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2001 07 03 RDAi i I Redevelopment Agency Agendas are available on the City's Web Page @ www.la-quinta.org Redevelopment Agency Agenda CITY COUNCIL CHAMBER 78-495 Calle Tampico La Quinta, California 92253 Regular Meeting Tuesday. July 3. 2001 - 2:00 P.M. Beginning Res. No. RA 2001-03 CALL TO ORDER Roll Call: Board Members: Adolph, Pena, Perkins, Sniff, Chairperson Henderson IL PUBLIC COMMENT At this time, members of the public may address the Redevelopment Agency on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. Please watch the timing device on the podium. Ill. CLOSED SESSION 1. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED ON THE WEST SIDE OF JEFFERSON STREET, SOUTH OF THE ALL AMERICAN CANAL AND NORTH OF AVENUE 54. PROPERTY OWNER/NEGOTIATOR: KSL 2. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED AT THE NORTHEAST CORNER OF AVENUE 48 AND ADAMS STREET. PROPERTY OWNER/AGENT: KINER GROUP RDA Agenda July 3, 0(0 1 3. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED ON THE SOUTH SIDE OF HIGHWAY 111 BETWEEN WASHINGTON AND SIMON DRIVE (APN: 643-020-001). PROPERTY OWNER/NEGOTIATOR: MIKE RYAN NOTE: Time permitting, the Redevelopment Agency Board may conduct Closed Session discussions during the dinner recess. In addition, when the Agency is considering acquisition of property, persons identified as negotiating parties are not invited into the Closed Session Meeting. .Mole] -A dIC;frI111oil IV. PUBLIC COMMENT At this time members of the public may address the Agency Board on items that appear within the Consent Calendar or matters that are not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. When you are called to speak, please come forward and state your name for the record. Please watch the timing device on the podium. For all Agency Business Session matters or Public Hearings on the agenda, a completed "request to speak" form must be filed with the City Clerk prior to the Agency beginning consideration of that item. V. CONFIRMATION OF AGENDA VI. APPROVAL OF MINUTES 1. MINUTES OF JUNE 5, 2001. 2. MINUTES OF JUNE 19, 2001. VII. CONSENT CALENDAR Note: Consent Calendar items are considered to be routine in nature and will be approved by one motion. APPROVAL OF DEMAND REGISTER DATED JULY 3, 2001. Vill. BUSINESS SESSION 1. CONSIDERATION OF A RESOLUTION OF THE BOARD OF DIRECTORS OF THE LA QUINTA REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF TAX ALLOCATION BONDS OF SAID AGENCY IN A PRINCIPAL AMOUNT NOT TO EXCEED FORTY-EIGHT MILLION DOLLARS ($48,000,000) TO FINANCE A PORTION OF THE COSTS OF A REDEVELOPMENT PROJECT KNOWN AS THE LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 AND APPROVING CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH. A. RESOLUTION ACTION RDA Agenda -2- July 3, 2001 002 IX. PRESENTATIONS - None XIII. PUBLIC HEARINGS - None XIV. ADJOURNMENT - Adjourn to a Regular Meeting of the Redevelopment Agency to be held on July 17, 2001, commencing with Closed Session at 2:00 P.M. in the City Council Chambers, 78-495 Calle Tampico, CA 92253. DECLARATION OF POSTING I, June S. Greek, Secretary of the La Quinta Redevelopment Agency, do hereby declare that the foregoing agenda for the La Quints Redevelopment Agency meeting of July 3, 2001, was posted on the outside entry to the Council Chamber, 78-495 Calle Tampico and on the bulletin board at the La Quints Chamber of Commerce and at Stater Bros., 78-630 Highway 111, on Friday, June 29, 2001. DATED: June 29, 2001 JUNE S. GREEK, CIVIC Secretary, La Quints Redevelopment Agency The La Quints City Council Chamber is handicapped accessible. If special equipment is needed for the hearing impaired, please call the City Clerk's Office at 777-7025, 24-hours in advance of the meeting and accommodations will be made. FDA Agenda -3- July 3, 2001 003 T:ey' 4 4Qa!"fw cF w' AGENDA CATEGORY: BUSINESS SESSION COUNCIL/RDA MEETING DATE: JULY 3, 2001 CONSENT CALENDAR ITEM TITLE: STUDY SESSION Demand Register Dated July 3, 2001 RECOMMENDATION: Approve Demand Register Dated July 3, 2001 BACKGROUND: Prepaid Warrants: 14VOW41=1W11 45716 - 457181 93,067.36 45719 - 457271 22,102.00 45728 - 457411 760,225.52 Wire Transfers) 229,672.95 P/R 7093 - 7162) 88,453.67 P/R Tax Transfers) 25,799.55 CITY DEMANDS $1,920,070.73 Payable Warrants: 45742 - 458971 1,566,334.03 RDA DEMANDS 865,584.35 $2,785,655.08 $2,785,655.08 FISCAL IMPLICATIONS• Demand of Cash -RDA $865,584.35 Filance Director [lll] LA 1, CITY OF LA QUINTA BANK TRANSACTIONS 6/13/01 - 6/27/01 6/22/01 WIRE TRANSFER - DEFERRED COMP $6,106.03 6/22/01 WIRE TRANSFER- PERS $11,020.92 6/22/01 WIRE TRANSFER - CREDIT UNION $5,546.00 6/18/01 WIRE TRANSFER - RDA ESCROW $60,000.00 6/18/01 WIRE TRANSFER - RDA ESCROW $60,000.00 6/18/01 WIRE TRANSFER - RDA ESCROW $25,000.00 6/18/01 WIRE TRANSFER - RDA ESCROW $12,000.00 6/18/01 WIRE TRANSFER -RDA ESCROW $50 000.00 TOTAL WIRE TRANSFERS OUT $229,672.95 ACCOUNTS PAYABLE - AP5005 CITY OF LA QUINTA CHECK CHECK NUMBER DATE CHECK REGISTER BANK ID: DEF VENDOR NO. NAME ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 2:15PM 06/27/01 PAGE 1 PAYMENT AMOUNT 45742 06/27/01 &01439 JOHN ACKLEY 76.00 45743 06/27/01 &01440 ED ALDERSON 38.00 45744 06/27/01 &01441 SHARON BILLS 462.94 45745 06/27/01 &01442 LEE BRANKLINE 76.00 45746 06/27/01 &01443 LYNN BRUCE 50.00 45747 06/27/01 &01444 CHARLES BURRES 38.00 45748 06/27/01 &01445 CALIFORNIA POOLS & SPAS 484.80 45749 06/27/01 &01446 BETTE CHENEY 38.00 45750 06/27/01 &01447 FRED DAVIS 76.00 45751 06/27/01 &01448 JOHN FISHER 76.00 45752 06/27/01 &01449 DOROTHY HOWARD 17.00 45753 06/27/01 &01450 MC DERMOTT ENTERPRISES 500.00 45754 06/27/01 &01451 PM LA QUINTA LLC 19.50 45755 06/27/01 &01452 LOU SLACK 38.00 45756 06/27/01 &01453 SRHI LLC 150.00 45757 06/27/01 &01454 TRIAD 2 12.00 45758 06/27/01 &01455 U S HOME CENTRAL CAL 2596.78 45759 06/27/01 &01457 BECKY FRANCO 36.00 45760 06/27/01 &01458 THOMAS HETMANEK 60.00 45761 06/27/01 &01459 JEAN HOGREFE 36.00 45762 06/27/01 &01460 DENAE HOLT 36.00 45763 06/27/01 &01461 ELAINE HUNTER 36.00 45764 06/27/01 &01462 SHANNON KIENZLE 36.00 45765 06/27/01 &01463 BONNIE KODESCH 17.00 45766 06/27/01 &01464 CHARLES MAGALLAN 45.00 45767 06/27/01 &01465 MYRNA MANN 36.00 45768 06/27/01 &01466 DELIA MUNOZ 36.00 45769 06/27/01 &01467 COLLEEN O'SHAUGHNESSY 36.00 45770 06/27/01 &01468 PROFESSIONAL DOOR SYSTEM 25.00 45771 06/27/01 &01469 ANGELICA VILLANUEVA 30.00 45772 06/27/01 &01470 CAROLYN WALKER 45.00 45773 06/27/01 &01471 MARGARET WESTLY 36.00 45774 06/27/01 &01472 CINDY ZAMOREZ 36.00 45775 06/27/01 &01473 ROSEMARIE BERRYESSA 44.00 45776 06/27/01 &01474 BERNADETTE BIERMAN 52.00 45777 06/27/01 &01475 JACQUELYN COTHRAN 104.00 45778 06/27/01 &01476 INGRID CZERNY 6.00 45779 06/27/01 &01477 CHARLES DUGGAN 55.00 45780 06/27/01 &01478 BRUCE KAY 52.00 45781 06/27/01 &01479 NINA MORALES 24.00 45782 06/27/01 &01480 DEL RENDA 44.00 45783 06/27/01 &01481 MARIA RUIZ 52.00 45784 06/27/01 &01482 BARBARA STORKERSEN 22.00 45785 06/27/01 &01483 CAROL VIRGINIA 22.00 45786 06/27/01 AlRO01 A-1 RENTS 84.03 45787 06/27/01 AAA100 AAA SEASONS 3768.00 45788 06/27/01 ACE010 ACE HARDWARE 198.96 003 006 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER CITY OF LA QUINTA BANK ID: DEF 2:15PM 06/27/01 PAGE 2 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT 45789 06/27/01 AME015 AMERICAN PLANNING ASSOC 246.00 45790 06/27/01 AME175 AMERICAN FORENSIC NURSES 147.00 45791 06/27/01 ASCO01 A & S COFFEE SERVICE 28.00 45792 06/27/01 AUT030 AUTOMATED TELECOM 396.97 45793 06/27/01 BAN070 BANNER AMERICAN PRODUCTS 105.96 45794 06/27/01 BER150 BERRYMAN & HENIGAR INC 12314.00 45795 06/27/01 BI0100 BIO TOX 162.90 45796 06/27/01 B00010 BOOK PUBLISHING COMPANY 4885.25 45797 06/27/01 BRI100 BRINKS INC 275.40 45798 06/27/01 BUR050 BUREA OF RECLAMATION YUMA 3368.00 45799 06/27/01 CAD010 CADET UNIFORM SUPPLY 14.16 45800 06/27/01 CAL065 CALIF JOINT POWERS INS 319538.00 45801 06/27/01 CDWO50 CDW GOVERNMENT INC 1977.85 45802 06/27/01 CEN010 CENTURY FORMS INC 213.24 45803 06/27/01 CFI100 CFI SPORTS FLOORING 3168.00 45804 06/27/01 CIT025 CITICORP VENDOR FINANCE 325.39 45805 06/27/01 CLA050 CLASSIC AUTO TRANSPORT 196.00 45806 06/27/01 COA010 COACHELLA VLY ARCHAEOLOGI 35.00 45807 06/27/01 C00050 J P COOKE CO, THE 11.05 45808 06/27/01 COR150 CORPORATE EXPRESS 450.06 45809 06/27/01 COS050 COSTCO BUSINESS DELIVERY 291.59 45810 06/27/01 CPR104 CPRS DIST XI 10.00 45811 06/27/01 CRA050 DANIEL CRAWFORD JR 124.95 45812 06/27/01 CVA010 C V A G 2106.02 45813 06/27/01 DAN200 DANONE WATERS OF NORTH 444.09 45814 06/27/01 DDP100 DD PAINTING 3620.00 45815 06/27/01 DES018 DESERT ELECTRIC SUPPLY 5666.17 45816 06/27/01 DESO40 DESERT JANITOR SERVICE 4378.50 45817 06/27/01 DES060 DESERT SUN PUBLISHING CO 9886.18 45818 06/27/01 DIE050 DIETERICH POST 90.32 45819 06/27/01 DOU010 DOUBLE PRINTS 1 HR PHOTO 13.30 45820 06/27/01 EIS010 EISENHOWER IMMEDIATE CARE 610.00 45821 06/27/01 EVA050 DAVID EVANS & ASSOC INC 968.00 45822 06/27/01 EXP200 EXPRESS DETAIL 750.00 45823 06/27/01 FED010 FEDERAL EXPRESS CORP 480.98 45824 06/27/01 FER200 FERRIS, JOHNSON & ASSOC 2457.50 45825 06/27/01 FIR005 FIRELINE FIRE EQUIPMENT 233.87 45826 06/27/01 FIR007 FIRST AID SELECT 294.53 45827 06/27/01 FIR015 FIRST AMERICAN REAL 490.74 45828 06/27/01 FOX100 FOX VALLEY SYSTEMS INC 38.91 45829 06/27/01 GAS010 GASCARD INC 436.10 45830 06/27/01 GAT020 GATEWAY COMPANIES INC 1246.59 45831 06/27/01 GRA010 GRANITE CONSTRUCTION CO 677870.12 45832 06/27/01 GUY100 GUYS & GALS UNIFORMS 146.23 45833 06/27/01 HAR010 HARRIS & ASSOCIATES 40186.00 45834 06/27/01 HEG050 JIM HEGGE 871.75 45835 06/27/01 HIL150 HILTON FARNKOPF & 2290.00 45836 06/27/01 HOA010 HUGH HOARD INC 248.44 45837 06/27/01 HOM030 HOME DEPOT 699.78 007 004 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 2:15PM 06/27/01 CITY OF LA QUINTA BANK ID: DEF PAGE 3 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT 45838 06/27/01 HOR100 DODIE HORVITZ 100.00 45839 06/27/01 ICB200 ICBM, INC 56.95 45840 06/27/01 IMP100 IMPACT SCIENCES INC 13747.63 45841 06/27/01 INF030 INFORMATION RESOURCES 390.00 45842 06/27/01 INT018 INTERNATIONAL PERSONNEL 299.00 45843 06/27/01 JIF100 JIFFY LUBE/AFMS 30.19 45844 06/27/01 JPRO10 JP REPROGRAPHICS 311.83 45845 06/27/01 JUD010 JUDICIAL DATA SYSTEMS COR 100.00 45846 06/27/01 KIN050 KINKO'S 15.96 45847 06/27/01 KIN100 KINER/GOODSELL ADVERTISNG 720.00 45848 06/27/01 KRI100 BRUCE KRIBBS CONSTRUCTION 40.00 45849 06/27/01 LAW075 LAW ENFORCEMENT LEGAL 34.50 45850 06/27/01 LEA020 LEAGUE OF CALIF CITIES 790.00 45851 06/27/01 L00010 LOCK SHOP INC 324.02 45852 06/27/01 LOW100 LOWE'S COMPANIES INC 397.66 45853 06/27/01 LUN050 LUNDEEN PACIFIC CORP 391.93 45854 06/27/01 NAW010 RON NAWROCKI 1500.00 45855 06/27/01 NIC101 NICKERSON & ASSOC INC 13082.50 45856 06/27/01 OFF005 OFFICE DEPOT INC 230.43 45857 06/27/01 OFF010 OFFICE MAX 171.98 45858 06/27/01 PIC100 PICKENS FUEL CORP 18.20 45859 06/27/01 PIT010 PITNEY BOWES CREDIT CORP 1366.00 45860 06/27/01 PIT020 PITNEY BOWES 99.33 45861 06/27/01 POW100 POWERS AWARDS 23.50 45862 06/27/01 PRE015 THE PRESS -ENTERPRISE CO 472.12 45863 06/27/01 PRI020 THE PRINTING PLACE 1401.70 45864 06/27/01 PUR100 PURKISS ROSE-RSI 6851.00 45865 06/27/01 QUA200 QUALITY FENCE CO INC 4885.00 45866 06/27/01 RAL050 RALPHS GROCERY CO 72.51 45867 06/27/01 RAS020 RASA - ERIC NELSON 5235.00 45868 06/27/01 RBF100 RBF CONSULTING 3927.20 45869 06/27/01 RIV080 RIVERSIDE COUNTY HEALTH 302.00 45870 06/27/01 RIV100 RIVERSIDE COUNTY SHERIFFS 264129.56 45871 06/27/01 RIV101 RIV COUNTY SHERIFF/INDIO 2880.99 45872 06/27/01 RIV152 RIV COUNTY TRANSPORTATION 68.00 45873 06/27/01 SAX100 SAXON ENGINEERING SERVICE 2170.00 45874 06/27/01 SMA010 SMART & FINAL 47.91 45875 06/27/01 SNE100 ROGER SNELLENBERGER ASSOC 2600.00 45876 06/27/01 SOI100 SOIL & PLANT LABORATORY 776.00 45877 06/27/01 SOU007 SOUTHWEST NETWORKS, INC 9116.25 45878 06/27/01 SOU100 SOUTHLAND GEOTECHNICL INC 3514.50 45879 06/27/01 STA045 STAN'S AUTO TECH 314.48 45880 06/27/01 STA050 STAPLES 19.31 45881 06/27/01 TER100 TERRA NOVA PLANNING & 22725.05 45882 06/27/01 TKDO10 T.K.D. ASSOCIATES INC 29578.61 45883 06/27/01 TOP100 TOP OF THE LINE SIGNS 87.50 45884 06/27/01 TRIO10 TRI LAKE CONSULTANTS INC 23985.50 45885 06/27/01 TRI100 TRI STATE LAND SURVEYORS 6250.00 45886 06/27/01 TRU010 TRULY NOLEN INC 86.00 10 005 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 2:15PM 06/27/01 CITY OF LA QUINTA BANK ID: DEF PAGE 4 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT 45887 06/27/01 USH100 USHERWOOD & ASSOC OF CAL 10265.48 45888 06/27/01 USO100 US OFFICE PRODUCTS 450.33 45889 06/27/01 USPO10 U S POSTMASTER 125.00 45890 06/27/01 VAN075 VANDORPE CHOU ASSOC INC 3450.00 45891 06/27/01 VOG050 CHRIS A VOGT 137.50 45892 06/27/01 WEL150 WELTY'S POSTAL CONNECTION 10.54 45893 06/27/01 WES020 WEST GROUP 64.50 45894 06/27/01 WIL035 WILLIAMS TILE INC 129.00 45895 06/27/01 WOR100 WORLDCOM 2295.00 45896 06/27/01 XERO10 XEROX CORPORATION 1545.98 45897 06/27/01 YOU100 YOUNG ENGINEERING SERVICE 7455.00 CHECK TOTAL 1,566,334.03 me O F Z O r N O W (•J F Q N 10 N �O N �D N �D N �O N �O N V �O N �C N �O N �G N �O N �O N �O N �O N �O m P O O O P O O O O O O O O O O O O ti F O O Z F W Z m m m �o rvi ri ui ri m r P m m m ri N00 P m Q £ d a 0 o e o 0 0 0 0 0 0 o rn o 0 o m o 0 P < .a] .a] 4 .a] .a] a s a a s a i s s s a a s a a 6 Q a 4 4 a a a a a a s a U U U F U U U W W W W U U U U \ \ \ z \ \ \ d d d d \ \ \ \ Z Z Z W Z Z Z Z Z Z Z 0 0 o E o 0 o u u o u o 0 o O z z z z a a a .. .. .. a m a m m a W Z a a F a F w F a m a a ° O m 0F OF 0F a❑ a❑ a❑ a❑ 0F OF OF u u❑ E u F u <m u ua F u ua F uW O d x W x W a x W a > O a x W x W a a U x a W a m m D m D m a x W m x W x W m x W °❑ o s ❑❑ 0 ❑ o ❑ 0 ❑❑ o 0 0 0 o❑❑❑ o ❑ o ❑❑ o ❑ W W w> w> W> W W> W> W> w w W W> w> W W> W ❑ W W W W W W W W W W W W W W W W U m o ❑ a \ 0 O • m P > 1 > m N Z Z E O O N t"t O� r'1 nt tit m ❑ M ❑ �O �O �O �O �O ✓t �J �p m \O m ❑ ti .y .r N .+ .i .y .r .y .+ .1 .r d a m m m a i O o w H a e P P O e e O e 0 0 0 0 P e P P W ✓1 V1 �(t O m� O Jl O O O O � N N V1 z e m a e o v e a F N e v c e a e v c z o 0 0 0 0 0 0 0 0 0 0 o O 0 0 0 ❑ 0 o O o 0 0 0 0 0 0 0 0 0 0 0 0 O o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 a o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 m m m N a a a a d d w d N N m m m d d d e 0 o m m m m a a a a Q 0 0 W W LN] 0 0 Jw N z .m] H H d d w w W m a W W O a a s W ❑ a a a a z `n m W W F a s m z a m z r� x U as U a W m z aa z z qq a W a a a a U 4 Q Q❑ 4 a ❑ Z d' C m W O O O O ❑ O w r a a o m m a W W W W Q a Z z a a Z a ri H F ❑❑ Z d Q 0 x x a W W z a a a a a F W W x m r7 z 0 n 0 n ❑ W x m W a W s >. a s u a u a u a u a u m m a s o F W W 2 O 7 P 11 P P P 1 O N P P P P e P P P P O a 1 Q N N N N N F O z O r N \ O N W 5 F N N N N N N N N N N N N a •~ z O O o O O O O N o o O O O O m r o O 0 O 0 O 0 O F �+• O O O O O O O m O O O a o o N a a m O £ m £ m £ m 4 a 4 a s W a 4 6 a W a E m m Q F Q F m Q F m a F m W O p O 0 F u X O F a W 0 F m O F O E a W 0 F m O F a W 0 F m m Q 0 F m Q 0 H m Q 0 F m Q O E F m X W a W a > O m O m a Y U a > O a m a > O a u a u a u a .a V O > E a ❑ O ❑ W ❑ O ❑ ❑ O ❑ ❑ 0 ❑ Q a O ❑ ❑ O ❑ ❑ O ❑ ❑ O ❑ ❑ ❑ 0 ❑ ❑ O ❑ ❑ z u z z z z z z z z m z z z z z z z z z z z z z z z W to > [u > W > {u > O > m > tL > to > {u > Iu > > Iu ❑ W W W W O W W W W W W W W U m W .. 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P � r o Y P Q Z d Q m w m a 1 0 o w F a o r o 0 0 0 0 0 0 0 0 o r o 0 o O W o m o 0 0 0 0 o O p o o P o 0 0 0 0 0 0 S Z O O N O O O O O O O O P O P P ut ry F 1 0 a m O 0 0 0 Q e o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N a 0 O U U N F W w U > O W m a m m m m m m m m Z U F F F F F F F F p m O o � O U U U U U U U U m U U d O U m O D O O O O p 0 Q H Q z .z. m ❑ ❑ ❑ ❑ ❑ ❑ o ❑ a a Q o 0 0 0 0 0 0 o W p Q a a a a a a a a F o F F a 1 a z d d d d d d d d d m x W F W a p W w w w a 0 F z o U u U U H U W o m d Q m a Q a a m a w w d w W d w m o a o o 0 0 0 0 0 0 0 0 m z a a y a a a (n [A N N (n N N m m F fu uz] E F ❑ O O p O O p D p � > U 3 3 3 Z O O O O O O O O O N O O O Yl D O .y O O O O O O O O O m 0U 0 0 0 0 0 0 0 U mm m mm m m I+ 027 Q U H E O O> 0 0> 0 0 0 O > 3 3 3 024 r r r N N N b m b F E F o m o N � � m �n N V1 O O m O O O 01 O rl N VI e a a a > a m O > O m 0 0 F m F Q F Y F 41 U a F a a s ul O O O S S ❑ z ❑ a O U Z a Z w Z Z fil til !v 4] Z 4] > > > C > z O H U a O N m P O m P N N N N I m m O O a o 41 0 0 m O b E O a O+ 2 O O m m F Z m m � m N 0 f1 -1 U Q o 0 n,R 025 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER CITY OF LA QUINTA BANK ID: DEF CHECK CHECK VENDOR NUMBER DATE NO. NAME ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 08:07AM 06/22/01 PAGE 1 PAYMENT AMOUNT 45728 06/21/01 &01456 JOHN ALLCHIN 62.50 45729 06/21/01 COA080 COACHELLA VALLEY WATER 859.75 45730 06/21/01 COS060 COSTCO WHOLESALE STORE 893.97 45731 06/21/01 COU010 COUNTS UNLIMITED INC 1150.00 45732 06/21/01 DCT100 DC & TC LLC 100000.00 45733 06/21/01 DES051 DESERT SANDS UNIFIED SCHL 655069.35 45734 06/21/01 LAQ050 LA QUINTA CITY EMPLOYEES 364.00 45735 06/21/01 RIV040 RIVERSIDE CNTY DEPT CHILD 426.50 45736 06/21/01 SMI010 MARILYN SMITH 110.34 45737 06/21/01 SUPl00 SUPPORT PAYMENT CLEARING- 150.00 45738 06/21/01 UNIO05 UNITED WAY OF THE DESERT 179.00 45739 06/21/01 VER050 FREDRICO VERDUGO 450.00 45740 06/21/01 VER200 VERIZON 441.11 45741 06/21/01 VER210 VERIZON INTERNET SOLUTION 69.00 CHECK TOTAL 760,225.52 029 ) ✓) IO OI r m .y N m e rZ� e e c e a O F Z O N \ n S b U V' U' U' O O O O U' U• O� O� U' T O� £ d a d m F F F F E F F F F F F F F F m O o 0 Z F w Z O O £❑ � O �(1 r N O� O �O V N O b �n r rn o o m o �n ri o w N Oi P1 O w O m 0� ❑ ❑ O L• �O O� Z Z I w O K �O ❑ �p N O v'1 m m O O •� a O S o n > e .. 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F �. r-i p 4 o 0 F �n a r+ a i a• 4 IZ.1 U U~ m b ? d N U ❑ E a s U w m °° a a a a s a a a 2 E F F Q a E S F \ F a F F F C9 F ❑ O ❑ O O O E F O O o 0 I O 1 I O w w F F F 4 a F w F O F F F �• F F F w U U ❑ O a N 4 w t. �U d 3 a >> a m m a a m a w a a+ a u a O a N K m N 0❑ w w❑ S N O N O h O >> a ❑❑ H - ❑ ❑ a❑ O ❑ ❑ I Z U z z a m z a a z fu d Z a z S Z O z ❑ Z m z ❑ z ❑ m ❑ w w w w d d w w 1,. w o w w w w £ > > o > a 4 > � � > aa, > � > ❑ > a > a > .. > a > a m w w cwu a 3 3 m m dq F F a ry a a ¢ a a U w 1 I ❑ a VI m �O m N N > > 1 > m p 0 O O m .z. ❑ .z, `a z 4 z d a m w m a 1 p o w F a ill N Vl O N O O N O O O O O O ❑ m rl rr m ri r rl �n E l0 m IO r r 10 �O Ip m N N r N N Z N c e tl t1 N N m e O O N O O '.J I(1 �(1 �(1 ✓1 N N m O O O O O O O Nl e V ry .y e v lG T O O N O O ry N Q O O O O O 0 0 O O O O O O O a ❑ I x m H F n O O a a 1 a m H a❑ R d 4 a F d a O ❑ z z x .a] Q Z Sn O h F 3 i. a a a >> rat w V O U F 3 >� s s s a w U O U O uFi w a b w a O 3 O U F O U O vF1 w s y w s O 3 O U F p U U z O❑ w F a z O❑ m Z 0 U U rzi w [' s F s Z m Z DN 0 U U a a F a U ❑ ❑ H w H z � m ❑ z a m F w um] ❑ d £ w r F Q F q U a w ❑ �• z w ❑ w a H E m zT d £ a a w w ❑ U w x z F z o q a q Z C ❑ d F d v❑i z 0 ❑ O !� U q U > �O Q O w mm O Q O U O Q O V om O p u O 0 U I O 0 u O O 0 u o rl F U ❑ � O m w ❑ � O O' 4 a e O > a ❑ rn 00 d ' z m ❑ 030 027 O F z 0 ti N � N 2 b U' Q 41 41 41 til 41 4] 4] til til b 0 ti f O O 01 O� O� Q� 1�1 O Z E 4] Z Y 0 o p a a a s F a a z F N F £ Z F O F m 0 O O w O O > O F m F O F U O 0 F V U U U 6� a a >£ U>>>> a F a O O O m p m m m m 0 z O > a O a❑ ..] a ❑ ❑ Z U Z u Z z a F z z z z Z K 2 �-+ w > U> Z Z. z Z Z Z Z> fil > ❑ > O>S> F> ❑ a O O m o N 1 O > m o r m rn r P 0 N H ti G HZ£ m m m m m rn ❑ � r ❑ � z r r r .o �o m m n Q Z a a m m m a i o o m F a m m o 0 0 0 0 0 41 0 b a O O O O O O O O O O O O Z o t+t N o M m rf M O F Z m P P P r+i m m ri r+i O N P b N a o 0 0 0 0 0 0 0 0 H rl rl P rl 'i fY ry ti Z O F a � O m O m a � a i m m F > E a z O H 0 0 0 0 0 0 0 O Qol a Q N N N N N N N N a O z a m> m>> m m fai Z O > o sN o 0000000 s A 031 028 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 10:32AM 06/19/01 CITY OF LA QUINTA BANK ID: DEF PAGE 1 CHECK CHECK VENDOR NUMBER DATE NO. NAME ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 45719 06/19/01 AAA001 AAA TRAVEL AGENCY 45720 06/19/01 BOY075 BOYS & GIRLS CLUB OF 45721 06/19/01 COL045 COLT SECURITY SERVICES 45722 06/19/01 DEM150 LOUIS DE MARTINO 45723 06/19/01 HAR100 JOHN HARDCASTLE 45724 06/19/01 LEA020 LEAGUE OF CALIF CITIES 45725 06/19/01 SOU037 SOUTHERN CALIF ASSOC CODE 45726 06/19/01 TRE100 JUAN TREVINO 45727 06/19/01 VER100 RUBEN VERDUGO CHECK TOTAL PAYMENT AMOUNT 3515.00 7500.00 252.00 8500.00 280.00 1035.00 120.00 450.00 450.00 22,102.00 OP 029 C O F Z 0 m � S O W F £ £ £ £ £ £ £ £ K a m F F F F F F E F F m O O O O O O O O O O F O O O O O O O O O W 2 ill O N O O ill O O O 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q �fI ill q N �Il N W O c m m r F Z m O > + O~ � O W r. Z ❑ o a u u m m U m W 4 a W s a a a U a a ty a a W u a a W a a \ a a q a a Z > F F F m F ❑ F Z F z E Z F O F O F o a o £ o z o 0 o a o 0 0 0 0 F d F \ F £ F Q F F F w F w F O F F d m F m C O m O a O W O U O F O Z O O O > C Z ❑ Q❑ ❑ W❑ a O F E O a❑ K❑ Z U Y Z Z m z £ z W z m Z m z W Z W Z F W O W ❑ W >>q W - W W U W U w O m > O > > > > > > > > uu O a uml uu O O U W ❑ a 0 a > m z z £ z ❑ Y a a m W m m � o o w m o r r o 0 o rn m O to r m �n m b r m m •i 1p C N H rl l0 1p lD F Z O O O O O N t"1 m O O O O ut Jl O U O N N O O O O m ry N q O O O o O o O o O W ❑ O m m U W W U W U o m u z ❑ a W m o z W w a d W U ra a r-i H F m £ U H W [al U d m Z Q U O U o Q C a > a o r a F z Q o i o 0 o ❑n oz F to W a ° Z O o r C ill o N m o 0 0 O o 0 0 0 0 U. H qq O O Q U q m U O = a In F > 033 030 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER CITY OF LA QUINTA BANK ID: DEF CHECK CHECK VENDOR NUMBER DATE NO. NAME ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 45716 06/13/01 IMP010 IMPERIAL IRRIGATION DIST 45717 06/13/01 PET010 PETTY CASH/CITY LA QUINTA 45718 06/13/01 STA010 STAMKO DEVELOPMENT CHECK TOTAL 1:43PM 06/13/01 PAGE 1 PAYMENT AMOUNT 953.08 446.87 91667.41 93,067.36 034 031 F Z O U 4 W w W W W W W w w w w w W W W m m m O O O O m Z E w z m o o 1 o r r .+ P o N m o m r a r m r o m �+ z z z z z� a a a a ¢ a a a a 9 m m m m m m m m p 0 0❑❑ a W W w W W W W W W Q \\\\ a Z O F c a a a a a a a a F Z Z Z Z Z F w° m0 O F �� m �/] m m m m m m ❑ p❑ O❑ m U a Q a Q a a a Q Q a W W W w w a � z o u c; u u u u u u u u o £££££ o U E Z +- >• >• N J+ �• J+ >• >. Z m m vl r/1 m Z O a :il w W W W W w W W ❑ p❑ p p W U w m o W > I > m m z z £ N p ❑ � z p P a a m W m a 0 o F a o O N o N O o 0 0 0 W O O N O O O O £m O O m O m O O O O O N O ill N �D 'J r O� U1 r 1'1 ry rl r r .y m m V1 z N P o m o 0 o m m o 0 0 0 0 m o F Z N O f+l 'Y m N rl P Jl .4 a o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 F F F F F F F F F F m Z Z Z Z Z Z Z Z Z p D 0 0 0 O 0 0 0 0 z a s 0 a ol a s a ao'� qo o F z z z z z Q O F H r H ry F F M FF d 0 d 0 d 0 d 0 d 0 a U u u U u u U u u aL] I a \ \ \ \ \ \ \ \ \ La] W lail 4a] N N m m m N m VI N w w W W w a z a O p O p❑ 4 0 U u u u u u U u U 0 0 0 0 N a O a m W Y F >• F J+ F )+ F f� F N F N F Y F i� F Y m z a a a a a a a a m m w m m m F u W Z O > O O O O O O O p O O O O O O O 0 0 0 0 0 0 0 0 0 0 0 0 U N m F F F F F F F F F U £M W W W W W w W W W F F F F F a U a a a m m a m a a m m m m m A 035 037 A/P - AP6002 CITY OF LA QUINTA CHECK BK INVOICE NUMBER ID DATE 45637 DEF 06/12/01 TOTAL VOIDED CHECKS TO BE VOIDED BANK ID: DEF 3:04PM 06/20/01 PAGE 1 VENDOR VENDOR INVOICE AMT. PAID NUMBER NAME DESCRIPTION 655069.35 DES051 DESERT SANDS UNIFIED SCHL 2ND HALF 00/01 PASS THRU PMT 655,069.35 036 033 A/P - AP6OO2 CHECKS TO BE VOIDED CITY OF LA QUINTA BANK ID: DEF CHECK BK INVOICE VENDOR VENDOR NUMBER ID DATE AMT. PAID NUMBER NAME 45638 DEF O5/30/01 816.00 DES052 DESERT SANDS UNIFIED TOTAL VOIDED 816.00 INVOICE DESCRIPTION FACILITY USE 3:08PM 06/20/01 PAGE 1 037 034 A/P - AP60O2 CHECKS TO BE VOIDED CITY OF LA QUINTA BANK ID: DEF CHECK BK INVOICE VENDOR VENDOR NUMBER ID DATE AMT. PAID NUMBER NAME 45727 DEF 06/19/01 450.00 VER100 RUBEN VERDUGO TOTAL VOIDED 450.00 11:44AM 06/19/01 PAGE 1 INVOICE DESCRIPTION SOCCER OFFICIAL 03R 035 T-iht 4 4Q" AGENDA CATEGORY: COUNCIL/RDA MEETING DATE: ITEM TITLE: Consideration of a Resolution of the Board of Directors of the La Quinta Redevelopment Agency Authorizing the Issuance of Tax Allocation Bonds of Said Agency in a Principal amount not to Exceed $48,000,000 to Finance a Portion of the Costs of a Redevelopment Project Known as the La Quinta Redevelopment Project Area No. 1 and Approving Certain Documents and Taking Certain Other Actions in Connection Therewith RECOMMENDATION: BUSINESS SESSION: July 3, 2001 CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Adopt a resolution of the La Quinta Redevelopment Agency authorizing the issuance of tax allocation bonds for a principal amount not to exceed $48,000,000, approving certain documents and talking certain actions in connection therewith for La Quinta Redevelopment Project No. 1. FISCAL IMPACT: The Agency will incur issuance costs that will be funded from bond proceeds. The Agency's financing team projects issuance costs of $1,600,000. BACKGROUND AND OVERVIEW: As part of the Agency's fiscal management activities, the Agency Board authorized staff to evaluate the feasibility of issuing additional tax allocation bonds secured only by tax increment revenue from Project No. 1 . In May 2001, the Agency Board approved the financing team (bond counsel, disclosure counsel, underwriter and fiscal consultant) and directed the team to structure a tax allocation bond issue. The team has subsequently been evaluating existing Agency payment obligations, preparing tax increment revenue projections, and consulting with both rating agencies and insurance companies. The amount of capital the Agency can raise through tax allocation bonds will be determined by market conditions (interest rates, discount rates, and overall economic conditions); however, preliminary 039 projections indicate that the Agency can raise $46.0 million today, and an additional $25.0 to $30.0 million in 2003. Bond activities have progressed to a point where draft documents have been completed and are ready to be distributed to bond insurance and rating agencies. In order to do so, staff is seeking Agency Board approval of the attached resolution that authorizes the following: • The issuance of up to $48.0 million in Project No. 1 Series 2001 Tax Allocation Bonds (2001 Bonds); • Authorizes the Agency Chair or Executive Director to sign the final bond certificates and related documents, and take actions necessary to deliver the bonds in accordance with the attached resolution and Indenture of Trust (Attachment 1); • Approves the Indenture of Trust which will serve as the contract between the Agency and bond holders; • Appoints U.S. Bank Trust National Association as the bond trustee (the entity that collects bond payments from the Agency and disburses these payments to the bond holders); • Authorizes the bond underwriter to distribute the Preliminary Official Statement, the document that discloses all of the details regarding the bonds; • Authorizes the Agency Chair or Executive Director to sign the Continuing Disclosure Agreement (Attachment 2); and • Authorizes the Executive Director and Finance Director to pay all of the issuance costs. Per the Agency's strategic planning activities, it is projected that Project No. 1 has $340.0 million of non -housing fund financing capacity over the next 32 years. This capacity represents revenue that remains after housing fund deposits and taxing agency payments, and is based upon a 2% per annum growth rate for Project No. 1 assessed values. In comparison, between fiscal years 1999-2000 and 2000-2001 the Project No. 1 assessed values grew by 18%, and the fiscal consultants report for the 2001 Bonds supports a 10.8% growth rate between fiscal years 2000-2001 and 2001-2002. Discussions with the Agency Board surfaced a desire to access this financing capacity in order to fund needed capital and facility improvements, and to facilitate projects that generate on -going General Fund revenue. The proposed 2001 Bonds will be approximately $46.0 in size and will require a projected $99.5 million of the $340.0 million financing capacity to retire (these are projected figures because the final costs are determined by the market interest and discount rates, and the insurance/rating agency costs in effect when the bonds are sold). Servicing the 040 002 Agency's existing non -housing bond obligations (the Project No.1 1994 and 1998 Bonds) will require $64.0 million of the $340.0 million financing capacity. The combined cost of all of the aforementioned bonds will require approximately 48% or $163.5 million of the $340.0 million financing capacity, leaving $176.5 million to repay Project No. 1 General Fund loans, to retire other General Fund costs related to Project No. 1 non -housing implementation activities, and to consider issuing additional bonds. The Agency's financing team anticipates that the bond principal amount will be $46.0 million. We are asking for authorization to issue up to $48.0 million in the event market conditions warrant selling additional bonds, in excess of $46.0 million, using the same amount of revenue needed for debt service payments. The 2001 Bonds are projected to generate $41.8 million in net proceeds. Per prior Agency Board direction, it is anticipated that the net proceeds will be allocated as follows: • $8.2 to $8.6 million to retire a loan with Riverside County, wherein the Agency retained $10.0 million of County General, Fire and Library Fund tax increment revenue during the first 10 years of Project No. 1; • $15.0 million for capital improvements and public facilities that serve Project No. 1; and • Up to $18.2 million for economic development initiatives. During the initial discussions regarding the use of 2001 Bond proceeds, staff indicated that $5.0 million of bond proceeds should be reserved to fund project staff and overhead costs. The bond team has reviewed the Agency's cash flow circumstances given the additional debt service burden of the 2001 Bonds. Table 1 below presents projected tax increment revenue available for debt service payments (after deducting housing funds deposits and taxing agency payments), combined bond debt service payments (1994, 1998 and 2001 bond payments) and revenue remaining after combined debt service. As indicated, the Agency will have sufficient capacity to fund administrative and other costs for the foreseeable future without setting aside 2001 Bond proceeds for this purpose. 041 00.14 Table 1 - Redevelopment Fund Revenue After Combined Bond Debt Service Fiscal Year Redevelopment Fund Revenue Available For Debt Service Bond Debt Service 1994/1998/2001 Bonds Redevelopment Fund Revenue After Combined Debt Service 2001-02 $8,019,404 $2,955,057 $5,064,347 2002-03 8,310,558 5,521,934 2,788,624 2003-04 8,493,220 5,307,084 3,186,136 2004-05 8,679,536 5,317,414 3,362,122 2005-06 8,869,579 5,307,646 3,561,933 2006-07 9,063,422 5,302,186 3,761,236 2007-08 9,261,141 5,300,034 3,961,107 2008-09 9,462,816 5,294,669 4,168,147 2009-10 7,998,997 5,289,720 2,709,277 2010-11 8,160,838 5,284,592 2,876,246 2011-12 8,325,915 5,282,616 3,043,299 FINDINGS AND ALTERNATIVES: Alternatives available to the Agency Board include: 1. Adopt a resolution of the La Quinta Redevelopment Agency authorizing the issuance of tax allocation bonds Series 2001 for principal amount not to exceed $48,000,000, approving certain documents and taking certain actions in connection therewith for La Quinta Redevelopment Project No. 1; or 2. Provide staff with alternative direction. 7Jil ly submitted, Finance Director Approved for Submission by: � S Thomas P. Genovese, City Manager Attachments: 1. Indenture of Trust 2. Continuing Disclosure Agreement 042 004 RESOLUTION NO. RA RESOLUTION OF THE BOARD OF DIRECTORS OF THE LA QUINTA REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF TAX ALLOCATION BONDS OF SAID AGENCY IN A PRINCIPAL AMOUNT OF NOT TO EXCEED FORTY-EIGHT MILLION DOLLARS ($48,000,000) TO FINANCE A PORTION OF THE COSTS OF A REDEVELOPMENT PROJECT KNOWN AS THE LA QUINTA REDEVELOPMENT PROJECT AREA NO.1 AND APPROVING CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the La Quinta Redevelopment Agency (the "Agency"), is a redevelopment agency (a public body, corporate and politic) duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Community Redevelopment Law (Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of the State of California) and the powers of the Agency include the power to issue bonds for any of its corporate purposes; and WHEREAS, the Redevelopment Plan for a redevelopment project known and designated as "La Quinta Redevelopment Project Area No. 1" has been adopted and approved by Ordinance No. 43 of the City of La Quinta, which became effective on December 29, 1983, and all requirements of law for and precedent to the adoption and approval of the Redevelopment Plan have been duly complied with; and WHEREAS, pursuant to Resolution No. RA 85-5 the Agency issued Twenty Million Dollars ($20,000,000) of "La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1985" (the "Series 1985 Bonds"); pursuant to Resolution No. RA 88-14 the Agency issued Eight Million Dollars ($8,000,000) of Tax Allocation Bonds, Series 1989 (the "Series 1989 Bonds"); pursuant to Resolution No. RA 90-4 the Agency issued Nineteen Million Six Hundred Ninety -Five Thousand Dollars ($19,695,000) of Tax Allocation Refunding Bonds, Series 1990 (the "Series 1990 Bonds"); pursuant to Resolution No. RA 91-12 the Agency issued Eight Million Seven Hundred Thousand Dollars ($8,700,000) of Tax Allocation Bonds, Series 1991 (the "Series 1991 Bonds"); pursuant to an Indenture of Trust, dated as of May 1, 1994, between the Agency and Bank of America National Trust and Savings Association (the "1994 Indenture"), the Agency issued Twenty -Six Million Six Hundred Sixty Five Thousand Dollars ($26,665,000) of Tax Allocation Bonds, Series 1994 (the "Series 1994 Bonds"); and pursuant to Resolution No. RA-98-01 the Agency issued Fifteen Million Seven Hundred Sixty Thousand Dollars ($15,760,000) of Tax Allocation Refunding Bonds, Series 1998 (the "Series 1998 Bonds"); and WHEREAS, in order to raise additional funds for the implementation of the Redevelopment Plan, the Agency deems it necessary at this time to issue tax allocation bonds on a panty with the Series 1994 Bonds and Series 1998 Bonds for such purpose; and 043 124/015610-0053 Y 184889.03 AM01 r 1 tl i r WHEREAS, the corporate purposes of the Agency will be accomplished by issuing at this time tax allocation parity refunding bonds in a principal amount of not to exceed Forty -Eight Million Dollars ($48,000,000) pursuant to this Resolution and a supplement hereto to be designated "La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 2001 (the "Bonds"); and WHEREAS, the Agency is authorized to issue the Bonds pursuant to the Community Redevelopment Law of the State of California (being Part I of Division 24 of the Health and Safety Code of the State of California, as amended) (the "Law"); and WHEREAS, the Agency has received a proposal to purchase the Bonds and has determined that the proposal of Wedbush Morgan Securities (the "Underwriter") should be accepted; and WHEREAS, this Board of Directors desires to proceed to issue the Bonds, sell the Bonds to the La Quinta Financing Authority (the "Authority") and then to the Underwriter. NOW, THEREFORE, the Board of Directors of the La Quinta Redevelopment Agency DOES HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS: SECTION 1. Each of the above recitals is true and correct and this Board so finds and determines. SECTION 2. The issuance of the Bonds in the principal amount of not to exceed Forty -Eight Million Dollars ($48,000,000) is hereby authorized. The Bonds shall mature on the dates, pay interest at the rates, shall be subject to redemption and shall be governed by the terms and conditions set forth in an Indenture of Trust, dated as of August 1, 2001, (the "Indenture") to be prepared by Bond Counsel to the Agency and executed by the Chair or Executive Director or Finance Director and Secretary of the Agency (herein "Chair" and "Secretary" respectively), which Indenture shall be substantially in the form on file with the City Clerk, with such additions thereto and changes therein as are recommended or approved by Bond Counsel to the Agency and the officers executing the same, with such approval to be conclusively evidenced by the execution and delivery of the Indenture. Capitalized terms used in this Resolution which are not defined herein have the meaning ascribed to them in the Indenture on file in the office of the City Clerk. The Chair, the Executive Director, the Finance Director, the Secretary, or their designees are hereby authorized and directed to execute and deliver the Indenture. SECTION 3. The Bonds shall be executed on behalf of the Agency by the manual or facsimile signature of the Chair or Executive Director and attested with the manual or facsimile signature of the Secretary. SECTION 4. The covenants set forth in the Indenture to be executed in accordance with Section 2 above are hereby approved, shall be deemed to be covenants of the Agency and shall be complied with by the Agency and its officers. The Indenture shall constitute a contract between the Agency and the Owners of the Bonds. SECTION 5. U.S. Bank Trust National Association, Los Angeles, California, is hereby appointed to act as Trustee for the Bonds. The Executive Director of the Agency, or his written 124/015610-0053 184889.03 AMO1 -2- designee, is hereby authorized to enter into an agreement with the Trustee to provide such services to the Agency. SECTION 6. The Purchase Contract by and among the Agency, the Authority and the Underwriter on file with the Secretary offering to purchase the Bonds to bear interest as set forth in the Indenture is hereby approved and the Executive Director or Finance Director is authorized to execute and deliver the Purchase Contract in said form with such changes thereon as the officers executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 7. The Chair or Executive Director or Finance Director is authorized to execute a final Official Statement in substantially the form of the Preliminary Official Statement, and Continuing Disclosure Agreement relating thereto, which have been presented at this meeting and are hereby approved, with such additions thereto and changes therein as are recommended or approved by Bond Counsel to the Agency and the officer executing the same, with such approval to be conclusively evidenced by the execution and delivery of such documents. The Underwriter is hereby authorized to distribute the Preliminary Official Statement to prospective purchasers of the Bonds and to provide to the purchasers of the Bonds from the Underwriter copies of the final Official Statement. The Executive Director or Finance Director is hereby authorized to sign a certificate pursuant to Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 pertaining to the Preliminary Official Statement. SECTION 8. Each and every officer of the Agency is authorized to perform his or her services on behalf of the Agency. The Executive Director or Finance Director, or his written designee, is authorized to incur such costs and to contract for all services necessary to effect the issuance of the Bonds. Such services shall include, but not be limited to, printing the Bonds, printing the Preliminary Official Statement and the Official Statement, obtaining legal services, fiscal agent services and any other services deemed appropriate for the issuance of the Bonds including, without limitation, the costs of Bond Insurance, Reserve Fund Surety, and Rating Agency Services (referred to in the Indenture as "Costs of Issuance") and the payment for said Costs of Issuance shall be approved by the Executive Director or Finance Director. The Executive Director or Finance Director, or his written designee, is authorized to pay for such Costs of Issuance with Bond proceeds established pursuant to the Indenture without further approval of this Board of Directors. SECTION 9. All actions heretofore taken by officers and agents of the Agency with respect to the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and the Chair and Secretary and the other officers of the Agency responsible for the fiscal affairs of the Agency are hereby authorized and directed to take any actions and execute and deliver any and all certificates, instruments, agreements and documents as are necessary to accomplish the issuance, sale and delivery of the Bonds in accordance with the provisions of this Resolution and the fulfillment of the purposes of the Bonds as described in the Indenture as determined by Bond Counsel. In the event that the Chair or Executive Director is/are unavailable to sign any document authorized for execution herein, the Finance Director shall sign such document. Any document authorized herein to be signed by the Secretary may be signed by a duly appointed deputy secretary. M' 124/015610-0053 -3- r �� 184889.03 AM01 '�i ADOPTED AND APPROVED this 3rd day of July, 2001. LA QUINTA REDEVELOPMENT AGENCY TERRY HENDERSON, Chairperson ATTEST: JUNE S. GREEK, Agency Secretary APPROVED AS TO FORM: M. KATHERINE JENSON, Agency Counsel AM l24/015610-0053 { 184889.03 AM01 -4- `� (r STATE OF CALIFORNIA ) SECRETARY'S CERTIFICATE )ss. RE ADOPTION OF RESOLUTION COUNTY OF RIVERSIDE ) I, JUNE S. GREEK, Secretary of the La Quinta Redevelopment Agency, DO HEREBY CERTIFY that the foregoing Resolution was duly adopted by said Agency at an adjourned regular meeting of said Agency held on the 3rd day of July, 2001, and that the same was passed and adopted by the following vote to wit: AYES: NOES: ABSENT: ABSTAIN: (SEAL) Secretary of La Quinta Redevelopment Agency STATE OF CALIFORNIA ) SECRETARY'S CERTIFICATE )ss. OF AUTHENTICATION COUNTY OF RIVERSIDE ) I, JUNE S. GREEK, Secretary of the La Quinta Redevelopment Agency, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. of said Agency and that said Resolution was adopted at the time and by the vote stated on the above certificate, and has not been amended or repealed. Dated: (SEAL) 2001 Secretary of La Quinta Redevelopment Agency 047 i 24/015610-0053 r jy 184889.03 AM01 � j ATTACHMENT INDENTURE OF TRUST Dated as of August 1, 2001 by and between the LA QUINTA REDEVELOPMENT AGENCY U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee Relating to $48,000,000* La Quinta Redevelopment Agency La Quinta Redevelopment Project Area No. 1 Tax Allocation Bonds, Series 2001 * Preliminary, subject to change. 124/015610-0053 184550.04 AM01 012) INDENTURE OF TRUST THIS INDENTURE OF TRUST (the "Indenture") is made and entered into as of August 1, 2001, by and between LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic duly, organized and existing under the laws of the State of California (the "Agency"), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as trustee (the "Trustee"); WITNESSETH WHEREAS, the Agency is a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the Health and Safety Code of the State (the "Law"), including the power to issue bonds for any of its corporate purposes; and WHEREAS, a Redevelopment Plan for the Project Area, commonly known as the La Quinta Redevelopment Project, in the City of La Quinta, California (the "Redevelopment Project") has been adopted by Ordinance No. 43 of the City of La Quinta, which became effective on December 29, 1983, in compliance with all requirements of the Law; and WHEREAS, to finance redevelopment activities within the areas constituting the Redevelopment Project (the "Project Area"), the Agency has previously issued tax allocation bonds in the aggregate principal amount of $20,000,000 ("1985 Bonds"), pursuant to its Resolution No. RA 85-5 adopted on July 30, 1985; and WHEREAS, to finance redevelopment activities within its Project Area, the Agency has previously issued its La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1989, in the aggregate principal amount of $8,000,000 (the "1989 Bonds"), pursuant to Resolution No. RA 88-14 adopted by the Agency on December 20, 1988; and WHEREAS, to finance redevelopment activities within its Project Area and to refund the 1985 Bonds, the Agency has previously issued its La Quinta Redevelopment Project, Tax Allocation Refunding Bonds, Series 1990, in the aggregate principal amount of $19,695,000 (the "1990 Bonds"), pursuant to Resolution No. 90-4 adopted by the Agency on April 25, 1990; and WHEREAS, to finance redevelopment activities within its Project Area, the Agency has previously issued its La Quinta redevelopment Project, Tax Allocation Bonds, Series 1991, in the aggregate principal amount of $8,700,000 (the "1991 Bonds"), pursuant to Resolution No. FA 91-12 adopted by the Agency on October 9, 1991 (the "1991 Resolution"); and WHEREAS, to finance redevelopment activities within its Project Area, the Agency issued its $26,665,000 aggregate principal amount of La Quinta Redevelopment Project 049 �24i015610-W53 r !� 1 +� is45so.oanmm lei ) Tax Allocation Refunding Bonds, Series 1994 (Project Area No. 1) (the "1994 Bonds") pursuant to the provisions of Articles 1 through 4 of Chapter 5 of Division 7 of Title I of the Government Code of the State of California (the "JPA Law") for the purpose of providing funds to (1) advance refund the then outstanding principal amount of the 1989 Bonds on September 1, 1998 and pay the principal of and interest on the 1989 Bonds to and including September 1, 1998, (ii) advance refund the then outstanding principal amount of the 1990 Bonds on September 1, 2000 and pay the principal of and interest on the 1990 Bonds to and including September 1, 2000, (iii) finance the costs of additional redevelopment activities, (iv) fund a reserve fund, and (v) pay certain expenses of the Agency in issuing the Bonds; and WHEREAS, to finance redevelopment activities within its Project Area, the Agency issued its $15,760,000 aggregate principal amount of La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998 (the "1998 Bonds") for the purpose, among others, to (i) advance refund the 1991 Bonds, (ii) finance the costs of additional redevelopment activities; and (iii) pay certain expenses of the Agency in issuing the Bonds; and WHEREAS, the Agency has determined to issue its $48,000,000 aggregate principal amount of La Quinta Redevelopment Project Area No. 1, Tax Allocation Bonds, Series 2001 (the "Bonds") for the purpose, among others, to (i) finance the costs of additional redevelopment activities; and (ii) pay certain expenses of the Agency in issuing 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 d to secure the payment of the principal thereof, premium, if any and interest thereon, the Agency and the Trustee have duly authorized the execution and delivery of this Indenture; and WHEREAS, the Agency has determined that all acts and proceedings required by law necessary to make the Bonds when executed by the Agency, and authenticated and delivered by the Trustee, the valid, binding and legal special obligations of the Agency, and to constitute this Indenture a legal, valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done or taken; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and the interest on all the Bonds issued and Outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the Agency and the Trustee do hereby covenant and agree with one another, for the benefit of the respective owners from time to time of the Bonds, as follows: 000 124/01561M053 r+ 1 184550.04 AM01 _3_ 01 ARTICLE I DETERMINATIONS; DEFINITIONS Section 1.1 Findings and Determinations. The Agency has reviewed all proceedings heretofore taken and has found, as a result of such review, and hereby finds and determines that all things, conditions and acts required by law to exist, happen or be performed precedent to and in connection with the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Agency is now duly empowered, pursuant to each and every requirement of law, to issue the Bonds in the manner and form provided in this Indenture. Section 1.2 Definition. Unless the context otherwise requires, the terms defined in this Section 1.02 shall, for all purposes of this Indenture, of any Supplemental Indenture, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. "A enc ," means the La Quinta Redevelopment Agency, a public body corporate and politic duly organized and existing under the Law. "Alternative Reserve Account Security" means one or more letters of credit, Surety Bond or bond insurance policies, for the benefit of the Trustee in substitution for or in place of all or any portion of the Reserve Requirement. "Annual Debt Service" means, for each Bond Year, the sum of (a) the interest payable on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Term Bonds are redeemed from mandatory sinking fund payments as scheduled, and (b) the principal amount of the Outstanding Term Bonds scheduled to be paid or redeemed from mandatory sinking fund payments in such Bond Year. "Authorized Representative" means the Executive Director of the Agency or such other person designated in writing by the Chairman of the Agency. "Average Annual Debt Service" means the amount determined by dividing the sum of all Annual Debt Service amounts due in each of the Bond Years following the date of such calculation by the number of such Bond Years. "Bond" or "Bonds" means the La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1, Tax Allocation Bonds, Series 2001 and, if the context requires, any Parity Debt, authorized by and at any time Outstanding pursuant to this Indenture and any Supplemental Indenture. "Bond Counsel" means an attorney or firm of attorneys acceptable to the Agency of nationally recognized standing in matters pertaining to the federal tax exemption 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 or the District of Columbia. "Bond Insurer" means 051 124/015610-0053 0 5 184550.04 AM01 "Bondowner" or "Owner of Bonds', or any similar term means any person, who shall be the registered owner or his duly authorized attorney, trustee or representative. For the purpose of Bondowners' voting rights or consents, Bonds owned by or held for the account of the Agency shall not be counted. "Bond Year" means any twelve-month period beginning on September 2 in any year and extending to the next succeeding September 1, both dates inclusive except that the first Bond Year shall commence on the Closing Date and end on September 1, 2002. "Business DU' means a day of the year on which banks in Los Angeles, California, are not required or permitted to be closed and on which Federal Reserve system is not closed. "Chair" means the Chair of the Agency appointed pursuant to Section 33113 of the Health and Safety Code of the State, or other duly appointed officer of the Agency authorized by the Agency by resolution or by-law to perform the functions of the chairman in the event of the chairman's absence or disqualification. "City" means the City of La Quinta, California. "Closing Date" means the date on which the Bonds are delivered by the Agency to the original purchaser thereof. "Code" means the Internal Revenue Code of 1986, as amended and any regulations, rulings, judicial decisions, and notices, announcements and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it, or any applicable regulations adopted under the Internal Revenue Code of 1954, as amended. "Computation Year" means the period beginning on the Closing Date and ending on September 30, 2001 and each September 30 thereafter until there are no longer any Bonds Outstanding. "Continuing Disclosure Agreement" means the agreement by that name of the Agency dated the Closing Date and any amendment or supplement thereto. "Costs of Issuance" means the costs and expenses incurred in connection with the issuance and sale of the Bonds, including, but not limited to, any rating agency fees, recording fees, municipal bond insurance premiums, Alternative Reserve Account Security premiums, the acceptance and initial annual fees and expenses of the Trustee, fees and charges payable under the Escrow Agreement, legal fees and expenses, costs of printing the Bonds and Official Statement, fees of financial consultants and other fees and expenses set forth in a Written Certificate of the Agency to be paid from the Costs of Issuance Account of the Redevelopment Fund. "Count " means the County of Riverside, a county duly organized and existing under the laws of the State. 05� I ) I K 124/015610-0053 184550.04 AM01 _5- "Debt Service" means the scheduled amount of interest and amortization of principal payable on the Bonds and on any Parity Debt 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. "Debt Service Fund" means the fund by that name established and held by the Trustee pursuant to Section 4.03. "Depository' means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to Section 2.04. "Depository System Participant" means any participant in the Depository's book - entry system. "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Event of Default" means any of the events described in Section 8.01. "Federal Securities" means any noncallable, direct general obligations of the United States of America, the payment of principal of and interest on which are unconditionally and fully guaranteed by the United States of America. "Fiscal Year" means any twelve-month period beginning on July 1 in any year and extending to the next succeeding June 30, both dates inclusive, or any other twelve month period selected and designated by the Agency to the Trustee in writing as its official fiscal year period. "Indenture" means this Indenture of Trust, dated as of the date hereof, by and between the Agency and the Trustee, as originally entered into or as it may be amended or supplemented by any Supplemental Indenture entered into pursuant to the provisions hereof. "Independent Financial Consultant, "Independent Engineer," "Independent Certified Public Accountant" or "Independent Redevelopment Consultant" means any individual or firm engaged in the profession involved, appointed by the Agency, and who, or each of whom, has a favorable reputation in the field in which his opinion or certificate will be given, and: (a) is in fact independent and not under domination of the Agency; (b) does not have any substantial interest, direct or indirect, with the Agency; and (c) is not connected with the Agency as an officer or employee of the Agency, but who may be regularly retained to make reports to the Agency. "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service," 30 Montgomery Street, loth Floor, Jersey City, New Jersey 07202, Attention: Editor, Kenny Information Services' "Called Bond Service," 65 Broadway, 16th Floor, New York, New 053 124/015610-0053 r 184550.04 AM01 -6 York 10006; Moody's Investors Service "Municipal and Government," 5250 77 Center Drive, Suite 150, Charlotte, North Carolina 28217, Attention: Called Bond Department, Standard & Poor's Corporation "Called Bond Record," 25 Broadway, 3rd Floor, New York, New York 10004; and in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other services providing information with respect to the redemption of bonds as the Agency may designate in a Request of the Agency delivered to the Trustee. "Interest Payment Date" means March 1 and September 1 of each year, commencing March 1, 2002, and in each year thereafter so long as any of the Bonds remain outstanding hereunder. "Investment Agreement" means the unconditional obligation of one or more banks, insurance companies or other financial institutions with a long-term unsecured debt rating of "A" or better by Standard & Poor's or Moody's (or a claims -paying rating of "A" by the Standard & Poor' s or Moody' s) as of the date of execution thereof, providing for the investment of moneys held under this Indenture. Each Investment Agreement must be reviewed and approved by Standard & Poor's or Moody's, as the case may be, and must at all times provide for payments to the Trustee which, together with all then scheduled payments and payments under other Permitted Investments, are sufficient in time and amount to permit the delivery of a cash flow certificate meeting the requirements of the definition thereof; provided that any Investment Agreement also: (i) shall contain a provision for collateralization at a level acceptable to Standard & Poor's or Moody's, as the case may be, and (ii) shall clearly state the exact rating requirements to be maintained with respect thereto. Extensions of the term of an Investment Agreement shall not require the consent of the owners of the Bonds. The Agency shall not withdraw moneys from an Investment Agreement in a manner or at a time which would result in it having to pay a breakage or withdrawal penalty thereunder unless such fee is paid from the Redevelopment Fund or the Agency has delivered to the Trustee a cash flow certificate which assumes that such withdrawal has been made and such penalty has been paid. "7PA Law" means the provisions of Articles 1 through 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State, as amended. "Law" means the Community Redevelopment Law of the State, constituting Part 1 of Division 24 of the Health and Safety Code of the State, and the acts amendatory thereof and supplemental thereto. "Maximum Annual Debt Service" means, as of the date of calculation, the largest amount obtained by totaling, for the current or any future Bond Year, the sum of (a) the interest payable on the Outstanding Bonds and any Parity Debt in such Bond Year, assuming that outstanding serial Bonds are retired as scheduled and that any Outstanding term Bonds are redeemed from mandatory sinking fund payments as scheduled, (b) the principal amount of Outstanding Bonds and any Parity Debt payable by their terms in such Bond Year, and (c) the principal amount of any Outstanding term Bonds scheduled to be redeemed from mandatory sinking fund payments in such Bond Year. If any proceeds of outstanding Parity Debt shall. be on deposit in an escrow fund from which amounts may not be released to the Agency unless the amount of Pledged Tax Revenues for the most recent Fiscal Year (as evidenced in a written 054 124/015610-0053 184550.04 AM01 -7- document from an appropriate official of the County), at least equals 130% of the amount of Maximum Annual Debt Service, which would result if the amount on deposit in such escrow fund were to be released to the Agency from such escrow fund in accordance with the terms of the related Supplemental Indenture, then for purposes of calculating Maximum Annual Debt Service, the Annual Debt Service on such Parity Debt shall be determined as if the amounts then on deposit in the escrow fund were withdrawn therefrom and applied to pay or redeem such Parity Debt in accordance with the terms of the related Supplemental Indenture. "Moody's" or "Moody's Investors Service" means Moody's Investors Service, Inc., New York, New York, or any successors or assignees. "Municipal Bond Insurance Policy" means the municipal bond insurance policy issued by the Bond Insurer insuring the payment when due of the principal of and interest on the Bonds as provided therein. "1994 Bonds" means the $26,665,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1994 (Project Area No. 1) issued pursuant to the 1994 Indenture. "1994 Indenture" means the Indenture of Trust dated as of May 1, 1994, authorizing the 1994 Bonds. "1998 Bonds" means the $15,760,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Refunding Bonds, Series 1998 issued pursuant to the 1998 Indenture. "1998 Indenture" means the Indenture of Trust, dated as of June 1, 1998, authorizing the 1998 Bonds. "Nominee" means (a) initially, Cede & Co., as nominee of DTC, and (b) any other nominee of the Depository designated pursuant to Section 2.04(a). "Opinion of Counsel" means a written opinion of an attorney or firm of attorneys of favorable reputation in the field of municipal bond law. Any opinion of such counsel may be based upon, insofar as it is related to factual matters, information which is in the possession of the Agency as shown by a certificate or opinion of, or representation by, an officer or officers of the Agency, unless such counsel knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which his or her opinion may be based, as aforesaid, is erroneous. "Outstandine" when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 9.03) all Bonds except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds paid or deemed to have been paid within the meaning of O 5 5 Section 9.03; and 124/015610-0053 019 184550.04 AM01 -8- (c) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the Agency pursuant hereto. "Owner" means, with respect to any Bond, the person in whose name the ownership of such Bond shall be registered on the Registration Books. "Parity Debt" means the Outstanding 1994 Bonds, Outstanding 1998 Bonds, and any additional tax allocation bonds (including, without limitation, bonds, notes, interim certificates, debentures or other obligations) issued by the Agency as permitted by the Indenture which are on a parity with the Bonds. "Participating Underwriter" shall have the meaning ascribed thereto in the applicable Continuing Disclosure Certificate. "Pass -Through Agreements" means the agreements entered into on or prior to the date hereof pursuant to Section 33401 of the Health and Safety Code with (i) County of Riverside; (ii) Desert Sands Unified School District,' (iii) Coachella Valley Water District; (iv) Desert Community College District; (v) County of Riverside Superintendent of Schools; (vi) Coachella Valley Mosquito Abatement District; and (vii) Coachella Valley Recreation and Park District. "Permitted Investments" means any of the following: A. The following obligations may be used as Permitted Investments for all purposes, including defeasance investments in refunding escrow accounts. (1) Cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in paragraph (2) below), or (2) Direct obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury of the United States of America. B. The following obligations to be used as Permitted Investments for all purposes other than defeasance investments in refunding escrow accounts. (1) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: Export -Import Bank Farm Credit System Financial Assistance Corporation — Rural Economic Community Development Administration (formerly the Farmers Home Administration) — General Services Administration 056 U.S. Maritime Administration 124/015610-0053 r 0 0 184550.04 AM01 -9- (GNMA ) (PHA's) Small Business Administration Government National Mortgage Association U.S. Department of Housing & Urban Development Federal Housing Administration Federal Financing Bank; (2) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: — Senior debt obligations rated "Aaa" by Moody's and "AAA" by S&P issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC) — Obligations of the Resolution Funding Corporation (REFCORP) Student Loan Marketing Association (SLMA) Senior debt obligations of the Federal Home Loan Bank System Senior debt obligations of other Government Sponsored Agencies approved by Bond Insurer; (3) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "A—l" or "A- 1+11 by S&P and "P-1" by Moody's and maturing no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the ratings of the bank.); (4) Commercial paper which is rated at the time of purchase in the single highest classification, "A-1" by S&P and "P—l" by Moody's and which matures not more than 270 days after the date of purchase; (5) Investments in a money market fund rated "AAAm" or "AAAm—G" or better by S&P including those for which U.S. Bank Trust National Association, its affiliates, parents, or subsidiaries provide investment, advisory or other management services; (6) Pre -refunded Municipal Obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and 057 124/015610-0053 184550.04 AMOI -to- - I (A) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of S&P and Moody's or any successors thereto; or (B)(i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph A(2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; (7) General obligations of states with a rating of at least "A2/A" or higher by both Moody's and S&P. (8) Investment agreements approved in writing by Bond Insurer supported by appropriate opinions of counsel with notice to S&P; and (9) Other forms of investments (including repurchase agreements) approved in writing by Bond Insurer with notice to S&P. C. The value of the above investments shall be determined as of the end of each month as follows: (1) As to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The' New York Times): the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination; (2) As to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The New York Times: the average bid price at such time of determination for such investments by any two nationally recognized government securities dealers (selected by the Trustee in its absolute discretion) at the time making a market in such investments or the bid price published by a nationally recognized pricing service; (3) As to certificates of deposit and bankers acceptances: the face amount thereof, plus accrued interest; and (4) As to any investment not specified above: the value thereof established by prior agreement between the Issuer, the Trustee and Bond Insurer. If a forward supply contract is used: {) V 124/015610-0053 _11- n n2� 184550.04 AM01 (i) Securities delivered to the escrow agreement must be non —callable U.S. Government obligations which do not mature later than the date on which needed to pay debt service on the refunded bonds. (ii) The CPA verification must be in form and substance satisfactory to Bond Insurer and must opine that the escrow is sufficient to defease the refunded bonds whether or not the forward supply contract provider delivers securities to the escrow. (iii) The forward supply contract must specify (a) the purchase price of the securities delivered to the escrow must not exceed the amount of cash received from maturing securities in the escrow, as specified in the verification, and (b) the maturity date of the securities delivered to the escrow must not be less than the purchase price paid for such securities. (iv) The forward supply contract provider shall have no resource to the escrow upon any failure of the issuer or escrow agent to perform its obligations under the forward supply contract. other than the payment of the purchase price for the securities to be delivered pursuant to the forward supply contract no payments of any other kind may be made from the escrow in respect of the forward supply contract. (v) The forward supply contract provider must be rated at least A by a nationally recognized rating agency.. (vi) The forward supply contract shall be in form and substance satisfactory to Bond Insurer. "Plan Limit" means the limitation contained in the Redevelopment Plan as to the number of dollars of taxes which may be divided and allocated to the Agency pursuant to the Redevelopment Plan, as such limitation may be required by, or pursuant to, the Law. "Pledged Tax Revenues" means Tax Revenues, less the Tax Revenues set aside as provided in Sections 33334.2 and 33334.3 of the Law and the Tax Revenues paid to certain taxing entities in the County of Riverside pursuant to certain agreements. "Project Area " means the territory within the La Quinta Redevelopment Project Area No. 1, as described in the Redevelopment Plan. "Oualified Surety Bond" means an insurance policy or surety bond issued by a company licensed to issue an insurance policy or surety, the claims paying ability of which is rated in the highest rating category by A.M. Best & Company (if rated by such), Standard & Poor's and Moody's. "Rating Categories" means any one of the investment grade rating categories (without regard to plus or minus signs or other numerical or qualifying designation) of Standard & Poor's and Moody's, or their respective successors or assigns. 059 124/015610-0053 �3 184550.04 AM01 -12- "Rebate Regulations" means any final, temporary, or proposed Treasury Regulations promulgated pursuant to Section 148 (f) of the Code. "Record Date" means, with respect to any Interest Payment Date, the close of business on the fifteenth (15th) calendar day of the month preceding such Interest Payment Date, whether or not such fifteenth (15th) calendar day is a Business Day. "Redevelopment Fund" means the fund by that name established and held by the Agency pursuant to Section 3.03. "Redevelopment Plan" means the Redevelopment Plan for the project designated as the "La Quinta Redevelopment Project Area No. 1", adopted and approved by Ordinance No. 43, which became effective on December 29, 1983, together with any amendments thereof heretofore or hereafter duly enacted pursuant to the Law. "Redevelopment Protect Area," "Redevelopment Project," or "Project Are means the project area defined and described in the Redevelopment Plan. "Registration Books" means the records maintained by the Trustee pursuant to Section 2.09 for the registration and transfer of ownership of the Bonds. "Report" means a document in writing signed by an Independent Redevelopment Consultant and including: (a) a statement that the person or firm making or giving such Report has read the pertinent provisions of this Indenture to which such Report relates; (b) a brief statement as to the nature and scope of the examination or investigation upon which the Report is based; and (c) a statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said consultant to express an informed opinion with respect to the subject matter referred to in the Report. "Reserve Fund" means the account by that name established and held by the Trustee pursuant to Section 4.03(b). "Reserve Requirement" means, with respect to the issue of Bonds or any Parity Debt, an amount equal to the least of (i) ten percent (10%) of the proceeds of the Bonds or any Parity Debt, as applicable, (ii) Maximum Annual Debt Service, with respect to the applicable bond issue, or (iii) 125% of Average Annual Debt Service, with respect to the applicable bond issue. "Resolution" means the resolution adopted by the Agency on July 3, 2001. "Revenues" means the Pledged Tax Revenues together with all other moneys held by the Trustee in any Fund or Account and the interest earnings thereon. 060 124/015610-0053 024 184550.04 AM01 -13- "Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax—(516) 227-4039 or 4190; Midwest Securities Trust Company, Capital Structures -Call Notification, 440 South La Salle Street, Chicago, Illinois 60605, Fax: (312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103; Attention: Bond Department, Dex-(215) 496-5058; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Agency may designate in a Written Request of the Agency delivered to the Trustee. "Six -Month Period" shall mean the period of the time beginning on the Closing Date and ending six months thereafter, and each six month period thereafter until the. latest maturity date of the Bonds (and any obligations that refund the Bonds). "SLGS" means U.S. Treasury Securities State and Local Government Series. "Special Fund" means the fund by that name established and held by the Agency pursuant to Section 4.02. "Standard & Poor's", "S&P" or "Standard & Poor's Ratings Group" means Standard & Poor's Ratings Group, New York, New York, or any successors or assigns. "State"means the State of California. "Subordinate Debt" means any loans, advances or indebtedness issued or incurred by the Agency pursuant to the Indenture, Which are either: (a) payable from, but not secured by a pledge of or lien upon, the Pledged Tax Revenues; or (b) secured by a pledge of or lien upon the Pledged Tax Revenues which is subordinate to the pledge of and lien upon the Pledged Tax Revenues for the security of the Bonds, the 1994 Bonds, the 1998 Bonds and the Parity Debt. "Supplemental Indenture" means any indenture then in full force and effect which has been duly entered into by the Agency under the Law, or any act supplementary thereto and amendatory thereof, at a meeting of the Agency duly convened and held, at which a quorum was present and acted thereon, amendatory of or supplemental to the Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized thereunder. "Surety" means the surety bond issued by the Bond Insurer guaranteeing certain payments into the Reserve Fund as provided therein and subject to the limitations set forth therein. "Tax Certificate" means that certain Tax Certificate executed by the Agency on the Closing Date with respect to the Bonds. "Tax Regulations" means temporary and permanent regulations promulgated under Section 103 and all related provisions of the Code. "Tax Revenues" means that portion of taxes levied upon taxable property in the Project Area and received by the Agency on or after the date of issue of the Bonds for the Project Area of the Agency pursuant to Article 6 of Chapter 6 of the Law and Section 16 of Article XVI 061 124/015610-0053 184550.04 AMOI -14- n 2 Nt) of the Constitution of the State of California, or pursuant to other applicable State laws, and as provided in the Redevelopment Plan, and (to the extent permitted by law) all payments, subventions and reimbursements, if any, to the Agency specifically attributable to ad valorem. taxes lost by reason of tax exemptions and tax rate limitations. "Term Bonds" means the Bonds maturing in the years 2021 and 2031. "Trustee" means U.S. Bank Trust National Association, as trustee hereunder, or any successor thereto appointed as trustee hereunder in accordance with the provisions of Article VI. "Trust Office" means such corporate trust office of the Trustee as may be designated from time to time by written notice from the Trustee to the Agency, initially being Los Angeles, California, except that with respect to presentation of Bonds for payment of or registration of transfer and exchange, such term shall mean the office of the Trustee in St. Paul, Minnesota or such other office designated by the Trustee. "Written Request of the Agency" or "Written Certificate of the Agency" means a request or certificate, in writing signed by the Executive Director, Deputy Executive Director, Secretary or Treasurer of the Agency or by any other officer of the Agency duly authorized by the Agency for that purpose. Section 1.3 Rules of Construction. All references herein to "Articles", "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture, and the words "herein", "hereof', "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. r' e 124550.04 AMD1 -15- r `.r __ 6 184550.04 AM01 G) ARTICLE II AUTHORIZATION AND TERMS Section 2.1 Authorization of Bonds. Bonds in the aggregate principal amount of Forty -Eight Million Dollars ($48,000,000) are hereby authorized to be issued by the Agency under and subject to the terms of this Indenture and the Law. This Indenture constitutes a continuing agreement with the owners of all of the Bonds issued or to be issued hereunder and then Outstanding to secure the full and final payment of principal and interest on all Bonds which may from time to time be executed and delivered hereunder, subject to the covenants, agreements, provisions and conditions herein contained. The Bonds shall be designated the "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1 Tax Allocation Bonds, Series 2001. Section 2.2 Terms of Bonds. The Bonds shall be issued in fully registered form without coupons in the denomination of $5,000 or any integral multiple thereof The Bonds shall mature on September 1 of each year and shall bear interest (calculated on the basis of a 360-day year of twelve 30-day months) at the rate per annum as follows: Maturity Date Principal Interest (September 1) Amount Rate Interest on the Bonds shall be payable semiannually on each Interest Payment Date to the person whose name appears on the Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check of the Trustee mailed by first class mail on each Interest Payment Date to such Owner at the address of such Owner as it appears on the Registration Books as of such Record Date; provided however, that payment of interest may be by wire transfer to an account in the continental United States to any registered owner of Bonds in the aggregate principal amount of $1,000,000 or more who shall furnish written wire instructions to the Trustee before the applicable Record Date. Principal of any Bond shall be paid upon presentation and surrender thereof, at maturity at the Trust Office of the Trustee. The principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Each Bond shall be dated August 1, 2001, and shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) a Bond is authenticated on or before February 15, 2002, in which event it shall bear interest from August 1, 2001, provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. 063 24/015610-0053 r• 84550.04 AM01 -16- Section 2.3 Redemption of Bonds. A. Terms of Redemption. (1) Optional Redemption. The Bonds may be called before maturity and redeemed at the option of the Agency, in whole or in part from the proceeds of refunding Bonds or any other available funds on September 1, 2011, or any date thereafter, prior to maturity. Bonds called for redemption shall be redeemed at the redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed) plus accrued interest to the redemption date as shown in the following table: Redemption Date Redemption Price September 1, 2011 through August 31, 2012 102% September 1, 2012 through August 31, 2013 101 % September 1, 2013 and thereafter 100% (2) Sinking Fund Redemption. The Term Bonds maturing on September 1, 2021, will be subject to mandatory redemption in part, by lot, on September 1, 2013, and on each September 1 thereafter to and including September 1, 2021, at a redemption price equal to the principal amount thereof together with accrued interest thereon to the redemption date, without premium, from minimum sinking fund payments nn hand in the Debt Service Fund in the vears and amounts as follows: Year Amount* Year Amount* 2013 $1,485,000 2018 $1,910,000 2014 1,560.000 2019 2,005,000 2015 1,640,000 2020 2,110,000 2016 1,725,000 2021(maturity) 2,220,000 2017 1,815,000 (3) Sinking Fund Redemption. The Tenn Bonds maturing on September 1, 2031, will be subject to mandatory redemption in part, by lot, on September 1, 2022, and on each September 1 thereafter to and including September 1, 2031, at a redemption price equal to the principal amount thereof together with accrued interest thereon to the redemption date, without premium, from minimum sinking fund payments nn hand in the, ne,ht Ce,rvice Fnnd in the vears and amounts as follows: Year Amount* Year Amount* 2022 $2,330,000 2027 $2,995,000 2023 2,450,000 2028 3,150,000 ffil r 14/015010.0053 84550.04 AMOI -17- 028 2024 2,580,000 2029 3,315,000 2025 2,710,000 2030 3,485,000 2026 2,850,000 2031(maturity) 3,665,000 Minimum sinking fund payments for any Term Bond redeemed pursuant to Section 2.03(A)(1) hereof shall be reduced pro rata. B. Call and Redemption. The Agency may by resolution direct the call and redemption prior to maturity of Bonds by the Trustee in such amounts as funds are available therefor and shall give notice to the Trustee of such redemption not less than sixty (60) days prior to the redemption date. C. Notice of Redemption. Notice of redemption prior to maturity (except as provided below) shall be given by first class mail, postage prepaid to the registered owner of each Bond at the address shown on the registration books of the Trustee not less than thirty (30) nor more than sixty (60) days prior to such redemption date. Neither failure to mail such notice nor any defect in any notice so mailed shall affect the sufficiency of the proceedings for the redemption of any Bonds. The notice of redemption shall (a) state the redemption date; (b) state the redemption price; (c) state the numbers of the Bonds to be redeemed; provided, however, that whenever any call for redemption includes all of the outstanding Bonds, the numbers of the Bonds need not be stated; (d) state as to any Bonds redeemed in part only, the registered Bond numbers and the principal portion thereof to be redeemed; (e) state that interest on the principal portion of the Bonds so designated for redemption shall cease to accrue from and after such redemption date and that on said date there shall become due and payable on each of such Bonds the redemption price thereof; (f) the date of issue of the Bonds as originally issued; (g) the rate of interest borne by each Bond being redeemed and (h) the place of redemption. D. Notice of Redemption. The actual receipt by the Owner of any Bond or notice of such redemption shall not be a condition precedent to redemption, and failure to receive such notice shall not affect the validity of the proceedings for the redemption of such Bonds or the cessation of interest on the redemption date. Notice of redemption of Bonds shall be given by the Trustee and on behalf of the Agency at the expense of the Agency. In addition to the foregoing notice, further notice shall be given by the Trustee as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. Each further notice of redemption shall be sent 2 days prior to sending notice of redemption pursuant to the first paragraph of this section by registered or certified mail or overnight delivery service to the Securities Depositories. Upon the payment of the redemption price of any Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number 065 124/015610-0053 -1 c4- ^ 029 184550.04 AM01 identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. An affidavit of mailing by the Trustee that notice of redemption has been given as herein provided shall be conclusive as against all parties, and no Bondowner whose Bond is called for redemption may object thereto or object to the cessation of interest on the redemption date fixed by any claim or showing that he failed actually to receive such a of call and redemption. E. Redemption Fund. There is hereby created with the Trustee a special trust fund called the "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1 Tax Allocation Bonds, Series 2001, Redemption Fund" (hereinafter referred to as the "Redemption Fund"). There shall be set aside in the Redemption Fund, prior to mailing as above required, moneys for the purpose and sufficient to redeem, at the premiums, if any, payable as provided in this Indenture, the Bonds designated in such notice of redemption to be redeemed as provided in this section. Said moneys must be set aside in the Redemption Fund solely for that purpose and shall be applied by the Trustee to the payment (principal and premium, if any) of the Bonds to be redeemed upon presentation and surrender of such Bonds. Moneys for the purpose and sufficient to redeem the Bonds designated in the notice as hereinbefore required to be redeemed as provided in this Section shall be deposited in the Redemption Fund on or prior to the business day preceding the redemption date. Any interest due on the Bonds on or prior to the redemption date shall be paid, pro rata with the Series 1994 Bonds and Series 1998 Bonds then subject to mandatory sinking fund redemption, if necessary, from the Redemption Fund upon presentation and surrender thereof. F. Partial Redemption of Bonds. Upon surrender of any Bond redeemed in part only, the Agency shall execute and the Trustee shall authenticate and deliver to the registered owner thereof, at the expense of the Agency, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bond surrendered and of the same interest rate and same maturity. Such partial redemption shall be valid upon payment of the amount thereby required to be paid to such registered owner, and the Agency and the Trustee shall be released and discharged from all liability to the extent of such payment. G. Effect of Redemption. Notice of redemption having been duly given as aforesaid, and moneys for payment of the principal of, premium, if any, and interest payable upon redemption of the Bonds being set aside as aforesaid, the Bonds, or parts thereof, as the case may be, so called for redemption shall, on the redemption date, become due and payable at the redemption price specified in such notice, interest on the Bonds, or parts thereof, as the case may be, so called for redemption shall cease. to accrue, shall cease to be entitled to any lien, benefit or security under this Resolution, and the Owners of said Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof, and, in the case of partial redemption of Bonds, also to receive a new Bond or Bonds for the unredeemed balance as aforesaid. All Bonds, or parts thereof, as the case may be, redeemed pursuant to the provisions of this Section shall be cancelled upon surrender thereof. e 124/015610-0053 184550.04 AM01 -19- "` 030 H. Purchase of Bonds. In lieu of redemption, the Trustee, at the written direction of the Agency, shall purchase Bonds from amounts on deposit in the Redemption Fund on the open market at a price not to exceed the current redemption price on the next succeeding Interest Payment Date plus accrued interest, if any, to the date of purchase. Section 2.4 Book Entry. (a) Original Delivery. The Bonds shall be initially delivered in the form of a separate single fully registered Bond without coupons (which may be typewritten) for each maturity of the Bonds. Upon initial delivery, the ownership of each such Bond shall be registered on the Registration Books in the name of Cede & Co., as nominee of the Depository Trust Company (the "Nominee"). Except as provided in subsection (c), the ownership of all of the Outstanding Bonds shall be registered in the name of the Nominee on the Registration Books. With respect to Bonds the ownership of which shall be registered in the name of the Nominee, the Agency and the Trustee shall have no responsibility or obligation to any Depository System Participant or to any person on behalf of which holds an interest in the Bonds. Without limiting the generality of the immediately preceding sentence, the Agency and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Depository System Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Depository System Participant or any other person, other than a Bond Owner as shown in the Registration Books, of any notice with respect to the Bonds, (iii) the payment to any Depository System Participant or any other person, other than a Bond Owner as shown in the Registration Books, of any amount with respect to principal of premium, if any, or interest on the Bonds or (iv) any consent given or other action taken by the Depository as Owner of the Bonds. The Agency and the Trustee may treat and consider the person in whose name each Bond is registered as the absolute owner of such Bond for the purpose of payment of principal, premium and interest on such Bond, for the purpose of giving notices of redemption and other matter, with respect to such Bond, for the purpose of registering transfers of ownership of such Bond, and for all other purposes whatsoever. The Trustee shall pay the principal of and interest and premium, if any, on the Bonds only to the respective owners or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to payment of principal of and interest and premium, if any, on the Bonds to the extent of the sum or sums so paid. No person other than a Bond Owner shall receive a Bond evidencing the obligation of the Agency to make payments of principal, interest and premium, if any, pursuant to this Indenture. Upon delivery by the Depository to the Nominee of written notice to the effect that the Depository has determined to substitute a new Nominee in its place, and subject to the provisions herein with respect to Record Dates, such new Nominee shall become the Nominee hereunder for all purposes; and upon receipt of such a notice the Agency shall promptly deliver a copy of the same to the Trustee. (b) ftresentation Letter. In order to qualify the Bonds for the Depository's book entry system, the Agency and the Trustee shall execute and deliver to such Depository a letter representing such matters as shall be necessary to so qualify the Bonds. The execution and delivery of such letter shall not in any way limit the provisions of subsection (a) above or in any other way impose upon the Agency or the Trustee any obligation whatsoever with respect to 067 124/015610-0053 1 r 184550.04 AMO1 _20_ 1 ) -1 persons having interests in the Bonds other than the Bond Owners. The Trustee agrees to comply with all provisions in such letter with respect to the giving of notices thereunder by the Trustee. In addition to the execution and delivery of such letter, the Agency may take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the Depository's book -entry (c) Transfers Outside Book -Entry System. In the event that either (i) the Depository determines not to continue to act as Depository for the Bonds, or (ii) the Agency determines to terminate the Depository as such, then the Agency shall thereupon discontinue the book -entry system with such Depository. In such event, the Depository shall cooperate with the Agency and the Trustee in the issuance of replacement Bonds by providing the Trustee with a list showing the interests of the Depository System Participants in the Bonds, and by surrendering the Bonds, registered in the name of the Nominee, to the Trustee on or before the date such replacement Bonds are to be issued. The Depository, by accepting delivery of the Bonds, agrees to be bound by the provisions of this subsection (c). If, prior to the termination of the Depository acting as such, the Agency fails to identify another Securities Depository to replace the Depository, then the Bonds shall no longer be required to be registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Article 2. Prior to its termination, the Depository shall furnish the Trustee with the names and addresses of the Participants and respective ownership interests thereof. (d) Payments to the Nominee. Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal of and interest and premium, if any, on such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the letter described in subsection (b) of this Section or as otherwise instructed by the Depository. Section 2.5 Form of Bonds. The Bonds, the form of Trustee's Certificate of Authentication, and the form of Assignment to appear thereon, shall be substantially in the form set forth in Exhibit A, which is attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture. Section 2.6 Execution of Bonds. The Bonds shall be executed on behalf of the Agency by the signature of its Chairman or Executive Director and the signature of its Secretary who are in office on the date of this Indenture or at any time thereafter. Either or both of such signatures shall be made manually or shall be affixed by facsimile thereof. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bonds to the purchaser, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bonds to the purchaser. Any Bond shall be signed and attested on behalf of the Agency by such persons as at the actual date of the execution of such Bond shall be the proper officers of the Agency although on the date of such Bond any such person shall not have been such officer of the Agency. Only such of the Bonds as shall bear thereon a certificate of authentication in the form hereinbefore set forth, executed manually and dated by and in the name of the Trustee by 068 24/015610-0053 184550.04 AM01 -21- ,. 032 the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that such Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture. In the event temporary Bonds are issued pursuant to Section 2.10 hereof, the temporary Bonds may bear thereon a certificate of authentication executed and dated by the Trustee, may be initially registered by the Trustee, and, until so exchanged as provided under Section 2.10 hereof, the temporary Bonds shall be entitled to the same benefits pursuant to this Indenture as definitive Bonds authenticated and delivered hereunder. Section 2.7 Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, upon surrender of such Bond to the Trustee at its Trust Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Whenever any Bond or Bonds shall be surrendered for registration of transfer, the Agency shall execute and the Trustee shall deliver a new Bond or Bonds, of like series, interest rate, maturity and principal amount. The Trustee shall collect from the Owner any tax or other governmental charge on the transfer of any Bonds pursuant to this Section 2.07. The Trustee may refuse to transfer, under the provisions of this Section 2.07, any Bond which has matured or has been called for redemption. Section 2.8 Exchange of Bonds. Bonds may be exchanged at the Trust Office of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations of the same series, interest rate and maturity.. The Trustee shall collect any tax or other governmental charge on the exchange of any Bonds pursuant to this Section 2.08. The Trustee may refuse to exchange, under the provisions of this Section 2.08, any Bond which has matured or has been called for redemption. Section 2.9 Registration Books. The Trustee will keep or cause to be kept, at its Trust Office, sufficient records for the registration and registration of transfer of the Bonds, which shall at all times during normal business hours be open to inspection by the Agency, upon reasonable prior notice to the Trustee; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on the Registration Books, Bonds as hereinbefore provided. Section 2.10 Temporary Bonds. The Bonds shall be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds shall be printed, lithographed or typewritten, shall be of such denominations as shall be determined by the Agency, and shall contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Agency upon the same conditions and in substantially the same manner as the definitive Bonds. If the Agency issues temporary Bonds it will execute and furnish definitive Bonds without delay, and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange therefor at the Trust Office of the Trustee, and the Trustee shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized. denominations, interest rates and like 069 124/015610-0053 154550.04 AM01 -22- r 033 maturities. Until so exchanged, the temporary Bonds shall be entitled to the same benefits pursuant to this Indenture as definitive Bonds authenticated and delivered hereunder. Section 2.11 Bonds, Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Agency, at the expense of the owner of such Bond, shall execute, and the Trustee shall thereupon deliver, a new Bond of like tenor and amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or upon the order of, the Agency. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft shall be submitted to the Trustee and, if such evidence and the indemnity to be given satisfactory to the Trustee, the Agency, at the .expense of the Owner, shall execute, and the Trustee shall thereupon deliver, a new Bond of like tenor and amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Agency may require payment by the Owner of a sum not exceeding the actual cost of preparing each new Bond issued under this Section 2.11 and of the expenses which may be incurred by the Agency. and the Trustee in the premises. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Agency whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds issued pursuant to this Indenture. 070 l 24/01561MO53 034 1 84550.04 AM01 -23- ARTICLE III DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS; PARITY DEBT Section 3.1 Issuance of Bonds. Upon the execution and delivery of this Indenture, the Agency shall execute and deliver to the Trustee Bonds in the aggregate principal amount Forty Eight Million Dollars ($48,000,000) and the Trustee shall authenticate and deliver the Bonds upon the Written Request of the Agency. Section 3.2 Application of Sale and Certain Other Amounts. On the Closing Date the proceeds of sale of the Bonds in the amount of $ representing the principal amount of the Bonds of $ , less underwriters' discount of $ less original issue discount of $ , plus accrued interest of $ shall be paid to the Trustee and applied as follows: (a) The Trustee shall deposit $ representing accrued interest received on the sale of the Bonds in the Debt Service Fund; (b) The Trustee shall deposit $ into the Costs of Issuance Account within the Redevelopment Fund to pay the Costs of Issuance. At closing, the Trustee shall wire transfer from the Costs of Issuance Account of the Redevelopment Fund $ to the Bond Insurer as payment of the premium on the Municipal Bond Insurance Policy and $ to the Bond Insurer as payment of the premium on the Surety Bond; and (c) The Trustee shall deposit the remaining funds in the amount of $ in the Redevelopment Fund. The Trustee may establish such temporary fund or account on its records as it may deem appropriate to facilitate such deposits and transfers. Section 3.3 Redevelopment Fund. There is hereby established a separate fund known as the Redevelopment Fund (the "Redevelopment Fund"), which the Agency hereby covenants and agrees to cause to be maintained and which shall be held in trust by the Trustee. Within the Redevelopment Fund herein, there is hereby established a temporary Account known as the Cost of Issuance Account, to be held by the Trustee hereunder in trust. The moneys in the Redevelopment Fund shall be used in the manner provided by the Law solely for the purpose of aiding in financing the Redevelopment Project. The moneys in the Cost of Issuance Account shall be used for the payment of the Costs of Issuance. The Trustee shall pay moneys from the Cost of Issuance Account upon receipt of claims thereon. The Agency has warranted that no funds on deposit in the Redevelopment Fund shall be applied for any purpose not authorized by the Law. The Trustee shall establish and hold a Costs of Issuance Account within the Redevelopment Fund into which ,it shall make the deposit specified in section 3.03 (A)(3). Any amounts remaining in said account as of January 1, 2002 shall be transferred to the Redevelopment Fund held by the Agency. 071 124/015610-0053 _24_ h ' 0 3 1 84550.04 AM01 Section 3.4 Issuance of Parity Debt. In addition to the Bonds, the Agency may, by Supplemental Indenture, issue or incur Parity Debt payable from Pledged Tax Revenues on a parity with the Bonds to finance additional redevelopment activities with respect to the Project Area in such principal amount as shall be determined by the Agency. The Agency may issue or incur any such other Parity Debt subject to the following specific conditions all of which are hereby made conditions precedent to the issuance and delivery of such Parity Debt issued under this Section. (a) The Agency shall be in compliance with all covenants set forth in this Indenture, all Supplemental Indentures, the 1994 Indenture, and the 1998 Indenture. (b) The Pledged Tax Revenues estimated to be received for the then current Fiscal Year based on the most recent assessed valuation of property in the Project Area as evidenced in written documentation from an appropriate official of the County, shall be at least equal to 130% of Maximum Annual Debt Service on all Bonds, Parity Debt, the 1994 Bonds and the 1998 Bonds which will be Outstanding immediately following the issuance of such Parity Debt; provided, however, for the purpose of this subsection (b), Pledged Tax Revenues shall be exclusive of the product of the following: (i) Tax Revenues attributable to all property subject to pending appeals within the Project Area, times (ii) the percentage representing, (x) the actual amount of reduction in assessed valuation as compared to (y) the aggregate assessed valuation of such properties prior to the reduction as a result of successful appeals; provided further, the percentage set forth in (ii) above shall be based on the County -wide experience, as verified by an Independent Redevelopment Consultant, for the last two (2) fiscal years; (c) The Supplemental Indenture providing for the issuance of such Parity Debt under this Section 3.04 shall provide that interest thereon shall be payable on March 1 and September 1, and principal thereof shall be payable on September 1 in any year in which principal is payable; (d) The Supplemental Indenture providing for the issuance of such Parity Debt may provide for the establishment of separate funds; (e) The aggregate amount of the principal of and interest on all Outstanding Bonds, the 1994 Bonds, the 1998 Bonds, Parity Debt, if any, and Subordinate Debt coming due and payable following the issuance of such Parity Debt shall not exceed the maximum amount of tax increment revenues permitted under the Plan Limit to be allocated and paid to the Agency following the issuance of such Parity Debt; (f) The aggregate principal amount of the Outstanding Bonds, the 1994 Bonds, the 1998 Bonds, the Parity Debt and Subordinate Debt following the issuance of such Parity Debt shall not exceed the maximum principal amount of indebtedness permitted under the Redevelopment Plan; and (g) The Agency shall deliver to the Trustee a Written Certificate of the Agency certifying that the conditions precedent to the issuance of such Parity Debt set 079 t24i015eto-W53 r 0361 3 184550.04 AMot -25- forth above in this Section 3.04 above have been satisfied and that an amount equal to the Reserve Requirement is on deposit in the Reserve Fund as of the delivery of such Parity Debt. (h) For purposes of the issuance of Parity Debt or release of escrowed proceeds unless otherwise approved by the Bond Insurer, Pledged Tax Revenues shall be calculated by multiplying most the recent assessed value in the Project Area as certified by the County by the basic 1 % tax rate (without regard to overrides) and shall be further reduced by: (i) the amount of subventions paid by the State or any other amount appropriated by the State for the Agency; (ii) unless the "Teeter Plan" is currently in effect and the County has made no announcement that the plan would terminate, the amount derived by applying the average percentage by which the actual tax collections in the Project Area are less than the amount of the tax levy in the Project Area for the immediately preceding two (2) Fiscal Years; (iii) the maximum percentage of Tax Revenues payable to a taxing entity pursuant to all non —subordinated Pass Through Agreements, regardless of whether such maximum percentage is in effect for that year; if a Pass Through Agreement includes a step up provision or takes effect upon the occurrence of some event, that pass through shall be calculated at the maximum rate pursuant to the step up or as if the event had already taken place; (iv) the percentage of Tax Revenues which must be deposited to the Low and Moderate Income Housing Fund with the exception of amounts which, in the opinion of Bond Counsel, may be used to pay Debt Service; (v) The amount required to be paid to the County for administrative expenses; (i) Prior to the issuance of Parity Debt or release of escrowed proceeds an independent redevelopment consultant shall certify that Pledged Tax Revenues, adjusted pursuant to the parity test, are at least 1.30X Maximum Annual Debt Service on the Bonds, the 1994 Bonds, the 1998 Bonds, and Parity Debt outstanding after the increase of the proposed Parity Debt; and 0) If the Agency has outstanding or proposes to issue bonds bearing interest at a variable rate, the interest on such bonds shall be assumed to be the maxim interest rate allowable under the financing document in all instances where an assumption about interest rates is necessary unless the interest rate is "synthetically" fixed with a Bond Insurer approved interest rate swap or cap agreement which is in effect for the life of the Bonds, in which case the synthetically fixed rate shall be used. Section 3.5 Issuance of Subordinate Debt. In addition to the Bonds, the Agency o .7 may incur Subordinate Debt in such principal amount as shall be determined by the Agency. The 124/015610-0053 r ♦~ 184550.04 AM01 -26- �a 3 t Agency may issue or incur such Subordinate Debt subject to the following specific conditions precedent: (a) The Agency shall be in compliance with all covenants set forth in this Indenture, all Supplemental Indentures, the 1994 Indenture and the 1998 Indenture. (b) If, and to the extent, such Subordinate Debt is payable from tax increment revenues within the Plan Limit, then the aggregate amount of the principal of and interest on all Outstanding Bonds, all Subordinate Debt, Parity Debt, the 1994 Bonds, and the 1998 Bonds coming due and payable following the issuance of such Subordinate Debt shall not exceed the maximum amount of tax increment revenues permitted under the Plan Limit to be allocated and paid to the Agency following the issuance of such Subordinate Debt. (c) Except with respect to any Subordinate Debt issued and delivered on the Closing Date, the Agency shall deliver to the Trustee a Written Certificate of the Agency certifying that the conditions precedent to the issuance of such Subordinate Debt set forth in subsections (a) and (b) of this Section 3.05 have been satisfied. Section 3.6 Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be dependent upon the completion of the Redevelopment Project or upon the performance by any person of his obligation with respect to the Redevelopment Project. 074 124/015610-0053 038 184550.04 AM01 -27- ARTICLE IV SECURITY OF BONDS; FLOW OF FUNDS Section 4.1 Security of Bonds; Equal Security. Except as provided in Section 6.06, the Bonds shall be equally secured by a first pledge of and lien on a parity with the 1994 Bonds and the 1998 Bonds on all of the Pledged Tax Revenues and a first and exclusive pledge of and lien upon all of the moneys in the Special Fund, the Debt Service Fund and the Reserve Fund without preference or priority for series, issue, number, dated date, sale date, date of execution or date of delivery. Except for the Pledged Tax Revenues and such moneys, no funds or properties of the Agency shall be pledged to, or otherwise liable for, the payment of principal of or interest on the Bonds. In consideration of the acceptance of the Bonds by those who shall hold the same from time to time, this Indenture shall be deemed to be and shall constitute a contract between the Agency and the Owners from time to time of the Bonds, and the covenants and agreements herein set forth to be performed on behalf of the Agency shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or the time of sale, execution and delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. Section 4.2 Special Fund; Deposit of Pledged Tax Revenues. There is hereby established a special fund to be known as the "Special Fund", which shall be held by the Agency and invested in Permitted Investments. The Agency shall deposit all of the Pledged Tax Revenues received in any Bond Year in the Special Fund promptly upon receipt thereof by the Agency, until such time during such Bond Year as the amounts on deposit in the Special Fund equal the aggregate amounts required to be transferred to the Trustee for deposit into the Debt Service Fund and the Reserve Fund in such Bond Year pursuant to Section 4.03 and for deposit in such Bond Year in the funds and accounts established with respect to Parity Debt, as provided in any Supplemental Indenture. All Pledged Tax Revenues received by the Agency during any Bond Year in excess of the amount required to be deposited in the Special Fund during such Bond Year pursuant to the preceding paragraph of this Section 4.02 shall be released from the pledge and lien hereunder for the security of the Bonds and may be applied by the Agency for any lawful purposes of the Agency, including but not limited to the payment of Subordinate Debt, or the payment of any amounts due and owing to the United States of America pursuant to Section 5.12. Prior to the payment in full of the principal of and interest on the Bonds and the payment in full of all other amounts payable hereunder and under any Supplemental Indentures, the Agency shall not have any beneficial right or interest in the moneys on deposit in the Special Fund, except as may be provided in this Indenture and in any Supplemental Indenture. Section 4.3 Deposit of Amounts by Trustee. There is hereby established a trust fund to be known as the "Debt Service Fund" and a trust fund known as the "Reserve Fund", to be held by the Trustee hereunder in trust. Moneys in the Special Fund shall be transferred by the Agency in the following amounts, at the following times, for deposit by the Trustee in the funds: 079 124/015610-0053 0 O 3 4 184550.04 AM01 -28- (a) Debt Service Fund. On or before the second Business Day preceding each Interest Payment Date, the Agency shall withdraw from the Special Fund and transfer to the Trustee for deposit in the Debt Service Fund an amount which when added to the amount contained in the Debt Service Fund on that date, will be equal to the aggregate amount of the interest becoming due and payable on the Outstanding Bonds on such Interest Payment Date. No such transfer and deposit need be made to the Debt Service Fund if the amount contained therein is at least equal to the interest to become due on the next succeeding Interest Payment Date upon all of the Outstanding Bonds. On or before the second Business Day preceding September 1 in each year, beginning September 1, 2013 the Agency shall withdraw from the Special Fund and transfer to the Trustee for deposit in the Debt Service Fund an amount which, when added to the amount then contained in the Debt Service Fund, will be equal to the principal and/or sinking fund payment becoming due and payable on the outstanding Bonds, on the next Interest Payment Date. No such transfer and deposit need be made to the Debt Service Fund if the amount contained therein is at least equal to the principal to become due on the next Interest Payment Date on all of the Outstanding serial Bonds and any maturing term Bonds. All moneys in the Debt Service Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the interest and the principal of the serial Bonds and maturing term Bonds as it shall become due and payable. (b) Reserve Fund. In the event that the amount on deposit in the Reserve Fund at any time becomes less than the Reserve Requirement, the Trustee shall promptly notify the Agency of such fact to the extent known to the Trustee. Promptly upon receipt of any such notice, the Agency shall withdraw from the Special Fund and transfer to the Trustee an amount sufficient to maintain the Reserve Requirement on deposit in the Reserve Fund. If there shall then not be sufficient moneys in the Special Fund to transfer an amount sufficient to maintain the Reserve Requirement on deposit in the Reserve Fund, the Agency shall be obligated to continue making transfers as Pledged Tax Revenues become available in the Special Fund until there is an amount sufficient to maintain the Reserve Requirement on deposit in the Reserve Fund. No such transfer and deposit need be made to the Reserve Fund so long as there shall be on deposit therein a sum at least equal to the Reserve Requirement. All money in the Reserve Fund shall be used and withdrawn by the Trustee solely for the purpose of making transfers to the Debt Service Fund, in the event of any deficiency at any time in any of the Debt Service Funds for the retirement of all the Bonds then Outstanding, except that so long as the Agency is not in default hereunder, any amount in the Reserve Fund in excess of the Reserve Requirement shall be withdrawn from the Reserve Fund semiannually on the third Business Day preceding each March 1 and September 1 by the Trustee and upon receipt of a Written Request of the Agency deposited in the Rebate Fund or in the Debt Service Fund. All amounts in the Reserve Fund on the final Interest Payment Date shall be withdrawn from the Reserve Fund and shall be transferred either (i) to the Debt Service Fund, to the extent required to make the deposits then required to be made pursuant to this Section 4.03, or (ii) if the Agency shall have caused to be deposited in the Debt Service Fund an amount sufficient to make the deposits required by Section 4.03, then the Trustee shall upon the Written Request of the Agency transfer the remaining amount to the Rebate Fund or to the Agency for deposit in the Redevelopment Fund. 07E 124/015610-0053 ^ 040 184550.04 AM01 -29- The Agency reserves the right to substitute, at any time and from time to time, one or more letters of credit, Alternative Reserve Account Security, bond insurance policies or other form of guarantee approved in writing by the Bond Insurer from a financial institution the long-term unsecured obligations of which are rated to the Bond Insurer's satisfaction in substitution for or in place of all or any portion of the Reserve Requirement, under the terms of which the Trustee is unconditionally entitled to draw amounts when required for the purposes hereof. Upon deposit by the Agency with the Trustee of any such letter of credit, surety bond, bond insurance policy or other form of guarantee, the Trustee shall withdraw from the Reserve Fund and transfer to the Agency for deposit in the Redevelopment Fund an amount equal to the principal amount of such letter of credit, Alternative Reserve Account Security, bond insurance policy or other form of guarantee. The Reserve Fund will initially be funded with the Alternative Reserve Account Security to be issued by the Bond Insurer in the amount of the Reserve Requirement. If and to the extent that the Reserve Fund has been funded with a combination of cash (or Permitted Investments) and a Alternative Reserve Account Security, then all such cash (or Permitted Investments) shall be completely used before any demand is made on such Alternative Reserve Account Security, and replenishment of the Alternative Reserve Account Security shall be made prior to any replenishment of any such cash (or Permitted Investments). If the Reserve Fund is funded, in whole or in part, with more than one Alternative Reserve Account Security, then any draws made against such Alternative Reserve Account Security shall be made pro-rata. If it is necessary to make a draw upon the Bond Insurer's Alternative Reserve Account Security, the Trustee shall deliver to the Bond Insurer a Demand for Payment (as defined in the Bond Insurer's Alternative Reserve Account Security) substantially in the form required by the Bond Insurer's Alternative Reserve Account Security at least three days prior to the date on which the funds from such draw are needed. The Trustee shall maintain adequate records, verified by the Bond Insurer, as to the amount available to be drawn at any given time under the Bond Insurer's Surety Bond. If during any Bond Year (i) Pledged Tax Revenues remain in the Special Fund after providing (or otherwise reserving) for all deposits required by clause (a) during the entirety of such Bond Year, (ii) the amounts on deposit in the Reserve Fund and in any debt service reserve account established with respect to any Parity Debt are equal to or exceed their respective required funding levels, (iii) any Alternative Reserve Account Security used to fund the Reserve Fund or any debt service reserve accounts established with respect to any Parity Debt are fully replenished and all interest on amounts advanced under such Alternative Reserve Account Security has been paid to the provider thereof, and (iv) the Agency is not in default hereunder, then any moneys then on deposit in the Special Fund may be used in any manner provided by law for the purpose of aiding in financing the Redevelopment Project, including early redemption or purchase of the Bonds and Parity Debt, as provided in this Indenture and permitted by the Law. (e) Surplus. The Agency shall not be required to deposit in the Special Fund in any Bond Year an amount of Pledged Tax Revenues which, together with other available amounts in the Special Fund, exceeds the amounts required to be transferred to the Trustee from the Special Fund with respect to such Bond Year pursuant to this Section 4.03. In the event that, for any reason whatsoever, any amount shall 077 124/015610-0053 -30- r ll 184550.04 AM01 remain on deposit in the Special Fund on the last day of any Bond Year (being the applicable September 1) after making all of the transfers from the Special Fund with respect to such Bond Year theretofore required to be made pursuant to this Section 4.03 the Agency may withdraw such amount from the Special Fund to be used for any lawful purpose of the Agency. Section 4.4 Payment Procedure Pursuant to the Surety Bond. As long as the Surety Bond shall be in full force and effect, the Agency and Trustee agree to comply with the following provisions: (a) In the event and to the extent that moneys on deposit in the Debt Service Fund plus all amounts on deposit in and credited to the Reserve Fund in excess of the amount of the Surety Bond, are insufficient to pay the amount of principal and interest coming due, then upon the later of (i) one (1) day after receipt by the General Counsel of Bond Insurer of a demand for payment in the form attached to the Surety Bond as Attachment 1 (the "Demand for Payment'), duly executed by the Trustee certifying that payment due from the Agency for payment of interest or principal on the Bonds under the Indenture has not been made to the Trustee; or (ii) the payment date of the Obligations as defined in the Demand for Payment presented by the Trustee to the General Counsel of Bond Insurer, Bond Insurer will make a deposit of funds in an account with the Trustee or its successor, in New York, New York, sufficient for the payment to the Trustee of amounts which are then due to the Trustee under the Indenture (as specified in the Demand for Payment) up to but not in excess of the Surety Bond Coverage, as defined in the Surety Bond; provided, however, that in the event that the amount on deposit in, or credited to, the Reserve Fund, in addition to the amount available under the Surety Bond includes amounts available under a letter of credit, insurance policy, surety bond or other such funding instrument (the "Additional Funding Instrument'), draws on the Surety Bond and the Additional Funding Instrument shall be made on a pro rata basis to fund the insufficiency. (b) Trustee shall, after submitting to Bond Insurer, the Demand for Payment as provided in (a) above, make available to Bond Insurer all records relating to the Funds and Accounts maintained under this Indenture. (c) the Trustee shall, upon receipt of moneys received from the draw on the Surety Bond, as specified in the Demand for Payment, credit the Reserve Fund to the extent of moneys received pursuant to such Demand. (d) the Reserve Fund shall be replenished in the following priority: (i) principal and interest on the Surety Bond shall be paid from first available Revenues, principal and interest on the Surety Bond and on the Additional Funding Instrument shall be paid from first available Revenues on a pro rata basis; (ii) after all such amounts are paid in full, amounts necessary to fund the Reserve Fund to the required level, after taking into account the amounts available under the Surety bond and the Additional Funding Instrument shall be deposited from next available Revenues. M i 124/015610-0053 r 042 184550.04 AM01 -3 1- ARTICLE V OTHER COVENANTS OF THE AGENCY Section 5.1 Punctual Payment. The Agency shall punctually pay or cause to be paid the principal and interest to become due in respect of all the Bonds together with, the premium thereon, if any, in strict conformity with the terms of the Bonds and of this Indenture. The Agency shall faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplemental Indentures and the Bonds. Nothing herein contained shall prevent the Agency from making advances of its own moneys howsoever derived to any of the uses or purposes referred to herein. Section 5.2 Limitation of Additional Indebtedness; Against Encumbrances. The Agency hereby covenants that, so long as the Bonds are Outstanding, the Agency shall not issue any bonds, notes or other obligations, enter into any agreement or otherwise incur any indebtedness, which is in any case payable from all or any part of the Pledged Tax Revenues, excepting only the Bonds, the 1994 Bonds, the 1998 Bonds, any Parity Debt and any Subordinate Debt, and the Agency will not otherwise encumber, pledge or place any charge or lien upon any of the Pledged Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created in the Indenture for the benefit of the Bonds. Any Pass - Through Agreements entered into by the Agency pursuant to Section 33401 of the Law or any other applicable provisions of the Law after the date of this Indenture, shall provide that payment of any amounts thereunder shall be subordinate to the pledge in this Indenture of Pledged Tax Revenues or other amounts pledged to the payment of the Bonds. Section 5.3 Extension of Payment. The Agency will not, directly or indirectly, extend or consent to the extension of the time for the payment of any Bond or claim for interest on any of the Bonds and will not, directly or indirectly, be a party to or approve any such arrangement by purchasing or funding the Bonds or claims for interest in any other manner. In case the maturity of any such Bond or claim for interest shall be extended or funded, whether or not with the consent of the Agency, such Bond or claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded. Section 5.4 Payment of Claims. The Agency shall promptly pay and discharge, or cause to be paid and discharged, any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the properties owned by the Agency or upon the Pledged Tax Revenues or any part thereof, or upon any funds in the hands of the Trustee, or which might impair the security of the Bonds. Nothing herein contained shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of said claims. Section 5.5 Books and Accounts; Financial Statements; Annual Calculation of Available Tax Revenues. The Agency shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Agency and the City of La Quinta, in which complete and correct entries shall be made of all transactions relating to the 079 124/015610-0053 184550.04 AM01 -32- (141, Redevelopment Project, the Tax Revenues and the Special Fund. Such books of record and accounts shall at all times during business hours be subject to the inspection of the Owners of not less than ten percent (10%) in aggregate principal amount of the Bonds then Outstanding, or their representatives authorized in writing. The Agency will cause to be prepared and filed with the Trustee annually, within one hundred and eighty (180) days after the close of each Fiscal Year so long as the Bonds are Outstanding, complete audited financial statements with respect to such Fiscal Year showing the Tax Revenues, all disbursements of Tax Revenues and the financial condition of the Redevelopment Project, including the balances in all funds and accounts relating to the Redevelopment Project, as of the end of such Fiscal Year. The Agency shall furnish a copy of such statements to any Owner upon reasonable request and at the expense of such Owner. Section 5.6 Protection of Security and Rights of Owners. The Agency will preserve and protect the security of the Bonds and the rights of the owners. From and after the Closing Date, the Bonds shall be incontestable by the Agency. Section 5.7 Payments of Taxes and Other Charges. Except as otherwise provided herein, the Agency will pay and discharge, or cause to be paid and discharged, all taxes, service charges, assessments and other governmental charges which may hereafter be lawfully imposed upon the Agency or the properties then owned by the Agency in the Project Area, or upon the revenues therefrom when the same shall become due. Nothing herein contained shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of said taxes, assessments or charges. The Agency will duly observe and conform with all valid requirements of any governmental authority relative to the Redevelopment Project or any part thereof. Section 5.8 Taxation of Property. All amounts derived by the Agency pursuant to Section 33673 of the Law with respect to the lease of property for redevelopment shall be treated as Tax Revenues for all purposes of this Indenture. Section 5.9 Disposition of Property. The Agency will not participate in the disposition of any land or real property in the Project Area to anyone which will result in such property becoming exempt from taxation because of public ownership or use or otherwise (except property dedicated for public right—of—way and except property planned for public ownership or use by the Redevelopment Plan in effect on the date of this Indenture) so that such disposition shall, when taken together with other such dispositions, aggregate more than 10 percent of the land area or more than 10 percent of the most recent assessed valuation of the property in the Project Area unless such disposition is permitted as hereinafter provided in this Section 5.09. If the Agency proposes to participate in such a disposition, it shall thereupon appoint an Independent Redevelopment Consultant to report on the effect of said proposed disposition. If the Report of the Independent Redevelopment Consultant concludes that the security of the Bonds or the rights of the owners will not be materially impaired by said proposed disposition, the Agency may thereafter make such disposition. If said Report concludes that such security will be materially impaired by said proposed disposition, the Agency shall disapprove said proposed disposition. 080 044 124/015610-0053 184550.04 AM01 -33- Section 5.10 Maintenance of Tax Revenues. The Agency shall comply with all requirements of the Law to insure the allocation and payment to it of the Tax Revenues, including, without limitation, the timely filing of any necessary statements of indebtedness with appropriate officials of the County and, in the case of amounts payable by the State appropriate officials of the State. No amendment to the Redevelopment Plan shall reduce Pledged Tax Revenues as certified by an Independent Redevelopment Consultant unless consented to by Bond Insurer. Section 5.11 Tax Covenants. The Agency covenants and agrees to contest by court action or otherwise any assertion by the United States of America or any department or agency thereof that the interest received by the Bondowners is includable in gross income of the recipient under federal income tax laws. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest with respect to the Bonds and any Parity Debt will not be adversely affected for federal income tax purposes, the Agency covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows: (a) Private Activity. The Agency will take no action or refrain from taking any action or make any use of the proceeds of the Bonds or any Parity Debt or of any other moneys or property which would cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the Code; (b) Arbitrage. The Agency, will make no use of the proceeds of the Bonds or any Parity Debt or of any other amounts or property, regardless of the source, or take any action or refrain from taking any action which will cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code; (c) Federal Guaranty. The Agency will make no use of the proceeds of the Bonds or any Parity Debt or take or omit to take any action that would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code; (d) Information Reporting. The Agency will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code; (e) Hedge Bonds. The Agency will make no use of the proceeds of the Bonds or any Parity Debt or any other amounts or property, regardless of the source, or take any action or refrain from taking any action that would cause either the Bonds to be considered "hedge bonds" within the meaning of Section 149(g) of the Code unless the Agency takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of interest on the Bonds for federal income tax purposes; and (0 Miscellaneous. The Agency will take no action or refrain from taking any action inconsistent with its expectations stated in that certain Tax Certificate executed by the Agency in connection with each issuance of Bonds and any Parity Debt 081 24/015610-0053 ^ 045 184550.04 AMO1 -34- and will comply with the covenants and requirements stated therein and incorporated by reference herein. Section 5.12 Establishment and Application of Rebate Fund. (a) Establishment. A special fund is hereby created and designated the "Rebate Fund" to be held by the Trustee and in which there shall be established two separate accounts designated the "Rebate Account" and the "Alternative Penalty Account." Absent an opinion of independent counsel that the exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected, the Agency shall cause to be deposited in each such account of the Rebate Fund such amounts as are required to be deposited therein pursuant to this Section and the Tax Certificate. All money at any time deposited in the Rebate Account or the Alternative Penalty Account shall be held by the Trustee in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund shall be governed by this Section and the Tax Certificate, unless and to the extent that the Agency delivers to the Trustee an opinion of independent counsel that the exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected if such requirements are not satisfied. (1) Rebate Account. The following requirements shall be satisfied with respect to the Rebate Account: (i) Payment to the Treasury. The Trustee shall pay, as directed by a representative of the Agency, to the United States Treasury, out of amounts in the Rebate Account, (X) Not later than 60 days after the end of (A) the fifth Bond Year, and (B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and (Y) Not later than 60 days after the payment of all the Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148 (f) of the Code. In the event that, prior to the time of any payment required to be made from the Rebate Account, the amount in the Rebate Account is not sufficient to make such payment when such payment is due, the Agency shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this Subsection (a) (1) shall be made to the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255 on or before the date on which such payment is due, and shall be 089 124/015610-0053 046 184550.04 AMO1 -35- accompanied by Internal Revenue Service Form 8038—T, or shall be made in such other manner as provided under the Code. (2) Alternative Penalty Account. (i) Six -Month Computation. If the 1-1/2% Penalty has been elected, within 85 days of each particular Six —Month Period, the Agency shall determine or cause to be determined whether the 1-1/2% Penalty is payable (and the amount of such penalty) as of the close of the applicable Six —Month Period. The Agency shall obtain expert advice in making such determinations. (ii) Six -Month Transfer. Within 85 days of the close of each Six -Month Period, upon the written direction of an Agency Representative, the Trustee shall deposit in the Alternative Penalty Account from any legally available source of funds (as specified by the Agency in the aforesaid written direction), if and to the extent required, so that the balance in the Alternative Penalty Account equals the amount of 1-1/20 Penalty due and payable to the United States Treasury determined as provided in Subsection (a) (2)(i) above. In the event that immediately following the transfer provided in the previous sentence, the amount then on deposit to the credit of the Alternative Penalty Account exceeds the amount required to be on deposit therein to make the payments required by Subsection (a) (2) (iii) below, the Trustee, at the written direction of a representative of the Agency, shall withdraw the excess from the Alternative Penalty Account and credit the excess to the Debt Service Fund. (iii) Payment to the Treasury. The Trustee shall pay, as directed in writing by an Agency Representative, to the United States Treasury, out of amounts in the Alternative Penalty Account, not later than 90 days after the close of each Six —Month Period the 1-1/2% Penalty, if applicable and payable, computed in accordance with Section 148 (f) (4) of the Code. In the event that, prior to the time of any payment required to be made from the Alternative Penalty Account, the amount in such account is not sufficient to make such payment when such payment is due, the Agency shall calculate the amount of such deficiency and direct the Trustee to deposit an amount received from any legally available source of funds — equal to such deficiency into the Alternative Penalty Account prior to the time such payment is due. Each payment required to be made pursuant to this Subsection (a) (2) shall be made to the Internal Revenue Service, Philadelphia, Pennsylvania 19255 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038—T or shall be made in such other manner as provided under the Code. 11M 047 124/0156)0-0053 184550.04 AMO1 -36- (b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after payment of the Bonds, the payments described in Subsection (a) (1)(i) or (a)(2)(iii) (whichever is applicable), may be withdrawn by the Agency and utilized in any manner by the Agency. (c) Survival of Defeasance. Notwithstanding anything in this Section or this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance of the Bonds. Section 5.13 Compliance with the Code. The Agency shall take any and all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds. Section 5.14 Compliance with the Law; Low and Moderate Income Housing Fund. The Agency shall ensure that all activities undertaken by the Agency with respect to the redevelopment of the Project Area are undertaken and accomplished in conformity with all applicable requirements of the Redevelopment Plan and the Law. In the event the Agency shall amend the Redevelopment Plan, the Agency shall receive prior written approval of such amendment from the Bond Insurer, which approval shall not be unreasonably withheld, in particular, with respect to those provisions which do not adversely affect the Agency's pledge of Pledged Tax Revenues under this Indenture. Without limiting the generality of the foregoing, the Agency covenants that it shall deposit or cause to be deposited in the Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the Law, all amounts when, as and if required to be deposited therein pursuant to the Law and shall expend amounts deposited in the Low and Moderate Income Housing Fund, including, without limitation, proceeds of any Parity Debt deposited therein, solely in accordance with Section 33334.2 of the Law. Section 5.15 Management and Operation of Properties. The Agency will manage and operate all properties owned by the Agency and comprising any part of the Redevelopment Project, in a sound and businesslike manner, and will keep such properties insured at all times in conformity with sound business practice. Section 5.16 Annual Review of Tax Revenue. On the first Business Day of each Fiscal Year, the Agency will review (i) the total amount of Tax Revenues remaining available to received by the Agency under the Redevelopment Plan, and (ii) the outstanding principal of and interest on the Bonds, the 1994 Bonds, the 1998 Bonds, the Parity Debt, if any, and Subordinate Debt, if any. In the event the Agency shall determine that its acceptance of Tax Revenues in any Fiscal Year will cause to amount remaining under the Plan Limit to be less than the outstanding principal of and interest on the Bonds, the 1994 Bonds, the 1998 Bonds, the Parity Debt, if any, and Subordinate Debt, if any, the Agency shall (i) deposit Tax Revenues in the Special Fund in an amount equal to the principal of and interest on the Bonds for that Fiscal Year, and (ii) deposit the remaining Tax Revenues in an escrow fund to be then established and held by the Agency for the purpose of redeeming all the then outstanding Bonds, the 1994 Bonds, the 1998 Bonds, the Parity Debt, if any, and the Subordinate Debt, if any. m•. 184550.04 AM01 048 184550.04 AM01 _37_ Section 5.17 Covenant With Respect to Mortgages. The Agency covenants that the proceeds of the Bonds will not be used directly or indirectly for mortgages (or similar security instruments) on owner -occupied residences so as to cause the Bonds to be subject to the provisions of Section 143 of the Code and the Tax Regulations promulgated thereunder. Section 5.18 Further Assurances. The Agency will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the owners of the rights and benefits provided in this Indenture. Section 5.19 Continuing Disclosure. The Agency hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this Indenture, failure of the Agency to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default; however, any Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking a mandate or specific performance by court order. A: 124/01561 AMOI 049 I84550.04 nMol '38' ARTICLE VI THE TRUSTEE Section 6.1 Duties, Immunities and Liabilities of Trustee. (a) The Trustee shall, prior to the occurrence of an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants shall be read into this Indenture against the Trustee. The Trustee shall, during the existence of any Event of Default (which has not been cured or waived), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) The Agency may remove the Trustee at any time, unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee (i) if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or (ii) if at any time the Agency has knowledge that the Trustee shall cease to be eligible in accordance with subsection (e) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation. In each case such removal shall be accomplished by the giving of written notice of such removal by the Agency to the Trustee, whereupon the Agency shall appoint a successor Trustee by an instrument in writing. (c) The Trustee may at any time resign by giving written notice of such resignation to the Agency and by giving the Owners notice of such resignation by first class mail, postage prepaid, at their respective addresses shown on the Registration Books. Upon receiving such notice of resignation, the Agency shall promptly appoint a successor Trustee by an instrument in writing. (d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within forty-five (45) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any owner (on behalf of such owner and all other Owners) may petition any court of competent jurisdiction at the expense of the Agency for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Agency and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, 086 050 124/015610-0053 194550.04 AM01 -39- rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Agency or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the Agency shall mail a notice of the succession of such Trustee to the trusts hereunder to each rating agency which then has a current rating on the Bonds and to the Owners at their respective addresses. shown on the Registration Books. If the Agency fails to mail such notice within fifteen (15) days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Agency. (e) Any Trustee appointed under the provisions of this Section in succession to the Trustee shall be a trust company, a federally chartered savings institution or bank having the powers of a trust company having a trust office in the State, having a combined capital and surplus of at least $75,000,000, and subject to supervision or examination by federal or state authority. If such bank, savings institution or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such bank, savings institution or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section. Section 6.2 Merger or Consolidation. Any bank, federally chartered savings institution or trust company into which the Trustee may be merged or converted or with which either of them may be consolidated or any bank, savings institution or trust company resulting from any merger, conversion or consolidation to which it shall be a party or any bank, savings institution or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such bank, savings institution or trust company shall be eligible under subsection (e) of Section 6.01, shall be the successor to such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. Section 6.3 Liability of Trustee. (a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Agency, and the Trustee shall not assume responsibility for the 087 124/015610-0053 _40_ n ' V.l 1. 184550.04 AM01 1. correctness of the same, nor make any representations as to the validity or sufficiency of this Indenture or of the Bonds nor shall incur any responsibility in respect thereof, other than as expressly stated herein. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or intentional misconduct. The Trustee shall not be liable for the acts of any agents of the Trustee selected by it with due care. The Trustee may become the Owner of any Bonds with the same rights it would have if they' were not Trustee and, to the extent permitted by law, may act as depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of the Owners, whether or not such committee shall represent the owners of a majority in principal amount of the Bonds then Outstanding. (b) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (c) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture, except for actions arising from the negligence or intentional misconduct of the Trustee. The permissive right of the Trustee to do things enumerated hereunder shall not be construed as a mandatory duty. (d) The Trustee shall not be deemed to have knowledge of any Event of Default hereunder unless and until it shall have actual knowledge thereof, or shall have received written notice thereof at its Trust Office. Except as otherwise expressly provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of an Event of Default thereunder. The Trustee shall not be responsible for the validity or effectiveness of any collateral given to or held by it. Without limiting the generality of the foregoing, the Trustee shall not be responsible for reviewing the contents of any financial statements furnished to the Trustee pursuant to Section 5.05. No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The Trustee shall be entitled to charge interest on all amounts advanced by it hereunder at the maximum rate permitted by law. The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys or receivers and the Trustee � 088 124/015610-0053 -41- o V ("y 184550.04 AM01 shall not be responsible for any misconduct or negligence on the part of any agent, attorney or receiver appointed with due care by it hereunder. The Trustee shall have no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds. Section 6.4 Right to Rely on Documents. The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion or other paper or document believed by it to be genuine and to have been signed or prescribed by the proper party or parties, in the absence of negligence or intentional misconduct by the Trustee. The Trustee shall not be bound to recognize any person as the owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto is established to the satisfaction of the Trustee. Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the Agency, which shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Written Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. The Trustee may conclusively rely on any certificate or report of any Independent Accountant or Independent Redevelopment Consultant appointed by the Agency. Section 6.5 Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject at all reasonable times upon reasonable notice to the inspection of the Agency and any Owner, and their agents and representatives duly authorized in writing, during regular business hours and under reasonable conditions. Section 6.6 Compensation and Indemnification. The Agency shall pay to the Trustee from time to time reasonable, compensation for all services rendered under this Indenture in accordance with the letter proposal from the Trustee approved by the Agency and also all reasonable expenses, charges, legal and consulting fees (including fees and expenses of internal legal counsel of Trustee) and other disbursements and those of its attorneys, agents and employees, incurred in and about the performance of its powers and duties under this Indenture. Upon the occurrence of an Event of Default, the Trustee shall have a first lien on the Tax Revenues and all funds and accounts held by the Trustee hereunder to secure the payment to the Trustee of all fees, costs and expenses, including reasonable compensation to its experts, attorneys and counsel incurred in declaring such Event of Default and in exercising the rights and remedies set forth in Article VIII hereof. The Agency further covenants and agrees to indemnity and save the Trustee and its officers, directors, agents and employees, harmless against any loss, expense and liabilities 124/015610-0053 184550.04 AM01 -42- 089 053 which it may incur arising out of or in the exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability, but excluding any and all losses, expenses and liabilities which are due to the negligence or intentional misconduct of the Trustee, its officers, directors, agents or employees. The obligations of the Agency and the rights of the Trustee under this Section 6.06 shall survive resignation or removal of the Trustee under this Indenture and payment of the Bonds and discharge of this Indenture. Section 6.7 Deposit and Investment of Moneys in Funds. Moneys in the funds established hereunder shall, in accordance with a Written Request of the Agency, be invested by the Trustee in Permitted Investments. The Trustee may conclusively rely on any direction contained in a Written Request of the Agency to invest in investments that such investments are Permitted Investments. In the absence of a Written Request of the Agency, the Trustee shall invest moneys in item B(5) of the definition of Permitted Investments. The obligations in which moneys in the said funds are invested shall mature on or prior to the date on which such moneys are estimated to be required to be paid out hereunder. The obligations in which moneys in the Reserve Fund are so invested shall be invested in obligations maturing no later than five years after the date of investment; provided no such investment shall mature later than the final maturity of the Bonds; provided further, if such investments may be redeemed at par so as to be available on each Interest Payment Date, any amount of the Reserve Fund may be invested in such redeemable investments of any maturity on or prior to the final maturity of the Bonds. The Trustee shall sell or present for redemption any obligations so purchased whenever it may be necessary to do so in order to provide moneys to meet any payment required under this Indenture. Notwithstanding anything herein to the contrary, the Trustee shall not be responsible for any loss from investments, sales or transfers undertaken in accordance with this Indenture. Any interest, income or profits from the deposits or investments of all funds (except the Rebate Fund and, to the extent required by Section 4.03 hereof, the Reserve Fund) shall be deposited in the Debt Service Fund. For purposes of determining the amount of deposit in any fund held hereunder, all income `and profits from Permitted Investments credited to such fund shall be valued at market value. The Trustee shall annually, on or about September 1 of each year commencing on September 1, 2002 and at such times as the Agency shall deem appropriate, value the investments in such funds. Notwithstanding anything to the contrary contained herein, in making any valuations of investments hereunder, the Trustee may utilize computerized securities pricing services that may be available to it, including those available through its regular accounting system. Except as otherwise provided in this Section, Permitted Investments representing an investment of moneys attributable to any fund and all investment profits or losses thereon shall be deemed at all times to be a part of said fund. For purposes of this provision, the Trustee may act as principal or agent in the acquisition or disposition of investments. For purposes of this Section, the Trustee may commingle moneys in funds and accounts established under the Indenture. The Agency acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Agency the right to receive brokerage confirmations of security transactions as they occur, the Agency will not receive such confirmations to the extent permitted by law. The Trustee will furnish the Agency periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder. The Trustee may make any investments hereunder through its own bond or investment department or trust 124/015610-0053 184550.04 AM01 -43- 090 054 investment department, or those of its parent or any affiliate. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. Section 6.8 Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with industry standards, in which complete and accurate entries shall be made of all transactions relating to the proceeds of the Bonds made by it and all funds and accounts held by the Trustee established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Agency at reasonable hours and under reasonable circumstances. The Trustee shall furnish to the Agency, at least monthly, an accounting of all transactions in the form of its customary statements relating to the proceeds of the Bonds and all funds and accounts held by the Trustee pursuant to this Indenture. Section 6.9 Appointment of Co -Trustee or Agent. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an additional individual or institution as a separate or co -trustee. The following provisions of this Section 6.09 are adopted to these ends. In the event that the Trustee appoints an additional individual or institution as a separate or co —trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate or co —trustee but only to the extent necessary to enable such separate or co —trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co —trustee shall run to and be enforceable by either of them. Should any instrument in writing from the Agency be required by the separate or co —trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Agency. In case any separate co -trustee, or a successor, shall become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate or co — trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new successor or co —trustee to such separate or co —trustee. No Trustee or separate or co -trustee shall be liable for the actions or omissions of such other Trustee or separate or co -trustee. 091 124/015610_0053 f 055 184550.04 AM01 -44 In addition to the appointment of a co -trustee hereunder, the Trustee may, at the expense and with the prior written consent of the Agency, appoint any agent of the Trustee in New York, New York, for the purpose of administering the transfers or exchanges of Bonds or for the performance of any other responsibilities of the Trustee hereunder. Section 6.10 Powers of Bond Insurer in Relation to the Trustee. (a) The Trustee may be removed at any time, at the request of Bond Insurer for any breach of this Indenture. (b) Bond Insurer shall receive prior written notice of any Trustee resignation. (c) Every successor Trustee appointed pursuant to this Section shall be a trust company or bank in good standing located in or incorporated under the laws of the State, duly authorized to exercise trust powers and subject to examination by federal or state authority, having a reported capital and surplus of not less than $75,000,000 and acceptable to Bond Insurer. (d) Notwithstanding any other provision of this Indenture, in determining whether the rights of the Bondholders will be adversely affected by any action taken pursuant to the terms and provisions of this Indenture, the Trustee shall consider the effect on the Bondholders as if there were no Municipal Bond Insurance Policy. (e) Notwithstanding any other provision of this Indenture, no removal, resignation or termination of the Trustee shall take effect until a successor, acceptable to Bond Insurer, shall be appointed. 092 1845o a4 AMo; -45- 056 ARTICLE VII MODIFICATION OR AMENDMENT OF THIS INDENTURE Section 7.1 Amendment With Consent of Owners. Upon the prior consent of the Bond Insurer, this Indenture and the rights and obligations of the Agency and of the owners may be modified or amended at any time by a Supplemental Indenture which shall become binding upon adoption, without consent of any Owners, to the extent permitted by law and only for any one or more of the following purposes: (a) to add to the covenants and agreements of the Agency in this Indenture contained, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power herein reserved to or conferred upon the Agency; (b) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Indenture, or in any other respect whatsoever as the Agency may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not materially adversely affect the interests of the Owners; (c) to provide for the issuance of Parity Debt pursuant to Section 3.04 or the issuance of Subordinate Debt pursuant to Section 3.05, and to provide the terms and conditions under which such Parity Debt or Subordinate Debt may be issued, including, but not limited to, the establishment of special funds and accounts relating thereto and any other provisions relating solely thereto, subject to and in accordance with the provisions of Section 3.04 and 3.05; or (d) to amend any provision hereof relating to the requirements of or compliance with the Code, to any extent whatsoever but only if and to the extent such amendment will not adversely affect the exemption from federal income taxation of interest on any of the Bonds, in the opinion of nationally recognized bond counsel. Except as set forth in the preceding paragraph, upon the prior consent of the Bond Insurer, this Indenture and the rights and obligations of the Agency and of the owners may be modified or amended at any time by a Supplemental Indenture which shall become binding when the written consent of the owners of a majority in aggregate principal amount of the Bonds then Outstanding are filed with the Trustee. No such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Agency to pay the principal or interest at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the Owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee. Section 7.2 Effect of Supplemental Indenture. From and after the time any Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall be deemed to be modified and amended in accordance therewith, the respective rights., duties and 093 184550.04 -0053 AM01 05(" tsasso.oa nmm -46- obligations of the parties hereto or thereto and all Owners, as the case may be, shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 7.3 Endorsement or Replacement of Bonds After Amendment. After the effective date of any amendment or modification hereof pursuant to this Article VII, the Agency may determine that any or all of the Bonds shall bear a notation, by endorsement in form approved by the Agency, as to such amendment or modification and in that case upon demand of the Agency the Owners of such Bonds shall present such Bonds for that purpose at the Trust Office of the Trustee, and thereupon a suitable notation as to such action shall be made on such Bonds. In lieu of such notation, the Agency may determine that new Bonds shall be prepared at the expense of the Agency and executed in exchange for any or all of the Bonds, and in that case, upon demand of the Agency, the Owners of the Bonds shall present such Bonds for exchange at the Trust Office of the Trustee, without cost to such Owners. Section 7.4 Amendment by Mutual Consent. The provisions of this Article VII shall not prevent any owner from accepting any amendment as to the particular Bond held by such owner, provided that due notation thereof is made on such Bond. Section 7.5 Notice to Standard & Poor' s. The Agency agrees to forward to Standard & Poor's Ratings Group, 25 Broadway, New York, New York 10004, any amendments consented to by the Bond Insurer and entered into pursuant to this Article VII. M. 124/015610-0053 -47- r 058 184550.04 AM01 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF OWNERS Section 8.1 Events of Default. The following events shall constitute Events of Default hereunder: (a) if default shall be made in the due and punctual payment of the principal of or interest on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) if default shall be made by the Agency in the observance of any of the covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, other than a default described in the preceding clause (a) , and such default shall have continued for a period of sixty (60) days following receipt by the Agency of written notice from the Trustee or any Owner of the occurrence of such default; or (c) if the Agency shall commence a voluntary action under Title 11 of the United States Code or any substitute or successor statute. If an Event of Default has occurred and is continuing, the Trustee shall, if directed by the Bond Insurer, or if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding and consented to by the Bond Insurer, (a) declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in this Indenture or in the Bonds to the contrary notwithstanding, and (b) exercise any remedies available to the Trustee and the owners in law or at equity. Immediately upon receiving notice or actual knowledge of the occurrence of an Event of Default, the Trustee shall give notice of such Event of Default to the Bond Insurer and the Agency by telephone confirmed in writing. Such notice shall also state whether the principal of the Bonds shall have been declared to be or have immediately become due and payable. With respect to any Event of Default described in clauses (a) or (c) above the Trustee shall, and with respect to any Event of Default described in clause (b) above the Trustee in its sole discretion may, also give such notice to the Owners by mail, which shall include the statement that interest on the Bonds shall cease to accrue from and after the date, if any, on which the Trustee shall have declared the Bonds to become due and payable pursuant to the preceding paragraph (but only to the extent that principal and any accrued, but unpaid, interest on the Bonds is actually paid on such date). This provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Agency shall deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal and interest (to the extent permitted by law) at the net effective rate per annum of the Bonds, and the reasonable expenses of the Trustee (including fees r� 124/015610-0053 1845%04 AM01 -48- 059 09!, and expenses of its 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 Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Agency and to the Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences. However, no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. Section 8.2 Application of Funds. All of the Pledged Tax Revenues and all sums in the funds and accounts established and held by the Trustee hereunder upon the date of the declaration of an Event of Default, and all sums thereafter received by the Trustee hereunder, shall be applied by the Trustee in the order following upon presentation of the several Bonds, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid: First, to the payment of the fees, costs and expenses of the Trustee in declaring such Event of Default and in exercising the rights and remedies set forth in this Article VIII, including reasonable compensation to its agents, attorneys and counsel; and Second, to the payment of the whole amount then owing and unpaid, upon the Bonds for principal and interest, with interest on the overdue principal and installments of interest at the net effective rate then borne by the outstanding Bonds (to the extent that such interest on overdue installments of principal and interest shall have been collected) , and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such principal and interest without preference or priority of principal over interest, or interest over principal, or of any installment of interest over any other installment of interest, ratably to the aggregate of such principal and interest. Section 8.3 Power of Trustee to Control Proceedings: In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon the direction of the Bond Insurer or upon the request of the Owners of a majority in principal amount of the Bonds then Outstanding upon the consent of the Bond Insurer, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the owners of a majority in principal amount of the Outstanding Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation. Section 8.4 Limitation on Owner's Right to Sue. No Owner of any Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to 124/015610-0053 060 184550.04 AM01 -49_ 09E the Trustee written notice of the occurrence of an Event of Default; (b) the owners of a majority in aggregate principal amount of all the Bonds then outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities, including fees and expenses of its counsel, to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder; it being understood and intended that no one or more Owners shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all owners of the Outstanding Bonds. The right of any Owner of any Bond to receive payment of the principal of (and premium, if any) and interest on such Bond as herein provided, shall not be impaired or affected without the written consent of such owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture. Section 8.5 Non -Waiver. Nothing in this Article VIII or in any other provision of this Indenture or in the Bonds, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay from the Pledged Tax Revenues and other amounts Pledged hereunder, the principal of and interest on the Bonds to the respective Owners on the respective Interest Payment Dates, as herein provided, or affect or impair the right of action, which is also absolute and unconditional, of the Owners or the Trustee to institute suit to enforce such payment by virtue of the contract embodied in the Bonds. A waiver of any default by any Owner or the Trustee shall not affect any subsequent default or impair any rights or remedies on the subsequent default. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners and the Trustee by the Law or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners and the Trustee. If a suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned or determined adversely to the Owners or the Trustee, the Agency, the Trustee and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. Section 8.6 Actions by Trustee as Attorney -in -Fact. Any suit, action or proceeding which any owner shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners similarly situated and 124/015610-0053 184550.04 AM01 -50- 061 on-? the Trustee is hereby appointed (and the successive respective Owners by taking and holding the Bonds or Parity Debt, as applicable, shall be conclusively deemed so to have appointed it) the true and lawful attorney -in -fact of the respective Owners for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney -in -fact, provided, however, the Trustee shall have no duty or obligation to exercise any such right or remedy unless it has been indemnified to its satisfaction from any loss, liability or expense (including fees and expenses of its counsel). Section 8.7 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law. '4. 06? 124/015610-0053 184550.04 AMOI -51- ARTICLE IX MISCELLANEOUS Section 9.1 Benefits Limited to Parties. Nothing in this Indenture, expressed or implied, is intended to give to any person other than the Agency, the Trustee and the owners, any right, remedy, claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of the Agency shall be for the sole and exclusive benefit of the Trustee and the Owners. Section 9.2 Successor is Deemed Included in All References to Predecessor. Whenever in this Indenture or any Supplemental Indenture either the Agency or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Agency or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 9.3 Discharge of Indenture. If the Agency shall pay and discharge the indebtedness evidenced by the Bonds, or any portion thereof, in any one or more of the following ways: (a) by well and truly paying or causing to be paid the principal of and interest on such Bonds, as and when the same become due and payable; (b) by irrevocably depositing with the Trustee or an escrow agent, in trust, at or before maturity, money which, together with the available amounts then on deposit in the funds and accounts established pursuant to this Indenture, is fully sufficient to pay. such Bonds, including principal and interest; or (c) by irrevocably depositing with the Trustee or an escrow agent, in trust, Federal Securities in such amount as an Independent Certified Public Accountant shall determine will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established pursuant to this Indenture, be fully sufficient to pay and discharge the indebtedness evidenced by such Bonds (including principal and interest) at or before maturity; and, in the event that the Agency has made either of the deposits referred to in paragraphs (b) or (c) above, the Agency shall have provided the Trustee with (i) a report of an Independent Certified Public Accountant to the effect that the moneys or obligations so deposited with the Trustee are sufficient to pay the principal of, and interest on all Bonds Outstanding, as and when the same shall become due and payable, and (ii) an opinion of Bond Counsel to the effect that all conditions precedent to the defeasance of the Bonds have been met then, at the election of the Agency, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Pledged Tax Revenues and other funds provided for in this Indenture and all other obligations of the Trustee and the Agency under this Indenture with respect to such Bonds shall cease and terminate, except only (a) the obligations of the Agency under Section 5.12, (b) the obligation of the Trustee to transfer and exchange such 099 063 124/015610-0053 184550.04 AM01 -52- Bonds hereunder, (c) the obligations of the Agency under Section 6.06, and (d) the obligation of the Agency to pay or cause to be paid to the owners, from the amounts so deposited with the Trustee, all sums due thereon and to pay the Trustee all fees, expenses and costs of the Trustee. Notice of such election shall be filed with the Trustee. In the event the Agency shall, pursuant to the foregoing provision, pay and discharge any portion or all of the Bonds then Outstanding, the Trustee shall be authorized to take such actions and execute and deliver to the Agency all such instruments as may be necessary or desirable to evidence such discharge, including, without limitation, selection by lot of Bonds of any maturity of the Bonds that the Agency has determined to pay and discharge in part. In the event the Agency shall, pursuant to the foregoing provision, pay and discharge all of the Bonds then Outstanding, any funds thereafter held by the Trustee which are not required for said purposes, shall be paid over to the Agency. Notwithstanding anything herein to the contrary, in the event that the principal and/or interest due on the Bonds shall be paid by Bond Insurer pursuant to the Municipal Bond Insurance Policy, the Bonds shall remain Outstaying for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer, and the assignment and pledge of the trust estate and all covenants, agreements and other obligations of the Agency to the registered owners shall continue to exist and shall run to the benefit of Bond Insurer, and Bond Insurer shall be subrogated to the rights of such registered owners. Section 9.4 Execution of Documents and Proof of Ownership by Owners. Any request, consent, declaration or other instrument which this Indenture may require or permit to be executed by any Owner may be in one or more instruments of similar tenor, and shall be executed by such Owner in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. The ownership of Bonds and the amount, maturity, number and date of ownership thereof shall be proved by the Registration Books. Any request, consent, declaration or other instrument or writing of the owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Agency or the Trustee in good faith and in accordance therewith. Section 9.5 Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the Agency or the City of La Quinta (but excluding Bonds held in any employees' retirement fund) shall be disregarded and deemed not to be outstanding for the purpose of any such determination, provided, however, that for the purpose of determining whether the Trustee shall be protected in 1WE 124/015610-0053 064 4 184550.04 AM01 -53- relying on any such demand, request, direction, consent or waiver, only Bonds which the Trustee knows to be so owned or held shall be disregarded. Section 9.6 Waiver of Personal Liability. No member, officer, agent or employee of the Agency shall be individually or personally liable for the payment of the principal of or interest or any premium on the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. Section 9.7 Destruction of Cancelled Bonds. Whenever in this Indenture provision is made for the surrender to the Trustee of any Bonds which have been paid or cancelled pursuant to the provisions of this Indenture, the Trustee shall destroy such bonds and provide the Agency a certificate of destruction. The Agency shall be entitled to rely upon any statement of fact contained in any certificate with respect to the destruction of any such Bonds therein referred to. Section 9.8 Notices. Any notice, request, complaint, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by first class, postage prepaid, or sent by facsimile, or other form of telecommunication, addressed as follows: If to the Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attention: Executive Director Telephone: (760) 777-7100 Facsimile: (760) 777-7105 If to the Trustee: U.S. Bank Trust National Association 550 S. Hope Street, Suite 500 Los Angeles, California 90071 Attn: Corporate Trust Services Telephone: (213) 533-8713 Facsimile: (213) 533-8729 If to the Bond Insurer: Section 9.9 Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of this Indenture shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Indenture. The Agency hereby declares that it would have adopted this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Indenture 101 124/015610-0053 065 194550.04 AM01 -54- may be held illegal, invalid or unenforceable. If, by reason of the judgment of any court, the Trustee is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Trustee hereunder shall; pending appointment of a successor Trustee in accordance with the provisions of Section 6.01 hereof, be assumed by and vest in the Treasurer of the Agency in trust for the benefit of the Owners. The Agency covenants for the direct benefit of the Owners that its Treasurer in such case shall be vested with all of the rights and powers of the Trustee hereunder, and shall assume all of the responsibilities and perform all of the duties of the Trustee hereunder, in trust for the benefit of the Bonds, pending appointment of a successor Trustee in accordance with the provisions of Section 6.01 hereof. Section 9.10 Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, to the extent permitted by law, any money held by the Trustee in trust for the payment and discharge of the interest or premium (if any) on or principal of the Bonds which remains unclaimed for two (2) years after the date when the payments of such interest, premium and principal have become payable, if such money was held by the Trustee at such date, or for two (2) years after the date of deposit of such money if deposited with the Trustee after the date when the interest and premium (if any) on and principal of such Bonds have become payable, shall be repaid by the Trustee to the Agency as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bond owners shall look only to the Agency for the payment of the principal of and interest on such Bonds. Section 9.11 Execution in Counterparts. This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 9.12 Governing Law. This Indenture shall be construed and governed in accordance with the internal laws of the State. Section 9.13 Provisions Relating to Bond Insurer. A. Provisions Relating to Bond Insurer Consent. (1) Consent of Bond Insurer. Any provision of this Indenture expressly recognizing or granting rights in or to Bond Insurer may not be amended in any manner which affects the rights of Bond Insurer hereunder without the prior written consent of Bond Insurer. (2) Consent of Bond Insurer in Addition to Bondholder Consent. Unless otherwise provided in this Section, Bond Insurer's consent shall be required in addition to Bondholder consent, when required, for the following purposes: (1) execution and delivery of any Supplemental Indenture or amendment, supplement or change to or modification of the Indenture; (ii) removal of the Trustee and selection and appointment of any successor trustee; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires bondholder consent. (3) Consent of Bond Insurer in the Event of Insolvency. Any reorganization or liquidation plan with respect to the Agency must be acceptable 102 124/015610-0053 -55- 18455O.04 AM01 ') 6 C to Bond Insurer. In the event of any reorganization or liquidation, Bond Insurer shall have the right to vote on behalf of all bondholders who hold Bond Insurer insured bonds absent a default by Bond Insurer under the applicable Municipal Bond Insurance Policy insuring such Bonds. (4) Consent of Bond Insurer Upon Default. Anything in this Indenture to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default as defined herein, Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders or the Trustee for the benefit of the Bondholders under this Indenture, including, without limitation; (i) the right to accelerate the principal of the Bonds as described in this Indenture, and (ii) the right to annul any declaration of acceleration and Bond Insurer shall also be entitled to approve all waivers of events of default. Upon the occurrence of an Event of Default, the Trustee may, with the consent of Bond Insurer, and shall, at the written direction of Bond Insurer or the Bondholders owning 51 % or more of the Principal of Bonds Outstanding with the consent of Bond Insurer, by written notice to the Agency and Bond Insurer, declare the principal of the bonds to be immediately due and payable, whereupon that portion of the principal of the Bonds thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become be immediately due and payable, anything in this Indenture or the Bonds to the contrary notwithstanding. B. Information to be Provided to the Bond Insurer. (1) While the Municipal Bond Insurance Policy or Surety Bond is in effect, the Agency shall furnish Bond Insurer (to the attention of the Surveillance Department, unless otherwise indicated): (a) As soon as practicable after the filing thereof, a copy of any financial statement of the Agency and a copy of any audit and annual report of the Agency; (b) A copy of any notice to be give to the registered owners of the Bonds, including, without limitation, notice of any redemption of or defeasance of Bonds, and any certificate rendered pursuant to this Indentured relating to the security for the Bonds; and (c) Such additional information as Bond Insurer may reasonably request. (2) The Trustee shall notify Bond Insurer of any failure of the Agency to provide relevant notices, certificates, etc. (3) The Agency will permit Bond Insurer to discuss the affairs, finances and accounts of the Agency or any information Bond Insurer may reasonably request regarding the security for the Bonds with appropriate officers of the Agency. The Trustee or Agency will permit Bond Insurer to have access to 103 124/015610-0053 184550.04 AM01 -56- r 067 and to make copies of all books and records relating to the Bonds at any reasonable time. (4) Bond Insurer shall have the right to direct an accounting at the Agency's expense, and the Agency's failure to comply with such direction within thirty (30) days after receipt of written notice of the direction from Bond Insurer shall be deemed a default hereunder; provided, however, that if compliance cannot occur within such period, then such period will be extended so long as compliance is begun within such period and diligently pursued, but only if such extension would not materially adversely affect the interests of any registered owner of the Bonds. (5) Notwithstanding any other provision of this Indenture, the Trustee or Agency shall immediately notify Bond Insurer if at any time there are insufficient moneys under the Indenture to make any payments of principal and/or interest as required and immediately upon the occurrence of any Event of Default hereunder. (6) To the extent that the Agency has entered into a Continuing Disclosure Certificate with respect to the Bonds, Bond Insurer shall be included as party to be notified. Section 9.14 Payment Procedure Pursuant to the Municipal Bond Insurance Policy. As long as the Municipal Bond Insurance Policy shall he in full force and effect, the Agency, the Trustee agrees to comply with the following provisions: (a) At least one (1) day prior to all Interest Payment Dates the Trustee will determine whether there will be sufficient funds in the funds and accounts (including from a draw on any Alternative Reserve Account Security) to pay the principal of or interest on the Bonds on such Interest Payment Date. If the Trustee determines that there will be insufficient funds in such funds or accounts, the Trustee shall so notify Bond Insurer. Such notice shall specify the amount of the anticipated deficiency, the Bonds to which such deficiency is applicable and whether such Bonds will be deficient as to principal or interest, or both. if the Trustee has not so notified Bond Insurer at least one (1) day prior to an Interest Payment Date, Bond Insurer will make payments of principal or interest due on the Bonds on or before the first (P) day next following the date on which Bond Insurer shall have received notice of nonpayment fro the Trustee. (b) the Trustee shall, after giving notice to Bond Insurer as provided in (a) above, make available to Bond Insurer and, at Bond Insurer's direction, to the United States Trust Company of New York, as insurance trustee for Bond Insurer or any successor insurance trustee (the "Insurance Trustee"), the registration books of the Agency maintained by the Trustee, and all records relating to the funds and accounts maintained under this Indenture. (c) the Trustee shall provide Bond Insurer and the Insurance Trustee with a list of registered owners of Bonds entitled to receive principal or interest payments from 104 l24/015610-0053 0 184550.04 AM01 -57 Bond Insurer under the terms of the Municipal Bond Insurance Policy; and shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the registered owners of Bonds entitled to receive full or partial interest payments from Bond Insurer and (ii) to pay principal upon Bonds surrendered to the Insurance Trustee by the registered owners of Bonds entitled to receive full or partial principal payments from Bond Insurer. (d) the Trustee shall, at the time it provides notice to Bond Insurer pursuant to (a) above, notify registered owners of Bonds entitled to receive the payment of principal or interest thereon from Bond Insurer (i) as to the fact of such entitlement, (ii) that Bond Insurer will remit to them all or a part of the interest payments next coming due upon proof of Bondholder entitled to interest payments and delivery to the Insurance Trustee, of an appropriate assignment of the registered owner's right to payment, (iii) that should they be entitled to receive full payment of principal from Bond Insurer, they must surrender their Bonds (along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee to permit ownership of such Bonds to be registered in the name of Bond Insurer) for payment to the Insurance Trustee, and not the Trustee, and (iv) that should they be entitled to receive partial payment of principal from Bond Insurer, they must surrender their Bonds for payment thereon first to the Trustee, who shall note on such Bonds the portion of the principal paid by the Trustee, and then, along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid portion of principal. (e) in the event that the Trustee has notice that any payment of principal of or interest on a Bond which has become due for payment and which is made to a Bondholder by or on behalf of the Agency has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Trustee shall, at the time Bond Insurer is notified, notify Bond Insurer and notify all registered owners that in the event that nay registered owner's payment is so recovered, such registered owner will be entitled to payment from Bond Insurer to the extent of such recovery if sufficient funds are not otherwise available, and the Trustee shall fumish to Bond Insurer its records evidencing the payments of principal of and interest on the Bonds which have been made by the Trustee, and subsequently recovered from registered owners and the dates on which such payments were made. (f) in addition to those rights granted Bond Insurer under this Indenture, Bond Insurer shall, to the extent it makes payment of principal of or interest on Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terns of the Municipal Bond Insurance Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past sue interest, the Trustee shall note Bond Insurer's rights as subrogee on the registration books of the Agency maintained by the Trustee, upon recipient from Bond Insurer of proof of the payment of interest thereon to the registered owners of the Bonds, and (ii) in the case of subrogation as to claims for past due principal, the Trustee shall note Bond Insurer's rights as subrogee on the registration 105 124/015610-0053 ii 184550.04 AM01 _58_ 0 books of the Agency maintained by the Trustee, upon surrender of the Bonds by the registered owners thereof together with proof of the payment of principal thereof. Section 9.15 Interested Parties. A. Bond Insurer As Third Party Beneficiary. To the extent that this Indenture confers upon or gives or grants to Bond Insurer any right, remedy or claim under or by reason of this Indenture, Bond Insurer is hereby explicitly recognized as being a third -party beneficiary hereunder and may enforce any such right remedy or claim conferred, given or granted hereunder. B. Parties Interested Herein. Nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the Agency, the Trustee, Bond Insurer, and the registered owners of the Bonds, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Agency contained by and on behalf of the Agency shall be for the sole and exclusive benefit of the Agency, the Trustee, Bond Insurer, and the registered owners of the Bonds. C. Notwithstanding anything in this Indenture to the contrary, if Bond Insurer has failed to make any payments under the Municipal Bond Insurance Policy, and such failure remains unremedied, all rights accruing to Bond Insurer hereunder with respect to the giving of instructions approvals or consents shall cease to be in force and effect until such time as such failure to make such payments has been remedied. 106 124/015610-0053 -59- iJ 184550.04 AMOt IN WITNESS WHEREOF, the LA QUINTA REDEVELOPMENT AGENCY, has caused this Indenture to be signed in its name by its Executive Director and attested by its Secretary, and U.S. BANK TRUST NATIONAL ASSOCIATION, by its Authorized Officer and attested by an Authorized Officer, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officers thereunto duly authorized, all as of the day and year first above written. LA QUINTA REDEVELOPMENT AGENCY Chair ATTEST: Secretary U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee !ell ATTEST: Authorized Officer Authorized Officer 107 124/015610-0053 -60- 071, 184550.04 AM01 R-1 EXHIBIT A (FORM OF BOND) UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNT OF RIVERSIDE LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 TAX ALLOCATON BONDS, SERIES 2001 INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP: September 1, August 1, 2001 504194 REGISTERED OWNER: Cede & Co. PRINCIPAL SUM The LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, duly organized and existing under and by virtue of the laws of the State of California (the "Agency"), for value received hereby promises to pay to the Registered Owner stated above, or registered assigns, on the Maturity Date stated above, the Principal Sum stated above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the interest payment date next preceding the date of the authentication of this Bond, unless (i) this Bond is authenticated prior to an interest payment date and after the close of business on the fifteenth day of the month preceding such interest payment date, in which event it shall bear interest from such interest payment date, or (iii) this Bond is authenticated on or before February 15, 2002, in which event it shall bear interest from the Dated Date above; provided however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on this Bond, until payment of such Principal Sum in full, at the Interest Rate per annum above, payable semiannually on September 1 and March 1 in each year, commencing March 1, 2002, calculated on the basis of 360-day year comprised of twelve 30-day months. Principal hereof is payable at the corporate trust office of U.S. Bank Trust National Association, as trustee (the "Trustee"), in St. Paul, Minnesota. Interest hereon (including the final interest payment upon maturity) is payable by check of the Trustee mailed by first class mail to the Registered Owner hereof at the Registered Owner's address as is appears on the registration books maintained by the Trustee at the close of business on the fifteenth day of the month next preceding such interest payment ate; provided however, that payment of interest may be by wire transfer to an account in the Continental United States to any registered owner of Bonds in the aggregate principal amount of $1,000,000 or more upon written instructions of any 108 124/015610_0053 - (� 1 2 184550.04 AM01 0 such registered owner filed with the Trustee for that purpose prior to the close of business on the fifteenth calendar day of the month next preceding such interest payment date. This Bond is one of a duly authorized issue of bonds of the Agency designated as "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1, Tax Allocation Bonds, Series 2001" (the "Bonds"), of an aggregate principal amount of Forty -Eight Million Dollars ($48,000,000), all of like tenor and date (except for such variations if any, as may be required to designate varying series, numbers, maturities or interest rates and other provisions) and all issued pursuant to the provisions of Articles 1 through 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California and the Community Redevelopment Law, constituting Part 1 of Division 24 of the Health and Safety Code of the State of California (collectively, the "Law") and pursuant to a resolution of the Agency adopted on July 3, 2001, and an Indenture of Trust, dated as of July 1, 2001, (the "Indenture") entered into by and between the Agency and U.S. Bank Trust National Association (the "Trustee"), in Los Angeles, California authorizing the issuance of the Bonds. Additional bonds, notes or other obligations may be issued on a parity with the Bonds, but only subject to the terms of the Indenture. Reference is hereby made to the Indenture (copies of which are on file at the office of the Agency) and all indentures supplemental thereto and to the Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Pledged Tax Revenues, as that term is defined in the Indenture, and the rights thereunder of the registered owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Agency thereunder, to all of the provisions of which Indenture the Registered Owner of this Bond, by acceptance hereof, assents and agrees. The Bonds have been issued by the Agency to provide financing for additional redevelopment projects, as further provided in the Indenture. The Bonds are special obligations of the Agency and this Bond and the interest hereon and all other Bonds and the interest thereon (to the extent set forth in the Indenture), are payable from and are secured by a first pledge of the lien of the Pledged Tax Revenues derived by the Agency from the Project Area (as defined in the Indenture) on a parity with the 1994 Bonds and the 1998 Bonds. There has been created and will be maintained by the Agency, the Special Fund (as defined in the Indenture) into which Pledged Tax Revenues shall be deposited from which the Agency shall transfer to the Trustee moneys for payment of the principal of and the interest on the Bonds when due. As and to the extent set forth in the Indenture, all such Pledged Tax Revenues are exclusively and irrevocably pledged to and constitute a trust fund, in accordance with the terms hereof and the provisions of the Indenture and the Law, for the security and payment of principal of, and for the security and payment of interest on, the Bonds. In addition, the Bonds shall be additionally secured at all times by a first and exclusive pledge of and lien upon all of the moneys i the Special Fund, the Debt Service Fund and the Reserve Fund (as such terms are defined in the Indenture). Except for the Pledged Tax Revenues and such moneys, no funds or properties of the Agency shall be pledged to, or otherwise liable for, the payment of principal of or interest on the Bonds. 109 07r1 124/015610-0053 184550.04 AM01 -62- The Bonds may be called before maturity and redeemed at the option of the Agency, in whole or in part from the proceeds of refunding Bonds or any other available funds on September 1, 2011, or any date thereafter, prior to the maturity. Bonds called for redemption shall be redeemed at the redemption prices(expressed as a percentage of the principal amount of Bonds to be redeemed) plus accrued interest to the redemption date as shown in the following table: Redemption Date Redemption Price September 1, 2011 through August 31, 2012 102% September 1, 2012 through August 31, 2013 101% September 1, 2013 and thereafter 100% Sinking Fund Redemption. The Term Bonds maturing on September 1, 2021, will be subject to mandatory redemption in part, by lot, on September 1, 2013, and on each September 1 thereafter to and including September 1, 2021, at a redemption price equal to the principal amount thereof together with accrued interest thereon to the redemption date, without premium, from minimum sinking fund payments on hand in the Debt Service Fund in the years and amounts as follows: Year Amount* Year Amount* 2013 $1,485,000 2018 $1,910,000 2014 1,560.000 2019 2,005,000 2015 1,640,000 2020 2,110,000 2016 1,725,000 2021(maturity) 2,220,000 2017 1,815,000 Sinking Fund Redemption. The Term Bonds maturing on September 1, 2031, will be subject to mandatory redemption in part, by lot, on September 1, 2022, and on each September 1 thereafter to and including September 1, 2031, at a redemption price equal to the principal amount thereof together with accrued interest thereon to the redemption date, without premium, from minimum sinking fund payments on hand in the Debt Service Fund in the years and amounts as follows: Year Amount* Year Amount* 2022 $2,330,000 2027 $2,995,000 2023 2,450,000 2028 3,150,000 2024 2,580,000 2029 3,315,000 2025 2,710,000 2030 3,485,000 110 124/015610-0053 184550.04 AM01 -63- 074 2026 2,850,000 2031(maturity) 3,665,000 Minimum sinking fund payments for any Term Bond redeemed pursuant to Section 11A(1) hereof shall be reduced pro rata. If an Event of Default, as deemed in the Indenture, shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture. The Bonds are issuable as fully registered Bonds without coupons in denominations of $5,000 and any integral multiple thereof. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Indenture, Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations and of the same maturity. This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the corporate trust office of the Trustee, in St. Paul, Minnesota, but only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of this Bond. Upon registration of such transfer a new fully registered Bond or Bonds, the Trustee will deliver a new Bond or Bonds, of like series, interest rate, maturity and principal to the transferee. The Trustee may refuse to transfer or exchange any Bond which has matured. The Agency and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Agency and the Trustee shall not be affected by any notice to the contrary. The rights and obligations of the Agency and the registered owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Agency to pay the principal or interest at the time an place and at the rate and n the currency provided herein of any Bond without the express written consent of the registered owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee. This Bond is not a debt of the City of La Quinta, the State of California, or any of its political subdivisions, and neither said City, said State, nor any of its political subdivisions is liable hereon, nor in any event shall this Bond be payable out of any funds or properties other than those of the Agency. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. It is hereby certified that all of the things, conditions and acts required to exist, or have happened or to have been performed precedent to and in the issuance of this Bond do exist, have (�111 ,24/015610-0053 1 1 75 184550.04 AM01 -64- happened or have been performed in due and regular time and manner as required by the Law and the laws of the State of California, and that amount of this Bond, together with all other indebtedness of the Agency, does not exceed any limit prescribed by the Law or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the Trustee's Certificate of Authentication hereon shall have been manually signed by the Trustee. IN WITNESS WHEREOF, the La Quinta Redevelopment Agency has caused this Bond to be executed in its name and on its behalf with the original or facsimile signature of its Executive Director and attested by the original or facsimile signature of its Secretary, all as of August 1, 2001. LA QUINTA REDEVELOPMENT AGENCY Un ATTEST: Secretary Executive Director 112 24/015610_0053 0 7 1) 184550.04 AM01 -65- [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Bonds described in the within -mentioned Indenture. Authentication Date: U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee 0 Authorized Officer 113 071 124/015610-0053 184550.04 AM01 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or Tax Regulations: TEN COM - - as tenants in common UNIF GIFT MIN ACT Custodian TEN ENT - - as tenants in entireties (Cult.) (Minor) IT TEN as joint tenants with right under Uniform Gifts to Minors Act (State) of survivorship and not as tenants in common ADDITIONAL ABBREVIATIONS MAY ALSO BE USED ALTHOUGH NOT IN THE LIST ABOVE [FORM OF ASSINGMENT] For value received in the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within -registered Bond and hereby irrevocably constitute(s) and appoints(s) attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises. Dated: Signatures Guaranteed: Note Signature(s) must be guaranteed by an eligible Guarantor Institution. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. 114 078 124/015610-0053 184550.04 AMO1 TABLE OF CONTENTS Page ARTICLE I DETERMINATIONS; DEFINITIONS....................................................4 Section 1.1 Findings and Determinations....................................................................4 Section1.2 Definition..................................................................................................4 Section 1.3 Rules of Construction.............................................................................15 ARTICLE II AUTHORIZATION AND TERMS........................................................16 Section 2.1 Authorization of Bonds...........................................................................16 Section2.2 Terms of Bonds.......................................................................................16 Section 2.3 Redemption of Bonds.............................................................................17 Section2.4 Book Entry..............................................................................................20 Section2.5 Form of Bonds........................................................................................21 Section 2.6 Execution of Bonds.................................................................................21 Section 2.7 Transfer of Bonds...................................................................................22 Section 2.8 Exchange of Bonds.................................................................................22 Section 2.9 Registration Books..................................................................................22 Section 2.10 Temporary Bonds....................................................................................22 Section 2.11 Bonds, Mutilated, Lost, Destroyed or Stolen..........................................23 ARTICLE III DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS; PARITYDEBT.......................................................................................24 Section 3.1 Issuance of Bonds...................................................................................24 Section 3.2 Application of Sale and Certain Other Amounts....................................24 Section 3.3 Redevelopment Fund..............................................................................24 Section 3.4 Issuance of Parity Debt...........................................................................25 Section 3.5 Issuance of Subordinate Debt.................................................................26 Section 3.6 Validity of Bonds....................................................................................27 115 124/015610-0053 079 184550.04 AM01 _1_ Page ARTICLE IV SECURITY OF BONDS; FLOW OF FUNDS.......................................28 Section 4.1 Security of Bonds; Equal Security..........................................................28 Section 4.2 Special Fund; Deposit of Pledged Tax Revenues...................................28 Section 4.3 Deposit of Amounts by Trustee..............................................................28 Section 4.4 Payment Procedure Pursuant to the Surety Bond...................................31 ARTICLE V OTHER COVENANTS OF THE AGENCY.........................................32 Section 5.1 Punctual Payment....................................................................................32 Section 5.2 Limitation of Additional Indebtedness; Against Encumbrances ............ 32 Section 5.3 Extension of Payment.............................................................................32 Section 5.4 Payment of Claims..................................................................................32 Section 5.5 Books and Accounts; Financial Statements; Annual Calculation of Available Tax Revenues.....................................................................32 Section 5.6 Protection of Security and Rights of Owners.........................................33 Section 5.7 Payments of Taxes and Other Charges ................................................... 33 Section 5.8 Taxation of Property...............................................................................33 Section 5.9 Disposition of Property...........................................................................33 Section 5.10 Maintenance of Tax Revenues................................................................34 Section 5.11 Tax Covenants........................................................................................34 Section 5.12 Establishment and Application of Rebate Fund......................................35 Section 5.13 Compliance with the Code......................................................................37 Section 5.14 Compliance with the Law; Low and Moderate Income Housing Fund......................................................................................................37 Section 5.15 Management and Operation of Properties..............................................37 Section 5.16 Annual Review of Tax Revenue.............................................................37 Section 5.17 Covenant With Respect to Mortgages....................................................38 116 080 l24/015610-0053 184550.04 AM01 -11- Page Section 5.18 Further Assurances..................................................................................38 Section 5.19 Continuing Disclosure............................................................................38 ARTICLE VI THE TRUSTEE......................................................................................39 Section 6.1 Duties, Immunities and Liabilities of Trustee.........................................39 Section 6.2 Merger or Consolidation.........................................................................40 Section 6.3 Liability of Trustee.................................................................................40 Section 6.4 Right to Rely on Documents...................................................................42 Section 6.5 Preservation and Inspection of Documents.............................................42 Section 6.6 Compensation and Indemnification........................................................42 Section 6.7 Deposit and Investment of Moneys in Funds.........................................43 Section 6.8 Accounting Records and Financial Statements.......................................44 Section 6.9 Appointment of Co -Trustee or Agent.....................................................44 Section 6.10 Powers of Bond Insurer in Relation to the Trustee.................................45 ARTICLE VII MODIFICATION OR AMENDMENT OF THIS INDENTURE .......... 46 Section 7.1 Amendment With Consent of Owners....................................................46 Section 7.2 Effect of Supplemental Indenture...........................................................46 Section 7.3 Endorsement or Replacement of Bonds After Amendment ...................47 Section 7.4 Amendment by Mutual Consent.............................................................47 Section 7.5 Notice to Standard & Poor' s..................................................................47 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF OWNERS .................48 Section 8.1 Events of Default....................................................................................48 Section 8.2 Application of Funds...............................................................................49 Section 8.3 Power of Trustee to Control Proceedings...............................................49 Section 8.4 Limitation on Owner's Right to Sue.......................................................49 117 Section8.5 Non-Waiver.............................................................................................50 724/015610-0053 081 184550.04 AMOI -111- Page Section 8.6 Actions by Trustee as Attorney-in-Fact..................................................50 Section 8.7 Remedies Not Exclusive.........................................................................51 ARTICLE IX MISCELLANEOUS............................................................................... 52 Section 9.1 Benefits Limited to Parties......................................................................52 Section 9.2 Successor is Deemed Included in All References to Predecessor .......... 52 Section 9.3 Discharge of Indenture............................................................................52 Section 9.4 Execution of Documents and Proof of Ownership by Owners...............53 Section9.5 Disqualified Bonds..................................................................................53 Section 9.6 Waiver of Personal Liability ...................................................................54 Section 9.7 Destruction of Cancelled Bonds.............................................................54 Section9.8 Notices....................................................................................................54 Section9.9 Partial Invalidity......................................................................................54 Section 9.10 Unclaimed Moneys.................................................................................55 Section 9.11 Execution in Counterparts.......................................................................55 Section 9.12 Governing Law.......................................................................................55 Section 9.13 Provisions Relating to Bond Insurer.......................................................55 Section 9.14 Payment Procedure Pursuant to the Municipal Bond Insurance Policy...................................................................................................... 57 Section 9.15 Interested Parties.....................................................................................59 118 082 124/015610-0053 184550.04 AM01 -1v- ATTACHMENT CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (the "Disclosure Agreement") is executed and delivered by the La Quinta Redevelopment Agency (the "Agency") and U.S. Bank Trust National Association, a national banking association, duly authorized to accept and execute trusts of the character herein set forth (the "Dissemination Agent'), in connection with the issuance by the Agency of its $48,000,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1, Tax Allocation Bonds, Series 2001 (the "Bonds"). The Bonds are being issued pursuant to an Indenture of Trust, dated as of August 1, 2001 between the Agency and U.S. Bank Trust National Association, as Trustee (the "Indenture"). The Agency and the Dissemination Agent covenant and agree as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Agency and the Dissemination Agent for the benefit of the holders and beneficial owners of the Bonds in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in the Disclosure Agreement, unless otherwise defined, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Agency pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Dissemination Agent" shall mean U.S. Bank Trust National Association, or any successor Dissemination Agent designated in writing by the Agency and which has filed with the Trustee a written acceptance of such designation. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. Currently, the following are National Repositories: Bloomberg Municipal Repositories P.O. Box 840 Princeton, NJ 08542-0840 (609)279-3200 FAX (609) 279-5962 E-mail: Munis@Bloomberg.com Kenny Information Systems, Inc. Attn: Kenny Repository Service 65 Broadway, 16th Floor New York, NY 10006 (212) 770-4595 119 124/015610-0053 fj 784980.01 AM01 r 0 8 q FAX (212) 797-7994 DPC Data Inc. One Executive Drive Fort Lee, NJ 07024 (201)346-0701 FAX (201) 947-0107 E-mail: nrmsir@dpcdata.com Thomson NRMSIR Attn: Municipal Disclosure 395 Hudson Street - 3rd Floor New York, NY 10014 Phone: (212) 807-5001 or (800) 689-8466 Fax: (212) 989-2078 E-mail: Disclosure c@Muller.com "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Repository" shall mean each National Repository and each State Repository. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State Repository" shall mean any public or private repository or entity designated by the State of California as a state repository for the purpose of the Rule and recognized as such by the Securities and Exchange Commission. As of the date of this 3 ifleNre Agreement, there is no State Repository. Section 3. Provisions of Annual Reports. (a) The Agency shall, or shall cause the Dissemination Agent to, not later than seven (7) months after the end of the Agency's fiscal year (which date currently would be January 31, based upon the June 30 end of the Agency's fiscal year), commencing with the report for the 2001-2002 fiscal year, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. Not later than fifteen (15) Business Days prior to said date, the Agency shall provide the Annual Report to the Dissemination Agent (if other than the Agency). The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the Agency may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if not available by that date. The Dissemination Agent (if other than the Agency) shall have no duty to review or approve the content of the Annual Report, or any part thereof. If the Agency's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under 120 Section 5(c). 124/015610-0053 1 ._ 8 4 184980.01 AM01 (b) If the Agency is unable to provide to the Repositories an Annual Report by the date required in subsection (a), the Agency shall send a notice on or before such date to the Municipal Securities Rulemaking Board and to the appropriate State Repository (if any) in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall: (i) determine each year prior to the date for providing the Annual Report the name and address of each National Repository and each State Repository, if any; and (ii) if the Dissemination Agent is other than the Agency, and if, and to the extent it can confirm such filing of the Annual Report, file a report with the Agency certifying that the Annual Report has been provided to the Repositories pursuant to this Disclosure Agreement, stating the date it was provided and listing all the Repositories to which it was provided. Section 4. Content of Annual Reports. The Agency's Annual Report shall contain or incorporate by reference the following: (a) Audited Financial Statements prepared in accordance with generally accepted auditing standards as promulgated to apply to governmental entities from time to time by the California State Controllers office. If the Agency's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed and provided to the Repositories in the same manner as the Annual Report when they become available. (b) The following financial information and operating data set forth in the final Official Statement: (i) Ten largest property tax payers in the Project Area, including name, assessed valuation and percent of total assessed valuation substantially the format set forth under the caption "Largest Local Secured Taxpayers" of the Official Statement; (ii) Annual assessed valuations, tax increment values, Pledged Tax Revenues (as defined in the Indenture) and ratio of Pledged Tax Revenues to debt service on Bonds, in substantially the formats of the tables set forth under the captions "PLEDGED TAX REVENUES Historical. Tax Revenues" and "Projected Pledged Tax Revenues and Debt Service Coverage" of the Official Statement. (iii) Discussion of any property tax appeals, which, either alone or in the aggregate could have greater than a 10% adverse effect on Pledged Tax Revenues. 12 1 085 124/015610-0053 2184980.01 AM01 Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Agency or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Agency shall clearly identify each such other document so included by reference. Section 5. Renorting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Agency shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: (i) Principal and interest payment delinquencies. (ii) Non-payment related defaults. (iii) Unscheduled draws on debt service reserves reflecting financial difficulties. (iv) Unscheduled draws on credit enhancements reflecting financial difficulties. (v) Substitution of credit or liquidity providers, or their failure to perform under the terms of the credit enhancement or the obligation to provide liquidity. (vi) Adverse tax opinions or events affecting the tax-exempt status of the security. :.1 GO (vii) Modifications to rights of security holders. (viii) Contingent or unscheduled bond calls. (ix) Defeasances. (x) Release, substitution, or sale of property securing repayment of the (xi) Rating changes. (b) Whenever the Agency obtains knowledge of the occurrence of a Listed Event, the Agency shall as soon as possible determine if such event would be material under applicable Federal securities law. The Dissemination Agent shall have no responsibility for such determination and shall be entitled to conclusively rely on the Agency's determination. (c) If the Agency determines that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the Agency shall promptly file 122 124/015610-0053 184980.01 AMOI n8F a notice of such occurrence with the Municipal Services Rulemaking Board and each State Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(viii) and (ix) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds pursuant to the Indenture. Section 6. Termination of Reporting Obligation. The Agency's and the Dissemination Agent's obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Agency shall give notice of such termination in the same manner as for a Listed Event under Section 5(c). Section 7. Dissemination Agent. (a) The Agency may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under the Disclosure Agreement and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Agency pursuant to this Disclosure Agreement. The Agency may replace the Dissemination Agent with or without cause. If at any time there is no designated Dissemination Agent appointed by the Agency, or if the Dissemination Agent so appointed is unwilling or unable to perform the duties of Dissemination Agent hereunder, the Agency shall be the Dissemination Agent and undertake or assume its obligations hereunder. Any company succeeding to all or substantially all of the Dissemination Agent's corporate trust business shall be the successor to the Dissemination Agent hereunder without the execution or filing of any paper or any further act. The Dissemination Agent may resign its duties hereunder at any time upon written notice to the Agency, which resignation shall be effective upon receipt of such notice with or without the appointment of a successor Dissemination Agent. (b) The Dissemination Agent shall be paid compensation by the Agency for its services provided hereunder and for reasonable expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder in accordance with its schedule of fees agreed to between the Dissemination Agent and the Agency from time to time. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the Agency hereunder and, when acting in the capacity of Dissemination Agent hereunder, shall not be deemed to be acting in any fiduciary capacity for the Agency, holders or beneficial owners of the Bonds, or any other party. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon any written direction from the Agency or an opinion of nationally recognized bond counsel. Section 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Agency may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied: (a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change 123 ry n 124/015610_0053 4 1 ( / 184980.01 AMOI in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would not, in the opinion of nationally recognized bond counsel, have violated the requirements of the Rule had the amendment or waiver been in effect at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds. If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided. If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the Agency to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be sent to the Repositories in the same manner as for a Listed Event under Section 5(c). Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Agency from disseminating any other information, using the means of dissemination set forth in the Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Agency chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Agency shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Agency to comply with any provision of this Disclosure Agreement, any Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Agency to comply with its obligations under this Disclosure Agreement. A default under this Disclosure 124 121/015610-0053 5 088 184980.01 AM01 Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the Agency to comply with this Disclosure Agreement shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of Dissemination Agent. All of the immunities, indemnities, and exceptions from liability in Article IX of the Indenture insofar as they relate to the Trustee shall apply to the Trustee and the Dissemination Agent in this Disclosure Agreement. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and shall have no liability to the Agency for performance or failure to perform its duties hereunder, other than for its own negligence or willful misconduct. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon any written direction from the Agency or an opinion of nationally recognized bond counsel. The obligations and rights of the parties under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. No person shall have any right to commence any action against the Agency, the Trustee or Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Agreement. Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Agency, the Dissemination Agent, the Participating Underwriters and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. Dated: August _, 2001 LA QUINTA REDEVELOPMENT AGENCY 0 Executive Director U.S. BANK TRUST NATIONAL ASSOCIATION, as Dissemination Agent Lo Authorized Signatory 125 I24/015610-0053 184980.01 AM01 6 ()8q EXHIBIT A NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD [AND (Add name of State Repository, if any)] OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: La Quinta Redevelopment Agency Name of Bond Issue: $48,000,000 La Quinta Redevelopment Project No. 1 Tax Allocation Bonds Series 2001 Date of Issuance: August _, 2001 NOTICE IS HEREBY GIVEN that the La Quinta Redevelopment Agency (the "Issuer") has not provided an Annual Report with respect to the above -named Bonds as required by the Indenture of Trust, dated as of August 1, 2001, by and between the Issuer and U.S. Bank Trust National Association, as trustee. The Issuer anticipates that the Annual Report will be filed by Dated: 12001 cc: U.S. Bank Trust National Association 550 South Hope Street, Suite 500 Los Angeles, CA 90071 LA QUINTA REDEVELOPMENT AGENCY 0 126 ,24/015610-0053 090 184980.01 AM01 A-1