoring prggrams. legislative services - analysis of the impact of proposed or newly enacted legislation on specific projects and on the redevelopment field generally The firm's specialization in and focus on California redevelopment has resulted in extensive technical knowledge and working experience in redevelopment planning, financing and legislative analysis. The firm's expertise in providing redevelopment consulting services is illustrated by the following involvements: • 21 active contracts with governmental entities for consulting services on an as- needed basis - including analyses for financing, planning and implementation purposes; • financial analyses mandated by AB 1290 (specifically the use of cash flow modeling in Implementation Plans) have been provided for several years as a part of financial services for on -going clients in the course of implementing existing redevelopment projects and as a part of the financial services in redevelopment plan adoptions; • working experience in 63% of the counties in California with redevelopment projects and engagement by two counties to review and audit their respective systems for property tax revenue allocation; • fiscal consultant services provided on over 240 tax allocation bond issues having total par value of almost $6 billion (bond issue client list is enclosed as Attachment III); • technical assistance provided in the establishment of redevelopment related legislation - Mr. Arceneaux, President of Katz Hollis, served as the Chairman of the Technical .Committee for the California Redevelopment Association's legislative activities on AB 1290; • The preparation of 50 feasibility studies for plan adoptions and the adoption of 90 redevelopment plans and amendments; • speaking engagements with a number of state -wide professional organizations on redevelopment subjects that included financing, plan adoptions, and the preparation of the Statement of Indebtedness; and, • deposition and testimony of Katz Hollis senior staff as expert witnesses in redevelopment litigation. Katz Hollis is composed of analytical staff, professional staff and clerical staff. The professional staff is responsible for office management. The analytical staff consists of the President, Senior Vice President, Vice Presidents, Senior Associates, Associates, Senior Analysts and Analysts. The President, Senior Vice President, and Vice Presidents are responsible for management of the firm, provision of technical expertise, and for client management. Senior Associates and Associates are responsible for client management and supervision/preparation of client services. The Senior Analysts and Analysts are involved with the analysis of data, preparation of reports and spreadsheets, systems programming and other research and analytical functions. Analysts are specialists in county property tax information systems, data, and reports. We would like to call your attention to selected technical qualifications and services of Katz Hollis as related to implementation assistance. Katz Hollis offers a full range of implementation assistance which supplements the in -house expertise of staff. While the processes for program implementation remain the same, the methods of implementation depend on the specific project as well as the individual circumstances of the jurisdiction. Katz Hollis is qualified to both identify the method and to implement the processes to effect a successful site - specific development project. Katz Hollis provides assessment of the desirability of a jurisdiction's involvement in specific development efforts and in the management of that involvement should the development proceed. Assistance with one or more specific processes can include: 1. The solicitation of development proposals through preparation of Requests for Qualifications and Requests for Proposals and the subsequent evaluation of competing responses; 2. The negotiation of Exclusive Negotiating Rights Agreements; 3. The negotiation of Disposition and Development Agreements ( "DDA ") and Owner Participation Agreements ( "OPA "); and 4. The preparation of project - 'specific development schedules and the coordination of required approvals, including presentations to policy boards. 4 T,, r Specifically, Katz Hollis has both successful experience and expertise in negotiation, monitoring and management of DDAs and OPAs which has resulted in the implementation of the full spirit of the agreements. We understand the issues and constraints of both the private and public sector and how accommodation can be reached. We also provide advice and evaluation in the drafting of such agreements. For presentations to political bodies and other parties regarding development projects, the experience of amplifying, illustrating, and demonstrating project specifics provides a thorough basis for project evaluation and review. We make ourselves available to agencies for effective and efficient individual and team meetings on an as- needed basis. Katz Hollis has extensive experience regarding acquisition and site assembly. We provide management and coordination of the efforts of cities, redevelopment agencies, and developer consultants including planners, relocation consultants, civil engineers, landscape architects, attorneys and title and escrow companies as well as county, state and federal agencies. Katz Hollis can also assist in the implementation of development projects by bringing to bear the firm's expertise in the analysis and estimation of revenues to be generated by private development efforts and the firm's understanding of the ways that cities and agencies can leverage revenues to provide funding for city /agency responsibilities attendant to implementing development proposals. Some of the -specific services Katz Hollis can provide include: • Site specific tax increment and other revenue analysis to determine what resources, if any, will be available to the jurisdiction as a result of development implementation. • Developer pro forma review to determine a most important development resource, the appropriate payment by the developer for the development opportunity. • Determination or review of financing alternatives that will optimize the revenues and other resources of the undertaking. • Overall- assessment of financial feasibility given the opportunities and constraints identified in the other analyses. • Preparation of reports required prior to the sale or lease of land or the construction of public improvements. Principals Lawrence J. Arceneaux, President Mr. Arceneaux is in charge of financial, bond, and legislative analyses for redevelopment and other public agencies throughout California and other states. Mr. Arceneaux served as Chairman of the Technical Committee of -the California Redevelopment Association's legislative activities on Assembly Bill 1290 - California Redevelopment Law Reform Act. As the Principal in charge of financial and bond services to public agencies, he has managed or been involved in the majority of the 250 plus tax allocation bond issues (totaling over $6 billion) where Katz Hollis has served as Fiscal Consultant. Mr. Arceneaux is also the client manager of services provided to several of the largest redevelopment agencies in the state, including the City of Los Angeles Community Redevelopment Agency. Mr. Arceneaux is a member of the National Council on Urban Economic Development and the International Association of Assessing Officers. Mr. Arceneaux is graduate of Tulane University School of Architecture and has undertaken graduate studies at the University of California at Los Angeles. 5 Sandra Read Lane, Senior Associate Ms. Lane is the Senior Associate responsible for the management of planning and implementation services for a variety of proposed real estate developments in both the public and private sector. She provides hands on and advisory project management including the preparation of Requests for Qualifications and Requests for Proposals, and the negotiation and preparation of Exclusive Negotiating Rights Agreements, Disposition and Development Agreements, and Owner Participation Agreements. Ms. Lane directs and coordinates site specific implementation activities including acquisition, relocation, clearance, marketing, property management and site improvement. Before joining Katz Hollis, Ms. Lane was a Project Manager and Assistant to the Deputy Executive Director of the Philadelphia Redevelopment Authority. There she was responsible for administration of the Technical Services Department, the Department responsible for implementation activities for forty-three project areas. As a Senior Planner for the Environmental Management Agency of the County of Orange she directed the County's Housing Rehabilitation Program and Affordable Housing Incentives Program. As Redevelopment Manager and Community Development Director for the City of Lynwood she managed the ongoing programs and projects of the Agency as well as the operation of the Planning, Building and Code Enforcement Divisions. Ms. Lane is a State of California General Contractor and a member of the Building Industry Association. Ms. Lane is a graduate of the University of Pennsylvania and completed graduate studies in public administration/urban politics at Temple University. Stephanie Smith Lovette, Senior Associate Ms. Lovette is a Senior Associate in the area of financial and development services. Her responsibilities include the preparation of financial analysis for plan adoptions /amendments, negotiations with taxing entities, development of traditional and alternative financing structures and the provision of financial advisory services and the sale /placement of bonds. Ms. Lovette also acts as financial consultant on the creation and /or amendment of redevelopment projects. The financial consulting work encompasses tax increment revenue projections, assistance in the development of the redevelopment plan and report, analysis of taxing entity revenue sharing scenarios, and analysis of the cost and benefits of specific real estate developments. She has explained the redevelopment plan and process to taxing entities, city councils, planning commissions, citizens committees and the general public. She also participated in taxing entity revenue sharing negotiations prior to the adoption of AB 1290. Prior to joining Katz Hollis, Ms. Lovette was an investment banker specializing in California public agency debt, including Tax Allocation Bonds, General Obligation Bonds, Certificates of Participation, and bonds secured by Assessment and Mello Roos liens. Ms. Lovette has conducted negotiated and competitive bond sales acting as either an underwriter or financial advisor. Ms. Lovette is an active member of the San Francisco Municipal Forum, Municipal Management Assistants of Northern California, and the California Elected Women's Association for Education and Research. Ms. Lovette is a graduate of the University of California at Irvine. III. PROJECTS AND REFERENCES LIST Cities of Marina and Seaside reference: Rich Guillen Acting City Manager and John Longley, City Manager phone: (respectively) (831)899 -6203 and (831)384 -3715 In a joint effort, the Cities of Marina and Seaside asked Katz Hollis to prepare a Request for Qualifications for development of two major planning areas on the former Fort Ord. One of these areas is slated for development as a regional entertainment center and the other area is proposed as a mixed -use town center containing office, residential and neighborhood commercial uses. Katz Hollis worked extensively with the policy boards of each municipality in order to frame the solicitation in the manner most responsive to the communities' wishes within the constraints of the regionally approved Fort Ord Base Reuse Plan; Los Angeles County Community Development Commission, Redevelopment Feasibility Study reference: Shirley Young phone: (213) 890 -7203 Katz Hollis is providing analysis on the eligibility and desirability of redevelopment plan adoption for 7 non- contiguous areas consisting of approximately 7,000 acres. Katz Hollis conducted a full survey to determine the existing uses and blighting conditions in the seven areas. Working with a market economist we then analyzed the type and amount of development that could be supported. This portion of the work included analyzing regional economic trends, market analysis of land uses, and the development potential. This information was utilized to create a realistic scenario of development capacity and absorption and a development prototype to be used in the different sub - areas. Katz Hollis utilized this information to prepare financial feasibility analysis assess the adequacy of potential project resources to cover anticipated costs of redevelopment over time. The financial feasibility analysis included program definition, cost identification, revenue and resources estimation, and cashflow analysis. City of Seaside, Laguna Grande Redevelopment Project Area (Restaurant and Hotel Sites) reference: Mr. Rich Guillen, Acting City Manager phone: (831) 899 -6203 Katz Hollis assisted the Redevelopment Agency of the City of Seaside with its efforts to market two sites located within the boundaries of the Laguna Grande Redevelopment Project and continues to assist the Agency with negotiations for the sites' disposition and development. As a result of the Request for Proposals (RFP) prepared and issued by Katz Hollis, a developer was identified for the first site. The 2.2 -acre site is zoned for visitor - serving uses and lies partially within the coastal zone. Katz Hollis prepared the RFP, evaluated responses and recommended a developer to the Agency Board. Katz Hollis negotiated the Disposition and Development Agreement (DDA) including the provision of developer incentives. The Environmental Impact Report (EIR), which addresses the project as well as a required zoning ordinance amendment, is currently being prepared by Katz Hollis. Should the EIR be certified, the Board will "be asked to formally consider the DDA which provides for the development of a 140 room Courtyard by Marriott Hotel. Katz Hollis is currently negotiating a DDA with a major restaurant chain interested in locating on the Monterey Peninsula and a reciprocal parking agreement with the Embassy Suites hotel located adjacent to the site. IV. SCOPE OF WORK AND FEE DOWNTOWN MOORPARK REVITALIZATION ANALYSIS AND IMPLEMENTATION PLAN SCOPE OF WORK The following Scope of Work presents the tasks that are required to prepare a market analysis and fiscal feasibility study for the City of Moorpark's Old Town Commercial District. We understand that this study is part of a revitalization strategy proposed by the City of Moorpark for this area. The scope addresses the following key objectives: Development of destination activities and recruitment of key commercial activities to downtown Increase in sales tax revenues from the Downtown 7 Phase 1 Analysis and Design Task 1 Market Feasibility Study Project Initiation. A project initiation meeting will be held between members of the consultant team and the City staff. The purpose will be to define the issues more specifically and to refine the schedule and presentation format. Review Existing Studies and Conditions. Existing studies related to the project will be evaluated. This will include reviewing the existing Specific Plan, market studies, and conducting a field survey of current tenants in the area, and conducting an inventory of nearby areas that may be competing with Downtown Moorpark. Compile Existing Data Resources. This task includes the compilation of data including taxable sales performance, demographic variables, identification of market groups, potential purchasing power and financial data, such as possible funding resources for implementation. Market Analysis. The market analysis will define retail, entertainment, office and other land uses that can be supported by the appropriate trade area with their associated population, employment, visitor traffic and income and expenditure characteristics, as detailed in the following subtasks: a. Demographic and Income Analysis. This task will provide the background demographic and household income analysis to assist in evaluating the existing conditions and retail potential of the local population. The market area will be defined on a Census block group basis in coordination with City staff and consultants and will focus on the residential and visitor population that will be within the market area of the Downtown Moorpark. b. Employment Analysis. This task will assemble and evaluate employment generators in the local area that would potentially dine and shop in Downtown Moorpark, such as the Community College, business park employment, and other civic and educational institutions. C. Retail Uses. The retail analysis will be based on a leakage analysis to identify where sources of the local population spend their income and what types of expenditure power is currently captured in the Downtown Moorpark. This will include compiling and reviewing an existing inventory of retail uses, square footage, and sales data, as well as examining the competition in the market area, including the previous market study and City building records. The analysis will focus on the range of community and neighborhood level shopping, as well as specialty shops and restaurants, that would be compatible with the Downtown Moorpark commercial market area. d. Transit and Pedestrian Oriented Development. Because of the desire to create a retailing district linked with surrounding residential land uses, an evaluation of retail land uses will be made that will specifically serve the local population within walking distance of the Downtown Moorpark commercial district. Task 2 Analysis of Strengths, Weaknesses and Barriers to Development To obtain a preview of how development might unfold in the Downtown, an analysis will be made of the surrounding market area in terms of the kinds of retailing and services that now serve the Moorpark market, where it is located, and what seems to be missing. That is, what can downtown Moorpark offer both businesses and patrons. What are the barriers to development and does the solution require public, private or joint action. Task 3 Opportunities for Market Driven Development Based on the results of the economic, demographic and land use analysis, the consultant team will meet with City staff to assemble a set of land uses which are consistent with market demand and suitable with the City's development vision. This will include the following: Strategic Tenant Analysis. Drawing from the market analysis and a detailed examination of the performance of existing tenants within the market area, we will identify strategic segments of local serving retail uses that will be compatible with the Downtown Moorpark commercial district. Our current sense is that 0 downtown Moorpark can have much to offer families and children from Moorpark and the surrounding area, as well as visitors to the area. From a retailing perspective, these would include, but not be limited to: Amusement/Entertainment Antiques Apparel and Accessories Arts and Crafts/Hobby Supplies/Fabrics AudioNideo Hair and Beauty Products and Services Bookstores Childcare Computer Supplies Consumer Electronics Convenience Stores Educational Services and Supplies Ethnic Foods Greeting Cards Health/Fitness Home Furnishings and Improvements Jewelers Mail/Parcel Package /Delivery Pet Supplies Photography and Supplies Restaurants Shoes/Footwear Specialty Merchandise Sporting Goods Definition of Optimal Land Use Mix. Based upon the market and strategic tenant analysis, a range of land uses will be defined. The analysis will build upon the existing land uses that are strong, and identify the market conditions under which the desired land uses will likely develop. This may include the required lease ranges, square footage requirements, compatible tenants, accessibility and visibility considerations and necessary public improvements as well as incentives or subsidies. Analysis of Fiscal Cost and Benefits. This task will assemble and compare the cost and benefits for two land use options. Order -of- magnitude municipal service cost estimates will be compiled. It is assumed that the City and project team will assist in preparation of the cost assumptions. This will also include an identification of additional operations and maintenance costs for enhanced public improvements, such as streetscapes, landscaping, open space and street furniture. An analysis will be provided with a focus on the increased revenue capability of sales tax and property tax. A projection will be made of ongoing sales tax and property tax from the proposed development. A comparison of the projected fiscal revenues and costs will be made at buildout. This task will estimate increases in sales and property taxes, as well as other significant, annually recurring revenues. Economic Benefits. A qualitative discussion of the economic benefits to the area from the development of improved public infrastructure and revitalized businesses will be made. This will include the potential for adjacent land uses to experience indirect benefits and develop and revitalize beyond the current project boundaries. Summary of Benefits. The fiscal and economic benefits will be summarized as to both quantitative and qualitative impacts in a draft report. The intent will be to show that the recommended scenario yields public benefits exceeding any public costs. This report will be modified based on City and project team comments. Task 4 Analysis Incentive Options This task will review all of the possible incentive options, including: redevelopment land writedowns and use of tax increment for infrastructure and downtown beautification; provision of public parking; use of TEA21 transportation funding for accessibility improvements and to create a pedestrian friendly environment. Other incentives might include working closely with developers and businesses that seek to develop or enhance existing properties in order to expedite their processing time and to assist financially through other grant and loan programs. Task 5 Formulate a Developer /Business Recruitment Strategy This task would outline a Developer/Business Recruitment Strategy that builds on the identified incentive options. The plans requested by the Agency as part of Phase H which would include detail on process and the identification of responsibilities for both consultants and staff during the implementation phase. For example, after marketing materials are prepared, a series of workshops might be held to explain the process to interested developers and property owners, clarify incentives for them, and elicit from them their concerns-and suggestions. The consultant team could also assist in preparing development concept plans for key sites and then assist the City staff in contacting interested developers and businesses. An important feature of our work that will run throughout this assignment will be "reality testing." This involves talking to the retailers and developers who we believe have a legitimate possibility of doing business in downtown Moorpark. We would talk with them fairly early in the process to elicit a sense of the concepts that may workfor the downtown revitalization. Task 6 Meetings /Coordination Meetings /coordination with City staff to periodically guide the project and to present final results are assumed. In addition, two public workshops or presentations are assumed. Phase 2 Planning for Actualization This phase will assist the City in developing implementation plans. An approximate budget for the development of the Recruitment Strategy and Plan is estimated with more detailed budgeting once the specific steps are identified. Task 1 Plan a Recruitment Strategy A plan will be prepared as to how prospective developers and businesses will be attracted to the downtown. The elements of the plan will include: reasons why downtown Moorpark provides the market opportunities, the advantages of developing early in the revitalization process, the incentive package that can be offered, both process and financial, and the business friendly atmosphere that will build a mutually beneficial public /private partnership Task 2 Plan the Recruitment of Development Firms and Businesses The recruitment plan will specify the steps to recruit firms and the respective roles of the City and consultant team. The plan will include an outline for: marketing materials, venues to provide marketing presentations, such as trade shows, developer conferences and through the Internet, and City staffing that can facilitate ongoing economic development. Task 3 Develop Criteria for the Evaluation of Developer and Business Proposals and for Developer Selection 10 :mac u The team would develop criteria and recommend as process for the evaluation of developer and business proposals as well as for developer selection. The team would be available to provide assistance, as outlined in the plans, as the Agency moves from planning to implementation. 11 PROPOSED BUDGET Phase I Analysis and Design $28,000 Task 1 Prepare Market Feasibility Study Task 2 Analyze Strengths, Weaknesses and Barriers to Development Task 3 Identify Opportunities for Market Driven Development Task 4 Analyze Incentive Options Task 5 Formulate a Developer/Business Recruitment Strategy Task 6 Meetings /Coordination Phase H Planning for Actualization .,$ 6,000 Task 1 Plan a Recruitment Strategy Task 2 Plan the Recruitment of Development Firms and Businesses Task 3 Develop Criteria for the Evaluation of Developer and Business Proposals and for Developer Selection Total 12 $34,000 KatzHollis Attachment I Qualifications of Joint Venture Firms (Stanley R. Hoffman Associates and Rodino Associates) 4 { Is STANLEY R. HOFFMAN AND ASSOCIATES REFERENCES Economic Element, City of Baldwin Park General Plan Update Mr. Steve Cervantes Community Development Director City of Baldwin Park 14403 East Pacific Avenue Baldwin Park, CA 91803 (626) 813 -5261 On a project team with Cotton /Beland/Associates, we prepared an economic and market analysis for the City of Baldwin Park's General Plan Update. The final product resulted in an Economic Element for the General Plan. We analyzed the labor pool and consumer base for the City and surrounding markets in order to develop a strategic plan best suited to the City. The resultant economic element established goals and policies for the City's long -term fiscal health. The analysis also focused on subareas of the City that provided the best opportunities for revitalization, including the older, downtown business district. Fiscal benefits were analyzed for alternative land uses. October 1997-August 1998. Adams Square Market Feasibility and Fiscal Analysis Study, City of Glendale Brian League Planner City of Glendale 633 East Broadway, Room 103 Glendale, CA 91206 -4386 We recently prepared a market feasibility and fiscal benefits analysis for the Adams Square neighborhood commercial district in the southeastern portion of Glendale. The City of Glendale is seeking to revitalize the area and encourage a broader mix of retail and service tenants. The study prepared a detailed inventory of competitive retail establishments and projected retail expenditure potential from the surrounding community that was leaking to other retailers. The final product was a set of recommendations related to broadening the local serving tenant mix and potential revitalization and expansion possibilities. July - October 1998. Empire Center Economic Analysis, City of Burbank Roger Baker Community Development Department City of Burbank P.O. Box 6459/275 East Olive Avenue Burbank, CA 91502 (818) 238 -5278 On a project team with LSA Associates, we prepared a retail market analysis of the proposed Burbank Empire Center project in the City of Burbank. The project, planned on the former Lockheed Aircraft Manufacturing site, included a mix of land uses including regional and neighborhood serving retail, restaurants, hotel and office development. The major issue for the City was to evaluate the appropriate mix of land uses to minimize competitive retail impacts on their downtown Media Center regional shopping mall and adjacent stores. May - August 1998 Rodino Associates Urban Revitalization & Real Estate Consulting 05.01 - #4 Five projects undertaken by the firm within the past five (5) years that are of a similar nature to the services requested herein: HISPANIC MARKET SHOPPING CENTER INVESTMENT STRATEGY FOR THE LOS ANGELES METROPOLITAN AREA: An investment strategy was developed incorporating analyses of demographics, shopping and consumption patterns, retail market characteristics, job creation potential, and shopping center investment performance in the Latino market. Prepared for the RILEY - PEARLMAN COMPANY and their Real Estate Investment Trust clients. (1996 -1997) DOWNTOWN POMONA REVITALIZATION PROGRAM: Created and directed a one year stbrt-up effort to begin the revitalization of downtown Pomona, California. Project included preparation of a strategic plan, creation of promotional events, preparation of retail space inventory and a marketing plan. (1994 -1995) SHOPPING CENTER MANAGEMENT: Directed the management of a portfolio of 12 neighborhood and community shopping centers in California, totaling 1.5 million square feet of retail space, including the preparation of management plans, lease negotiations, repositioning plans, marketing and promotions. (1992- 1995) MARKETING AND PROMOTIONS FOR "MIRACLE ON BROADWAY": Prepared marketing and promotional strategies, conducted a highly successful district -wide "Mother's Day" sale, prepared advertising materials, organized local retailers, and interfaced with print media. (1995) THE SUPERMARKET INDUSTRY IN LOS ANGELES COUNTY. A comprehensive sectoral analysis of the supermarket industry including its history, retail strategies and financials, inner -city concentrations, job creation and economic development impact. Prepared as part of a Ph.D. program research project at the UCLA School of Public Policy and Social Research, Department of Urban Planning. (Fall 1997) 3651 Malibu Vista Drive, Malibu, CA 90265 3101459 -9474 Fax. 3101454 -6046 bobrodino @aoi.com Rodino Associates Urban Revitalization & Real Estate Consulting #5 - Four references for projects undertaken within the last two years. 1. Malcolm Riley, Malcolm Riley & Associates (formerly Riley /Pearlman Co.) 11640 San Vicente Blvd. Suite 202 Los Angeles, CA 90049 Phone: 310/820 -5891 Hispanic Shopping Center Investment Strategy project - see above 2. James Watson Watson & Associates 101 Main Street Suite A . Seal Beach, CA 90740 Phone: 562/430 -0503 Analysis of the retail market in Huntington Park, CA; analysis of the cash flow and investment value, and sale of Marguerita Plaza, a 76,000 sq ft shopping center. (Dec 31, 1996) 3. Michael Rubin Vice President Burnham Pacific Properties 610 W. Ash Street Suite 1600 San Diego, CA 92101 Phone: 619/652 -4724 Analysis of the retail markets in Palm Desert and Cathedral City, CA; analysis of cash flow and investment value, and sale of three shopping centers in the Palm Desert - Cathedral City markets. (1997 - 1998) 4. Prof Goetz Wolff UCLA Department of Urban Planning 3250 Public Policy Building Box 951656 Los Angeles, CA 90095 -1656 Phone: 310/206 -4285 Analysis of Supermarket Industry in Los Angeles county (Fall 1997 -see above) KatzHollis Attachment II Projects and References Lists of Joint Venture Firms STANLEY R. HOFFMAN ASSOCIATES QUALIFICATIONS Stanley R. Hoffman Associates is a professional economic consulting and corporation established in 1981 and provides fiscal and financial analysis, economic and policy analysis and real estate market research for public EXPERIENCE agencies and private firms. Services are designed to meet a variety of client needs, ranging from overall market assessments to the details of site - specific development staging seeking innovative solutions for the client's specific requirements. Services Provided Services are provided individually and in cooperation with project teams in a variety of planning situations including: preparation of specific plans, redevelopment plans, general plans and amendments, annexation and incorporation studies, development agreements and fee analyses and environmental impact reports. There currently are three offices in California: Los Angeles, Tustin and Alameda. Fiscal and Financial Analysis. Information is provided on cost and benefit consequences of land use and infrastructure changes to cities and counties. Means are determined for funding public infrastructure improvements required for development. Areas of concentration are as follows: • Fiscal Impact Models • Public Costs and Revenues • Fiscal Impacts of Alternative Land Use Plans • Development Impact Fee Studies • Financing Strategies for Capital and Operating Costs • Annexation and Incorporation Studies Economic and Policy Analysis. Services are provided in the formulation of economic policies and strategies. Specific areas of emphasis include: • General Plan and Specific Plan Programs • Economic Development Strategies • Project Phasing Strategies • Public/Private Coordination Real Estate Market Research. Decision - relevant information on development opportunities is provided for overall market evaluations and site - specific assessments. Techniques include: • Land Use Market Absorption Studies • Highest and Best Use Analysis • Financial Pro Formas • Market Feasibility Assessments • Growth Management Phasing Plans SKHA Stanley R. Hoffman Associates FISCAL ECONOMIC AND FINANCIAL SERVICES Key Staff Resumes Stanley R. Hoffman, Stanley R. Hoffman has over twenty -eight years experience in the fields AICP of fiscal and financial analysis, economic and demographic studies, land Principal use projections, real estate market research and computer -based financial modeling. He has managed major programs in both the public and private sectors, involving numerous presentations before political and academic bodies and professional audiences. Since establishing Stanley R. Hoffman Associates in January 1981, Mr. Hoffman has specialized in fiscal and economic impact studies and on market feasibility studies for residential, office, major retail shopping centers and office/hotel projects. These studies have been prepared for many clients including cities, counties, redevelopment agencies, other public agencies and developers. Major fiscal and financial analyses have included large -scale mixed use land developments in many jurisdictions throughout California. Mr. Hoffman is experienced in preparing development ,fee impact programs and nexus studies. He has also worked on establishing Mello - Roos Community Facilities Districts and special assessment districts. These programs cover a wide range of land development and phasing patterns, facilities including transportation, drainage, sewerage, fire equipment and stations and other infrastructure. He is responsible for the company's copyrighted fiscal impact models that are being utilized in several cities and counties in California. The models are tailored to the unique characteristics of each jurisdiction and are designed to project revenues and costs associated with future development under specific assumptions about land use, phasing and infrastructure requirements. Education and Affiliations: Mr. Hoffman holds a master's degree in urban planning from UCLA, 1972; a master's degree in electrical engineering from the University of Michigan, 1967; and a bachelor's in engineering from UCLA, 1966. He maintains affiliations and leadership roles with several professional planning organizations including the California Planning Roundtable, California Planning Foundation, the American Planning Association and the American Institute of Certified Planners. He is past co- president of the UCLA Graduate School of Architecture and Urban Planning Alumni Association. Teaching/Speaking Assignments: Mr. Hoffman taught a graduate course entitled Urban Public Finance at UCLA in the Public Policy Department during Spring Quarters 1997 and 1996. He also is often a guest speaker on professional panels, conferences, seminars and graduate courses at various Universities in Southern California in the fields of planning and economic development. In May 1997, in association with the alumni association, he put together a seminar on GIS technology and its applications in financial planning. He also taught courses at the University of Southern California and the University of California, Irvine Extension Program in Land Use and Development Planning. SHIE[A Stanley R. Hoffman Associates FISCAL, ECONOMIC AND FINANCIAL SERVICES ti K ,.. OFFICE LOCATIONS Los Angeles Office 11661 San Vicente Boulevard Suite 505 Los Angeles, California 90049 (310) 820 -2680 phone (310) 820 -8341 fax Tustin Office 18031 Irvine Boulevard Suite 202 Tustin, California 92680 (714) 573 -2281 phone (714) 573 -1446 fax Bay Area Office 238 Ennismore Court Alameda, California 94502 (510) 537 -4594 phone (510) 537 -5107 fax SRHA @PACBELL.NET FEE SCHEDULE Principal: $130 per hour Senior Staff: $85 per hour Support Staff: $45 per hour SHHA Stanley R. Hoffman Associates FISCAL , ECONOMIC AND FINANCIAL SERVICES Robert J. Rodino .... experience in the public and private sectors 30 years of experience in urban revitalization, economic development, and real estate investments. Lecturer at Urban Land Institute - University of Southern California's "Real Estate Trends" conference, 1998. Lecturer at International Downtown Association's "Annual Conference" - Seattle, WA, 1994. Chairman - "Hispanic Retail Markets" panel International Council of Shopping Centers' conference, Anaheim, CA, 1996. Ph.D. Studies in Urban Planning and Revitalization at UCLA (currently enrolled). M.A. Government, Boston University B.S. Mathematics, Manhattan College. Author: "Capturing the Latino Market: Repositioning for Fun and Profit" California Centers magazine, Spring 1994. Author of several articles on real estate investment strategies, Real Estate Review, Winter and Spring, 1987. Licensed Real Estate Broker, California Bob Rodino is the principal and founder of Rodino Associates, a consulting firm specializing in urban revitalization, economic development, and real estate investment. He is head of the investment analysis and sales activity for the joint venture, Malcolm Riley & Assoc/ Latinvest. Mr. Rodino has been a consultant to both the public and private sectors: for local governments, non - profits, institutional investors, and major developers in New York, California, and the Southwest. His background combines creation and operation of numerous central business district and neighborhood revitalization projects and studies, the acquisition and sale of over $500 million of investment properties, the management of 1.2 million square feet of shopping center space, and the development of retail, office, and industrial properties, His consulting career began in the South Bronx where, for six years he created and directed a highly successful program rehabilitating, managing, and leasing 400 inner -city apartments, including a bi- lingual vocational training program, for a local community development corporation. Bob was Senior Vice President of Glenfed Realty Investments, building a property portfolio of $300 million, and President of Amsted Management, managing 1.2 million square feet of retail space. Bob is widely recognized as a specialist in the Hispanic retail market in California.