HomeMy WebLinkAboutAgenda Packet 1998/03/10
"I decíare ,,"1er penalty of perjury that i am
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the Pu'clic ,"C,...iCiIG Lul,iin ; b on
Tuesday, March 10, 1998 DATEO,r3 '.')-7'5?SiGNED .....-----' Council Chambers
6:00 p.m. Public Services Building
Re ular Meetin of ,he Cit of Chula Vista
CALL TO ORDER
1. ROLL CALL: Councilmembers Moot -' Padilla -' Rindone -' Salas -' and
Mayor Horton -'
2. PLEDGE OF ALLEGIANCE TO THE FLAG. MOMENT OF SILENCE
3. APPROVAL OF MINUTES: None submitted,
4. SPECIAL ORDERS OF THE DAY: None submitted,
CONSENT CALENDAR
(Items 5 through II)
The staff recommendations regarding the following items listed under the Consent CaIenOOr will be enacted by
the Council by one motion without discussion unless a Councilmember, a member of the public, or City staff
requests that the item be pulled for discussion, If you wish to speak on one of these items, please fill oul a
"Request to Speak Form" available in the lobby and submit it to the City Clerk prior 10 Ihe meeting. Items pulled
from the Consent CaIenOOr will be discussed after Board and Commission Recommendations and Action Items,
Items pulled by the public will be the first items of business.
5, WRITTEN COMMUNICATIONS:
a, Letter from the City Attorney stating that to the best of his knowledge from observance of
actions taken in Closed Session nn 3/3/98, that there were no reportable actions which are
required under the Brown Act to be reported. It is recommended that the ldter be received
and filed,
b, Letter from Chair of the Charter Review Commission re¡:arding Council Referral on
Geographic Residency Requirements for Councilmembers. It is reconunended that the lelter
be received and tiled,
c. Letter from Dr. Barry Russell requesting $250 to help fund the Cultural Arts Classical Music
Competition May 16-17. The funds for this activity go to duplicating,judges' fees, and other
operational costs. Consistent with Council Action in 1996 and 1997, It is reconnnended that the
same amount of funding as in 1997 be provided, that is. $200,
6. ORDINANCE 2724 AMENDING CHAPTER 15.48 OF THE MUNICIPAL CODE
REGULATING SWIMMING POOL ENCLOSURES (second readin~ and
adoption) -In September 1996, Governor Wilson signed into law AB-3305. The
California Swinaning Pool Safety Act. The Act manda'es local hulldmg
departments enforce minimum standards for fencing enclosures around pools and
spas serving single family dwellings, These new standards apply to all new
swimming pools permitted atìer 111/98, Staff recommends Council place the
ordinance on second reading and adoption, (Director of Building and Housing)
¡
Agenda -2- March 10. 1998
7. RESOLUTION 18916 REVISING SALARY BANDS FOR EXECUTIVE MANAGEMENT
PERSONNEL - It became clear in the recent salary adjustments tÒr executive
managers that the salary bands used for those positions are extremely out-of-dak
and need to be updated. They have not been increased overall since November
1992, when they were raised by 2.5%. Since that time, there have only been
some minor amendments to specific bands, Raising each of the bands by 5%
will allow the new City Manager more flexibility for adjusting department head
salaries. The increases suggested apply only to the upper and lower limits of
the bands and do not necessarily bear any relationship to actual salaries of
positions within each band, Staff recommends approval of the resolution, (City
Manager) 4/5th's vote required.
8. RESOLUTION 18919 AUTHORIZING CERTAIN AMENDMENTS TO THE FINANCING
DOCUMENTS AND RELATED ACTIONS WITH RESPECT TO THE
$9,490,000 CITY OF CIruLA VISTA MUL TIFAMIL Y HOUSING
REVENUE BONDS (TERRA NOVA ASSOCIATES PROJECT), 1992
ISSUE A - In 1985, the City Council approved the issuance of a tax-exempt
multi-family mortgage revenue bond of $10, 115,000 tÒr financing Terra Nova
Villas, a 232 unit apartment project at 440 East H Street, a project developed
by the general partnership of Terra Nova Associates, As a result. the project
received a favorable interest rate mortgage and. in accordance with federal
regulations, entered into a regulatory agreement with the City COll11Túttlßg 20
percent of the project units (46 units) to affordable low-income tenants, [n
February 1992, the City issued its $9,490.000 Variable Rate Multifamily
Housing Refunding Revenue Bonds 1992 Issue A to rotund the 1985 Bonds,
The 1992 Bonds are secured in part by a Letter of Credit provided by the
Industrial Bank of Japan, LId, (IBJ), The IBJ Letter of Credit is now abou' to
expire and the project owner wishes to provide a substitute Letter of Credit from
Dresdner Bank AG. Staff recommends approval of the resolution, (Director
of Community Development)
9. RESOLUTION 18920 ACCEPTING BIDS AND AWARDING CONTRACT FOR THE
CONSTRUCTION OF "THIRD A VENUE SlDEW ALK1MPROVEMENTS,
FROM "E" STREET TO "G" STREET, IN THE CITY (STM330j, AND
AUTHORIZING THE CITY MANAGER TO EXECUTE CHANGE
ORDERS AS APPROPRIATE TO UTILIZE THE REMAINING
CONTINGENCY FUNDS TO REPAIR AREAS OF LESSER PRIORITY
THAN THOSE BID- Funding for this project was budgeted during the fiscal
year 1997/98 Capital Improvement Program budget process, The project was
budgeted to reduce the potential for accidents caused by pedestrians tripping
over broken, raised, or missing portions of sidewalks and tree grates in the
downtown area, Staff recommends approval of the resolution awarding the
contract to Gypsy Queen. [nc,. National City. in the amount of $28.950 and
authorizing the City Manager to execute a change order. (Director of Public
Works)
10. RESOLUTION 18921 ACCEPTING BIDS AND AWARDING CONTRACT FOR "STORM
DRAIN REHABILITATION - INDUSTRIAL BOULEVARD, WEST Of
MARSAT COURT, NORTH OF DOROTHY STREET IN THE CITY (DR-
126)" - On 2/18/98, sealed bids were received for "Storm Drain RehabilitatIOn,"
Agenda -3- March 10. 1998
The work to be done consists of removal of existing plugs in ,he 36 inch
reinforced concrete pipe storm drain in Induslrial Boulevard, The work mcludes
excavation and grading, saw cutting, asphalt concrete pavement. shoring,
installation of polyvinyl chloride pipe sliplining system and traftïc control, Staff
recommends approval of the resolution awarding the contract to Roberts
Engineering Contractors, Escondido. in the amount of $34.600, (Director of
Public Works)
11. RESOLUTION 18922 ACCEPTING THE DONATION OF TRAVEL EXPENSES TO ATTEND
THE CALIFORNIA NATURAL GAS TRANSIT OPERATIONS FORUM
IN PALM SPRINGS, CALIFORNIA, MARCH 18-19, 1998 - SDG&E will
be participating in a meeting co-sponsored by Sunline Transit. Deere Power
Systems, Cummins Engine Corp" and California's other investor-owned gas
utilities, This conference will focus on an up-to-the minute brieting about
natural gas usage for transit purposes, The participating agencies are inviting a
number of carefully chosen transit agencies from throughout Calilornia to
participate in the forum, They have extended an invitation for Chula Vista
Transit representatives to attend, with travel expenses being covered by the
utility, Staff recommends adopting the resolution accepting the donation of
travel and expenses and authorize the appropriak designees to attend the
California Natural Gas Transit Operations Forum, (Deputy City Manager)
. . . END OF CONSENT CALENDAR' . .
ADJOURNMENT TO REGULAR AND/OR JOINT MEETING OF THE REDEVELOPMENT AGENCY
ORAL COMMUNICATIONS
This is an opportunity for the general public to address the City Council on any subjecl mailer within Ihe
Council'sjurisdiction that is not an item on this agendnfor public discussion, (State law, however, generally
prohibits the City Council from taking action on any issues not included on the posted agenda.) If you wish to
address the Council on such a subject, please complete the "Request to Speak Under Oral Communications
Form" available in the lobby and submit it to the City Clerk prior to the meeting. Those who wish to speak,
please give your name and address for record purposes and follow up action,
PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES
The following items have been advertised and/or posted as public hearings as required by ÚlW. If you wish to
speak to any item, please fill out the "Request to Speak Form" avaiÚlble in the lobby and submit it to Ihe City
Clerk prior to the meeting.
12. PUBLIC HEARING PCM-98-24; AMENDMENTS TO THE SALT CREEK RANCH (NOW
KNOWN AS ROLLING HILLS RANCH) SECTIONAL PLANNING AREA
(SPA) PLAN TO ALLOW CERTAIN ENCROACHMENTS INTO
SIDEYARD SETBACKS IN THE SF!, SF2, AND SF3 SINGLE FAMILY
LAND USE DISTRICTS - PACIFIC BAY HOMES - The applicant proposes
to amend the Sectional Planning Area (SPA) plan tor the proJect tormeriy
Agenda -4- March 10. 1998
known as Salt Creek Ranch and now identitied as Rolling Hills Ranch, The
proposed amendments would allow certaIn setback encroachments which would
accommodate trellis structures over driveways, where the driveways lead to
garages located in the rear of the lot for the SF I, SF2, and SF3 single family
detached land use districts, Staff recommends Council place the ordinance on
first reading, (Director of Planning)
ORDINANCE 2725 APPROVING AMENDMENTS TO THE SALT CREEK RANCH
SECTIONAL PLANNING AREA (SPA) PLAN CONSISTING OF
MODIFICATIONS TO THE PLANNED COMMUNITY DISTRICT
REGULATIONS REGARDING CERTAIN SIDEYARD SETBACK
ENCROACHMENTS (first readin~)
BOARD AND COMMISSION RECOMMENDATIONS
This is the time the City Council will consider items which have been forwarded 10 them for consideration by one
of the City's Boards, Commissions, and/or Committees.
None submitted,
ACTION ITEMS
The items listed in this section of the agenda are expected to elicit substantial discussions and deliberations by
the Council, staff, or members of the general public. The items will be considered individually by Ihe Council
and staffrecommenootions may in certain cases be presented in the allernative. Those who wish to speak, please
fill out a "Request to Speak" form available in the lobby and submit it to the City Clerk prior 10 the meeting,
None submitted.
ITEMS PULLED FROM THE CONSENT CALENDAR
This is the time the City Council will discuss items which have been removed from the Consenl Calendar,
AgenOO items pulled at the request of the public will be considered prior to those pulled by Councilmembers,
OTHER BUSINESS
13, CITY MANAGER'S REPORTlS)
a. Scheduling of meetings.
14. MAYOR'S REPORTCS)
a. Ratification of appointment to the Cul'ural Arts Commission - Thomas J, Erhard, (to till vacancy
created by Commissioner Scott, whose term expires June 30. 1998),
Agenda -5- March 10. 1998
15. COUNCIL COMMENTS
ADiOURNMENT
The meeting will adjourn to (a closed session and thence to) the regular City Council meeting on March 17, 1998
at 6:00 p.m. in the City Council Chambers,
A special joint meeting/worksession of the Redevelopment Agency will be held immediately following the City
Council meeting.
.,. declare Imder penalty of perjury that I am
employed by V", ","it.~ Qf Chu:a Vista in the
Offic" O'{ '[:"3 , ¡'; .. ¡"" "n ' ':,:"°': : posted
this ¡\~è'" f,., , ">"" Board at
Tuesday, March 10, 1998 ~~eT~~::o/t'lii [~:;. ,.'~r:&;u~7~~ on . Council Chambers
6:00 p.m. "-~. l ","',,- YI PUbhc ServIces Butldmg
(inunediately following the City Council Meeting)
Citv of Chula Vista City Council
CLOSED SESSION AGENDA
Effective April 1, 1994, there have been new amendments to the Brown Act. Unless the City Attorney, the City
Manager or the City Council states otherwise at this time, the Council will discuss and deliberate on the following
items of business which are permitted by law to be the subject of a closed session discussion,and which the
Council is advised should be discussed in closed session to best protect the interests of the City. The Council is
required by law to return to open session, issue any reports of.tl11111 action taken in closed session, and the votes
taken. However, due to the typical length of time taken up by closed sessions, the videotaping will be terminated
at this point in order to save costs so that the Council's return from closed session, reports of.tl11111 action taken,
and adjournment will not be videotaped. Nevertheless, the report of final action taken will be recorded in the
minutes which will be available in Ihe City Clerk's Office.
1. CONFERENCE WITH LEGAL COUNSEL REGARDING:
1. Existing litigation pursuant to Govermnent Code Section 54956.9
Luna v. City of Chula Vista
2. Initiation of litigation pursuant to Government Code Section 54956.9 (0) I case
CONFERENCE WITH LABOR NEGOTIATOR - Pursuant to Govermnent Code Section 54957.6
. Agency negotiator: John Goss or designee for CVEA, WCE, POA, IAFF, Executive
Management, Mid-Management, and Unrepresented.
Employee organization: Chula Vista Employees Association (CVEA) and Western Council of
Engineers (WCE) , Police Oftïcers Association (POA) and International Association of Fire
Fighters (IAFF).
Unrepresented employee: Executive Management. Mid-Management. and Unrepresented,
2. REPORT OF ACTIONS TAKEN IN CLOSED SESSION
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CllY OF
CHUlA VISTA
OFFICE OF THE CITY A TIORNEY
Date: March 4, 1998
To: The Honorable Mayor and City Council
From: John M. Kaheny, city AttorneY~~
Re: Report Regarding Actions Take in Closed Session
for the Meeting of 3/3/98
The City Council met in Closed Session on 3/3/98 to discuss USA v.
city of San Diego; Calderon v. City of Chula Vista; Wolfe v. City
of Chula Vista; and Griffin v. City of Chula Vista.
The Redevelopment Agency met in Closed Session on 3/3/98 to discuss
Conference with Real Property Negotiator - Price and terms for
disposition: 760 Broadway - Broadway Village Business Homes, L.P.
The City Attorney hereby reports to the best of his knowledge from
observance of actions taken in the Closed Session in which the City
Attorney participated, that there were no reportable actions which
are required under the Brown Act to be reported.
JMK:lgk
C:Iltlclossess,no
5C{..
276 FOURTH AVENUE. CHULA VISTA. CALIFORNIA 91910 . (619) 691-5037 . FAX (619) 585-5612
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CITY OF
CHULA VISTA
OFFICE OF THE CITY ATTORNEY
February 18, 1998
The Honorable Mayor and City Council
City of Chula vista
276 Fourth Avenue
Chula Vista, Ca. 91919
Re: Council Referral - Geographic Residency
As a result of Councilmember Rindone's request, the Charter
Review Commission has been exploring the possibility of amending
the Charter of Chula vista to provide for a district residency
requirement for Councilmembers. His concept envisioned dividing
the City into Council districts for residency purposes only with
all candidates continuing to run for election citywide. At its
September 15, 1997 meeting, Councilmember Rindone made a
presentation concerning his proposal. At the October 27, 1997
meeting of the Commission, Councilmember Moot gave his perspective
on the issue. Finally, city Manager Goss gave a presentation at
the November meeting. There was limited public comment at each of
these meetings.
Based on the presentations and public comment, the Charter
Review Commission unanimously believes that now is not the time to
make such a change to the Charter of the City of Chula vista.
with respect to the issue of geographic residency, the
Commission is unanimous in stating that "if it's not broke--it
don't need fixing!", Le., is there a need to change from electing
Councilmembers at large by seat, to electing Councilmembers at
large by geographic residency?
The Commission is satisfied that there have not been to date
any significant problems created by electing City Council members
at large by seat rather, than by geographic residency, nor has
there been a problem in the conduct of City business based on
geography.
There is also a concern that there are no logical geographic
boundaries in Chula Vista. Who would undertake the massive and
potentially politically divisive task of setting such boundaries?
If implemented the geographic residency lines would have to be
periodically redrawn as the city grows and in that process create
~c.: (~ ~(lL/) Wri-Hé+l ~rV\UVllèo.h~ --SIlo!?!
C. . ~ 276 FOURTH AVENUE. CHULA VISTA. CALIFORNIA 91910 . (619) 691-5037 . FAX (619) 585-5612
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The Honorable Mayor and city Council
February 18, 1998
Page Two
political controversy in the community where the lines are drawn.
Complicating this issue is the fact the California and U. s.
Constitutions would require a reapportionment every ten years.
Further, a residency restriction may discourage Councilmembers
from moving to different locations within the City while they are
serving on the City Council.
This is not to say that sometime in the future that this issue
ought to be reconsidered in light of changing conditions.
As an alternative to geographic residency for council
candidates, the Commission proposes that at some future point in
time (perhaps when the city population reaches 200,000) that the
city council be increased by at least two members to a new total of
7, including the Mayor.
Very truly yours,
f}L c:D~ I~
John Dorso, Chair
c: lere Igeograph, ee
51,..è)-
CITY OF CHULA VISTA
February 24, 1998
Mayor Shirley Horton
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 92010
Dear Mayor Horton:
As you know, the Chula Vista Cultural Arts Commission sponsors the Cultural Arts
Classical Music Competition every year. This year, the 6th Annual Competition will be
held May 16-17 at the Chula Vista Public Library. This very successful event requires
the work of a number of volunteers in the Chula Vista community and is a major
cultural offering for the citizens of the city.
The organizing committee would like to request $250 to help fund this competition.
For the past few years, the Council has provided funding and we would like to
continue the relationship developed in the past. The funds for this activity go to
duplicating, judges' fees, and other operational costs.
I would like to thank you for your support of this event in the past and hope that your
continued support will help us provide a broad cultural experience for the citizens at
Chula Vista.
51"" Iy, ~ /
Bany R ..11, p~
Committee Member, 6th Annual Cultural Arts Classical Music Competition
799 Brookstone Road, #101
Chula Vista, CA 91913
cc: Charlotte Stevenson
Gretchen Evans
Jacqueline Watson
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ORDINANCE NO. ~ 7:¿ y...\\\j
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AN ORDINANCE OF THE CITY OF CHU~~A AMENDING
CHAPTER 15.48 OF THE CHULA~ ICIPAL CODE
REGULATING SWIMMING POOL E URES
The City Council of the City of Chu1a Vista does hereby
ordain as follows:
SECTION I: That Chapter 15.48 of the Chula vista
Municipal Code is hereby amended to read as follows:
Sec. 15.48.010 Definitions.
For the purposes of this chapter, the following words and
phrases shall have the meanings respectively ascribed to them by
this section:
,)Iz. "Enclosure" means a fence aE' a'tbeE' salià stE'lietliFe with
apeRiR~s, hales aE' ~aps theE'eiR Re laR~eF 'tbaR twe aRà
aRe half iRehes iR aRY àimeRsiaR, pFa7iàeà, heweveF, that if
a pieJtet feRae is eE'eetoeà aE' JIIaiR~aiReà, ~e haE'ieaRtal
àimeRsiaRs shall Ra~ eueeeà faliE' iRehes, aftà pE'e dàeà
fliF~he:E' tha~ a âwellift~ Reuse aE' aeeessaE'Y 2liilàiR~ may 2e
liseà as paE't af sueh eftelesuFe. , wall or other barrier that
comDletelv surrounds a swimminq Dool lot or Dremises .
"Exit alarms" means devices that make audible. continuous
alarm sounds when anv door that cermits access from the
residence to the cool area that is without anv interveninq
enclosure. is oDened or is left aiar. Exit alarms.mav be
batterv oDerated or mav be connected to the electrical
wirinq of the buildinq.
"Public swimminq Dool" means a swimminq Dool ocerated for
the use of the qeneral Dublic with or without charqe. or for
the use of the members and quests of a crivate club. Public
swimminq cool does not include a swimminq cool located on
the qrounds of a Drivate sinqle-familv home.
B-. "Swimming pool" or "pool" means a eaRtaiReE' aE' struetUE'e
àesi~Reà feE' aE' liseà feE' swi_iR~ aE' \¡aàiR~ 2Y parseRs, ar
whieh is àesi~Reà feE' aE' liseà as a fish paRd ar lily paRd.
anv structure intended for swimminq or recreational bathinq
that contains water over 18 inches deeD. "Swimminq Dool"
includes in-qround and above-qround structures and includes.
but is not limited to. hot tubs. scas. Dortable scas. and
nonDortable wadinq cools.
Sec. 15.48.020 Enclosure required-Exception.
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Every person in possession of land within the city, either
as owner, purchaser under contract, lessee, tenant, or licensee,
upon which is situated a swimming pool, shall at all times
maintain on the lot or premises upon which such a pool is
located, and completely surrounding such pool, lot or premises, a
substantial fence or other solid structure not less than five
feet in height, with openings, holes or gaps therein no larger
than four inches in any dimension. I I'raviàeri, ha..e",er, ~hat if a
l'ie]tet fel'lee is ereeteà ar mail'ltail'leà, the haE'ieal'l~al àimel'lsial'l
shalll'lat eueeeà faHr il'lehes1 I'ra.iàed further that Aany wall of
a &fte- sinqle family dwellinq, duple¥ al'lri ~~a family rivellil'l~,
ar a wall aE' ...alls, havil'llj ' 1'1;19 riears :that a1'61'1 riireetly il'lta the
l'ael area, af al'l apartment,buildinr or accessory buildings-
ther6ta, may be used as p~t of th, enclosure. The vertical
clearance from the roun' to the ottom of the enclosure shall be
no more than two inches,~nd the tside surface shall be free of
rotrusions cavit'es or other h sical characteristics that
would serve as handho!ds or footholds that could enable a child
below the a e of five ea s to/climb over. Doors and ates in
these walls shall meet the re irements of Sec. 15.48.030.
Eueel'tial'll B1Ülriil'llj 's e¡asseà èi' the èuilriil'llj ' eerie as ather
~:=::::~:e:~::~~~~:::~~::~~::::::~:~::::~Ij '~:~:~:~;t~:~!~~
rieers al'el'lil'llj ' ~iFeetly il'lte the l'ael areá. I
Sec. 15.48.03b Gates and ~~ors in enc~6sur~~pecifications-
Exception~' ';'
, ,
All gites and door~!opening through,~UCh enclosures shall be
equipped with a self-clQsing and self-l fching device located at
least fout feet six incþes abovegroun level, designated to keep
and capable of keepingisuch doo~ or ga e securely closed at all
times wgen not in a7tu~1 use! ' ,
,
\ /
,
T~he self-latching
device shall be located on the Pol side of the fence and shall
be a minimum of six inches belowfthe to of the fence. All open
type fences and gates shall have/soli areas extending a minimum
of twenty-four inches in all directi s from below the latching
device. ~
In addition to the above reauirements. sinale familv dwellinas
and attached or detached aaraaes leadina to the pool area shall
be provided with one of the followinq safety features:
2
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b The Dool shall be isolated from access to a home bv an
enclosure that meets the reQUirements of Sec.
15.48.020.
~ The residence will be eauiDDed with exit alarms on
those doors Drovidina direct access to the Dool.
~ All doors Drovidina direct access from the home to the
swimmina Dool shall be eauiDDed with a self-closina.
self-Iatchina device with a release mechanism Dlaced no
lower than 54 inches above the floor.
9.... Other means of Drotection. if the dearee of Drotection
afforded is eQUal to or areater than that afforded bv
anv of the devices set forth in subdivisions (a) to
(d). inclusive. as determined bv the Director of
Buildina and Housina.
ExceDtion: Sinale familv dwellinas with hot tubs or SDas
eauiDDed with lockina safetv covers that comDlv with
American Societv for Testina Materials - Emeraencv
Performance SDecification (ASTM - ES 13-89) need not comDlv
with anv of the additional reQUirements a) throuah e) above.
Sec. 15.48.040 Gates and doors in enclosure-Modifications of
specifications permitted when.
The Director of Buildina and Housina èailàiB~ iBs~eetBr may
make a slight modification, for good cause shown in individual
cases, with respect to the nature or position of the latch
required by Section 15.48.030. Upon the application of a
property owner, the Director of Buildina and Housina èuilàiB~
iBs~eetBr may grant extensions of time for compliance, for good
cause shown in individual cases. Such extensions of time shall
not exceed thirty days at a time.
Sec. 15.48.060 Variances from regulations permitted
when-Procedure.
The owners, occupants or persons in possession or control of
the property wherein a swimming pool is located subject to the
provisions of this chapter may apply for modification or variance
of the terms and regulations set forth in this chapter. The
application fee for a hearing before the Board of Appeals and
Advisors is as set forth in the Master Fee Schedule the Re~aireà
¥eefSt. The application submitted to the Department of Building
and Housing shall be reviewed by the Director of Building and
Housing to determine whether or not the modification as requested
would adversely affect the public health, safety or general
welfare. The Director of Building and Housing shall forward his
report and recommendation to the Board of Appeals. The Board of
Appeals shall review the report, allow and provide for specific
3
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modifications of terms of the chapter when it shall be determined
that strict compliance with the terms of this chapter will not
materially benefit or safeguard the public and that the work to
be done will result in undue hardship to the owners or occupants
or persons in possession or in control of the property.
Sec. 15.48.070 Location of pool-Limitations.
No swimming pool shall be permitted in any front yard, as
defined in the zoning ordinance of the city, or in any side yard,
as defined in the zoning ordinance of the city, facing on a
dedicated street.
Sec. 15.48.080 Compliance required-Time limit-certain provisions
not retroactive.
The p'E'avisial'\s af this ehapteE' shall Be eelllf'llieà '.d'th \.ithiR
forty five days after the effeetive date af the aE'àiRal'\ea
codified iR this ehapteE'. This chapter shall not be retroactive
with respect to its provisions governing the location of swimming
pools and with respect to the provisions of Section 15.48.050,
Sec. 15.48.090 Other protective devices authorized when.
Other protective devices or structures may be used providing
such structures and protective devices have been previously
approved by the board of appeals of the city. The board of
appeals shall determine that the degree of protection provided by
the substitute devices or structures is not less than the
protection afforded by the fence, gate, self-latching and
self-closing device described elsewhere in this chapter.
Sec. 15.48.100 Violation-Continuation deemed nuisance.
The continuation of any violation of the provisions of this
chapter is declared to be a nuisance.
Sec. 15.48.105 Review of plans for public swimming pools-Fee.
Any person desiring the review and approval of plans and
specifications for a public swimming pool by the Director of
Environmental ~ Health pursuant to section 116038 7789 af
Title 17 of the California Health and Safetv Code AàllliRistE'ative
€eàe shall submit the plans to the director accompanied by a fee
as set forth in this section to cover the cost of the review. As
soon after the plans and specifications are submitted as is
practical, the director shall review or cause to be reviewed the
plans and specifications and shall determine whether they are in
accordance with the requirements of the California Health and
Safetv Code. the California Code of Requlations. the California
Buildina Code and the California Electrical Code oertainina to
oublic oools EeetiaRs 7789 at se~. af Title 17 af the CalifaE'Ria
4
~ &/f
^àmi~is~ra~i¥e eeàs. In the event that the plans and
specifications do not comply with the ^àmiRis~ra~i:e Code§
pra,>isiafts, amended plans and specifications may be submitted to
the Director for rereview and approval, and the fee for each such
rereview shall be as set forth in this section, payable to the
Director in advance. The fees are as fellews:shall be that as
established bv the Countv of San Dieao Board of su~ervisors i:
the Annual Fee Ordinance commencina with Section 6 .107 of th
San Dieao Countv Code of Reaulatorv Ordinances
A. Peel rlaR I'Eviet; . . . . . . . . . . .Sse.ee.
B. reel . rlaR rereviet;. ' " . . . . . .ç2e.ee.
Sec. 15.48.110 Public pool-Permit required.
No person shall maintain or operate any pool except a
private pool unless an annual operating permit is issued therefor
by the eeIiR~:¡heal~h affiee r Director of Environmental Health.
A pool shall be considered a private pool if it is intended for
non-commercial use as a swimmina Dool bv not more than three
owner families and their auests maiR~aiReà ey aft iftàiviàaal fer
the ~se ef his family aRà frieftàs aRà fer s~immift~ iRs~rae~ieft
pre~rams ef sher~ àara~ieft ~~ieh are eeRàaeteà ey ar speRsereà ey
the Jl.merieaR Reà erase ar ether li)[e reee~Ril!eà er~aiÜl!atdeR.. An
annual operating permit issued by the Director of Environmental
Health ee~R~y health effieer is required for the operation of
any public pool including, but not limited to, all commercial
pools, real estate and community pools, pools at hotels, motels,
resorts, auto and trailer parks, auto courts, apartment houses,
clubs, public or private schools and gymnasia, and health
establishments. Every person applying for a permit as required
by this section shall, at the time of making application for such
permit, pay an annual inspection fee of sixty dollars for the
first pool under one ownership and on the same property, and a
fee af thirty dallal's fer eash aàài~ieftal peel eft the same
J.3reperty aRà aRàer the same e~'ftership fella,,"s shall be that as
established bv the Countv of San Dieao Board of SuDervisors in
the Annual Fee Ordinance commencina with Section 65.107 of the
San Dieao Countv Code of Reaulatory Ordinances. The annual
operating permit shall be effective for a twelve-month period
from the date of issuance.
Penalties for late Davment of the Health Permit shall be as
established in the San Dieao County Fee Ordinance.
lR aRY ease ~here ~fte applieaR~ has failed fer a perieà af
thirty days te file the applieatieR aRà eetaiR the permi~
re~ireà ey this seetieR, there shall ee aààeà te aRà eelleeteà
vi~h ~he iRsJ.3ee~ieR fee a peRal~y e~al te teft pereeR~ ef the
fee; aRà fer eaeh aàài~ieftal meftth er frae~ieR ef a meftth after
5
~ ---
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- """, ..----..,
the ex~i~atieft ef saià thi~ty àay ~e~ieà that the a~~lieaftt fails
te file StieR a~~lieatieft aftà eBtaift sash ~ePmit, tRe~e shall Be
aààeàte aftà eelleeteà \lith the ifts~eetieft fee aft aàài1Üeftal
~~~~:~ e~al te teft ~ereeftt ef the ifts~eetieft feel ~~e7iàeà,
he\{e~e~, that ift fte eveftt shall the tetal ~eftalty aààeà te tae
~~~~:e~ieft fee ~~FStiaftt te this seetieft Be mere thaft sixty
~ereeftt ef tae ifts~eetieft fee. ~e im~esitieft e~ ~aj~eftt ef the
~:ft~:~y i~eseà BY tRia seetieft saall ftet ~peveftt the impesitieft
ef afty etae~ ~eftalty ~peseriBeà BY state la~ e~ eity erài~;~;;,
Rer shall it ~~e?eftt a e~imiftal ~reseeatieft fe~ vielatieft ef tRia
eha~ter.
Sec. 15.48.120 Public pool-Renewal of permit-Penalty for
delinquency.
A permit issued pursuant to this chapter shall be renewed
annually. Application for the renewal shall be made to the
ceaftty healta effieer Director of Environmental Health. At the
time application is made, there shall be paid to the county
health officer the annual fee prescribed by Section 15.48.110.
The annual fee, if unpaid longer than thirty days after the
expiration of the previous permit, is delinquent, and thereafter
a penalty shall be imposed in the manner prescribed ~n Section
15.48.110.
Sec. 15.48.130 Enforcement of sections 15.48.110 and 15.48.120.
The County of San Diego, acting through its officers and
employees, shall enforce the provisions of Sections 15.48.110 and
15.48.120 and carry out such inspection activities pursuant to
the agreement for ~tiBlie health services entered into on December
7, 1952; provided, however, that the city shall undertake
appropriate legal action for any violation of said sections.
SECTION II: This ordinance shall take effect and be in full
force on the thirtieth day from and after its adoption.
Presented by Approved as to form by
Kenneth Larsen, Director of
Building and Housing
C:\or\chap1548
6
~ t -'~
COUNCIL AGENDA STATEMENT
Item NO.~ í1
Meeting Date ~;J;8
/ r'9J¿,
ITEM TITLE Resolution - Revising Salary Bands for
Executive Management Personnel
SUB!UTTED BY city Manager~ 4/5ths Vote: Yes --L
It became clear in processing the recent salary adjustments for
executive managers that the salary bands used for those positions
are extremely out-of-date and need to be updated. They have not
been increased overall since November 1992, when they were raised
by only 2.5%. Since that time, there have only been some minor
amendments to specific bands, where the upper limi t has been
increased or positions were moved from one band to another, or
where positions were added or deleted from the bands. Even with
those changes, many executive positions are at the ,top, or very
close to the top, of the band.
Raising each of the bands by 5% will allow the new City Manager
more flexibility for adjusting department head salaries. The
increases suggested apply only to the upper and lower limits of the
bands and do not necessarily bear any relationship to actual
salaries of positions within each band. For your information,
during the period December 1992 through December 1997, the C.P.I.
increased by 10.3%.
Attachment A reflects the proposed salary bands, which include a 5%
increase to the upper and lower limits of each band.
FISCAL IMPACT: N.A.
JDG:mab
~
7-/
RESOLUTION NO. ) ~9 /1
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA REVISING SALARY BANDS FOR
EXECUTIVE MANAGEMENT PERSONNEL
WHEREAS, it became clear in the recent salary adjustments
for executive managers that the salary bands used for those
positions are extremely out-of-date and need to be updated; and
WHEREAS ,- they have not been increased overall since
November, 1992, when they were raised by 2.5%; and
WHEREAS, since that time, there have only been some minor
amendments to specific bands, where the upper limit has been
increased or positions were moved from one band to another, or
where positions were added or deleted from the bands; and
WHEREAS, even with those changes, many executive
positions are at the top, or very close to the top, of the band;
and
WHEREAS, raising each of the bands by 5% will allow the
new city Manager more flexibility for adjusting department head
salaries; and
WHEREAS, the increases suggested apply only to the upper
and lower limits of the bands and do not necessarily bear any
relationship to actual salaries of positions within each band; and
WHEREAS, Attachment A reflects the proposed salary bands,
which include a 5% increase to the upper and lower limits of each
band.
NOW, THEREFORE, BE IT RESOLVED the City Council of the
City of Chula vista does hereby revise the Salary Bands for
Executive Management Personnel as set forth in Attachment A,
attached hereto and incorporated herein by reference as if set
forth in full.
Presented by Approved as to form by
John D. GOSS, city Manager
C:\r8\8alary.bnd
?/;l
-,-------- - n_~"______n' "-",----,,,,-- -----",
Attachment A
EXECUTIVE SALARY SCHEDULE Rev. 3/03/98
Reso.
Executive Salary Band Minimum Limit Maximum Limit
E-S $7,300/month $lO,SlO/month
$87,600/year $126,120/year
Assigned Positions:
Assistant City Manager
Chief of Police
Deputy City Manager
E-4 $6,410/month $9,160/month
$76,920/year $109,920¡year
Assigned Positions:
Assistant City Attorney
Director of Public Works
E-3 $S, 860 ¡month $8,440¡month
$70,320¡year $101,280¡year
Assigned Positions:
Director of Community Development
Director of Finance
Director of Parks & Recreation
Director of Planning
Fire Chief
Library Director
E-2 $S,320/month $7, nO/month
$63,840/year $92,S20/year
Assigned Positions:
Assistant Chief of Police
Assistant to the City Manager
Director of Building & Housing
Director of Management & Information Services
Director of Human Resources
Deputy Director of Public Works
City Engineer
Executive Director, Nature Center
E-l $4,770/month $7,190/month
$S7,240/year $86,280¡year
Assigned Positions:
Budget Manager
Revenue Manager
Assistant Director of Finance
Assistant Director of Building & Housing
Assistant Director of Planning
Assistant Library Director
Assistant Director of Community Development
Assistant Director of Management & Information Services
Assistant Director of Human Resources
Police Captain
Special Projects Manager
- ?-}
,-----,-,-,--,
COUNCIL AGENDA STATEMENT
Item ~
Meeting Date 03-10-98
ITEM TITLE: RESOLUTION I Y4 ) 'ì AUTHORIZING CERTAIN AMENOMENTS TO THE
FINANCING DOCUMENTS AND RELATED ACTIONS WITH RESPECT TO THE
$9,490,000 CITY OF CHULA VISTA MULTIFAMILY HOUSING REVENUE BONOS
(TERRA NOVA ASSOCIATES PROJECT), 1992 ISSUE A
SUBMITTED BY: Community Development Director ú... ~ .
REVIEWED BY: City Manager Jt1 ~ ~ (4lliths Vote: Yes- No..x.1
BACKGROUND: In 1985 the City Council approved the issuance of a tax-exempt multi-family mortgage
revenue bond of $10,115,000 for financing Terra Nova Villas, a 232 unit apartment project at 440 East H
Street, a project developed by the general partnership of Terra Nova Associates. As a result, the project
received a favorable interest rate mortgage and, in accordance with federal regulations, entered into a
regulatory agreement with the City committing 20 percent of the project units (46 units) to affordable low-
income tenants. In February, 1992, the City issued its $9.490,000 Variable Rate Multifamily Housing
Refunding Revenue Bonds 1992 Issue A to refund the 1985 Bonds. The 1992 Bonds are secured in part
by a Letter of Credit provided by the Induslrial Bank of Japan, Ltd. (lBJ). The IBJ Letter of Credit is now
about to expire and the project owner wishes to provide a substitute letter of Credit from Dresdner Bank
AG, a German Bank.
RECOMMENDATION: That the City Council approve a resolution authorizing the execution and delivery
of an Intercreditor Agreement and amendments to the Indenture of Trust, loan Agreement and other
financing documents related to the 1992 Bonds in order to provide for the substitution of the Dresdner Bank
AG letter of Credit.
BOARDSICOMMISSIONS RECOMMENDATION: Not Applicable.
DISCUSSION: Under the terms of the existing loan Agreement for the 1992 Bonds, the project owner
has a right to provide a substitute letter of Credit, as long as the conditions set forth in Section 5.08 are
satisfied. Section 5.08 requires, among other items, that the rating on the 1992 Bonds not be lowered or
withdrawn following delivery of the new letter of Credit and that the rating be at least "AA-fA-1 + ". As
a condition of issuing its letter of Credit, Dresdner Bank AG is requiring that the City and the Bond Trustee
enter into an Intercreditor Agreement as well as certain amendments to the Indenture of Trust to provide
for a purchase in lieu of redemption following certain events of default by the project owner, as well as
certain changes to the loan Agreement. These changes are embodied in the Intercreditor Agreement, the
Amended and Restated Indenture of Trust, and the Amended and Restated loan Agreement, which have been
reviewed and approved by the City Attorney's office and the special Bond Counsel to the City, and are
hereby submitted to the Council for approval. The resolution presented for adoption by the Council will
9-1
Page 2, Item -
Meeting Date 03-10-98
hereby submitted to the Council for approval. The resolution presented for adoption by the Council will
authorize the Mayor to execute and deliver these documents, together with any other certificates or
agreements that are necessary in order to effect the substitution of the Dresdner Bank AG letter of Credit.
FISCAL IMPACT: The proposed Intercreditor Agreement and amendments to the Indenture of Trust, loan
Agreement and other financing documents related to the Terra Nova 1992 multifamily housing revenue bond
will not have any fiscal impact on the City.
ATTACHMENTS:
A - Amended and Restated loan A nt
B. Intercreditor Agreement
C. Amended and Re~dt
IJA"hI H:\HOM~COMMOEV\STAFF,RE~O3, 10,98\TERRANOVA (March 5, 1998 110:47811111
$.? ~~
RESOLUTION NO. / pq / C)
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA AUTHORIZING CERTAIN AMENDMENTS TO THE FINANCING
DOCUMENTS AND RELATED ACTIONS WITH RESPECT TO THE
$9,490,000 CITY OF CHULA VISTA MULTIFAMILY HOUSING
REVENUE BONDS (TERRA NOVA ASSOCIATES PROJECT), 1992
ISSUE A
WHEREAS, the City of Chula Vista (the "City") has previously issued its
$9,490,000 Variable Rate Multifamily Housing Refunding Revenue Bonds (Terra Nova Associates
Project), 1992 Issue A (the "Bonds") pursuant to an Indenture of Trust dated as of February 1,
1992, as amended by that certain First Supplemental Indenture of Trust dated as of February 15,
1995 (collectively, the "Original Indenture"), between the City and First Interstate Bank of
California, as trustee under the Original Indenture, whose successor-in-interest is now BNY
Western Trust Company (the "Trustee"), and caused to be made a loan (the "Loan") from the
proceeds of the Bonds to Terra Nova Associates, a California general partnership (the "Original
Owner"), pursuant to a Loan Agreement dated as of February 1, 1992, as amended by that certain
First Amendment to Loan Agreement dated as of February 15, 1995 (collectively, the "Original
Loan Agreement") among the County, the Trustee and the Original Owner; and
WHEREAS, pursuant to the terms of the Original Indenture, The Industrial Bank of
Japan, Limited ("IBJ") has delivered its irrevocable letter of credit to the Trustee to secure the
repayment of the Bonds; and
WHEREAS, on March 1 0, 1994, BRE Properties, Inc., a Delaware corporation (the
"New Owner"), assumed the obligations of the Original Owner under the documents relating to
the Bonds with the consent of the City, the Trustee and IBJ; and
WHEREAS, the IBJ letter of credit is expiring and the New Owner as requested that
the City and the Trustee approve certain amendments to the Original Indenture and the Original
Loan Agreement in order to permit a substitute letter of credit (the "Substitute Letter of Credit")
to be delivered by Dresdner Bank AG, New York Branch ("Dresdner"); and
WHEREAS, Stradling Yocca Carlson & Rauth, a Professional Corporation, as Bond
Counsel to the City, will render its opinion to the effect that such amendments to the Original
Indenture and the Original Loan Agreement will not adversely affect the exclusion from gross
income for federal income tax purposes of interest on the Bonds (the "Opinion"); and
WHEREAS, the City desires to approve the amendments to the Original Indenture
and the Original Loan Agreement requested by the New Owner and to authorize its officers to
grant any needed consents or take any other actions required to effectuate the amendments to
the Original Indenture and the Original Loan Agreement and the delivery of the Substitute Letter
of Credit including the execution and delivery of that certain Intercreditor Agreement by and
among the Trustee, the City and Dresdner; and
WHEREAS, there has been presented at this meeting the form of an Amended and
Restated Indenture of Trust dated as of March 1, 1998 between the City and the Trustee (the
"Amended Indenture") and an Amended and Restated Loan Agreement dated as of March 1, 1998
by and among the New Owner, the City and the Trustee (the "Amended Loan Agreement");
¥ ,3
NOW, THEREFORE, BE IT RESOLVED BY the City Council of the City of Chula Vista:
Section 1, The above recitals, and each of them, are true and correct,
Section 2. The proposed forms of the Amended Indenture and the Amended Loan
Agreement and the Intercreditor Agreement presented at this meeting are hereby approved, and
each of the Mayor, the City Manager, or his designee, the Finance Director and the City Clerk is
hereby authorized and directed, for and in the name of the City, to execute, acknowledge and
deliver the Amended Indenture and the Amended Loan Agreement and the Intercreditor Agreement
substantially in the form presented, with such additions thereto and changes therein as the officer
or officers executing the same may approve, such approval to be conclusively evidenced by the
execution and delivery thereof; provided, however, that such documents shall be executed only
upon receipt of the Opinion and the written consent of the New Owner and Dresdner to such
execution. The City hereby finds and determines that the amendments contained in the foregoing
documents are of the type permitted under Section 9.01 (c) of the Original Indenture.
Section 3. All officers ofthe City are each authorized and directed, jointly and severally,
to do any and all things and to execute and deliver any and all documents which they deem
necessary or advisable in order to implement the terms of the Amended Indenture, the Amended
Loan Agreement, the Intercreditor Agreement, and the delivery of the Substitute Letter of Credit,
including, but not limited to, giving any consents required to be given by the City under any
documents related to the Bonds, and otherwise to effectuate the purposes of this Resolution; and
any such actions previously taken by such officers are hereby ratified and confirmed. Should the
City Manger be unavailable to sign, then the Community Development Director and any other
designee of the City Manager may sign in his place.
Section 4. This Resolution shall take effect from and after its adoption.
Presented by Approved as to form by
@~S~ -<
Chris Salomone
Director of Community Development
IIJA,,") H,\HOMElCOMMOEV\RESOSIt""",, 1M"," 5, 1998 ",OO,mll
'¿,-tj
i
AMEND ED AND REST A TED
LOAN AGREEMENT
Among
CITY OF mULA VISTA, CALIFORNIA,
BNY WESTERN TRUST COMPANY,
as Trustee
and
BRE PROPERTIES, INc.,
a Delaware Corporation
Dated as of March 1, 1998
??~f+-(
563346,2124036.0004
,
AMENDED AND RESTATED
LOAN AGREEMENT
TIllS AMENDED AND RESTATED LOAN AGREEMENT, dated as of March 1,1998, by
and among the CITY OF CHULA VISTA a municipal corporation and charter city, organized and
existing under the laws of the State ofCalifomÎa (the "City"), BNY WESTERN TRUST COMPANY,
as trustee under that certam Amended and Restated Indenture of Trust, dated as of March 1, 1998, by
and between the City and said trustee (the "Trustee"), and BRE PROPERTIES, INc., a corporation
organized and existing under the laws of the State of Delaware (the "Borrower"), amends and restates
in its entirety that certam Loan Agreement dated as of February 1, 1992, as amended by that certam
First Amendment to Loan Agreement dated as of February 15, 1995 by and among the City, the
Trustee and the Borrower.
RECITALS
WHEREAS, the City is authorized by Article 11 of Chapter 3 of Part 1 of Division 2 of Title 6
of the Govemmef!t Code of the State ofCalifomÎa (the "Act") to issue revenue bonds for the purpose of
refunding its bonds issued to finance the acquisition and construction of multifamily rental housing in
the City; and
WHEREAS, the Borrower's predecessor-in-interest (the "Prior Owner") requested the
assistance of the City in refinancing a multifamily rental housing development located at 440 East "H.
Street in the City (the "Project"), and as a condition to the granting of such financial assistance, the
Borrower has agreed to assume the Prior Owner's obligations under that certam Amended and
Restated Regulatory Agreement sad Declaration of Restrictive Covenants (the "Regulatory
Agreement"), setting forth certam restrictions with respect to the Project; and
WHEREAS, after due investigation and deliberation, the City agreed to assist in the refinancing
of the Project by issuing the City ofChuia Vista Variable Rate Multifamily Housing Refunding
Revenue Bonds (Terra Nova Associates Project), 1992 Issue A (the "Bonds"), in the principal amount
of $9,490,000, and making a loan to the Prior Owner of such principal amount (the "Loan") upóri the
terms and conditions set forth herein; and
WHEREAS, the Borrower has assumed the obligations of the Prior Owner under the Loan;
and
WHEREAS, as security for the payment of the Loan, the Borrower has entered into a Deed of
Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "Deed of Trust"), pursuant to
the terms of which the Borrower conveyed to a trustee for the benefit ofDresdner Bank AG. (New
York Branch) (the "Credit Bank"), and the Trustee, respectively, a security interest in the Project, and,
as further security for such repayment of the Loan, the Borrower has delivered to the City a Letter of
Credit of the Credit Bank against which the Trustee is required to draw in accordance with the terms
thereof up to (a) an amount sufficient to pay (i) the aggregate principal amount of the Bonds, and (ü) to
enable the Trustee to pay the purchase price or portion of the purchase price equal to the principal
8;-4 -;L
563346.2'24036,0004
amount of Bonds delivered to it pursuant to the Indenture; and (b) an amount equal to 39 days' interest
on the Bonds at a rate of 12% per annum;
NOW TIŒREFORE, in consideration of the premises and the respective representations and
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section 1.1. Definition of Terms. Unless the contest otherwise requires, the capitalized
terms used in this Agreement shall have the meanings specified in the Regulatory Agreement or in
Section 1.1 of the Amended and Restated Indenture of Trust, dated as of March 1, 1998 (the
"Indenture"), by and between the City and the Trustee, providing for the issuance of the Bonds, as such
Indenture is originally executed or as it may from time to time be supplemented or amended as
provided therein. -
Section 1.2. Rules of Construction.
(a) The singular form of any word used herein, including the teens defined in
Section 1.1 of the Indenture, shaII include the plural, and vice versa The use herein of a word of any
gender shall include coITelative words of all genders.
(b) Unless otherwise specified, references to Articles, Sections and other
subdivisions of this Agreement are to the designated Articles, Sections and other subdivisions of this
Agreement as originally executed The words "hereof," "herein," "hereunder" and words of similar
import refer to this Agreement as a whole.
(c) The headings or titles of the several articles and sections, and the table of
contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the
meaning, construction or effect of the provisions hereof.
ARTICLE II
GENERAL REPRESENTATIONS AND AGREEMENTS
Section 2.1. Representations and Agreements of the City. The City makes the following
representations and agreements as the basis for its undertakings herein contained:
(a) The City is a municipal corporation and charter city, duly organized and
existing under the laws of the State of California. By proper action, the City has authorized the
execution, delivery and due performance by it of this Agreement.
(b) To refinance the Project, the City will issue the Bonds, which will mature, bear
interest and be subject to redemption as set forth in the Indenture.
(c) The Bonds will be issued under and secured by the Indenture, pursuant to
which the City's interest in this Agreement (except certain rights of the City to payment for fees,
't'-!1-3
563346.2\24036.0004 ~
expenses and indemrùfication and certain rights of enforcement) will be pledged to the Trustee as
security for payment of the principal of, premium, ifany, and interest on the Bonds.
(d) The City has not pledged and will not pledge its interest in this Agreement for
any purpose other than to secure the Bonds under the Indenture.
(e) The City is not in default under any of the provisions of the laws of the State of
Califomia which default would affect its existence or its powers referred to in this Section 2,1.
(f) No officer or other official of the City has any personal financial interest
whatsoever in the Project or the Borrower or in the transactions contemplated by this Agreement.
(g) This Agreement, the Indenture and the Intercreditor Agreement have been duly
authorized, executed and delivered by the City and when duly executed and delivered by the Borrower
and the Trustee, will constitute the legal, valid and binding obligation of the City enforceable against
the City in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency,
reorganization, or other laws or equitable principles limiting creditors' rights generally. The City makes
no representation as to the availability of specific performance or other equitable remedies,
Section 2.2. Representations and Agreement of the Trustee. The Trustee makes the
following representations and agreements as the basis for its undertakings herein contained:
(a) The Trustee has been duly organized under the laws of the State ofCalifomia
wid is validly existing as a state banking corporation in pod standing under the laws governing its
creation, with full corporate power to own its properties and conduct its business.
(b) This Agreement, the Indenture and the Intercreditor Agreement have been duly
authorized, executed and delivered by the Trustee and when duly executed and delivered by the
Borrower and the City, will constitute the legal, valid and binding obligation of the Trustee enforceable
against the Trustee in accordance with its terms except as enforcement may be limited by bankruptcy,
insolvency, reorganization, or other laws or equitable principles limiting creditors' rights generally, The
Trustee makes no representation as to the availability of specific performance or other equitable
remedies,
Section 2.3. Representations and Agreements of the Borrower. The Borrower makes
the following representations and agreements as the basis for its undertakings herein contained:
(a) The Borrower is a corporation, duly formed under the laws of the State of
Delaware, is in good standing in the State of California, has the power and authority to own its
properties and assets and to carry on its business as now conducted and as contemplated to be
conducted hereunder and under the Regulatory Agreement, and has the power to enter into and has
duly authorized, by proper action, the execution and delivery of this Agreement and all other
documents contemplated hereby to be executed by the Borrower, including, without limitation, the
Regulatory Agreement and the Credit Agreement.
(b) Neither the execution and delivery of this Agreement or any other document in
connection with the refinancing of the Project, the consummation of the transactions contemplated
hereby and thereby, nor the fulfillment of or compliance with the terms and conditions hereof and
~- 1t-1
S63346,2\24036.0004 3--
thereof, conflicts with or results in a breach of any of the terms, conditions or provisions of the
Borrower's agreement or other partnership documents or of any agreement or instrument to which the
Borrower is now a party or by which it is bound, or constitutes a default (with due notice or the
passage of time or both) under any of the foregoing, or results in the creation or imposition of any
prohibited lien, charge or encumbrance whatsoever upon any of the property or assets of the Borrower
under the terms of any instrument or agreement to which the Borrower is now a party or by which it is
bound.
(c) The Project is located wholly within the City.
(d) The Borrower has and shall have title to the Project sufficient to carry out the
pwposes of this Agreement, and such title shall be in and remain in the Borrower except as pennitted
by Section 6.2 hereof and the Regulatory Agreement.
(e) The Borrower shall make no changes to the Project or to the operation thereof
which would affect the qualification of the Project under the Act (as defined in the Regulatory
Agreement) or impair the exclusion from gross income for federal income tax purposes of the interest
on the Bonds. The Borrower intends to utilize the Project as multifamily rental housing during the
Qualified Project Period
(I) None of the proceeds of the Bonds will be used to pay costs of issuance of the
Bonds.
(g) To the best knowledge of the Borrower, there is no action, suit or proceeding at
law or in equity or by or before any governmental ins1rumentaIity or other agency now pending, or, to
the knowledge of the Borrower, threatened against or affecting it or any of its properties or rights,
which, if adversely detennined, would materially impair its right to carry on business substantially as
now conducted or as now contemplated to be conducted, or would materially adversely affect its
financial condition. After consummation of the refinancing transaction, the Borrower will not be in
material default in the perfonnance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any material agreement or ins1rument to which it is a party.
(h) The operation of the Project in the manner presently contemplated and as
described herein does not conflict with any zoning, water or air pollution or other ordinance, order, law
or regulation applicable thereto. The Borrower has caused the Project to be designed and built in
accordance with all applicable federal, state and local laws or ordinances (including rules and
regulations) relating to zoning, building, safety and environmental quality.
(i) The Borrower has filed or caused to be filed all federal, state and local tax
returns which are required to be filed, and has paid or caused to be paid all taxes as shown on said
returns or on any assessment received by it, to the extent that such taxes have become due.
(j) No officer or other official of the City has any personal financial interest
whatsoever in the Project or the Borrower or in the transactions contemplated by this Agreement.
(k) The Borrower obtained all necessary certificates, approvals, pennits and
authorizations required with respect to the construction of the Project from applicable local
governmental agencies and agencies of the State of California and the federal government.
6'- 4- ,Ç
563346,2\24036.0004 4..
(I) The Borrower is not in default under the provisions of the Prior Regulatory
Agreement (as such term is defined in the Regulatory Agreement) or the Housing Cooperation
Agreement.
(m) To the best knowledge of the Borrower, the Borrower has not taken any action,
or failed to take any action, which action or failure to act adversely affects the tax-exempt status of the
interest on the Prior Bonds.
(n) The Borrower is not in default under any document, instrument or commitment
to which the Borrower is a party or to which it or any of its property is subject which default affects the
ability of the Borrower to carry out its obligations under this Agreement, the Regulatory Agreement,
the Credit Agreement, the Housing Cooperation Agreement or the Remarketing Agreement.
(0) The Borrower (i) intends to hold the Project for its own account, (ii) is not now
in negotiation nor has entered into any contract to sell the Project, (iii) has not entered into any
agreement or otherwise binding commitment to sell the Project, (iv) recognizes that the refinancing of
the Prior Bonds has independent significance apart from any future sale of the Project because of the
net reduction in total debt service costs for the Project, and (v) does not intend that the issuance of the
Bonds and the refinancing of the Prior Bonds constitute a formally separate step in a single prearranged
transaction to reach the end result of the sale of the Project.
ARTICLE III
REFINANCING OF THE PROJECT; ISSUANCE OF THE BONDS
Section 3.1. Agreement to Issue Bonds; Application of Bond Proceeds, To provide
funds to refinance the Project, the City agrees that it will issue under the Indenture, sell and cause to be
delivered to the purchasers thereof, the Bonds, bearing interest at the rates and payable as to principal
and interest at the times as set forth in the Indenture. The City will thereupon deposit the proceeds
received from the sale of the Bonds with the Trustee as provided in the Indenture.
Section 3.2. Disbursement From the Program Fund. Pursuant to the Indenture, the
proceeds of the Bonds deposited in the Program Fund have been applied by the Trustee to make the
Loan to the Prior Owner which has now been assumed by the Borrower by transferring such proceeds
to the Bond Fund for the Prior Bonds, to be applied as provided in the Escrow Agreement.
Section 3.3. Investment of Moneys; Arbitrage. Upon written direction of the Borrower,
any moneys in any fund or account held by the Trustee shaII be invested or reinvested by the Trustee in
Investment Securities as provided in the Indenture, and the Borrower hereby approves such provisions
of the Indenture and directs the Trustee to make such investments, subject to the covenants of Section
5.6(b) hereof
Section 3.4. Limited Liability. All obligations of the City incurred hereunder shall be
special obligations of the City, payable solely and onJy from the funds and accounts pledged therefore
under the Indenture. The Bonds, and the interest thereon, do not constitute a debt, liability, general or
moral obligation or pledge of the faith or loan of the credit of the City, the State or any other political
subdivision of the State, within the meaning of any constitutional or statutory limitation or provisions.
Neither the faith and credit nor the taxing power of the City, the State or any political subdivision
&- A- - b
563346.2\24036.0004 '5-
thereof is pledged to the payment of the principal of or premium, if any, or interest on the Bonds or any
other costs incident thereto.
ARTICLE IV
LOAN OF PROCEEDS; PAYMENT PROVISIONS
Section 4.1. Loan of Bond Proceeds. The City and the Trustee agree, upon the terms and
conditions in this Agreement, to make the Loan to the Borrower in an amount equal to the aggregate
principal amount of the Bonds, for the purpose of refinancing the Project. Pursuant to said covenant
and agreement, the City has issued the Bonds upon the terms and conditions contained in this
Agreement and the Indenture and has caused the proceeds of the Bonds to be applied by the Trustee as
provided in Article ill of the Indenture and Section 3.2 hereof,
Section 4.2. Loan Repayment and Payment of Other Amounts.
(a) The Borrower hereby acknowledges its indebtedness to the City and agrees to
repay the Loan in the amounts and at the tunes necessmy to enable the Trustee, on behalf of the City, to
pay when due all amounts payable with respect to the Bonds when due, whether at maturity or by
redemption (with premium, if applicable) or acceleration or upon tender with a failure to remarket, or
otherwise. The Borrower hereby covenants and agrees to pay, during any Variable Period, the Loan on
the Business Day immediately preceding each Interest Payment Date, commencing March 31, 1995, in
an amount equal to the principal and Purchase Price of, and interest on the Bonds due and payable on
such Interest Payment Date until the principal and Purchase Price of, premium, if any, and interest on
the Bonds shall have been paid in full or provision for the payment thereof shall have been made in
accordance with the Indenture.
The City hereby agrees that the Borrower's repayment obligations hereunder
shall be reduced from time to time by any amounts drawn under the Letter of Credit, if any, and
applied to the payment of debt service on the Bonds. The Borrower hereby agrees to cause the Letter
of Credit to be delivered to the Trustee on.the Closing Date in accordance with the terms of the Credit
Agreement and Section 5_8 hereof
(b) The Borrower agrees: (1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it under the Indenture and the other agreements relating to
the Bonds to which the Trustee is a party; (2) except as otherwise expressly provided in the Indenture
or such other agreements, to reimburse each of the Trustee and the Tender Agent upon its request for
all reasonable expenses, disbursements and advances (including reasonable counsel fees) incurred or
made by the Trustee or the Tender Agent in accordance with any provision of the Indenture or other
agreements to which the Trustee or the Tender Agent is a party or pursuant to which it is required to
act (including the reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be attributable to its negligence or
wiUful misconduct; (3) to indemnify the Trustee and the Tender Agent for, and hold each harmless
against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of the trust under the Indenture or any other
agreement relating to the Bonds to which the Trustee or the Tender Agent is a party or pursuant to
which it is required to act, including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or duties thereunder; and
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563346,2\24036,0004 ~
(4) to pay any annual fee of any Rating Agency then rating the Bonds, if any, the fees of the
Remarketing Agent, the Tender Agent and any paying agents, and any other amounts referred to in
Section 8.6 of the Indenture.
(c) The Borrower also agrees to pay: (i) within thirty (30) days after receipt of
request for payment thereof, all reasonable expenses of the City related to the Project and the financing
thereof which are not otherwise required to be paid by the Borrower under the terms of this Agreement
and are not paid from the Cost of Issuance Fund under the Indenture, including, without limitation,
legal fees and expenses incurred in connection with the amendment, interpretation and enforcement of
any documents relating to the Project or the Bonds; and (ii) an annual fee to the City in an amount
equal to .036% of the outstanding principal amount of the Bonds, on each March 1 commencing
March 1, 1993, throughout the Qualified Project Period (as defined in the Regulatory Agreement) to
compensate the City for acting as Administrator under the Regulatory Agreement In the event that the
Administrator referenced in clause (ii) above is terminated or resigns, the City agrees to use its best
efforts to find a replacement Administrator the fees of which are comparable to those referenced in
such clause (ii).
(d) The Borrower also agrees to pay any fees and other costs required to be
incurred by the City and/or the Trustee to comply with the provisions of Sections 6,7 and 6,8 of the
Indenture, including but not limited to any expenses related to computations to detennine if moneys are
required to be rebated to the United States and any amount required to be rebated to the United States
pursuant to Section 6.8 of the Indenture. Any such payment shall be made immediately upon written
demand therefor.
(e) The Prior Owner has paid on the Closing Date, the administrative fee of the
City in the amount of$35,125.
(t) In the event the Borrower should fail to make any of the payments required in
this Section 4.2, the item or installment so in default shall continue as an obligation of the Borrower
until the amount in default shall have been paid in full, and the Borrower agrees to pay the same with
interest thereon, at the rate per annum equal to the Prime Rate (as such term is defined in the Credit
Agreement) plus one and one-half percent (11/2%) from the date of such default until the date of such
payment by the Borrower.
Section 4.3. Unconditional Obligations. The obligations of the Borrower to make the
payments required by Section 4.2 hereof and to perform and observe the other agreements on its part
contained herein shall be absolute and unconditional, irrespective of any defense or any rights of set-
off, recoupment or counterclaim it might otherwise have against the City or the Trustee, and during the
term of this Agreement, the Borrower shall pay absolutely net the payments required hereunder, free of
any and without abatement, diminution or set-off. Until such time as the principal of, premium, if any,
and interest on the Bonds shall have been fully paid, or provision for the payment thereof shall have
been made as required by the Indenture, the Borrower (i) will not suspend or discontinue any payments
provided for in Section 4.2 hereof; (ii) will perform and observe all of its other covenants contained in
this Agreement; and (iii) except as provided in Article vm hereof, will not terminate this Agreement
for any cause, including, without limitation, the occurrence of any act or circumstances that may
constitute failure of consideration, destruction of or damage to the Project, commercial frustration of
purpose, any change in the tax or other laws of the United States of America or of the State of
8'- A -~
S63346,2124<J36.0004 '1--
California or any political subdivision or either of these, or any failure of the City or the Trustee to
perform and observe any covenant, whether express or implied, or any duty, liability or obligation
arising out of or connected with this Agreement or the Indenture, except to the extent permitted by this
Agreement.
Notwithstanding the foregoing, all obligations of the Borrower hereunder shall be nonrecourse
with respect to the general and lirnited partners of the Borrower, except for the obligations of the
Borrower under Sections 4.2(b), (c) and (d), 7.3, 9.2 and 9.3.
Section 4.4. Assignment of City's Rights. As security for the payment of the Bonds, the
City in the Indenture assigns to the Trustee and to the Credit Bank certain of the City's rights under this
Agreement, including the right to receive payments hereunder (except for the right of the City to
receive certain payments, if any, with respect to fees, expenses and indemnification under Sections
4,2(c), (d) and (e), 7.3, 9.2 and 9.3 hereof), and the City hereby directs the Borrower to make the
payments required hereunder (except such payments for City fees, expenses and indemnification)
directly to the Trustee. The Borrower hereby assents to such assignment and agrees to make payments
directly to the Trustee without defense or set-off by reason of any dispute between the Borrower and
the City, the Credit Bank or the Trustee. By virtue of such assignment, the Trustee shall have the right
to enforce the obligations of the Borrower hereunder.
Bonds wlùch are tendered for purchase but are not remarketed pursuant to Section 8.14 of the
Indenture shall be held as Bank Bonds, Such Bank Bonds shall be treated as remarketed by the
Remarketing Agent pursuant to Section 8.16 of the Indenture. The City hereby assigns to the Trustee
and the Credit Bank, respectively, as assignee of the Borrower, all of the City's right, title and interest
in and to any and all proceeds of any subsequent remarketing of any such Bonds so purchased, and
hereby agrees to direct the Remarketing Agent to pay any such proceeds to the Tender Agent for
distribution to the Credit Bank.
Section 4.5. Amounts Remaining in Bond Fund. It is agreed by the parties hereto that
after (i) payment in full of the Bonds ITom Available Amount. or provision for such payment having
been made as provided in the Indenture, (ii) payment of all fees, charges and expenses of the Trustee
and any paying agents in accordance with the terms of the Indenture, and (iii) payment of all other
amounts required to be paid under this Agreement and the Indenture, any amounts remaining in the
Bond Fund held by the Trustee under the Indenture shall be paid by the Trustee first, to the Credit
Bank to the extent any amounts are owed to the Credit Bank under the Credit Agreement as the result
of a drawing under the Letter of Credit, and then to the Borrower, as provided in Section 5,6 of the
Indenture, and the City shall have no claim to such amounts,
Section 4.6. RecourseJNon-Recourse. Notwithstanding any other provision or term
contained herein or in the Credit Agreement, the promissory note, the Regulatory Agreement, the
Indenture, the Deed of Trust and related documents, the parties hereto agree that upon the occurrence
of any Event of Default hereunder, the City and the Trustee shall look solely to the Letter of Credit and
the Borrower's interest in the Project, as encumbered by the Deed of Trust, to satisfy the obligations of
the Borrower hereunder to repay the Loan and shall neither seek nor take any deficiency or monetary
judgment against the Borrower, any of the partners of the Borrower or any of the officers, shareholders
or partners of any of the partners of the Borrower.
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S63346.2\24036,OOO4 S-
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
Section 5.1. Right of Access to the Project and Records. The Borrower agrees that
during the term of this Agreement the City, the Administrator, the Credit Bank, the Trustee and the
duly authorized agents of any of them shall have the right but not the obligation at all reasonable times
and upon reasonable notice during normal business hours to enter upon the site of the Project to
examine and inspect the Project and to have access to the books and records of the Borrower with
respect to the Project
Section 5.2. Maintenance of Existence; Assignments.
(a) The Borrower agrees that during the term of this Agreement it will remain in
good standing and qualified to do business in the State of California and will maintain its existence as a
corporation, will not dissolve or otherwise dispose of all or substantially all of its assets and will not
combine or consolidate with or merge into another entity or permit one or more other entities to
consolidate with or merge into it; provided, however, that the Borrower may so combine, consolidate
with, or merge into another entity existing under the laws of one of the states of the United States, or
permit one or more other entities to consolidate with or merge into it, or sell or otherwise transfer to
another entity all or substantially all of its assets as an entirety and thereafter dissolve, provided that the
surviving, resulting or transferee entity, as the case may be, (i) assumes and agrees in writing to pay
and perform all of the obligations of the Borrower hereunder, and (ii) qualifies to do business in the
State of California; and provided further that the Borrower shall have obtained the written approval of
the Credit Bank.
(b) The rights and obligations of the Borrower under this Agreement may be
assigned by the Borrower to any person in whole or in part, in connection with and in proportion to, any
conveyance of all or part of the Project which complies with Section 10 of the Regulatory Agreement
and with the Credit Agreement; provided that (i) the assignee shall assume in writing the obligations of
the Borrower hereunder to the extent of the interest assigned, and a copy of such instrument of
assumption shall be delivered to the City and the Trustee within ten (10) days after the execution
thereof; (ii) the Borrower shall have obtained the written consent of the Credit Bank and the City; and
(iii) the Borrower shall remain liable for its obligations hereunder to the extent of any interest not so
assigned
(c) The rights and obligations of the Borrower under this Agreement may also be
assigned by the Borrower to any person in whole or in part, subject, however, to each of the following
conditions:
(i) No assignment other than pursuant to subsection (a) or (b) of this
Section shal1 relieve the Borrower from primary liability for any of its obligations
hereunder, and in the event of any assignment not pursuant to subsection (a) or (b) of
this Section the Borrower shall continue to remain primarily liable for the payments
specified in Section 4,2 hereof and for performance and observance of the other
agreements on its part herein provided to be performed and observed by it.
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563346.2124036,0004 ~
(ii) Any assignment fÌ'om the Borrower shall retain for the Borrower such
rights and interests as will permit it to perform its obligations under this Agreement and
the Regulatory Agreement, and any assignee the Borrower shall assume the obligations
of the Borrower hereunder and under the Regulatory Agreement to the extent of the
interest assigned.
(iii) The Borrower shall, within thirty days after delivery thereof, furnish or
cause to be funùshed to the City and the Trustee a true and complete copy of each such
assignment together with an instrument of assumption and the written consent of the
Credit Bank to such assignment
Section 5.3. Statement of Compliance; Notice of Certain Events, Bankruptcy
Certificate.
(a) The Borrower will deliver to the City, the Credit Bank, the Administrator and
the Trustee, within 120 days after the end of each calendar year, a written statement signed by an
Authorized Borrower Representative stating, as to the signer thereof, that (1) a review of the activities
of the Borrower during such year and of performance under this Agreement and under the Regulatory
Agreement has been made under their supervision, and (2) to the best of the knowledge of such
Representative, based on such review, the Borrower has fulfilled all its obligations under such
documents throughout such year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such Representative and the nature and status thereof,
(b) The Borrower hereby covenants to notify the City, the Credit Bank, the
Administrator and the Trustee in writing of the occurrence of any Event of Default hereunder or under
the Regulatory Agreement or any event which, with the passage of time or service of notice, or both,
would constitute an Event of Default hereunder or under the Regulatory Agreement, specifying the
nature and period of existence of such event and the actions being taken or proposed to be taken with
respect thereto. Such notice shall be given promptly, and in no event less than ten (10) Business Days
after the Borrower receives notice or knowledge of the occurrence of any such event The Borrower
further agrees that it will give prompt written notice to the Trustee, the Credit Bank and the City if
insurance proceeds or condemnation awards are received with respect to the Project and are not used to
repair or replace the Project, which notice shall state the amount of such proceeds or award.
Section 5.4. Maintenance and Repair, The Borrower agrees to maintain the Project, or
cause the Project to be maintained, during the term of this Agreement (i) in a reasonably safe condition
and (ii) in good repair and in good operating condition, ordinary wear and tear excepted, making fÌ'om
time to time all necessary repairs thereto and renewals and replacements thereof.
Section 5.5. Additional Instruments. The Borrower hereby covenants to execute and
deliver such additional instruments and to perform such additional acts as may be necessary, in the
opinion of the City, the Credit Bank or the Trustee, to carry out the intent hereof or to perfect or give
further assurances of any of the rights granted or provided for herein or contemplated hereby,
Section 5.6. Tax Exempt Status of Bonds,
(a) It is the intention of the parties hereto that interest on the Bonds shall be and
remain excluded fÌ'om the gross income of the owners thereoffor pwposes offederal income taxation,
?;- A- / I
563346.2\24036.0004 lG-
and to that end the covenants and agreements of the Borrower in this Section and in Sections 2.3,3.3,
4,2(d) and 5.7 are for the benefit of the City and the Trustee on behalf of and for each and every Owner
of the Bonds.
(b) The Borrower covenants and agrees that it will not knowingly and willingly use
or permit the use of any of the funds provided by the City hereunder or any other funds of the
Borrower, directly or indirectly, or direct the Trustee to invest any funds held by it hereunder or under
the Indenture, in such manner as would, or enter into, or allow any "related person" (as defined in
Section 147(a)(2) of the Code) to enter into, any arrangement, fonnal or informal, for the purchase of
the Bonds that would, or take or omit to take any other action that would, to the knowledge of the
Borrower cause any Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code or
"federally guaranteed" within the meaning of Section 149(b) of the Code and applicable regulations
promulgated from time to time thereunder.
(c) In the event that at any time the Borrower is of the opinion or becomes
otherwise aware that for pwposes of this Section 5,6 or Section 6.6 of the Indenture it is necessary to
restrict or to limit the Yield on the investment of any moneys held by the Trustee under the Indenture,
the Borrower shall determine the limitations and so instruct the Trustee in writing (with a copy to the
City) and cause the Trustee to comply with those limitations under the Indenture.
The Borrower will take such action or actions as may be reasonably necessary in the opinion of
Bond Counse~ or ofwbich it otherwise becomes aware, to fully comply with Section 148 of the Code.
(d) The Borrower will take such action or actions as necessary to ensure
compliance with Sections 6.6 through 6.13 of the Indenture.
(e) The Borrower further agrees that it shall not discriminate on the basis of race,
creed, color, sex or national origin in the lease, use or occupancy of the Project or in connection with
the employment or application for employment of persons for the construction, operation and
management of the Project.
(t) The Borrower further warrants and covenants that it has not executed and will
not execute any other agreement, or any amendment or supplement to any other agreement, with
provisions contradictoxy to, or in opposition to, the provisions hereof, of the Indenture and of the
Regulatoxy Agreement, and that in any event, the requirements of this Agreement and the Regulatoxy
Agreement are paramount and controlling as to the rights and obligations herein set forth and supersede
any other requirements in conflict herewith and therewith,
(g) The Borrower shall not, pursuant to an arrangement, fonnal or informal,
purchase Bonds in an amount related to the amount of the Loan.
Section 5.7. Regulatory Agreement. In order to maintain the exclusion from the gross
income of the owners thereof for pwposes of federal income taxation of interest on the Bonds and to
assure compliance with the laws of the State of California, the Law and certain additional requirements
of the City, the Borrower hereby agrees that it shall, concurrently with or before the execution and
delivexy of the Bonds, execute and deliver and cause to be recorded the Regulatoxy Agreement.
?;- A -/ d-
563346.2\24036.0004 ~
The Borrower shall comply with eveI)' tenn of the Regulatol)' Agreement, and the Borrower
hereby acknowledges that in the event of a default under the Regulatol)' Agreement wlùch is not cured,
the Loan may be accelerated. The Borrower agrees to cause any amendments to the Regulatol)'
Agreement to be recorded in the appropriate official public records. The books and records of the
Borrower pertaining to the incomes of and rents charged to Lower-Income Tenants residing in the
Project shall be open to inspection by any authorized representative of the City, the Credit Bank, the
Administrator and the Trustee. In any event, however, the Trustee may rely, without further
investigation or review, upon such books and records and all certificates and statements in connection
therewith,
Section 5.8. Letter of Credit. On and after March 1, 1996, at all times before Conversion
there shall be provided and continuously available to the Trustee, as beneficiaI)', an irrevocable direct
pay Letter of Credit (whether in the fonn of a letter of credit or any other credit instrument) meeting the
requirements of subsection (a) of this Section while the Bonds bear interest at a Variable Rate or
subsection (b) of this Section wlùle the Bonds bear interest at a Reset Rate; and at all times after
Conversion there shall be provided and continuously available to the Trustee an irrevocable Letter of
Credit (whether in the fonn of a letter or credit or any other credit instrument) meeting the
requirements of subsection (c) of this Section, The Borrower shall have the right at any time, whether
or not in connection with Conversion or any Reset Date or the pending expiration of any then-
outstanding Letter of Credit, to provide to the Trustee a substi~te Letter of Credit wlùch meets the
requirements of this Section.
(a) The following requirements shall apply to any Letter of Credit provided wlùle
the Bonds bear interest at a Variable Rate:
(1) Any Letter of Credit provided in substitution for any then outstanding
Letter of Credit shall be for a tenn commencing not later than the expiration date of the
tenn of the prior Letter of Credit.
(2) Any Letter of Credit provided in substitution for any then-outstanding
Letter of Creditshall be for a tenn of not less than one year; provided that any Letter of
Credit may provide that it shall terminate prior to its stated expiration date upon a
Reset Date or the Conversion Date or upon receipt by the Credit Bank of notice from
the Trustee that no Bonds remain outstanding or upon the date of issuance and delivel)'
of a substitute Letter of Credit.
(3) Each Letter of Credit shall be in an amount at any date not less than the
swn of the aggregate principal amount of the Bonds then outstanding, plus an amount
equal to interest on the Bonds for a period of thirty-nine (39) days calculated at an
asswned rate of twelve percent (12%) per annwn or such higher rate as may be
determined in accordance with the provisions of the Indenture.
(4) Each Letter of Credit shall have provisions pennitting drawings
thereunder to pay amounts due on the Bonds on the scheduled dates for payment of
such amounts or upon redemption or acceleration and to pay the Purchase Price of
Bonds tendered for purchase as provided in Section 2.3 of the Indenture, and shall be
in a fonn acceptable to the Trustee.
6- A -/3
563346,2\24036.0004 n.
(5) Each Letter of Credit shall be issued by a national banking association
organized under the National Banking Act, or any successor law, or a banking
corporation organized under the laws of any state of the United States, or a savings and
loan association or corporation or savings bank organized under the laws of the United
States or any state thereof, or a branch or agency of a foreign banking corporation or
association licensed in one of the States of the United States, or any other issuer
acceptable to the City, the Trustee and the Borrower. to pay amounts due on the Bonds
on the scheduled dates for payment of such amounts or upon redemption or
acceleration and to pay the Purchase Price of Bonds tendered for purchase as provided
in Section 2.3 of the Indenture, and shall be in a fonn acceptable to the Trustee,
(6) Each Letter of Credit delivered to the Trustee (other than the Letter of
Credit initially provided) must be accompanied by (i) an opinion of Bond Counsel
addressed to the Trustee to the effect that delivery of the Letter of Credit complies with
the provisions of this Agreement and the Indenture and will not cause interest on the
Bonds to become includable in gross income for federal income tax pwposes; and (ii)
one or more Opinions of Counsel, addressed to such of the parties as may so request,
to the effect, singly or together, that:
(A) The Letter of Credit is a legal, valid and binding obligation of
the Credit Bank, enforceable against the Credit Bank in accordance with its
terms, except as limited by applicable reorganization, insolvency, liquidation,
readjustment of debt, moratorium or other similar laws affecting the
enforcement of the rights of creditors generally as such laws may be applied in
the event of a reorganization, insolvency, liquidation, readjustment of debt or
other similar proceeding of or moratorium applicable to the Credit Bank and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and
(B) Payments made by the Credit Bank under the Letter of Credit
will not be voidable under Section 547 of the Federal Bankruptcy Code in the
context of a case or proceeding by or against the Borrower or by the City under
the Federal Bankruptcy Code.
(7) Each Letter of Credit delivered to the Trustee in substitution for the
then-outstanding Letter of Credit shall be accompanied by a written statement, signed
by an officer of the Rating Agency to the effect that the then rating on the Bonds will
not be lowered or withdrawn following the delivery of such Letter of Credit, and that
the rating on the Bonds following the delivery of such Letter of Credit will be at least
AA-/A-I+ (or its equivalent) unless the City otherwise consents in writing to a lower
minimum rating.
(b) The following requirements shall apply to any Letter of Credit provided in
connection with a Reset Date or during a Reset Period:
(I) The Letter of Credit initially provided shall be effective from no later
than the Closing Date. The Letter of Credit provided in connection with a Reset Date
shall be delivered on or before the Reset Date and shall be effective from no later the
<6- Ii -if
563346.2\24036.0004 ~
Reset Date, and any Letter of Credit provided in substitution for any then-outstanding
Letter of Credit shall be for a term commencing not later than the expiration date of the
prior Letter of Credit
(2) Each Letter of Credit shall be for a term expiring not earlier than the
final day of the applicable Reset Period; provided that any Letter of Credit may provide
that it shall terminate prior to its stated expiration date upon receipt by the Credit Bank
of notice from the Trustee that no Bonds remain outstanding or upon the date of
issuance and delivery of a substitute Letter of Credit
(3) Each Letter of Credit shall be in an amount at any date not less than the
sum of the aggregate principal amount of the Bonds then outstanding, plus an amolUlt
equal to interest on the Bonds for a period of at least 210 days,
(4) Each Letter of Credit shall contain provisions permitting drawings
thereunder to pay amounts due on the Bonds on the scheduled dates for payment of
such amounts or upon redemption or acceleration and to pay the Purchase Price of
Bonds tendered for purchase as provided in Section 2.3 of the Indenture, and shall be
in a form acceptable to the Trustee.
(5) Each Letter of Credit shall be issued by an entity described in
subsection (a)(5) of this Section.
(6) The commitment to issue the Letter of Credit to be delivered to the
Trustee in connection with a Reset Date and each subsequent Letter of Credit delivered
to the Trustee must be accompanied by an opinion of Bond Counsel and one or more
Opinions of Counsel, each addressed to the Trustee, to the effect set forth in subsection
(a)(6) of this Section.
(7) The commitment to issue the Letter of Credit to be delivered to the
Trustee in connection with a Reset Date shall be accompanied by a written statement,
signed by an officer of the Rating Agency to the effect that the then long-term rating on
the Bonds will not be lowered or withdrawn following the delivery of such Letter of
Credit, and that the rating on the Bonds following the delivery of such Letter of Credit
will be at least AA- (or its equivalent) unless the City otherwise consents in writing to a
lower minimum rating prior to the Reset Date; and each subsequent Letter of Credit
delivered to the Trustee shall be accompanied by a written statement of such Rating
Agency to the same effect.
(c) The following requirements shall apply to any Letter of Credit provided in
connection with or after Conversion, as applicable:
(1) The Letter of Credit provided in connection with Conversion shall be
delivered on or before the Conversion Date and shall be effective from no later than the
Conversion Date, and any Letter of Credit provided in substitution for any then-
outstanding Letter of Credit shall be for a term commencing not later than the
expiration date of the prior Letter of Credit.
~- If -J':;
563346.2\24036.0004 ~
(2) Each Letter of Credit shall be for a term expiring not earlier than the
finaI maturity date of the Bonds; provided that any Letter of Credit may provide that it
shall terminate prior to its stated expiration date upon receipt by the Credit Bank of
notice ITom the Trustee that no Bonds remain outstanding or upon the date of issuance
and delivery of a substitute Letter of Credit.
(3) Each Letter of Credit shall be in an amount at any date not less than the
sum of the aggregate principal amount of the Bonds then outstanding, plus an amount
equal to interest on the Bonds for a period of at least 210 days.
(4) Each Letter of Credit shall contain provisions permitting drawings
thereunder to pay amounts due on the Bonds on the scheduled dates for payment of
such amounts or upon redemption or acceleration, and shall be in a form acceptable to
the Trustee.
(5) Each Letter of Credit shall be issued by an entity described in
subsection (a)(5) of this Section.
(6) The commitment to issue the Letter of Credit to be delivered to the
Trustee in connection with Conversion and each subsequent Letter of Credit delivered
to the Trustee must be accompanied by an opinion of Bond Counsel and one or more
Opinions of Counsel, each addressed to the Trustee, to the effect set forth in subsection
(a)(6) of this Section.
(7) The commitment to issue the Letter of Credit to be delivered to the
Trustee in connection with Conversion, as provided in Section 2.2(d) of the Indenture,
shall be accompanied by a written statement, signed by an officer of the Rating
Agency, to the effect that the then long-term rating on the Bonds will not be lowered or
withdrawn following the delivery of such Letter of Credit, and that the rating on the
Bonds following the delivery of such Letter of Credit will be at least AA- (or its
equivalent) unless the City otherwise consents in writing to a lower minimum rating
prior to the Conversion Date; and each subsequent Letter of Credit delivered to the
Trustee shall be accompanied by a written statement of such Rating Agency to the
same effect,
Section 5.9. Indenture. The Borrower hereby agrees to all of the terms and provisions of
the Indenture and accepts each of its obligations expressed or implies thereunder. The Borrower hereby
approves the initial appointment under the Indenture of the Trustee, the Remarketing Agent and the
Tender Agent for the Bonds, The Borrower hereby agrees that it will not, and will not permit any
guarantor of the Borrower to, purchase any Bonds ITom the Remarketing Agent.
Section 5.10. No Untrue Statements, Neither this Agreement nor any other document,
certificate or statement furnished to the Trustee, the Credit Bank, the underwriter for the Bonds or the
City by or on behalf of the Borrower, contains to the best of the Borrower's knowledge any untrue
statement of a material fact or omits to state a material fact necessary in order to make the statement
contained herein and therein not misleading as of the date hereof It is specifically understood by the
Borrower that all such statements, representations and warranties furnished by or on behalf of the
Borrower to the City or its agents shall be deemed to have been relied upon by the City as an
?,?-f}-/h
363346,2\24036.0004 15..
inducement to make the Loan and that if any such statements, representations and warranties were
materially incorrect at the time they were made, the City may consider any such misrepresentation or
breach an Event of Default hereWlder.
Section 5.11. Useful Life. Within the meaning of Section 147(b) of the Code, the average
maturity of the Bonds does not exceed 120 percent of the average reasonably expected economic life of
the facilities financed with the proceeds of the Prior Bonds.
Section 5.12. Taxes and Governmental and Utility Charges. The Borrower shall payor
cause to be paid, during the term of tIús Agreement, as the same respectively become due, all taxes and
governmental charges of any kind whatsoever that may at any time be lawfulJy assessed or levied
against or with respect to the Project or any part thereof; including, without limiting the generality of
the foregoing, any taxes levied upon the Project which, if not paid, will become a charge on the receipts
from the Project prior to or on a parity with the charge thereon and the pledge or assignment thereof to
be created and made in the Indenture, or a lien against the Project or any interest therein or the
revenues derived therefrom or hereWlder on a parity with the charge of the Deed of Trust and the
pledge or assignment thereof to be created and made in the Indenture, or any interest therein (including
the Trustee's interest), or the rentals and revenues derives therefrom or hereWlder; all utility and other
charges incurred in the operation, maintenance, use, occupancy and upkeep of the Project and all
assessments and charges lawfulJy made by any governmental body for public improvements that may
be secured by a lien of the Project, provided that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period of years, the Company
shall be obligated to pay only such instaIIments as are required to be paid during the Term of this
Agreement. The Borrower shall submit to the Trustee and the City on or before May 1 of each year
proof of its payment of all taxes and governmental charges; provided, however, the Trustee shall be
WIder no obligation to review the authenticity of such proof of payment or its sufficiency nor shall any
liability attach to the Trustee with respect to the receipt of such proof of payment.
The Borrower may, at the Borrower's expense and in the Borrower name, in good faith contest
any such taxes, assessments and other charges and, in the event of any such contest, may permit the
taxes, assessments or other charges so contested to remain Wlpaid during the period of such contest
and any appeal therefrom unless the Trustee or the Credit Bank shall notify the Borrower that, in the
opinion of independent counsel by nonpayment of any such items the lien of the Deed of Trust will be
materially endangered or the Project or any essential part thereof will be subject to lose or forfeiture, in
which event that the Borrower shall promptly pay such taxes, assessments or charges, In the event that
the Borrower shall fail to pay any of the foregoing items required by this Section to be paid by the
Borrower, the City, the Credit Bank or the Trustee may (but shall be WIder no obligation to) pay the
same, and any amoWlt so advanced therefor by the City, the Credit Bank or the Trustee shall become
an additional obligation of the Borrower to the party making the advance, which amoWlts, together with
interest thereon at a rate per annum equal to the Prime Rate (as such term is defined in the Credit
Agreement) plus one and one-half (1-l/2%) from date of such advance to the date paid by the
Borrower, the Borrower agrees to pay.
Section 5.13. Insurance. The Borrower shall, at its expense and on or before the Closing
Date, deliver to the Trustee and the Bank, as co-insured, an American Land Title Association title
insurance policy with endorsement so as to be payable to the Bank and to the Trustee for the use and
benefit of the Owners of the Bonds. Such policy shall be in form satisfactory to the Trustee and the
~~H -/7
563346.2\24036,0004 ~
Bank and in the amoWlt of not less than Nine Million Four HWldred Ninety Thousand Dollars
($9,490,000), and shall insure the Borrower's fee title to the Project free and clear of encwnbrances
other than Permitted Encwnbrances consented to by the Trustee and the Credit Bank,
The Borrower shall, at all times, provide, maintain and keep in force all insurance policies
required by the Deed of Trust or the Credit Agreement. The Borrower sha11 submit to the Trustee, the
Credit Bank and the City on or before each May 1 proof of the insurance coverage required by the
Deed of Trust or the Credit Agreement, provided, the Trustee shall be Wlder no obligation to review
the authenticity of such proof of coverage or the sufficiency of coverage, nor shall any liability attach to
the Trustee with respect to the receipt of such proof of coverage.
Section 5.14. Advances. In the event the Borrower shall fail to maintain the insurance
coverage required by the Deed of Trust or shall fail to keep the Project in good repair and operating
condition, the City, the Credit Bank or the Trustee may (but shall be Wlder no obligation to) take out
the required policies of insurance and pay the premiums on the same or may make such repairs or
replacements therefor and shall become an additional obligation of the Company to such party, which
amoWlts, together with interest thereon at a rate per mmwn equal to the Prime Rate (as such term is
defined in the Credit Agreement) plus one' and one-half percent (1-1/2%) from. the date of such
advance to the date paid by the Borrower, the Borrower agrees to pay. "
ARTICLE VI
DAMAGE, DESTRUCfION AND CONDEMNATION;
USE OF PROCEEDS
Section 6.1. Obligation to Continue Payments. If prior to full payment of the Bonds (or
provisions for payment thereof in accordance with the provisions of the Indenture) the Project or any
portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty, or title to, or
the temporæy use of, the Project or any portion thereof shall be taken Wlder the exercise of the power
of eminent domain by any governmental body or by any person, firm or corporation acting Wlder
governmental authority, the Borrower shall nevertheless be obligated to continue to pay the amoWlts
specified in Article N hereof, to the extent not prepaid in accordance with Article VIII hereof.
Section 6.2. Application oCNet Proceeds, The Net Proceeds, if any, of any insurance or
condemnation awards resulting from the damage, destruction or condemnation of the Project or any
portion thereof shall be applied in one or more of the following ways at the election of the Borrower,
such election to be subject to any conditions set forth in the Deed of Trust and the Credit Agreement,
by written notice to City, the Credit Bank and the Trustee:
(a) The prompt repair, restoration, relocation, modification or improvement of the
stage of completion of construction of the damaged, destroyed or condemned portion of the Project to
enable such portion of the Project to accomplish at least the same function as such portion of the
Project was designed to accomplish prior to such damage or destruction or exercise of such power of
eminent domain.
(b) Prepayment of all or a portion of the Loan, subject to and in accordance with
Article VIII hereof and the prior written consent of the Credit Bank, and redemption of Bonds;
provided that no part of the Net Proceeds may be applied for such purpose unless (1) the entire amoWlt
t;-I1- /<6
563346.2\24036.0004 1-1...
of the Loan is so prepaid and all of the outstanding Bonds are to be redeemed in accordance with the
Indenture, or (2) in the event that only a portion of the Loan is so prepaid, the Borrower shall furnish to
the City and the Trustee a certificate of the Authorized Borrower Representative acceptable to the City
and the Trustee stating (i) that the property forming part of the portion of the Project that was damaged
or destroyed by such casualty or was taken by such condemnation proceedings is not essential to the
Borrower's use or possession of such portion of the Project or (ü) that such part of the portion of the
Project theretofore completed has been repaired, replaced, restored, relocated, modified or improved to
enable such portion of the Project to accomplish at least the same function as such portion of the
Project was designed to accomplish prior to such damage or destruction or the taking by such
condemnation proceedings.
Section 6.3. Insufficiency of Net Proceeds. If the Project or a portion thereof is to be
repaired, restored, relocated. modified or improved pursuant to Section 6.2 hereof, and if the Net
Proceeds are insufficient to pay in full the cost of such repair, restoration, relocation, modification or
improvement, the Borrower will nonetheless complete the work or cause the work to be completed and
will pay or cause to be paid any coat in excess of the amount of the Net Proceeds.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Any one of the following wlúch occurs and continues shall
constitute an Event of Default:
(a) the occurrence of an Event ofDefauIt described in Section 7. 1 (b), (c) or (d)
hereof, or a default under the Regulato!)' Agreement, if, as set forth in a written opinion of Bond
Counsel delivered to the Trustee, such default would be likely to result in interest on the Bonds
becoming includable in gross income of a Holder for federal income tax purposes if the Bonds remain
outstanding (an Acceleration Default");
(b) failure by the Borrower (i) to pay any amounts required to be paid under
Section 4.2 hereof at the times specified therein, or (ü) to deliver the Bankruptcy Certificate required
by Section 6.3(c) hereof at the times specified therein;
(c) failure by the Borrower to observe and perfonn any other covenant, condition
or agreement on its part required to be observed or perfonned by this Agreement (including
performance of its obligations under the Regulato!)' Agreement and the Housing Cooperation
Agreement), and wlúch continues for a period of thirty (30) days after written notice, specifying such
failure and requesting that it be remedied, given to the Borrower by the City or the Trustee, unless the
City and the Trustee shall, with the consent of the Credit Bank, agree in writing to an extension of such
time prior to its expiration; provided, however, that if the failure stated in the notice cannot be corrected
within such period, the City, the Credit Bank and the Trustee will not unreasonably withhold their
consent to an extension of such time if corrective action is instituted within such period and diligently
pursued until the default is corrected;
(d) the making of any representation or warranty by the Borrower in this
Agreement, the Credit Agreement or in any document executed in connection with this Agreement
wlúch is false or misleading in any material respect when made; or
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S63346.2\24036.0004 ~
(e) receipt by the Trustee from the Credit Bank of notice of (i) nonreimbursement
of the interest portion of the Letter of Credit following a drawing thereon to pay interest on the Bonds,
or (ii) an event of default under the Credit Agreement or the Deed of Trust and a request that it be
treated as an Event of Default hereunder.
The provisions of subsection ( c) of this Section, except with respect to defaults under the
Regulatory Agreement or under Section 6,6 hereof, are subject to the limitation that the Borrower shall
not be deemed in default if and so long as the Borrower is unable to carry out its agreements hereunder
by reason of strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any
kind of the government of the United States or of the State ofCalifomia or any of their departments,
agencies, or officials, or any civil or military authority; insurrections, riots, epidemics, landslides;
lightning; earthquake; fire; hurricanes; stonns; floods; washouts; droughts; arrests; restraint of
government and people; civil disturbances; explosions; breakage or accident to machinery,
transmission pipes or canals; partial or entire failure of utilities; or any other cause or event not
reasonably within the control of the Borrower; it being agreed that the settlement of strikes, lockouts
and other industrial disturbances shall be entirely within the discretion of the Borrower, and the
Borrower shall not be required to make settlement of strikes, lockouts and other industrial disturbances
by acceding to the demands of the opposing party or parties when such course is, in the judgment of
the Borrower, unfavorable to the Borrower, This limitation shall not apply to any default except under
subsection (c) of this Section.
The Trustee shall not be deemed to have knowledge of any Event of Default hereunder unless
and until it shall have actual knowledge thereof or it shall have received written notice thereof
Section 7.2. Remedies on Default.
(a) Whenever any Event of Default shall have occurred and shall continue, after
giving notice to the Credit Bank and subject to any right of the Credit Bank to cure any such default,
the City and the Trustee may take anyone or more of the following remedial steps, subject to the rights
of the Credit Bank under the Intercreditor Agreement:
(1) The Trustee, upon the occurrence of an Acceleration Default or a
default under Section 7.1 (b) hereof, or at the request or with the consent of the Credit
Bank upon the occurrence of any other Event of Default hereunder, by written notice to
the Borrower, shall immediately declare to be due and payable immediately the unpaid
balance of the Loan.
(2) The City, the Credit Bank and the Trustee may have access to and may
inspect, examine and make copies of the books and records and any and all accounts,
data and federal income tax and other tax returns of the Borrower,
(3) The City or the Trustee may take whatever action at law or in equity as
may be necessary or desirable to collect the payments and other amounts then due and
thereafter to become due or to enforce performance and observance of any obligation,
agreement or covenant of the Borrower under this Agreement.
(4) The Trustee may institute any action or proceeding at law or in equity
for the collection of any sums due and unpaid, and may prosecute any such action or
~- /j -c;) 0
563346.2\24036.0004 l.!z
proceeding to judgment or final decree, and may enforce any such judgment or final
decree against the Borrower and collect in the manner provided by law the moneys
adjudged or decreed to be payable,
(b) In case the Trustee or the City shall have proceeded to enforce its rights under
tlùs Agreement and such proceedings shall have been discontinued or abandoned for any reason or
shall have been detennined adversely to the Trustee or the City, then, and in every such case, the
Borrower, the Trustee, the Credit Bank and the City shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the Borrower, the Trustee, the
Credit Bank and the City shall continue as though no such action had been taken.
(c) In case proceedings shall be pending for the bankruptcy or for the
reorganization of the Borrower under the federal bankruptcy laws or any other applicable law, or in
case a receiver or trustee shall have been appointed for the property of the Borrower or in the case of
any other similar judicial proceedings relative to the Borrower, or the creditors or property of the
Borrower, then the Trustee shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount owing and unpaid pursuant to tlùs
Agreement and, in case of any judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the Trustee allowed in such
judicial proceedings relative to the Borrower, its creditors or its property, and to collect and receive any
moneys or other property payable or deliverable on any such claims, and to distribute such amounts as
provided in the Indenture after the deduction of its charges and expenses. Any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized to make such payments to the Trustee, and
to pay to the Trustee any reasonable amount due it for compensation and expenses, including expenses
and fees of counsel incurred by it up to the date of such distribution.
Such rights and remedies as are given to the City under this Article vn have been assigned to
the Trustee under the Indenture and to the Credit Bank pursuant to the Intercreditor Agreement, to
which assignment the Borrower hereby consents. Such rights and remedies shall be exercised by the
Trustee and the Bondholders as provided in the Indenture and by the Credit Bank as provided in the
Intercreditor Agreement.
Section 7.3. Agreement to Pay Attorneys' Fees and Expenses. In the event the
Borrower should default under any of the provisions of tlùs Agreement and the City or the Trustee
should employ attorneys or incur other expenses for the collection of the payments due under tlùs
Agreement or the enforcement of performance or observance of any obligation or agreement on the
part of the Borrower herein contained, the Borrower agrees to pay to the City or the Trustee the
reasonable fees of such attorneys and such other expenses so incurred by the City or the Trustee,
Section 7.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to the
City, the Credit Bank or the Trustee is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and shall be in addition to every other
remedy given under tlùs Agreement or now or hereafter existing at law or in equity or by statute. No
delay or omission 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 thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle the City or the Trustee
to exercise any remedy reserved to it in tlùs Article, it shall not be necessary to give any notice, other
~-A -eJ, (
563346.2\24036,0004 ~
than such notice as may be herein expressly required or required by law to be given. Such rights and
remedies as are given the City hereunder shall also extend to the Trustee, and the Trustee and the
holders of the Bonds shall be deemed third party beneficiaries of all covenants and agreements herein
contained,
Section 7.5. No Additional Waiver Implied by One Waiver, In the event any agreement
or covenant contained in this Agreement should be breached by the Borrower and thereafter waived by
the City or the Trustee with the consent of the Credit Bank, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach hereunder,
Section 7.6. Notice of Certain Events. The Borrower hereby covenants to advise the City,
the Credit Bank and the Trustee promptly in writing of the occurrence of any Event of Default
hereunder or any event which, with the passage of time or service of notice, or both, would constitute
an Event of Default hereunder, specifying the nature and period of existence of such event and the
actions being taken or proposed to be taken with respect thereto. In addition, the Borrower hereby
covenants to advise the City, the Credit Bank and the Trustee promptly in writing of the occurrence of
any default under the Loan or of the occurrence of an Act of Bankruptcy,
ARTICLE VIII
PREPAYMENT
Section 8.1. Prepayment of Loan. The Loan shall not be prepaid except as provided in
this Section. No prepayment of the Loan shall relieve the Borrower of its obligations under the
Regulatory Agreement during the Qualified Project Period With the prior written consent of the
Credit Bank, the Borrower shall be permitted or required to prepay, or shall be deemed to have
prepaid, the Loan, in whole or in part, and the principal amount thereof shall be reduced accordingly, in
an amount equal to the principal amount of Bonds redeemed and on the date of such redemption, as
follows:
(a) Reserved,
(b) The Borrower shall be required to prepay the Loan from the amount of any Net
Proceeds of any insurance or condemnation award which are not used to repair or replace the Project
pursuant to Section 6,2 hereof
(c) The Borrower shall be permitted to prepay the Loan at any time (i) while the
Bonds bear interest at a Variable Rate or on a Reset Date or the Conversion Date, (ü) at any time not
more than 180 days nor less than 120 days before any date on which the Bonds are subject to
redemption pursuant to Section 4.1 (f) of the Indenture, and (iü) such lesser period of time before any
date on which the Bonds are subject to redemption pursuant to Section 4.1(f) of the Indenture as may
be approved in writing by the Credit Bank, but only on at least 30 day's notice to the Trustee of such
redemption and only if the amounts to be applied to the payments of principal, premium, if any, and
interest on the Bonds are Available Amounts.
(d) The Borrower shall be required to prepay the full remaining balance of the
Loan, upon the occurrence of an Acceleration Default and the acceleration of the Loan pursuant to
f;-If -;(~
563346.2\24036.0004 ~
Section 7.2 hereof, or the Credit Bank's request for, or consent to, the acceleration of the Loan
following any other Event of Default hereunder pursuant to said Section 7.2,
(e) The Borrower shall be required to prepay the Loan in whole on the date
necessary in order for the Bonds to be redeemed as provided in Section 4. 1 (e) of the Indenture.
Section 8.2. Redemption of Bonds Upon Prepayment. Upon any prepayment of the
Loan as provided in Section 8, I, the Trustee is required by the Indenture to call all or part of the Bonds
for redemption and to draw upon the Letter of Credit in the respective amounts set forth in the
applicable paragraph of Section 4.1 of the Indenture.
Notwithstanding the preceding sentence, in the event of a redemption of Bonds pursuant to
Section 4.1 (g) or (h) of the Indenture, the Credit Bank shall have the option to purchase Bonds in lieu
of redemption, pursuant to Section 4,6 of the Indenture, provided that the exercise of such option does
not cause the Credit Bank to become insolvent
Section 8.3. Amount of Prepayment. In the event of any prepayment pursuant to Section
8.1, the amoWlt of the Loan deemed to be prepaid shall be equal to the principal amoWlt of Bonds
redeemed as described in Section 8.2. In the case of prepayment of the Loan in full, the Borrower shall
pay to the Trustee an amoWlt sufficient, together with other funds held by the Trustee and available for
such purpose, to pay all reasonable and necessary fees and expenses of the City, the Trustee and any
paying agent accrued and to accrue through final payment of the Bonds and all other liabilities of the
Borrower accrued and to accrue WIder this Agreement, and shall pay to the City any amoWlt required
by Section 4.2(c). In the case of partial prepayment of the Loan, the Borrower shall payor cause to be
paid to the Trustee an amoWlt sufficient, together with other funds held by the Trustee and available for
such purpose, to pay expenses of redemption of the Bonds to be redeemed upon such prepayment.
The Borrower agrees that it will not volWltarily prepay the Loan or any part thereof, except in
amounts sufficient to redeem Bonds in an amoWlt equal to at least $100,000 plus any multiple of
$5,000 in excess thereof during any Variable Period, or in whole multiples of $6,000 at any other time,
and to pay any applicable redemption premium and accrued interest to the redemption date.
In addition, if the Borrower shall prepay the Loan in whole during the Qualified Project Period,
as defined in the Regulatory Agreement, the Borrower shall pay to the City, on the date of such
prepayment, an amoWlt equal to the present value, as of the date of such prepayment, of the annual fees
of the City which would have been payable as provided in Section 4.2(c) for the remaining term of the
Qualified Project Period, based on the amoWlt of the Bonds outstanding immediately prior to the date
of such prepayment (such present value calculated based upon a discoWlt rate equal to the yield on the
Bonds immediately prior to such prepayment), or such lesser amoWlt as is necessary, in the opinion of
Bond CounseL to preserve the tax-exempt status of interest on the Bonds, to compensate the City for
its services and expenses (including those of any Administrator appointed by it) in monitoring
compliance with the Regulatory Agreement for the remaining portion of the Qualified Project Period.
6'- A ~cJ3
563346.2\24036.0004 ~
ARTICLE IX
LIMITATION ON LIABILITY
EXPENSES; INDEMNIFICATION
Section 9.1. Limitation on Liability of City. The City shall not be obligated to pay the
principal of, or premiwn, if any, or interest on the Bonds, except ITom Revenues. The Borrower hereby
acknowledges that the City's sole source of moneys to repay the Bonds and to pay expenses related
thereto will be provided by the payments made by the Borrower pursuant to this Agreement, together
with other Revenues, including any drawings WIder the Letter of Credit or investment income on
certain funds and acCOWlts (except the Rebate FWld) held by the Trustee WIder the Indenture, and
hereby confirms that amoWlts available to pay all principal of, and premiwn, if any, and interest on the
Bonds as the same shall become due (whether by maturity, redemption, acceleration or otherwise),
have been calculated to be at all times sufficient for such purpose.
Any obligation or liability of the City created by or arising out of this Agreement (including,
without limitation, any liability created by or arising out of the representations, wan antics or covenants
set forth herein or otherwise) shall not impose a debt or pecuniary liability upon the City or a charge
upon its general credit, but shall be payable solely out of the Revenues. Neither the issuance of the
Bonds nor the delivexy of this Agreement shall, directly or indirectly or contingently, obligate the City
to make any appropriation for their payment Nothing in the Bonds or in the Indenture or this
Agreement or the proceedings of the City authorizing the Bonds or in the Law or in any other related
document shall be construed to authorize the City to create a debt of the City within the meaning of any
constitutional or statutoxy provision of the State of Califomia. No breach of any pledge, obligation or
agreement of the City hereWlder may impose any pecuniary liability upon the City or any charge upon
its general credit or against its taxing powers.
Section 9.2. Expenses. The Borrower covenants and agrees to pay and to indemnify the
City and the Trustee against all costs and charges, including reasonable fees and disbursements of
attorneys, accoWltants, consultants and other experts, incurred in good faith in connection with this
Agreement, the Bonds or the Indenture, except to the extent, with respect to the Trustee, made
necessary by the negligence or willful misconduct of the Trustee.
Section 9.3. Indemnification.
(a) The Borrower releases the City from, and covenants and agrees that the City shall not
be liable for, and covenants and agrees, to the extent pennitted by law, to indemnify and hold harmless
the City and its officers, employees and agents ITom and against, any and all losses, claims, damages,
liabilities or expenses, of evexy conceivable kind, character and nature whatsoever arising out of,
resulting ITom or in any way connected with (I) the Project, or the conditions, occupancy, use,
possession, conduct or management of, or work done in or about, or ITom the plamúng, design,
acquisition, installation or construction of the Project or any part thereof; (2) the issuance and sale,
resale or remarketing of any Bonds or any certifications or representations made by anyone other than
the City in connection therewith and the carrying out of any of the transactions contemplated by the
Bonds and tlùs Agreement; (3) the Trustee's acceptance or administration of the trusts WIdei' the
Indenture, or the exercise or performance of any of its powers or duties WIder the Indenture; or (4) any
Wltrue statement or alleged Wltrue statement of any material fact or omission or alleged omission to
'is-it -de!
563346.2\24036,0004 14
state a material fact necessa¡y make the statements made, in the light of the circumstances under which
they were made, not misleading, in any official statement or other offering circular utilized by the City
or any underwriter or placement agent in connection with the sale or remarketing of any Bonds;
provided that such indemnity shall not be required for damages that result trom the negligence or
willful misconduct on the part of the party seeking such indemnity, The Borrower further covenants
and agrees, to the extent permitted by law, to payor to reimburse the City and its officers, employees
and agents for its any and all costs, reasonable attorneys' fees, liabilities or expenses incurred in
connection with investigating, defending against or otherwise in connection with any such losses,
claims, damages, liabilities, expenses or actions. The provisions of this Section shall survive the
retirement of the Bonds.
(b) The Borrower releases the Trustee from, and covenants and agrees that the
Trustee shall not be liable for, and covenants and agrees, to the extent permitted by law, to indemnity
and hold harmless the Trustee and its officers, employees and agents trom and against any and all
losses, claims damages, liabilities or expenses, of every conceivable kind, character and nature
whatsoever arising out of, resulting from or in any way connected with (1) the Project, or the
conditions, occupancy, use, possession, conduct or management ot: or work done in or about, or trom
the planning, design, acquisition, installation or construction of the Project or any part thereof; (2) the
issuance of any Bonds or any certifications or representations made by the Borrower in connection
therewith and the carrying out by the Borrower of any of the transactions contemplated by the Bonds
and this Agreement; (3) the Trustee's acceptance or administration of the trusts under the Indenture; or
(4) with respect to the Borrower, any untrue statement or alleged untrue statement of any material fact
or omission or alleged omission to state a material fact necessa¡y to make the statements made, in the
light of the circumstances under which they were made, not misleading, in any official statement or
other offering circular utilized by the City or any underwriter or placement agent in connection with the
sale of any Bonds; provided that such indemnity shall not be required for damages that result trom
negligence or willful misconduct on the part of the party seeking such indemnity, The Borrower further
covenants and agrees, to the extent permitted by law, to payor to reimburse the Trustee and its
officers, employees and agents for any and all costs, reasonable attorneys' fees, liabilities or expenses
incurred in connection with investigating, defending against or otherwise in connection with any such
losses, claims, damages, liabilities, expenses or actions, except to the extent that the same arise out of
the negligence or willful misconduct of the party claiming such payment or reimbursement. The
provisions of this Section and Section 4.2(b) shall survive the resignation or removal of the Trustee and
the retirement of the Bonds.
Nothing contained herein shall in any way be construed to impose any duties upon the Trustee
beyond those contained in the Indenture. All immunities, indemnities, exceptions trom liability and
other provisions of the Indenture insofar as they relate to the Trustee shall apply to this Agreement. The
immunities of the Trustee also extend to its directors, officers, employees and agents.
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. All notices, certificates or other communications shall be deemed
sufficiently given on the third day following the day on which the same have been mailed by first class
mail, postage prepaid, addressed to the City, the Administrator, the Borrower, the Trustee or the Credit
6'- /} -cJ5
563346.2\24<)36.0004 ~
Bank at the respective addressee set forth in Section 11.6 of the Indenture. A duplicate copy of each
notice, certificate or other communication given hereunder by either the City or the Bondowner to the
other shall also be given to the Trustee and the Credit Bank. The City, the Borrower, the Trustee and
the Credit Bank may, by notice given hereunder, designate any different addresses to which subsequent
notices, certificates or other communications shall be sent
Notwithstanding the foregoing provisions of this Section 10.1, the Trustee shall not be deemed
to have received, and shall not be liable for failing to act upon the contents of, any notice UlÙess and
until the Trustee actually receives such notice.
Section 10.2. Severability. If any provision of this Agreement shall be held or deemed to
be, or shall in fact be, illegal, inoperative or unenforceable, the same shall not affect any other provision
or provisions herein contained or render the same invalid, inoperative, or unenforceable to any extent
whatever.
Section 10.3. Execution of Counterparts, This Agreement 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; provided, however, that for purposes of perfecting a security interest in this Agreement by
the Trustee under Article 9 of the California Uniform Commercial Code, only the counterpart
delivered, pledged, and aligned to the Trustee shall be deemed the original
Section 10.4. Amendments, Changes and Modifications, Except as otherwise provided in
this Agreement or the Indenture, subsequent to the initial issuance of Bonds and prior to their payment
in full, or provision for such payment having been made as provided in the Indenture, this Agreement
may be effectively amended, changed, modified, altered or terminated only by written instrument
executed by the parties hereto and only with the prior written consent of the Credit Band
Section 10.5. Governing Law. This Agreement shall be governed exclusively by and
construed in accordance with the applicable laws of the State of California.
Section 10.6. Authorized Representatives. Whenever under the provisions of this
Agreement the approval of the Borrower or the City or the Credit Bank is required for any action, and
whenever the Borrower or the City or the Credit Bank is required to deliver any notice or other writing,
such approval or such notice or other writing shall be given, respectively, on behalf of the Borrower by
the Authorized Borrower Representative and on behalf of the City by the Authorized City
Representative and on behalf of the Credit Bank by the Authorized Bank Representative, and the City,
the Trustee, the Credit Bank and the Borrower shall be authorized to act on any such approval or notice
or other writing and none of the parties hereto nor the Credit Bank shall have any complaint against the
other or against the Trustee as a result of any such action taken,
Section 10.7. Tenn of the Agreement. This Agreement shall be in full force and effect
from the date hereof and shall continue in effect as long as any of the Bonds are outstanding or the
Trustee holds any moneys under the Indenture, whichever is later, The provisions of Section 9,3 and all
representations, certifications and covenants by the Borrower as to all matters affecting the tax-exempt
statue of the Bonds survive the termination of this Agreement
Section 10.8. Binding Effect; Third Party Beneficiary. This Agreement shall inure to the
benefit of and shall be binding upon the City, the Trustee, the Credit Bank, the Borrower and their
~-/f -¿;¿G
563346.2\24036,0004 ~
respective successors and assigns; subject, however, to the limitations contained in Section 6,2 hereof.
The Credit Bay and the Administrator are intended to be third party beneficiaries of this Agreement to
the extent the provisions hereof are expressly for the benefit of the Credit Bank or the Administrator,
Section 10.9. Capacity of Trustee. The Trustee is entering into this Loan Agreement solely
in its capacity as Trustee under the Indenture and the duties, powers and liabilities of the Trustee in
acting hereunder shall be subject to the provisions of the Indenture, including, without limitation, the
provisions of Article VIII thereof.
C¡S-/}-cJ]
563346,2\24036.0004 ~
.
IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name and
its seal to be hereunto affixed and attested by its duly authorized officer, the Trustee has caused this
Agreement to be executed in its name by its duly authorized officer, and the Borrower has caused this
Agreement to be executed in its name by its general partners, all as of the date first above written,
CITY OF CHULA VISTA
By
Director of Finance
Attest:
City Clerk
BNY WESTERN TRUST COMPANY,
as Trustee
By:
Authorized Officer
By:
Authorized Officer
BRE PROPERTIES, INc., a Delaware corporation
By:
By:
«;- It -c2~
S63346.2124036,OOO4 ~
INTERCREDITOR AGREEMENT
BETWEEN
BNY WESTERN TRUST COMPANY,
as Trustee
and
DRESDNER BANK AG,
New York Branch [and Grand Cayman Branch]
Dated as of March -' 1998
Relating to
$9,490,000
City ofChula Vista
Variable Rate Multifamily Housing Refunding Revenue Bonds
(Terra Nova Associates Project), 1992 Issue A
~-(3-1
TABLE OF CONTENTS
Page
TABLE OF CONTENTS
Page
SECTION 1. EXERCISE OF RIGHTS UNDER BOND DOCUMENTS AND BANK
DOCUMENTS ................................',........,...........".,....................,....,..,......,..3
SECTION 2, EXERCISE OF RIGHTS AFTER FAILURE BY BANK TO HONOR A
DRAW UNDER THE LETTER OF CREDIT .....................,..................,.....,...4
SECTION 3, AMENDMENT OF DOCUMENTS...,.....,.................,.,...............,..,...,....,,....,.4
SECTION 4. ACCESS TO RECORDS AND OTHER INFORMATION .............................. 5
SECTION 5, INTERCREDITOR AGREEMENT FOR BENEFIT OF PARTIES
HERETO...........,..............,...,...".."..,............,....,......,.....................................5
SECTION 6. SEVERABILITY............................,...............,.,.....,..................,...................,,5
SECTION 7. NOTICES....."..,...".,................................................,.......,...,..........,...,.....,....,5
SECTION 8. SUCCESSORS AND ASSIGNS...........,.."............,....,..................,...,.."...,.,...6
SECTION 9, COUNTERPARTS ............................."..,.........................,.........,...,...............,6
SECTION 10. GOVERNING LAW.................,...........................,...........".....,.."..,...,......,.....6
SECTION 11. NO IMPAIRMENTS OF OTHER RIGHTS............,..................,.....................6
SECTION 12. LETTER OF CREDIT NOT TO BE IMPAIRED: REMEDIES .......................6
SECTION 13. SUBROGATION................,......,....,..,...,.,........,...,........."....,.,.,...".............,... 7
SECTION 14. LIMITATION ON ACTIONS ................,..........,....,........................................7
SECTION 15. HEADINGS.............................................,.....,....,....,...,.,..............,.............."..7
SECTION 16. LIABILITY OF TRUSTEE ......................,..,....,.................,..........,................. 7
SECTION 17. TERMINATION.........."..............,...,..."....,.......,......................,........"..."",.... 7
6- ß " ~
'+
568136.1\24036.0004
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT dated as of March -' 1998 among
Dresdner Bank AG, acting through its New York Branch [and Grand Caymen Branch] (the
"Bank"), the City ofChula Vista, California (the "Issuer") and BNY WESTERN TRUST
COMPANY, a , as trustee under the hereinafter described Indenture (the
"Trustee");
RECITALS:
A. At the request of Terra Nova Associates (the "Prior
Borrower"), the Issuer issued its Multifamily Housing Revenue Bonds (Terra Nova Associates
Project), Series 1985, in the principal amount of$lO, 115,000 (the "Prior Bonds") to finance the
construction of a multifamily housing project known as "Terra Nova Villas" (the "Project"). At
the further request of the Original Borrower, the Issuer issued its Variable Rate Multifamily
Housing Refunding Revenue Bonds (Terra Nova Associates Project), 1992 Issue A in the original
principal amount of $9,494,000 and currently outstanding in the principal amount of $[9,240,000]
(the "Bonds"). The Bonds were issued pursuant to an Indenture of Trust, dated as of February 1,
1992 (the "Original Indenture"), between the Issuer and First Interstate Bank of California, as
trustee (the "Prior Trustee"), as amended by that certain [Amended and Restated Indenture of
Trust], dated as of March 1, 1998 (the "[Amended and Restated Indenture)" and together with
the Original Indenture and as it may be further amended or supplemented, the "Indenture") by and
between the Issuer and Trustee, as successor to the Prior Trustee (the "Trustee").
B. The Issuer made a loan (the "Loan") of the proceeds of the
Bonds to the Prior Borrower pursuant to a Loan Agreement, dated as of February 1, 1992 (the
"Original Loan Agreement"), by and among the Issuer, the Prior Borrower and the Prior Trustee,
as amended by that certain [Amended and Restated Loan Agreement], dated as of March I, 1998
(the "[Amended and Restated Loan Agreement)" and together with the Original Loan Agreement
and as it may be further amended or supplemented, the "Loan Agreement") by and among the
Issuer, the Trustee and the Borrower, as successor to the Prior Borrower, to refinance the
acquisition and construction of the Project.
C. The Original Borrower requested The Industrial Bank of Japan,
Limited, Los Angeles Agency (the "Original Bank") to issue its irrevocable direct pay letter of
credit as additional security for the Prior Bonds (the "Original Letter of Credit") pursuant to a
Letter of Credit Agreement, dated as of March 1, 1985, by and between the Original Borrower
and the Original Bank (as amended, the "Original Reimbursement Agreement"). The Original
Borrower requested the Original Bank to amend and restate the Original Letter of Credit in
connection with the issuance of the Bonds (as so amended and restated and as further amended,
the "Restated Original Letter of Credit") pursuant to a First Amendment to Letter of Credit
Agreement, dated as of February 1, 1992, by and between the Original Bank and the Original
Borrower.
D. The Original Borrower entered into an Assignment and
Assumption Agreement, dated as of March 10, 1994, pursuant to which the Original Borrower
'&;~13-3
568136.1\24036,0004
assigned to the Borrower, and the Borrower assumed, all of the Original Borrower's right, title
and interest in and to and obligations under, the Project and under each of the documents relating
to the Bonds to which the Original Borrower was a party. In connection with the assignment by
the Original Borrower to the Borrower, the Bank issued a First Amendment to Restated Letter of
Credit dated March 14, 1994. At the Borrower's request, the Original Bank further amended the
Restated Letter of Credit on February 15, 1995 to extend the expiration date thereof to March 1,
1998 and on February 19, 1998 to extend the expiration date thereof to March 1, 1998,
E. The Borrower has decided to replace the Restated Original
Letter of Credit .and hereby applies and requests that the Bank issue such replacement irrevocable
direct pay letter of credit in an amount not exceeding $[9,358,475] (the "Letter of Credit").
F. A5 one condition to its issuance of the Letter of Credit, the
Bank has required the Borrower to enter into that certain Reimbursement Agreement of even
date herewith with the Bank (the "Reimbursement Agreement"), which governs the tenus and
conditions on which the Borrower will be obligated to pay the Bank for issuing the Letter of
Credit and to reimburse the Bank for any drawings made under the Letter of Credit.
G, The Loan is evidenced by a promissory note of the Borrower in
the original principal amount of $9,494,000 (the "Note"), and the obligations of the Borrower
under the Note and the Loan Agreement are secured by a Deed of Trust and Security Agreement
with A5signment of Rents dated as of March 1, 1985 (as heretofore amended, the "First Deed of
Trust") from the Borrower, as Trustor, to the Prior Trustee, as trustee, for the benefit of the
Trustee and the Prior Bank, as co-beneficiaries and by certain other security documents from the
Borrower to the Trustee and the Bank (herein, the First Deed of Trust together with the Note, the
Loan Agreement, the Indenture and all other documents evidencing and securing the obligations
of the Borrower to repay the Loan are referred to collectively as the "Loan Documents"); and
H. The obligations of the Borrower under the Original
Reimbursement Agreement for the payment of amounts in connection with any draw on the Letter
of Credit are also secured by the First Deed of Trust and other security documents from the
Borrower to the Prior Bank and all other obligations of Borrower under the Original
Reimbursement Agreement are secured by that certain Second Deed of Trust and Security
Agreement with A5signment of Rents dated as of March 1, 1985 (as heretofore amended, the
"Second Deed of Trust"); and
I. The First Deed of Trust and the Second Deed of Trust will be
released and reconveyed concurrently with the issuance of the Letter of Credit, and the Note and
all obligations of the Borrower under the Loan Agreement will be secured by a Deed of Trust,
A5signment of Rents, Security Agreement and Fixture Filing of even date herewith from the
Borrower, as Trustor, for the benefit of the Trustee and the Bank, as co-beneficiaries (the" Deed
of Trust" and together with all other documents evidencing and securing the obligations of the
Borrower under the Loan Agreement and in connection with the Bonds are referred to herein
collectively, as the "Bond Documents"); and
6-/3 - L(
568136.1\24036.0004 ~-
J. The obligations of the Borrower to the Bank under the
Reimbursement Agreement wilI also be secured by the Deed of Trust and certain other security
documents (the Deed of Trust and all other documents evidencing and securing the obligations of
the Borrower under the Reimbursement Agreement are referred to herein colIectively as the
"Bank Documents"); and
K. The parties desire to enter into this Intercreditor Agreement
with respect to the exercise of certain rights, remedies and options by the respective parties hereto
under the above described documents;
NOW, THEREFORE, the parties hereto covenant and agree as folIows:
Section 1. Exercise of Rights Under Bond Documents and Bank Documents.
Subject to the provisions of Section 2 hereof, so long as (a) the Letter of Credit shalI be in effect,
and (b) the Bank shall not have failed to honor a properly presented draw request on the Letter of
Credit, the folIowing provisions shalI be applicable:
Section Ll Upon the occurrence ofan Event of Default under the
Reimbursement Agreement or any of the Loan Documents, the Bank shall be pennitted
and is hereby authorized to take any and alI actions and to exercise any and all rights,
remedies and options which it may have under the Bank Documents or any of the Loan
Documents to obtain the curing of such default, or to foreclose the Deed of Trust and sell
the Mortgaged Property (as defined therein) or any part thereof (or accept a deed in lieu
offoreclosure) and selI or otherwise realize upon the property mortgaged, pledged and
assigned to the Bank under the Bank Documents or any of the Loan Documents and the
other security instruments included therein, without objection or interference by the
Trustee; provided that the Bond Documents (excluding the Deed of Trust) shall not be
discharged or materially impaired thereby.
Section 1.2 The Trustee shall not take any action pursuant to the Deed
of Trust to declare the outstanding balance of the Bonds or the Note to be due pursuant to
the Indenture or the Loan Agreement or to foreclose or otherwise enforce or discharge the
lien or security interest of the Deed of Trust or selI the Mortgaged Property described
therein, or to exercise any other rights or enforce any other remedies provided for in the
Deed of Trust or any other Bond Document against any property described therein,
without the prior written consent of the Bank. This provision shall not restrict or limit the
actions required to be taken by the Trustee in connection with the redemption or purchase
of, or payment of interest on, the Bonds at or prior to maturity in accordance with the
provisions of the Indenture, the application by the Trustee of any funds held under the
Indenture in accordance with the tenns thereof or the submission of any claim and the
collection and application of moneys paid under the Letter of Credit in accordance with
the terms of the Letter of Credit and the Indenture.
Section 1.3 In the event the Bank or its designee shall become the legal
or beneficial owner of the Mortgaged Property by foreclosure, purchase or deed in lieu of
foreclosure, the Bank or its designee shall execute and deliver to the Trustee and the
;?-ß- S
568136.1\24036.0004 -,,-
Issuer an instrument in writing assuming and agreeing to perform the obligations of the
Borrower under the Bond Documents from and after the date of such acquisition, with the
benefit, however, ofthe nonrecourse provisions contained in the Bond Documents.
Section 1.4 The Trustee and the Issuer agree, subject to the provisions
of Section 1.5 hereof (and the provisions of the Indenture with respect to the use by the
Trustee of the same degree of care and skill as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs), that each will cooperate with the
Bank and take or refrain from taking any and all action, including joining in such
proceedings at law or in equity and executing such documents as the Bank may request
and direct to enforce the obligations of the Borrower under the Bond Documents, in order
that the rents and other revenues, profits and proceeds from the Project (including without
limitation any proceeds of insurance), which are pledged and assigned to the Trustee and
the Bank jointly under the Deed of Trust (the "Pledged Revenues"), shall be available,
after the payment of any and all costs and expenses incurred in the collection thereof, to
pay any outstanding and unpaid obligations of the Borrower under the Loan Agreement
(but only if the Trustee or the Issuer is entitled under the Bond Documents to receive and
apply such Pledged Revenues for such purpose), subject to the Bank's rights of
subrogation, and under the Reimbursement Agreement, in such order and manner as the
Bank shall determine,
Section 1.5 The Bank, in consideration for the agreement by the Trustee
and the Issuer to cooperate with the Bank and to exercise, or refrain from exercising,
certain rights, remedies and options under the Bond Documents at the request and
direction of the Bank, hereby covenants and agrees to pay any and all costs, fees and
expenses (including reasonable attorneys fees and expenses) which may be incurred in
connection therewith; provided, however, that the Bank shall not be obligated under this
Intercreditor Agreement (i) to pay any costs, fees or expenses which the Issuer or the
Trustee may suffer or incur by reason of the negligent or wilIful failure of the Trustee to
perform the undertakings, trusts and duties imposed upon the Trustee under the Indenture
and the other Bond Documents, or (ii) to pay any costs, fees or expenses which the
Trustee may incur by reason of the Trustee's exercise or failure to exercise any power or
discretion other than at the Bank's direction,
Section 2. Exercise ofRilZhts After Failure by Bank to Honor a Draw Under
the Letter of Credit. (a) If the Bank fails, due to an injunction or other prohibition by a court of
competent jurisdiction or a regulatory agency having jurisdiction over the Bank or other cause
beyond the control of the Bank, to honor a properly presented draw request on the Letter of
Credit, the Bank and the Trustee shall in good faith act jointly in administering, enforcing and
effecting the remedies granted under the Bond Documents and the Bank Documents, as
applicable.
(b) Except as provided in Subsection 2(a) hereof, if the Bank fails to honor a
properly presented draw request on the Letter of Credit, the Trustee may assume sole
responsibility in administering, enforcing and effecting the remedies granted under the Bond
Documents.
ç¿--(3 - h
568136,1124036,0004 -\-
Section 3. Amendment of Documents, The parties hereto agree that they will
not enter into any amendment, change or modification of any of the documents referred to in this
Intercreditor Agreement without the express prior written consent to such amendment, change or
modification by the other parties hereto; provided that each party agrees that it will not
unreasonably withhold its consent to any amendment, change or modification requested by
another party hereto if its interests, and in the case of the Trustee the interests of the Bondholders,
are not adversely affected thereby.
Section 4. Access to Records and Other lnfonnation. The Bank at its expense
may at any reasonable time examine or copy any letter, account, or other documentation or
infonnation in the possession or control of the Trustee relating to .or connected with the Project,
the Bonds and collections under the Note and the Loan Agreement, The Trustee shall, at the
request and expense of the Bank, take reasonable steps to obtain for the Bank any infonnation or
documents in the possession of any third party relating to or in connection with the Project or the
Bonds,
Section 5. lntercreditor Al!Teement for Benefit of Parties Hereto. Nothing in
this lntercreditor Agreement, express or implied, is intended or shall be construed to confer upon,
or to give to, any person other than the parties hereto and their respective successors and assigns,
any right, remedy or claim under or by reason of this Intercreditor Agreement or any covenant,
condition or stipulation hereof; and the covenants, stipulations and agreements contained in this
lntercreditor Agreement are and shall be for the sole and exclusive benefit of the parties hereto
arid their respective successors and assigns,
Section 6. Severability. In case anyone or more of the provisions contained in
this Intercreditor Agreement shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not in any way be
affected or impaired thereby,
Section 7. Notices. All notices, demands, certificates or other
communications hereunder shall be in writing and shall be deemed sufficiently given or served for
all purposes when presented personally or sent by certified or registered mail, postage prepaid,
return receipt requested, or sent by private courier service, with proper address as indicated
below. Each party may, by written notice given to the other parties, designate any other address
or addresses to which notices, certificates or other communications to them shall be sent when
required as contemplated by this Intercreditor Agreement. Notices sent by private courier service
shall be deemed to have been given if and when received (unless the addressee refuses to accept
delivery, in which case they shall be deemed to have been given when first presented to the
addressee for acceptance) and any notice sent by registered or certified mail shall be deemed given
or served three Business Days after the date of mailing thereof Until otherwise so provided by the
respective parties, all notices, certificates and communications to each of them shall be addressed
as follows:
To the Bank: Dresdner Bank AG,
New York Branch [and Grand Cayman Branch]
333 South Grand Avenue" Suite 1700
'&-- /3- 7
568136.1124036.0004 -\
Los Angeles, California 90071
Attention: Vitol Wiacek
g-fJ - '6'
S68136,l\24036.0004 -~
To the Issuer: City ofChula Vista
Attention:
To the Trustee: BNY Western Trust Company
Attention:
To the Borrower: BRE Properties, Inc.,
Section 8. Successors and Assigns. Whenever in this Intercreditor Agreement
any of the parties hereto is named or referred to, the successors and assigns of such party shall be
deemed to be included and all covenants, promises and agreements contained in this Intercreditor
Agreement by or on behalf of the respective parties hereto shall bind and inure to the benefit of
the respective successors and assigns of such parties, whether so expressed or not.
Section 9. Counteroarts. This Intercreditor Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original but all
counterparts together constituting only one instrument.
Section 10. Governing Law, It is the intention of the parties hereto that this
Intercreditor Agreement and the rights and obligations of the parties hereunder shall be governed
by and construed and enforced in accordance with the laws of the State of California.
Section 11. No Impairments of Other Rights. Nothing in this Intercreditor
Agreement is intended or shall be construed to impair, diminish or otherwise adversely affect any
other rights the Bank may have or may obtain against the Borrower, including but not limited to
the Bank's rights under the Deed of Trust, the other Bond Documents, as a holder of Bonds, in
the event it shall be or become a holder thereof, and the Bank's rights of subrogation.
Section 12. Letter of Credit Not to be Imoaired: Remedies. No failure of the
Trustee or the Issuer to perform any undertakings or honor any covenants or agreements
hereunder shall affect the obligation of the Bank on the Letter of Credit after the issuance thereof,
but the Bank shall have full right and power to enforce said undertakings, covenants and
agreements directly against the Trustee or the Issuer by suit for specific performance or claims for
damages or a combination of the foregoing.
c;?-ß-q
~68136,1I24036.0004 -\
Section 13.
Section 14. Subrogation. The Trustee agrees that the Bank shall be subrogated
to its rights and remedies under the Bond Documents upon and to the extent of the Bank's
payment of the principal of, or purchase price for, or interest on, the Bonds, or the payment or
performance of any obligation under the Bond Documents, and the Trustee agrees to cooperate
with the Bank in connection with the Bank's enforcing any of such rights and remedies and agree
not to take any actions that would prejudice the exercise of such right of subrogation.
Section 15, LillÚtation on Actions. No action arising out of this lntercreditor
Agreement may be brought against the Bank unless such action is commenced within twelve (12)
months following the date of default or non-performance by such party,
Section 16, Headings. Headings herein are for convenience only and shall not
be relied upon in interpreting or enforcing this Intercreditor Agreement.
Section 17, Liabilitv of Trustee. The Trustee agrees that it shall be personally
liable to compensate the Bank for any loss, cost, liability or expense (including reasonable
attorneys fees) incurred by the Bank as a result of (i) the Trustee's negligence or willful
llÚsconduct in holding moneys deposited with it for payment of the Bonds or (ü) an unauthorized
modification or assignment of the Letter of Credit,
Section 18, Termination. This lntercreditor Agreement shall terminate at such
time when the Letter of Credit has been canceled by the Trustee and the Trustee has returned the
canceled Letter of Credit to the Bank and the Bank has no further obligation to make any
payments under the Letter of Credit and the Borrower has paid all amounts due and owing to the
Bank under the Reimbursement Agreement and the other Bank Documents.
~- ;3-10
568136.1124036.0004 -~
IN WITNESS WHEREOF, the Trustee, the Bank and the Issuer have caused this
lntercreditor Agreement to be executed in their respective corporate names and have caused their
respective corporate seals to be hereunto affixed and attested by their duly authorized officers, all
as of the date first above written,
BNY WESTERN TRUST COMPANY
By:
Name:
Title:
DRESDNER BANK, AG,
New York Branch [and Grand Cayman Branch]
By:
Name:
Title:
By:
Name:
Title:
CITY OF CHULA VISTA
By:
Name:
Title:
'6-(3- ) I
S68136,ll24Q36,OOO4 -9.-
The undersigned, as the Borrower referred to in the foregoing Intercreditor
Agreement, hereby acknowledges receipt and acceptance of such Intercreditor Agreement this
- day of March, 1998,
BRE PROPERTIES, INC., a
Delaware corporation
By:
Name:
Title:
'is- {3- I ~
S68 136. 1\24036.0004 -1~-
AMENDED AND RESTATED
INDENTURE OF TRUST
by and between the
CITY OF CHULA VISTA, CALIFORNIA
and
BNY WESTERN TRUST COMPANY,
as Trustee
Dated as of March 1, 1998
Relating to
$9,490,000
City ofChula Vista
Variable Rate Multifamily Housing Refunding Revenue Bonds
(Terra Nova Associates Project), 1992 Issue A
~- C- (
562518.2\24036.0004
THIS AMENDED AND RESTATED INDENTURE OF TRUST (the "Indenture"), dated as
of March 1, 1998, by and between the CITY OF CHULA VISTA, a municipal corporation and charter
city, duly organized and existing under the laws of the State Df California (herein called the "City"),
and BNY WESTERN TRUST COMPANY, a state banking corporation organized under the laws of
the State of California, and being qualified to accept and administer the trusts hereby created (herein
called the "Trustee"), amends and restates in its entirety that certain Indenture of Trust by and between
the City and First Interstate Bank of California dated as of February 1,1992, as amended by that
certain First Supplemental Indenture of Trust dated as of February 15,1995,
WITNESSETH:
WHEREAS, Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code
of the State of California (herein called the "Act") authorizes local agencies to incur indebtedness for
the purpose of refunding revenue bonds, and the Act provides a complete, additional and alternative
method for doing the things authorized thereby;
WHEREAS, the City has determined to engage in a program of refunding certain revenue
bonds of the City issued to finance the construction and development of multifamily rental housing
pursuant to Chapter 7 of Part 5 of Division 31 of the Health and Safety Code of the State of California,
and has determined to borrow money for such purpose by the issuance ofrevenue bonds as authorized
by the Act;
WHEREAS, all conditions, things and acts required by the Act, and by all other laws of the
State of California, to exist, have happened and have been performed precedent to and in connection
with the issuance of the -city of Chula Vista Variable Rate Multifamily Housing Refunding Revenue
Bonds (Terra Nova Associates Project), 1992 Issue A (the "Bonds") exist, have happened, and have
been performed in due time, form and manner as required by law, and the City is now duly authorized
and empowered, pursuant to each and every requirement of law, to issue the Bonds for the purpose, in
the manner and upon the terms herein provided;
WHEREAS, the City has duly entered into an amended and restated loan agreement (the
"Agreement" or the "Loan Agreement") with the Trustee and BRE Properties, Inc, (the "Borrower")
specifying the terms and conditions of the lending of the proceeds of the Bonds to the Borrower for the
refinancing of a 232-unit multifamily rental housing development located at 440 East "H" Street, in the
City of Chula Vista (the "Project") and the repayment by the Borrower of such loan, and the Borrower
has entered into a Credit Agreement (as hereinafter defined) pursuant to which Dresdner Bank AG
issued its irrevocable standby letter of credit to secure the repayment of the Bonds; and
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 of the interest and prernium, if any, thereon, the City has
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 City, authenticated and delivered by the Trustee and duly issued, the valid, binding and
legal limited obligations of the City, and to constitute this Indenture a valid and binding agreement for
562518.2'24036.0004 ??-- C - d--
the uses and purposes herein set forth, in accordance with its terms, have been done and taken; and the
execution and delivery of this Indenture have been in all respects duly authorized;
NOW, THEREFORE, TIllS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of, and the interest and premium, if any, on, all Bonds at any time issued and
outstanding under this Indenture, according to their tenor, and to secure the performance and
observance of all the covenants and 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 for 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
whereof is hereby acknowledged, the City covenants and agrees with the Trustee, for the equal and
proportionate benefit of the respective registered owners from time to time of the Bonds and for the
benefit of the Credit Bank (as hereinafter defined), as follows:
ARTICLE I
DEFINITIONS AND GENERAL PROVISIONS
Section 1.1. Definitions. Unless the context otherwise requires, the terms defined in this
Section 1,1 shall, for all purposes of this Indenture and of the Loan Agreement and of any indenture
supplemental hereto or agreement supplemental thereto, have the meanings herein specified, as
follows:
The term "Acceleration Default" shall mean an Event of Default described in Section 7. 1 (a) of
the Loan Agreement.
The term "Act" shall mean Article 11, commencing with Section 53580, of Chapter 3 of Part 1
of Division 2 of Title 5 of the Govemment Code of the State ofCalifomia, as now in effect and as it
may ITom time to time hereafter be amended or supplemented.
The term "Act of Bankruptcy" shall mean the filing of a petition in bankruptcy (or other
commencement of a bankruptcy or similar proceeding) by or against the Borrower and/or a general
partner or any guarantor of the Borrower, or the City, under any applicable bankruptcy, insolvency or
similar law as now or hereafter in effect.
The term "Act of Bankruptcy of the Bank" shall mean the closing, liquidation, insolvency or
bankruptcy of the Credit Bank, or its failure to pay its debts generally as such debts become due or its
admission in writing of its inability to pay any of its indebtedness or its consent to appointment of a
receiver, liquidator, trustee or similar official for itself or for all or any substantial part of its properties
or assets or the appointment of any such trustee, receiver, liquidator or similar official or the institution
of insolvency, reorganization, arrangement or liquidation proceedings (or similar proceedings) by or
against the Credit Bank,
The term "Administrator" shall mean, initially, the City, or a substitute or replacement
administrator, if any, appointed by the City, in any case acting as agent of the City in the administration
of the Regulatory Agreement.
~- C - 3
562518.2\24036.0004 -~
The term "Agents" shall mean the Remarketing Agent, the Tender Agent and any paying agent
hereunder.
The term "Agreement" or "Loan Agreement" shall mean the Amended and Restated Loan
Agreement, of even date herewith, among the City, the Borrower and the Trustee as originally
executed or as it may from time to time be supplemented or amended.
The term "Authorized Amount" shall mean Nine Million Four Hundred Ninety Thousand
Dollars ($9,490,000), the authorized principal amount of the Bonds.
The term "Authorized Bank Representative" shall mean any person who at the time and from
time to time may be designated as such, by written certificate furnished to the City and the Trustee
containing the specimen signature of such person and signed on behalf of the Credit Bank by any
officer of the Credit Bank, which certificate may designate an alternate or alternates.
The term "Authorized Borrower Representative" shall mean any person who at the time and
from time to time may be designated as such, by written certificate furnished to the City and the
Trustee containing the specimen signature of such person and signed on behalf of the Borrower by a
general partner of the Borrower, which certificate may designate an alternate or alternates,
The term "Authorized City Representative" shall mean the City Manager, Finance Director or
Community Development Director of the City, or any other person designated to act in such capacity
by a Certificate of the City containing the specimen signature of any of such persons which certificate
may designate an alternate or alternates.
The term "Authorized Denominations" shall mean during the period from the Closing Date to
March 1, 1995, $5,000 or any integral multiple thereof, during any Variable Period, $100,000 or any
integral multiple thereof (except that one Bond may be in the principal amount of$100,000 and any
integral multiple of $5,000 in excess thereof), and during any Reset Period or on and after the
Conversion Date, S5,000 and any integral multiple thereof.
The term "Available Amounts" means (i) moneys derived from drawings under the Letter of
Credit, (ii) moneys held by the Trustee in funds and accounts established under this Indenture for a
period of at least 91 days and not commingled with any moneys so held for less than said period and
during which period no petition in bankruptcy was filed by or against the Borrower, any general partner
or guarantor of the Borrower or the City under the United States Bankruptcy Code, uruess such petition
was dismissed and all applicable appeal periods have expired without an appeal having been filed,
(iii) moneys held by the Trustee in funds and accounts established under this Indenture and with
respect to which the Trustee has received an opinion of counsel with expertise in bankruptcy matters to
the effect that such moneys would not be deemed preferential transfers in the event of a bankruptcy
proceeding with respect to the City, the Borrower or any general partner of the Borrower, or (iv)
investment income derived from the investment of moneys described in clause (i), (ii) or (iii).
The term "Bank Bonds" means Bonds purchased with moneys drawn by the Trustee under the
Letter of Credit and registered in the name of the Credit Bank or its nominee in the records of the
Trustee, registrar or DTC.
?-c- ((
562518.2'24036,0004 -3.-
The term "Bankruptcy Certificate" shall mean a certification by Authorized Borrower
Representative which states that no Act of Bankruptcy with respect to the Borrower or any general
partner thereof, or the City has occurred or is occurring during the period from the date of the
immediately preceding Bankruptcy Certificate of the Borrower to the date of such Bankruptcy
Certificate.
The term "Bond Counsel" shall mean any attorney at law or firm of attorneys selected by the
City, of nationally recognized standing in matters pertaining to the federal tax status of interest on
bonds issued by states and political subdivisions, and duly admitted to practice law before the highest
court of any state of the United States of America, but shall not include counsel for the Borrower or the
Credit Bank.
The term "Bond Fund" shall mean the fund established pursuant to Section 5.2 hereof
The term "Bonds" shall mean the City of Chula Vista Variable Rate Multifamily Refunding
Revenue Bonds (Terra Nova Associates Project), 1992 Issue A, issued and outstanding hereunder.
The term "Bond Year" means the one-year period beginning on March 2 in each year and
ending on March 1 in the following year, except that the first Bond Year shall begin on the Closing
Date and end on March 1, 1993.
The term "Borrower" shall mean (i) BRE Properties, Inc., a Delaware corporation, as
successor-in-interest to Terra Nova Associates, a general partnership, and its successors and assigns,
and (ii) any surviving, resulting or transferee entity as provided in Section 5.2 of the Agreement.
The term "Business Day" shall mean any day other than a Saturday, Sunday, legal holiday, day
on which banking institutions in New York, New York, in the city in which the Credit Bank's office for
the presentation of drawings under the Letter of Credit is located or in the city in which Trustee's
Principal office is located, or day on which the New York Stock Exchange is or are authorized or
obligated by law or executive order to close,
The term "Certificate of the City" shall mean a certificate of the City signed by an Authorized
City Representative. If and to the extent required by the provisions of Section 1,3, each Certificate of
the City shall include the statements provided for in Section 1.3,
The term "Certified Resolution" shall mean a copy of a resolution of the City certified by the
City Clerk of the City, or by any Deputy thereof, to have been duly adopted by the City Council of the
City and to be in full force and effect on the date of such certification.
The term "City" shall mean the City ofChula Vista, California, the issuer of the Bonds
hereunder, and its successors and assigns as provided in Section 11.1.
The term "Closing Date" shall mean February 19, 1992, the date of initial issuance and
delivery of the Bonds.
The term "Code" shall mean the Internal Revenue Code of 1986, as amended, and the
Regulations thereunder, or any successor to the Internal Revenue Code of 1986, as amended, except as
the Tax Reform Act of1986 may make the Internal Revenue Code of1964, as amended prior to the
rC~5
562518.2\24036.0004 -~-
Tax Reform Act of1986, applicable to the Bonds and the Project (sometimes referred to as the "1954
Code"). Reference to any particular Code section shall, in the event of such successor Code, be
deemed to be reference to the successor to such Code section.
The term "Conversion" shall mean establishment of the interest rate on the Bonds at the Fixed
Rate, pursuant to Section 2.2(d).
The term "Conversion Date" shall mean the date on which the Fixed Rate becomes effective,
The term "Costs of Issuance Fund" shall mean the fund established pursuant to Section 3.4
hereof
The term "Credit Agreement" shall mean, initially, the Reimbursement Agreement, dated as of
March 1, 1998, between the Borrower and the Credit Bank, as it may from time to time be further
supplemented or amended, providing for the issuance of the Letter of Credit, and any subsequent
similar agreement pursuant to which a substitute Letter of Credit may be issued.
The term "Credit Bank" shall mean Dresdner Bank AG, acting through its New York Branch,
as issuer of the Letter of Credit, or any issuer ofa substitute Letter of Credit as permitted under
Section 5.8 of the Loan Agreement, and the respective successors and assigns of the business thereof
and any surviving, resulting or transferee banking association or corporation with or into which it may
be consolidated or merged or to which it may transfer all or substantially all of its banking business,
The term "Debt Service" means the scheduled amount of interest and amortization of principal
payable on the Bonds during the period of computation, excluding amounts scheduled during such
period which relate to principal which has been retired before the beginning of such period,
The term "Deed of Trust" shall mean any deed of trust, assignment 9frents, security
agreement and fixture filing securing the obligations of the Borrower under the Loan Agreement and
the Credit Agreement, as such deed of trust may be originally executed or as from time to time
supplemented and amended.
The term "Demand Date" shall mean any date on which any Bond is required to be purchased
pursuant to Sections 2.2 and 2,3 hereof
The term "Escrow Agreement" means that certain Agreement Regarding Redemption,
Defeasance and Payment of1985 Bonds, dated as of February 1, 1992, by and among the City, the
Borrower and the trustee for the 1986 Bonds,
The term "Event of Default" as used herein other than with respect to defaults under the Loan
Agreement shall have the meaning specified in Section 7.1 hereof, and as used in the Loan Agreement
shall have the meaning specified in Section 7.1 thereof.
The term "Fixed Rate" shall mean the interest rate borne by the Bonds after Conversion and
until the maturity date of the Bonds, determined in accordance with Section 2,2( d) hereof.
The term "Gross Proceeds" means the sum of the following amounts:
~- c- G
562518,2'24036.0004 ~
(i) original proceeds, namely, net amounts (after payment of all expenses of issuing the
Bonds) received by or for the City as a result of the sale of the Bonds, excluding original proceeds
which become transferred proceeds (detennined in accordance with applicable RegUlations) of
obligations issued to refund in whole or in part the Bonds;
(ii) investment proceeds, namely, amounts received at any time by or for the City, such as
interest and dividends, resUlting from the investment of any original proceeds (as referenced in clause
(i) above) or investment proceeds (as referenced in this clause (ii») in Nonpurpose Obligations,
increased by any profits and decreased (if necessary, below zero) by any losses on such investments,
excluding investment proceeds which become transferred proceeds (detennined in accordance with
applicable Regulations) of obligations issued to refund in whole or in part the Bonds;
(iii) sinking fund proceeds, namely, amounts, other than original proceeds, investment
proceeds or transferred proceeds (as referenced in clauses (i) and (ii) above) of the Bonds, which are
held in the Bond Fund and any other fund to the extent that the City reasonably expects to use such
other fund to pay Debt Service on the Bonds;
(iv) amounts in any fund established as a reasonably required reserve or replacement fund;
(v) Investment Property pledged as security for payment of Debt Service on the Bonds by
the Borrower or a related person or by the City;
(vi) amounts received with respect to the Loan;
(vii) amounts, other than as specified in this definition, used to pay Debt Service on the
Bonds; and
(viii) amounts received as a result of investing amounts described in this definition.
The term "holder" or "Bondholder" or "owner" or "bondowner" shall mean the person in
whose name any Bond is registered.
The term "Housing Cooperation Agreement" shall mean the Housing Cooperation Agreement,
dated February 26, 1985, between the City and the Borrower.
The term "Indenture" shall mean this Indenture, as originally executed or as it may from time
to time be supplemented, modified or amended by any supplemental indenture entered into pursuant to
the provisions hereof
The term "Intercreditor Agreement" shall mean the Intercreditor Agreement dated as of March
1,1998 by and among the Trustee, the City and the Credit Bank.
The term "Interest Payment Date" shall mean (i) for interest accrued during any Variable
Period, the first Business Day of each month, (ii) for interest accrued during any Reset Period, March 1
and September 1 of each year, commencing during the initial Reset Period September 1, 1992 and
during any Reset Period thereafter commencing on the March 1 or September 1 next following the
applicable Reset Date, and (iii) for interest accrued on and after the Conversion Date, March 1 and
<g--C- 7
562518.2\24036.0004 -'&-
September I of each year, cornmencing on the March I or September I next following the Conversion
Date.
The term "Interest Period" shall mean each period cornmencing on an Interest Payment Date
and ending on the day before the next succeeding Interest Payment Date, except that the first Interest
Period shall begin on the Closing Date and shall end on the day before the first Interest Payment Date,
The term "Investment Property" means any security (as said term is defined in section
165(g)(2)(A) or (B) of the Code), obligation, annuity or investment-type property, excluding, however,
obligations the interest on which is excluded from gross income under section 103 of the Code.
The term "Investment Securities" shall mean any of the following (including any funds
comprised of the following, which may be funds maintained or managed by the Trustee): (a) United
States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which the full faith and
credit of the United States are pledged for the payment of principal and interest (including State and
Local Government Series); (b) obligations, participations, or other instruments of or issued by a federal
agency or a United States government-sponsored enterprise, the principal of and interest on which is
unconditionally guaranteed by the United States; (c) any obligations on which the interest is exempt
from federal income taxation and which are rated by the Rating Agency in its highest long-term or
short-term rating category (such obligations may include funds for which First Interstate BanCorp, its
subsidiaries or affiliates, provide investment advisory or other services); (d) certificates of deposit
issued by, or time or demand deposits or other banking arrangements with, a nationally or state-
chartered bank (including the Credit Bank and the Trustee) or savings and loan association which, to
the extent they are not insured by Federal deposit insurance, are collateralized by securities eligible to
secure public deposits in the State, or which are issued by or with such an institution having a
minimwn capital of $500,000,000 and rated within the top two ratings of a nationally recognized rating
service; (e) ta,"{able government money market portfolios restricted to obligations with maturities of one
year or less issued or guaranteed as to payment of principal and interest by the full faith and credit of
the United States of America (such obligations may include funds for which First Interstate BanCorp,
its subsidiaries or affiliates, provide investment advisory or other services); and (f) an investment
agreement with a financial institution rated AA or better by Standard & Poor's upon receipt of the
written consent of Standard & Poor's.
The term "Issuance Costs" means all costs and expenses of issuance of the Bonds, including,
but not limited to:
(i) underwriters' discount and fees;
(ii) counsel fees, including bond counsel, underwriter's counsel, Credit Bank counsel,
Borrower's counsel and City attorney fees, as well as any other specialized counsel fees incurred in
connection with the issuance of the Bonds or the Loan;
(iii) the City's fees and expenses incurred in connection with the issuance of the Bonds,
including fees of any advisor to the City, and the City administrative fee for processing the request of
the Borrower to issue the Bonds;
(iv) rating agency fees;
~- C- <¿š
S62S18,2'24036.0004 -\
(v) Trustee's fees and Trustee's counsel fees, and initial fees of the Remarketing Agent and
Tender Agent;
(vi) paying agent's and certifying and authenticating agent's fees related to issuance of the
Bonds;
(vii) accountant's fees related to issuance of the Bonds;
(viii) printing costs of the Bonds and of the preliminary and final official statements;
(ix) publication costs associated with the financing proceedings; and
(x) costs of engineering and feasibility studies necessary to the issuance of the Bonds,
The term "Law" means Chapter 7 of Part B of Division 31 of the Health and Safety Code of
the State ofCalifornÎa.
The term "Letter of Credit" shall mean that certain letter of credit issued by the Credit Bank, or
any reissuance or extension thereof or any substitute letter of credit or other credit instrument provided
during any Variable Period meeting the requirements of Section 5, 8( a) of the Loan Agreement, or
provided during any Reset Period meeting the requirements of Section 5.8(b) of the Loan Agreement,
or provided in connection with or after Conversion meeting the requirements of Section 5.8(c) of the
Loan Agreement.
The term "Loan" shall mean the loan made by the City to the Borrower pursuant to the
Agreement for the purpose of refinancing the Project.
The term "Loan Agreement" shall mean the Agreement as defined herein.
The term "Market Risk Event" shall mean (a) (i) legislation enacted by the Congress, or
introduced in the Congress, or reconunended to the Congress for passage by the President of the
United States or the United States Department of the Treasury or the Internal Revenue Service or any
member of the United States Congress, or favorably reported for passage to either House of Congress
by any Committee of such House to which such legislation has been referred for consideration, or (ii) a
decision rendered by a court established under Article m of the Constitution of the United States, or the
United States Tax Court, or (iii) an order, nùing, regulation or conununication (including a press
release) issued by the United States department of the Treasury or the Internal Revenue Service, or (iv)
any action taken or statement made by or on behalf of the President of the United States or the United
States Department of the Treasury or the Internal Revenue Service or any member of the United States
Congress which indicates or implies that legislation will be introduced in the current or next scheduled
session of the United States Congress, in each case referred to in clauses (i), (ii), (iii) and (iv) above
with the purpose or effect, directly or indirectly, of including interest on the Bonds in the gross income
for federal income tax purposes of any owner of the Bonds; or (b) legislation enacted or any action
taken by the Securities and Exchange Commission which, in the opinion of counsel to the Remarketing
Agent, has the effect of requiring the remarketing of the Bonds to be registered under the Securities
Act of 1933, as amended (the "Securities Act"), or any other "security," as defined in the Securities
Act, issued in connection with or as part of the remarketing of the Bonds to be so registered or the
Indenture to be qualified as an indenture under the Trust Indenture Act of 1939, as amended; or any
~~C - q
362518,2\24036.0004 -::g"
event shall have occurred or shall exist which, in the reasonable judgment of the Remarketing Agent,
makes or has made untrue or incorrect in any material respect any statement or information contained
in the reoffering circular distributed in connection with the Conversion or is not or was not reflected in
such reoffering circular but should be or should have been reflected therein in order to make the
statements or information contained therein not rnisleading in any material respect; or (c) in the
reasonable judgment of the Remarketing Agent, any event which makes it impractical or inadvisable
for the Remarketing Agent to remarket or enforce agreements to remarket Bonds because (i) trading in
securities generally shall have been suspended on the New York Stock Exchange, Inc., or a general
banking moratorium shall have been established by federal, New York or State of California
authorities, or (ü) the State of California shall have taken any action, whether administrative, legislative,
judicial or otherwise which materially and adversely affects the Remarketing Agent's ability to
remarket the Bonds, or (üi) a war or other national calamity involving the United States shall have
occurred.
The term "Net Proceeds", when used with respect to any insurance proceeds or condenmation
award, shall mean the amount remaining after deducting ITom the gross proceeds thereof all expenses
(including attorneys' fees) incurred in the collection of such proceeds or award.
The term "Net Proceeds", when used with respect to the Bonds, means the proceeds of the
Bonds received by or for the City on the Closing Date, less amounts used to pay Issuance Costs.
The term "Nonpurpose Obligation" means any Investment Property which is acquired with the
gross proceeds of the Bonds other than the Loan,
The term "Opinion of Counsel" shall mean a written opinion of counsel, who may be counsel
for the City or Bond Counselor counsel for the Trustee, and who shall be acceptable to the Trustee, If
and to the extent required by the provisions of Section 1.3, each Opinion of Counsel shall include the
statements provided for in Section 1.3,
The term "Outstanding", when used as of any particular time with reference to Bonds, shall,
subject to the provisions of Section II, 8( e), mean all Bonds theretofore authenticated and delivered by
the Trustee under this Indenture except:
(a) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for
cancellation;
(b) Bonds for the payment or redemption of which moneys or securities in the
necessary amount (as provided in Section lOA) shall have theretofore been deposited with the Trustee
(whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such
Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been
given as in Article IV provided or provision satisfactory to the Trustee shall have been made for the
giving of such notice;
(c) Bonds in lieu of or in substitution for which other Bonds shall have been
authe:1ticated and delivered by the Trustee pursuant to the terms of Section 2.7; and
(d) Bonds tendered or deemed tendered for purchase pursuant to Article IT thereof.
~-C -/0
562518.2'24036.0004 ~
The term "Person" shall mean an individual, a corporation, a partnership, a trust, an
unincorporated organization or a government or any agency or political subdivision thereof.
The term "Principal Office" with respect to the Trustee shall mean the principal corporate trust
office of the Trustee located at the address set forth in Section 11.6 hereof, or at such other place as the
Trustee shall designate by notice given under said Section 11,6; and with respect to the Remarketing
Agent shall mean its office located at the address set forth in Section 1 1.6 hereof, or at such other place
as the Remarketing Agent shall designate to the Trustee as provided in Section 8.12; and with respect
to the Credit Bank shall mean its office located at the address set forth in Section 11.6 hereof, or at
such other place as the Credit Bank shall designate as provided in said Section 11,6; and with respect
to the Tender Agent shall mean its office located at the address set forth in Section 11,6 hereof, or at
such other place as the Tender Agent shall designate to the Trustee as provided in Section 8,17.
The term "Prior Bonds" shall mean the City of Chula Vista, California, Multifamily Rousing
Revenue Bonds (Terra Nova Associates Project) Series 1985,
The term "Prior Owner" shall mean Terra Nova Associates, a California general partnership,
The term "Program Fund" shall mean the fund established pursuant to Section 3.3 hereof
The term "Project" shall mean the multifamily rental housing development consisting of 232
units located at 440 East "R" Street in the City, including real property, structures, buildings, fixtures
or equipment, as it may at any time exist, which facilities are to be refinanced, in whole or in part, from
the proceeds of the sale of the Bonds and any real property, structures, buildings, fixtures or equipment
acquired in substitution for, as a renewal or replacement of, or a modification or improvement to, all or
any part of such facilities.
The term "Purchase Price", with respect to any Bond required to be purchased pursuant to
Section 2.3 hereof, shall mean the principal amount of such Bond plus interest accrued thereon to the
Demand Date.
The term "Purchase Price" for the purpose of computation of the Yield of the Bonds, has the
same meaning as the term "issue price" in sections 1273(b) and 1274 of the Code, and, in general,
means the initial offering price to the public (not including bond houses and brokers, or similar persons
or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial
amount of the Bonds are sold or, if the Bonds are privately placed, the price paid by the first buyer of
the Bonds or the acquisition cost of the first buyer, The term "Purchase Price", for the purpose of
computation of the Yield of Nonpurpose Obligations, means the fair market value of the Nonpurpose
Obligations on the date of use of Gross Proceeds of the Bonds for acquisition thereof, or iflater, on the
date that Investment Property constituting a Nonpurpose Obligation becomes a Nonpurpose Obligation
of the Bonds.
The term "Rating Agency" shall mean Standard & Poor's Corporation or its successors and
assigns or, if such entity shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, any other nationally recognized rating agency designated by the Trustee at the
Written Direction of the City and the Credit Bank,
~-C-II
~62~18.2124036.0004 -1Q-
The term "Record Date" shall mean, with respect to each Interest Payment Date during a
Variable Period, the close of business on the Business Day before such Interest Payment Date, and
with respect to any Interest Payment Date during a Reset Period, including the period from the Closing
Date to March 1,1995, or after Conversion, the close of business on the fifteenth (15th) day of the
month (whether or not a Business Day) before such Interest Payment Date,
The term "Regulations" means the Incomes Tax Regulations promulgated or proposed by the
Department of the Treasury pursuant to the Code from time to time or pursuant to any predecessor
statute to the Code,
The term "Regulatory Agreement" shall mean the Amended and Restated Regulatory
Agreement and Declaration of Restrictive Covenants of even date herewith, by and among the City, the
Trustee and the Borrower, required to be executed, delivered and recorded with respect to the Project
pursuant to Section 5.7 of the Loan Agreement.
The term "Remarketing Agent" shall mean the remarketing agent appointed in accordance with
Section 8,12 hereof.
The term "Remarketing Agreement" shall mean the Remarketing Agreement, of even date
herewith, among the Borrower, the City and the Remarketing Agent, and any similar substitute or
additional such agreement providing for the remarketing of the Bonds, in each case as supplemented or
amended from time to time,
The term "Remarketing Date" shall mean the date by which the Remarketing Agent is required
to notify the Trustee, the Tender Agent and the Credit Bank of the Bonds for which it has found
purchasers, as set forth in Section 8.14 hereof.
The term "Reserve Fund" shall mean the fund established by Section 3.5 hereof.
The term "Reserve Fund Requirement" shall mean during the period from the date of issuance
and delivery of the Bonds to March 1, 1995, as of any date of calculation, not less than two hundred
fifteen (215) days interest on all Bonds which were outstanding as of the earlier of (a) the date ninety-
five (95) days prior to such date of calculation or (b) the date on which an Act of Bankruptcy shall have
occurred and be continuing, and thereafter shall be the Reserve Fund Requirement, if any, necessary to
secure the then applicable Letter of Credit and/or a rating on the Bonds in the amount required by such
Credit Bank and/or Rating Agency,
The term "Reset Date" shall mean any date upon which the Bonds begin to bear interest at a
Reset Rate for the succeeding Reset Period or at a Variable Rate following a Reset Period, which initial
Reset Date shall be March 1, 1995.
The term "Reset Period" shall mean each period during which the Bonds bear interest at a
Reset Rate, which initial Reset Period shall be from the date of the issuance and delivery of the Bonds
to and including February 28, 1995.
The term "Reset Rate" shall mean the rate of interest borne by the Bonds as determined in
accordance with Section 2.2(c) hereof, which initial Reset Rate during the period from February 19,
'(S-C-/d-
j62j18.2124036.0004 -~-
1992 to and including February 28, 1995 shall be the interest rates set forth in Section 2,1 (a) of the
Indenture.
The tenn "Responsible Officer" of the Trustee sha1l mean and include the chainnan of the
board of directors, the president, the general manager, every vice president, every assistant vice
president, the cashier, every assistant cashier, every trust officer, and every officer and assistant officer
of the Trustee, other than those specifically above mentioned, to whom any corporate trust matter is
referred because of his knowledge of, and familiarity with, a particular subject.
The tenn "Revenues" shall mean all amounts pledged hereunder to the payment of principal of,
premium, if any, and interest on the Bonds, consisting of the following: (i) all moneys drawn by the
Trustee under the Letter of Credit except payments of the Purchase Price of the Bonds, (ii) any portion
of the Net Proceeds of the Bonds deposited with the Trustee under Section 3.2 hereof (üi) any income
earned on investments pursuant to Section 6.3 hereof, (iv) any repayments of the Loan required or
pennitted to be made by the Borrower pursuant to Section 4.2(a) or 8.1 of the Loan Agreement and (v)
any amounts held in the fì.mds and accounts established under this Trust Indenture; but such tenn shall
not include payments to the United States, the City, the Administrator or the Trustee pursuant to
Sections 4,2(b), 4,2(c), 4.2(d), 4.2(e), 7.3, 8.3,9,2 and 9.3 of the Agreement or Sections 6,8 and 8.6
hereof or Sections 23 or 24 of the Regulatory Agreement.
The tenn "Supplemental Indenture" or "Indenture Supplemental Hereto" shall mean any
indenture hereafter duly authorized and entered into between the City and the Trustee in accordance
with the provisions of this Indenture.
The tenn "Tender Agent" means the Tender Agent appointed in accordance with Section 8,17.
The tenn "Tender Notice" shall mean a notice of demand for purchase of Bonds given by any
Bondholder pursuant to Section 2.3 hereof
The tenn "Trustee" shall mean BNY Western Trust Company, a state banking corporation
organized under the laws of the State ofCalifomia, as the successor to First Interstate Bank of
Califomia, or its successor as Trustee hereunder.
The tenn "Variable Interest Accrual Period" shall mean, during any Váriable Period, a period
beginning on any Wednesday and ending on the following Tuesday, except that the first Variable
Interest Accrual Period for any Variable Period shall begin on the first day of such Variable Period and
end on the following Tuesday.
The tenn "Variable Interest Computation Date" shall mean, with respect to any Variable
Interest Accrual Period, the Tuesday before the first day of such Variable Interest Accrual Period, or if
any such Tuesday is not a Business Day, the next succeeding Business Day.
The tenn "Variable Period" shall mean each period during which the Bonds bear interest at a
Variable Rate.
The tenn "Variable Rate" shall mean the variable rate of interest borne by the Bonds as
determined in accordance with Section, 2.2(b) hereof
'¡j--C-/~
562518.2\24036.0004 -1t-
The term "Variable Rate Adjustment Date" shall mean any date upon which the Bonds begin
to bear interest at a Variable Rate for the succeeding Variable Period.
The teens "Written Consent", "Written Demand", "Written Direction", "Written Election",
"Written Notice", "Written Order", "Written Request" and "Written Requisition" of the City, the
Borrower or the Credit Bank shall mean, respectively, a written consent, demand, direction, election,
notice, order, request or requisition signed on behalf of the City by an Authorized City Representative,
on behalf of the Borrower by an Authorized BorTOwer Representative, or onbehalf of the Credit Bank
by an Authorized Bank Representative,
The term "Yield" means that yield determined by or on behalf of the City which, when used in
computing the present worth of all payments of principal and interest (or other payments in the case of
Nonpurpose Obligations which require payments in a form not characterized as principal and interest)
on a Nonpurpose Obligation or on the Bonds produces an amount equal to the Purchase Price of such
Nonpurpose Obligation or the Bonds, all computed as prescribed in applicable Regulations and, in the
case of variable rate obligations, as further prescribed in Section 6.7 hereof
Sedion 1.2. Rules of Construction.
(a) The singular form of any word used herein, including the terms defined in
Section },}, shall include the plural, and vice versa, unless the context otherwise requires. The use
herein of a pronoun of any gender shall include correlative words of the other genders.
(b) All references herein to "Articles", "Sections" and other subdivisions hereof
are to the corresponding Articles, Sections or subdivisions of this Indenture as originally executed; 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.
(c) The headings or titles of the several Articles and Sections hereof, and any table
of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect
the meaning, construction or effect of this Indenture.
Section 1.3. Content of Certificates and Opinions. Every certificate or opinion with
respect to compliance with a condition or covenant provided for in this Indenture or the Agreement
shall include (a) a statement that the person or persons making or giving such certificate or opinion
have read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as
to the nature and scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (c) a statement that, in the opinion of the signers,
they have made or caused to be made such examination or investigation as is necessary to enable them
to express an informed opinion as to whether or not such covenant or condition has been complied
with; and (d) a statement as to whether, in the opinion of the signers' such condition or covenant has
been complied with.
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562518,2'24036.0004 -~-
ARTICLE II
THE BONDS
Section 2.1. Authorization and Terms of Bonds.
(a) Authorization. There are hereby authorized to be issued bonds of the City
designated as "City of Chula Vista Variable Rate Multifamily Housing Refunding Revenue Bonds
(Terra Nova Associates Project), 1992 Issue An in the aggregate principal amount of the Authorized
Amount. Any Bonds delivered on or after Conversion shall be designated "City of Chula Vista
Multifamily Housing Refunding Revenue Bonds (Terra Nova Associates Project)," with the same year
and series designation as the Bonds replaced with such Bonds, No Bonds may be issued hereunder
except in accordance with this Article, The maximwn aggregate principal amount of Bonds which may
be issued and outstanding under this Indenture shall not exceed the Authorized Amount, exclusive of
Bonds executed and authenticated as provided in Section 2.8.
(b) General Terms. Any Bonds delivered on a Variable Rate Adjustment Date or
during a Variable Period shall be in substantially the form set forth in Exhibit A hereto; any Bonds
delivered on the Closing Date or on a Reset Date or during a Reset Period shall be in substantially the
form set forth in Exhibit B hereto; any Bonds delivered on or after Conversion shall be in substantially
the form set forth in Exhibit C hereto; in each case with necessary or appropriate variations, omissions
and insertions as pennitted or required by this Indenture, including any supplemental indenture. If
appropriate, the provisions shown on said Exhibit A, said Exhibit B or said Exhibit C as appearing on
the back of the Bonds may be inserted in place of the paragraph referring to such provisions.
The Bonds shall mature on the following dates and in the following amounts and shall pay
interest at the following per armwn rates:
Maturitv Date Princioal Amount Interest Rate
March 1, 1994 $ 130,000 4.50%
March 1, 1993 120,000 4.00
March 1, 2005 9,240,000 5.00
The Bonds shall be issuable oilly as fully registered Bonds, without coupons, in Authorized
Denominations, and shall be numbered ITom one upward, in the order of their authentication, with any
other designation as the Trustee deems appropriate, The Bonds shall be dated as of February 1, 1992,
shall bear interest payable on September 1, 1992 and on each Interest Payment Date thereafter to and
including March 1, 1995, at the rates per armum set forth above, and thereafter at the rate per armum
determined ITom time to time as provided in Section 2.2, and shall be subject to redemption prior to
maturity as provided in Article IV. Each Bond shall bear interest ITom the date to which interest has
been paid on the Bonds next preceding the date of its registration, unless it is registered as of an
Interest Payment Date for which interest has been paid or after the Record Date in respect thereof, in
which event it shall bear interest ITom such Interest Payment Date, or unless it is registered on or
before the Record Date for the first Interest Payment Date, in which event it shall bear interest ITom its
date. Any such interest not paid or duly provided for when due shall forthwith cease to be payable to
the owner on the regular Record Date therefor and shall be paid to owner in whose name the Bond is
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5625t8.2124036,OOO4 -1\
registered at the close of business on a special record date for the payment of such defaulted interest to
be fixed by the Trustee, notice of which shall be given to the owners by first-class mail not less than ten
(10) days prior to such special record date,
(c) Payment. Both the principal and redemption price, including any premium, of
the Bonds shall be payable in lawful money of the United States of America only upon presentation
thereof at the Principal Office of the Trustee, Payment of the interest on any Bond shall be made in like
lawful money to the person appearing on the bond registration books of the Trustee as the registered
owner thereof on the applicable Record Date, such interest to be paid by check mailed on the Interest
Payment Date by first class mail, postage prepaid, to the registered owner at its address as it appears
on such registration books, except that the Trustee will. at the request of any registered owner of
SI,OOO,OOO or more in aggregate principal amount of Bonds, make payments of interest on such Bonds
by wire transfer to the account designated by such owner to the Trustee in writing at least fifteen (15)
days before the Record Date for such payments, any such designation to remain in effect until
withdrawn in writing. Principal and interest on any Bank Bond shall be payable as set forth in the
Credit Agreement.
Section 2.2. Determination of Interest Rate on the Bonds.
(a) The Bonds shall bear interest at a rates per annum set forth in Section 2.1
hereof, calcwated on the basis of a 360-day year from and including the Closing Date to and including
March 1, 1995; and thereafter shall bear interest as thereafter determined at the applicable rate set forth
in this Section.
(b) Variable Rate, Provided no Event of Default shall have occurred and be
continuing, the rate of interest on the Bonds may, with the written consent of the Credit Bank, be
established at a Variable Rate on any Reset Date, in accordance with the procedures set forth in this
subsection (b). In order to effect establishment of a Variable Rate, the Borrower must deliver such
written consent and a written notice to the Trustee, the City, the Credit Bank, the Tender Agent and the
Remarketing Agent specifying (i) the date on which the interest rate on the Bonds will commence to be
calculated at a Variable Rate which shall be not less than forty (40) days after notice is received by the
parties, and (ii) any redemption amounts for each Interest Payment Date thereafter at a price equal to
the principal amount of Bonds subject to redemption plus interest accrued thereon to the date fixed for
redemption, without premium, pursuant to Section 4.1 hereof Such notice must be accompanied by
(i) an opinion of Bond Counsel to the effect that the establishment of the Variable Rate in accordance
with the procedure described in this subsection (b) is pennitted by this Indenture and the Act and will
not adversely affect the exclusion from gross income for federal income tax purposes of interest on the
Bonds, (ii) pursuant to Section 6.8(a) of the Agreement, an unconditional commitment ofa bank or
other entity to issue the Letter of Credit to be in effect upon and after the Reset Date, together with
accompanying documentation required by Section 6,8(a) of the Agreement, (iii) the fonn of notice to
be given by the Trustee to the owners of the Bonds with respect to the establishment of the Variable
Rate, (iv) payment to the Trustee of such amount as the Trustee reasonably determines may be
required in connection with the establishment of the Variable Rate, including, but not limited to, its
own fees and expenses and the cost of printing Bonds, (v) evidence from the Rating Agency to the
effect that the then-current rating of the Bonds will not be lowered or withdrawn solely as a result of
the establishment of the Variable Rate.
'2-C-/?::J
S6251S.2\24036.0004 -~-
The Trustee shall give notice to the owners of the Bonds, in the same manner that notices of
redemption are given, not less than thirty (30) days before the Reset Date specifYing: (i) the Reset
Date, and that the interest rate on the Bonds will be established at the Variable Rate on the Reset Date;
and (ii) that all Bonds must be surrendered to the Tender Agent for purchase not later than 9:30 a.m.,
New York City time, on the Reset Date.
If the Letter of Credit to be in effect upon and after a Reset Date, or an irrevocable
commitment to issue such Letter of Credit, is not delivered to the Trustee at least ten (10) days before
the applicable Reset Date, or if on any Business Day within ten (10) Business Days before the
applicable Reset Date the Trustee receives notice ITom the Remarketing Agent that a Market Risk
Event has occurred, the Trustee shall promptly (but in any event within two (2) Business Days) given
notice to the owners of the Bonds, in the same manner that the notice of the establishment of the Reset
Rate described in the preceding paragraph was given, canceling such notice and stating that the Bonds
will be subject to the redemption pursuant to Section 4,1(e) hereof The Trustee shall also provide
written notice of the cancellation to the Credit Bank, the City and the Remarketing Agent.
Any Bond not tendered to the Tender Agent for purchase in accordance with the provisions of
this Section 2.2(c) on a Reset Date shall be deemed to have been tendered for purchase on such Reset
Date pursuant to Section 2.3 hereof for all purposes of this Indenture, including particularly
Article VllI hereof
Upon every Reset Date or Variable Rate Adjustment Date immediately following a Reset
Period, the Trustee shall cause to be prepared, at the expense of the Borrower, new Bonds in the form
set forth in Exhibit A or Exhibit B, as applicable, Any such Bonds shall be executed and authenticated
as provided in Section 2.4, and shall be delivered to Bondholders purchasing such Bonds on the Reset
Date or Variable Rate Adjustment Date without charge.
The Variable Rate of interest borne by the Bonds for each Variable Interest Accrual Period
shall be the Variable Rate determined by the Remarketing Agent and reported to the Trustee, the
Tender Agent, the Borrower and the Credit Bank, as provided in Section 8,12 hereof, on the Variable
Interest Computation Date for such Variable Interest Accrual Period, Any Bondholder may obtain
information on the Variable Rate by request to the Trustee. The Bonds shall bear interest during any
Variable Period computed on the basis of a 365 or 366, as appropriate, day-year and actual number of
days elapsed,
The Variable Rate determined by the Remarketing Agent on each Variable Interest
Computation Date shall be that rate of interest which, ifbome by the Bonds, would, in its judgment,
having due regard to prevailing financial market conditions, be the interest rate required, but which
would not exceed the interest rate required, to be borne by the Bonds in order for their market value on
said date to be 100% of the principal amount thereof (disregarding accrued interest); provided that in
no event shall the Variable Rate at any time exceed 12% per annum unless and to the extent that there
shall have been delivered to the Trustee (i) a Letter of Credit in an amount equal to the then outstanding
principal amount of the Bonds plus interest thereon for a period of 39 days calculated at the higher
Variable Rate, and (ii) an opinion of Bond Counsel to the effect that such higher Variable Rate is
permitted under applicable law and will not, in itself, cause the interest on the Bonds to be included in
the gross incomes of the Bondowners for federal tax purposes; and provided further that the Variable
Rate on any Bond shall never exceed the maximum rate of interest which may be charged or collected
~- C - ! 7
S62518.2124036.0004 -~-
by the registered owner thereof pursuant to provisions of federal or state law applicable to such owner.
lithe Remarketing Agent shall fail or refuse to detennine the Variable Rate on any Variable Rate
Computation Date, then the Variable Rate most recently detennined shall remain in effect for the first
Variable Interest Accrual Period for which no Variable Rate is detennined; and for each Variable
Interest Accrual Period thereafter until the Remarketing Agent detennines the Variable Rate as
provided above, the Variable Rate shall be equal to the lesser of (i) ninety percent (90%) of the
A-IIP-1 commercial paper rate as reported in the Wall Street Joumal on each Variable Interest
Computation Date, or (ii) the maximum Variable Rate allowable under the two provisos in the
preceding sentence.
The detennination of the Variable Rate by the Remarketing Agent shall (in the absence of
manifest error) be conclusive and binding on the holders of the Bonds, the City, the Borrower, the
Credit Bank, the Remarketing Agent and the Trustee, and each shall be fully protected in relying on it.
(c) Reset Rate, Provided no Event of Default shall have occurred and be
continuing, the rate of interest on the Bonds may, with the written consent of the Credit Bank, be
established at a Reset Rate on any Interest Payment Date during a Variable Period or on any Reset
Date, in accordance with the procedures set forth in this subsection (c). In order to effect establishment
of a Reset Rate, the Borrower must deliver such written consent and a written notice to the Trustee, the
City, the Credit Bank, the Tender Agent and the Remarketing Agent specifying (i) (if the Bonds then
bear interest at a Variable Rate) the Reset Date, which shall be not less than forty (40) days after notice
is received by the parties, (ii) the proposed duration of the Reset Period, which shall be at least six
months and shall tenninate on the date immediately prior to an Interest Payment Date, (iii) the date on
which the Reset Rate will be detennined by the Remarketing Agent, which date shall be not later than
the Business Day immediately prior to the Reset Date and (iv) any redemption amounts for each
Interest Payment Date thereafter at a price equal to the principal amount of Bonds subject to
redemption plus interest accrued thereon to the date fixed for redemption, without premium, pursuant
to Section 4.1 hereof Such notice must be accompanied by (i) an opinion of Bond Counsel to the effect
that the establishment of the Reset Rate in accordance with the procedure described in this subsection
(c) is permitted by this Indenture and the Act and will not adversely affect the exclusion from gross
income for federal income tax purposes of interest on the Bonds, (ii) pursuant to Section 5,8(b) of the
Agreement, an unconditional commitment of a bank or other entity to issue the Letter of Credit to be in
effect upon and after the Reset Date, together with accompanying documentation required by
Section 5.8(b) of the Agreement, (iii) the form of notice to be given by the Trustee to the owners of the
Bonds with respect to the establishment of a Reset Rate, (iv) payment to the Trustee of such amount as
the Trustee reasonably detennines may be required in connection with the establishment of the Reset
Rate, including, but not limited to, its own fees and expenses and the cost of printing Bonds, (v)
evidence from the Rating Agency to the effect that the then-current rating of the Bonds will not be
lowered or withdrawn solely as a result of the establishment of the Reset Rate (except for any
withdrawal of a short-term rating if the long-term rating then in effect is confirmed to be not lower than
AA-).
The Trustee shall give notice to the owners of the Bonds, in the same manner that notices of
redemption are given, not less than thirty (30) days before the Reset Date specifying: (i) the Reset
Date, and that the interest rate on the Bonds will be established at the Reset Rate on the Reset Date;
and (ii) that all Bonds must be surrendered to the Tender Agent for purchase not later than 9:30 am.,
New York City time, on the Reset Date,
'¡?-C-/f(
'62S18,2\24036.0004 -~-
If the Letter of Credit to be in effect upon and after a Reset Date, or an irrevocable
commitment to issue such Letter of Credit, is not delivered to the Trustee at least ten (10) days before
the applicable Reset Date, or if on any Business Day within ten (10) Business Days before the
applicable Reset Date the Trustee receives notice ITom the Remarketing Agent that a Market Risk
Event has occurred, the Trustee shall promptly (but in any event within two (2) Business Days) give
notice to the owners of the Bonds, in the same manner that the notice of the establishment of the Reset
Rate described in the preceding paragraph was given, canceling such notice and stating that the Bonds
will bear interest at a Variable Rate. The Trustee shall also provide written notice of the cancellation to
the Credit Bank, the City and the Remarketing Agent.
Any Bond not tendered to the Tender Agent for purchase in accordance with the provisions of
this Section 2.2( c) on a Reset Date shall be deemed to have been tendered for purchase on such Reset
Date pursuant to Section 2.3 hereoffor all purposes of this Indenture, including particularly
Article VIII hereof
From and after each Reset Date until the last day of the related Reset Period, the Bonds will
bear interest at the applicable Reset Rate, payable on March 1 and September 1 of each year,
commencing on the Interest Payment Date next following the Reset Date, computed on the basis of a
360-day year of twelve 30-day months. The Reset Rate shall be that rate, determined by the
Remarketing Agent on the date specified in the notice ITom the Borrower referred to in the first
paragraph of this subsection (c), which, in the judgment of the Remarketing Agent, having due regard
to prevailing market conditions, would be required, but would not exceed the rate, which would be
required, to be borne by the Bonds in order for the market value of the Bonds on said date to be 100%
of the principal amount thereof (disregarding accrued interest); provided that in no event shall any
Reset Rate exceed any maximwn rate pennitted by law to be paid on the Bonds or to be charged on the
Loan,
The determination of a Reset Rate by the Remarketing Agent in accordance with the provisions
of this subsection (c) shall (in the absence of manifest error) be conclusive and binding upon the
holders of the Bonds, the City, the Credit Bank, the Remarketing Agent. the Borrower and the Trustee,
and each shall be protected in relying on it.
At least forty (40) and not more than fifty (50) days prior to the Interest Payment Date
following the final day of a Reset Period, such final day of the initial Reset Period being February 28,
1995, the Borrower shall elect to have the Bonds bear interest ITom and after such Interest Payment
Date at a Reset Rate for a new Reset Period or at a Variable Plate or Fixed Rate by giving written
notice of such election to the Trustee, the City, the Credit Bank and the Remarketing Agent. If the
Borrower fails to make such election, or fails to supply the items required by the applicable subsection
of this Section 2.2 by the dates specified in such subsection, the interest rate on the Bonds shall be a
Variable Rate determined in accordance with the procedures set forth in subsection (b) of this
Section commencing on the day immediately following the last day of the Reset Period. The Trustee
shall promptly (but in any event within three (3) Business Days after such failure) give notice to the
owners of the Bonds, in the same manner that the notice of the establishment of the Reset Rate
described in the second paragraph of this Section 2.2(c) was given, stating that the Bonds will
thereafter bear interest at a Variable Rate. The Trustee shall also provide written notice of such event to
the Credit Bank, the City and the Remarketing Agent.
'6'-C-/~
562518.2\24036,0004 -~-
Upon every Reset Date or Variable Rate Adjustment Date immediately following a Reset
Period, the Trustee shall cause to be prepared, at the expense of the Borrower, new Bonds in the form
set forth in Exhibit A or Exhibit B, as applicable, Any such Bonds shall be executed and authenticated
as provided in Section 2.4, and shall be delivered to Bondholders purchasing such Bonds on the Reset
Date or Variable Rate Adjustment Date without charge,
(d) Fixed Rate, The rate of interest on the Bonds may, with the written consent of
the Credit Bank, be established at a Fixed Rate on any Interest Payment Date during a Variable Period
or on any Reset Date, in accordance with the procedures set forth in this subsection (d), In order to
effect Conversion, the Borrower must deliver such written consent and a written notice to the Trustee,
the City, the Credit Bank, the Tender Agent and the Remarketing Agent specifying (i) the Conversion
Date, which shall be not less than forty (40) days after such notice is received by such parties, (ii) the
date on which the Fixed Rate will be determined by the Remarketing Agent, which date shall be not
later than the Business Day immediately prior to the Conversion Date; and (iii) any redemption
amounts for each Interest Payment Date thereafter at a price equal to the principal amount of Bonds
subject to redemption plus interest accrued thereon to the date fixed for redemption, without premium,
pursuant to Section 4.1 hereof. Such notice must be accompanied by (i) an opinion of Bond Counsel to
the effect that Conversion in accordance with the procedures described in this subsection (d) i6
permitted by this Indenture and the Act and will not adversely affect the exclusion of interest on the
Bonds from gross income for federal income tax purposes, (ii) if necessary pursuant to Section 5. 8(b)
of the Agreement, an unconditional commitment of a bank to issue the Letter of Credit to be in effect
upon and after Conversion, together with accompanying documentation required by Section 5.8(c) of
the Agreement, (iii) the form of notice to tee given by the Trustee to the owners of the Bonds with
respect to Conversion, (iv) payment to the Trustee of such amount as the Trustee reasonably
determines may be required in connection with Conversion, including, but not limited to,its own fees
and expenses and the cost of printing Bonds, (v) evidence from the Rating Agency to the effect that the
then current rating of the Bonds will not be lowered or withdrawn solely as a result of Conversion
(except for any withdrawal ofa short-term rating if the long-term rating then in effect is confirmed to
be not lower than AA-).
The Trustee shall give notice to the owners of the Bonds, in the same manner that notices of
redemption are given, not less than thirty (30) days before the Conversion Date, specifying: (i) that the
interest rate on the Bonds will be established at the Fixed Rate and the date the Fixed Rate will become
effective; and (ii) that all Bonds must be surrendered to the Tender Agent for purchase not later than
9:30 am., New York City time, on the Conversion Date,
If the Letter of Credit to be in effect upon and after Conversion, or an irrevocable commitment
to issue such Letter of Credit, is not delivered to the Trustee at leastten (10) days before the
Conversion Date, or if on any Business Day at least ten (10) Business Days before the Conversion
Date, the Trustee receives notice from the Borrower to the effect that it no longer wishes to proceed
with the Conversion, or if on any Business Day within ten (10) Business Days before the Conversion
Date the Trustee receives notice from the Remarketing Agent that a Market Risk Event has occurred,
the Trustee shall promptly (but in any event within three (3) Business Days) give notice to the owners
of the Bonds, in the same manner that the notice of Conversion described in the preceding paragraph
was given, canceling such notice of Conversion and stating that the Bonds will bear interest at a
Variable Rate. The Trustee shall also provide written notice of the cancellation to the Credit Bank, the
City and the Remarketing Agent. In such event, the Trustee shall cause new Bonds, substantially in
~-C-c2 0
562518,2'24036.0004 -~-
form of Exhibit A, to be prepared at the expense of the Borrower. Any such Bonds shall be executed
and authenticated as provided in Section 2.4, and shall be delivered to Bondholders on the Reset Date
or Variable Rate Adjustment Date without charge in exchange for any outstanding Bonds.
Any Bond not tendered to the Tender Agent for purchase in accordance with the provisions of
this Section 2.2(d) on the Conversion Date shall be deemed to have been tendered for purchase on such
Conversion Date pursuant to Section 2,3 hereoffor all purposes of this Indenture, including particularly
Article VIII hereof
From and after Conversion and until maturity, the Bonds will bear interest at the Fixed Rate,
payable on March 1 and September 1 of each year, commencing on the Interest Payment Date next
following the Conversion Date, computed on the basis of a 350-day year of twelve 30-day months, The
Fixed Rate shall be that rate, determined by the Remarketing Agent on the date specified in the notice
ITom the Borrower referred to in the first paragraph of this subsection (d), which, in the judgment of
the Remarketing Agent, having due regard for prevailing financial market conditions, would be
required, but would not exceed the rate which would be required, to be borne by the Bonds in order for
the market value of the Bonds on such date to be 100% of the principal amount thereof (disregarding
accrued interest); provided that in no event shall the Fixed Rate exceed any maximum rate permitted
by law to be paid on the Bonds or to be charged on the Loan.
The determination of the Fixed Rate by the Remarketing Agent shall (in the absence of
manifest error) be conclusive and binding on the holders of the Bonds, the City, the Trustee, the Credit
Bank and the Remarketing Agent, and each shall be fully protected by relying on the rate. The Trustee
shall, upon written request of any Bondholder, notify such Bondholder of the Fixed Rate to be in effect
on and after the Conversion Date.
Upon Conversion, the Trustee shall cause to be prepared, at the expense of the Borrower, new
Bonds in the form set forth in Exhibit C hereto and stating the Fixed Rate. Any such Bonds shall be
executed and authenticated as provided in Section 2.4, and shall be delivered to Bondholders on the
Conversion Date without charge in exchange for any outstanding Bonds,
Section 2.3. Demand for and Mandatory Purchase, For the period beginning on the
Closing Date to and including February 28, 1995, the Bonds shall not be subject to demand for
purchase by any registered owner of such Bond or subject to any mandatory purchase. Thereafter, and
only to the extent the Letter of Credit provides for payment with respect thereto, any Bond, or any units
of principal amount thereof in Authorized Denominations, shall (unless remarketed pursuant to
Section 8.14 hereof) be purchased, ITom the sources prescribed in Section 8.16 hereof on demand of
the registered owner of such Bond (or, so long as Bonds are in "book-entry only" form pursuant to
Section 2,9, demand of a Direct Participant with respect to such Bonds), or upon being tendered or
deemed tendered pursuant to Section 2.2 hereof, on any Business Day during a Variable Period or on
any Reset Date or the Conversion Date, at a Purchase Price equal to the principal amount thereof, or of
any units thereof purchased in Authorized Denominations, plus interest accrued thereon, if any, to the
date of purchase, upon (a) in the case of a demand purchase while the Bonds bear interest at a Variable
Rate, delivery to the Tender Agent, with a copy to the Trustee and the Remarketing Agent, of a written
notice in the form set forth as Exhibit D hereto (a "Tender Notice") which states (i) the principal
amount of such Bond for which payment is demanded, (ii) that such demand is irrevocable and (üi) the
date on which such Bond or units of principal amount thereof in Authorized Denominations shall be
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562518.2\24036.0004 -~-
purchased pursuant to this Section 2.3 (the "Demand Date"), which date shall be a Business Day not
prior to the seventh (7th) day next succeeding the date of the receipt of the Tender Notice by the
Tender Agent; and (b) in all cases, delivery to the Tender Agent, at or prior to 9:30 a.m., New York
City time, on the Demand Date, of such Bond (with an appropriate transfer of registration fonn
executed in blank and in fonn satisfactory to the Tender Agent). In the event that a depository is
appointed pursuant to Section 2.9 hereof and a "book-entry only" system is in effect with respect to the
Bonds, delivery of Bonds for purchase on the Demand Date may be effected in the manner set forth by
such depository.
Bonds not delivered to the Tender Agent on or prior to 9:30 a.m., New York City time, on the
Demand Date shall be deemed purchased for all purposes of this Indenture and interest shall cease to
accrue on such Bonds.
Payment of the principal portion of the Purchase Price of the Bonds tendered for purchase on
March 1, 1995 pursuant to this Section 2.3 shall be paid with the proceeds of the remarketing of the
Bonds pursuant to Section 8,14 hereof and the interest portion of such Purchase Price shall be paid
from amounts on deposit in the Reserve Fund,
Payment of the Purchase Price of any Bond shall be made by check or by wire transfer (if
requested in writing by the registered owner) or as designated in the Tender Notice with respect to
such Bond, but only upon delivery and surrender of such Bond to the Tender Agent on the Demand
Date.
Anything herein to the contrary notwithstanding, no Bonds shall be purchased pursuant to this
Section or remarketed pursuant to Section 8.14 if an Event of Default hereunder other than an Event of
Default under Section 7.1(d) shall have occurred and be continuing, or if all of the Bonds shall have
been called for redemption, and no Bonds shall be purchased pursuant to this Section or remarketed
pursuant to Section 8.14 after the Conversion Date; nor shall any Bond be purchased pursuant to this
Section if such Bond is registered in the name of the City, the Borrower or the Credit Bank, or known
by the Trustee to be registered in the name of any general partner or guarantor of the Borrower or any
nominee of the City, the Borrower, the Credit Bank, or any such general partner or guarantor,
Not later than the seventh (7th) day before each Reset Date and the Conversion Date (or, if
such day is not a Business Day, then on the next succeeding Business Day), the Trustee shall notify the
Tender Agent by telephone, promptly confinned in writing, with a copy to the Remarketing Agent and
the Credit Bank, that all outstanding Bonds are deemed to have been tendered for purchase on such
Reset Date as provided in Section 2.2( c) or the Conversion Date as provided in Section 2.2( d) and the
principal amount of the Bonds so outstanding, and such notice from the Trustee shall be treated as a
Tender Notice for all purposes of this Indenture, including this Section and Article VIII hereof, whether
or not the Bonds referred to therein are delivered to the Tender Agent; provided that payment of the
Purchase Price of any such Bonds shall be made only upon delivery and surrender thereof to the
Tender Agent.
Sedion 2.4. Execution of Bonds. The Bonds shall be signed in the name and on behalf of
the City with the manual or facsimile signature of its Mayor and the manual or facsimile signature of its
City Clerk, under the seal of the City. Such seal may be in the fonn of a facsimile of the City's seal and
may be imprinted or impressed upon the Bonds. The Bonds shall then be delivered to the Trustee or
the Tender Agent for authentication by the Trustee or the Tender Agent, as the case may be. In case
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562518.2'24036.0004 -~-
any officer who shall have signed any of the Bonds shall cease to be such officer before the Bonds so
signed shall have been authenticated or delivered by the Trustee or the Tender Agent, as the case may
be, or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and,
upon such authentication, delivery and issuance, shall be as binding upon the City as though the
officers who signed the same had continued to be such officers of the City. Also, any Bond may be
signed on behalf of the City by such persons as on the actual date of the execution of such Bond shall
be the proper officers although on the nominal date of such Bond any such person shall not have been
such officer.
OIùY such of the Bonds as shall bear thereon a certificate of authentication in the form set forth
in Exhibit A, Exhibit B or Exhibit C hereto, executed by the Trustee or the Tender Agent, as the case
may be, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and
such certificate of the Trustee or the Tender Agent, as the case may be, shall be conclusive evidence
that the Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled
to the benefits of this Indenture.
Section 2.5. Transfer and Exchange of Bonds. As to any Bond, including Bank Bonds,
the person in whose name the ownership of such Bond or Bank Bond shall be registered on the
Registration Books shall be deemed and regarded as the absolute owner thereof for all purposes, Any
Bond may, in accordance with the terms of this Indenture, be transferred upon the books of the
Trustee, required to be kept pursuant to the provisions of Section 2,6, by the person in whose name it is
registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at
the Principal Office of the Trustee, or of the Tender Agent, as the case may be, accompanied by a
written instrument of transfer in a form acceptable to the Trustee, or the Tender Agent, as the case may
be, duly executed. Bonds may be exchanged at the Principal Office of the Trustee for a like aggregate
principal amount of Bonds of the same series of other authorized denominations. Whenever any Bond
shall be surrendered for transfer or exchange, the City shall execute and the Trustee or the Tender
Agent, as the case may be, shall authenticate and deliver a new Bond or Bonds of the same series, for a
like aggregate principal amount.
The Trustee shall require the payment by the Bondholder requesting any such transfer or
exchange of any tax, fee or other governmental charge required to be paid with respect to such transfer
or exchange, and may, in connection with any exchange, collect a charge equal to a customary fee
charged by the Trustee for such exchange, but any such transfer or exchange shall otherwise be made
without charge to the Bondholder requesting the same. The cost of printing any Bonds and any services
rendered or any expenses incurred by the Trustee or the Tender Agent in connection therewith shall be
paid by the Borrower,
No transfer or exchange shall be required to be made of any Bonds called for redemption or of
any Bonds during the ten (10) days next preceding the giving of any notice of redemption.
Section 2.6. Bond Register, The City hereby appoints the Trustee as registrar and
authenticating agent, and the Tender Agent as co-registrar and co-authenticating agent for the Bonds,
The Trustee and the Tender Agent will keep or cause to be kept at their respective Principal Offices
sufficient books for the transfer of the Bonds, which shall at all reasonable times upon reasonable
notice be open to inspection by the City and the Borrower; and, upon presentation for such purpose, the
2 -C-023
562518.2124036,0004 -~-
Trustee as registrar shall, under such reasonable regulations as it may prescribe, transfer or cause to be
transferred, on said books, Bonds as hereinbefore provided,
Section 2.7. Temporary Bonds. The Bonds may be issued initially in temporary fonn
exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed,
lithographed or typewritten, shall be of such Authorized Denominations as may be determined by the
City 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 City and be authenticated and registered by the Trustee
upon the same conditions and in substantially the same manner as the definitive Bonds, If the City
issues temporary Bonds, it will execute and furnish without unreasonable delay definitive Bonds,
which may be printed, lithographed or typewritten, and thereupon the temporary Bonds may be
surrendered, for cancellation, in exchange therefor at the Principal Office of the Trustee, and the
Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate
principal amount of definitive Bonds of Authorized Denominations, Until so exchanged, the temporary
Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and
delivered hereunder.
Section 2.8. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the City, at the expense of the holder of said Bond, shall execute, and the Trustee shall
thereupon authenticate and deliver, a new Bond of like tenor and principal amount in exchange and
substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bonds so
mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by it and delivered to,
or upon the order o£ the City. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence
of such loss, destruction or theft may be submitted to the Trustee, and if such evidence is satisfactory to
it and indemnity satisfactory to it shall be given, the City, at the expense of the holder, shall execute,
and the Trustee shall thereupon authenticate and deliver, a new Bond oflike tenor and number in lieu
of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured
or shall have been called for redemption, instead of issuing a substitute Bond, the Trustee on behalf of
the City may pay the same without surrender thereof). The City may require payment of a reasonable
fee for each new Bond delivered under this Section and payment of the expenses which may be
incurred by the City and the Trustee. Any Bond delivered under the provisions of this Section in lieu of
any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual
obligation on the part of the City 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 secured by this Indenture.
Section 2.9. Use of Depository, Notwithstanding any provision of this Indenture to the
contrary:
(a) As per the direction of the initial purchasers of the Bonds, the ownership of one
fully registered Bond for each maturity of the Bonds shall be registered in the name of Cede & Co,
("Cede"), as nominee of The Depository Trust Company ("DTC"), New York, New York. Payments
of interest on, principal of and any premium on the Bonds shall be made to the account of Cede on each
payment date at the address indicated for Cede in the registration books of the City kept by the Trustee
by transfer of immediately available funds. DTC has represented to the City that it will maintain a
book-entry system in recording ownership interests of its participants (the "Direct Participants"), and
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the ownership interests of a purchaser of a beneficial interest in the Bonds (a "Beneficial Owner") will
be recorded through book entries on the records of the Direct Participants.
(b) With respect to Bonds registered in the name of Cede, the City, the Trustee and
the Tender Agent shall have no responsibility or obligation to any Direct Participant (with the exception
of the right of Direct Participants to demand purchase of Bonds pursuant to Section 2.3 hereof) or to
any Beneficial Owner of such Bonds, Without limiting the immediately preceding sentence, the City,
the Trustee and the Tender Agent shall have no responsibility or obligation with respect to (i) the
accuracy of the records of DTC, Cede or any Direct Participant with respect to any beneficial
ownership interest in the Bonds, (ii) the delivery to any Direct Participant, Beneficial Owner or other
person, other than DTC, of any notice with respect to the Bonds, including any notice of redemption,
(iii) the payment to any Direct Participant, Beneficial Owner or other person, other than DTC, of any
amount with respect to the principal or redemption price of, or any interest on, the Bonds or (iv) any
consent given or other action taken by DTC as owner of the Bonds, The City, the Trustee and the
Tender Agent may treat DTC as, and deem DTC to be, the absolute owner of each Bond for all
purposes whatsoever (with the exception of the right of Direct Participants to demand purchase of
Bonds pursuant to Section 2.3 hereof) including (but not limited to) (i) payment of the principal or
redemption price of, and interest on, each such Bond, (ii) giving notices of purchase or redemption and
other matters with respect to such Bonds and (iii) registering transfers with respect to such Bonds. The
Trustee shall pay the principal or redemption price of, and interest on, all Bonds only to or upon the
order ofDTC, and all such payments shall be valid and effective to fully satisfy and discharge the City's
obligations with respect to such principal or redemption price, and interest, to the extent of the sum or
sums so paid. No person other than DTC shall receive a Bond evidencing the obligation of the City to
make payments of principal or redemption price of, and interest on, the Bonds pursuant to this
Indenture. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede. and subject to the transfer provisions hereof,
the word "Cede" in this Indenture shall refer to such new nominee of DTC.
(c) (i) DTC may determine to discontinue providing its services with respect
to the Bonds at any time by giving reasonable written notice to the City, the Trustee and the Tender
Agent and discharging its responsibilities with respect thereto under applicable law.
(ii) The City, in its sole discretion and without the consent of any other
person, may terminate, upon provision of notice to the Trustee and Tender Agent, the
services ofDTC with respect to the Bonds if the City determines that the continuation
of the system of book-en try-only transfers through DTC (or a successor securities
depository) is not in the best interests of the Beneficial Owners of the Bonds or is
burdensome to the City, and shall terminate the services ofDTC with respect to the
Bonds upon receipt by the City, the Trustee and the Tender Agent of written notice
from DTC to the effect that DTC has received written notice from Direct Participants
having interests, as shown in the records ofDTC, in an aggregate principal amount of
not less than fifty percent (50%) of the aggregate principal amount of the then
Outstanding Bonds to the effect, that: (A) DTC is unable to discharge its
responsibilities with respect to such Bonds; or (B) a continuation of the requirement
that all of the Outstanding Bonds be registered in the registration books kept by the
Trustee in the name of Cede, as nominee ofDTC, is not in the best interest of the
Beneficial Owners of such Bonds.
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562518,2124036,0004 -2>\-
(d) Upon the termination of the services ofDTC with respect to the Bonds
pursuant to subsection (c)(ii)(B) hereof, or upon the discontinuance or termination of the services of
DTC with respect to the Bonds pursuant to subsection (c)(i) or subsection (c)(ii)(A) hereof after which
no substitute securities depository willing to undertake the functions ofDTC hereunder can be found or
which, in the opinion of the City, is willing and able to undertake such functions upon reasonable and
customary terms, the Bonds shall no longer be restricted to being registered in the registration books
kept by the Trustee in the name of Cede as nominee ofDTC. In such event, the City shall issue and the
Trustee shall transfer and exchange Bond certificates as requested by DTC or Direct Participants of
like principal amount, series and maturity, in Authorized Denominations to the identifiable Beneficial
Owners in replacement of such Beneficial Owners' beneficial interests in the Bonds.
(e) Notwithstanding any other provision of this Indenture to the contrary, so long
as any Bond is registered in the name of Cede, as nominee ofDTC, all payments with respect to the
principal or redemption price of, and interest on, such Bond and all notices with respect to such Bond
shall be made and given, respectively, to DTC as provided in the representation letter of the City and
the Trustee addressed to DTC with respect to the Bonds.
(1) In connection with any notice or other communication to be provided to
Bondowners pursuant to this Indenture by the City, the Tender Agent or the Trustee with respect to any
consent or other action to be taken by Bondowners, the City, the Tender Agent or the Trustee, as the
case may be, shall establish a record date for such consent or other action and give DTC notice of such
record date not less than fifteen (15) calendar days in advance of such record date to the extent
possible.
(g) Notwithstanding any provision herein to the contrary, the City and the Trustee
may agree to allow DTC, or its nominee, Cede, to make a notation on any Bond redeemed in part to
reflect, for informational purposes only, the principal amount and date of any such redemption,
(h) Notwithstanding any provision herein to the contrary, so long as the Series A
Bonds are subject to a system of book-en try-only transfers pursuant to this Section, any requirement for
the delivery of Bonds to the Trustee or the Tender Agent in connection with a mandatory tender
pursuant to Section 2.2 shall be deemed satisfied upon the transfer, on the registration books ofDTC,
of the beneficial ownership interests in such Bonds tendered for purchase to the account of the Tender
Agent, or a Direct Participant acting on behalf of the Tender Agent.
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.1. Authentication and Delivery of the Bonds. The City has executed the
Bonds and delivered them to the Trustee. The Trustee has authenticated the Bonds in an aggregate
principal amount not exceeding the Authorized Amount, and has delivered them to or upon the Written
Order of the City. Prior to the authentication and delivery of any of the Bonds by the Trustee, there
was delivered to the Trustee each of the following:
(1) a Certified Resolution authorizing issuance and sale of the Bonds and execution and
delivery of all related documents required to be executed and delivered by the City;
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'62518,2'24036.0004 -~-
(2) original executed counterparts of this Indenture, the Loan Agreement and the
Regulatory Agreement;
(3) the original of the Letter of Credit; and
(4) a Written Order of the City to the Trustee to authenticate and deliver the Bonds as
directed in such Written Order, upon payment to the Trustee, for the account of the City, of the sum
specified therein.
Section 3.2. Application of Proceeds of-Bonds,
(a) The proceeds received by the City ITom the sale of the Bonds were deposited in
trust with the Trustee, who set aside $9,490,000 of such proceeds in the Program Fund, and
$23,632.50 of such proceeds in the Bond Fund, representing accrued interest due and payable on the
Bonds on September 1,1992,
(b) Upon the issuance of the Bonds, the City delivered or caused to be delivered to
the Trustee ITom the Prior Owner a program fee in the amount of $676,186,08 ($204,378.14 of which
was paid by the Prior Owner directly, $282,277.08 of which was received ITom United New Mexico
Bank and $188,530,86 of which is to be received ITom the trustee for the Prior Bonds), whereupon the
Trustee deposited (i) ITom the amounts received ITom the Prior Owner and the trustee for the Prior
Bonds, $392,909.00 of such amount in the Cost of Issuance Fund created pursuant to Section 3.4
hereof, and (ii) the entire amount of $282,277.08 received from United New Mexico Bank in the
Reserve Fund created pursuant to Section 3.6 hereof, and applied such amounts as provided in said
Sections,
Section 3.3. Program Fund. The amounts in the Program Fund established by the Trustee
were applied to fund the Loan to the Borrower by transferring such amount to the bond fund for the
Prior Bonds as a payment of the outstanding balance of the project loan financed by the Prior Bonds, as
further described in the Escrow Agreement. As of the date hereof, no amounts remain in the Program
Fund.
Section 3.4. Cost of Issuance Fund. There was hereby created and established with the
Trustee a separate trust fund which shall be designated the "Cost of Issuance Fund," Amounts in the
Cost of Issuance Fund were used to pay Issuance Costs. As of the date hereof, no amounts remain in
the Costs of Issuance Fund.
Section 3.5. Reserve Fund. There is hereby created and established with the Trustee a
separate trust fund which shall be designated the "Reserve Fund", which shall be applied only as
provided in this Section.
(b) Whenever and to the extent that moneys in the Bond Fund, if any, are
insufficient for the purpose of paying principal of, redemption price or interest on the Bonds, as the
case may be, whether at the stated payment date, by redemption of Bonds or upon acceleration, money
on deposit in the Reserve Fund shall be applied pursuant to Section 5.2 hereof by the Trustee for such
purposes to the applicable account of the Bond Fund on the Business Day preceding such payment
date without further authorization or direction. Moneys in the Reserve Fund will be deposited by the
Trustee in the Bond Fund in order to pay first the interest on the Bonds equally and ratably, and second
'6--(.- c2 7
562518,2\24036,0004 -~-
the principal of the Bonds equally and ratably as the same shall become due and payable whether by
reason of maturity, redemption or otherwise, Moneys in the Reserve Fund were applied on March 1
1995 to the payment of the interest portion of the Purchase Price of the Bonds remarketed pursuant to
Section 8.14 hereof, or in the event the Bonds are not remarketed on March 1, 1995, are redeemed
pursuant to Section 4.1 hereof. As of the date hereof, no amounts remain in the Reserve Fund.
(c) If on the Business Day immediately succeeding each March 1, the amount on
deposit in the Reserve Fund shall exceed the Reserve Fund Requirement on outstanding Bonds, such
excess shall be transferred to the Bond Fund. If there i6 on deposit in the Reserve Fund an amount
sufficient to pay the principal of all outstanding Bonds through maturity, and such amount is Available
Amounts, the amount in excess of such principal amount shall be transferred to the Borrower, When
the amounts on deposit in the Bond Fund and the Reserve Fund are sufficient to pay principal and
interest on Outstanding Bonds through maturity thereof, and such amounts are Available Amounts" the
Trustee shall discharge this Indenture pursuant to the provisions of Section 10,1 hereof and the
Borrower will not be required to make further payments to the Trustee for deposit in such funds.
(d) The Borrower is obligated to make deposits in Available Amounts within five
(5) days of any withdrawal of moneys from the Reserve Fund as may be necessary to allow the moneys
on deposit in the Reserve Fund to equal the Reserve Fund Requirement or to restore the Reserve Fund
to the amounts required to satisfy the Reserve Fund Requirement The Trustee shall notify the
Borrower and the Credit Bank of any withdrawal made from the Reserve Fund.
ARTICLE IV
REDEMPTION OF BONDS
Section 4.1. Circumstances of Redemption. The Bonds are subject to redemption upon
the circumstances, on the dates and at the prices set forth as follows:
(a) The Bonds shall be subject to redemption in whole on the first date for which
notice of redemption can timely be given, at a price equal to the principal amount of Bonds to be
redeemed plus interest accrued thereon to the date fixed for redemption, without preuúwn, if the Credit
Bank shall wrongfully dishonor a draw on the Letter of Credit, or, if within 60 days of notice to the
Trustee of an Act of Bankruptcy of the Bank, the Borrower shall fail to deliver to the Trustee a Letter
of Credit from another institution which meets the requirements ofSectÏon 5,8 of the Loan Agreement
(b) The Bonds shall be subject to redemption in whole or in part on any Interest
Payment Date, at a price equal to the principal amount of Bonds to be redeemed plus interest accrued
thereon to the date fixed for redemption, without preuúwn, upon prepayment of the Loan in whole or in
part, in an amount as nearly equal as possible to, but not exceeding, the amount of any Net Proceeds of
insurance or condemnation awards not used to repair or replace the Project
(c) The Bonds shall be subject to redemption in whole or in part on any Interest
Payment Date, at a price equal to the principal amount of Bonds to be redeemed plus interest accrued
thereon to the date fixed for redemption, without preuúwn, during any Variable Period or on any Reset
Date or the Conversion Date, in the amount of any voluntary prepayments of the Loan.
2?-G~~r
562518.2'24036.0004 -2Ct
(d) The Bonds shall be subject to redemption in whole on any date at a price equal
to the principal amount of Bonds to be redeemed plus interest accrued thereon to the date fixed for
redemption, without premium, upon acceleration of the Loan in whole following an Acceleration
Default or following an Event of Default under Sections 7.1 (b) and ( e) of the Loan Agreement
(e) The Bonds shall be subject to redemption in whole, at a price equal to the
principal amount thereof, plus interest accrued thereon to the date fixed for redemption, without
premium, on the last Business Day which is not less than five days before the date of expiration of any
Letter of Credit unless the Trustee receives a renewal or extension of or replacement for such Letter of
Credit meeting the requirements of Section 5,8 of the Loan Agreement or, in the case of replacement of
the Letter of Credit in connection with any Reset Date or the Conversion Date, an unconditional
commitment of an entity to issue the Letter of Credit to be in effect upon and after such Reset Date or
Conversion Date, in each case not less than thirty (30) days before the expiration of the then-existing
Letter of Credit
(I) The Bonds are subject to optional redemption in whole or in part, on any
Interest Payment Date during any Reset Period or after Conversion, (i) in the amount specified for any
Interest Payment Date in connection with the establishment of a Reset Rate or a Conversion pursuant to
2.2(c) or 2.2(d), respectively, at a price equal to the principal amount of Bonds to be redeemed plus
interest accrued thereon to the date fixed for redemption, without premium, and (ii) otherwise during
the periods set forth below, at the respective redemption prices set forth below expressed as
percentages of the principal amounts of the Bonds called for redemption:
Term of Reset Period
or from Conversion
to Maturitv No-Call Period RedemDtÏon Price No Premium
7 or more years First 4 years after Reset 101.5% 8th year and thereafter
or Conversion Date (reducing .5% each year)
¡
4 years or more First 3 years after Reset 101% 7th year and thereafter
(but less than 7) or Conversion Date (reducing .5% each year)
(g) The Bonds shall be subject to redemption on any date in whole at a price equal
to the principal amount of Bonds to be redeemed plus interest accrued thereon to the date fixed for
redemption, without premium, at the written request or with the written consent of the Credit Bank
following any Event of Default under the Loan Agreement other than those referred to in Section 4,I(d)
hereof
(h) The Bonds maturing on March 1, 2008 are subject to the mandatory
redemption in part on any Interest Payment Date on or after September 1, 1996 from amounts received
by the Trustee representing payments of the principal amount of the Loan to the extent such mandatory
redemption is required by the Credit Bank.
The Trustee is hereby authorized and directed, and hereby agrees, to give notice of the call for
redemption of Bonds at the times set forth in this paragraph, to fix the date for any such redemption
within the periods prescribed by Section 4.3 hereof, and, if Available Amounts are available, to redeem
the Bonds so called on the date so fixed by the Trustee and set forth in such notice. The Trustee shall
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562518.2\24036.0004 -~-
give such redemption notice (i) in the case of redemption pursuant to (b) or (c) above, only after receipt
of the amount of the Loan prepayment to be applied to such redemption; (ii) in the case of redemption
pursuant to (a) or (e) above, at the time required therefore pursuant to Section 4.3, without any further
authorization or direction; (iii) in the case of redemption pursuant to (t) above, at the time required
therefore pursuant to Section 4.3, upon receipt of notice that the option is being exercised but only if
the Trustee then holds Available Amounts on deposit in the Bond Fund sufficient to pay, and set aside
for the payment of, any premium due upon such redemption, or if the Letter of Credit then in effect
may be drawn upon to pay such premium and is in an amount equal to such premium plus the other
amounts required by Section 5.8 of the Loan Agreement; (iv) in the case of redemption pursuant to (d)
above, as soon as practicable, but not later than two (2) days (A) after receipt of an opinion of Bond
Counsel indicating that an Acceleration Default has occurred, (B) upon acceleration of the Loan by the
Trustee on behalf of the City, or (C) after receipt from the Credit Bank of notice of a
nonreimbursement of the interest portion of the Letter of Credit following a drawing thereon or an
event of default under the Credit Agreement or the Deed of Trust and request that it be treated as an
Event of Default pursuant to Section 7. 1 (e) of the Loan Agreement (such redemption to occur not later
than five (5) days after any event set forth in (A), (B) or (C) above); and (v) in the case of redemption
pursuant to (g) above, as soon as practicable after receipt from the Credit Bank of a request for or
consent to acceleration of the Loan following any Event of Default under the Loan Agreement other
than an Acceleration Default or an Event of Default pursuant to Section 7.1 (e) of the Loan Agreement
Section 4.2. Selection of Bonds for Redemption. When any redemption is made pursuant
to any of the provisions of this Indenture and less than all of the outstanding Bonds are to be redeemed,
the Trustee shall select the Bonds to be redeemed by lot, in any marmer the Trustee deems fair, in
whole multiples of minimum Authorized Denominations. In no event shall Bonds be redeemed in
amounts other than whole multiples of minimum Authorized Denominations. For purposes of a
redemption pursuant to Section 4,l(b) or (c) hereof, the Trustee may round down to the nearest
minimum Authorized Denomination. For purposes of redeeming Bonds in denominations greater than
minimum Authorized Denominations, the Trustee shall assign to such Bonds a distinctive number for
each such principal amount and, in selecting Bonds for redemption by lot, shall treat such amounts as
separate Bonds, The Trustee shall promptly notify the City in writing of the numbers of the Bonds
selected for redemption.
If any Bonds tendered for purchase pursuant to Section 2,3 hereof and delivered pursuant to
Section 8.16 hereof shall have been selected for redemption, then the new Bond delivered pursuant to
Section 8.16 hereof shall be delivered with notice that it is subject to such redemption and shall be
deemed to be the Bond so selected for redemption notwithstanding the notice period stated in
Section 4,3 hereof
Section 4.3. Notice of Redemption. Subject to the provisions of the last paragraph of
Section 4.1, notice of redemption shall be given by the Trustee for and on behalf of the City, by first
class mail, not less than thirty (30) days nor more than sixty (60) Days òr, in the case of a redemption
pursuant to Sections 4, 1 (a), (d) or (e), not less than three (3) days prior to the redemption date, to the
registered owner of each Bond called for redemption, at its address as it appears on the registration
books or at such address as it may have filed with the Trustee for that purpose, but neither failure to
mail such notice to any Bondholder nor any defect in any notice so mailed shall affect the sufficiency of
the proceedings for the redemption of any of the Bonds with respect to which such failure or defect
shall have occurred. Each notice of redemption shall state the redemption date, the place of
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redemption, the source of the funds to be used for such redemption,the principal amount and, if less
than all, the distinctive numbers of the Bonds to be redeemed, and shall also state that the interest on
the Bonds in such notice designated for redemption (other than the unredeemed portions, if any,
thereot) shall cease to accrue from and after such redemption date and that on said date there will
become due and payable on each of said Bonds the principal amount thereof to be redeemed, interest
accrued thereon to the redemption date and the premium, if any, thereon (such premium to be
specified). Neither the City nor the Trustee shall have any responsibility for any defect in the CUSIP
number that appears on any Bond or in any redemption notice with respect thereto, and any such
redemption notice 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 City nor the Trustee shall be
liable for any inaccuracy in such numbers.
Section 4.4. Partial Redemption of Bonds, Any Bond may be redeemed in whole or in
part, but no part of any Bond shall be redeemed in an amount less than a mirùmum Authorized
Denomination, and Bonds remaining after any redemption shall be in Authorized Denominations. Upon
surrender of any Bond redeemed in part only, the City shall execute and the Trustee shall authenticate
and deliver to the registered owner thereof, without charge to the owner thereof, a new Bond or Bonds
ofIike series and maturity and of Authorized Denominations designated by such owner equal in
aggregate principal amount to the unredeemed portion of the Bond surrendered.
Section 4.5. Effect of Redemption. Notice of redemption having been dilly given as
aforesaid, and moneys for payment of the redemption price being held by the Trustee, the Bonds so
called for redemption shall, on the redemption date designated in such notice, become due and payable
at the redemption price specified in such notice, interest on the Bonds so called for redemption shall
cease to accrue, said Bonds shall cease to be entitled to any lien, benefit or security under this
Indenture, and the holders of said Bonds shall have no rights in respect thereof except to receive
payment of the redemption price thereof
All Bonds fully redeemed pursuant to the provisions of this Article IV shall be destroyed by the
Trustee upon receipt of prior written instructions, which shall thereupon deliver to the City a certificate
evidencing such destruction.
Section 4.6. Bank's Right to Purchase Bonds in Lieu of Redemption.
(a) Notwithstanding any provision of this Indenture to the contrary, to the extent
described herein, the Bonds may be purchased by the Credit Bank in lieu of redemption and be
remarketed in accordance with the tenns of this Section 4.6 and Article VIII hereof
(b) The Credit Bank shall have the right, in the event of a mandatory redemption of
the Bonds pursuant to Section 4. 1 (d) or (e) of this Indenture, to elect to purchase the Bonds in lieu of
their redemption, at a purchase price equal to 100% of the principal amount thereof, plus accrued
interest thereon to the date of purchase. To exercise its purchase right hereunder, the Credit Bank shall
give written notice of the exercise thereof to the Trustee, the City, the Remarketing Agent and the
Borrower at least five Business Days prior to the Trustee's mailing of a notice of redemption. Upon
receipt of such written notice, such redemption date shall be deemed to constitute a Tender Date for all
Outstanding Bonds and all Outstanding Bonds shall be deemed to have been tendered on the Tender
Date whether or not actually delivered to the Trustee. In such event, the Trustee shall draw under the
Letter of Credit pursuant to Section 5,5 of this Indenture to the extent necessary to effect a purchase of
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5625t8.2\24036,OOO4 -~-
all Bonds Outstanding, it being the intention of the City that the Bonds remain Outstanding after such
purchase and that interest on the Bonds continue to accrue, All Bonds purchased in lieu of redemption
shall be registered in the name of the Credit Bank, and shall remain as Bank Bonds unless and until
such Bonds are remarketed in accordance with the requirements of Article vm hereof
(c) If the Credit Bank elects to cause a purchase in lieu of redemption hereunder,
all Bonds shall be redeemed pursuant to this Section 4,6 on the fifth anniversary of such purchase in
lieu of redemption (or if such day is not a Business Day on the next preceding Business Day) unless an
opinion of Bond Counsel is delivered to the Trustee to the effect that not redeeming the Bonds on such
date will not adversely affect the exclusion ITom gross income for federal income tax purposes of the
interest on the Bonds. In the event that the Bonds are registered in the name of the Credit Bank, or its
nominee, on such redemption date, such redemption shall occur automatically by cancellation of the
Bonds on the books of the Trustee without payment of any redemption price to the Credit Bank by the
Trustee, Interest on such Bonds shall cease to accrue as of the redemption date whether or not
presented to the Trustee for cancellation,
(d) In no event shall Bonds purchased in lieu of redemption pursuant to this
Section 4,6 be remarketed unless (l)the Trustee receives notice ITom the Credit Bank that the Letter of
Credit has been reinstated in the amount of the drawing under the Letter of Credit used to purchase
such Bonds, or a substitute Letter of Credit is delivered to the Trustee in accordance with the
requirements of Section 5.8 of the Loan Agreement; and (2) the Trustee receives an opinion of Bond
Counsel that such remarketing will not adversely affect the exclusion ITom gross income for federal
income tax purposes of interest on the Bonds. In the event the Bonds are registered in the name of the
Bank, or its nominee pursuant to this Section 4.6, then the Trustee shall affix a notation to such Bonds
as follows: "The Bonds are not transferable unless the conditions of Section 4.6(d) of the Indenture
have been satisfied."
ARTICLE V
REVENUES
Sel:tion 5.1. Pledge of Revenues, All of the Revenues are hereby irrevocably pledged to
the punctual payment of the principal of, premium, if any, and interest on the Bonds, subject to the
provisions of this Indenture permitting the application of such Revenues for the purposes and on the
tenDS and conditions set forth herein.
The City also hereby transfers in trust, grants a security interest in and assigns to the Trustee,
for the benefit of the holders ITom time to time of the Bonds and for the benefit of the Credit Bank, all
of its right, title and interest in the Revenues and the Loan Agreement (except for the right to receive
fees, expenses and indemnification and its rights of enforcement with respect to such fees, expenses
and indemnification thereunder).
All Revenues shall be held in trust for the benefit of the holders ITom time to time of the Bonds
and for the benefit of the Credit Bank, but shall nevertheless be disbursed, allocated and applied solely
for the uses and purposes hereinafter in this Article V set forth.
Neither the City (or any Councilmember thereof) nor any person executing the Bonds is liable
personally on the Bonds or subject to any personailiability or accountability by reason of their issuance.
?}- C. - 3;;L
S62S13.2124Q36.0004 -1l-
The Bonds are limited obligations of the City and are not a debt, nor a pledge of the faith and credit, of
the State of Califomia or any of its political subdivisions, and neither are they liable on the Bonds, nor
are the Bonds payable out of any funds or properties other than those of the City pledged for the
payment thereof The Bonds do not constitute an indebtedness within the meaning of any constitutional
or statuto!)' debt limitation. The issuance of the Bonds shall not directly or indirectly or contingently
obligate the City, the State of Califomia or any political subdivision thereof to levy or to pledge any
form of taxation whatever therefor or to make any appropriation for their payment.
Section 5.2. Bond Fund. There is hereby created and established with the Trustee a
separate trust fund which shall be designated the "Bond FillJd", which shall be applied only as provided
in this Section,
The Trustee shall deposit in the Bond FillJd ITom time to time, upon receipt thereof, (i) all
amOillJts drawn by the Trustee illJder the Letter of Credit as provided in Section 5.5 hereof; (ii) income
received from the investment of moneys on deposit in the Bond FillJd; (iii) amOillJts deposited in the
Bond FillJd pursuant to Section 3.2 hereof; (iv) amOillJts transferred to the Bond FillJd ITom the Reserve
FillJd pursuant to Section 3.5 hereof; and (v) any other Revenues, including insurance proceeds,
condeITlllation awards and other Loan prepayment amOillJts received ITom or for the aCCOillJt of the
Borrower. The Trustee shall establish a separate subaccoillJt in the Bond FillJd for amOillJts drawn
illJder the Letter of Credit, and such amOillJts shall not be commingled with other moneys in the Bond
FillJd. The Trustee shall establish a separate subaccoillJt in the Bond FillJd for each payment of moneys
into the Bond FillJd (except for amOillJts drawn illJder the Letter of Credit), and such moneys shall not
be commingled with other moneys in the Bond FillJd, except that any such moneys in the Bond FillJd
that have been held by the Trustee for at least 91 days without a bankruptcy petition having been filed
by or against the City or the borrower (or any general partner or guarantor of the Borrower) may be
' commingled with other Available AmOillJts in a single subaccoillJt of the Bond FillJd.
Except as provided in this Section 5.02 and in Sections 5.6 and 10.3, moneys in the Bond FillJd
shall be used solely for the payment of the principal of and premium, if any, and interest on the Bonds
as the same shall become due, whether at maturity or upon redemption or acceleration or otherwise;
provided that, upon receipt by the Trustee of the proceeds of a draw on the Letter of Credit and
payment of the interest and/or principal then due on the Bonds with such proceeds or other Available
ArnOillJts in the Bond FillJd, the Trustee shall remit to the Credit Bank amOillJts then on deposit in the
Bond FillJd to the extent of such draw. In making payments of principal, premium, if any, and interest
on the Bonds, the Trustee shall (i) use amOillJts drawn by the Trustee illJder the Letter of Credit, (ii)
then use other Available ArnOillJts held in the Bond FillJd" and (iii) then use any other funds on deposit
with the Trustee.
Notwithstanding the above, upon the payment of the Purchase Price of the Bonds and the
remarketing thereof on March 1, 1995, amOillJts on deposit in the Bond FillJd on March 2, 1995 (i)
representing Loan Repayments, which shall be deemed for such pwposes to be volillJtary Loan
repayments, and (ii) representing transferred amOillJts ITom the Reserve FillJd pursuant to Section
3.5(c), may be applied by the Trustee to the redemption of Bonds upon receipt by the Trustee of
written notification by the Borrower to apply such amOillJts to the redemption of Bonds pursuant to
Section 4.1(c) hereof or, absent the written notification by the Borrower as set forth above, shall be
paid to the Borrower ITee and clear of any lien created illJder this Indenture.
¿? -C-3'3
562518.2\24036,0004 -~-
Amounts drawn on the Letter of Credit in conjunction with an Act of Bankruptcy having
occurred and deposited in the Bond Fund which may be applied to the payment of the principal amount
of Bonds having matured on the March 1 preceding the date of such drawing shall be held in escrow by
the Trustee and upon receipt by the Trustee of a notice that amounts paid by the Trustee as principal on
the preceding March 1 have been recaptured by a bankruptcy court, the Trustee shall pay such
escrowed amounts to the owners of the Bonds from which such principal payments have been
captured.
Section 5.3. Investment of Moneys. Except as otherwise provided in this Section, in
Section 6.7 or Section 6.8 hereof, any moneys in any of the funds and accounts to be established by the
Trustee pursuant to this Indenture shall be invested by the Trustee, if and to the extent then permitted
by law, in Investment Securities selected and directed in writing by the BoITower, and subsequent to
March 1, 1996 with the written approval of the Credit Bank, with respect to which payments of
principal thereof and interest thereon are scheduled or otherwise payable not later than the date on
which it is estimated that such moneys will be required by the Trustee. In the absence of such
directions, the Trustee shall invest such monies in Investment Securities described in clause (c) or (e)
of the definition thereof Amounts drawn under the Letter of Credit and proceeds received from the
remarketing of the Bonds shall not be invested, except at the written direction of the Credit Bank, and
then only in Investment Securities of the type described in clauses (a) or (b) of the definition thereof.
Amount's held in the Bond Fund and the Reserve Fund other than amounts drawn under the Letter of
Credit shall be invested only in Investment Securities described in clauses (a), (b), (c), (e) or (f) of the
definition thereof maturing or subject to payment upon demand of the holder thereof within 30 days
after the acquisition of any such investment and in any event not later than the date on which it is
estimated that such moneys will be required by the Trustee. Notwithstanding the above, amounts held
in the Bond Fund which are invested in Investments Securities described in clauses (a), (b), (c), ( e) or
(f) shall not be invested at a yield in excess of the Yield on the Bonds. The Trustee shall have no
liability or responsibility for any loss resulting from any investment made in accordance with this
Section 5.3.
For the purpose of determining the amount in any fund or account all Investment Securities
credited to such fund or account shall be valued at cost (which shall be measured exclusive of accrued
interest after the first payment of interest following purchase.)
Any interest, profit or loss on such investment of moneys in any fund or account shall be
credited or charged to the respective funds or accounts from which such investments are made, except
as otherwise provided in Section 6.8 hereof The Trustee may sell or present for redemption any
obligations so purchased whenever it shall be necessary in order to provide moneys to meet any
payment, and the Trustee shall not be liable or responsible for any loss resulting from such sale or
redemption.
The Trustee may make any and all investments permitted under this Section 5,3 through its
own bond department or any affiliate.and may pay said bond department reasonable, customary fees
for placing such investments.
Section 5.4. Assignment to Trustee; Enforcement of Obligations, The City hereby
transfers, assigns and sets over to the Trustee, for the benefit of the Bondholders, and to the Credit
Bank on a basis subordinate to that of the Trustee and the Bondholders, and the Trustee and the Credit
~C -3 r
j62518.2'24O36,OO04 -~-
Bank, respectively, hereby accept, all of the Revenues, all moneys at any time held in any fund
heretUlder and any and all rights and privileges the City has tUlder the Agreement, except for the City's
right to receive payments tUlder Sections 4.2(c) and (e), 7.3, 9.2 and 9.3 of the Agreement, and the
right of the City to enforce certain covenants of the Borrower relating to compliance with the Law and
maintenance of the exclusion from gross income for federal tax purposes of interest on the Bonds; and
any Revenues or other amotUlts payable to the Trustee heretUlder or tUlder the Agreement which are
collected or received by the City shall be deemed to be held, and to have been collected or received, by
the City as the agent of the Trustee, and shall forthwith be paid by the City to the Trustee, The Trustee
also shall be entitled to take all steps, actions and proceedings reasonably necessary in its judgment (I)
to enforce the terms, covenants and conditions of, and preserve and protect the priority of its interest in
and tUlder, the Agreement and the Letter of Credit and (2) to assure compliance with all covenants,
agreements and conditions on the part of the City contained in this Indenture with respect to the
Revenues,
Section 5.5. Letter of Credit, The City hereby authorizes and directs the Trustee, and the
Trustee hereby agrees, to draw on the Letter of Credit in accordance with its tenns for the payment of
the principal and Purchase Price and interest on the Bonds upon maturity, redemption, acceleration,
demand for purchase or mandatory tender thereof as set forth herein, in order to receive payment
theretUlder for the purposes set forth herein.
Each such drawing shall be made not later than the time required by the Letter of Credit in
order to receive payment theretUlder on the Business Day on which payment of the amotUlt of such
drawing is required to be made to the holders of the Bonds pursuant to this Indenture, The Trustee
hereby acknowledges that the Letter of Credit delivered on the Closing Date requires that demands for
payment theretUlder be received by the Credit Bank no later than 11:00 a.m., California time, on a
Business Day in respect of a payment by II :30 a.m., California time, on the next succeeding Business
Day; provided, however, if an acceleration of the Bonds is declared due to (i) a failure to pay the
Purchase Price of the Bonds on March 1, 1995, (ii) the failure to deliver a Letter of Credit on March 1,
1995 or (iii) an Act of Bankruptcy has occurred, the initial Letter of Credit provides that a demand for
payment theretUlder as the result of either such event be received by the Credit Bank not later 9:00
a,m" California time, in respect of a payment by 12:00 noon, California time, the same day of such
demand. The Trustee shall give notice of each such drawing to the Borrower at the time of each draw.
The Trustee shall comply with all provisions of the Letter of Credit in order to realize upon any
drawing theretUlder, and will not draw upon the Letter of Credit at any time for payment of the
principal or Purchase Price, if any, of any Bonds registered in the name of the Credit Bank or its
nominee or the Borrower or any guarantor or general partner of the Borrower or any nominee thereof
or the City or its nominee (provided that the Trustee shall have no duty to investigate whether Bonds
are registered in the names of such nominees).
The Trustee agrees to accept any Letter of Credit confonning to the requirements of
Section 5,8(a) of the Agreement which is delivered to the Trustee while the Bonds bear interest at a
Variable Rate in substitution for the then-outstanding Letter of Credit, to accept any Letter of Credit
confonning to the requirements of Section 5.8(b) of the Agreement which is delivered to the Trustee in
connection with a Reset Date or during a Reset Period in substitution for the then-outstanding Letter of
Credit, and to accept any Letter of Credit confonning to the requirements of Section 5, 8( c) of the
Agreement which is delivered to the Trustee in connection with Conversion or which is delivered to the
Trustee at any time after Conversion in substitution for the then-outstanding Letter of Credit. Upon
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562518,2\24036.0004 ~4-
acceptance of any such substitute Letter of Credit, the Trustee shall surrender the superseded Letter of
Credit to the issuer thereof and shall give notice of such substitution to Bondholders in same manner
that notices of redemption are given as soon as practicable upon receipt by the Trustee of notice of such
substitution.
The Trustee shall give all required notices to the Credit Bank in accordance with the provisions
of the Letter of Credit, including, but not linúted to, notice of receipt of a substitute Letter of Credit,
notice of a successor Trustee, and notice of discharge or defeasance of this Indenture. The Trustee shall
transfer, in a timely manner, to any paying agent, if other than the Trustee, all amounts drawn under the
Letter of Credit in order to make payments on the Bonds, or, in the case of a draw on the Letter of
Credit to pay the Purchase Price of any Bonds tendered pursuant to Section 2.3 hereof and not
remarketed pursuant to Section 8.14 hereof, the Trustee shall arrange for payments under the Letter of
Credit to be made directly to the Tender Agent
Section 5.6. Payment to Credit Bank. When there are no longer any Bonds outstanding,
and all fees, charges and expenses of the Trustee, the Tender Agent and any paying agents have been
paid or provided for, all expenses of the City relating to the Project and this Indenture have been paid
or provided for, all other amounts payable hereunder and under the Agreement have been paid, and this
Indenture has been discharged and satisfied, the Trustee shall pay to the Credit Bank, to the extent that
amounts are owed to the Credit Bank under the Credit Agreement, or to the BoITower to the extent no
money is owed the Credit Bank under the Credit Agreement by check or wire all amounts remaining in
the Bond Fund,
Settion 5.7. Consents of Credit Bank. Notwithstanding anything to the contrary in this
Indenture, the Loan Agreement, the Regulatory Agreement, or the Deed of Trust, the consent of the
Credit Bank shall not be required and the Credit Bank shall not be entitled to give directions with
respect to the exercise of any rights or remedies of the Trustee or the holders if the Credit Bank has
wrongfully dishonored a draw under the Letter of Credit and such wrongful dishonor has not been
cured.
ARTICLE VI
COVENANTS OF THE CITY
Settion 6.1. Payment of Principal and Interest. The City shall punctually pay, but only
out of Revenues as herein provided, the principal and the interest (and prenúurn, if any) to become due
in respect of every Bond issued hereunder at the times and places and in the manner provided herein
and in the Bonds, according to the true intent and meaning thereof. When and as paid in full, all Bonds
shall be delivered to the Trustee and shall forthwith be destroyed if so instructed by the City.
Settion 6.2. Paying Agents. The City, with the written approval of the Trustee and the
Credit Bank, may appoint and at all times have one or more paying agents in such place or places as
the City may designate, for the payment of the principal of, and the interest (and prenúurn, if any) on,
the Bonds. It shall be the duty of the Trustee to make such arrangements with any such paying agent as
may be necessary and feasible to assure, to the extent of the moneys held by the Trustee for such
payment, the availability of funds for the prompt payment of the principal of and interest and prenúum,
if any, on the Bonds presented at either place of payment The paying agent initially appointed
hereunder is the Trustee.
~-C-- 3h
562\18.2\24036.0004 -~-
Section 6.3. Preservation of Revenues; Amendment of Documents, The City shall not
take any action to interfere with or impair the pledge and assignment hereunder of Revenues and the
assignment to the Trustee of rights of the City under the Agreement, or the Trustee's enforcement of
any rights hereunder or thereunder, shall not ta\œ any action to impair the validity or enforceability of
the Agreement, and shall not waive any of its rights under or any other provision of or pennit any
amendment of the Agreement, without the prior written consent of the Trustee and the Credit Bank
(provided that such approval of the Credit Bank shall not be required (although the Trustee shall give
notice to the Credit Bank) if the Trustee shall have received an opinion of Bond Counsel to the effect
that such waiver is required to preserve the exclusion of interest on the Bonds from gross income for
federal income tax purposes or compliance by the Bonds or the Project with the Law and the laws of
the State of California).
The Trustee may give such written consent, and may itself take any such action or consent to a
waiver of any provision of or an amendment or modification to or replacement of the Agreement, the
Letter of Credit, the Regulatory Agreement or any other document, instrument or agreement relating to
the security for the Bonds, only if (i) such action or such waiver, amendment, modification or
replacement (a) is authorized orrequired by the terms of this Indenture or the Agreement, or (b) will
not, in the opinion of the Trustee, which may be based on an Opinion of Counsel, materially adversely
affect the interests of the holders of the Bonds or result in any impairment of the security hereby given
for the payment of the Bonds, or (c) has first been approved by the written consent of the holders of at
least sixty percent (60%) in principal amount of the Bonds then outstanding; (ii) any such action or
such waiver, amendment, modification or replacement will not have the effect of extending the time for
payment or reducing the amount due and payable of any amount due and payable by the Credit Bank
under the Letter of Credit; (iii) the Trustee shall have obtained the prior written approval of the Credit
Bank (provided that such approval of the Credit Bank shall not be required (although the Trustee shall
give notice to the Credit Bank) if the Trustee shall have received an opinion of Bond Counsel to the
effect that such action or such waiver, amendment, modification or replacement is required to preserve
the exclusion of interest on the Bonds from gross income for federal income tax purposes or
compliance by the Bonds and the Project with the Law and the laws of the State of California); and (iv)
the Trustee shall have first obtained an opinion of Bond Counsel to the effect that such action or such
waiver, amendment, modification or replacement will not adversely affect the exclusion of interest on
the Bonds from gross income for federal income tax purposes or conformance of the Bonds and the
Project with the Law or the laws of the State of California relating to the Bonds,
Section 6.4. Compliance with Indenture. The City shall not issue, or pennit to be issued,
any Bonds secured or payable in any manner out of Revenues in any manner other than in accordance
with the provisions of this Indenture; it being understood that the City reserves the right to issue
obligations payable from and secured by sources other than the Revenues and the assets assigned
herein. The City shall not suffer or pennit any default to occur under this Indenture, but shall faithfully
observe and perform all the covenants, conditions and requirements hereof. So long as any Bonds are
outstanding, the City shall not create or suffer to be created any pledge, lien or charge of any type
whatsoever upon all or any part of the Revenues, other than the lien of this Indenture.
Section 6.5. Further Assurances. Whenever and so often as requested 60 to do by the
Trustee, the City shall promptly execute and deliver or cause to be executed and delivered all such
other and further instruments, documents or assurances, and promptly do or cause to be done all such
other and further things, as may be necessary or reasonably required in order to further and more fully
?j-C- -3 --;
562518.2\24036.0004 -~-
vest in the Trustee and the Bondholders all of the rights, interests, powers, benefits, privileges and
advantages conferred or intended to be conferred upon them by this Indenture and to perfect and
maintain as perfected such rights, interests, powers, benefits, privileges and advantages.
Section 6.6. No Arbitrage. The City shall not take, nor permit nor suffer to be taken by the
Trustee or otherwise, any action with respect to the Gross 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 the issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the
meaning of Section l48(a) of the Code and Regulations promulgated thereunder,
Section 6.7. Investment Limit above 150 Percent of Annual Debt Service.
(a) General Rule. Except as provided in subsection (b) of this Section, at no time
during any Bond Year shall the City allow the Borrower to permit the aggregate amount of Gross
Proceeds of the Bonds invested in Nonpurpose Obligations with a Yield higher than the Yield on the
Bonds to exceed 150 percent of the Debt Service on the Bonds for such Bond Year. In addition, the
City shall assure that, beginning with the fourth Bond Year, said aggregate amount of Gross Proceeds
of the Bonds invested in Nonpurpose Obligations with a Yield higher than the Yield on the Bonds is
promptly and appropriately reduced as the outstanding principal amount of the Bonds is reduced. In
order to comply with the preceding sentence, the City shall assure the reduction of said investment in
Nonpurpose Obligations with a Yield higher than the Yield on the Bonds within a period not to exceed
30 days following the expiration of the third Bond Year and each Bond Year thereafter and within a
period not to exceed 30 days following the payment of any principal on the Bonds (by maturity,
redemption, acceleration or otherwise), provided, however, that said reduction may be made by the
disposition within the applicable 30-day period of Nonpurpose Obligations with a Yield higher than the
Yield on the Bonds which are in excess of 150 percent of Debt Service on the Bonds and that said
reduction need not be made if the failure to make said reduction will not violate the 150 percent
requirement set forth in the first sentence of this Section.
(b) Exclusions. For the purpo,se of subsection (a) of this Section, the aggregate
amount of Gross Proceeds invested in Nonpurpose Obligations shall be determined without regard to
those Gross Proceeds which are:
(i) invested for a period not in excess of three years from the date of
issuance of the Bonds, until needed for accrued interest or for the governmental
purpose of the Bonds, and which constitute original proceeds or investment proceeds
(within the meaning of clauses (i) and (ii) of the definition of Gross Proceeds);
(ii) invested for a period not in excess of 13 months, from the date of
deposit. in a fund that is used primarily to achieve a proper matching of revenues and
Debt Service on the Bonds within each Bond Year and that is depleted at least once a
year except for a reasonable carryover amount not in excess of the greater of one year's
earnings on the fund or one-twelfth of annual Debt Service on the Bonds and which do
not constitute original proceeds or investment proceeds within the meaning of clauses
(i) and (ii) of the definition of Gross Proceeds;
(iii) invested for a period not in excess of 30 days, from the date of deposit,
in a fund that is reasonably expected to be used to pay Debt Service on the Bonds and
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S62S 1 8,2\24036,0004 ~7-
wlùch do not constitute original proceeds or investment proceeds within the meaning of
clauses (i) and (ii) of the definition of Gross Proceeds;
(iv) invested for a period not in excess of one year, from the date of receipt,
in a fund that is reasonably expected to be used to pay Debt Service on the Bonds and
which constitute amounts received from investment of amounts deposited in a fund that
is reasonably expected to be used to pay Debt Service on the Bonds but do not
constitute original proceeds or investment proceeds within the meaning of clauses (i)
and (ü) of the definition of Gross Proceeds;
(v) invested for a period not in excess of one year, from the date of receipt,
and constitute amounts received from investment of original proceeds or investment
proceeds (within the meaning of clauses (i) and (ii) of the definition of Gross
Proceeds); or
(vi) invested for a period not in excess of three years, from the date of
receipt, in a revolving fund and constitute receipts from the sale of real or tangible
property acquired with proceeds of the Bonds and that will be used for the acquisition
of additional real or tangible property,
(c) Determination of Amount Invested, For the purpose of subsection (a) of
this Section, in determining the aggregate amount of Gross Proceeds of the Bonds invested in
Nonpurpose Obligations, each Nonpurpose Obligation in which Gross Proceeds are invested shall be
valued as if the Nonpurpose Obligation was acquired for its fair market value on the date of acquisition
or, if later, on the date upon wlùch the Investment Property constituting the Nonpurpose Obligation
becomes a Nonpurpose Obligation with respect to the Bonds (for example, Investment Property earlier
acquired which is later pledged as security for the Bonds). Revaluation following said date is not
required unless this Indenture elsewhere requires revaluation in accordance with fair market value on a
later date, in which event said revaluation shall apply for the purpose of subsection (a) of this Section.
(d) Determination of Yield of Variable Rate Nonpurpose Obligations. For
the purpose of subsection (a) of this Section, the Yield on a Nonpurpose Obligation that consists of
variable rate Investment Property shall be determined as of the date the Nonpurpose Obligation is
acquired and as of the first day of each Bond Year by assuming that the rate of interest will be the
weighted average rate of interest for such Investment Property during the preceding one-year period (or
portion thereof in wlùch the Nonpurpose Obligation was outstanding), With respect to a Nonpurpose
Obligation purchased on its date of issue, the Yield for the first Bond Year shall be determined by
assuming that the rate of interest will be the initial rate of interest for such Nonpurpose Obligation as
determined under the prescribed fonnula on such date of issue (without regard to any fixed rate initially
applicable to such Nonpurpose Obligation).
(e) Determination of Yield of Variable Rate Bonds. For the purpose of
subsection (a) of this Section, the Yield and the Debt Service on the portion of the Bonds bearing a
variable rate of interest shall be determined as of the first day of each Bond Year, by assuming that the
rate of interest on such portion of the Bonds will be (i) for the first Bond Year, the initial rate of interest
for such portion as determined under the prescribed fonnula on the date of issuance of the Bonds
(without regard to any fixed rate initially applicable to such portion), and (ii) for any subsequent Bond
Year, the weighted average rate of interest for such portion during the preceding Bond Year,
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562518.2\24036,0004 -~-
(f) Exception. For the purpose of subsection (a) hereof, Nonpurpose Obligations
subject to such subsection need not be sold or disposed of if such sale or disposition would result in the
realization of a loss for federal income tax purposes that exceeds that amoWlt that would be paid to the
United States pursuant to Section 6.8 hereof (but for such sale or disposition) at the time of such sale or
disposition (not including amoWlts that have been previously paid to the United States pursuant to
Section 6.8) if a payment Wlder Section 6.8 were due at such time; provided, however, that the
preceding sentence shall not apply to the extent that other Nonpurpose Obligations acquired with the
Gross Proceeds of the Bonds may be sold or disposed of without incurring a loss in excess of the
amoWlt that would be paid to the United States pursuant to Section 6,8 (but for such sale or
disposition) at the time of such sale or disposition if a payment Wlder Section 6.8 were due at such
time; and provided, further, that with respect to any Nonpurpose Obligation that, Wlder the rule
described in this subsection need not be sold or disposed of, said rule shall cease to apply thirty (30)
days after the last day of the first Bond Year ending thereafter on which the Nonpurpose Obligation in
question can be sold or disposed of without incurring a loss in excess of the amoWlt that would be paid
to the United States pursuant to Section 6.8 (but for such sale or disposition) if a payment Wlder
Section 6,8 were due at such time, For the purposes of this subsection, Nonpurpose Obligations in
which Gross Proceeds of the Bonds are invested which are acquired at different times or with different
interest rates or maturity periods shall be treated as separate issues of Nonpurpose Obligations.
Section 6.8. Rebate of Excess Investment Earnings to United States. The City hereby
covenants to cause the Trustee to arrange for the calculation of and rebate to the federal government, in
accordance with the Regulations, excess investment earnings to the extent required by section 148(t) of
the Code. The Trustee hereby agrees to cause such calculations to be made, and to demand in writing
from the Borrower any amoWlts required to be rebated to the federal government pursuant to
Section 4.2(d) of the Loan Agreement. Any fees or expenses incurred by the Trustee or the City Wlder
or pursuant to this Section 6.8 shall be billed to the Borrower Wlder Section 4.2(d) of the Loan
Agreement.
In order to provide for the administration of this Section 6.8, the Trustee may provide for the
employment of independent attorneys (including Bond Counsel), accoWltants and consultants
compensated on such reasonable basis as the Trustee may deem appropriate, and in addition to and
without limitation of the provisions of Section 8,2, the Trustee may rely conclusively upon and shall be
fully protected from all liability in relying upon the opinions, calculations, determinations, directions
and advice of such attorneys, accoWltants and consultants employed by it hereWlder.
Section 6.9. Limitation on Issuance Costs, The City shall assure that, from the proceeds
of the Bonds received from the original purchaser thereof on the Closing Date and investment earnings
thereon, an amoWlt not in excess of two percent (2%) of the face amoWlt of the Bonds shall be used to
pay for, or provide for the payment of Issuance Costs. For this purpose, if the fees of such original
purchaser are retained as a discoWlt on the purchase of the Bonds, such retention shall be deemed to be
an expenditure of proceeds of the Bonds for said fees.
Section 6.10. Federal Guarantee Prohibition. The City shall take no action nor pennit nor
suffer any action to be taken if the result of the same would be to cause the Bonds to be "federally
guaranteed" within the meaning of Section 149(b) of the Code.
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562518.2'24036,0004 -~-
Section 6.11. Land Limitation, No more than twenty-five percent (25%) of the Net
Proceeds of the Bonds shall be used, directly or indirectly, for the acquisition ofland or any interest
therein.
Section 6.12. Existing Facilities Limit.
(a) No proceeds of the Bonds shall be used for the acquisition of any tangible
property or an interest therein, other than land or an interest in land, unless the first,use of such
property is pursuant to such acquisition; provided, however, that this limitation shall not apply with
respect to any building (and the equipment therefor) if Rehabilitation Expenditures with respect to such
building equal or exceed 15 percent of the portion of the cost of acquiring such building (and
equipment) financed with the Net Proceeds of the Bonds; and provided, further, that this limitation
shall not apply with respect to any structure other than a building if Rehabilitation Expenditures with
respect to such structure equal or exceed 100 percent of the portion of the cost of acquiring such
structure financed with the Net Proceeds of the Bonds.
(b) For the purpose of this Section, the tenn "Rehabilitation Expenditures" means
any amount properly chargeable to the capital account to the Borrower for the property acquired in
connection with the rehabilitation of such property, or in the case of property constituting equipment, in
connection with the replaceme,nt of such equipment with equipment having substantially the same
function, excluding, however, amounts incurred after the date two years after the later of the date of
acquisition of the property in question or the date of issuance of the Bonds.
Section 6.13. Prohibited Facilities, No portion of the proceeds of the Bonds shall be used
to provide any airplane, skybox or other private luxury box, health club facility, facility primarily used
for gambling, or store the principal business of which is the sale of alcoholic beverages for
consumption off premises, No portion of the proceeds of the Bonds shall be used for an office unless
the office is located on the premises of the facilities constituting the Project and unless not more than a
de minimus amount of the functions to be perfonned at such office is not related to the day-to-day
operations of the Project
ARTICLE VII
DEFAULT
Section 7.1. Events of Default; Acceleration; Waiver of Default Each of the following
events shall constitute an "Event of Default" hereunder:
(a) failure to pay the principal of or premium (if any) on any Bond when and as the
same shall become due and payable, whether at maturity as therein expressed, by proceedings for
redemption, by declaration or otherwise;
(b) failure to pay any installment of interest on any Bond when such interest
installment shall become due and payable;
(c) failure to pay the Purchase Price of any Bond tendered in accordance with the
provisions of Section 2.3 hereof when such Purchase Price shall become due and payable or to deliver
a Letter of Credit to the Trustee, prior to 8:30 am., California time, on March 1,1995;
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562518.2\24036,0004 ~~-
(d) failure by the City to perfonn or observe any other of the covenants,
agreements or conditions on its part in this Indenture or in the Bonds contained, and the continuation of
such failure for a period of thirty (30) days after written notice thereof, specifying such default and
requiring the same to be remedied, shall have been given to the City, the Borrower and the Credit Bank
by the Trustee, or to the City, the Credit Bank and the Trustee by the holders of not less than twenty-
five percent (25%) in aggregate principal amount of the Bonds at the time outstanding or by the Credit
Bank to the City, the Borrower and the Trustee; and
(e) an Act of Bankruptcy.
No default specified in (d) above shall constitute an Event of Default unless the City,
the Borrower and the Credit Bank shall have failed to correct such default within the applicable period;
provided, however, that if the default shall be such that it cannot be corrected within such period, it
shall not constitute an Event of Default if corrective action is instituted by the City, the Borrower or the
Credit Bank within the applicable period and diligently pursued until the earlier of the correction of the
default or 90 days (unless the Credit Bank shall consent to an extension), With regard to any alleged
default concerning which notice is given to the Borrower or the Credit Bank under the provisions of (d)
above, the City hereby grants the Borrower and the Credit Bank full authority for the account of the
City to perfonn any covenant or obligation the non-perfonnance of which is alleged in said notice to
constitute a default in the name and stead of the City with full power to do any and all things and acts to
the same extent that the City could do and perfonn any such things and acts and with power of
substitution,
Subject to Sections 7.12 and 7.13 hereof, during the continuance of an Event of Default, unless
the principal of all the Bonds shall have already become due and payable, the Trustee may, and upon
the occurrence of any Event of Default specified in (a) or (b) above or upon the written request of the
Credit Bank or the holders of not less than twenty-five percent (25%) in aggregate principal amount of
the Bonds at the time outstanding, or in the case of any other Event of Default, the Trustee shall, by
notice in writing to the City, the Credit Bank and the Remarketing Agent, declare the principal of all the
Bonds then outstanding, and the interest accrued thereon, to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and payable, anything in this
Indenture or in the Bonds contained to the contrary notwithstanding, Upon any such declaration of
acceleration, the Trustee shall fix a date for payment of the Bonds, which date shall be with respect to
(i) March 1,1995 with respect to the failure to pay the Purchase Price of the Bonds on March 1,1995
or the failure to deliver to the Trustee a Letter of Credit on or before 8:30 a.m., California time, on
March 1, 1996, (ii) the date of an occurrence of an Act of Bankruptcy and (ui) as soon as practicable
after such declaration with respect to any other such declaration, and shall draw upon any then
outstanding Letter of Credit in accordance with its tenns on March 1, 1995 with respect to an
acceleration as set forth in subsection (i) above, and on or before such date with respect to any other
event of Default specified in (a), (b) or (c) above, and apply the amount so drawn, together with any
other Available AmOWlts, to pay on such date the principal of and interest on the Bonds so due and
payable.
The preceding paragraph, 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 drawing is made
under the Letter of Credit or any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, there shall have been deposited with the Trustee
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562518.2\24036,0004 ~-
Available Amounts sufficient to pay all the principal of the Bonds matured or required to be redeemed
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 the reasonable expenses of the Trustee, its
agents and counsel, and any and all other defaults known to the Trustee (other than in the payment of
principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have
been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be
adequate shall have been made therefor, then, and in every such case, the holders of at least a majority
in aggregate principal amount of the Bonds then outstanding, by written notice to the City and to the
Trustee and with indemnification satisfactory to the Trustee and with the written approval of the Credit
Bank, may, on behalf of the holders of all the Bonds, rescind and annul such declaration and its
consequences and waive such default; but no such rescission, annulment or waiver shall extend to or
shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon.
Upon any acceleration pursuant to this Section 7.1, the Trustee shall promptly on the date of
such acceleration submit to the Credit Bank such documents as may be required under the Letter of
Credit to draw upon the Letter of Credit in an amount which, together with all other Available
Amounts then on deposit in the accounts and funds held under this Indenture and available to pay
principal of and interest on the Bonds, equals the total amount of principal of and interest on the Bonds
coming due and payable by reason of such acceleration, All amounts received by the Trustee with
respect to the Letter of Credit shall be deposited in the Bond Fund upon receipt thereof by the Trustee
and applied as provided in Section 7.3.
Following a purchase in lieu of redemption pursuant to Section 4.6 of this Indenture and
provided either the Letter of Credit or any obligation of the Borrower under the Credit
Agreement is outstanding, the Trustee shall not accelerate the maturity of the Bonds unless
there has been a default by the Borrower and the Trustee receives the written consent of the
Credit Bank.
Section 7.2. Institution of Legal Proceedings by Trustee, Subject to Sections 7.12 and
7.13 hereof, if one or more of the Events of Default shall occur and be continuing, the Trustee in its
discretion may, and upon the written request of the holders of a majority in principal amount of the
Bonds then outstanding and, in the case of an Event of Default described in Section 7.1 (d), upon the
written request of the Credit Bank, and upon being indemnified to its satisfaction therefor the Trustee
shall, proceed to protect or enforce its rights or the rights of the holders of Bonds under the Act or
under this Indenture, the Agreement and the Letter of Credit, by a suit in equity or action at law, either
for the specific perfonnance of any covenant or agreement contained herein or therein, or in aid of the
execution of any power herein or therein granted, or by mandamus or other appropriate proceeding for
the enforcement of any other legal or equitable remedy as the Trustee shall deem most effectual in
support of any of its rights or duties hereunder; provided that any such request from the Bondholders or
the Credit Bank shall not be in conflict with any rule oflaw or with this Indenture, expose the Trustee
to personal liability or be unduly prejudicial to Bondholders not joining therein. Notwithstanding the
above, nothing herein shall cause the Trustee to delay in taking actions expressly required by this
Indenture for the protection of the Bondholders. '
Section 7.3. Application of Moneys Collected by Trustee. Any moneys collected by the
Trustee pursuant to Section 7,2 shall be applied in the order following, at the date or dates fixed by the
Trustee and, in the case of distribution of such moneys on account of principal (or premium, if any) or
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562518.2124036,0004 -~
interest, upon presentation of the Bonds and stamping thereon the payment, if only partially paid, and
upon surrender thereof, if fully paid:
First: For payment of all amounts due to the Trustee under Section 8,6,
Second: For deposit in the Bond Fund to be applied to payment of the principal of all Bonds
then due and unpaid and the premium, if any, and interest thereon; ratably to the persons entitled
thereto without discrimination or preference; except that no payment of principal, premium or interest
shall be made with respect to any Bonds registered in the name of the City, the BoITower or the Credit
Bank, or known by the Trustee to be registered in the name of any general partner or guarantor of the
BoITower or any nominee of the City, the BoITower, the Credit Bank, or any general partner or
guarantor of the BoITower, until all amounts due on all Bonds not so registered have been paid
(provided that the Trustee shall have no duty to investigate whether the Bonds are registered in the
name of any general partner or guarantor of the BoITower.)
Third: For payment of all other amounts due to any person hereunder or under the Loan
Agreement.
Fourth: To the Credit Bank for application in accordance with the Credit Agreement.
Section 7.4. Effect of Delay or Omission to Pursue Remedy, No delay or omission of
the Trustee, of the Credit Bank or of any holder of Bonds to exercise any right or power arising from
any default shall impair any such right or power or shall be construed to be a waiver of any such default
or acquiescence therein, and every power and remedy given by this Article VII to the Trustee, to the
Credit Bank or to the holders of Bonds may be exercised from time to time and as often as shall be
deemed expedient. In case the Trustee shall have proceeded to enforce any right under this Indenture,
and such proceedings shall have been discontinued or abandoned because of waiver or for any other
reason, or shall have been detennined adversely to the Trustee, then and in every such case the City,
the Trustee, the Credit Bank and the holders of the Bonds, severally and respectively, shall be restored
to their former positions and rights hereunder in respect to the trust estate; and all remedies, rights and
powers of the City, the Trustee, the Credit Bank and the holders of the Bonds shall continue as though
no such proceedings had been taken.
Section 7.5. Remedies Cumulative, No remedy herein confeITed upon or reserved to the
Trustee, to the Credit Bank or to any holder of the Bonds is intended to be exclusive of any other
remedy, but each and 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,
Section 7.6. Covenant to Pay Bonds in Event of Default. The City covenants that, upon
the happening of any Event of Default, the City will pay to the Trustee upon demand, but only out of
Revenues, for the benefit of the holders of the Bonds, the whole amount then due and payable thereon
(by declaration or otherwise) for interest or for principal and premium, or both, as the case may be, and
all other sums which may be due hereunder or secured hereby, including reasonable compensation to
the Trustee, its agents and counsel, and any expenses or liabilities incurred by the Trustee hereunder. In
case the City shall fail to pay the same forthwith upon such demand, the Trustee, in its own name and
as trustee of an express trust, and upon being indemnified to its satisfaction shan be entitled to institute
proceedings at law or in equity in any court of competent jurisdiction to recover judgment for the whole
amount due and unpaid, together with costs and reasonable attorneys' fees, subject, however, to the
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562518.2'24036,0004 -~-
condition that such judgment, if any, shall be limited to, and payable solely out of, Revenues and any
other assets pledged, transferred or assigned to the Trustee under Section 5.4 as herein provided and
not otherwise. The Trustee shall be entitled to recover such judgment as aforesaid, either before or after
or during the pendency of any proceedings for the enforcement of this Indenture, and the right of the
Trustee to recover such judgment shall not be affected by the exercise of any other right, power or
remedy for the enforcement of the provisions of this Indenture.
Section 7.7. Trustee Appointed Agent for Bondholders. The Trustee is hereby
appointed the agent and attorney of the holders of all Bonds outstanding hereunder for the purpose of
filing any claims relating to the Bonds.
Section 7.8. Power of Trustee to Control Proceedings. Subject to Sections 7.12 and 7.13
hereof, in the event that the Trustee, upon the happening of an Event of Default, shall have taken any
action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own
discretion or upon the written request of the holders of a majority in principal amount of the Bonds then
outstanding or, in the case of an Event of Default described in Section 7, 1 (d), upon the written request
of the Credit Bank, it shall have full power, in the exercise of its discretion for the best interests of the
holders of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise,
settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there
no longer continues an Event of Default hereunder, discontinue, withdraw, compromise or settle, or
otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it
a written request signed by the Credit Bank and by the holders of at least a majority in principal amount
of the Bonds outstanding hereunder opposing such discontinuance, withdrawal, compromise,
settlement or other disposal of such litigation.
Section 7.9. Limitation on Bondholders' Right to Sue. Subject to Sections 7.12 and 7.13
hereof, no holder 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 holder
shall have previously given to the Trustee written notice of the occurrence of an Event of Default
hereunder; (b) the holders of at least 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 holders shall have
tendered to the Trustee indemnity satisfactory to it 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 thirty (30) 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 holder of Bonds of any remedy hereunder;
it being understood and intended that no one or more holders of Bonds shall have any right in any
manner whatever by its 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
holders of the outstanding Bonds,
The right of any holder of any Bond to receive payment of the principal of (and premium, if
any) and interest on such Bond out of Revenues, as herein and therein provided, on and after the
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562518.2\24036,0004 -~-
respective due dates expressed in such Bond, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected without the consent of such
holder, notwithstanding the foregoing provisions of this Section or Section 7.8 or any other provision of
this Indenture.
Section 7.10. Limitation of Liability to Revenues. Notwithstanding anything in this
Indenture contained, the City shall not be required to advance any moneys derived from the proceeds of
taxes collected by the City, by the State of California or by any political subdivision thereof or from any
source of income of any of the foregoing other than the Revenues, for any of the purposes in this
Indenture mentioned, whether for the payment of the principal of or interest on the Bonds or for any
other purpose of this Indenture. The Bonds are lirnited obligations of the City, and are payable from
and secured by the Revenues only,
Section 7.11. Notice of Default. If a default occurs of which the Trustee is by Section 8.I(c)
hereof required to take notice or ifnotice of default be given as in said Section 8.I(c) provided, the
Trustee shall (i) immediately give telephonic notice thereof to the Borrower and the Credit Bank,
unless the Trustee received notice thereof from the Credit Bank, with written confirmation of such
notice to be mailed by first-class mail within three (3) Business Days thereafter, and (ii) within fifteen
(IS) days thereafter (unless such default is cured or waived), mail by first-class mail notice of such
default to each registered owner of Bonds then outstanding; provided that, except in the case of a
default in the payment of the principal of, premium, if any, or interest on any Bond, the Trustee may
withhold such notice to the Bondholders if and so long as the Trustee in good faith determines that the
withholding of such notice is in the interests of the Bondholders; and provided further that, in the case
of any default of the character specified in Section 7,1 (d), no such notice to the Bondholders shall be
given until at least thirty (30) days after notice thereof is received by the Trustee.
Section 7.12. Limitation on Defaults and Remedies. Notwithstanding anything herein to
the contrary in this Indenture, no Event of Default under Section 7. 1 (a) and (b) shall exist or occur
unless and until the Credit Bank shall fail to pay, when due and payable, any amount due and payable
under the Letter of Credit, and, until such time, if any, as the Credit Bank shall so fail to pay any such
amount, and the Trustee shall have made reasonably diligent efforts to contact the Credit Bank by
telephone or similar immediate means of communication to attempt to confirm that such failure has
occurred, neither the Trustee, the City nor the holders of the Bonds shall have the right or be permitted
to exercise any of the rights or remedies granted or permitted to anyone or more of them under this
Article VII; provided, however, that nothing in this Section 7.12 is intended or shall be construed to
affect the obligation of the Trustee pursuant to Section 5.5,
Section 7.13. Rights of the Credit Bank. Notwithstanding any other provision of this
Indenture, the rights and obligations of the Credit Bank, the City and the Trustee shall be governed by
the Intercreditor Agreement. The Credit Bank may at any time send the Trustee notice of the
occurrence of an event of default hereunder or under the Loan Agreement, the Credit Agreement or
any project loan documents, and the Trustee agrees to take no action following receipt of any such
notice unless and until the Trustee receives a request from the Credit Bank directing the Trustee to
pursue any of the rights or remedies provided for herein.
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562518.2'24036,0004 -~-
ARTICLE VIII
THE TRUSTEE AND AGENTS
Section 8.1. Duties, Immunities and Liabilities of Trustee, The Trustee shall, prior to an
Event ofDefau1t, and after the curing of all Events ofDefau1t which may have occurred, perform such
duties and only such duties as are specifically set forth in this Indenture, including the duty to draw on
the Letter of Credit as required by Section 5,5 hereof, and no additional covenants or duties of the
Trustee shall be implied in this Indenture, the Regu1atory Agreement, the Letter of Credit or otherwise.
The Trustee shall, during the existence of any Event of Defau1t (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 prudent trustees familiar with such matters wou1d exercise or use under similar
circumstances in the conduct of their own affairs.
No provision of this Indenture shall be construed to relieve the Trustee from liability for its own
negligent action or its own negligent failure to act, except that:
(a) Prior to such an Event of Defau1t hereunder and after the curing of all Events of
Defau1t which may have occurred, (I) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of
bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the
Trustee conforming to the requirements of this Indenture; but in the case of any such certificate or
opinion which by any provision hereof is specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or not it conforms to the
requirements of this Indenture;
(b) At all times, regardless of whether or not any Event of Defau1t shall exist, (1)
the Trustee shall not be liable for any error of judgment made in good faith by a responsible officer or
officers or by any agent or attorney of the Trustee appointed with due care unless the Trustee was
negligent in ascertaining the pertinent facts; and (2) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the direction of the Credit
Bank, accompanied by an opinion of Bond Counsel as provided herein or in accordance with the
directions of the holders of not less than a majority, or such other percentage as may be required
hereunder, in aggregate principal amoWlt of the Bonds at the time outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee WIder this Indenture;
(c) The Trustee shall not be required to take notice or be deemed to have notice of
(i) any default hereWlder or WIder the Loan Agreement, except defau1ts under Section 7, 1 (a), (b) or (c)
hereof, unless a responsible officer of the Trustee shall be specifically notified in writing of such defau1t
by the City, the Credit Bank or the owners of at least twenty-five percent (25%) in aggregate principal
amoWlt of all Bonds then outstanding, or (ii) any defau1t under the Regu1atory Agreement, including an
Acceleration Defau1t, unless a responsible officer of the Trustee shall be specifically notified in writing
of such defau1t by the City;
'g-C - C(7
562518.2\24036.0004 ~-
(d) Before taking any action under Article VII hereof or this Section. at the request
or direction of the Bondholders or the Credit Bank, the Trustee may require that a satisfactory
indemnity bond be furnished by the Bondholders or the Credit Bank, as the case may be, 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 default in connection with
any action so taken;
(e) Upon any application or request by the City to the Trustee to take any action
under any provision of this Indenture, the City shall furnish to the Trustee a Certificate of the City
stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, and an Opinion of Counsel stating that in the opinion of such Counsel
all such conditions precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents i6 specifically required by any
provision of this Indenture relating to such particular application or request, no additional certificate or
opinion need be furnished;
(I) The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder or under the Regulatory Agreement or the Loan Agreement either directly or through
agents or attorneys and the Trustee shall not be responsible for any negligence or misconduct on the
part of any agent or attorney appointed with due care by it hereunder;
(g) Neither the Credit Bank, the Remarketing Agent, the City, the Tender Agent
nor the Borrower shall be deemed to be agents of the Trustee for any purpose, and the Trustee shall not
be liable for any noncompliance of any of them in connection with their respective duties hereunder or
in connection with the transactions contemplated hereby;
(h) The Trustee shall be entitled to rely upon telephonic notice for all purposes
whatsoever so long as the Trustee reasonably believes such telephonic notice has been given by a
person authorized to give such notice;
(i) The immunities extended to the Trustee also extend to its directors, officers,
employees and agents;
(j) Under no circumstances shall the Trustee be liable in its individual capacity for
the obligations evidenced by the Bonds, it being the sole obligation of the Trustee to administer, for the
benefit of the Bondholders, the various funds and accounts established hereunder; and
(k) No permissive power, right or remedy conferred upon the Trustee hereunder
shall be construed to impose a duty to exercise such power, right or remedy,
None of the provisions contained in this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur individual financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers. Whether or not therein expressly so provided, every
provision of this Indenture, the Loan Agreement, the Regulatory Agreement, the Deed of Trust, the
Intercreditor Agreement or any other document relating to the conduct, powers or duties of, or
affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this
Article VIII,
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562518.2\24036.0004 -~
Section 8.2. Right of Trustee to Rely Upon Documents, Etc. Except as otherwise
provided in Section 8.1:
(a) The Trustee may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order,
bond or other paper or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) Any consent, demand, direction, election, notice, order or request of the City
mentioned herein shall be sufficiently evidenced by a Written Consent, Written Demand, Written
Direction, Written Election, Written Notice, Written Order or Written Request of the City, and any
resolution of the City may be evidenced to the Trustee by a Certified Resolution;
(c) The Trustee may consult with counsel (who may be counsel for the City,
counsel for the Trustee or Bond Counsel) and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered by it hereunder in good faith and
in accordance with the opinion of such counsel;
(d) Whenever in the administration of the trusts of 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, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by a Certificate of the City; and such Certificate of the City shall,
in the absence of negligence or bad faith on the part of the Trustee, be full warrant to the Trustee for
any action taken or suffered by it under the provisions of this Indenture upon the faith thereof; and
(e) The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the City, the Borrower and the Remarketing Agent (but with respect to
the Remarketing Agent, OIùY those books and records relating to the Bonds), personally or by agent or
attorney.
(f) In determining whether a petition in bankruptcy has been filed against the City
or the Borrower (or any general partner or guarantor of the Borrower), the Trustee may rely
conclusively upon a Certificate of the City or a certificate of the Borrower.
(g) The Trustee and the Tender Agent may conclusively rely on information
furnished by DTC in determining the identity and holdings of Direct Participants,
Section 8.3. Trustee Not Responsible for Recitals. The recitals contained herein and in
the Bonds shall be taken as the statements of the City, and the Trustee assumes no responsibility for the
correctness of the same or for the correctness of the recitals in the Loan Agreement or the Regulatory
Agreement The Trustee shall have no responsibility with respect to any information, statement or
recital in any offering memorandum or other disclosure material prepared or distributed with respect to
the Bonds. The Trustee makes no representations as to the value or condition of any assets pledged or
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562518.2\24036.0004 -~
assigned as security for the Bonds, or as to the right, title or interest of the City therein, or as to the
security provided thereby or by this Indenture, the Loan Agreement, the Deed of Trust or the Letter of
Credit, or as to the compliance of the Project with the Act or the Law, or as to the tax-exempt status of
the Bonds, or as to the technical or financial feasibility of the Project, or as to the validity or sufficiency
of this Indenture as an instrument of the City or of the Bonds as obligations of the City, The Trustee
shall not be accountable for the use or application by the City or the Remarketing Agent of any of the
Bonds authenticated or delivered hereunder or of the use or application of the proceeds of such Bonds
by the City or the Borrower or their agents,
Section 8.4. Intervention by Trustee. The Trustee may intervene on behalf of the
Bondholders in any judicial proceeding to which the City is a party and which, in the opinion of the
Trustee and its counsel, has a substantial bearing on the interests of owners of the Bonds and, subject
to the provisions of Section 8,l(d), shall do so if requested in writing by the owners of a majority in
aggregate principal amount of all Bonds then outstanding,
Section 8.5. Moneys Received by Trustee to be Held in Trust. All moneys received by
the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other funds except to the extent required by law
or as otherwise provided herein. Amounts drawn under the Letter of Credit and proceeds of any
remarketing of Bonds shall not be commingled with any other funds held by the Trustee hereunder.
The Trustee shall be under no liability for interest on any moneys received by it hereunder except such
as it may agree with the City to pay thereon. Any moneys held by the Trustee may be deposited by it in
its banking department and (excluding any moneys derived from a drawing on the Letter of Credit)
invested in Investment Securities.
Section 8.6. Compensation and Indemnification of Trustee and Agents. The Borrower
is required under the Loan Agreement (I) to pay, pursuant to Section 4.2(b) of the Loan Agreement, to
the Trustee from time to time reasonable compensation for all services rendered by it hereunder and
under the other agreements related to the Bonds to which it is a party (which compensation shall not be
limited by any provision oflaw in regard to the compensation of a trustee of an express trust); (2)
except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture or other agreement related to the Bonds to which the Trustee is a party
or incurred in complying with any request made by the City or Rating Agency with respect to the
Bonds (including the reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be adjudicated by a court of
competent jurisdiction to be attributable in whole or in part to its negligence or bad faith; (3) to
indemnify the Trustee for, and to hold it harnùess against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or duties hereunder or
other agreement to which the Trustee is a party; and (4) to indemnify the Trustee for any reasonable
fees incurred during a period of default hereunder, The Agents shall be entitled to reasonable
compensation for all services rendered by them as such Agents, and the Borrower is required under the
Loan Agreement to provide for payment or reimbursement of the Agents upon request for all expenses,
disbursements and advances incurred or made by the Agents in accordance with an of the provisions of
this Indenture (including the reasonable compensation and the expenses and disbursements of their
<i?~C- SO
562518.2124036.0004 \9-
counsel and of an persons not regularly in their employ) except any such expense, disbursement or
advance as may arise from their negligence or bad faith. If any property, other than cash, shan at any
time be held by the Trustee subject to this Indenture, or any supplemental indenture, as security for the
Bonds, the Trustee, if and to the extent authorized by a receivership, bankruptcy or other court of
competent jurisdiction or by the instrument subjecting such property to the provisions of this Indenture
as such security for the Bonds, shall be entitled but not obligated to make advances for the purpose of
preserving such property or of discharging tax liens or other prior liens or encumbrances thereon. The
rights of the Trustee and the Agents to compensation for services and to payment or reimbursement for
expenses, disbursements, liabilities and advances shall have and is hereby granted a lien and a security
interest prior to the Bonds in respect of all property and funds held or collected by the Trustee as such,
except funds held in trust by the Trustee for the benefit of the holders of particular Bonds, proceeds of
any drawing on the Letter of Credit and proceeds received from the remarketing of the Bonds, and
other Available Amounts held by the Trustee in the Bond Fund, all of which amounts shall be held
solely for the benefit of the Bondholders and used only for the payment of principal of and premium, if
any, and interest on the Bonds, The Trustee's rights to immurúties, indemnities and protection from
liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or
removal and final payment of the Bonds,
Section 8.7. Qualifications of Trustee, There shall at all times be a trustee hereunder
which shall be a corporation or banking association organized and doing business under the laws of the
United States or of a state thereof, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000, and subject to supervision or
examination by federal or state authority, If such corporation or banking association publishes reports
of condition at least annually, pursuant to law or to the requirements of any supervising or examining
authority above referred to, then for the purposes of this Section the combined capital and surplus of
such corporation or banking association 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 Action, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.8.
Section 8.8. Resignation and Removal of Trustee and Appointment of Successor
Trustee.
(a) The Trustee may at any time resign by giving written notice delivered to the
City and by giving written notice to the Bondholders by first class mail. Upon receiving such notice of
resignation, the City, with the consent of the Credit Bank and the Borrower (which consents shall not
be unreasonably withheld), shall promptly appoint a successor trustee by an instrument in writing. Ifno
successor trustee shall have been so appointed and have accepted appointment within forty-five (45)
days after the giving of such notice of resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any Bondholder who has been a
bona fide holder of a Bond for at least six months may, on behalf of itself and others similarly situated,
petition any such court for the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and may prescribe, appoint a successor trustee.
(b) In case at any time either (1) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.7 and shall fail to resign after written request therefor by
the City or by any Bondholder who has been a bona fide holder of a Bond for at least six (6) months, or
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5625t8.2124036.0004 -~c
(2) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, the City shall remove the Trustee and, upon such removal or upon
any removal pursuant to paragraph (c) of this Section 8.8, except as otherwise provided in said
paragraph (c), shall appoint (subject to the reasonable consent of the Borrower) a successor trustee by
an instrument in writing, or any such Bondholder may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment
of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and
may prescribe, remove the Trustee and appoint a successor trustee,
(c) The City, or if an Event of Default has occurred and is continuing, the holders
of a majority in aggregate principal amount of the Bonds at the time outstanding may at any time
remove the Trustee for just cause and may appoint a successor trustee, in each case with the approval
of the Borrower and the Credit Bank and by an instrument or concurrent instruments in writing signed
by the City or such Bondholders, as the case may be, and delivered to the Trustee, the Tender Agent,
the City, the Credit Bank and the Remarketing Agent.
(d) Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section shall become effective only upon acceptance of
appointment and assumption of duties by the successor trustee as provided in Section 8.9, and upon
transfer of the Letter of Credit to the successor Trustee.
Section 8.'9."" .. Acceptance of Trust by Successor Trustee. Any successor trustee appointed
as provided in Section 8.8 shall execute, acknowledge and deliver to the City and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become vested with and shall assume all the rights, powers, trusts, duties
and obligations of its predecessor in the trusts hereunder, with like effect as if originally named as
Trustee herein; but, nevertheless, on the Written Request of the City or the request of the successor
trustee, the trustee ceasing to act shall execute and deliver an instrument transferring to such successor
trustee, upon the trusts herein expressed, all the rights, powers and trusts of the trustee so ceasing to
act. Upon request of any such successor trustee, the City shall execute any and all instruments in
writing necessary or desirable for more fully and certainly vesting in and confirming to such successor
trustee all such rights, powers and duties. Any trustee ceasing to act shall, nevertheless, retain a lien
upon all property or funds held or collected by such trustee to secure the amounts due it as
compensation, reimbursement, expenses and indemnity afforded to it by Section 8.6.
No successor trustee shall accept appointment as provided in this Section 8,9 unless at the time
of such acceptance such successor trustee shall be eligible under the provisions of Section 8,7.
Upon acceptance of appointment by a successor trustee as provided in this Section, the City or
such successor trustee shall give Bondholders notice by first class mail of the succession of such
trustee to the trusts hereunder,
In the event of the appointment of a successor Trustee, the predecessor Trustee which has
resigned or been removed shall cease to be Trustee of the funds hereunder and bond registrar and
paying agent for the Bonds, and the successor Trustee shall become such trustee and shall accept such
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562518,2\24036.0004 -~-
other appointments as the trustee may hold, including the offices of bond registrar and paying agent
hereunder.
Section 8.10. Merger or Consolidation of Trustee, Any corporation or association into
which the Trustee may be merged or with which it may be consolidated, or any corporation'or
association resulting ITom any merger or consolidation to which the Trustee shall be a party, or any
corporation or association succeeding to the business of the Trustee, shall be the successor of the
Trustee hereunder without the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding, provided that such successor trustee
shall be eligible under the provisions of Section 8.7.
Section 8.11. Accounting Records and Reports. The Trustee shall keep proper books of
record and account in which complete and correct entries shall be made of all transactions relating to
the receipt, disbursement, allocation and application of the Revenues and the proceeds of the Bonds,
Such records and other information shall be open to inspection by the City, by the Borrower, by the
Credit Bank and by any Bondholder at any reasonable time on reasonable notice. The Trustee shall
furnish to the City and the Borrower regular reports on such dates and containing such information as
the City or the Borrower shall reasonably require, covering the activities and responsibilities of the
Trustee.
Section 8.12. Remarketing Agent. The City shall, at the direction of the Credit Bank with
the consent of the Credit Bank, appoint a Remarketing Agent for the Bonds, subject to the conditions
set forth in Section 8.13 hereof The Remarketing Agent initially appointed hereunder is PaineWebber
Incorporated, The Remarketing Agent shall designate to the Trustee its Principal Office and signify its
acceptance of the duties and obligations imposed upon it hereunder by execution of the Remarketing
Agreement The Remarketing Agent shall, and shall agree in the Remarketing Agreement to, do each
of the following:
(a) act as agent for the City in determining the Variable Rate and, if and as
necessary, the Reset Rate or the Fixed Rate, act as agent for Bondholders in receiving and holding
Bonds tendered for purchase and moneys to pay the Purchase Price thereof, and act as agent for the
Credit Bank in all matters related to Bank Bonds;
(b) notify the Trustee, the Credit Bank, the Borrower and the Tender Agent of the
Variable Rate determined in accordance with Section 2.2(b), the Reset Rate determined in accordance
with Section 2.2( c), and the Fixed Rate determined in accordance with Section 2.2( d), on the Variable
Interest Computation Date or other date required for such determination, each such notification to be in
writing or by telex or telecopier or other communication device which produces a written record
thereof, or by telephone confirmed within one Business Day by any such written communication; and
upon request by the City, submit copies of any such notices to the City;
(c) hold all moneys delivered to it hereunder for the purchase of Bonds in trust for
the benefit of the person which shall have so delivered such moneys until the Bonds purchased with
such moneys shall have been delivered to or for the account of such person, and not commingle such
moneys with other funds of the Remarketing Agent;
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562518,2\24036,0004 -~-
(d) keep such books and records with regard to the remarketing of the Bonds as
shall be consistent with prudent industry practice and make such books and records available for
inspection by the City, the Trustee and the Credit Bank at all reasonable times; and
(e) perform the duties and comply with the provisions set forth in Sections 8.13
through 8.16 hereof, inclusive.
Sertion 8.13. Qualifications of Remarketing Agent.
(a) The Remarketing Agent shall be a national banking association or a member of
the National Association of Securities Dealers, Inc., and authorized by law to perform all the duties
imposed upon it by this Indenture and the Remarketing Agreement
(b) The Remarketing Agent may at any time resign and be discharged of the duties
and obligations created by this Indenture by giving at least sixty (60) days' written notice to the City,
the Borrower, the Credit Bank, the Trustee and the Tender Agent, but any such resignation shall not be
effective until a successor is appointed and has accepted such appointment
(c) The Remarketing Agent may be removed at any time, and a successor
Remarketing Agent appointed at the direction of the Borrower with the approval of the Credit Bank
and the City, upon receipt by the Trustee of an instrument directing such removal and appointment,
signed by the Credit Bank, the Borrower and the City, and filed with the Remarketing Agent, the
Trustee and the Tender Agent Within thirty (30) days after receipt of such filing, the Trustee shall
confirm in writing to the successor Remarketing Agent, the Credit Bank, the Borrower and thè City
that such removal has been approved and the successor Remarketing Agent has been appointed, No
removal of the Remarketing Agent shall be effective until a successor is appointed and has accepted
such appointment
(d) In the event of the resignation or removal of the Remarketing Agent, the
Remarketing Agent shall pay over, assign and deliver any moneys and Bonds held by it in such
capacIty to Its successor,
Section 8.14. Remarketing of Bonds. Upon the receipt by the Rernarketing Agent of any
notice from the Tender Agent that any Bondholder (or Direct Participant, with respect to any Bonds in
"book-entry only" form pursuant to Section 2.9) has delivered a Tender Notice pursuant to Section 2.3
hereof, or upon receipt of any notice from the Trustee of Bonds deemed to have been tendered in
accordance with the provisions of Section 2.2(b), (c) or (d), the Remarketing Agent shall offer for sale
and use its best efforts to market the Bonds referred to in such Tender Notice or such notice from the
Trustee (which shall be deemed to be a Tender Notice as provided in Section 2.3) at a price of par plus
accrued interest to the Demand Date, in accordance with the Remarketing Agreement; provided,
however, that the Rernarketing Agent shall not offer for sale or sell such Bonds to the City, the
Borrower or any general partner or any guarantor of the Borrower, If any Bank Bonds exist and the
conditions to remarketing set forth in Section 4.6 have been satisfied, then such Bank Bonds shall be
rernarketed first The Remarketing Agent shall give telephonic notice, promptly confirmed in writing,
to the Trustee, the Tender Agent and the Credit Bank by 12:00 noon, New York City time, on each
Demand Date, including any Reset Date or Conversion Date (each, a "Remarketing Date") specifying
the names, addresses, and taxpayer idèntification numbers of the purchasers of, and the principal
amount and denominations of, such Bonds, if any, for which it has found purchasers as of such
'¿--C- 5<:(
562518.2\24<J36.DOO4 -~-
Remarketing Date, the Purchase Price at which the Bonds are to be sold (which shall be par plus
accrued interest to the Demand Date) and the Demand Date. The Remarketing Agent shall instruct
such purchasers to deliver to it, no later than 11:30 am., New York City time, on the Demand Date, in
same day funds, the amount required to purchase such Bonds. Upon receipt by the Remarketing Agent
of such amount from such purchasers, the Remarketing Agent will give written instructions to the
Tender Agent, as co-authenticating agent, to transfer the registered ownership of the Bonds to the
respective purchasers, and to deliver such Bonds to such purchasers, The Tender Agent shall hold all
Bonds delivered to it in trust for the benefit of the respective Bondholders which shall have so
delivered such Bonds until moneys representing the purchase price of such Bonds shall have been
delivered to or for the account of or to the order of such Bondholders. The Remarketing Agent shall
remit the Purchase Price of such Bonds to the Tender Agent, no later than 11 :30 a,m., New York City
time, on the Demand Date, and the Tender Agent shall remit the Purchase Price of such Bonds to the
tendering Bondholder or Bondholders entitled to the same as provided in Section 2.3. In the event that
any purchaser which shall have been identified by the Remarketing Agent to the Trustee and the
Tender Agent shall fail to pay the Purchase Price for any Bonds prior to 11:30 a,m., New York City
time, on the Demand Date, the Remarketing Agent shall not be obligated to accept delivery of such
amount after such time. The Remarketing Agent will immediately notify the Trustee, the Credit Bank
and the Tender Agent of any such failure to receive the Purchase Price for such Bonds, Two Business
Days prior to the Demand Date and on the Demand Date (including any Reset Date or the Conversion
Date), the Tender Agent shall notify the Trustee, the Credit Bank and the Remarketing Agent of the
amount of funds held by the Tender Agent as ofl1:30 a.m., New York City time, on each such date
constituting the Purchase Price of the Bonds remarketed by the Remarketing Agent. The Tender Agent
shall hold all moneys ¡:Ielivered to it for the purchase of Bonds in trust in a non-commingled account for
the benefit of the person or entity which shall have so delivered such moneys until the Bonds purchased
with such moneys shall have been delivered to or for the account of such person, The City and the
Borrower shall not have any right, title or interest in such monies,
Notwithstanding the provisions of the foregoing paragraph, in the event any Bond to be
tendered for purchase to the Trustee under this Section 8.14 on March 1, 1995 shall not be remarketed
by the Remarketing Agent, such failure to remarket confirmed by the Remarketing Agent to the
Trustee by telex, telephonic or telegraphic notice, or the Purchase Price of any such Bond shall not
have been received by the Trustee on or prior to 11 :30 a.m., New York City time on the Demand Date,
the Trustee shall promptly give notice to the Bondholders of such failure to remarket the Bonds or such
failure to receive such Purchase Price, and the Trustee shall forthwith declare an Event of Default to
have occurred under Section 7.1(c) and shall proceed to accelerate the Bonds and immediately draw
upon the Letter of Credit in accordance with Section 5.5 hereof and the provisions of the Letter of
Credit.
The City, the Borrower or any partner or any guarantor of the Borrower may not purchase any
Bonds, from the Remarketing Agent or otherwise.
Section 8.15. Purchase of Bonds Not Remarketed. Subject to Section 8.14 hereof, Bonds
tendered for purchase on March 1,1995 shall be purchased only from the proceeds of the remarketing
of the Bonds as set forth above and from amounts on deposit in the Reserve Fund and shall not be
subject to purchase from the proceeds of draw on the Letter of Credit. Subsequent to March 1, 1995, in
the event that the proceeds ofremarketing of any Bond in respect of which a Tender Notice has been
given have not been received by the Tender Agent on or prior to 11:30 a,m" New York City time, two
??-c -55
562518,2\24036,0004 -5\-
Business Days prior to the Demand Date, the Trustee shall, within the time required by Section 5,6
hereof, draw on the Letter of Credit in an amount sufficient to enable the Tender Agent to pay the
Purchase Price of such Bond, On each Demand Date, the Trustee shall pay to the Tender Agent, but
only ITom amounts drawn under the Letter of Credit, the Purchase Price of any Bonds for which it has
received a Tender Notice and which have not been remarketed pursuant to Section 8.14 hereof or
arrange to have such amounts drawn under the Letter of Credit to be paid directly to the Tender Agent.
Upon receipt of such Purchase Price and upon receipt of the Bonds tendered for purchase pursuant to
Section 2.3 hereof, the Tender Agent shall pay such Purchase Price to the registered owners thereof;
provided that, if the Bonds are Bank Bonds, the Tender Agent shall pay such amount to the Credit
Bank. Any amounts drawn under the Letter of Credit to purchase Bonds shall be used solely for such
purpose, Any Bonds so purchased with amounts drawn under the Letter of Credit by the Trustee shall
be Bank Bonds. Amounts drawn under the Letter of Credit which are not used to purchase Bonds
pursuant to this Section 8.15, shall be remitted by the Trustee or the Tender Agent to the Credit Bank
promptly upon payment of the Purchase Price of the Bonds.
Section 8.16. Delivery of Purchased Bonds,
(a) Bonds remarketed by the Remarketing Agent pursuant to Section 8.14 hereof
shall be cancelled by the Tender Agent and new Bonds in a like aggregate principal amount shall be
registered by the Trustee in the names and shall be in the denominations set forth in the written notice
given to the Trustee and the Tender Agent by the Remarketing Agent pursuant to Section 8.14 hereof,
and the Tender Agent shall deliver such Bonds to the purchasers thereof at the written direction of the
Remarketing Agent and shall promptly notify the Trustee in writing of such cancellation and delivery.
(b) Bonds purchased for the account of the Credit Bank pursuant to Section 8.15
hereof shall be registered by the Trustee in the name of the Credit Bank and shall be delivered by the
Tender Agent to the Credit Bank as required by the Credit Agreement. So long as any Bonds are
registered in the name of the Credit Bank or its nominee, the Borrower or its nominee or the City or its
nominee, such Bonds shall be subordinate as to principal to all other Bonds outstanding hereunder and
may not be tendered for purchase pursuant to Section 2.3 hereof. Subject to the terms of Section
4. 6( d) hereof, the Remarketing Agent shall, however, continue its efforts to remarket Bank Bonds on
behalf of the Credit Bank and such Bank Bonds shall be remarketed before any other Bonds are
remarketed,
(c) Notwithstanding any other provisions hereof, neither the Trustee nor the
Tender Agent shall deliver Bonds purchased with the proceeds of a draw on the Letter of Credit to a
new purchaser following a remarketing of such Bonds until the Trustee has received written
notification ITom the Credit Bank that the Letter of Credit has been reimbursed by an amount sufficient
to cover principal and interest on such Bonds in the amounts required by Section 5,8(a)(3) of the Loan
Agreement.
Section 8.17. Tender Agent. The Trustee on behalf of the City shall appoint the Tender
Agent for the Bonds, subject to the conditions set forth in Section 8.18 hereof. The Tender Agent
initially appointed hereunder shall be the Trustee, The Tender Agent shall designate to the Trustee its
Principal Office and signify its acceptance of the duties and obligations imposed upon it hereunder by a
written instrument of acceptance delivered to the City, the Credit Bank, the Trustee and the
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562518.2'24036.0004 -~-
Remarketing Agent Wlder which the Tender Agent aclmowledges its qualifications and authority to act
as Tender Agent Wlder this Indenture and agrees, particularly, as follows:
(I) The Tender Agent shall, upon receipt of a Tender Notice from any Bondholder (or
Direct Participant, with respect to a Bond in "book-entry only" form pursuant to Section 2.9), give
prompt telephonic notice thereof to the Trustee and the Remarketing Agent, specifying the amoWlt of
Bonds to be purchased and the Demand Date, and shall, not later than the following Business Day,
confirm such telephonic notice in writing and deliver to the Remarketing Agent, the Trustee and the
Credit Bank a copy of such Tender Notice.
(2) On each Demand Date, the Tender Agent shall give the Remarketing Agent, the Credit
Bank and the Trustee telephonic notice, confirmed in writing by the following Business Day, of the
principal amoWlt of Bonds delivered pursuant to Section 2.3,
(3) The Tender Agent shall hold all Bonds delivered to it pursuant to Section 2.3 in trust
for the benefit of the respective Bondholders which shall have so delivered such Bonds Wltil such
Bonds are required by this Indenture to be delivered to the respective purchasers thereof
(4) The Tender Agent shall cancel all Bonds for which it has received written notice of
remarketing from the Remarketing Agent and shall authenticate new Bonds in a like aggregate
principal amoWlt in the names and in the denominations set forth in the written notice given to the
Tender Agent by the Remarketing Agent pursuant to Section 8.14 hereof.
(5) The Tender Agent shall deliver Bonds to the purchasers thereof in accordance with
Section 8,16 hereof The Tender Agent shall remit the Purchase Price of tendered Bonds to the
tendering Bondholders in accordance with Section 8,14 hereof
(6) The Tender Agent shall deliver to the Trustee all tendered Bonds cancelled.
(7) The Tender Agent shall keep such books and records as shall be consistent with
prudent industry practice and shall make such books and records available for inspection by the City,
the Trustee and the Credit Bank at all reasonable times.
Section 8.18. -Qualifications of Tender Agent. The Tender Agent shall be a commercial
bank or trust company with a principal office in New York, New York, having a capitalization of at
least $25,000,000 and authorized by law to perform all the duties imposed upon it by this Indenture;
provided that, in any event, the Trustee may serve as the Tender Agent so long as the Bonds are in
"book-entry only" form pursuant to Section 2.9. The Tender Agent shall be an affiliate of the Trustee
unless the Trustee has no affiliate meeting the requirements of the first sentence of this Action, in
which case the selection of the Tender Agent shall be subject to the approval of the Credit Bank and the
Borrower.
The Tender Agent may at any time resign and be discharged by giving at least sixty (60) days'
notice to the Trustee, the City, the Borrower and the Credit Bank, The Tender Agent may be removed
at any time, with the approval of the Credit Bank and the Borrower, by an instrument signed by the
Trustee and filed with the Tender Agent, the Remarketing Agent and the City,
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In the event of the resignation or removal of the Tender Agent, the Tender Agent shall pay
over, assign and deliver any moneys and Bonds held by it in such capacity, and shall deliver all books
and records relating thereto, to its successor or, if there be no successor, to the Trustee.
In the event that the Trustee on behalf of the City shall fail to appoint a Tender Agent
hereunder, or in the event that the Tender Agent shall resign or be removed, or be dissolved, or if the
property or affairs of the Tender Agent shall be taken under the control of any state or federal court or
administrative body because of bankruptcy or insolvency, or for any other reason, and the Trustee shall
not have appointed its successor as Tender Agent, the Trustee, notwithstanding the provisions of the
first paragraph of this Section 8.18, shall be deemed to be the Tender Agent for all purposes of this
Indenture until the appointment by the Trustee of the Tender Agent or a successor Tender Agent, as the
case may be, notwithstanding the fact that the Trustee may not meet the qualifications set forth in the
first paragraph of this Section 8.18. The Tender Agent shall pay to tendering Bondholders the Purchase
Price of any Bonds for which it has received a Tender Notice and which have not been remarketed
pursuant to Section 8, 1B hereof, but solely ITom amounts received ITom the Trustee pursuant to a draw
under the Letter of Credit; and the Tender Agent shall pay to tendering Bondholders the Purchase Price
of any Bonds for which it has received aT ender Notice and which have been remarketed pursuant to
Section 8.14 hereof, but solely ITom amounts received ITom the Remarketing Agent.
Insofar as such provisions may be applicable, the Tender Agent shall enjoy the same protective
provisions in the performance of its duties hereunder as are specified in Sections 8.1(a), (b), (t) and (b),
8.2,8.3 and 8,6(3), with respect to the Trustee. The Tender Agent shall perform such duties, and only
such duties, as are specifically set forth in this Indenture and the Agreement and no implied covenants
shall be read into this Indenture or the Agreement against the Tender Agent.
Section 8.19. Dealing in Bonds. The Credit Bank, the Trustee, the Tender Agent or the
Remarketing Agent, in its individual capacity, may each in good faith buy, sell, own, hold and deal in
any of the Bonds, and may join in any action which any Bondholder may be entitled to take with like
effect as if it did not act in any capacity hereunder. The Trustee, the Tender Agent, the Credit Bank or
the Remarketing Agent, in its individual capacity, either as principal or agent, may also engage in or be
interested in any financial or other transaction with the City or the Credit Bank, and may act as
depository, trustee or agent for any committee or body of Bondholders secured hereby or other
obligations of the City as ITeely as if it did not act in any capacity hereunder. It is expressly understood
that the Trustee and the Tender Agent in carrying out their respective duties hereunder shall each be
acting as a conduit with respect to deliveries of Bonds for purchase and purchases pursuant to
Section 2.3 hereof
Section 8.20. Notice of Resignation or Removal. Notwithstanding any other provision of
this Article VllI, notice of any resignation or removal of the Trustee, Co-Trustee, Paying Agent, Co-
Paying Agent, Remarketing Agent, Tender Agent, Co-Authenticating Agent or Co-Transfer Agent
must be provided by any such entities to the Credit Bank and the Borrower. In addition, no successor
shall be appointed without the Credit Bank's consent. A copy of any instrument of acceptance
executed by any such entity shall be delivered to the Credit Bank, In addition, to the extent any such
entity is required to keep books and records pursuant to this Indenture, the Credit Bank shall have the
right to inspect such books and records on the terms and conditions provided herein for any other party.
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ARTICLE IX
MODIFICATION OF INDENTURE
Section 9.1. Modification of Indenture without Consent of Bondholders, The City and
the Trustee, from time to time and at any time, subject to the conditions and restrictions in this
Indenture contained, may enter into an indenture or indentures supplemental hereto, which indenture or
indentures thereafter shall fonn a part hereof, for anyone or more of the following purposes:
(a) to add to the covenants and agreements of the City in this Indenture contained,
other covenants and agreements thereafter to be observed, or to assign or pledge additional security for
the Bonds, or to surrender any right or power herein reserved to or conferred upon the City; provided
that no such covenant, agreement, assignment, pledge or surrender shall materially adversely affect the
interests of the holders of the Bonds;
(b) to evidence the succession of a new Trustee hereWIder, or to provide for the
appointment of a co-trustee or for a paying agent in addition to the Trustee;
(c) to make such provisions for the purpose of curing any ambiguity, inconsistency
or onússion, or of curing, correcting or supplementing any defective provision contained in this
Indenture, or in regard to matters or questions arising WIder this Indenture, as the City may deem
necessary or desirable and not inconsistent with this Indenture and which shall not materially adversely
affect the interests of the holders of the Bonds;
(d) to provide for the issuance of coupon bonds or to provide for the use of a book-
entry system; provided, however, that the City and the Trustee shall have received an opinion of Bond
Counsel to the effect that issuance of the Bonds in coupon fonn or the use of a book-entry system,
respectively, complies with all applicable laws and will not adversely affect the exclusion of interest on
the Bonds from gross income for federal income tax purposes;
(e) to modifY, amend or supplement this Indenture or any indenture supplemental
hereto in such manner as to permit the qualification hereof or thereof WIder the Trust Indenture Act of
1939, as amended, or any sinúlar federal statute hereafter in effect, and, if they so determine, to add to
this Indenture or any indenture supplemental hereto such other tenns, conditions and provisions as may
be permitted by said Trust Indenture Act of 1939, as amended, or sinúlar federal statute, and which
shall not materially adversely affect the interests of the holders of the Bonds;
(1) to make such additions, deletions or modifications as may be necessary to
assure compliance with section 142(d), 148(d)(3) or 148(t) of the Code, or
(g) otherwise to assure the exclusion from gross income WIder federal tax law of
interest on the Bonds; or
(h) to modify, alter, amend or supplement this Indenture in any other respect,
including amendments which would otherwise be described in Section 9,2 hereof, if notice of the
proposed supplemental indenture is given to Bondholders (in the same manner as notices of
redemption are given) at least thirty (30) days before the effective date thereof and, on or before such
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effective date, the Bondholders have the right to demand purchase of their Bonds pursuant to
Section 2,3 hereof
Any supplemental indenture authorized by the provisions of this Section may be executed by
the City and the Trustee without the consent of or, except in the case of clause (g) above, notice to the
holders of any of the Bonds at the time outstanding, notwithstanding any of the provisions of
Section 9.2, but (i) the Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise; (ii) the
Trustee shall not enter into any such supplemental indenture which affects the rights or obligations of
the Borrower hereunder or under the Agreement without first obtaining the written consent of the
Borrower; and (iii) the Trustee shall not enter into any supplemental indenture without first obtaining
the written consent of the Credit Bank, except as required in the opinion of Bond Counsel to maintain
the exclusion from gross income for federal income tax purposes of interest on the Bonds, in which
case the Trustee shall give prior notice thereof to the Credit Bank.
Section 9.2. Modification of Indenture with Consent of Bondholders. With the prior
written consent of the Credit Bank and the consent of the holders of not less than sixty percent (60%) in
aggregate principal amount of the Bonds at the time outstanding, evidenced as provided in
Section 11.8, the City and the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of any supplemental indenture; provided,
however, that, except to the extent permitted by Section 9,1, no such supplemental indenture shall (1)
extend the fixed maturity of any Bond or reduce the rate of interest thereon or extend the time of
payment of interest, or reduce the amount of the principal thereof, or reduce any premium payable on
the redemption thereof, without the consent of the holder of each Bond so affected, or (2) reduce the
aforesaid percentage of holders of Bonds whose consent is required for the execution of such
supplemental indentures, or permit the creation of any lien on the Revenues prior to or on a parity with
the lien of this Indenture, except as permitted herein, or permit the creation of any preference of any
Bondholder over any other Bondholder or deprive the holders of the Bonds of the lien created by this
Indenture upon the Revenues, or impair the right of the owners of Bonds to demand purchase thereof
pursuant to Section 2.3 hereof, without in each case the consent of the holders of all the Bonds then
outstanding. Nothing in this paragraph shall be construed as making necessary the approval of any
Bondholder of any supplemental indenture permitted by the provisions of Section 9,1. Upon receipt by
the Trustee of a Certified Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Bondholders, as aforesaid, the Trustee
shall join with the City in the execution of such supplemental indenture, unless (i) such supplemental
indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental
indenture; (ii) such supplemental indenture affects the rights or obligations of the Borrower hereunder
or under the Loan Agreement, in which case the Trustee shall enter into such supplemental indenture
only if the Trustee has received the Borrower's written consent thereto; or (iii) such supplemental
Indenture affects the rights or obligations of the Tender Agent hereunder, in which case the Trustee
shall enter into such supplemental indenture only if the Trustee has received the Tender Agent's written
consent thereto.
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562518,2'24036.0004 -öz-
It shall not be necessary for the consent of the Bondholders under this Section to approve the
particular fonn of any proposed supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof
Promptly after the execution by the City and the Trustee of any supplemental indenture
pursuant to the provisions of this Section, the Trustee shall give Bondholders, by first class mail, a
notice setting forth in general terms the substance of such supplemental indenture, Any failure of the
Trustee to give such notice, or any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
Section 9.3. Effect of SupplementaJ Indenture, Upon the execution of any supplemental
indenture pursuant to the provisions of this Article IX, this Indenture shall be and be deemed to be
modified and amended in accordance therewith, and the respective rights, duties and obligations under
this Indenture of the City, the Trustee, the Credit Bank and all holders of outstanding Bonds shall
thereafter be detennined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such supplemental indenture
shall be part of the tenns and conditions of this Indenture for any and all purposes.
Section 9.4. Opinion of Counsel as to SupplementaJ Indenture. Subject to the
provisions of Section 8.1, the Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel as conclusive evidence that any supplemental indenture executed
pursuant to the provisions of this Article IX is authorized and permitted by this Indenture.
Section 9.5. Notation of Modification on Bonds; Preparation of New Bonds. Bonds
authenticated and delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article IX may bear a notation, in fonn approved by the Trustee and the City as to
any matter provided for in such supplemental indenture, and if such supplemental indenture shall so
provide, new Bonds, so modified as to conform, in the opinion of the Trustee and the City, to any
modification of this Indenture contained in any such supplemental indenture, may be prepared by the
City, authenticated by the Trustee and delivered without cost to the holders of the Bonds then
outstanding, upon surrender for cancellation of such Bonds in equal aggregate principal amounts.
Section 9.6. Notice to Rating Agency, The Trustee shall give to any Rating Agency which
maintains a rating on the Bonds notice of any amendment made to this Indenture or the Letter of Credit
or the tennination, renewal or expiration of the Letter of Credit, notice of any amendment made to the
Loan Agreement or the Credit Agreement with the knowledge of the Trustee, notice of any pledge of
additional collateral to the Credit Bank known to the Trustee, notice of any extraordinary redemptions
or any redemption or defeasance or purchase of all of the Bonds, notice of any Reset Period or
Conversion, and notice of any successor Trustee or Tender Agent hereunder or any successor
Remarketing Agent.
ARTICLE X
DEFEASANCE
Section 10.1. Discharge of Indenture. Subsequent to Conversion, if the entire indebtedness
on all Bonds outstanding shall be paid and discharged in anyone or more of the following ways:'
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(a) by the payment of the principal of (including redemption premium, if any) and
interest on all Bonds outstanding; or
(b) by the deposit or credit to the accOtmt of the Trustee, in trust, at or before
maturity, of money or securities in the necessary amount (as provided in' Section 10.4) to payor
redeem Bonds outstanding, whether by redemption or otherwise; or
(c) by the delivery to the Trustee, for cancellation by it, of all Bonds outstanding;
and if all other sums payable hereunder by the City shall be paid and discharged, then and in that case
this Indenture shall cease, terminate and become null and void, except only as provided in Sections 2.4,
2,5,3,5,5.6,6.8,8.6 and 10,2 hereof, and thereupon the Trustee shall, upon Written Request of the
City, and upon receipt by the Trustee of a Certificate of the City and an Opinion of Counsel, each
stating that in the opinion of the signers all conditions precedent to the satisfaction and discharge of this
Indenture have been complied with, and with respect to the Opinion of Counsel that amounts applied or
to be applied to the payment of the Bonds are Available Amounts, forthwith execute proper
instruments acknowledging satisfaction of and discharging this Indenture. The fees, expenses and
charges of the Trustee and the Tender Agent (including reasonable counsel fees) must be paid in order
to effect such discharge. The satisfaction and discharge of this Indenture shall be without prejudice to
the rights of the Trustee to charge and be reimbursed by the Borrower for any expenditures which it
may thereafter incur in connection herewith.
The City or the Borrower may at any time surrender to the Trustee for cancellation by it any
Bonds previously authenticated and delivered which the City or the Borrower lawfully may have
acquired in any manner whatsoever, and such Bonds upon such surrender and cancellation shall be
deemed to be paid and retired.
Any Bank Bonds shall be deemed paid and shall no longer be considered Outstanding when the
Credit Bank returns such Bank Bonds to the Trustee, together with a request that the Trustee cancel
such Bank Bonds and notice from the Credit Bank that such Bank Bond has been paid or that the
Credit Bank has forgiven payment of such Bank Bond.
Section 10.2. Discharge of Liability on Bonds, Upon the deposit with the Trustee, in trust,
at or before maturity, of money or securities in the necessary amount (as provided in Section 10.4) to
payor redeem outstanding Bonds (whether upon or prior to their maturity or the redemption dàte of
such Bonds) provided that, if such Bonds are to be redeemed prior to the maturity thereof, notice of
such redemption shall have been given as in Article N provided or provision satisfactory to the Trustee
shall have been made for the giving of such notice, all liability of the City in respect of such Bonds shall
cease, terminate and be completely discharged, except only that thereafter the holders thereof shall be
entitled to payment by the City, and the City shall remain liable for such payment, but only out of the
money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the
provisions of Section 10.3.
Section 10.3. Payment of Bonds after Discharge of Indenture. Notwithstanding any
provisions of this Indenture, any moneys deposited with the Trustee or any paying agent in trust for the
payment of the principal of, or interest or premium on, any Bonds remaining unclaimed for two (2)
years after the principal of all the outstanding Bonds has become due and payable (whether at maturity
or upon call for redemption or by declaration as provided in this Indenture), shall then be paid to the
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562518.2'24036,0004 -~-
, City, and the holders of such Bonds shall thereafter be entitled to look amy to the City for payment
thereof, and amy to the extent of the amount so paid to the City, and all liability of the Trustee or any
paying agent with respect to such moneys shall thereupon cease, In the event of the payment of any
such moneys to the City as aforesaid, the holders of the Bonds in respect of which such moneys were
deposited shall thereafter be deemed to be unsecured creditors of the City for amounts equivalent to the
respective amounts deposited for the payment of such Bonds and so paid to the City (without interest
thereon),
Section 10.4. Deposit of Money or Securities with Trustee. Whenever in this Indenture it
is provided or permitted that there be deposited with or credited to the account of or held in trust by the
Trustee money or securities in the necessary amount to payor redeem any Bonds, the money or
securities so to be deposited or held shall be Available Amounts constituting:
(a) lawful money of the United States of America in an amount equal to the
principal amount of such Bonds and all unpaid interest thereon to maturity, except that; in the case of
Bonds which are to be redeemed prior to maturity and in respect of which there shall have been
furnished to the Trustee proof satisfactory to it that notice of such redemption on a specified
redemption date has been dilly given or provision satisfactory to the Trustee shall be made for such
notice, the amount so to be deposited or held shall be the principal amount of such Bonds and interest
thereon to the redemption date, together with the redemption preITÚum, if any; or
(b) noncallable direct obligations of the United States of America or obligations
which as to principal and interest constitute full faith and credit obligations of the United States of
America, in such amounts and maturing at such times that the proceeds of said obligations received
upon their respective maturities and interest payment dates, without further reinvestment, will provide
funds sufficient, in the opinion of a nationally recognized firm of certified public accountants, to pay the
principal, preITÚurn, if any, and interest to maturity, or to the redemption date, as the case may be, with
respect to all of the Bonds to be paid or redeemed, as such principal, preITÚum and interest become
due; provided that the Trustee shall have been irrevocably instructed by the City to apply the proceeds
of said obligations to the payment of said principal, preITÚum, if any, and interest with respect to such
Bonds,
ARTICLE XI
MISCELLANEOUS
Section 11.1. Successors of City. All the covenants, stipuIations, proITÚses and agreements
in this Indenture contained, by or on behalf of the City, shall bind and inure to the benefit of its
successors and assigns, whether so expressed or not If any of the powers or duties of the City shall
hereafter be transferred by any law of the State of California, and if such transfer shall relate to any
matter or thing permitted or required to be done under this Indenture by the City, then the body or
official who shall succeed to such powers or duties shall act and be obligated in the place and stead of
the City as in this Indenture provided,
Section 11.2. Limitation of Rights to Parties and Bondholders. Nothing in this Indenture
or in the Bonds expressed or implied is intended or shall be construed to give to any person other than
the City, the Trustee, the Borrower, the Credit Bank, the Agents and the holders of the Bonds issued
hereunder any legal or equitable right, remedy or claim under or in respect of this Indenture or any
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562518.2\24036,0004 -6~
covenant, condition or provision therein or herein contained; and all such covenants, conditions and
provisions are and shall be held to be for the sole and exclusive benefit of the City, the Trustee, the
Borrower, the Credit Bank, the Agents and the holders of the Bonds issued hereunder.
Section 11.3. Waiver of Notice, Whenever in this Indenture the giving of notice by mail or
otherwise is required, the giving of such notice may be waived in writing by the person entitled to
receive such notice and in any such case the giving or receipt of such notice shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
Section 11.4. Destruction of Bonds, Whenever in this Indenture provision is made for the
cancellation by the Trustee and the delivery to the City of any Bonds, the Trustee shall, in lieu of such
cancellation and delivery, destroy such Bonds upon receipt of the written instructions of the City and
deliver a certificate of such destruction to the City. Any destruction of the Bonds shall, upon Written
Request of the City, be done in the presence of an officer of the City.
Section 11.5. Separability of Invalid Provisions. In case anyone or more of the provisions
contained in this Indenture or in the Bonds shall for any reason be held to be invalid, i1!egal or
unenforceable in any respect, such invalidity, i1!egality or unenforceability shall not affect any other
provision of this Indenture, but this Indenture shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein.
Section 11.6. Notices. It shall be sufficient service of any notice, request, complaint, demand
or other paper on the City, the Administrator, the Trustee, the Tender Agent, the Credit Bank, the
Remarketing Agent, the Administrator or the Borrower if the same shall, except as otherwise provided
herein, be dilly mailed by first class mail, postage prepaid, or given by telephone or telecopier and
confinned by such mail, and to the other parties as follows:
The City: City ofChwa Vista
276 4th Avenue
Chwa Vista, California 91910
The Trustee: First Interstate Bank of California
Corporate Trust Department Wll-l
707 Wilshire Bowevard
Los Angeles, California 90017
The Credit Bank: The Industrial Bank of Japan
800 West 6th Street, Suite 1500
Los Angeles, California 90017
The Remarketing Agent: Paine Webber Incorporated
100 California Street, 12th Floor
San Francisco, California 94111
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362318.2\24036,0004 -~
The Tender Agent: First Interstate Bank of California
Corporate Trust Department Wl1-1
707 Wilshire Boulevard
Los Angeles, California 90017
The Borrower: Terra Nova Associates
c/o Patrick Development, Ltd.
2445 Fifth Avenue, Suite 400
San Diego, California 92101
A duplicate copy of each notice, certificate or other communication given hereunder by the City
or the Trustee to the other shall be given to the Tender Agent and the Credit Bank. The City, the
Administrator, the Trustee, the Tender Agent, the Credit Bank, the Remarketing Agent and the
Borrower may, by notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
Notwithstanding the foregoing provisions of this Section 11.6, the Trustee shall not be deemed
to have received, and shall not be liable for failing to act upon the contents of, any notice unless and
until the Trustee actually receives such notice.
Section 11.7. Authorized Representatives, Credit Bank May Act for Borrower,
Whenever under the provisions of this Indenture the approval of the City, the Credit Bank or the
Borrower is required for any action, and whenever the City, the Credit Bank or the Borrower is
required to deliver any notice or other writing, such approval or such notice or other writing shall be
given, respectively, on behalf of the City by the Authorized City Representative or on behalf of the
Credit Bank by the Authorized Bank Representative or on behalf of the Borrower by the Authorized
Borrower Representative, and the City, the Trustee, the Credit Bank and the Borrower shall be
authorized to act on any such approval or notice or other writing and neither party hereto nor the Credit
Bank nor the Borrower shall have any complaint against the others as a result of any such action taken.
In designating its Authorized Bank Representative, the Credit Bank shall have the right to provide
specific instructions to the Trustee in relation to the action which any of such Authorized Bank
Representatives is authorized to take as a representative of the Credit Bank under this Indenture.
Following receipt of a notice from the Credit Bank of the existence and continuation of a
default by the Borrower under the Credit Agreement and of the Credit Bank's election to do so, the
Trustee shall recognize any request notice, approval or other action of the Credit Bank instead of the
request, notice, approval or other action of the Borrower relating to requests, notices, approvals or
other actions which the Borrower is" entitled to take under this Indenture. All of such rights of the
Borrower hereunder may be exercised by the Credit Bank upon receipt of such notice by the Trustee;
provided, however, the Credit Bank shall not be deemed to have assumed the obligations of the
Borrower under this Indenture, the Loan Agreement, the Regulatory Agreement or any other
document, certification or other instrument relating to the Bonds by reason of such notice or the
exercise of such rights,
Section 11.8. Evidence of Rights of Bondholders,
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562518,2\24036.0004 -~-
(a) Any request, consent or other instrument required by this Indenture to be
signed and executed by Bondholders may be in any number of concurrent writings of substantially
similar tenor and may be signed or executed by such Bondholders in person or by agent or agents duly
appointed in writing. Proof of the execution of any such request, consent or other instrument or of a
writing appointing any such agent, or of the ownership of any Bonds, shall be sufficient for any purpose
of this Indenture and shall be conclusive in favor of the Trustee and of the City if made in the manner
provided in this Section,
(b) The fact and date of the execution by any person of any such request, consent
or other instrument or writing may be proved by the affidavit of a witness of such execution or by the
certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take
acknowledgments of deeds, certifying that the person signing such request, consent or other instrument
or writing acknowledged to him the execution thereof.
(c) The ownership of Bonds shall be proved by the Bond register maintained
pursuant to Section 2,6 hereof. The fact and the date of execution of any request, consent or other
instrument and the amount and distinguishing numbers of Bonds held by the person so executing such
request, consent or other instrument may also be proved in any other manner which the Trustee may
deem sufficient. The Trustee may nevertheless, in its discretion, require further proof in cases where it
may deem further proof desirable.
(d) Any request, consent or vote of the holder of any Bond shall bind every future
holder of the same Bond and the holder of any Bond issued in exchange therefor or in lieu thereof, in
respect of anything done or suffered to be done by the Trustee or the City in pursuance of such request,
consent or vote.
(e) In determining whether the holders 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 by the City or by any other direct or indirect obligor on the Bonds, or by any
person directly or indirectly controlling or controlled by, or under direct or indirect common control
with, the City or any other direct or indirect obligor on the Bonds, shall be disregarded and deemed not
to be outstanding for the purpose of any such detennination, provided that, for the purpose of
determining whether the Trustee shall be protected in relying on any such demand, reqùest, direction,
consent or waiver, only Bonds which the Trustee knows to be so owned shall be disregarded. Bonds so
owned which have been pledged in good faith may be regarded as outstanding for the purposes of this
subsection (e) if the pledgee shall establish to the satisfaction of the Trustee and the City the pledgee's
right to vote such Bonds and that the pledgee is not a person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the City or any other direct or indirect
obligor on the Bonds, In case of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee. Solely for purposes of the limitation expressed
in this paragraph ( e), the Credit Bank and the Borrower shall be deemed to be indirect obligors on the
Bonds.
(I) In lieu of obtaining any demand, request, direction, consent or waiver in
writing, the Trustee may call and hold a meeting of the Bondholders upon such notice and in
accordance with such rules and regulations as the Trustee considers fair and reasonable for the purpose
of obtaining any such action,
c;?-c - ((; (;
562518.2\24036.0004 -~-
Section 11.9. Waiver of Personal Liability. No officer, agent or employee of the City, and
no officer, official, agent or employee of the State of California or any department, board or agency of
any of the foregoing, shall be individually or personally liable for the payment of the principal of or
premium or interest on the Bonds or be subject to any personal liability or accountability by reason of
the issuance thereof; but nothing herein contained shall relieve any such person ITom the perfonnance
of any official duty provided by law or by this Indenture.
Section 11.10. Holidays. If the date for making any payment or the last date for perfonnance
of any act or the exercising of any right, as provided in this Indenture, is not a Business Day, such
payment may be made or act perfonned or right exercised on the next succeeding Business Day with
the same force and effect as if done on the date provided therefor in this Indenture and, in the case of
any payment, no interest shall accrue for the period after such date.
Section 11.11. Execution in Several Counterparts. This Indenture may be executed in any
number of counterparts and each of such counterparts shall for all purposes be deemed to be an
original; and all such counterparts, or as many of them as the City and the Trustee shall preserve
undestroyed, shall together constitute but one and the same instrument.
Section 11.12. Governing Law. This Indenture shall be governed by and construed in
accordance with the laws of the State of California.
'¡{-C-67
~62~t8.2\24036,OOO4 -~-
IN WITNESS WHEREOF, CITY OF CHULA VISTA has caused this Indenture to be signed
in its name and its seal to be hereunto affixed and attested by its duly authorized officers and FIRST
INTERSTATE BANK OF CALIFORNIA, in token of its acceptance of the trust created hereunder,
has caused this Indenture to be signed in its name and its seal to be hereunto affixed by its duly
authorized officers, all as of the day and year first above written.
CITY OF CHULA VISTA
By
Director of Finance
(SEAL)
Attest:
City Clerk
FIRST INTERSTATE BANK OF CALIFORNIA,
as Trustee
By
Authorized Officer
By
Authorized Officer
~-C~& ~
562518.2124036.0004 -6r(-
IN WITNESS WHEREOF, CITY OF CHULA VISTA has caused tlús Indenture to be signed
in its name and its seal to be hereunto affixed and attested by its dilly . authorized officers and FIRST
INTERST ATE BANK OF CALIFORNIA, in token of its acceptance of the trust created hereunder,
has caused tlús Indenture to be signed in its name and its seal to be hereunto affixed by its dilly
authorized officers, all as of the day and year first above written.
CITY OF CHULA VISTA
By
Director of Finance
(SEAL)
Attest:
City Clerk
FIRST INTERSTATE BANK OF CALIFORNIA,
as Trustee
By
Authorized Officer
By
Authorized Officer
~-C- 6 9
~62~18.2\24036.0004 -6\
EXHIBIT A
FORM OF VARIABLE RATE BOND
[FORM OF FACE OF BOND)
NO. $
CITY OF CHULA VISTA
VARIABLE RATE MULTIFAMILY HOUSING REFUNDING REVENUE BOND
(TERRA NOVA ASSOCIATES PROJECT),
1992 ISSUE A
INTEREST RATE MA TIJRITY D ATE ISSUE DATE CUSIP
Variable March 1, 2005
REGISTERED OWNER:
PRINCIPAL SUM: DOLLARS
The CITY OF CHULA VISTA, a municipal corporation and charter city, duly organized and
existing under the laws of the State of California (hereincalled the "City"), for value received, hereby
promises to pay (but only out of Revenues as hereinafter provided) to the registered owner identified
above or registered assigns, on March 1, 2005 (subjectto any right of prior redemption hereinafter
mentioned), the principal sum identified above in lawful money of the United States of America; and to
pay interest thereon in like money, until payment of such principal sum, at the rates and at the times as
hereinafter provided. The principal or redemption price hereof is payable only upon presentation and
surrender hereof at the principal corporate trust office of First Interstate Bank of California (herein
called the "Trustee"), in Los Angeles, California, and interest shall be paid by check mailed by the
Trustee on each Interest Payment Date, to the person in whose name this Bond is registered on the
applicable Record Date (as hereinafter defined), at the address of such registered owner shown on the
books of the Trustee, except that such interest payment may be made by wire transfer to any registered
owner of$I,OOO,OOO or more in aggregate principal amount of the Bonds who shall have designated to
the Trustee an account for such payment at least fifteen days before the Record Date therefor,
This Bond is one of a duly authorized issue of bonds of the City designated as "City ofChula
Vista Variable Rate Multifamily Housing Refunding Revenue Bonds (Terra Nova Associates Project),
1992 Issue A" (herein called the "Bonds"), in the initial aggregate principal amount of $ , authorized to
be issued pursuant to Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code
of the State of California (herein called the "Act"), and issued under and secured by an Indenture of
Trust, dated as of February 1, 1992 (herein called the "Indenture"), between the City and the Trustee.
Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of
the rights thereunder of the owners of the Bonds, of the nature and extent of the security, of the rights,
?--,C- 70
S62S 1 8.2\24036,0004 ~
duties and immunities of the Trustee and of the rights and obligations of the City thereunder, to all of
the provisions of which Indenture the holder of this Bond, by acceptance hereof, assents and agrees.
This Bond shall bear interest from the date to which interest has been paid next preceding the
date of registration of this Bond (unless this Bond is registered as of an Interest Payment Date, as
defined below, for which interest has been paid, or after the Record Date in respect thereof, in which
event it shall bear interest from such Interest Payment Date, or unless it is registered on or before the
Record Date for the first Interest Payment Date, in which event it shall bear interest from the date of
the first authentication and delivery of the Bonds), at the rate determined as provided herein, payable on
each Interest Payment Date. The tenn "Interest Payment Date" means, and the first Business Day of
each month thereafter until the rate of interest on the Bonds is established at a Reset Rate or Fixed
Rate, both as defined in the Indenture, and thereafter means March I and September I of each year,
The tenn "Record Date" means during any Variable Period, as defined in the Indenture, the close of
business on the Business Day (as defined in the Indenture) before an Interest Payment Date.
NEITHER THE F AITII AND CREDIT NOR THE TAXING POWER OF THE CITY IS
PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM OR INTEREST ON
TIllS BOND, THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY NOR DO
THEY CONSTIfUTE INDEBlEDNESS OF THE CITY UNDER ANY DEBT LIMITATION
IMPOSED BY THE CONSTITUTION OF THE STAlE OF CALIFORNIA,
The City hereby certifies that all of the conditions, things and acts required to exist, to have
happened and to have been perfonned precedent to and in the issuance of this Bond do exist, have
happened and have been perfonned in due time, fonn and manner as required by the Constitution and
statutes of the State of California (including the Act) and that the amount of this Bond, together with all
other indebtedness of the City, does not exceed any limit prescribed by the Constitution or statutes of
the State of California.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or
obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been
signed by the Trustee or the Tender Agent.
The Bonds are limited obligations of the City and, as and to the extent set forth in the
Indenture, are payable solely from, and secured by a pledge of and lien on, the Revenues, as that tenn
is defined in the Indenture, consisting primarily of amounts drawn under an irrevocable direct-pay letter
of credit issued by The Industrial Bank of Japan, Limited, (such bank or the issuer of any credit
instrument in substitution therefor being herein called the "Credit Bank"), for the account of the
borrower identified in the Indenture (the "Borrower") in favor of the Trustee concurrently with the
issuance of the Bonds, or any qualified letter of credit or other credit instrument issued in substitution
therefor (such letter of credit or substitute being referred to herein as the "Letter of Credit"), The Bonds
are being issued in order to provide funds to make a loan (the "Loan") to the Terra Nova Associates, a
general partnership, (the "Borrower") pursuant to a Loan Agreement, dated as of February I, 1992 (the
"Loan Agreement"), among the City, the Trustee and the Borrower, to refinance a multifamily rental
housing development (the "Project") in the City of Chula Vista, California.
Until the rate of interest on the Bond is converted to a Reset Rate or to a Fixed Rate, each as
defined in the Indenture, the rate of interest hereon shall be calculated on the basis of a year of365 or
366 days, as appropriate, for the actual number of days elapsed, and shall be a rate (the "Variable
2--(- 7 (
562518.2\24036.0004 A~
Rate"), determined by the remarketing agent appointed pursuant to the Indenture (the "Remarketing
Agent"), on the Tuesday of each week, or if any such Tuesday is not a Business Day, on the next
succeeding Business Day (a "Variable Interest Computation Date"), for the period beginning on such
Wednesday and ending on the next succeeding Tuesday (a "Variable Interest Accrual Period"), except
that the first Variable Interest Accrual Period shall commence on the Closing Date (as defined in the
Indenture) and end on the next succeeding Tuesday. The Variable Rate determined by the Remarketing
Agent on each Variable Interest Computation Date shall be that rate of interest which, ifbome by the
Bonds, would, in its judgment having due regard to prevailing financial market conditions, be the
interest rate required to be borne by the Bonds in order for their market value on said date to be 100%
of the principal amount thereof (disregarding accrued interest), subject to the limitations on such rate
set forth in the Indenture, including the limitations that the maximum Variable Rate on this Bond shall
never exceed the maximum rate of interest which may be charged or collected by the registered owner
hereof pursuant to provisions of federal or state law applicable to such owner. The determination of the
Variable Rate by the Remarketing Agent shall (in the absence of manifest error) be conclusive and
binding on the holders of the Bonds, the City, the Trustee, the Credit Bank, the Borrower and the
Remarketing Agent. If the Remarketing Agent shall fail or refuse to determine the Variable Rate on
any Variable Rate Computation Date, then the Variable Rate most recently determined shall remain in
effect for the first Variable Interest Accrual Period for which no Variable Rate is determined; and for
each Variable Interest Accrual Period thereafter until the Rernarketing Agent determines the Variable
Rate as provided above, the Variable Rate shall be equal to the lesser of ninety percent (900 of the
A-VP-l commercial paper rate as reported in the Wall Street Joumal on each Variable Interest
Computation Date or the maximum rate then pennitted under the Indenture. Any Bondholder may
obtain information on the Variable Rate by request to the Trustee,
Any Bond or portion thereof in an Authorized Denomination shall be purchased on any
Business Day during a Variable Period and on the date any Reset Rate or Fixed Rate becomes
effective (a "Reset Date" or the "Conversion Date," respectively), on demand of the registered owner of
such Bond (or, in the case of Bonds in "book-entry only" form, a Direct Participant, as defined in the
Indenture), or upon being tendered or deemed tendered as provided in the Indenture, at a Purchase
Price equal to the principal amount thereof, or of any Authorized Denomination thereof purchased, plus
interest accrued thereon, if any, to the date of purchase, upon (a) in the case of a demand, purchase
while the Bonds bear interest at a Variable Rate, delivery to First Interstate Bank of California, or its
successor as tender agent (the "Tender Agent"), at its principal office in New York, New York, with a
copy to the Trustee and the Remarketing Agent, of a written notice in the form set forth in the
Indenture (a "Tender Notice") which states (i) the principal amount of such Bond for which payment is
demanded, (ü) that such demand is irrevocable and (üi) the date on which such Bond or units of
principal amount thereof shall be purchased (the "Demand Date"), which date shall be a Business Day
not prior to the seventh (7th) day next succeeding the date of the receipt of the Tender Notice by the
Tender Agent; and (b) in all cases, delivery to the Tender Agent, at or prior to 9:30 a,m" New York
time, on the Demand Date, of such Bond (with an appropriate transfer of registration form executed in
blank and in form satisfactory to the Tender Agent), Payment of the Purchase Price of any Bond so
delivered shall be made by check or by wire transfer, or as designated in the Tender Notice, but only
upon delivery and surrender of such Bond to the Tender Agent on the Demand Date. No Bonds shall
be so purchased or remarketed if an Event of Default under the Indenture, other than certain specified
covenant defaults as described in the Indenture, shall have occurred and be continuing, or if all of the
Bonds shall have been called for redemption, and no Bonds shall be so purchased or remarketed while
the Bonds bear interest at a Reset Rate or a Fixed Rate except on a Reset Date or the Conversion Date,
ð'-C- 7~
562518.2\24036.0004 \3
The rate of interest on the Bonds may be established at a Reset Rate or Fixed Rate on any
Interest Payment Date in accordance with the procedures set forth in the Indenture, The Reset Rate or
Fixed Rate shall be computed on the basis of a year of 360 days with twelve 30-day months, and shall
be detennined by the Remarketing Agent as provided in the Indenture. The Trustee shall give to the
owners of the Bonds, in the same manner that notices of redemption are given, notice of the
establishment of a Reset Rate or Fixed Rate not less than thirty (30) days before any Reset Dab or the
Conversion Date, specifying the information set forth in the Indenture, If this Bond is not tendered for
purchase by 9:30 am" New York City time, on the Reset Date or Conversion Date it will be deemed
to have been so tendered and shall be purchased on such Reset Date or Conversion Date, at a price
equal to the principal amount hereof plus interest accrued to such date. The Purchase Price shall be
paid only upon presentment of the Bond,
The Bonds shall be subject to redemption prior to maturity, at a price equal to the principal
amount of Bonds redeemed plus interest accrued thereon to the date fixed for redemption, without
premium, (a) in whole or in part on any Interest Payment Date (i) if insurance or condemnation awards
are received with respect to the Project; or (ii) during any Variable Period or on any Reset Date or the
Conversion Date, if the Loan is voluntarily prepaid in whole or in part; or (b) in whole on any date if
the Loan is accelerated following a default by the Borrower; or (c) in whole five days before any date
on which any Letter of Credit expires, unless the Trustee receives a renewal or extension of or
replacement for such Letter of Credit meeting the requirements of the Loan Agreement or, in the case
of replacement in connection with any Reset Date or Conversion Date, an unconditional commitment to
issue the Letter of Credit, in each case not less than thirty (30) days before the expiration of such Letter
of Credit; or (d) in whole on the first date for which notice of redemption can timely be given if the
Credit Bank shall wrongfully dishonor a draw on the Letter of Credit or if within sissy (60) days of
notice to the Trustee of an Act of Bankruptcy of the Bank (as defined in the Indenture) the Borrower
shall fail to provide the Trustee with a Letter of Credit from another institution which meets the
requirements of the Loan Agreement. During any Reset Period, as defined in the Indenture, or after the
Conversion Date, the Bonds shall be subject to optional redemption in whole or in part only as set forth
in the Indenture,
Notice of redemption of Bonds shall be given to the registered owners thereof by mail, as
provided in the Indenture, not less than thirty (30) days or, in the case of redemption described in
clause (b), (c) or (d) of the preceding paragraph, such lesser amount of days as is specified in the
indenture. If this Bond is called for redemption and payment is duly provided therefor as specified in
the Indenture, interest hereon shall cease to accrue 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. The Indenture provides that in certain events such declaration and its consequences may be
rescinded by the holders of at least a majority in aggregate principal amount of the Bonds then
outstanding.
The Bonds are issuable only as fully registered Bonds without coupons in denominations of
$100,000 or any integral multiple thereof (except that one Bond may be in the principal amount of
$100,000 and any integral multiple of $6,000 in excess of $100,000) until the earlier of the first Reset
Date or the Conversion Date, and during any Variable Period, and $5,000 or any integral multiple
thereof during any Reset Period or on or after the Conversion Date. Subject to the limitations and upon
~-c- 73
562518.2\24036,0004 ~
payment of the charges, if any, provided in the Indenture, Bonds may be exchanged at the principal
corporate trust office of the Trustee for a like aggregate principal amoW1t of Bonds of the same series
of other authorized denominations.
This Bond is transferable by the registered owner hereof, in person, or by its attorney duly
authorized in writing, at the principal corporate trust office of the Trustee, but only in the manner,
subject to the limitations and upon payment of the charges provided in the Indenture, and upon
surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or Bonds, of
the same series and of authorized denomination or denominations, for the same aggregate principal
amoW1t, will be issued to the transferee in exchange herefor. The City and the Trustee may treat the
registered owner hereof as the absolute owner hereof for all purposes, and the City and the Trustee
shall not be affected by any notice to the contrary.
The Indenture contains provisions permitting the City and the Trustee to execute supplemental
indentures adding provisions to, or changing or eliminating any of the provisions of, the Indenture,
subject to the limitations set forth in the Indenture,
No officer, agent or employee of the City, and no officer, official, agent or employee of the
State of Califomia, nor any person executing this Bond, shall in any event be subject to any personal
liability or accoW1tability by reason of the issuance of the Bonds. The Bonds are not a debt, nor a
pledge of the faith and credit, of the State of California, or any of its political subdivisions and neither
are they liable on the Bonds, nor are the Bonds payable out of any funds or properties other than those
of the City pledged for the payment thereof. The Bonds do not constitute an indebtedness within the
meaning of any constitutional or statutory debt limitation.
IN WITNESS WHEREOF, the CITY OF CHULA VISTA has caused this Bond to be
executed in its name by the manual or facsimile signature of its Mayor and its official seal to be
impressed or printed hereon and attested by the manual or facsimile signature of its City Clerk, all as of
the Issue Date set forth above,
CITY OF CHULA VISTA
By
Mayor
(SEAL)
Attest:
By
City Clerk
ð'~C- 7ý
~62518.2\24036,OOO4 ~
[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within-mentioned Indenture and has been registered
on t\ús date:
. as Trustee
By
Authorized Signatory
~-C- 75
562518.2\24036,0004 ~
(FORM OF 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 Bond 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 a NOTICE: The signature on this assignment must
member firm of the New York Stock correspond with the name(s) as written on the
Exchange or a commercial bank or face of the within Bond in every particular
trust company. without alteration or eIÙargement or any
change whatsoever,
)?- C - -; (0
'62'18.2124036,0004 A\¿
EXHIBIT B
BOND FORM
NO. $
CITYOFCHULA VISTA
VARIABLE RATE MULTIFAMILY HOUSING REFUNDING REVENUE BOND
(TERRA NOVA ASSOCIATES PROJECT),
1992 ISSUE A
LAST DAY OF
INTEREST RATE MA TURfIY D ATE RESET PERIOD RESET DATE CUSIP
February 28, 1995 March 1,1995
REGISTERED OWNER: Cede & Co,
PRINCIPAL SUM: DOLLARS
The CITY OF CHULA VISTA, a municipal corporation and charter city corporate and politic,
duly organized and existing under the laws of the State of California (herein called the "City"), for
value received, hereby prornises to pay (but only out of Revenues as hereinafter provided) to the
registered owner identified above or registered assigns, on the Maturity Date set forth above (subject to
any right of prior redemption hereinafter mentioned), the principal sum identified above in lawful
money of the United States of America; and to pay interest thereon in like money, until payment of
such principal sum, at the Interest Rate set forth above, on March 1 and September 1 of each year,
commencing September 1, 1992 (each such date herein called an "Interest Payment Date") to and
including the Maturity Date set forth above (which is a "Reset Date" as defined in the Indenture) and
thereafter, if applicable, at the rate and times as provided in the Indenture referred to herein, The
principal or redemption price hereof is payable only upon presentation and surrender hereof at the
corporate trust office of First Interstate Bank of California (herein called the "Trustee"), in Los
Angeles, California, and interest shall be paid by check mailed, first class mail, postage prepaid to the
person in whose name this Bond is registered on the applicable Record Date (as hereinafter defined), at
the address of such registered owner shown on the books of the Trustee, except that such interest
payments may be made by wire transfer to any registered owner of $1,000,000 or more in aggregate
principal amount of the Bonds who shall have designated to the Trustee an accountÎor such payments
at least fifteen days before the Record Date therefor.
This Bond is one of a dilly authorized issue of bonds of the City designated as "City ofChuIa
Vista Variable Rate MuItifamily Housing Refunding Revenue Bonds (Terra Nova Associates Project),
1992 Issue A" (herein called the "Bonds"), in the initial aggregate principal amount of $9,490,000,
C¡S-vC - ì7
562518.2124036,0004 1\1
authorized to be issued pursuant to Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the
Government Code of the State of California (herein called the "Law"), and issued under and secured by
an Indenture of Trust, dated as of February 1, 1992 (herein called the "Indenture"), between the City
and the Trustee, Reference is hereby made to the Indenture and all indentures supplemental thereto for
a description of the rights thereunder of the owners of the Bonds, of the nature and extent of the
security, of the rights, duties and immunities of the Trustee and of the rights and obligations of the City
thereunder, to all of the provisions of which Indenture the holder of this Bond, by acceptance hereof,
assents and agrees.
This Bond shall bear interest from the date to which interest has been paid next preceding the
date of registration of this Bond (unless this Bond is registered as of an Interest Payment Date for
which interest has been paid, or after the Record Date in respect thereof, in which event it shall bear
interest from such Interest Payment Date, or unless it is registered on or before the Record Date for the
first Interest Payment Date, in which event it shall bear interest from the date of the first authentication
and delivery of the Bonds). The term "Record Date" means the fifteenth (15th) day of the month before
an Interest Payment Date.
NEITHER TIΠFAITH AND CREDIT NOR TIΠTAXING POWER OF TIΠCITY IS
PLEDGED TO TIΠPAYMENT OF TIΠPRINCIPAL OF OR PREMIUM OR INTEREST ON
THIS BOND. TIΠBONDS ARE NOT GENERAL OBliGATIONS OF TIΠCITY,
The Bonds are lirnited obligations of the City and, as and to the extent set forth in the
Indenture, are payable solely from, and secured by a pledge of and lien on, the Revenues (as that term
is defined in the Indenture). A standby letter of credit issued by The Industrial Bank of Japan, Lirnited,
Los Angeles Agency (such bank or the issuer of any credit instrument in substitution therefor being
herein called the "Credit Bank"), for the account of Terra Nova Associates, a California general
partnership (the "Borrower") in favor of the Trustee will be delivered concurrently with the issuance of
the Bonds, which letter of credit will secure payment of the principal amount of the Bonds only (such
letter of credit or substitute being referred to herein as the "Letter of Credit"). The Bonds are being
issued in order to provide funds to make a loan (the "Loan") to the Borrower pursuant to a Loan
Agreement, dated as of February 1, 1992 (the "Loan Agreement"), among the City, the Trustee and the
Borrower, to refinance a multifamily rental housing development (the "Project") in the City of Chula
Vista, California.
At the end of the Reset Period set forth above, the rate of interest on the Bonds will be
established at a new Reset Rate for a new Reset Period or at a Variable Rate or Fixed Rate and the
Bonds shall be subject to mandatory tender for purchase pursuant to provisions of the Indenture,
The Trustee shall give to the owners of the Bonds, in the same manner that notices of
redemption are given, notice of the establishment of a Reset Rate or Fixed Rate not less than thirty (30)
days before any Reset Date (as defined in the Indenture) or Conversion Date, specifYing the
information set forth in the Indenture. The Bonds are subject to mandatory tender for purchase on
March 1, 1995, If this Bond is not tendered for purchase by 9:30 a.m., New York City time, on the
Reset Date set forth above it will be deemed to have been so tendered and shall be purchased on the
Reset Date, at a price equal to the principal amount hereof plus interest accrued to such date; Payment
on March 1, 1996 of the Purchase Price of any Bond so tendered or deemed tendered is payable only
from the proceeds of the remarketing of the Bonds on March 1, 1995, and shall be made by check or
~~C - 7<t
'62' 18,2'24036,0004 B~
wire transfer, as designated by the Bond owner, but only upon delivery and surrender of such Bond to
the Tender Agent on the Reset Date. No Bonds shall be so purchased or remarketed if an Event of
Default under the Indenture (other than certain specified covenant defaults as described in the
Indenture) shall have occurred and be continuing, or if all of the Bonds shall have been called for
redemption.
This Bonds shall be subject to redemption prior to maturity, at a price equal to the principal
amount of Bonds redeemed plus interest accrued thereon to the date fixed for redemption, (a) in whole
or in part on any Interest Payment Date (i) if insurance or condemnation awards are received with
respect to the Project; or (ii) on any Reset Date if the Loan is voluntarily prepaid in whole or in part; or
(b) in whole on any date if the Loan is accelerated following certain defaults by the Borrower as set
forth in the Loan Agreement; or (c) in whole five (5) days before any date on which any Letter of
Credit expires, unless the Trustee receives a renewal or extension of or replacement for such Letter of
Credit meeting the requirements of the Loan Agreement not less than thirty (30) days before the
expiration of such Letter of Credit, at a price equal to the principal amount of Bonds redeemed plus
interest accrued thereon to the date of redemption; or (d) in whole on the first date for which notice of
redemption can timely be given if the Credit Bank shall wrongfully dishonor a draw on the Letter of
Credit or if within sixty (60) days of notice to the Trustee of an Act of Bankruptcy of the Bank (as
defined in the indenture the Borrower shall fail to provide the Trustee with a Letter of Credit from
another institution which meets the requirements of the Loan Agreement; or (e) in whole on any date at
the written request or with the written consent of the Credit Bank following an event of default under
the Loan Agreement not covered by (b) above.
The Bonds maturing on March 1, 2005 are subject to mandatory redemption on any Interest
Payment Date on or after September 1, 1995 from amounts received by the Trustee as payments of the
principal amount of the Loan to the extent such mandatory redemption is required by the Credit Bank,
Notice of Redemption of Bonds shall be given to the registered owners thereof by mail, as
provided in the Indenture, not less than thirty (30) days nor more than sixty (60) days or, in the case of
redemption following an acceleration of the Loan, not less than five (5) days before the date fixed for
redemption. If this Bond is called for redemption and payment is duly provided therefor as specified in
the Indenture, interest hereon shall cease to accrue 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, The Indenture provides that in certain events such declaration and its consequences may be
rescinded by the holders of at least a majority in aggregate principal amount of the Bonds then
outstanding.
The Bonds are issuable only as fully registered Bonds without coupons in denominations of
$5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the charges, if
any, provided in the Indenture, Bonds may be exchanged at the principal corporate trust office of the
Trustee for a like aggregate principal amount of Bonds of the same series of other authorized
denominations.
This Bond is transferable by the registered owner hereof, in person, or by its attorney duly
authorized in writing, at the principal corporate trust office of the Trustee, but only in the manner,
subject to the limitations and upon payment of the charges provided in the Indenture, and upon
~- c~ 79
S62St8.2\24036.0004 ~3
surrender and cancellation of this Bond, Upon such transfer a new fully registered Bond or Bonds, of
the same series and of authorized denomination or denominations, for the same aggregate principal
amount, will be issued to the transferee in exchange herefor. The City and the Trustee may treat the
registered owner hereof as the absolute owner hereoffor all purposes, and the City and the Trustee
shall not be affected by any notice to the contrary.
The Indenture contains provisions permitting the City and the Trustee to execute supplemental
indentures adding provisions to, or changing or eliminating any of the provisions of, the Indenture,
subject to the limitations set forth in the Indenture.
No officer, agent or employee of the City, and no officer, official, agent or employee of the
State of Califomia, nor any person executing this Bond, shall in any event be subject to any personal
liability or accountability by reason of the issuance of the Bonds. The Bonds are not a debt, nor a
pledge of the faith and credit, of the City ofChuia Vista, the State of California, nor any of its political
subdivisions and neither are they liable on the Bonds, nor are the Bonds payable out of any funds or
properties other than those of the City pledged for the payment thereof. The Bonds do not constitute an
indebtedness within the meaning of any constitutional or statutory debt limitation.
The City hereby certifies that all of the conditions, things and acts required to exist, to have
happened and to have been performed precedent to and in the issuance of this Bond do exist, have
happened and have been performed in due time, form and manner as required by the Constitution and
statutes of the State ofCalifomia (including the Act) and that the amount of this Bond, together with all
other indebtedness of the City, does not exceed any limit prescribed by the Constitution or statutes of
the State of California.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or
obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been
signed by the Trustee.
IN WITNESS WHEREOF, the CITY OF CHULA VISTA has caused this Bond to be
executed in its name by the manual or facsimile signature of its Mayor and its official seal to be
impressed or printed hereon and attested by the manual or facsimile signature of its City Clerk, all as of
the Reset Date set forth above.
CITY OF CHULA VISTA
By
Mayor
Attest:
City Clerk
~-C- ~G
'62'18.2\14036.0004 1\-4
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture and has been registered
on February 19, 1992.
FIRST INTERSTATE BANK OF CALIFORNIA,
as Trustee
By
Authorized Signatory
~C- ~(
562518.2'24036.0004 1\5
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 Bond 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 a NOTICE: The signature on this assignment must
member !inn of the New York Stock correspond with the name(s) as written on the
Exchange or a commercial bank or face of the within Bond in every particular
trust company. without alteration or enlargement or any
change whatsoever.
<?-c- ~~
562518.2'24036.0004 ~
EXHIBIT C
FORM OF FIXED RATE BOND
[FORM OF FACE OF BOND]
NO. $
CITY OF CHULA VISTA
MULTIFAMILY HOUSING REFUNDING REVENUE BOND
(TERRA NOVA ASSOCIATES PROJECT),
1992 ISSUE A
MATURITY D A IE: March 1, 2005 CUSIP
, REGISTERED OWNER:
PRINCIPAL SUM: DOLLARS
The CITY OF CHULA VISTA, a municipal corporation and charter city, duly organized and
existing under the laws of the State of California (herein called the "City"), for value received, hereby
prornises to pay (but oruy out of Revenues as hereinafter provided) to the registered owner identified
above or registered assigns, on March 1, 2005 (subject to any right of prior redemption hereinafter
mentioned), the principal sum identified above in lawful money of the United States of America; and to
pay interest thereon in like money, until payment of such principal sum, at the rate of percent (%) per
annum, on March 1 and September 1 of each year, commencing 1, - (each such date
herein called an "Interest Payment Date"), The principal or redemption price hereof is payable oruy
upon presentation and surrender hereof at the corporate trust office of First Interstate Bank of
California (herein called the "Trustee"), in Los Angeles, California, and interest shall be paid by check
mailed, first class mail, postage prepaid to the person in whose name this Bond is registered on or
before the Record Date (as hereinafter defined), at the address of such registered owner shown on the
books of the Trustee, except that such interest payments may be made by wire transfer to any
registered owner of$I,OOO,OOO or more in aggregate principal amount of the Bonds who shall have
designated to the Trustee an account for such payments at least fifteen days before the Record Date
therefor,
This Bond is one of a duly authorized issue of bonds of the City designated as "City ofChula
Vista Multifamily Refunding Revenue Bonds (Terra Nova Associates Project), 1992 Issue A" (herein
called the "Bonds"), in the initial aggregate principal amount of $9,490,000, authorized to be issued
pursuant to Article II of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the
State of California (herein called the "Law"), and issued under and secured by an Indenture of Trust,
dated as of February 1, 1992 (herein called the "Indenture"), between the City and the Trustee.
Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of
the rights thereunder of the owners of the Bonds, of the nature and extent of the security, of the rights,
duties and immunities of the Trustee and of the rights and obligations of the City thereunder, to all of
the provisions of which Indenture the holder of this Bond, by acceptance hereof, assents and agrees,
?-c- g3
5625[8,2124036,0004 ~
This Bond shall bear interest from the date to which interest has been paid next preceding the
date of registration of this Bond (unless this Bond is registered as of an Interest Payment Date for
which interest has been paid, or after the Record Date in respect thereof, in which event it shall bear
interest from such Interest Payment Date, or unless it is registered on or before the Record Date for the
first Interest Payment Date, in which event it shall bear interest from the date of the first authentication
and delivery of the Bonds), The term "Record Date" means the fifteenth (15th) day of the month before
an Interest Payment Date.
NEITHER THE F AmI AND CREDIT NOR THE TAXING POWER OF THE CTIY IS
PLEDGED TO THE PAYMENT OF THE PRJNCIP AL OF OR PREMIUM OR INTEREST ON
THIS BOND. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CTIY.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH ON THE BACK HEREOF AND SUCH FURTHER PROVISIONS ARE HEREBY
INCORPORATED BY REFERENCE AS IF FULLY SET FORTH HERE.
The City hereby certifies that all of the conditions, things and acts reqlÙred to exist, to have
happened and to have been peIiormed precedent to and in the issuance of this Bond do exist, have
happened and have been peIiormed in due time, form and maJUler as reqlÙred by the Constitution and
statutes of the State ofCalifomia (including the Act) and that the amount of this Bond, together with all
other indebtedness of the City, does not exceed any limit prescribed by the Constitution or statutes of
the State ofCalifomia
This Bond shall not be entitled to any benefit under the Indenture, or become valid or
obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been
signed by the Trustee.
IN WITNESS WHEREOF, the CTIY OF OlliLA VISTA has caused this Bond to be
executed in its name by the manual or facsimile signature of its Mayor and its official seal to be
impressed or printed hereon and attested by the manual or facsimile signature of its City Clerk, all as of
the Conversion Date set forth above.
CTIY OF CHULA VISTA
By
Mayor
Attest:
By
City Clerk
'G-C-6c(
562518,2'24036.0004 ~2
[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within-mentioned Indenture and has been registered
on this date:
, as Trustee
By
Authorized Signatory
---
~-C~'6S
562518.2124036.0004 ~
[FORM OF BACK OF BOND)
The Bonds are limited obligations of the City and, as and to the extent set forth in the
Indenture, are payable solely from, and secured by a pledge of and lien on, the Revenues (as that term
is defined in the Indenture), consisting primarily of amounts drawn under an irrevocable direct-pay
letter of credit issued by - (such bank or the issuer of any credit instrument in substitution therefor
being herein called the "Credit Bank"), for the account of Terra Nova Associates, a general partnership
(the "Borrower") in favor of the Trustee concurrently with the issuance of the Bonds, or any qualified
letter of credit or other credit instrument issued in substitution therefor (such letter of credit or
substitute being referred to herein as the "Letter of Credit"), The Bonds are being issued in order to
provide funds to make a loan (the "Loan") to the Borrower pursuant to a Loan Agreement, dated as of
February 1,1992 (the "Loan Agreement"), among the City, the Trustee and the Borrower, to refinance
a multifamily rental housing development (the "Project") in the City of Chula Vista.
The Bonds shall be subject to redemption prior to maturity, at a price equal to the principal
amount of Bonds redeemed plus interest accrued thereon to the date fixed for redemption, (a) in whole
or in part on any Interest Payment Date if insurance or condemnation awards are received with respect
to the Project if the Loan is accelerated following a default by the Borrower; or (b) in whole five days
before any date on which any Letter of Credit expires, unless the Trustee receives a renewal or
extension of or replacement for such Letter of Credit meeting the requirements of the Loan Agreement
not less than thirty (30) days before the expiration of such Letter of Credit, at a price equal to the
principal amount of Bonds redeemed plus interest accrued thereon to the date of redemption; or (c) in
whole on the first date for which notice of redemption can timely be given if the Credit Bank shall
wrongfully dishonor a draw on the Letter of Credit or if within sixty (60) days of notice to the Trustee
of an Act of Bankruptcy of the Bank (as defined in the Indenture) the Borrower shall fail to provide the
Trustee with a Letter of Credit from another institution which meets the requirements of the Loan
Agreement.
The Bonds shall also be subject to redemption in whole on any date or in part on any Interest
Payment Date, in an amount equal to any voluntary prepayments of the Loan, at a redemption price
equal to the principal amount of Bonds redeemed, plus interest accrued thereon to the date of
redemption, plus the applicable premium (expressed as a percentage of the principal amount of Bonds
redeemed) set forth below, as follows:
Term of Reset Period
or from Conversion Redemption
to Maturitv No-Call Period Price No Premium
7 or more years First 4 years 101.5% 7th year and
after Reset or thereafter
Conversion Date
4 years or more (but First 3 years 101% 4th year and
less than 7) after Reset or thereafter
Conversion Date
2--C - ~<d
562518.2'24036.0004 ~
Notice of Redemption of Bonds shall be given to the registered owners thereof by mail, as
provided in the Indenture, not less than thirty (30) days or, in the case of redemption following an
acceleration of the Loan, not more nor less than five (6) days before the date fixed for redemption. If
this Bond is called for redemption and payment is duly provided therefor as specified in the Indenture,
interest hereon shall cease to accrue 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. The Indenture provides that in certain events such declaration and its consequences may be
rescinded by the holders of at least a majority in aggregate principal amount of the Bonds then
outstanding.
The Bonds are issuable OIÙY as fully registered Bonds without coupons in denominations of
$5,000 or any integral multiple thereof Subject to the limitations and upon payment of the charges, if
any, provided in the Indenture, Bonds may be exchanged at the principal corporate trust office of the
Trustee for a like aggregate principal amount of Bonds of the same series of other authorized
denominations,
This Bond is transferable by the registered owner hereof, in person, or by its attorney duly
authorized in writing, at the principal corporate trust office of the Trustee, but only in the manner,
subject to the limitations and upon payment of the charges provided in the Indenture, and upon
surrender and cancellation of this Bond, Upon such transfer a new fully registered Bond or Bonds, of
the same series and of authorized denomination or denominations, for the same aggregate principal
amount, will be issued to the transferee in exchange herefor. The City and the Trustee may treat the
registered owner hereof as the absolute owner hereof for all purposes, and the City and the Trustee
shall not be affected by any notice to the contrary.
The Indenture contains provisions pennitting the City and the Trustee to execute supplemental
indentures adding provisions to, or changing or eliminating any of the provisions of, the Indenture,
subject to the limitations setforth in the Indenture,
No officer, agent or employee of the City, and no officer, official, agent or employee of the
State of Califomia, nor any person executing this Bond, shall in any event be subject to any personal
liability or accountability by reason of the issuance of the Bonds, The Bonds are not a debt, nor a
pledge of the faith and credit, of the City of Chula Vista, the State of Califomia, nor any of its political
subdivisions and neither are they liable on the Bonds, nor are the Bonds payable out of any funds or
properties other than those of the City pledged for the payment thereof The Bonds do not constitute an
indebtedness within the meaning of any constitutional or statutory debt limitation.
~-C-~7
562518.2\24036.0004 <\s
(FORM OF 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 Bond and do(es) hereby irrevocably constitute and appoint
, attorney, to transfer the same on the registration books of the Trustee,
with fun power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by a NOTICE: The signature on this assignment must
member !inn of the New York Stock correspond with the name(s) as written on the
Exchange or a commercial bank or face of the within Bond in every particular
trust company, without alteration or enlargement or any
change whatsoever,
'6-C-~
S62S 1 8.2'24036.0004 C~
EXHIBIT D
FORM OF TENDER NOTICE
Notice of Demand for Purchase
To:
The undersigned is the registered owner of the City of Chula Vista Variable Rate Multifamily
Housing Refunding Revenue Bond(s) (Terra Nova Associates Project), 1992 Issue A, No(s). (the
"Bonds"), The undersigned hereby irrevocably demands payment of $ aggregate principal amount of
the Bonds (which amount is $100,000 or an integral multiple of 5,000 in excess of $100,000) and
accrued interest thereon to the date of payment (the "Purchase Price"), and represents that it retains
either no Bonds or Bonds in a principal amount at least equal to $100,000,
Payment of the Purchase Price shall be made in the following marmer:
Check and complete (a) or (b):
(a) By check mailed to the undersigned at the following address:
; or
(b) By wire transfer of immediately available funds to Account No. - at the following
bank:
Payment shall occur on . (the "Demand Date"), which
shall be not prior to the seventh (7th) calendar day after (but not including) the date of receipt of this
notice by the addressee hereof, as Tender Agent (the "Tender Agent") or, if such seventh calendar day
is not a Business Day (as defined in the Indenture pursuant to which the Bonds were issued), the
Business Day next succeeding such day. Delivery hereof shall be made in person or by registered mail,
return receipt requested, to the address set forth above and shall occur upon receipt hereof by the
Tender Agent on a Business Day. The Bonds shall be tendered to the Tender Agent, at its address set
forth above, with a duly executed instrument of transfer in the form set forth on the Bonds, with
signature guaranteed in a marmer satisfactory to the Tender Agent, at or prior to 9:30 a.m., New York
time, on the Demand Date, and if the Bonds are not delivered by such time, the undersigned shall not
be entitled to payment of the Purchase Price therefor. The Bonds shall conform in all respects to the
description thereof in this Notice.
~-C - l{q
J62J18,2\24036.0004 ~
The undersigned hereby authorizes and directs PaineWebber Incorporated, as Remarketing
Agent, to arrange for the sale of all or any part of the Bonds at not less than par plus accrued interest to
the Demand Date. In the event of such a sale, payment of the Purchase Price of the Bonds shall be
made on the Demand Date as hereinabove provided. =,
This notice shall not be effective unless, simultaneously with the delivery hereof to the Tender
Agent, a copy hereof is sent to the Trustee at the address set forth below,
Date:
(Name of Registered Owner)
Authorized Signature
cc: Paine Webber Incorporated
100 California Street, 12th Floor
San Francisco, California 94111
First Interstate Bank of California
Corporate Trust Department, W11-l
707 Wilshire Boulevard
Los Angeles, California 90017
y;-C - 40
562518.2'24036,0004 D~
COUNCIL AGENDA STATEMENT
Item-3..-
Meeting Date 3/10/98
ITEM TITLE: Resolution , ~q q D Accepting bids and awarding contract for the
consttuction of "Third Avenue Sidewalk Improvements, from "E" Street
to "G" Street, in the City of Chula Vista, CA" (STM330) and authorizing
the City Manager to execute change orders as appropriate to utilize the
remaining contingency funds to repair areas of lesser priority than those bid
SUllMITJ'ED BY, 0;""", of """" W ocb ~
REVIEWED BY: City Manager J4 ~....... (4/5ths Vote: Yes_No..x)
At 2:00 p.m. on February 11, 1998 in Co erence Rooms 3, the Director of Public Works
received sealed bids for the consttuction of "Third Avenue Sidewalk Improvements, from "E"
Street to "G" Street, in the City of Chula Vista, CA." (STM330). The work to be done includes
removal and disposal of portions of existing sidewalks, cleaning out and replacement of tree grates,
root pruning of trees, installation of curb and gutter, colored and stamped concrete slabwork, traffic
control and the construction of all other miscellaneous items of work as shown on the plans.
RECOMMENDATION: That Council approve resolution accepting bids and awarding contract
to Gypsy Queen, Inc., National City, in the amount of $28,950.00 and authorizing the City
Manager to execute change orders as appropriate to utilize the remaining contingency funds to
repair areas of lesser priority than those bid.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
Funding for this project was budgeted during the FY 1997-98 Capital Improvement Program (CIP)
budget process. This project was budgeted to reduce the potential for accidents caused by
pedestrians tripping over broken; raised or missing portions of sidewalks and tree grates in the
Chu1a Vista Downtown area. The primary work targeted by.this contract includes areas where
the pedestrians could encounter high risk of tripping. The excellent bid we received will allow
us to repair areas that are deteriorating, but determined to pose a lesser risk for all accidents.
These areas will be corrected to the extent that the contingency fund allows. Staff will return to
Council with an information report summarizing the ultimate extent of the repairs accomplished
with the project funds.
Since this project is being done in a predominantly commercial area, there were restrictions put
on the contractor that mitigates the impact of the consttuction on business activities. Pending the
award of the contract by the City Council, consttuction is currently scheduled to begin March
23, 1998. Staff will coordinate the work with the contractor to hold the disruption during the
Easter period to a minimum. The contractor shall be required to attend the bi-weekly meetings
of the Chula Vista Downtown Business Association and brief area merchants on the consttuction
Ci ../
Page 2, Itern-
Meeting Date 3/10/98
schedule and answer questions from them throughout the duration of the project. Other
restrictions include keeping access and parking to businesses open at all times, maintaining both
lanes of through traffic at all times no matter what side of the street is under construction, and
working on one part of the street at a time. The contractor is required to complete the
construction before the expiration of thirty working days.
The project was advertised for a period of four weeks and plans were purchased by 10
contractors, and on the bid opening date we received five bids, shown below:
Contractor Bid Amount
Gypsy Queen, Inc., National City $28,950.00
HAR Construction, Inc., National City $35,686.60
Tim Moody, San Diego $43,675.00
Single Eagle, Inc., Poway $49,810.00
Star Paving Corporation, San Diego $50,246.00
The low bid by Gypsy Queen, Inc., is below the Engineer's estimate of $38,615.00 by $9,665.00
or by 25%. The Engineer's estimate was based on bids received for similar projects. It is our
opinion that staff received excellent bids for the project. We have verified the contractor's license
and other qualifications and determined that they are in good order. The low bidder has satisfactorily
met all the requirements. We, therefore, recommend awarding the contract to Gypsy Queen, Inc.,
National City.
Disclosure Statement
A copy of the contractor's Disclosure Statement is attached.
Prevailin¡¡- Wa¡¡-e Statement
This project is primarily funded through Residential Construction Tax Funds. Based on the
current project funding guidelines, no prevailing wage requirements were necessary as part of the
bid documents.
Environmental Status
The City's Environmental Coordinator has reviewed the work involved in this project and
determined that the project is exempt under Section 15301(c), Class I of the California
Environmental Quality Act (CEQA).
<i";r.
Page 3, Item-
Meeting Date 3/10/98
FISCAL IMPACT:
Financial Statement
FUNDS REQUIRED FOR CONSTRUCTION
A. Contract Amount $28,950,00
B. Contingencies $ 24,521.50
D. Material Testing $2,000.00
E. Staff Cost (Inspection and Design) $ 9,000.00
TOTAL FUNDS REQUIRED FOR CONSTRUCTION $64,471.50
FUNDS AVAILABLE FOR CONSTRUCTION
A. Third Avenue Sidewalk Improvements (STM330)- Project $64,471.50
Accottnts
TOTAL FUNDS AVAILABLE FOR CONSTRUCTION $64,471.50
Funding for this project was budgeted in the FY 97-98 CIP budget. The project as budgeted will
utilize Residential Construction Tax Funds. The action requested tonight would allow staff to
expend these funds for the construction work. The project will require OIÙY routine City
maintenance (mainly tree trimming) upon completion.
Exhibit: A - Cootractor's Disclosure Statement NOT SCANNED
File #O735-JO-STM330
H: IH 0 MEIEN G INEER lAGEND A IS TM3 3 O. AC
'1 -3!'l-1f
I THE CITY OF CHULA VISTA DISCLOSURE STATEMENT
é required to me a Statement of Disclosure of certain ownership or fmancial interests, payments. or campaign contributions,
J matters which will require discretionary action on the part of the City Council, Planning Commission, and all other official
/.es. The following information must be disclosed:
1. List the names of all persons having a financial interest in the property which is the subject of the application or the Cootract,
? e.g.. owner, applicant, Contractor, subcontractor, material supplier.
lip ¡,u..--
.
'01>:",' , ,. .
2. If any person* identified pursuant to (1) above is a corporation or partnership, list the names of all individuals owning more
than 10% of the shares in the corporation or owning any partnership interest in the partnership.
3, If any person* identified pursuant to (I) above is non-profit organization or a trust, list the names of any person serving as
director of the non-profit organization or as trustee or _beneficiary or trustor of the trost.
,,'
4. Have you had more than $250 wonh of business transacted with any member of the City staff, Boards, Commissions,
Comminees, and Council within the past tWelve month? Yes - No ~ If yes, please indicate persen(s):
5. Please identify each and every person, including any agents, employees, consultants, or independent Contractors who you
have assigned to represent you before the City in this maner.
/v1t'/-t-tt~ f-A'/7¿')(~L- /Y)Wtil'k
-~-
,
6. Have you and/or your officers or agents, in the aggregate, contributed more than $1,000 to a Council member in the current
or preceding election period? Yes - No ~ If yes, state which Council members(s): - '
* * * (NOTE: Attached a
Date: ()~- \ Ó -'1 <¡;
Signature of Contractor/Applicant
~ ç:..d. w 0.. "d- ~
Print or type name of Contractor/Applicant
* Person is defined as: "Any individual, firm, co-partnership, joint venture, assodalion, social club, fraternal organization,
corporalion, estale. trust. receiver, syndicate, this and any other counly, city or country, city l7U4nidpaliry, district, or other poUlical
subdivision, or any other group or combination acting as a unit.
..", T., IS q- L-/
RESOLUTION NO. IfqJeo
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING BIDS AND AWARDING
CONTRACT FOR THE CONSTRUCTION OF "THIRD AVENUE
SIDEWALK IMPROVEMENTS FROM "E" STREET TO "G"
STREET, IN THE' CITY OF CHULA VISTA, CA."
(STM330) AND AUTHORIZING THE CITY MANAGER TO
EXECUTE CHANGE ORDERS AS APPROPRIATE TO
UTILIZE THE REMAINING CONTINGENCY FUNDS TO
REPAIR AREAS OF LESSER PRIORITY THAN THOSE BID
WHEREAS, at 2:00 p.m. on February 11, 1998 in Conference
Rooms 3, the Director of Public Works received the following five
sealed bids for the construction of "Third Avenue Sidewalk
Improvements, from "E" Street to "G" Street, in the city of Chula
Vista, CA." (STM330):
Contractor Bid Amount
Gypsy Queen, Inc" National City $28,950,00
HAR Construction, Inc., National City $35,686.60
Tim Moody, San Diego $43,675,00
Single Eagle, Inc., Poway $49,810,00
Star Paving Corporation, San Diego $50,246,00
WHEREAS, the low bid by Gypsy Queen, Inc., is below the
Engineer's estimate of $38,615.00 by $9,665.00 or by 25% which was
based on bids received for similar projects; and
WHEREAS, staff has verified the contractor's license and
other qualifications and determined that they are in good order,
therefore, the low bidder has satisfactorily met all the
requirements and staff recommends awarding the contract to Gypsy
Queen, Inc., National City; and
WHEREAS, this project is primarily funded through
Residential Construction Tax Funds and based on the current project
funding guidelines, no prevailing wage requirements were necessary
as part of the bid documents; and
WHEREAS, the primary work targeted by this contract
includes areas where the pedestrians could encounter high risk of
tripping and the excellent bid received will allow repair of areas
1
9,~
that are deteriorating, but determined to pose a lesser risk for
all accidents; and
WHEREAS, the city's Environmental Coordinator has
reviewed the work involved in this project and determined that the
project is exempt under section 15301(c), Class 1 of the California
Environmental Quality Act (CEQA).
NOW, THEREFORE, BE IT RESOLVED the City Council of the
City of Chula vista does hereby accept the bids and award the
contract for the construction of "Third Avenue Sidewalk
Improvements, from "E" Street to "G" Street, in the city of Chula
Vista, Ca." (STM330) to Gypsy Queen, Inc., National City, in the
amount of $28,950.00.
BE IT FURTHER RESOLVED that the city Manager is hereby
authorized to execute change orders as appropriate to utilize the
remaining contingency funds to repair areas of lesser priority than
those bid with this contract.
BE IT FURTHER RESOLVED that the Mayor of the City of
Chula vista is hereby authorized and directed to execute said
contract for and on behalf of the City of Chula vista.
Presented by Approved as to form by
John P. Lippitt, Director of
Public Works
C:\rs\thirdave.bid
2
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COUNCIL AGENDA STATEMENT
ItemjjJ..
Meeting Date 3/10/98
ITEM TITLE: Resolution I~;}- Accepting bids and Awarding Contract for
"Storm Drain Rehabilitation - Industrial Blvd, West of Marsat Ct, North of
Dorothy St in the City ofChula Vista, CA (DRI26)."
SUBMITTED BY: Dh-octm of Pub Ii, wmy ~
REVIEWED BY: City Manager J{~." --- (4/5ths Vote: Yes_NoXJ
At 2:00 p.m. on February 18, 1998 in Conference Room I in the Public Services Building, the
Director of Public Works received sealed bids for "Storm Drain Rehabilitation - Industrial Blvd,
West of Mars at Ct, North of Dorothy St in the City ofChula Vista, CA (DR-126)." The work to be
done consists of removal of existing plugs in the thirty-six (36") inch reinforced concrete pipe (RCP)
storm drain in Industrial Blvd and installation of polyvinyl chloride (PVC) pipe sliplining system.
The work also includes excavation and grading, saw cutting, asphalt concrete pavement, shoring,and
traffic control.
RECOMMENDATION: That Council accept bids, award the contract for "Storm Drain
Rehabilitation - Industrial Blvd, west of Marsat Ct, north of Dorothy St in the City of Chula Vista,
CA (DR-I 26)" to Roberts Engineering Contractors, Escondido in the amount of $34,600.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
Funds for this project were budgeted in FY 1997-98 Capital Improvement Program (CIP) budget for
storm drain repair and will use Trunk Sewer Funds. In Fiscal Year 1992-93, a parallel 15" trunk
sewer line was constructed in Industrial Blvd, between Palomar Street and Main Street. During
construction ofthe trunk sewer under the 36" RCP storm drain, the storm drain pipe disintegrated.
The 36" RCP was either poorly made or the groundwater had a high salt concentration, since the
steel reinforcing bars were corroded and the concrete pipe was deteriorating.
At the time of construction of the IS" trunk sewer, the collapsed portion of the 36" RCP storm drain
could not be replaced due to the hydraulic conditions of the flowlines for the sewer and storm drain
pipes. Therefore, the 36" RCP needed to be repaired in order to prevent flooding upstream during
10' I
Page 2, Item -
Meeting Date 3/10/98
a 50-year storm. Sewer funds were utilized to repair this storm drain, since the construction of the
parallel trunk sewer main impacted the storm drain.
Bids for this project were received trom six contractors as follows:
Contractor Bid Amount
I. Roberts Engineering Contractors - Escondido $34,600.00
2. Gypsy Queen, Inc. - National City 43,700.00
3. Walter H. Garber & Son, Inc. - La Mesa 46,415.00
4. Rutledge Joint Venture - Lemon Grove 58,966.00
5. G. B. Cooke, Inc. - Azusa 73,456.00
6. Insituform Southwest - Santa Fe Spring 84,376.00
The low bid by Roberts Engineering Contractors is below the Engineer's estimate of $52,425 by
$17,825 or 34.0%. Staffs estimate was based on average prices just recently received for similar
type work and trom manufacturer's quotes for material costs. Staff received excellent bids for the
proposed work.
Staff has reviewed the references supplied by Roberts Engineering Contractors and these were
satisfactory. Therefore, staff recommends awarding the contract to Roberts Engineering Contractors
for construction of this project.
Disclosure Statement
A copy of the contractor's disclosure statement is attached as Attachment A.
Environmental Status
The Environmental Review Coordinator has reviewed the work involved in this project and has
determined that the project is exempt under Section 15302, Class 2 of the California Environmental
Quality Act (Minor Alterations of Existing Public Improvements or Public Structures).
Prevailing: Wage Statement
The source of funding for this project is Sewer Funds. Contractors bidding this project were not
required to pay prevailing wages to persons employed by them for the work under this project. No
special minority or women owned business requirements were necessary as part of the bid
documents. Disadvantaged businesses were encouraged to bid through the sending of the Notice to
Contractors to various trade publications.
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Page 3, Item-
Meeting Date 3/10/98
FISCAL IMPACT
FUNDS REQUIRED FOR CONSTRUCTION
A. Contract Amount $34,600.00
B. Contingencies (approximately 10%) 3,460.00
C. Staff Costs (Design, Construction & Inspection) 8,500.00
TOTAL FUNDS REQUIRED FOR CONSTRUCTION $46,560.00
FUNDS AVAILABLE FOR CONSTRUCTION
A. 1997-98 Trunk Sewer (600-6008-DR-126) $100,000.00
TOTAL FUNDS AVAILABLE FOR CONSTRUCTION $100,000.00
Funding used for this project will come from the Trunk Sewer Fund. Sewer funds were utilized to
repair this storm drain, since the construction of the parallel trunk sewer main impacted the storm
drain. Upon completion of the project, the storm drain will require routine City maintenance
involving cleaning of the storm drain on a periodic basis.
Attachments
A - Contractor's Disclosure Statement NOT SCANNED
BVH:bvh
RIHOMEIENGINEERIAGENDA \DRt26 t t3.BVH
File No: 0735-IO-DR-126
10 <3//0.-1- .
i'llI'. \. In 01 LlILI./\ VI~T/\ ) ~l'I.O~UIU: ST/\TF~IE'H
You are required to file a S,atement of Disclosure 01 certain ownership or financial intereSls. payments. or campaign contributions
on all malters which will require discrelionary action on the part of the Cily Council, Planning Commission, and all other official
bodies. The following information muSl be disclosed:
1. List the names of all persons having a financial intereSl in the property which is the subject of the application or the Contract.
e.g.. owner. applicant. Contractor. subcontractor. material supplier.
None
2. If any person" identified pursuant to (1) above is a corporation or partnership, list the names of all individuals owning more
than 10% of the shares in the corporation or owning any partnership interest in the partnership.
3. If any person" identified pursuant to (1) above is non.profit organization or a truSl. list the names of any person serving as
director of the non-profit organization or as trustee or beneficiary or truSlor of the truSl.
4. Have you had more than $250 worth of business transacted with any member of the City Slaff. Boards. Commissions.
Commiltees. and Council within the past twelve month? Yes - No - If yes. please indicate person(s):
5. Please Identify each and every person. including any agents, employees. consultants, or Illdependent Contractors who you
have assigned to represent you before the City in this matter.
6. Have you and/or your officers or agents. in the aggregate, contributed more than $1,000 to a Council member in the current
or preceding election period? Yes - No - If yes, state which Council members(s):
. . . (NOTE. ,~,"'" .,..&~
Date: 7/18/98
Fil1Sitn{~U{~ °ì5.g~trf¡'i3'}[/~PRJifnts Engineering Contr.
Victor N, Roberts, President
Print or type name of Contractor/Applicant
" Person is defined as: "Any individual, firm. co-partnership, joint venture. association. sacral club, fratemal organization,
corporation, eSlate, trust, receiver. syndicate. this and any other county, city or country. city muniCIpality, district. or other polilical
subdivision. or any other group or combination acting as a unit.
14 0 ~ ,,/
RESOLUTION NO. I?'t;).}
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RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING BIDS AND AWARDING
CONTRACT FOR "STORM DRAIN REHABILITATION -
INDUSTRIAL BOULEVARD, WEST OF MARSAT COURT,
NORTH OF DOROTHY STREET IN THE CITY OF CHULA
VISTA, CA. (DR126)"
WHEREAS, at 2:00 p.m. on February 18, 1998 in Conference
Room 1 in the Public Services Building, the Director of Public
Works received the following sealed bids for "Storm Drain
Rehabilitation - Industrial Blvd, West of Marsat ct, North of
Dorothy st in the City of Chula vista, CA (DR-126). ":
Contractor Bid Amount
1. Roberts Engineering Contractors - Escondido $34,600.00
2. Gypsy Queen, Inc. - National City 43,700.00
3. Walter H. Garber & Son, Inc. - La Mesa 46,415.00
4. Rutledge Joint Venture - Lemon Grove 58,966.00
5. G. B. Cooke, Inc. - Azusa 73,456.00
6. Insituform Southwest - Santa Fe Spring 84,376.00
WHEREAS, the low bid by Roberts Engineering Contractors
is below the Engineer's estimate of $52,425 by $17,825 or 34.0%
which estimate was based on average prices just recently received
for similar type work and from manufacturer's quotes for material
costs; and
WHEREAS, staff has reviewed the references supplied by
Roberts Engineering Contractors and these were satisfactory and,
therefore, recommends awarding the contract to Roberts Engineering
Contractors for construction of this project; and
WHEREAS, the Environmental Review Coordinator has
reviewed the work involved in this project and has determined that
the project is exempt under section 15302, Class 2 of the
California Environmental Quality Act (Minor Alterations of Existing
Public Improvements or Public Structures).
1
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NOW, THEREFORE, BE IT RESOLVED the City Council of the
City of Chula vista does hereby accept bids and award the contract
for "storm Drain Rehabilitation - Industrial Blvd, west of Marsat
ct, north of Dorothy st in the city of Chula vista, CA (DR-l26) " to
Roberts Engineering Contractors, Escondido in the amount of
$34,600.
BE IT FURTHER RESOLVED that the Mayor of the City of
Chula vista is hereby authorized and directed to execute said
contract for and on behalf of the city of Chula vista.
Presented by Approved as to form by
John P. Lippitt, Director of
Public Works
c: \rs\dr126
2
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COUNCIL AGENDA STATEMENT
Item II
Meeting Date 03/10/98
ITEM TITLE: Resolution: 1<2'1 à-.~ Accepting the Donation of
Travel Expenses to Attend the California Natural
Gas Transit Operations Forum in Palm Springs,
California, March 18-19, 1998
SUBMITTED BY: Deputy city ~nager~
REVIEWED BY: city ManagerJc. ~ -- 4/5ths Vote: Yes - No...1L)
San Diego Gas & Electric will be participating in a meeting co-
sponsored by Sunline Transit, Deere Power Systems, Cummins Engine
Corp., and California's other investor-owned gas utilities. This
conference will focus on an up to the minute briefing about natural
gas usage for transit purposes. The participating agencies are
inviting a number of carefully chosen transit agencies from
throughout California to participate in the forum. They have
extended an invitation for Chula vista Transit representatives to
attend, with travel expenses being covered by the utility.
RECOMMENDATION: That Council adopt the resolution accepting
the donation of travel and expenses and
authorize appropriate designees to attend the
California Natural Gas Transit Operations
Forum.
BOARD/COMMISSION RECOMMENDATION: N.A.
DISCUSSION:
The city has policies contained in the proposed "Chula vista co,
Reduction Plan" encouraging the purchase of clean fuel vehicles and
promoting the demonstration of new clean fuel technologies. The
City is also evaluating the possible purchase of natural gas buses
for its bus and municipal fleet. The meeting will provide valuable
technical information and an opportunity to learn from and ask
questions of a blue-ribbon panel of transit policy experts. Also,
the Task Force is willing to provide the City of Chula vista with
a white paper addressing any follow-up concerns or issues the City
may have. It would be appropriate for Council members or staff
involved in transit issue to represent Chula vista at this meeting.
FISCAL IMPACT: There would be no fiscal impact to the city as all
costs would be paid by SDG&E and the sponsors.
, t; - {
L
RESOLUTION NO.~~
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING THE DONATION OF TRAVEL
EXPENSES TO ATTEND THE CALIFORNIA NATURAL GAS
TRANSIT OPERATIONS FORUM IN PALM SPRINGS,
CALIFORNIA, MARCH 18-19, 1998
WHEREAS, San Diego Gas & Electric will be participating
in a meeting co-sponsored by Sunline Transit, Deere Power Systems,
Cummins Engine Corp., and California's other investor-owned gas
utilities; and
WHEREAS, this conference will focus on an up to the
minute briefing about natural gas usage for transit purposes; and
WHEREAS, the participating agencies are inviting a number
of carefully chosen transit agencies from throughout California to
participate in the forum; and
WHEREAS, they have extended an invitation for Chula vista
Transit representatives to attend, with travel expenses being
covered by the utility.
NOW, THEREFORE, BE IT RESOLVED the city Council of the
City of Chula vista does hereby accept the donation of travel
expenses to attend the California Natural Gas Transit Operations
Forum in Palm Springs, California, March 18-19, 1998 and authorize
appropriate designees to attend the California Natural Gas Transit
Operations Forum.
Presented by Approved as to form by
George Krempl, Deputy City
Manager
c: Irsldonation.sdg
11-1
1\';:; 2 ,':" SDG.'
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February 24, 1998 FEB27 NGV
Mayor Slúrley Horton - '-- NATURAL
Office of the Mayor --.-.- -" . GAS.
City ofChula Vista VEHICLE
276 4th Avenue
Chula Vista, CA 91910
Dear Mayor Horton:
San Diego Gas & Electric and the California Natural Gas Transit Task Force are pleased to
announce their sponsorship of the upcoming Clean Transit Operations Forum, to be held on
Wednesday and Thursday, March 18-19,1998 in Palm Springs, California. Sponsoring
participants in tlús public policy forum include Sunline Transit, key clean transit industry service
and equipment suppliers as Deere Power Systems, Cummins Engine Corp., and California's three
investor-owned gas utilities.
Your transit property has been selected to join a group of no more than six carefully chosen
transit agencies fÌ"om throughout California who will participate in tlús forum. By this letter, I am
pleased to invite you and one or two officials of Chula Vista Transit to participate in the Clean
Transit Operations Forum. Because of the policy-level content of the meeting, we are limiting
attendance to elected transit board members, general managers and senior operations managers.
As a participant, you will receive an up-to-the-minute briefing about natural gas transit, and have
the opportunity to discuss your questions and concerns with a blue-ribbon panel of technical and
transit policy experts. Finding solutions to your operational and political challenges is our
industry's utmost concern. Because of the very timely and important content oftlús meeting, our
sponsors have agreed to cover the costs of participants' travel expenses, subject to approval of
your governing board or council. An agenda for the forum is attached,
You can expect to leave tlús forum with a clear understanding of the benefits of natural gas to
your agency specifically, and with the commitment of the Task Force to provide your
organization with a white paper addressing any follow-up concerns or issues you may have.
I look forward to our response, and to the opportunity to answer any questions you may have.
Please feel fÌ"ee 0 ntact me at (619) 654-1105 or Pat Barnes our local Public Affairs
R"'?;L" ~ ( 19) 482-3352.
Sin erely,
J 1
e Semerad
r. Product Manager, Alternative Fuel Vehicles
Energy Products
cc. Pat Barnes
2/27/98 cc: Council; Bill Gustafson; Barbara Bamberger; , Geo:rge.. Krempl
Attachment
San Diego Gas & Electric " ~::r-
P.O. Box 1831 . San Diego, CA 92112
.."'""" ~ ,,~- ~- e"""""...
California Natural Gas Transit Task Force
Natural Gas Transit Operations Forum
March 18 and 19, 1998
Agenda
Wednesday, March 18
1:00 Convene at Spa Hotel, Palm Springs
(complimentary shuttle ITom Palm Springs Airport)
Introduction and Overview
Distribution of Forum Technical Materials
1:30 Shuttle to Sunline Transit Headquarters in Thousand Palms
1:45 Orientation and Tour ofSunline Clean Transit Operations
Maintenance Training Solutions for Natural Gas Buses
3:30 Return to Hotel
4:00 Review Forum Technical MaterialslLeisure Time
6:00 Reception
7:00 Dinner
Thursday, March 19
9:00 Forum session convenes at Spa Hotel
Welcoming Remarks
9:30 Topics
Public Health Issues
Operations Integration: Transit Case Examples
Product and Operations Issues
Natural Gas Fueling Solutions & Opportunities
Funding Solutions and Opportunities
12:00 Luncheon Speaker to be announced
Topic: Public hnage Value of Natural Gas Bus Fleet
1:00 Adjourn
Optional Tour: Energy Technology Training Center
College of the Desert, Palm Desert
Shuttle to Airport as needed 11/3
COUNCIL AGENDA STATEMENT
Item Jr
Meeting Date 3/10/98
ITEM TITLE: PUBLIC HEARING: PCM-98-24; Amendments to the Salt Creek
Ranch (now known as Rolling Hills Ranch) Sectional Planning Area (SPA)
Plan consisting of modification of the Planned Community District
Regulations to allow certain encroachments into sideyard setbacks in the SFI,
SF2, and SF3 Single Family land use districts- Pacific Bay Homes
ORDINANCE)1 d«pproving amendments to the Salt Creek Ranch
Sectional Planning Area (SPA) Plan consisting of modifications to the
Planned Community District Regulations regarding certain sideyard setback
encroachments
SUBMITTED BY: Director of Planning øt
REVIEWED BY: Ci~ M""""" ~ b¡J ~ (4/Sths Vote: Yes_No2Q
The applicant proposes to amend the Sectional Planning Area (SPA) plan for the project formerly
known as Salt Creek Ranch and now identified as Rolling Hills Ranch (see Attachment 1, Locator).
The proposed amendments would allow certain setback encroachments which would accommodate
trellis structures over driveways, where the driveways lead to garages located in the rear of the lot,
for the SFI, SF2, and SF3 single family detached land use districts of Rolling Hills Ranch. In order
to accommodate such encroachments, the applicant has proposed amendments to the SPA's Planned
Community District Regulations.
The Environmental Review Coordinator has determined that the project is exempt from
environmental review under CEQA as a Class 5(a) exemption (minor alteration in land use).
RECOMMENDATION:
That Council adopt the ordinance recommending approval of the amendments to the Salt Creek
Ranch Sectional Planning Area Plan and Planned Community District Regulations to allow certain
sideyard setback encroachments, as presented in the attached draft ordinance.
BOARDS/COMMISSIONS RECOMMENDATION:
At its February 11, 1998 meeting, the Planning Commission voted unanimously (7-0) to recommend
approval of the proposed amendments.
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Page 2, Item-
Meeting Date..3L!!lL2£.
DISCUSSION
Site Characteristics
The project site is the planned community of Rolling Hills Ranch, formerly known as Salt Creek
Ranch. Rolling Hills Ranch is a 1,200 acre residential community which includes 2662 residential
units on 791 acres, 27 acres of parks, 351 acres of open space, two school sites, two community
purpose facility sites, and a potential fire station site. This project is located east of the easterly
terminus of East H Street, north of the Eastlake Business Park and south and east of the future San
Miguel Ranch development.
Zonin¡¡¡ and Land Use
Zoning Land Use
Site PC (Rolling Hills Ranch Planned Community) Vacant, grading currently underway for
residential
North PC (San Miguel Ranch Planned Community) Vacant, future residential in San Miguel
Ranch
South PC (Eastlake I Planned Community) Light Industrial, Eastlake Business
Park
West PC (Eastlake I Planned Community) Multi-family; Salt Creek I Condos
PC (San Miguel Ranch) Vacant, future residential
East PC (atay Ranch Planned Community) Vacant, future low density residential
~
The proposed SPA amendments consist of the modification of the development standards contained
in the Planned Community District Regulations, to allow certain encroachments into sideyard
setbacks in the SF1, SF2, and SF3 Single Family (detached) land use districts (see Attachment 2,
Zoning Districts Map). These single family land use districts feature minimum lots sizes ranging
from 5,000 to 7,000 square feet, and each of these land use districts require minimum sideyard
setbacks of 5 feet on each side for the principal structure.
The requested encroachment is designed to accommodate trellis structures attached to the main
residence which would provide a covered parking area for single family lots where plans feature
attached garages located at the rear of the residence (see Attachment 3, sample floor plan). The
proposed encroachment would allow the placement of the supporting trellis post and eaves within
the 5 foot setback area, with no portion of the structure closer than 3 feet to the property line.
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Page 3, Item -
Meeting Date.1ill!L2.!!..
Analvsis
The land use districts affected by this application comprise a total of 1187 single family lots. The
application is intended to provide a design feature option for a new product type (attached two-car
garage at the rear of the residence with additional tandem space) which the developer will be test
marketing. The product being developed is similar to that product in the atay Ranch described as
the "Hollywood Driveway", featuring the longer driveway at the side of the property leading to a
garage which is significantly pulled back fiom the street.
Variances to allow this type of encroachment were previously granted by the Zoning Administrator
for five lots, including one model lot currently under construction, based upon site plan constraints
on those five lots. However, the applicants are processing this amendment to provide for more
widespread useage of this design feature should marketing of this floor plan prove successfuL
Staff is supportive of this residential product design which addresses a long-standing staff concern
regarding the undesirability of garages dominating single family streetscape. This floor plan pushes
the garage to the rear of the property, thus allowing the developer to provide a 3-car garage while
minimizing the garage's visual impact.
The wood trellis which is proposed to be utilized would be open on three sides, features a flat cover
at least 50% open to light, and is a maximum of 10 feet high. Thus the structure, while
complementary to the residence, also "disappears" somewhat due to its open construction and
therefore will not have negative or obstructive visual impacts on adjacent property.
As noted, the encroachment requested would be no more than 2 feet into the required 5 foot sideyard
setback; this includes the structure's eaves. In fact, this encroachment would be pennitted by right
if it was for the eaves alone; eaves, along with certain other architectural features, may encroach into
up to 40% of a sideyard setback. However, walls or posts may not encroach into setback areas, thus
necessitating this modification to the setbacks in order to accommodate the trellis feature.
Rather than change the established setbacks, the encroachment has been drafted as an exception to
the required setbacks (see Exhibit "A" attached to the Council Resolution). As proposed, this
encroachment would be provided only for a trellis structure over the driveway, and only for those
lots which feature the rear-garage floor plan. The amendment appears as a footnote on the
development standards under sideyard setbacks (see footnote #6 on Exhibit "A", attached to the draft
City Council resolution).
Staffwas initially concerned regarding the need to clarify the precise scenario and design for which
this encroachment is desired. As a result, staff has recommended and the applicant has agreed, that
additional design restrictions be utilized; these have been added in a text section immediately
following the development standards (see page 2 ofExhibit "A" attached to the Council Resolution).
These additional requirements and the accompanying graphic will clearly demonstrate the feature
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Page 4, Item -
Meeting Date~
for which the encroachment is intended, and will provide design parameters which will ensure that
the encroachment is not later used for enclosed structures or additions.
At its February 11, 1998 meeting, the Planning Commission considered this request. Members
concurred that the product being developed is desirable, and that the encroachments requested were
minor. Therefore, the Commission voted unanimously to recommend that the Council approve the
ordinance presented.
Conclusion
Staff finds the proposed residential product type to be desirable, and the trellis design feature for
which the proposed encroachment is intended a positive enhancement which poses no negative
impacts. For these reasons as well as others noted above, staff recommends approval of the
proposed amendments to the Rolling Hills Ranch SPA Plan Planned Community District
Regulations, in accordance with the attached draft City Council Resolution.
FISCAL IMPACT:
The applicant has paid all fees associated with the processing of this request.
Attachments
I. Planning Commission Resolution & Minutes NOT SCA."'tNW
2. Locator
3, Zoning districts map
4, Sample floor plan
5, Disclosure Statement NOr SCANNED
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A 7Tï1 CH M, E: AI T 1-
RESOLUTION NO. PCM-98-24
RESOLUTION OF THE CITY OF CHULA VISTA PLANNING COMMISSION
RECOMMENDING THAT THE CITY COUNCIL APPROVE AMENDMENTS
TO THE SALT CREEK RANCH SECTIONAL PLANNING AREA (SPA) PLAN
CONSISTING OF MODIFICATIONS TO THE PLANNED COMMUNITY
DISTRICT REGULATIONS REGARDING CERTAIN SETBACK
ENCROACHMENTS
WHEREAS, a duly verified application for an amendment to the Salt Creek Ranch (now
known as Rolling Hills Ranch) Sectional Planning Area (SPA) plan was filed with the Planning
Department of the City ofChula Vista on December 19, 1997 by Pacific Bay Homes ("Developer");
and,
WHEREAS, said application requests an amendment to the Salt Creek Ranch Planned
Co=unity District Regulations to allow, with certain restrictions, a 2 foot structural encroachment,
under certain circumstances, into required sideyard setbacks for the SFl, SF2, and SF3 Single
Family Land Use Districts; and,
WHEREAS, staff has recommended, and the applicant has agreed to, certain additional
amendments to support and clarify the requested Planned Community District Regulation
amendments; and,
WHEREAS, the Environmental Review Coordinator has determined that the project is
exempt ITom environmental review under CEQA as a Class 5(a) exemption; and,
WHEREAS, the Planning Director set the time and place for a hearing on the proposed SPA
plan amendments and notice of said hearing, together with its purpose, was given by its publication
in a newspaper of general circulation in the city and it mailing to property owners and tenants within
500 feet of the exterior boundaries of the property at least 10 days prior to the hearing; and,
WHEREAS, the hearing was held at the time and place as advertised, namely 7:00 p.m.,
February 11, 1998 in the Council Chambers, 276 Fourth Avenue, before the Planning Commission
and said hearing was thereafter closed.
NOW, THEREFORE, BE IT RESOLVED THAT THE PLANNING COMMISSION hereby
recommends that the City Council adopt the attached draft City Council Resolution approving the
amendments to the Salt Creek Ranch SPA plan Planned Community District Regulations in
accordance with the findings and subject to the conditions contained therein.
BE IT FURTHER RESOLVED THAT a copy of this resolution be transmitted to the City
CounciL
PASSED AND APPROVED BY THE PLANNING COMMISSION OF THE CITY OF CHULA
VISTA, CALIFORNIA, this 11th day of February, 1998, by the following vote, to-wit:
¡ J..r ~
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A)-:ES: Commissioners Aguillar, Davis, O'Neill, Ray, Tarantino, Thomas, Willett
NOES: None
ABSTh'T: None
G~
Patty DaYÍs, ChaIT
ATIEST:
..
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-4- February 11, 1998
Chal avis asked the Assistant City Attorney if, after having read the report
enough e public testimony, she could vote on this item.
MSC (Tho arantino) (6-0-1) to adopt the Negative Declaration iss or 15-98-15 and
ado esolution PCC-98-11 recommending that the City Council approve requested
nditional Use Permit for a small school enrolling a maximum of 25 students wit ecial
education needs at 795 East J Street. Motion carried.
2. PUBLIC HEARING: PCM-98-24¡ Amendments to the Rolling Hills Ranch (formerly known
as Salt Creek Ranch) Sectional Planning Area (SPA) Plan consisting of
modifications of the Planned Community District Regulations to allow
certain encroachments into sideyard setbacks in the SF1, SF2, and SF3
Single Family land use districts - Pacific Bay Homes.
Background: The applicant, Pacific Bay Homes, is proposing to amend the Rolling Hills Ranch
SPA plan consisting of modifications to the Planned Community District Regulations to allow
certain setback encroachments which would accommodate trellis structures over driveways,
where the driveway leads to garages located in the rear of the lot for the SF1, SF2, and SF3
single family detached land use district of Rolling Hills Ranch.
The requested encroachment would allow the placement of the supporting trellis post and
eaves within the 5 foot setback area, with no portion of the structure closer than 3 feet to the
property line. The land use districts affected by this application comprise a total of 1187 lots.
Staff is supportive of the product-type that this is intended for, however, there is concern with
how the encroachment might later be used by the residents. Because of this concern, staff
included a section that specifies construction standards and the intended use.
Staff Recommendation: That the Planning Commission adopt Resolution PCM-98-24
recommending approval of the amendments to the Rolling Hills Ranch Sectional Planning Area
Plan Planned Community District Regulations, in accordance with the findings and subject to
the conditions contained in the draft City Council resolution.
Public Hearing Opened 7:40
Guy Asaro, Pacific Bay Homes, 2300 Boswell Road, Chula Vista, CA 91914 stated it is highly
unlikely that they would plot two houses with the trellis facing each other and indicated they
have plotted the trellis plan in 20 homes out of 107, or approximately less than 20%. If it has
the anticipated market acceptance, they would plot future neighborhoods at a similar rate or
greater.
Public Hearing Closed 7:45.
JÀ,1
Planning Commission Minutes .5- February 11, 1998
Commission Discussion:
The Commission commended the developer for the innovative product-type that is being
proposed and their creativity in designing more attractive streetscapes.
MSC (Willett/Ray) (7-0) to adopt Resolution PCM-98-24 recommending approval of the
amendments to the Rolling Hills Ranch Sectional Planning Area Plan Planned Community
District Regulations, in accordance with the findings and subject to the conditions contained
in the draft City Council resolution. Motion carried.
3. Update on Council Items,
Mr. Lee reported council considered without incident, the two small subdivisions on the south
end of Eastlake.
The joint workshop with the City Council and the Elementary School District will take place
on Wednesday, February 18, therefore, staff would recommend canceling the Planning
Commission Workshop for that day.
MSC (RaylWillett) (7-0) to cancel the February 18, 1998 Planning Commission Workshop.
Motion carried.
DIRECTOR'S REPORT:
Mr. Lee stated that this year's Planning Commissioners Conference is scheduled for March 5th
in Long Beach and there is enough money in the budget for two commissioners to attend.
After discussion of scheduling availability, Chair Davis stated that Cmr. O'Neill would be first
choice and Cmr. Willett would be second. Both will check their schedule and confirm at a
later date with the Planning Commission Secretary on their availability.
ADJOURNMENT at 7:55 to the next regular Planning Commission meeting of February 25,
1998 at 7:00 p.m. in the Council Chambers.
IJ.~ ~
: I
I
I I
PRp~T
J LOCATION
SAN MIGUEL
. RANCH
E.L.'
WOODS
CHULA VISTA PLANNING DEPARTMENT
LOCATOR Ä~~~~: Pacific Bay Homes PROJECT DESCRIPTION:
ø AMENDMENTS
:g~~~ Rolling Hills Ranch Request: SPA Amendment, modify sideyard setbacks to allow 3'
tor trellises attached to residence to accomodate Hollywood
SCALE: I FILE NUMBER: driveway conditions. 1)-1
NORTH No Scale PCM-98-24
h:\home\planning\carlos~ocators\pcm9824.cdr 1/29/98 / J-,r (1
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PLAN 3
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TIŒCl OF CHULA VISTA DISCLOSURE ST :õME1>.j ~
,¡tn-AC H M tiNT Y<iu arc required to file a Statcment Dr Disclosure or ccnain ownct5hip Dr financial inlerc.qs, payments, or campaign
contrioulions. on all mailers which will reguire discrctionary action on thc pan of the City Council, Planning Commission, and
all other official bodies. The following information must be disclosed:
1. Lis! the narncs of all persons having a financial interesl in the property which is the suoject Df tbe application or the
Cùntract, e.g., owner, applicant. contractor, subcontractor, material supplier.
Pacific Bay HDmes
2, If any person' identified pursuant 10 (I) above is a corporation Dr partnership, list the namcs Df all individuals owning
marc than \0% of the sharcs in the corporation or owning any panncrship intcrcst in the partnership.
3. If any person' identified pursuant to (I) above is non-profit organization or a trust, list the names of any person
serving as director of the non-profit organization or as trustee or beneficiary or trustor of the trust.
4. Have you had more than $250 worth of busincss transacted with any member of the City staff, Boards, Commissions,
Commillees, and Council within the past twelve months" Ycs- No...x If yes, please indicate person(s): -
5. Please identify each and every person, including any agents, employees. consultants. or independent Cùntractors who
you have assigned to represent you before the City in this mailer.
LundstrDm & Associates
David .Lorimer & Associates
6. Have you and/or your officers or agents, in the aggregate, contributed more than $1,000 to a Councilmember in the
current or preceding election period? Yes- No2 If yes, state which Councilmember(s):
Date: \\!-z..Co/cr::¡.
ignature of contractor/applicant
GULf 4::,Nto
r~1 J- Print or type name of contractor/applicant
, Penn" is defincd "", "Any indip;"uo" fin.. co'po"nenhip. joim ""'/lUre, "-,,oeioIim, social club, frolcmo! mgonwnim, cmpo,oIim, crlOIC. mm. rccciw:r, syr.dico,~
rhis and 010' o<her cou"O', dry "',,¡ cowUT)', eio'mu"ieipolil)', dismc, 0' vI),er political subdi,'isim, 0' ""y o<her group 0' combinolion acli,,& "" a ww."
NEIGH33".H:xJD 1>-13 7B & 8 1&2 6 & 7A 3 5 41\. 4B
SFE SF1 SF2 SF3 SF4 SFA' MF'
7 Side yard setback (If} feet):
2, To adjacent residential 1Di5 6 1015 6 1015 6 1015 6 10156
lot (min, totaVone side) 1015 1015 SP SP
b. Distance between detached
residential units 10 10 10 10 10 10 10 SP NA
c. To adjacent S1reet
(comer lot) 15 15 10 10 10 10 10 SP SP
8 Rear yard selba:>: nn feet) 25 20 15 15 15 15 10 10 SP
9 Sœnic highway setbadcs:
a, East H Streeet (from
right-of-way)
. Minimum 20
- Comers
E H and Hunte Pkwy 100
E. H and other streets 3D
b. Hunte Par1<way
- Minimum 20
10 Building height nn feet) maximum:
A=ssory building maximum 45'
(mfeet) 28' 28' 28' 28' 28' 28' 26' 35
"'"""'""' heiOht i> 3.5""-..." ~no"'family """'"'. -...P""" by !he Zonino """"-Ior
, ..........,heò",i>..............."nwtti-Iomüyhome=.
6 Open trellis struaures anached to the residence may encroach up to two feer (including eaves) ¡lUO one
required sideyardfor properties in which rhe garage is Ioca1ed in the rear 50% of the lot, subject to the
requiremen1s of Planned Community District Regulations Section 2.3.1-.
Fmal San Creek SPA
213/47.008
November 12.1991
Amended February 11, 1998
Id---Iß
11, Parking spaces per unit:
Single-Family Estate 2 garage spaces
SF1 2 garage spaces
SF2 2 garage spaces plus 1 guest on street
sn 2 garage spaces plus 1 guest on street
SF4 2 garage spaces plus 1 guest on street
SF5 2 garage spaces plus 1 guest on street
SFA 2 spaces per dwelling unit (1 covered) plus guest parking
MF 1.5 spaces per 1 bedroom unit
2.0 spaces per 2 bedroom unit
2.5 spaces per 3 bedroom unit
2.3.1 Setback Encroachments for SF1 SF2. and SF3 Districts: :¡;",", "",00
An open trellis structure attached to the residence may /._.~
encroach into one sideyard setback to a maximum of 2 (. .'-
feet, including eaves, on tbose lots in which tbe ~ '
garage is located in the rear 50% of the lot. 1
Trellises shall span, but may not obstruct, the .
driveway (see graphic).
5"
The trellis shall be open on three sides and shall be I D
constructed of 8"x8" wooden posts with a flat wooden 0
cover at least 50% open to light. Maximum trellis I
1
height shall be 10'. The trellis shall be no larger 154
than 300 square feet, and is subject to all lot 3B "
coverage and floor area ratio regulations. r,=55S.ï7
,,'1\17 !
LeT 11
1
Final Salt Creek SPA
213/47.008 .
November 12, 1991 0 i I
Amended February 11, 1998 II-16 t, I
-- :rr~:-~-,---r--T
l"à-IH-
ORDINANCE NO. )Î J- ç
}\N ORDINlv~CE OF THE CITY OF CHULA VIST
APPROVING AMENDMENTS TO THE SALT CREEK
SECTIONAL PLANNING AREA (SPA) PLAN CON
MODIFICATIONS TO THE PLANNED CO
REGULATIONS REGARDING CERT
ENCROACHMENTS
WHERE.A..S, the area ofland which is the subject matter of this resolution is
diagrammatically represented in Exhibit A attached hereto and incorporated herein by this
reference, was formerly lmown as Salt Creek Ranch (and is now commonly lmown as Rolling
Hi11s Ranch) ("Project site"). .
WHEREAS, on December 19, 1997 Pacific Bay Homes ("Developer") filed a Sectional
Planning Area plan amendment application with the Planning Department of the City of Chula
Vista and requested approval of certain sideyard setback encroachments in the SFl, SF2, and
SF3 Single Family land use districts under the Salt Creek Ranch Planned Community District
Regulations ("Project"); and,
WHEREAS, staff recommended that certain additional amendments to the Salt Creek
Ranch Planned Community Deistrict Regulations be included to support and clarify the
requested amendments, and the applicants were agreeable to said amendments; and,
\VHEREAS, the Planning Commission held an advertised public hearing on said project
on February I I, 1998 and voted 7-0 to recommend that the City Council approve the Project;
and, '.
WHEREAS, the City Clerk set the time and place for a hearing on said Sectional
. Planning Area Plan amendment application and notice of said hearing, together with its purpose,
was given by its publication in a newspaper of general circulation in the city and its mailing to
property owners within 500 feet of the exterior boundaries of the property at least ten days prior
to the hearing; and,
WHEREAS, the hearing was held at the time and place, namely March 10, 1998 at 6:00
p.m. in the Council Chambers, 276 Fourth Avenue, before the City Council and said hearing was
thereafter closed.
NOW, THEREFORE, BE IT RESOLVED that the City Council does ordain as follows:
- SECTION I: That the proposed amendments to the Salt Creek Ranch Sectional Planning Area
Plan Planned Community District Regulations to allow certain sideyard setback encroachments
in the SFI, SF2, and SF3 land use districts are hereby approved as depicted in Exhibit "A",
attached hereto.
J:¿ -15,
I"
SECTION II: This ordinance shall take effect and be in full force and effect on the thirtieth day
from and after its second reading and adoption.
Presented by Approved as to form by
Q~~~
Robert A. Leiter John Kaheny
Planning Director City Attorney
).2r /b
'1
PROOF OF PUBLICATION This space is for the County Clerk's filing stamp I
(2015.5 C.G.P.)
STATE OF CALIFORNIA,
County of San Diego:
I am a citizen of the United States and Proof of Publicaton of:
a resident of the County aforesaid; I am CV 10535
over the age of eighteen years, and not --------------------------------------------------
a party to or interested in the above- NOTICE OF PUBLIC HEARING
entitled matter. I am the principal clerk - - - u - u u- - - - un- - - _n --- ---- -- - -- u n n- ---- - n
of the printer of the STAR-NEWS, a IIIJf\Ct II' rufLIC --
newspaper of general circulation, pub- CMUlAa~
lished ONCE WEEKLY in the city of ...... 10tice
Chula Vista and the South Bay Judicial KOTIC£~Š1tîiREílY GIVEN
THAT 'M QtUlA\I1SI'-CrrI
District, County of San Diego, which CQuNê L WiU hOI4. pu'lie
hOlrlDO to'con"'" 1M tol-
newspaper has been adjudged a news- IowInI: -
PCM."-2. . Appro"'" an
paper of general circulation by the a....-oltolho.StIt CraeI<
Superior Court of the County of San ft8nÌI\lnóiw~"
1Io1IIit_~""'""'~
Diego, State of California, under the Plannino Area Plan 10 ~Iow
certain __manls Into
date of April 23, 1951, Case Number sldiY<lnl..a.ic:tos In 1M SfI.
I ,Sf2.,1/HI Sf3. Simile Flmliy
182529; that the notice, of which the 'londusedtstrict.PICifIc.Bay
'HorIíIs.For-"-
annexed is a printed copy (set in type tIon.coIIPrIjodPl8mlfPIIIY
not smaller than nonpareil), has been _.11191.5105,
II you - 10 eballange lI1a
published in each regular and entire City's - on -."
In eourt;yvu mày be-
issue of said newspaper and not in any 10 raising on~ Iho.. i..ulS
you or ........ oIsa - at
supplement thereof on the following 1M P..._~ed
dates, to-wit: in lhII:ôlII;cê, ..!OriIIan
...--.
2/28 d~lvtred Io'1ha'CI\y Clerk's
OfflcIot«priar"""publie
i18IIfIIØ' .
all in the year 1998 SAID PUBLIC I!£AAIIIG WILL
BE HRI1 '" THE CITY COtIN-
ClLonra""IY. Mo!.h 10.
180, ot6:00 p,m. in 'ha
I certify (or declare) under penalty of Cd"nctt CIIam1la",Pflblie
SalVi'" _11!1;276 Fdulll1
perjury that the foregoing is true and A..nua. it which tIme any
~P"s.. desiring 10 be baard
correct. 1lIIY_'
0A1E0: ftbflllry 25, 1988
CV10535 '212B.
Dated at Chula Vista, California 91910
this 28 ,19~
S' ( l¿(
Ignature
PRINCIP K /.:¿~/?
r.,1
. I..:- r,{~ I
~O1:ŠC~
March 5, 1998
TO: ~. aonorabl. Mayor and Ci~ C~
FROM: John D. Goss, City Manager-lf(
SUBJECT: City Council Meeting of March 1 , 1998
This will transmit the agenda and related materials for the regular
City Council meeting of Tuesday, March 10, 1998. Comments
regarding the Written Communications are as follows:
5a. This is a letter from the City Attorney stating that to the
best of his knowledge from observance of actions taken in
Closed Session on 3/3/98 in which he participated, there were
no actions taken which are required under the Brown Act to be
reported.
IT IS RECOMMENDED THAT THIS LETTER BE RECEIVED AND FILED.
5b. This is a letter from the Chair of the Charter Review
Commission regarding Council Referral on Geographic Residency
Requirements for Councilmembers. IT IS RECOMMENDED THAT THE
LETTER BE RECEIVED AND FILED.
5c. This is a letter from Dr. Barry Russell requesting $250 to
help fund the Cultural Arts Classical Music Competition May
16-17. The funds for this activity go to duplicating, judges'
fees, and other operational costs. It is staff's belief that
this request does not meet Council Policy 159-02 criteria as
it does not provide a specific benefit to the City. However,
the City Council in the past two years approved a contribution
for this event. THEREFORE, CONSISTENT WITH COUNCIL ACTION IN
1996 AND 1997, IT IS RECOMMENDED THAT THE SAME AMOUNT OF
FUNDING AS IN 1997 BE PROVIDED, THAT IS, $200.
JDG:mab
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